Geopolitical consequences of the credit crunch.
Sempa, Francis P.
Geopolitical Consequences of the Credit Crunch
By Niall Ferguson, Senior Fellow, Hoover Institution
Reviewed by Francis P. Sempa, Contributing Editor
Video: http://www.hoover.org/multimedia/events/33772914.html
The prolific British historian Niall Ferguson recently spoke at the
Hoover Institution on the geopolitical implications of the current
financial crisis. Ferguson examined and debunked the increasingly
conventional view that the crisis will result in a "post-American
world."
Ferguson recalled that in the late 1980s we witnessed similar
predictions of American decline, most prominently displayed in Paul
Kennedy's influential book, The Rise and Fall of the Great Powers.
Two years after Kennedy's book was published, the Berlin Wall fell,
the Cold War ended, and the Soviet Union collapsed, leaving the United
States as the lone global superpower. The conventional wisdom quickly
shifted from American decline to the unipolar moment.
The current credit crunch is real and serious, Ferguson noted, and
governments are intervening in the crisis as if in a wartime situation.
But we are not headed for another great depression like that of the late
1920s and 1930s. Nor are we headed, Ferguson believes, for the end of
the American Empire or a post-American world.
Ferguson points to six reasons why America will remain the
world's preeminent power: The United States is fiscally positioned
to weather the current storm; the current crisis is actually worse for
everyone else--European and Asian banking systems are more vulnerable
than U.S. banks; the Chinese and Russian economies are in worse shape
than ours; the current crisis harms petro-states such as Iran, Russia,
and Venezuela, our geopolitical competitors and enemies; things are
improving in the Middle East; and "Chimerica," the
Chinese-American economic relationship--the most important economic and
geopolitical relationship in the world--remains vibrant.
Ferguson is always interesting and usually provocative, and this
fact-driven, historically-informed analysis does not disappoint.
