The Fleecing of America: Where's the support from new foreign centers of wealth and power?

[DeepModem Mom]

NYT: The Fleecing of America
By ROGER COHEN
Published: September 21, 2008

....Yes, folks, the cash is elsewhere. Asians have been saving rather than spending. Their consumers are in better shape, as are their banks. The China Investment Corp. (C.I.C.), a sovereign wealth fund, is sitting on $200 billion (and a 9.9 percent stake in Morgan Stanley) while China’s central bank is managing another $1.8 trillion in reserves. And what have we heard from the new centers of wealth and power — China, India, Brazil, Russia, the Gulf states — about America’s financial agony over the past week? Zilch....

Remember the last financial crisis in 1998? With the Russian economy in a freefall, Moscow officials scurried to the U.S. Treasury to secure vital American support for $17.1 billion in new International Monetary Fund loans. That steadied things.

The world has changed in the past decade. There’s been a steady transfer of wealth away from the United States in a shift most Americans have not yet grasped. But there has been no accompanying transfer of responsibility. New powers are free-riding as if it were still the American century.

It’s not. Imagine if Hu Jintao, the Chinese president, had declared last week: “China has a deep interest in the stability of the U.S. economy and the dollar. We stand ready to help in the essential return of confidence to financial markets. Talks with the U.S. Treasury are ongoing.” Or perhaps the BRIC countries (Brazil, Russia, India and China) might have put out such a joint statement.

Let’s be clear: this is an American mess forged by the American genius for new-fangled financial instruments in an era where the mantra has been that government is dumb and the markets are smart and risk is non-existent. The responsibility for undoing the debacle is chiefly American, too. But toxic mortgage-backed securities were peddled by plenty of foreign banks. And the decision to pour $85 billion of U.S. taxpayers’ money into the rescue of American International Group (A.I.G.), the insurance giant, followed appeals from foreign finance ministers to Henry Paulson, the Treasury secretary, to save a global company.

Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, told me: “Paulson said he was getting calls from finance ministers all around the world saying, you have to save A.I.G. Well, they should have been asked to contribute to the pot.”...

I know, you reap what you sow. Nobody’s itching to help the Bush administration. World central banks did inject billions in concerted action to help stabilize money markets. But the U.S. has essentially been on its own. Now foreign banks with U.S. affiliates will want a slice of the $700 billion bailout. That doesn’t make sense until the burden of this rescue starts reflecting a globalized world....

http://www.nytimes.com/2008/09/22/opinion/22cohen.html?_r=1&hp&oref=login

[sam sarrha]

1. they are waiting for Bu$h to let them buy all the foreclosures at 5 cents on the dollar to pay back

the 3/4 Trillion dollar loan we made to the crooks, that the ReThug's deregulated cause free markets regulate themselves so well