Monday, November 10, 2008

Can Obama Do It?

The historic election of Senator Barack Obama has created high expectations of progressive change in the US and around the world. The president-elect has undoubtedly exhibited powerful vision and capacity for organizing in scoring this unprecedented victory. However, after decades of arrogant abuse of political, military and economic power, the US faces an uphill battle to undo the errors of the past and to build a better future for all. I begin this essay with a look at the economic challenges facing us. The good news is that with determination and some good advice, the present crisis can be addressed from a long run perspective of creating a prosperous, sustainable green economy. This transformation can begin with a green public investment program.

It is important to cut out the jargon and describe the current economic situation in plain English. The United States is flirting with a depression, one that may last for years unless the government takes decisive action to overcome the current problems. With effective public policy, conditions could be mitigated to curb the trend towards a massive financial meltdown and economic disaster comparable to the Great Depression. Unless rapid and thoughtful steps are implemented, the looming economic collapse of our time could rival the devastation of the 1930’s.

The unemployment rate has already risen to 6.5 per cent and will keep rising. Many of the major nonfinancial corporations have announced substantial layoffs. The potential consequences, especially for the less affluent and the young, would be severe : a long period of stagnation---perhaps stagflation--with many years of little or no growth and stubbornly high unemployment, punctuated occasionally with a renewed recession.

Depression means that the economy cannot get out of the doldrums through private sector actions alone. Therefore , without public intervention the economy will be unable to begin the much needed process of expansion. Japan, the second-largest economy in the world in the 1980s and 90s, was in this condition for roughly twelve years, following the bursting of its own financial bubble. If the United States falls into a similar long term crisis it will affect not just the domestic economy but the global economy as well. This is at least partly due to the fact that the U.S. market for imports coupled with her huge trade deficits sustains the world economy in this age of globalization. This also exposes the folly of development strategies of countries like China that have neglected the development of a domestic market and focused narrowly on an export-led growth strategy only.



No one can profess with certainty the inevitability of a global economic collapse; but the consequences of denial and hesitation could prove grave. Even if chances are small that the worst will happen---and in this case chances for a bad outcome have been increasing--- it seems reckless to gamble. Taking strong measures now would save both the US and the world economy from a possible meltdown. The summit of 20 nations on Nov. 15 is a step in the right direction; but the US government needs to act on its own as well.

A depression can be read as a "market signal" of a dysfunctional economy that requires fundamental restructuring. Japan learned this the hard way. In the present case, the signal may be indicating the need for deep changes in the economic systems of the US and the world. At this fateful juncture, it is perhaps finally necessary to ask what might be flawed at a deep structural level and how these defects might be addressed before the situation becomes much worse.

It is now widely acknowledged that the Paulson plans from the treasury are not working very well in creating a real economic recovery. For many months, Paulson dismissed the growing anxieties expressed in financial circles and the real sectors of the economy. Moreover, he paid very little attention to the real sectors . Now that we are facing negative growth and a high likelihood of deflation, jumpstarting the real sectors of the economy has become the key issue. The good news, so to speak, is that the Federal Reserve is trying to follow the right course of action. Fed Chairman Ben Bernanke and his colleagues now acknowledge that the gravest danger now is a possible general deflation of prices and contraction of output, and they promise to combat this possibility. But in times of deflation, monetary policy is like pushing on a string; nothing substantial can happen until confidence is restored in the business sector.

But at least the Fed is doing something. To complement this and offer further stimulus, Washington's elected politicians must make the major fiscal effort that is required. A democratic public debate on this subject is imperative. Without a comprehensive and in-depth public airing of the policy issues, there is no way to develop the political foundation for undertaking large and controversial measures. If Washington responds tentatively with cautious half-measures, as Japan's government did for many years, then the results for us may be sadly similar also.



Fortunately, the president-elect and many of the members of the Congress now seem to understand the gravity of the situation. To put it bluntly, there is now a painful retreat from the self-delusion of the 1990s and the first six years of this century .Among other things, excesses such as the hyper-bubble in financial assets and real-estate led many firms to wildly exaggerate their likely future prifitability. The stock-market bubble was what many euphoric investors watched but the problem of wishful overvaluation was much more widespread. In an era of ICT revolution and pervasive herd behavior, business sectors (and their financiers) overinvested hugely on false expectations of future profitability.They generally used borrowed money to do so. In this way, they built too many factories, shopping centers and office buildings creating more productive capacity than even the credit-fueled demand in the US marketplace could possibly absorb. Consumers had also borrowed heavily in the recent past. To be fair, much of the consumption at the lower income groups is necessary; but the luxury consumption and speculative gambles of the rich outweighed by far the total consumption of the lower income groups.

