Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

US Launched Corporate Globalization and First to End It

Tariffs could shrink trade – and global economy
Joe Costello
September 1, 2010

Western Profits Wilt on China's Surging Wages

Big corporations, hungry for profits, hunt for cheap workers elsewhere
Ambrose Evans-Pritchard
August 31, 2010

Joys and Pains of a Global Paradigm Shift

Developing nations race to fill slack in global economy
Michael Casey
August 27, 2010

The Two-Tier Internet: Fighting for Control of the Web's Future

Most don’t understand the fight – and days of easy access for all could be numbered
Frank Dohmen, Martin U. Müller, Hilmar Schmundt
August 27, 2010

Time to Sort Out the Long Overdue Doha Round

A solution to the global economic slowdown is in plain sight
Hugh Corbet
August 26, 2010

Tax on Commodity Profits Could Postpone Scarcity

As an era of plenty concludes, nations seek long-term benefits from mineral holdings
Joergen Oerstroem Moeller
August 10, 2010

The World Economy Needs Balancing, But How?

Countries exporting, while shying away from importing, won't reduce global debt
David Dapice
August 3, 2010