Brazil and China?

Today Wall Street is falling. The Bush Administration could still stop the worst financial crisis in a long time. This is not the end of the world, but as far as crises go, this one is up high in anybody's scale. Mexico is not much better, nowadays there is no center of power, it is ironic coming from somebody like me; I am a liberal, not an authoritarian, but I can see that if power leaves the President, then power is up for grabs.

I see a deeper problem though; it is not only the "Laissez-faire" policies of the Republican Party in the US, or the inexperience of the Mexican President's National Action Party (PAN for its initials in Spanish) to run the country. It is the idea of progress at the expense of the other, and the environment, which to me, seems to be the root cause of what we see now. I have a sense of our species being at odds with Nature itself.

Of course if it is so, one could ask why now?

It is a historic fact that systems end, what one has to argue is why now is the time of reckoning for the tenets of laissez fair capitalism. I am not going to answer that, If I knew, I would've bought the right kind of stock and I would be a wealthy man by now, far from it. All I intend to do here is write a few post mortem ideas on the Bush Administration and the PAN failures to do what they were elected to do, to promote their respective ideologies, and their more important task, to protect their material base, the treasure of their countries.

Condoleeza Rice leaves a world in disarray for her successor. Almost all of Latin America jumped ship on the American model, from Nicaragua to Argentina the IMF does not set financial policies as it once did.

Countries that went their own way, like Brazil, seem to be faring better than the US right now. The media barons, Murdoch in the US, and Azcarraga in Mexico, are doing their best to keep people distracted while they keep the capital they can keep. I am not in the pay of neither man, so I can write here, what I think is wrong. The US and Mexico stopped producing goods and only managed the wealth they inherited, other countries filled the void, China and Brazil, among them. What we see now is one of the biggest capital transfers in history. In twenty years time it will be more important what the presidents in Brasilia, and Beijing, think, than whoever is in Washington D.C., thinks.

For my readers I know that this conclusion is not unexpected coming from me.

But there it is. The King is Dead, Long Live the King!

Besides you do not have to believe me, you can read Nobel Laurate Joseph E. Stiglitz:

"And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both."

"The continuing reliance on oil, regardless of price, points to one more administration legacy: the failure to diversify America’s energy resources. Leave aside the environmental reasons for weaning the world from hydrocarbons—the president has never convincingly embraced them, anyway. The economic and national-security arguments ought to have been powerful enough. Instead, the administration has pursued a policy of “drain America first”—that is, take as much oil out of America as possible, and as quickly as possible, with as little regard for the environment as one can get away with, leaving the country even more dependent on foreign oil in the future, and hope against hope that nuclear fusion or some other miracle will come to the rescue. So many gifts to the oil industry were included in the president’s 2003 energy bill that John McCain referred to it as the “No Lobbyist Left Behind” bill."

"Globalization means that America’s economy and the rest of the world have become increasingly interwoven. Consider those bad American mortgages. As families default, the owners of the mortgages find themselves holding worthless pieces of paper. The originators of these problem mortgages had already sold them to others, who packaged them, in a non-transparent way, with other assets, and passed them on once again to unidentified others. When the problems became apparent, global financial markets faced real tremors: it was discovered that billions in bad mortgages were hidden in portfolios in Europe, China, and Australia, and even in star American investment banks such as Goldman Sachs and Bear Stearns. Indonesia and other developing countries—innocent bystanders, really—suffered as global risk premiums soared, and investors pulled money out of these emerging markets, looking for safer havens. It will take years to sort out this mess."