Blame America, Economic Meltdown Started Overseas

• April 10, 2009

Hm, maybe if I would have cared I would have noticed.

One problem with this blame-game is that last year’s recession was much deeper in many European and Asian countries than it was in the United States.
By the fourth quarter of 2008, as the nearby table shows, real US gross domestic product was just 0.8 percent smaller than it had been a year earlier. The contraction was twice as deep in Germany and Britain and much worse in Japan and Sweden.
In February, US industrial production was 11.8 percent lower than a year before — while Singapore was down by 22.4 percent, Sweden by 22.9 percent and Japan by 38.4 percent.
What was the mechanism by which US problems were supposedly spread to other countries? It wasn’t international trade. The dollar value of US imports didn’t start to fall until August 2008, and imports of consumer goods didn’t fall until September — many months after Japan and Europe fell into recession.
Indeed, most of the economies that fell first and fastest were not heavily dependent on exports to the United States.

I have to be honest that I don’t follow economic matters in other countries very much. By that I mean I don’t follow them at all.
But this does make a lot of sense. One thing that’s bothered me all along is that if the problem stemmed from our financial system, then why did the US dollar climb in value against most major currencies last fall when all of this happened?
This wouldn’t excuse the weaknesses that were put into the US economy by the government meddling in the home loan market to fulfill some’s wishes for a society that we don’t have. That’s causing the US public a lot of problems now that the inevitable bubble burst.

Tags: Economy, International Scene

http://Array robert108

Another foolish statement from little sparkiestem. A difference without a distinction.
http://www.thedailyslant.com/ Hairy Polemic

The article is economically dishonest in that it equivocates between the “global recession” and the “banking crisis.”

It’s true that the US cannot be blamed for the global recession in the last quarter of 2008 — it was just a natural downward cycle in global economy. But US banking and debt (thanks, in part, to government fiddling and, in part, to media sensationalism) can be blamed for turning a natural global recession into a financial collapse.

Of course the US is not solely responsible. The UK was running similar levels of debt and over-leveraging prior to the recession.
http://SayAnythingBlog.com The_Whistler_ofnd

Let’s not ignore the long term consequences of Dem restrictions on domestic energy development, stretching back to Carter.

You mean what the Obama administration is doing now? I wonder who he’s listening to.
http://SayAnythingBlog.com The_Whistler_ofnd

Sparkless said:

no wonder you fellas can’t understand shit

We know why Sparkless can’t understand anything. His brain cells are stuck together like his nostrils.

But the reason that we were not able to quickly recover from the problems the way we did after the 2001 downturn was because our economy was over-leveraged with debt. In other words, our economy was employing people to produce a Gross Domestic Product that did not, in fact, reflect reality. So the whole thing just collapsed.

I don’t disagree with that.

However it seems to me that we should be very concerned about public policy that leads towards creating bubbles. That would mean we needed to change the Fannie and Freddie created bubble. (However the Obama administration looks to be patching the balloon to inflate it again.)

When it comes to consumer debt, it’s not really the government’s duty to tell us what we individuals can and cannot do.
robert108

Lots of words from little sparkiestem, but no meaning. Typical.

HP: Let’s not ignore the long term consequences of Dem restrictions on domestic energy development, stretching back to Carter. It has cost us trillions in lost revenue, funded terrorism, crippled our economy with high taxes, restrictive regulations and high energy prices, and has cost millions of jobs. It has been eroding the foundations of our prosperity for three decades.
Claude

Don’t feel bad about not following the global economy. Guess who else knows diddly-squat about it? All the non-producers running our government.
welder4

High gas prices caused most of the problems across the globe , when people are spending all their extra money (if there is such a thing) they can not buy hard ware or other high dollar items it becomes a situation of surviving instead of buying wide screen tv’s or auto’s it is common sense . one thing can be done right now and it would help more then anything being done is to build ten refineries and allow drilling here and all over the US.When I see that gasoline and energy cost have stabilized for the long term I will start buying again , but it is in slide mode at the present .
pparets

arbuckle said…

Just because you lack any understanding whatsoever of how to analyze causal situations doesn’t mean it can’t be done.

Inane babble which – when interpreted – means, “So I can say whatever I want and you can’t refute it, because you’re not conversant with the

structural cause for a phenomenon that has a specific origin point.

hence the phrase, ‘egghead’.
SigFan

Anyone could see a global slowdown coming in the latter half of ’08. As with all economic cycles, they come and go. We were on the tail-end of a long boom cycle, it was inevitable that the bust would come sooner or later.