This legacy of accumulated excesses lies across the American economy like a thick miasma. We now have persistent overcapacity in production, still overpriced financial assets and real estate, and unsupportable debt burdens for corporations and households. The predictable result is a deepening reluctance to invest or to consume.

Personal debt now far exceeds disposable income. Manufacturing is operating far below its productive capacity. For producers of most commodities including automobiles, demand is much lower than expected and capacity utilization has fallen to match the lowered expectations of sales and profits.It is then not sosurprizing that there is so little new investment. What firm is going to build new plants and increase capacity when so many existing ones are underutilized? Who would finance these projects even if they existed in the midst of this raging financial crisis? Now that consumers have lost the capacity to borrow and can no longer refinance even their home mortgages with ease, the collapse of aggregate demand has become far worse.

The US economy is unlikely to recover its full vigor until this dead weight is substantially reduced. In the meantime, the competition for market among firms around the world is raging. In the extreme case, this could turn into a beggar-thy-neighbor policy threatening to worsen the looming global depression. One implication of this possible scenario is that the prices of almost all assets in the global marketplace --- from financial investments and real estate to manufactured goods--- and all other commodities can fall precipitously and keep falling. This will be the obverse image of the exaggerated upward price movements during the boom years that many thought would never end. The overvaluations of assets in the United States has provoked global ramifications due to the transmission of the bubbles worldwide via speculative investments-- particularly through the securitization of subprime loans and the subsequent slicing and dicing and marketing of these dubious products.More generally, the development of a largely unregulated derivatives market added more fuel to this destructive conflagration of global finance.

At this time, the US government has the power to intervene on at least three basic policy areas if it wants to improve the economic conditions.First, the Federal Reserve can keep pumping money to reflate the economy and excite what Keynes called the"animal spirits" of business leaders. Rising prices will also ease the debt burdens of borrowers since they can pay back their debts with cheaper dollars. Second, Congress and the White House can simultaneously launch another major stimulus program composed of responsible public spending and quick-acting tax cuts. It will be running up far larger budget deficits than the Bush Administration has engineered; but that may be necessary in the short-run. Designed properly, such a package will create many jobs which people need and will eventually generate sufficient revenue. Finally, the US government in concert with the other countries may have to restructure or liquidate much of the current debt burdens. This, too, has occurred to some extent. But a more systemic effort is necessary at the national and global levels. It may be finally the politically right time to think about a new global financial architecture which many of us have been advocating since the Asian Financial Crisis.


Further negligence and inaction means allowing events to take their own course toward the self-destruction of a complex global economic system. During the tragi-comic episode that went by the name of government policy ,Andrew Mellon advised Herbert Hoover after the 1929 crash:"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate...It will purge the rottenness out of the system."


Such advice today will surely be a counsel of despair. We have learned much since the 1920s although the last 30 years seem to be decades of forgetfulness.As John Maynard Keynes explained in the thirties, in such times of depressed economic activities, only the government can get the money moving again by directly spending or transferring money to those who are sure to spend it.

The Fed can also inject new money into the system. This will result in further spending--- a multiplier effect--- and will stimulate further economic activity. However, it is not clear that the Fed by itself can have large fiscal effects.

Therefore, at present, federal deficits are an essential element of the solution: very large deficits to the tune of 300 to 350 billion dollars if you intend to jump-start a $14.4 trillion economy. True, borrow-and-spend therapy increases the national debt, and more of it is held by people abroad than before, but the alternative of economic chaos world wide is singularly dreadful.


In terms of this three fold crisis management strategy, the Federal Reserve has already shown an awareness of what may be required of it. It is reasonable to expect that the Fed would be prepared to use unorthodox tools to expand the money supply if short-term interest rates (already very low) can be cut no further. Instead of buying only short-term Treasury notes to inject new money into the economy, the central bank may purchase long-term US or foreign bonds. It may accept corporate debt, private bank loans and mortgage securities as collateral for the Fed's direct lending to banks.Also among the broad powers inherited by the Fed during the Great Depression is the ability to make emergency loans to private businesses or state and local governments in crisis.Thus the Fed can do much; but it is still doubtful that its actions alone can pull the economy out of the deep ditch it has fallen into.

We need more effective fiscal policies with a long-term perspective. While the political climate is ripe, forward-looking progressives should be drawing up astute lists of projects to strengthen the economy in the long run. Among these are: repairing the tattered infrastructure, launching innovative public investments in renewable energy and instituting sustainable green community development that will address both our current and future needs.

