Thursday, 28 May 2009

What Should Never Be Forgotten About This Financial Crisis

There's one thing that should never be forgotten about this financial crisis, but it is being forgotten and is barely mentioned at all. This crisis has come to Europe because of people who had too much faith in America. Just as our politicians had and continue to have too much faith in the Americans, so, too, did our bankers. They invested too much faith in a country that was unworthy of it.

Like our politicians, they wrongly assumed that America was a civilised nation; that it had a responsible government which would act on the basis of sound information and take steps to restrain excess rather than indulging in it.

What many Europeans don't realise is that America is essentially a banana republic. The same features are there: blind worship of El Presidente, stolen elections, excessive concentration of power in specific families, torture, politicised judiciary, unreasonably large spending on armaments. Face it. If it looks like a duck, walks like a duck, and every time it opens its mouth it says "Quack!" it's probably a duck. America is a banana republic. It has at least as much in common with the other countries of the American continent as it does with Europe, and it's time the people of Europe took note of this fact.

There is an interesting article in the London Review of Books, tracking the implosion of the Royal Bank of Scotland. It reveals clearly how the crisis was imported to Europe by banks that committed too much of their assets to lending in America. The core problem for Europe was not America. The core problem was Europeans who had too much faith in America.

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