http://blogs.cfr.org/forum/2008/10/08/its-not-1929/ Expert Conversations on World Events Thu, 04 Dec 2008 15:38:13 -0500 http://wordpress.org/?v=2.8.4 hourly 1 http://blogs.cfr.org/forum/2008/10/08/its-not-1929/#comment-260 jnye Thu, 09 Oct 2008 02:28:15 +0000 http://blogs.cfr.org/forum/2008/10/08/its-not-1929/#comment-260 I agree with Mike Mandelbaum. I doubt we will slip into a repeat of the 1930s. At the domestic level, we have institutions and lessons which exert a counter rather than pro-cyclical effect. After all, Herbert Hoover's policies made things worse, and there were no programs like social security to provide a safety net under the electorate. But what worries me is that the world economy is much more globalized than in the 1930s, yet we have not developed the instituitions at the global level to keep pace. What is most striking about the past few weeks is the irrelevance of the Bretton Woods institutions. This is a change since the Asian Crisis of 1998.In part, this is because the IMF has less less leverage over rich nations like the US, but it also reflects the failure to adapt or to develop new insitutions. Even the EU has had trouble avoiding beggar thy neighbor reactions (witness Ireland). Crisis provides opportunities for leadership, and for all the complaints about the US, it is hard to see it originating anywhere else. Unfortunately, we are stuck in lame duck days (or daze). Would it be too much to hope that the next administration would take some international institutional initiatives? If so, maybe the finanacial experts can tell us what they should look like. I agree with Mike Mandelbaum. I doubt we will slip into a repeat of the 1930s. At the domestic level, we have institutions and lessons which exert a counter rather than pro-cyclical effect. After all, Herbert Hoover’s policies made things worse, and there were no programs like social security to provide a safety net under the electorate. But what worries me is that the world economy is much more globalized than in the 1930s, yet we have not developed the instituitions at the global level to keep pace. What is most striking about the past few weeks is the irrelevance of the Bretton Woods institutions. This is a change since the Asian Crisis of 1998.In part, this is because the IMF has less less leverage over rich nations like the US, but it also reflects the failure to adapt or to develop new insitutions. Even the EU has had trouble avoiding beggar thy neighbor reactions (witness Ireland). Crisis provides opportunities for leadership, and for all the complaints about the US, it is hard to see it originating anywhere else. Unfortunately, we are stuck in lame duck days (or daze). Would it be too much to hope that the next administration would take some international institutional initiatives? If so, maybe the finanacial experts can tell us what they should look like.

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