How Did This Happen?

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Isn't it worth, say, ten minutes to try to figure out how this happened? [snip >]

Actually, how do we know the bad thing spread from the US to the rest of the world, and not vice versa? I invite you to look at the data. If you do, you will find that Europe's economic decline started before, and is deeper than, the US's.

Look at the 2nd quarter of 2008, for example. In that quarter, the US economy grew 0.7%. Yet the economies of France, Germany, Italy and Japan all shrank by 0.3% to 0.9%. In fact, the average for the Euro area was an economic shrinkage of 0.2%.

Those European economies that shrank in the 2nd quarter also shrank in the 3rd. By that time, so did the US's economy - but by just 0.1%. The Euro area's average shrinkage was twice that. The economies of Germany, Italy, Japan and the United Kingdom shrank five to six times as fast. [snip]

I don't think this is Bush's fault. I also don't think it's Barney Frank's fault. I think even looking for the blame in some part of the US, whether its housing market, some mysterious lack of regulation or some politician, is a red herring. If this situation is "inherited," I'd say we inherited it from Europe.

Given that no one involved, from the US to Iceland, Latvia or Europe generally, has been a bastion of "laissez-faire" capitalism, I think we can also dismiss blaming capitalism or free-markets for this one.

[Lots of good info., Highly Recommended > ]

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