http://finance.yahoo.com/news/larry-summers-past-month-may-121922702.html"This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system . True, there have been any number of periods of frustration for the US before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the US to persuade dozens of its traditional allies, starting with Britain, to stay out of it."
One of the rare instances where I've agreed with Summers.
Full column:
http://larrysummers.com/2015/04/05/time-us-leadership-woke-up-to-new-economic-era/
Comments
I was high school age at the time of Bretton Woods so my attention was elsewhere. I wonder if that announcement had a lot of impact at that moment or was realized over time? Larry Summers puts up a good argument in his column. We may not realize the impact of this moment right now but as time goes by, the impact of the decision will grow and become an inflection point in history.
From the article: "With US commitments unhonoured and US-backed policies blocking the kinds of finance other countries want to provide or receive through the existing institutions..."
For example, the simple-minded right-wing effort to dismember the export-import bank, which provides, among other things, financing for foreign airlines to purchase Boeing products. To achieve their vision of governmental purity the opponents of the ex-im bank would happily see the demise of the one major commercial airliner manufacturer left in the United States.
It is, of course. only a matter of time until China becomes the third major manufacturer of commercial aircraft. Does anyone really believe that they won't use any and all strategies possible to advance their national commercial interests?
"We have met the enemy, and he is us."