What must others think of the U.S. in light of our economic meltdown and inability to fix it? Carl Foster and Zara Gibb, two senior members of Peppercom’s UK office, offer their thoughts…
The "Special Relationship" doesn’t just mean Britain following America into Iraq, or the TV screens of Middle England being filled with the best of HBO, it seems you guys can’t even have a financial meltdown without us jumping on the bandwagon.
The UK actually had the first major headline in this saga – last year’s nationalisation of Northern Rock, a major UK bank. Then along came Bear Stearns and our problems began to look miniscule in comparison, and all that was before Fannie Mae and Freddie Mac.
9/11 made the world look at America differently – compassionately. Since then America’s reputation seems to have been in freefall. Regardless of our own debt-fueled decade of conspicuous consumption, all fingers point to the US when it comes to laying blame for the current global economic crisis. The attitude is: "America created this problem and so America needs to fix it." The front pages here lead with the surprise rejection of the bailout, many of them feature a gloomy photo of the Capital building.
Last week, the BBC’s business editor said of the bailout: “After leading us up the hill, it would be disastrous for American’s reputation if it failed to pass the measure.” In the words of John McFall, chairman of the House of Commons Treasury Select Committee, U.S. politicians "turned off the life support system for the economy."
People in the UK (at least for these RepMan followers) are left perplexed by the shock refusal of Congress to agree to the bailout. Understood, hard-working taxpayers shouldn’t be left to carry the bill for the failures of the fat cats, and the finance giants themselves should sort this mess out – but that just ain’t going to happen.
So, the political wrangling that has taken place in America has left banking experts warning a complete "failure of the financial system." Now we’re not City whiz kids, but that doesn’t sound good. With many Republicans ideologically in favour of free markets, no bailouts for losers and winner takes all – we’re left wondering who the winner will be.
Wow… “crucified on a cross of fools gold.”
I couldn’t imagine a better analogy to personify the reality of this fiasco.
Among others, a big concern of mine is ignorance and apathy of my community: a liberal arts college.
We are the ones that will benefit and/or suffer the most from the repercussions of tomorrow’s vote. In seven months, i.e. graduation, we’re going to be the one fishing for a job. We’re going to be the one applying for a loan to invest in a house with. We’re going to be the ones that have to figure out a way to decrease our trillions of debt.
Now, there’s certainly two sides to the coin and I am not bathing in self-pity.
What I am disturbed by is the fact that most of my peers have little to no idea of the economic situation that our futures depend upon.
Every time that I try to talk with someone younger than 25 about it, I get a political partisan or an utterly blank stare.
I don’t know if this saddens me more…
or scares me more.
I started a “facebook group” to work as a liason between the problem and my classmates.
Thanks for the comment, Bob. It’s easy to see why our country’s image is at an absolute nadir. Stil, as Monty Python would say, “Always look at the bright side of life…..” even if we are being crucified on a cross of fool’s gold.
If Peppercom ,or in fact my 9th grade son, had gone into a presentation the way Paulson and Bernanke were prepared they would have been laughed out of the room.Combine that with members running for political cover is it no wonder we ended up the way we did.
Growing up in England it was easy to not like, or understand, the United States because we really didn’t know them. Now because of the “CNNing” of the world everyone can be an expert. I was on an English soccer blog this morning and the conversation moved onto why a certain candidate was so stupid to pick their VP running mate. I will not say which one as I do not wish to show any bias but they said they thought she was a “total moron”
As the world just shakes it’s head in disbelief at what the the US is doing don’t worry I believe help is on the way.
Ultimately toxic assets are clogging the US financial system and threatening your (and the Global) economy. It really doesn’t matter if these are US banks or not. So although banks like Barclays and Royal Bank of Scotland may be able to participate in the US Treasury’s plan. I don’t think there will be any real winners but hopefully no losers either. No tax payer in the US (and the UK) likes bailing out people, who generally earn a hell of a lot of money, and gambled with that money.
Thank you for the insightful viewpoint. My question to both Carl and Zara is, if the modified bailout does pass today, do you think Britain will be a winner in the overall outcome? It seems a financial rescue plan may stop bank failings here and abroad.
Additionally, what are your thoughts on global banks being included in the government plan? I find the idea of taxpayer money going to international firms, who made the risky choice to invest in U.S. mortgages in the first place, disturbing.