Most of those observers agree that will occur will involve a massive consolidation of banks into a few giant institutions that are now lying in wait under the protection of the Federal Reserve which has recently rescued them and intends to distribute the spoils amongst them.
WAR AND TECHNOLOGICAL REVOLUTION
Much has been made of the usual role played by wars in catalyzing economic recoveries and of the influence of the conflicts in Iraq and Afghanistan on the present context. However, although great international confrontations such as World War II did indeed help the US, as relatively distant, isolated belligerent and provider of capital and equipment to its allies, pull out of the great depression after effective wholesale "nationalization" of its economy, relatively local wars, similar to the US war in Vietnam, cannot play such a pump priming function and do only further the interests of some niche sectors (arms manufacturers, financial speculators, energy traders, security contractors) of the economy at the cost of general welfare. While it is true that those "niche sectors" are controlled by people who make policies and generally govern the USA and Britain apart from some other powers, they do not compensate for the impoverishment of the nation as a whole due to the enormous costs it has to bear (more than a trillion USD in Iraq alone).
A small country , Israel, was able to emerge from stagnation and attain high growth rates through a high-tech revolution it engineered in the wake of the September 11th, 2001, terrorist attacks, by turning into a world leader in advanced defense, surveillance, security and domestic monitoring research and manufacturing. Being already a leading arms producer and merchant, the Jewish state also became a leading provider of anti-terrorist and "crowd control" equipment and know how that it is able to "test" on the local Palestinians, but a specialized sector of that scope is not large enough to revive an economy of the size of the USA.
This is not to say that a technological revolution of critical import, such as the emergence of the Internet /IT could not trigger a resurgence. The question, however, is whether any new technology, as Dave Johnson feared, would not be automatically outsourced to poorer manufacturing countries, hence doing little to solve the problems of the most developed economies. In the USA and in a few other states, it is widely suspected that the Department of Defense and associated contractors hold the key to some "epoch-making" technological breakthroughs, particularly in the sectors of energy-generating and carrying, aerospace, mass transportation, computing, artificial intelligence, surgery, nano and bio-technology sectors but that the military-industrial complex, notorious since the days of President Eisenhower's farewell speech, holds on to its secrets and takes a long time to reluctantly release them into the private sector as it is unwilling to lose its strategic edge on all rival and enemies, real or potential.
The question is whether the emergency in which the country finds itself will prompt a reform of this long-standing policy but it sounds likely that such an opening up will be preceded or accompanied by a new wave of protectionist measures intended to prevent as much as possible foreign access to these prized sources of competitive advantage, seen as assets for continuing global leadership. Likewise Europe, as advocated for years by French Nobel Prize winner in Economics Maurice Allais and recently by the eminent scholar Emmanuel Todd in an interview to the ENA journal of April 2009, can also be expected to raise the walls of protectionism on its borders in order to limit the damage of the crisis.
In the early nineteen seventies, the Vietnam war eventually brought Washington to the brink of insolvency and forced it to back out of the gold standard, effectively renouncing the Bretton Woods agreement, and to increase taxes enormously while inflation and interest rates skyrocketed. The invasions and occupations of Iraq and Afghanistan are having an even more painful effect since the US can no longer maintain the Dollar as the global reserve currency, which gave it a limitless credit line with the rest of the world.
Next Page 1 | 2 | 3 | 4 | 5 | 6 | 7
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
2
2
2