The good news is that the money spent on green development projects will create more jobs than other public investments. By using a social accounting matrix for the US, I estimated that more than 22 jobs will be created by spending an extra one million dollars on green public investment projects. By contrast, even progressive, non-military projects at best create approximately 15 new jobs per million dollar expenditure. Of course, military-industrial complex creates even fewer jobs; fewer than 10 for every million dollars of added expenditures.

The third avenue for dealing with the crisis--reducing the unsustainable debt burdens on families and businesses--is a challenge. It can lead to and already has led to favoritism. We have seen that rescuing big business while allowing smaller ones to disappear has been the rule in recent decades. This has been true of the recent financial firm bailouts engineered by the treasury and the Fed. Necessary as such bailouts may be at times from the larger perspective of preventing a big crash, a lively political debate about such matters will undoubtedly result in broader remedies. Such remedies can be both equitable and efficient. For example, the US government could create a "resolution trust corporation" for people--an agency that will supervise debt workouts for households, giving them more time to catch up with mortgage and credit card payments and avoid humiliating and life-destroying bankruptcies. Such a "resolution trust corporation" will have the authority to force compliance and improve the situation for all. This would be an institution with a democratic purpose that will work for promoting the genuine common good.

A progressive economic policy package now means facing up to some long-suppressed truths. Several successive US regimes have championed a corporate-led globalization, which has been good for US multinationals but not for the general public in the US and the world. Therefore, the larger reality is that the crisis of the US economy signals the need for a deep restructuring of globalization as well. The globalized system the United States launched and protected now is faced with the dilemma of too many factories and not enough buyers along with many other problems. A cooperative solution for our common good requires that the leading nations must join to launch worldwide stimulative policies. The fundamental solution, however, involves the kind of moderating reforms and building of global and regional institutions advocated by democratic social justice activists worldwide. Among these are: rules to rebalance the system, the genuine promotion of equitable wages and land reforms, and the institution of financial terms that give developing countries more time and space to seek their own distinctive economic strategies. Needed also are new institutions of global governance that are truly equitable and democratic rather than geared to the narrow short term interests of giant corporations and their supporters within the governments of their respective home countries and venal officials of the host countries. That's a very tall order for statesmanship in a world presently governed by mostly short-sighted politicians.


Clearly, the economic dysfunction in the current system involves many other contentious questions including the overbearing scale and power of certain dominant enterprises. The accumulating evidence also suggests that the mass-consumption economy that has flourished since World War II may need fundamental restructuring as well. Solving this difficult problem does have an additional silver lining: it will also launch us on the path of sustainable development.


The present condition is, of course, related to the gross and augmenting disparity of income and wealth over the past few decades. The average employee in the private sector earned a little over 40,000 dollars in 2006. During the same year the top 25 hedge fund managers earned an average of 570 million dollars with the top three earning over one billion dollars each. Such disparities inevitably lead to underconsumption by the masses and luxury consumption and speculation by the wealthy.

An even more vexing issue is that the long-term investment demand for many commodities may be absent when we have already built too many shopping centers selling cheap imports from China and other low cost production centers. We have also built too many jails, big houses for the rich and golf courses.


Now is the time to start investing in solutions to the problems the country has long neglected. With a properly designed economic strategy, many new economic opportunities can be created. For example, we can invest in the energy technologies and industrial transformations required for the post-hydrocarbons age of ecologically sustainable prosperity and sane living. We can invest in decent healthcare for all. We can build better transportation and production systems to deliver safe, healthy food and other necessities. We can invest in the smaller, more creative firms that run on cooperative stakeholder governance and thus are prepared to do things differently. We can and must invest in people: the human development that must begin with children and continue with good schooling for all at every level of education. These and other investment opportunities are where future jobs and higher social returns will be seen if we have the imagination and the courage to act before it is too late.


Those focused on maintaining vested interests and privileges will naturally resist such shifts in purpose and deploy their political muscle to block any promising policy moves. But a fundamental rethinking of our priorities at least would open the way to start towards the creation of a new world. The old world is dying and if we wait too long, we will die with it. Now that Obama has achieved the “impossible dream” of becoming the first interracial president of the US, it is time to dream anew, to strive for a different kind of politics, to take the first important step of green public investment programs, to revitalize the economy and galvanize all good citizens for the arduous climb towards an economy which will truly serve all the people. That is the kind of change that we the people and our new president must now fight for.

64 comments:

Brian Hill said...

A Sermon on the Meaning of “Yes We Can!”


