Friday, February 20, 2009

The Economic Ties That Bind

While the US Congress was talking about "stimulus for mice", "not accepting stimlus" and what was or wasn't going to help their constituents many were completing forgetting the big picture.

We live in a global economy

excerpt from:

Steven Pearlstein - Asia, Europe Find Their Supply Chains Yanked.
Beware the Backlash. -

"For the past two years, Asians and Europeans have tended to view their own financial and economic problems as largely imported from the United States. The impacts on their own economies, they reasoned smugly, would be modest and short-lived.

Turns out they were wrong.

Over the past two weeks, the bottom has fallen out of Asia's export economy while Europe has come face to face with a financial crisis that is as bad as ours and will probably become even worse without the kind of unified response that individual countries have so far resisted.

And what does that mean for us? Nothing good. It means that our downturn will be longer and deeper than many had hoped and that we can't rely as much on export growth to pull us out of the ditch."

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