Friday, November 14, 2008

World Enters Recession: Time For Global Action?

world curriencesSo while the U.S. may not have officially entered into a recession, those who don’t realize a recession is among us are in denial. Recessions are always announced well after they actually begin, and you can bet the announcement will come soon enough. The U.S. isn’t alone, though; the Euro Zone and Hong Kong recently announced a recession, along with several other countries. This economic downturn is a global phenomenon and everyone is being affected. The Prime Minister of Britain, Gordon Brown, has even started campaigning for a global response to the economic problems plaguing the world. Even if Brown can convince all the developed countries to act in unison, will it be enough?

Brown is coming to Washington in an attempt to get the U.S. on board with his plan, but many of his ideas--such as creating so-called colleges of supervisors for the world's largest financial institutions, where regulators from the countries in which the firms operate would meet to swap information and coordinate responses in an emergency--have not been received well in the past, according to the Wall Street Journal. Brown is also trying to restart the Doha round of international trade talks that collapsed earlier this year. Maybe governments will change their minds and be more willing to make compromises considering the magnitude of the economic problems, but it is hard to say.

I like what Brown is trying to do, as it seems that the world working together would be able to fix the problem better than everyone working individually, but I doubt his success. Trying to get this many countries on the same page working together for one purpose is going to be extremely difficult. Obviously everyone is going to be looking out for their own best interests, and trying to weed through that to come to an acceptable compromise is going to require a lot of time and a small miracle. I just don’t think Brown is going to be able to pull it off. Even if he is able to do it, though, would it really fix our problems?

I doubt that it will be able to make everything better, however if anything is going to work, I suppose a major global effort would be near the top of the list. In my mind, though, there are too many problems that need to be worked out, especially in the U.S. Sure, we might be able to put a Band-Aid on the problems and stop the bleeding for a while, but the wound isn’t going to heal with just a Band-Aid. We really need to address the problems and take action, action that will require diligence and time. Unfortunately in our “now” society, we want the problems fixed right now, even if those fixes are only temporary.

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