Let us now go forth into the Promised Land of true freedoms and real democracy.
Let us cherish the past and the wisdom of those whose dreams and vision saw this Land as it is now stretched out before us, those whose shoulders we now stand upon, those who have given us the power to see twice as far as they ever could.

Let us honor our ancestors in this struggle and all those who have passed on without passing over into this new land…

Let us not forget the struggles and the sacrifice that have brought each and every one of us to this place. Let us look both at what is behind us and ahead of us as we make our way forward together. Let us look both to the skies above and the grass-roots below for the inspiration we will need to carry on. And as we cross over the River and into the new world which we have so long waited for, let us prepare to make the sacrifices of celebration and of sharing that will be necessary in these times.

We are now, in this special time, one people. We are now, in this moment of destiny, all peoples who desire justice and fairness, opportunity and compassion. We are not alone!
And it will not be easy. There will be incredible sacrifices as we move forward to re-distribute not only the wealth, but to share the burdens and crises brought about by decades of wanton appetite and the irresponsible exploitation of both natural and financial resources. We will need to lift one another up even as we bring down the false idols of consumerism, materialism and gluttony. It will not be easy.

We can no longer add to the debts of future generations nor can we enter a Promised Land with the same failed values and disregard for Nature’s own budgets that have brought our planet and our continent into such peril. But we are up to this challenge.

We can place our faith in one another and in Our Creator’s patience with us, and realize our special place in the world as the children of God’s own dreams.

We can build a reborn nation, founded on the recycled failures and shortcomings of a past in contradiction with its own highest ideals. We can grow the new out of the composted experiences and nightmares of centuries of oppression and prejudice. We can find our way through the economic swamps and pitfalls of unchecked greed and avarice, and we can find dignity and pride in real work for real gain instead of jobs that treat people like helpless machinery.

We can build real leadership out of the relics of the misguided tragedy of following after empty promises and self-interested leaders, and the cronyism of a ruling elite. We can trust our neighbors again and we can provide great examples for our youth, excellent care for our elderly, and real access and comfort for our wounded and disabled.

We can guard privacy of thought, freedom of speech, and every individual’s right to choose both their partners and their children. We can empower science to become the servant of change and a guide to new benefits and knowledge for our species and the inter-relationships upon which we depend. Oh yes, we can open the Book of Life again and simplify our lives without causing pain and suffering, without causing death and fear, and without fostering hatred and tyranny, yes we can!

And who will dare stand against a people united in love and hope, who will oppose a nation bent on the re-distribution of wealth and the sharing of the burdens of poverty, who will stand in the way of the delivery of health and health care to those most in need and those who will need? Who will keep us from the promises of this Promised Land?

Yes, we can!

And if we hearken unto the laws of Nature and of our Creation, if we lift up the weak and stand strong against the enemies of freedom, if we take care of the land and one another, there will come rain in its season, and the work of our hands and our minds will be blessed, and we shall lend to many nations and not borrow from any.* If we live in the light and give what is right, we will fulfill the prophecies and become a great nation whose guiding beam shines bright into the darkness of the unknown and the future.

Yes, we can!


*Deuteronomy 28:12

Johnny Sundstrom
11/10/08

R Amin said...

Excellent conceputalization, analysis of causes, policy impertatives and the implementation strategies to deal with current global (as well as the U.S.)economic crisis.

I will look forward to future dicussions on big budget items such as national defense, entitlements, social security under the Change We Need Strategy.

Kijong said...

I really enjoyed reading your insightful conceptualization with a concrete action plan.
It would be interesting to see the historical parallel of the green public investment to the new deal: how big the green investment would be to current U.S. economy compared to how big the new deal was to the economy back then.

Alison Hill said...

A comprehensive and detailed analysis of the economic situation and its causes, as well as an enlightening and refreshing approach to tackling the issue. This indeed would be true change.
I look forward to your next article - Very informative!

Ben Gunter said...

This is an excellent blog, with regards to the problem analysis and even more so with regards to the policy suggestions. The big question however remains on how much any U.S. government can counter the herd behavior of now suddenly consuming less, which partly is, from an individual point of view, a rational decision as a person may get unemployed, face a reduction in income, etc. Obama can and will do a lot of correct things, but how much these things will change the herd behavior is a counterfactual we will never know.

Mauro Mondino said...

Your blog is a amazing source of knowledge for me: I couldn't find a better deployment of progressive ideals and policy prescriptions.
I was wondering what is your position about two topics:

* do we need a system of global governance on multinational corporations? how would you build it?
* what is your position on the management of the 700 bln USD bailout plan? it seems that the current administration is quite uncertain on how to deal with the crisis, perhaps only today the Treasury has showed a firm will for the first time since weeks.

