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Dec 22, 2008

Going global may be the only way out of this mess.

By Alan Stoga

Watch FLYP’s video editorial, which this year examines that past year and all that has happened that will shape the future.

 

Few will miss 2008.

It was a year of financial collapse and profound economic distress. Economists who had hesitated all year to use the “R” word suddenly discovered the “D” word—as in “deflation.” The last time the overall price level actually fell was in the 1930s, but it could be happening again.

With the virtuous cycle of globalization having turned vicious, America’s economic problems have spread around the world. Even China, for years seemingly immune to economic cycles, is now scrambling to sustain its development. The global financial system is left without any growth engine for the first time in recent memory.

Despite the stalled global economy, evidence of climate change continues to intensify. Arctic ice melt set a record, more of the Antarctic ice sheet seems at risk and methane release from the melting permafrost is increasing.

While scientists increasingly worry about the risk of irreversible ecological tipping points, many Americans refuse to connect the dots. Opinion polls show continued skepticism about the urgency of action to slow global warming.

American public opinion has also lost track of the wars in Iraq and Afghanistan, the danger of a collapsing Pakistan and the continuing risks of violent terrorism. And George Bush’s freedom agenda got its final comeuppance when Russia reminded Georgia and its neighbors who’s the boss in Central Asia.

So much for the era of unchallenged American power.

But economics trumps everything in a consumption-driven society. During this election year, we voted for the candidate who we thought had the best chance of saving our pocketbooks—Barack Obama.

Now, as Obama prepares to take office, the president-elect seems to be channeling Franklin Delano Roosevelt’s New Deal of massive spending, tax cuts, re-regulation and government intervention.

However, Obama’s challenge is much bigger than Roosevelt’s. FDR only had to resuscitate an economy that was largely insulated from the rest of the world, which meant national solutions worked. Obama has to re-energize an economy that is fundamentally global, which means that international solutions are critical.

Yet, global governance as it is now practiced is a joke. The global security and economic infrastructure is badly outdated, with the United Nations and monetary and trade negotiations all stalled. Eight years of Bush’s hyper-unilateralism only hastened the collapse of any real capacity to make and execute policy decisions on the basis of what is good for the planet.

That means Obama’s biggest challenge will be to persuade Americans that we are at the end of an era during which the U.S. could behave as though we existed in splendid isolation from the rest of the world. He has to convince the country that the problems that have derailed our economy, polluted our environment and undermined our security can only be solved through diplomatic give and take.

If he succeeds, we have a good chance to get out of this mess. If he fails, 2008 might seem like the good old days.
 


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