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.