THIS WORLD of OURS
By Bob Harwood
A New World Order
Might the global economic crisis, dire as it is, actually set the stage for ushering in a new world order for the benefit of all? The crisis clearly began in America with an ethos that rewarded short term greed and encouraged high risk behavior in an ever more unregulated environment. Angry citizens are paying the price in lost employment, lost homes, and dimmed hopes.
Private jetting, bailout seeking automotive executives and the Madoff scandal aroused anger. But insurance giant AIG using bailout money to pay obscene bonuses to the very executives responsible for their collapse caused global outrage. Pleas that the bonuses were essential to retain key personnel point to deeper systemic problems.
America’s already shameful income disparity was exacerbated by Bush’s tax cuts for the wealthiest. Enhanced after tax rewards set the stage for what followed. Fundamental reforms must: (1) Establish a far more steeply graduated income tax structure. (2) Restore an adequate regulatory system. (3) Reverse the trend to complex derivatives far removed from their underlying assets making risk appraisal virtually impossible as they are packaged and repackaged for sale. (4) Provide American leadership, not obstruction, on the world stage by engaging the rest of the world in respectful dialogue among equals.
The G20 summit in early April won international acclaim for tangible accomplishments and a respectful collaboration all too rare at previous summits. America backed off on its stimulus spending priority. France and Germany pressed, successfully, for a start on meaningful international regulation of a now irretrievably integrated global system. China was consulted respectfully and joined a consensus. The International Monetary Fund received major new funding to bolster nations in trouble.
Within America a more equitable tax structure coupled with Obama’s initiatives on education and healthcare can start to reduce economic disparity and achieve the more equitable balance other nations already enjoy. Raising the minimum wage is of greater concern than preserving unscathed the privileges of elite unions. Infrastructure projects will stimulate immediate employment while those focused on energy and the environment will advance the Green Economy of the future.
But Obama’s biggest challenge will be to overcome a wide range of deeply ingrained attitudes. The prudent depression generation was succeeded by the conspicuous consumption, reckless credit generation. Citizens in emerging economies now seek to replicate the life style we have flaunted. Short term thinking is entrenched. The private sector focuses on quarterly performance, politicians on election cycles. Parochialism is deeply ingrained. My constituency, my state, must be superseded by my nation and, yes, by my world. Individualism and insularity must be better balanced with community concerns, American concerns with world concerns. First World procrastination on the Doha Round to assist the world’s poorest must end.
Protectionism must be resisted. Globalization encourages efficient specialization. Interdependence enhances security, the very raison d’etre for the formation of the E.U. All nations are now exporters and importers. By 2005 global trade accounted for 30% of global GDP. Hope springs eternal. America could again become a Beacon of Hope, a model of leadership rather than a symbol of obstruction in ushering in a New World Order.