The New Face of America

In the early stages of the Iraq war, as stories of torture, the released photos from Abu Graib prison and the clear absence of any evidence whatsoever that weapons of mass destruction ever existed in Iraq, America was depicted, even by our formerly clear allies, as a rogue nation spinning wildly out of control. Those days have passed, we’ve long since moved on, but the world has found a new reason to hate us: so many people, from educated academics to working class laborers, believe with some justification, that the United States caused this managed depression.

The American subprime mortgage debacle, the acceleration of complex new American derivatives into the worldwide marketplace (adopted globally, I might add), debt packages rated as “safe” or “good” (read: A ratings) by American credit rating companies, regulated by the stringent controls of the American banking and securities regulators from seemingly experienced and competent American governmental agencies… well, it all started here.

That foreign banks, mouths dripping with greedy saliva, slurped up these toxic financial instruments, fanning the flames of demand that caused even lower-quality derivatives to be created to satisfy this ominous demand… well, they didn’t start the problem, the internationals say. Sure many imitated the American lifestyle, borrowing their way to comfort, but they just were following the apparently successful “life through leverage” American way. Governments everywhere loved the joy of growth through deficit-building borrowing. It was so modern and enlightened, so American.

Here’s the trigger: “Worldwide job losses from the recession that started in the United States in December 2007 could hit a staggering 50 million by the end of 2009, according to the International Labor Organization, a United Nations agency. The slowdown has already claimed 3.6 million American jobs.” February 14^th New York Times. We’ve seen protests, riots really, already in Greece, Bulgaria, Iceland (the picture above, also from the Times), Latvia, Chile, and the list goes on. The very foundation of the European Union is coming apart at the seams – meetings of EU leaders often devolve into catty sniping matches as nascent protectionism seems to be the new path. Governments are falling, regimes are being replaced.

The Western economic powers – the Group of 7 (Canada, France, Germany, Italy, Japan, United Kingdom, and United States ) – met recently to discuss a coordinated approach to battling the economic crisis, but the issue of “protectionism” was clearly a sensitive issue as the ministers addressed the a provision in the American Recovery and Reinvestment Plan that opens the door to trade wars. Giulio Tremonti, Italy’s finance minister, “spoke disdainfully of the ‘Buy America’ provision in the stimulus plan, which covers iron, steel and manufactured goods, as a political slogan. He and other ministers emphasized the importance of keeping the American economy free of protectionism [even as there were political cries from all over the earth for raising such barriers].” New York Times, February 15^th. He also trashed the massive amount of additional debt that America seemed to be adding to “solve” this problem, noting that it was over-borrowing that got us into this mess.

The Times noted that our very survival may be severely influenced by this financial meltdown going on around us, and for which we are being blamed: “Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.” My fear, when the dust settles and riots topple nations, is what retribution Americans may experience as they seek to pin all this on us. New tariffs? Limits on Americans traveling (restricted visa requirements? Open season on our companies and citizens around the world?

As we move towards stemming the blood loss, there will many all over the earth who will have lost their lifestyles, permanently and without hope of rebuilding, who will always harbor deep and abiding resentment against the nation they will always believe caused the loss. The February 14^th Los Angeles Times: “The survivors of the Depression are approaching the ends of their lives, and their tales flow freely -- of countless injuries and precious joys. They experienced humiliation and unexpected generosity, moments of fear and times of laughter.” Some things, you never forget.

I’m Peter Dekom, and it worries me too.