A nice rendition of why it's okay to be gloomy right now on globalization

OP-ED: The Great Illusion, By PAUL KRUGMAN, New York Times, August 14, 2008

We modeled the behavior, and now it's being imitated. We'll over-react and then it's off to the races. I used to believe the damage of the first Bush administration could be "reset" by the better behavior of the second Bush administration, meaning we'd reset the clock back to roughly 9/11 geopolitically. But the damage now seems worse than that. We're reverting all the way back to the late 1980s.

And if you want to scenario-ize globalization's destruction, this is a realistic pathway.

The only way it really goes downhill is if America is suckered by circumstances into believing it must basically take on the entire world. This is Bin Laden's supreme dream, affording him more strategic wiggle room than he ever dared to hope would be his.

(Thanks: motoole)

Comments

[Jeff J]

The key point that Tom made regarding Iran was "are they acting rationally?" He then went on to prove that, for the most part, they are. The same test applies here when considering the rationality of China and Russia in particular because of the level of sophistication between their large economic capabilities and relatively smaller political sophistication. China seems to act on economic need and attempts to keep a lid on nationalism whereas Russia uses the economics to bolster nationalism. Hopefully after China's coming out party with the Olympics, the scare in Georgia and some further trust building by the US, they can help along with others to prevent any backsliding in regards to globalization.

[Eric Chen]

It's a matter of setting our priorities.

Does it still have to conform to our idealistic Cold War promise of a democratic liberal world order? Or is it better as a regionally stabilized economic global world order, where democratic liberal features are desirable but ultimately optional?

His words inspired generations after his death, but is John F Kennedy's idealism finally obsolete?

[Louis Heberlein]

Add Barbara Tuchman's "The Proud Tower" to Krugman's history & old book references.

[dan Hare]

Perhaps this will quicken the balance of the G20+ nations who desire reliable rule set driven supply chains for energy and natural resources as well as for labor. I see Russia shooting itself in the foot here.

Also the push for a more effective international order that reflects todays reality points to a G20+ who have common interest in keeping supply chains open. Does the UN and Nato fuse into a larger body with a new agenda for a new age? All food for thought.

[JFRiley]

Tom,

certainly a little more pessimistic and depressing than we're used to. Hopefully a greenbay win Sunday will lift your spirits :)

This issue is the central one for me in this election: who has the better chance to continue globalizations trends? I asked this before but i'll repost. It seems that both candidtaes have traits that could help or hurt globlization.

McCain may try to bring us back to a cold war mentality, but he seems to also be about keeping the free trade going that is so critical to globalization.

Obama, if his primary speaches are to be believed, wants to help the american worker and stop jobs fron going overseas. I see trade barriers there. That could hurt. But its almost cetrtian he'll reach out and strengthen our alliances which are equally important.

Could you give us your take on where you think the candidates stand on those conflicting viewpoints?

[steve]

Cheney is over in Ukraine/Georgia now. Is he making promises that Bin Laden would approve of?

[Tom Barnett]

JFRiley,

Essentially agree, and in general, I'm an optimistic guy no matter who wins the White House, because I'm more impressed with the macro-trends (economic) of globalization than I am with any native American tendency toward protectionism. In short, I trust American business, more than the government, to keep globalization on track.