The Fleecing of America by Roger Cohen
Today's IHT has the above editorial that questions the silence of foreign economies amidst the collapse of large financial institutions in the last two weeks. I have highlighted some noteworthy paragraphs below but as much as the author thinks the new powers should help,what he did not bring up is the point that these same economies have propped up the American economy long enough (DECADES!!) not only with private investments but also investments in the US Treasury.
Okay here's the Hollywood version for you power lunchers at the Ivy:
You are Marky Mark pre-Entourage or Ed Burns pre-The Wire. You put in all your ideas and pitches and invest heavily on production for say, Universal or Paramount. But meanwhile, you do Entourage and the Wire for TV on the side with some people from school or the neighborhood.
Paramount or Universal meanwhile, has not released a single hit but Brad Grey keeps putting out 'blockbusters' (where the only thing that goes bust is the studio) with lots of publicity and expenses but very little income.
But Paramount being Paramount, you keep an office on the lot for the prestige and the hope that one day you will benefit from this alliance.
BUT THEN Entourage and the Wire become big hits on TV without Paramount's help.
Meanwhile, Brad Grey and Paramount are having tough times and have difficulty funding new films.
You---aka Ed Burns and Marky Mark--- have done really well with your TV shows.
Will you help finance a movie with Paramount knowing you have all these hits on TV?
Now we know why Steven Spielberg and Sylvester Stallone are looking to India.
'Cuz in India, even after Rambo 17 dies STILL in 'Nam, he can be reincarnated. It's part of their religion!
(Now for the real story...)
.......Yes, folks, the cash is elsewhere. Asians have been saving rather than spending. Their consumers are in better shape. Their banks are in better shape. The China Investment Corp. (CIC), a sovereign wealth fund, is sitting on $200 billion (and a 9.9 percent stake in Morgan Stanley) while China's central bank is managing another $1.8 trillion in reserves.
And what have we heard from the new centers of wealth and power - China, India, Brazil, Russia, the Gulf states - about America's financial agony over the past week? Zilch. Well, not quite. When asked about the crisis, Luiz Inácio Lula da Silva, the Brazilian president, said: "What crisis? Go ask Bush."......
.......The world has changed in the past decade. There's been a steady transfer of wealth away from the United States in a shift most Americans have not yet grasped. But there has been no accompanying transfer of responsibility. New powers are free-riding as if it were still the American century.......
But toxic mortgage-backed securities were pedaled by plenty of foreign banks. And the decision to pour $85 billion of U.S. taxpayers' money into the rescue of American International Group (AIG), the insurance giant, followed appeals from foreign finance ministers to Henry Paulson, the Treasury secretary, to save a global company. Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, told me: "Paulson said he was getting calls from finance ministers all around the world saying, you have to save AIG. Well, they should have been asked to contribute to the pot."