Some economic and financial experts, in fact, point out that pressuring China to appreciate the Yuan will prompt tit-for-tat retaliation, leading to trade protectionism similar to the events that caused the Great Depression of the 1930s and 40s. As the Straits Times (2010) reports, China “may retaliate if the United States imposes trade sanctions and other penalties over its exchange rate policy. ” The Depression started in 1929, after the American stock market crashed; and it lasted until the early 40s, at the close of World War II.
It “was so wide, so deep and so long because the international economic system was rendered unstable by British inability and United States unwillingness to assume responsibility for stabilizing it” (Kindleberger, 1973, pp. 291). Contrary to what many people think, “The shocks to the system from… the stock-market crash of 1929 were not so great” (Kindleberger). Protectionism was what made the Depression great. As Kindleberger asserts: “When every country turned to protect its national private interest, the world public interest went down the drain, and with it the private interests of all.
” Instead, in order for the global financial crisis to end, the American EHM has to retire. The US deficit is caused by overspending. The US funds its luxurious lifestyle by “drug” pushing and extortion, but much of the collected and laundered money simply goes to waste. It spends billions of dollars in arms and military bases around the world. It has unnecessary and wasteful policies like “Don’t Ask Don’t Tell. ” It spends on space stations, space probes, space shuttles and other NASA projects that the world can do without.
The US needs to cut all unnecessary spending and concentrate its resources on essentials. In the end, the global financial crisis was initiated by America, and it needs to start being honest with the world to heal it. The US has already lost much of its credibility in the world stage, and its imperialist policies and strategies are now well-known throughout the globe. Instead of pointing a finger at others, it needs to start the process of self reflection, cultivation and renewal. While the world may be suffering from a crisis, it is also a great opportunity for positive change.
President Obama can be a vessel that can deliver this change, but without the support of Congress or the American people, he is basically helpless. Meanwhile, the rest of globe will move on. It will not wait for America to be reborn since it may refuse to do so. They will simply move forward, learning from their bitter experiences, and hoping for the best. Hopefully, America will also learn from its mistakes and international peace and prosperity can be achieved. It may be wishful thinking, but sometimes, dreams do come true. References Agence France-Presse. (2010 Mar 21). “China warns against US sanctions.
” The Straits Times. Agence France-Presse. (2007 Jun 13). “Nuclear power plant loan finally paid. ” Inquirer. Berrett-Koehler Publishers. (2005 May 7). “Confessions of an Economic Hit Man. ” Financial Sense Newshour. Kindleberger, C. (1973). The World in Depression, 1929-39. Berkeley: University of California Press. Perkins, J. (2004). Confessions of an Economic Hit Man. San Francisco: Berrett-Koehler Publishers. Pinyo. (2008 Sep 22). “What Caused The Economic Crisis Of 2008? ” Moolanomy Personal Finance. Stumme, Susan. (2010 Mar 16). China dismisses US lawmakers on currency. Yahoo News.