13 December 2008


One outcome of the last few weeks has been that politicians around the world have been taking the opportunity to feel smug about the ongoing crisis.

The Europeans have been apparently enjoying the sight of the US struggling with its imploding finance industry, despite the effect that the seizing up of US credit markets is likely to have on their own economies.

Some people in Asia seem to imagine that they have decoupled from the US economy, when there is no evidence whatsoever that they are capable of adjusting to the reduction of such an important export market.

The Chinese have been lecturing the Americans on the importance of fiscal prudence when they have been instrumental themselves in feeding that imprudence with their enormous purchases of US debt.

Gordon Brown in the UK has been enjoying the sight of the other European nations and the US apparently scrambling to catch up with his own plans to re-float the good ship Brittania, despite the manifold vulnerabilities that the UK economy faces.

And now the German finance minister, Peer Steinbrück, has launched an outspoken attack on those plans even as grave dangers assail the Eurozone.

As each country attempts to isolate itself from the financial crisis with smug feelings of schadenfreude, the risk of contagion grows.

d. sofer