In The News

Outrage Over Offshoring Goes Off-Target

Ann All October 17, 2008
Offshoring work overseas by US companies is a handy populist issue during a US presidential campaigns. The issue distinguishes the two candidates: Republican John McCain staunchly supports free trade and low taxes; Democrat Barack Obama supports free-trade agreements, but urges tax incentives for companies that keep jobs inside the US. Many US workers bitterly blame the loss of high-skilled...

China Sneezes, Latin America Catches a Cold

Jeremy Martin October 17, 2008
Latin America has diversified in industry, investment and trade, shifting to rely less on the US and more on China. A slowdown in China, combined with financial crisis in the US, could seriously impact commodity prices for Latin America, reducing government spending and investment in infrastructure, explain Jeremy Martin and Roger Tissot of the Institute of the Americas, writing for Latin...

Asia's Fear of a Weak America

Philip Bowring October 17, 2008
East Asia has been the site of many "economic miracles" of the past half-century. Starting with Japan's post-World War II boom, continuing through the "Asian Tigers" and China, successes led to speculation that this is to be the "Pacific Century," as noted by columnist Philip Bowring in the International Herald Tribune. Yet those successes relied on the US...

The Death of the Washington Consensus?

Kevin Gallagher October 15, 2008
US officials over the past two decades insisted that free trade without limits tend to provide more benefits than costs for American and other consumers. Princeton economist Paul Krugman won the Nobel prize for economics, not for his columns for the New York Times, but for his study of international trade and his stance against trade without limits. Krugman has long insisted that government...

Chronicle of a Disaster Foretold

Ernesto Zedillo October 15, 2008
Low interest rates and plenty of credit in recent years created a housing bubble with the attendant risk. Investment banks divided the loans into complex financial packages, many labeled as safe and even insured. But the investments were safe only as long as housing prices continued to climb. “Once again the markets forget that financial innovations are likely to be underpriced and therefore...

Drawing the Wrong Lessons

Shashi Tharoor October 14, 2008
Some leaders from poor nations gloat about the global credit crisis and point fingers of blame at liberal, open-market policies. “In India, the debate between capitalist globalization and self-reliance required a huge paradigm shift,” writes Shashi Tharoor for the International Herald Tribune, noting that while the West associates capitalism with freedom, nations like India associate it with...

Icelandic Shoppers Splurge as Currency Woes Reduce Food Imports

Chad Thomas October 14, 2008
Three major Icelandic banks have collapsed, raising uncertainty about Iceland’s currency and ability to repay loans. Inventories of goods, including food and clothing, are shrinking. The island nation must import most food and other products, while the “government has asked banks to prioritize foreign currency transactions for essentials such as food, drugs and oil,” explains Chad Thomas,...