A new chapter in history?

[duda]

Hmmmm, We've been talking about this in history class for weeks now...Do you think that the current economic status of the US is leading it to its collpase? The fact that the corruption of the US and English economies due to poor regulations and other reasons is tearing their economy (the wall street crisis) scares me....and the fact that the chinese are buying the US banks in the last few days....And the fact that because EURO using nations have higher regulations than the USA or GBR, they will not be effected a lot by this economic crisis....AND AGAIN, the fact that the chinese economy won't be touched by the possible economic collapse that might hit these western countries...Is this a new chapter in history, or another thing the WEST will fight its way through.... I'd like to hear your opinion....

SORRY, I'm not going to list any sources because because there's too many of them....

[Yorkshireman]

I think because many people on here are so young they think that the first time they experience a recession that civilisation will end. There is some financial crisis or other every few years, the US won't collapse, nor GB nor the "West". We'll recover as always, maybe a few governments or presidents will lose elections as a result, but in a few months the status quo will return and it will be forgotten until next time.

[Astaroth]

I think because many people on here are so young they think that the first time they experience a recession that civilisation will end. There is some financial crisis or other every few years, the US won't collapse, nor GB nor the "West". We'll recover as always, maybe a few governments or presidents will lose elections as a result, but in a few months the status quo will return and it will be forgotten until next time.

100% agreed. +rep

[duda]

I think because many people on here are so young they think that the first time they experience a recession that civilisation will end. There is some financial crisis or other every few years, the US won't collapse, nor GB nor the "West". We'll recover as always, maybe a few governments or presidents will lose elections as a result, but in a few months the status quo will return and it will be forgotten until next time.

Okay, i never meant it that dramatic, but okay...

[Erik]

I think because many people on here are so young they think that the first time they experience a recession that civilisation will end. There is some financial crisis or other every few years, the US won't collapse, nor GB nor the "West". We'll recover as always, maybe a few governments or presidents will lose elections as a result, but in a few months the status quo will return and it will be forgotten until next time.

You'll have to go back more than a few years to see a similar situation.
All the way to 1929, in fact.

This won't be the end of the world, of course.
But like the great depression, this will certainly change many things in the world.
Like people talk about the "post 9-11 world" people will also talk about something like a "post financial crisis world". (though they would probably find a better phrase than I just did).

For one thing: I think this will put an end to the popularity of neo-liberalism, just like the collapse of the Soviet Union put an end to the popularity of communism. (I believe that's what the OP meant).

[Kleos]

There is a similar thread in the Academy; along the same lines of 'is the end for the USA as a superpower'; and I'll repost how I responded there. Your claim about China's economy not being touched is far off the mark - they could realistically come off just as bad as anyone else; especially if countries start flocking to protectionsim in a bid to revive domestic economies.

***

This crisis will obviously dent the US, no doubt, but at even the most extreme outcome there will only be shift towards a more multipolar world. America is certainly not finished, and there is no other power that can take the place of the worlds sole superpower. Kb8 has touched on just one of the major problems facing the EU (its not a unified nation, unification a long way off - if ever, sluggish economy, ageing population).

Russia scrapes the specifications for an energy superpower - yet even this is more of problem to Western Europe than the US. Other than having the luck to be blessed with very large gas reserves, it is underwhelming in all other terms; its GDP is less than than Brazil - let alone the USA; its GDP per capita wouldn't even be the highest in Africa, let alone the world; its military expenditure is outstripped by the UK and France, let alone the USA; and it lacks the demographic punch possessed by China, India and the US (1st,2nd & 3rd largest in the world respectively). Russia is a middle weight power thats confusing its energy assets as equating to world power - its what makes their recent posturing against the US rather laughable.

As for China, it has far, far too many problems of its own. Not least, one that plauges the US - a reliance on imports to meet fuel demands. According to J.h. Kunstler in "The Long Emergency", if China's demand for oil was to increase at its current rate, they will "consume 100% of currently available world exports in ten years – assuming no growth in demand elsewhere in the world and assuming no fall off in global production.”

Obviously; current demand from China is going to change - but it highlights the extent to which their industrialisation and modernisation is heavily reliant upon fuel imports. Even these imports it largely can only pay for due to other nations buying cheaply made products from China, and foreign investment in developing infrastructure. In the current climate; and especially if the USA is badly effected - such an income and investment is hardly guarenteed.

Niall Ferguson in his "Colossus", discusses the role of the USA in the near future, talking of potential rivals - he raises the following problems concerning China:

“A fundamental incompatibility exists between the free-market economy, based inevitably on private property and the rule of law, and the Communist monopoly on power, which breeds corruption and impedes the creation of transparent fiscal, monetary, and regulatory institutions.”

