11-10-2005, 12:17 PM
The tech-boom of the 1990s brought a sense of euphoria to the propertied classes of the United States and Europe. For a time, economists celebrated a world that had moved into a “new economy,” immune from classic economic cycles. While other less fortunate countries (Russia, Brazil, Indonesia, South Korea and others) were wracked with financial and currency crises, corporate chieftans and financial manipulators in Wall Street, London and Frankfurt embarked on wild investment programs, brazen insider trading schemes, and accounting cover-ups to portray unrealistically high profits. After Enron, WorldCom, and many other large corporations crashed in high-profile lawsuits and bankruptcies, the stock markets plunged in 2000 and the economies of the rich countries suddenly looked very shaky. None more so than the United States with its large and growing balance of payments deficit.
Some, including the IMF and the Bank for International Settlements, predict that the US trade deficit, worsened by high consumer debt and real estate speculation, may require a severe “adjustment” resulting in deflation, high interest rates and a weak dollar. After a decade of global currency crises, broad economic distress, and wrenching neoliberal reorganization, the US weakness -- as well as that of Japan -- may spell deeper international instability in the period ahead. As China builds up large trade surpluses and a sudden “correction” in the foreign exchange markets appears increasingly likely, Washington rejects all cooperative international programs to head off the impending financial reckoning.
This section posts materials on the crisis, its implications for the global political economy and corporate malfeasance.
US Trade and Budget Deficits, and the Fall of the Dollar
Due to record high US trade and budget deficits, the dollar has been losing value, weakening its status as the world’s major currency. By 2005, the rest of the world was subsidizing the US economy at a rate of more than $50 billion per month. High individual debt and a bubble in the housing market signal further weaknesses in the US financial system. Washington’s policy of nonconcern may have dangerous consequences, not only for the US economy, but for the entire dollar-tied global economy.
Corporate Crisis and Corporate Malfeasance
Accounting scams, insider trading schemes, and widespread corporate malfeasance came to light in a series of scandals that peaked in 2000-2002. Several respected companies collapsed, including energy mammoth Enron and accounting giant Arthur Andersen. Scandals hit WorldCom. Tyco, Parmalat, and many other firms and the head of the New York Stock Exchange retired in disgrace. These scandals reveal much about the corporate system and how it is run.
Tables and Charts on US Trade and Budget Deficits, and the Fall of the Dollar
This page provides numbers and graphs on the current state of the US economy.
http://www.globalpolicy.org/socecon/crisis/index.htm
Some, including the IMF and the Bank for International Settlements, predict that the US trade deficit, worsened by high consumer debt and real estate speculation, may require a severe “adjustment” resulting in deflation, high interest rates and a weak dollar. After a decade of global currency crises, broad economic distress, and wrenching neoliberal reorganization, the US weakness -- as well as that of Japan -- may spell deeper international instability in the period ahead. As China builds up large trade surpluses and a sudden “correction” in the foreign exchange markets appears increasingly likely, Washington rejects all cooperative international programs to head off the impending financial reckoning.
This section posts materials on the crisis, its implications for the global political economy and corporate malfeasance.
US Trade and Budget Deficits, and the Fall of the Dollar
Due to record high US trade and budget deficits, the dollar has been losing value, weakening its status as the world’s major currency. By 2005, the rest of the world was subsidizing the US economy at a rate of more than $50 billion per month. High individual debt and a bubble in the housing market signal further weaknesses in the US financial system. Washington’s policy of nonconcern may have dangerous consequences, not only for the US economy, but for the entire dollar-tied global economy.
Corporate Crisis and Corporate Malfeasance
Accounting scams, insider trading schemes, and widespread corporate malfeasance came to light in a series of scandals that peaked in 2000-2002. Several respected companies collapsed, including energy mammoth Enron and accounting giant Arthur Andersen. Scandals hit WorldCom. Tyco, Parmalat, and many other firms and the head of the New York Stock Exchange retired in disgrace. These scandals reveal much about the corporate system and how it is run.
Tables and Charts on US Trade and Budget Deficits, and the Fall of the Dollar
This page provides numbers and graphs on the current state of the US economy.
http://www.globalpolicy.org/socecon/crisis/index.htm