| On the one hand, many people are concerned that | | | | recession are worrying many developing country |
| those responsible for the financial problems are the | | | | analysts. |
| ones being bailed out, while on the other hand, a | | | | Many believed Asia was sufficiently decoupled from |
| global financial meltdown will affect the livelihoods of | | | | the Western financial systems. Asia has not had a |
| almost everyone in an increasingly inter-connected | | | | subprime mortgage crisis as many nations in the |
| world. The problem could have been avoided, if | | | | West have, for example. Many Asian nations have |
| ideologues supporting the current economics models | | | | witnessed rapid growth and wealth creation in recent |
| were not so vocal, influential and inconsiderate of | | | | years. This lead to enormous investment in Western |
| others' viewpoints and concerns. | | | | countries. |
| A collapse of the US sub-prime mortgage market and | | | | In recent years, there has been more interest in |
| the reversal of the housing boom in other | | | | Africa from Asian countries such as China. As the |
| industrialized economies have had a ripple effect | | | | financial crisis is hitting the Western nations the |
| around the world. Furthermore, other weaknesses in | | | | hardest, Africa may yet enjoy increased trade for a |
| the global financial system have surfaced. Some | | | | while. |
| financial products and instruments have become so | | | | While the media's attention is on the global financial |
| complex and twisted, that as things start to unravel, | | | | crisis (which predominantly affects the wealthy and |
| trust in the whole system started to fail. | | | | middle classes), the effects of the global food crisis |
| The extent of the problems has been so severe that | | | | (which predominantly affects the poorer and working |
| some of the world's largest financial institutions have | | | | classes) seems to have fallen off the radar. The two |
| collapsed. Others have been bought out by their | | | | are in fact inter-related issues; both have their causes |
| competition at low prices and in other cases, the | | | | rooted in the fundamental problems associated with a |
| governments of the wealthiest nations in the world | | | | neoliberal, one-size-fits-all, economic agenda imposed |
| have resorted to extensive bail-out and rescue | | | | on virtually the entire world. |
| packages for the remaining large banks and financial | | | | Borrowing at a time of recession seems risky, but |
| institutions. | | | | the idea is that this should be complimented with |
| Some of the bail-outs have also been accompanied | | | | paying back during times of growth. Likewise, |
| with charges of hypocrisy due to the appearance of | | | | reducing interest rates sounds like there would be |
| socializing the costs while privatizing the profits. In the | | | | less incentive for people to save money, when banks |
| meanwhile, smaller businesses and poorer people | | | | need to build up their capital reserves. However, as |
| rarely have such options for bail out and rescue when | | | | the real economy starts to feel the pinch, reduced |
| they find themselves in crisis. | | | | interest rate is an attempt to encourage people to |
| To some extent risky borrowers bear some | | | | take part in the economy. |
| responsibility, but overall they have lost out; lenders | | | | Well-designed regulations may protect us in the short |
| are being bailed out, while those taking out risky | | | | run and encourage real innovation in the long. Much of |
| loans either have lost their homes, or face a real | | | | our financial market's creativity was directed to |
| threat of losing their home in the near future. | | | | circumventing regulations and taxes. Accounting was |
| There is the argument that when the larger banks | | | | so creative that no one, not even the banks, knew |
| show signs of crisis, it is not just the wealthy that will | | | | their financial position. Meanwhile, the financial system |
| suffer, but also potentially everyone. With an | | | | resisted many of the innovations that would have |
| increasingly inter-connected world, things like a credit | | | | increased the efficiency of our economy. By reducing |
| crunch can ripple through the entire economy. | | | | the scope for these socially unproductive innovations, |
| Many have blamed the greed of Wall Street for | | | | we can divert creative activity in more productive |
| causing the problem in the first place because it is in | | | | directions. |
| the US that the most influential banks, institutions and | | | | The most powerful international institutions tend to |
| ideologues that pushed for the policies that caused | | | | have the worst democratic credentials: the power |
| the problems are found. | | | | distribution among countries is more unequal, and the |
| America is still immensely attractive to skilled | | | | transparency, and hence democratic control, is worse. |
| immigrants and is still capable of producing a Microsoft | | | | Although history often shows that those with |
| or a Google. Even its debt can be overcome. It has | | | | agendas of power tend to win out, history also |
| enormous resilience economically at a local and | | | | shows us that power shifts. A financial crisis of this |
| entrepreneurial level. | | | | proportion may signify the beginnings of such a shift. |
| For the developing world, the rise in food prices as | | | | During periods of boom, people do not want to hear |
| well as the knock-on effects from the financial | | | | of criticisms of the forms of economics they benefit |
| instability and uncertainty in industrialized nations is | | | | from, especially when it brings immense wealth and |
| having a compounding effect. High fuel costs, soaring | | | | power, regardless of whether it is good for |
| commodity prices together with fears of global | | | | everyone or not. |