For those enamoured by free markets and deregulation, the US experience makes for sobering reflection – although some argue that the Military-Industrial-Media Complex is hardly a model of free market economics.
For some time now, market fundamentalists had preached that the government should have as little do as as possible in regulating business. Now, we see Wall Street being brought to its knees and turning to the US government to bail out failed financial institutions, the victims of their own unbridled greed. All this is the result of financial deregulation with little oversight.
This is also what happens when the Occupation of Iraq meets financial deregulation, a wild credit bubble (cheap credit) and a colossal debt:
A shattering moment in America’s fall from power
The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over
Sunday September 28 2008
Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.
You can see it in the way America’s dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America’s standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.
Full article here.