The Making of a Mess

The Making of a Mess - NOTICE AUTHOR: Harold James This...

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AUTHOR: Harold James TITLE: The Making of a Mess SOURCE: Foreign Affairs 88 no1 162-8 Ja/F 2009 COPYRIGHT: The magazine publisher is the copyright holder of this article and it is reproduced with permission. Further reproduction of this article in violation of the copyright is prohibited. To contact the publisher: http://www.foreignrelations.org/public/ Fixing Global Finance, BY MARTIN WOLF. Johns Hopkins University Press, 2008,230 pp. $24.95. The current financial crisis poses a fundamental challenge to globalization and to its many analysts. All are now considering what the recent meltdown means-the euphoric globalizers, few of whom are left; the tragic globalizers, who see the benefits of interdependence but worry about a great crash ahead; the managerial globalizers, who would like a better way of controlling the process; the critical globalizers, who are pushing for radical reform; and, of course, the antiglobalizers. Which global institutions might manage the international economy, and how? they all wonder. European leaders, for example, have called for a new Bretton Woods Conference to reconsider the architecture of the international financial and trading systems. What kind of crisis is this, and what are its likely implications? Some crises are cathartic and push policymakers to take corrective measures; others, like the Great Depression, are radically destructive. Over recent decades, there have been blowouts at the financial center and storms at the periphery. After the meltdown in Latin America in the 1980s came a decade of stock-market and housing booms in the United States that eventually went bust. The Asian financial crisis of 1997-98 was also followed by a run on U.S. assets, causing a bubble (and the dot-com boom) that then burst. Is the latest financial collapse a first step on the road to a profound backlash against globalization? A decade ago, after the Asian financial crisis, Washington and various international financial institutions held up the U.S. system as a model to Asian governments. Today, it is Asia, especially China, that may be entitled, to give Americans a lecture. MASSIVE FAILURES Martin Wolf, the Financial Times chief economics commentator, has been a persistently insightful analyst. He has not forecast that financial globalization will necessarily end in disaster, but he has warned of its dangers and tried to address its shortfalls. Most recently, he has done so in Fixing Global Finance, an extremely helpful guide to the origins of today's problems and to possible solutions. The book was completed before the financial turmoil hit this past fall but was released in its midst, and in some respects this awkward timing makes for peculiar reading. Wolf seems to have been offering an eloquent defense of financial globalization even as it was being execrated -- not only by the usual church leaders and moralists, the French president, and the German finance minister but also by the candidates in the U.S. presidential election, who were calling for less
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This note was uploaded on 02/01/2012 for the course 790 319 taught by Professor Licklider during the Spring '09 term at Rutgers.

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The Making of a Mess - NOTICE AUTHOR: Harold James This...

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