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China, Japan, Germany and the petrodollar states must expand consumer demand and consumption

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2009-01-06 09:21

Frank K
Colorado Springs, CO

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In her Nation article, Redoing Globalization, Sherle R. Schwenninger points out that "the economic crisis is the result not just of unscrupulous mortgage lenders and unregulated investment bankers on Wall Street but of the globalization of finance and trade that key members of his economic team set in motion when they were in the Clinton administration. The uncomfortable truth is that the current system of global commerce and transnational finance is inherently prone to crisis and is incompatible with Obama's goal of rebuilding the American middle class. Any sustainable recovery on the domestic front, therefore, will depend on his success in getting other countries to agree to fundamental changes in that global system."

"The main focus of the new administration's international economic statecraft must be on the large current-account surplus economies--China, Japan, Germany and the petrodollar states, which are running surpluses of 9.5 percent, 4 percent, 7.3 percent and more than 10 percent, respectively. These economies must lead in spurring world growth not only because, with the United States, they bear responsibility for the crisis but also because they are in the best position to lead, given their large surpluses and foreign currency."

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