You are hereDangerous Deglobalization -- WSJ article summary
Dangerous Deglobalization -- WSJ article summary
WSJ - Article Summary--The Dangers of turing inward:Countries are attempting to protect their own companies and workers from the economic crisis. The fianancial and political damage will be severe, argues Jeffrey E. Garten. This is just a summary. The original author of this article has all the rights on the ideas and content.
If you have been following the news on global trade in recent weeks, there was a surge of news related to trade barriers, economic nationalism, and restrictions on globalization. There have been peaceful and sometimes violent demonstrations from Iceland to Russia, from U.K to Spain and across the globe on local jobs for local people, buy local goods etc. The author argues that this kind of global trade picture was only last seen in 1929-1930 which led to depression in U.S and economic collapse in the rest of the world which eventually led to world war II. Isn't this scary?
The perceived root cause of this global economic crisis is supposed to be the egregious lending practices and housing market speculation in U.S. It is now a well known debate among economic pundits in emerging countries whether U.S style capitalism is one to follow to lead the path of prosperity. Time only decides this, but socialism and communism were never the favorites of free world either.
The GDPs around the world are in severe downturn and the global trade is declining even faster. The economic situation of the respective countries is pushing the local politicians to play the card of protectionism with out any regard to the dangerous after effects of de-globalization. Tariffs, quotas, discouraging global immigration can only lead to more unrest and disturbances as it was proven before.
In America, OBAMA's new gung-ho hope speeches and policies do little to turn the tide. With all the bailout packages, TARP funds being allocated to american enterprises with special restrictions on global players could further deteriorate the situation. It is interesting to note how U.S.A can recover itself from this mess by sticking to trade inside it's borders, for it needs so much of export money to erase it's trade deficit and battle inflation.
Last time around when we had similar globalization crisis, there were no IMF, WTO and such. But as they say, these organization are succumbing to the bureaucracy and their endless summits with no fruitful results. They have to take more active part in curbing this new found disease of economic nationalism around the world. They can do so by publishing the list of countries and their anti globlization policies.
Lastly, we should not forget the fruits of globlization which gave rise to the silicon valley with Indian, Chinese, Isreali brain power. USA needs the best of the world again to raise among the rubble and lead the world.