12.28.2006
WIll the Dam Break in 2007? (Guardian.co.uk)
The world survived 2006 without a major economic catastrophe but the year produced warning signs for the future of the global economy.
Joseph Stiglitz
December 27, 2006 12:30 PM
The world survived 2006 without a major economic catastrophe, despite sky-high oil prices and a Middle East spiralling out of control. But the year produced abundant lessons for the global economy, as well as warning signs concerning its future performance.
Unsurprisingly, 2006 brought another resounding rejection of fundamentalist neo-liberal policies, this time by voters in Nicaragua and Ecuador. Meanwhile, in neighbouring Venezuela, Hugo Chávez won an overwhelming electoral: at least he had brought some education and healthcare to the poor barrios, which previously had received little of the benefits of the country's enormous oil wealth.
Perhaps most importantly for the world, voters in the United States gave a vote of no confidence to President George W Bush, who will now be held in check by a Democratic Congress.
When Bush assumed the presidency in 2001, many hoped that he would govern competently from the centre. More pessimistic critics consoled themselves by questioning how much harm a president can do in a few years. We now know the answer: a great deal.
Never has America's standing in the world's eyes been lower. Basic values that Americans regard as central to their identity have been subverted. The unthinkable has occurred: an American president defending the use of torture, using technicalities in interpreting the Geneva Conventions and ignoring the Convention on Torture, which forbids it under any circumstances. Likewise, whereas Bush was hailed as the first "MBA president," corruption and incompetence have reigned under his administration, from the botched response to Hurricane Katrina to its conduct of the wars in Afghanistan and Iraq.
In fact, we should be careful not to read too much into the 2006 vote: Americans do not like being on the losing side of any war. It was this failure, and the quagmire into which America had once again so confidently stepped, that led voters to reject Bush. But the Middle East chaos wrought by the Bush years also represents a central risk to the global economy. Since the Iraq war began in the 2003, oil output from the Middle East, the world's lowest-cost producer, has not grown as expected to meet rising world demand. Although most forecasts suggest that oil prices will remain at or slightly below their current level, this is largely due to a perceived moderation of growth in demand, led by a slowing US economy.
(More ... Guardian Unlimited > Comment is free ...)
Joseph Stiglitz
December 27, 2006 12:30 PM
The world survived 2006 without a major economic catastrophe, despite sky-high oil prices and a Middle East spiralling out of control. But the year produced abundant lessons for the global economy, as well as warning signs concerning its future performance.
Unsurprisingly, 2006 brought another resounding rejection of fundamentalist neo-liberal policies, this time by voters in Nicaragua and Ecuador. Meanwhile, in neighbouring Venezuela, Hugo Chávez won an overwhelming electoral: at least he had brought some education and healthcare to the poor barrios, which previously had received little of the benefits of the country's enormous oil wealth.
Perhaps most importantly for the world, voters in the United States gave a vote of no confidence to President George W Bush, who will now be held in check by a Democratic Congress.
When Bush assumed the presidency in 2001, many hoped that he would govern competently from the centre. More pessimistic critics consoled themselves by questioning how much harm a president can do in a few years. We now know the answer: a great deal.
Never has America's standing in the world's eyes been lower. Basic values that Americans regard as central to their identity have been subverted. The unthinkable has occurred: an American president defending the use of torture, using technicalities in interpreting the Geneva Conventions and ignoring the Convention on Torture, which forbids it under any circumstances. Likewise, whereas Bush was hailed as the first "MBA president," corruption and incompetence have reigned under his administration, from the botched response to Hurricane Katrina to its conduct of the wars in Afghanistan and Iraq.
In fact, we should be careful not to read too much into the 2006 vote: Americans do not like being on the losing side of any war. It was this failure, and the quagmire into which America had once again so confidently stepped, that led voters to reject Bush. But the Middle East chaos wrought by the Bush years also represents a central risk to the global economy. Since the Iraq war began in the 2003, oil output from the Middle East, the world's lowest-cost producer, has not grown as expected to meet rising world demand. Although most forecasts suggest that oil prices will remain at or slightly below their current level, this is largely due to a perceived moderation of growth in demand, led by a slowing US economy.
(More ... Guardian Unlimited > Comment is free ...)
Labels: economy, Guardian, Opinion, Stiglitz
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