I was in a conversation with some folks the other day. One of them was espousing the thought that while there was a real downturn in the US (and global) economy coming, the liberals and their lap-dogs, the media, kept blowing it up out of proportion. The reason was they (the Democrats) needed something they could hang on the Republicans that would actually resonate with the voters. Unfortunately, the theory continued, it got out of control to reach the point we are at currently, and the Democrats are now stuck with the unintended consequences they created. Interesting theory and I can buy into the hype on the left part. I wonder though if this is true, that the “crisis” was manufactured for political gain, how much of the consequential damage was intended rather than unintended?

A little conspiracy-theoryish, but I never will underestimate the lengths that politicians of any stripe will go to to remain in power.
robert108

Little sparkestem continues to drool uncontrollably, trying to make a distinction between “cause” and “origin”, which are functionally the same thing.
http://SayAnythingBlog.com The_Whistler_ofnd

But US banking and debt (thanks, in part, to government fiddling and, in part, to media sensationalism) can be blamed for turning a natural global recession into a financial collapse.

It seems to me though that the global recession probably led to a lot of the problems in the financial markets which led to the meltdown last fall.

Now we did create the subslime mortgage problems BUT the other derivatives are based on the global financial markets and are beyond the regulation of the US. (Or so it seems to me.)
http://www.thedailyslant.com/ Hairy Polemic

Whistler,

It seems to me though that the global recession probably led to a lot of the problems in the financial markets which led to the meltdown last fall.

That’s correct. But the reason that we were not able to quickly recover from the problems the way we did after the 2001 downturn was because our economy was over-leveraged with debt. In other words, our economy was employing people to produce a Gross Domestic Product that did not, in fact, reflect reality. So the whole thing just collapsed.

The whole subprime mess was just one of many factors leading to the crisis. I think the biggest problem was that our very high rate of consumer and national debt prevented us from being able to absorb those other facts like we were able to in the past.

So even if current spending manages to pull us out of our current mess, it will pretty much insure a crisis at least twice as bad the next time we go into a downward cycle because our overall debt will be that much greater.
Brent

One thing that’s bothered me all along is that if the problem stemmed from our financial system, then why did the US dollar climb in value against most major currencies last fall when all of this happened?

This is not simple. The dollar, at least in the short-term, is still seen as a refuge.
http://sayanythingblog.com/readers/author/sparkiearbuckle sayanything-81

pp and r108 – a law of nature can cause one result and not another, despite not having an origin, per se (e.g. laws of nature are eternal, right?).
http://sayanythingblog.com/readers/author/sparkiearbuckle sayanything-81

not only that, it equivocates between ‘origin’ and ’cause’. something that originates here or there may be caused by any number of things.
http://sayanythingblog.com/readers/author/sparkiearbuckle sayanything-81

Hint: AIG insured European banks to break their own regulations. A majority of the problems those banks ended up having had to do with business they did in the US.

I know you guys don’t like and can’t comprehend extended narratives so I won’t bother, but your inability to take responsibility for the political and economic decisions of your GOP leaders is absolutely pathetic.

What was the mechanism by which US problems were supposedly spread to other countries?

Oh my god. Its not apparent after listing a few stats. Must be nothing there.

But this does make a lot of sense.

What does? Where’s the claim other than, ‘its their fault’. Do explain.
http://sayanythingblog.com/readers/author/sparkiearbuckle sayanything-81

no wonder you fellas can’t understand shit about economics anymore. the premise that you can partition up things by country, in this sort of global economic situation, and ascribe specific blame based on where the currency fell first, or whatever… is so fucking stupid I don’t know where to begin. Iceland is stupid, that I will grant, but they are neither the cause nor origin of the problem.

Consider Soros’s speculation. It could be the cause of a given currencies collapse, despite the collapse occuring within the nation-state’s economy. If we are tracing ‘origins’ of all this, perhaps we should go back to the Bretton Woods agreement, or further? ALso, we can distinguish between direct and mediated caused phenomena.
http://sayanythingblog.com/readers/author/sparkiearbuckle sayanything-81

A difference without a distinction.

Wrong. You can have a structural cause for a phenomenon that has a specific origin point.

Just because you lack any understanding whatsoever of how to analyze causal situations doesn’t mean it can’t be done.

You are confusing your stupidity with reality, again.

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