|Kenneth Rogoff||There’s conjecture about the dominance of the American
economy, but the superpower’s economy is living on borrowed time and
borrowed money and 2006 could well see the start of its decline, says
Kenneth Rogoff. Year after year, we’ve seen the “gargantuan” US trade
deficit continue to blow out, with US consumers “bingeing as if it were
Christmas all year round.” For those who believe in the transcendent
dominance of the US economy, the States has a more flexible labour
market, forces good corporate leaders to the top and draws in the
world’s best scientists, researchers and students. On the other hand,
says Rogoff, sceptics say the US already contains the “seeds of its own
socio-economic decline” – namely worsening income equality, wage growth
and poverty highlighted by Hurricane Katrina. And both sides point to
the massive US trade deficit to prove their point – with the “true
believers” claiming it represents the world wanting to buy into the US,
and sceptics saying it’s a sign the US is running on borrowed time.
Which is it? asks Rogoff. Well, the dominant age of “American
exceptionalism” is almost over, and the per capita incomes of Europe
and Japan will soon catch up with the US. Other countries will copy the
US’s social and economic frameworks, and the huge trade deficit is just
propping up an already inflated economy. “At some point, the party is
going to end” and it could even start this year, says Rogoff.
Crikey says: An even-handed look at the
future of the almighty US economy which, according to Rogoff, might not be so
mighty for much longer.
| Much comment in recent days has assumed
that real progress was possible in what is called the Middle East peace
process if Sharon had survived
in power. But this view seems to be ill-founded, says Max Hastings.
Sharon surely had
no intention of allowing any dispensation on the West Bank that might
Palestinians to create an economically and socially viable state. He
peace – but he also wanted to secure Israel’s
borders. All over the world, nations jostle for each other’s land, and
fare better in assessing the Israel-Palestine conflict if we viewed it
context of other such disputes. Consider India and
Pakistan, Russia and Ukraine, China and Taiwan – even, within
Britain, Northern Ireland. Yet most nations with territorial demands
are reaching out to
minorities of their own peoples from which they have become separated.
by contrast, is seeking to colonise land inhabited either by
no-one at all. Resolutions are seldom achieved by rational bilateral
negotiation, and are almost always imposed either by a dominant third
some decisive catastrophe. But it seems the Israelis will remain
insufficiently despairing to make indispensable territorial
Americans won’t oblige them to do so; and the Palestinians will remain
to muster a credible negotiating position. And Sharon’s departure
will not alter these fundamentals.
Crikey says: Hastings continues the process that’s begun in
some parts of the media of chipping away at Sharon’s golden reputation.
More importantly, he changes the lens through which we view the
Israel/Palestine conflict, presenting a pragmatic approach that clears
away the usual rhetoric.
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