“Production is running far ahead of domestic consumption – thus making the economy heavily dependent on exports” (This is important, because China will not come off well if richer nations have less to spend on imports in an economic downturn)

Added to this is a host of environmental problms that are quite serious - more so due to the fact that actionis always taken too late in regards to nature- desertification in places, and to quote from the first source: “Of China’s 617 cities, 300 already face water shortages. Of China’s approximately 23,000 miles of major rivers, 80% no longer support fish life.” India, I'd imagine, would have its own set of problems, very similar to China with its very large population, and similar economic position. Though it has the immense benefit of being a democratic and capitalist country, it too lacks what it takes to become the worlds superpower.

So in all, I think the USA will weather this storm. Its weathered similar before. It may come off weaker in relation to its "rivals", but it will still be the top dog. And the USA does have plenty of room for manouvre - if the political will was there- for instance it could easily eliminate its national debt within ten years, with the necessary cut backs in expenditure - so its far from at the 'point of no return' in any of its domestic troubles; though I would say that a growing national debt if left unchecked could do some real damage to the US.

***

And I hate to repeat the tired cliche, but "when the USA sneezes..." - you get the idea; all the regulation in the world is not going to stop the countries of Europe and especially China from being badly hit by any downturn in America's economic fortunes.

[imb39]

Hmmmm, We've been talking about this in history class for weeks now...Do you think that the current economic status of the US is leading it to its collpase? The fact that the corruption of the US and English economies due to poor regulations and other reasons is tearing their economy (the wall street crisis) scares me....and the fact that the chinese are buying the US banks in the last few days....And the fact that because EURO using nations have higher regulations than the USA or GBR, they will not be effected a lot by this economic crisis....AND AGAIN, the fact that the chinese economy won't be touched by the possible economic collapse that might hit these western countries...Is this a new chapter in history, or another thing the WEST will fight its way through.... I'd like to hear your opinion....

SORRY, I'm not going to list any sources because because there's too many of them....

America got through the Great Depression. Britain, during my lifetime weathered and grew stronger after the enormous turmoil of the eighties. The world will continue. The end is not nigh. It's going to be tough, but these times happen.

[spartan117]

hmmm... 777 point drop- largest single day drop in history

I wonder what effect this will have on credit and the resulting effect on the rest of the economy.

As I recall China is very much effected by the turmoil in the stock market in the United States.

[danzig]

The Repubs are the ones that voted this deal down. Pull yourselves up by your boot straps & take responsibility for your actions.

The problem this is more a case of the captain and crew crashing the boat into an iceberg and going crew and 1st class passengers first into the lifeboats. We needed this deal if for no other reason stability/confidence in the system....yeah the US isnt going to collapse (as some tin foil head people seem to think) because it was rejected but its going to be alot more painful.

[Da Skinna]

I'm sorry but didn't World War 2 effectively end the Great Depression?

[attilavolciak07]

Hmmmm, We've been talking about this in history class for weeks now...Do you think that the current economic status of the US is leading it to its collpase? The fact that the corruption of the US and English economies due to poor regulations and other reasons is tearing their economy (the wall street crisis) scares me....and the fact that the chinese are buying the US banks in the last few days....And the fact that because EURO using nations have higher regulations than the USA or GBR, they will not be effected a lot by this economic crisis....AND AGAIN, the fact that the chinese economy won't be touched by the possible economic collapse that might hit these western countries...Is this a new chapter in history, or another thing the WEST will fight its way through.... I'd like to hear your opinion....

SORRY, I'm not going to list any sources because because there's too many of them....

Possibly. I'm no economics expert, it seems bad but these seem to pass through every time, usually with the "world will end" motive being most favored.

Also, the advertisements in my TWC window say "Signs of a falling nation: is it time for the UK and US to pass". If that isn't correct then I don't know what is.

[Da Skinna]

http://www.pbs.org/moyers/journal/09262008/watch.html

Andrew J. Bacevich. This guys is a real patriot, and understands America is at an end. You're an idiot if you try questioning this guy's patriotism.

And Kevin Phillips, a Republican strategist, talking about the economy.

http://www.pbs.org/moyers/journal/09192008/watch2.html

[dwringer]

Yeah, the USA didn't disintegrate after the Great Depression; in fact we rose to be a superpower in the years SINCE.

And history doesn't actually operate in chapters, even though textbooks do, so I doubt it would have seemed even in 1929 that we were entering a "new chapter in history".

Of course it is tempting to point to 9/11/2001 and say that ushered in a "new chapter"; I would disagree. The only thing that happened in 2001 is a new presidential administration. ;p

[Da Skinna]

Hello???

1937-1945???

[Scar Face]

It's rather overconfident to simply discard this financial crisis as "just another crisis" when already it has surpassed any other crisis since the Great Depression, and its effects have not yet even been fully felt...

[The King Of Peasants]

As bad as a at least very bad recession maybe depression would be at least at the end of the tunnel we would be better for it. Though with how soft americans have become I'm not sure we could handle it....

[Da Skinna]

Soft as in reliant on technology right?