Oscar said...
This comment has been removed by the author.
Figaro said...

Dear Dr. Khan,

Thank you for this thoughtful and excellent analysis. I agree with the three-pronged approach that you've emphasized. However, I think that the size of the stimulus package that you've proposed is way too small, especially given all of the issues that you've rightly pointed out that are needed to be addressed. In a more than $14 trillion economy and given the breadth and scope of the crisis, I would argue for a stimulus package of close to $1 trillion. One would expect more than half of the $1 trillion to be used in infrastructure and developing a green economy. The rest would be sent to people not on Wall Street or Main Street, but those who are on the Side Streets, the lower middle class and poor. The "Side Street" term is borrowed from Tavis Smiley during his recent appearance on NBC's Meet The Press.

A stimulus package for the poor and the lower middle class is more likely to help kick start the economy than one for the upper middle class and the rich. The first group is certainly to spend the money. More importantly, however, such spending would be additional money in the economy. On the other hand, the rich might spend it, and even when they spend it, it would not necessarily be additional money in the economy. Had they not received a stimulus check, they would have spent their own money anyway; or at least, they had the capacity to spend anyway.

Again, thank you. I am looking forward to reading more from your blog on these critical issues.

Best,
Figaro

Unknown said...

The author points out the severe economic situation the US is confronted with. The ongoing depression reflects a dysfunctional economy which needs fundamental restructuring.
Instead of focusing on various signs of the depression, people in the US need to look into the current situation at a deep structural level. Excesses such as hyper-bubble in financial assets, overcapacity in production, and unsupportable debt burdens for corporations and households all lead US economy to a possible destruction.
The author argues that the US government must intervene actively with several policies such as injecting new money to the system. However, what happens in the US economy is closely related to the American way of production and consumption. As long as the US still holds its mass-consumption economy, the financial crisis cannot be solved completely. The Americans need more effective fiscal policies with a long-term perspective, as the author puts.
Economic crisis does not happen all at once. The deep structural causes need to be paid attention to. In the long run, a sustainable green community and economy development may be one of the resolutions.

Elaine (Chiao-Ru Chuang) said...

Comment on The Article---- " Can Obama Do It ? "

Although Obama won the unprecedented victory then being the new presidentof U.S. He will also face the gigantic challenge that revitalize the economy and make the proper policy to modify stagnation states.

In the article, author point out the way that new government to against the depression is intervention the economy. And there are three basic policy government can adopt to improve the economic conditions. For example, First, the Federal Reserve can keep pumping money to excite economy. Second, White House can launch another major stimulus program, compouse of responsible public spending and quick-acting tax cut. Finally, to restructure or liquidate much of the current debt burdens. But in my point of view, to inject money into the system will guarantee the revival of economic activity ? If the outcome is not as optimistic as we think,and who will undertake the money that was pumping into the market ?

Therefore, I prefer to the green development project just like " a social accounting matrix " that was mentioned by author. Because of using some kind of this development project can not only establish a long-term perspective but create some job chance. Moreover, I also agree the viewpoint of author about new government should face squarely all of the problem that may lead ill-conditioned to the economy. And authority ought to use the power to liquidate all corrupt,rottenness as well as the situation which is suppress the important truths.

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André said...

Respond to “Can Obama Do It?”
By Andy Chi
Published: December 31, 2008

From the economic tsunami to international inflation, till the global recession, this is not only the policy side problem but also the controversial between the Right and Left.
First of all, in the side of economic policy, we have no choice but to notice the representative work “The General Theory of Employment, Interest, and Money”. His theory is not general but special one because the demanding economy is deriving form the economic crisis.
70 years ago, the Great Depression is similar as the economic crisis today, both facing the overproduction, disparity between the rich and the poor, insufficient of demand and liquidity trap (when the nominal interest rate reach to a low standard, no matter how much currency the central bank release can’t stop the propensity of the people who would rather hold the money than spend.), even though the interest rate descend to zero, it can’t stimulating the consumptions. This is more obviously in the developed nations. Since in the aging population society, the livelihood of the aging populations partially count on the interest of their pension. If cut down the interest rate, they will be more conservative in shopping.
Although the industries have the incentive about the cost cutting (the cost of the capital is interest) to invest more. Owing to the accumulation of inventory and the declining of marginal propensity of consumption made the industries holding a pessimistic attitude. Of cause it blocked the further investment. And in the vicious circle of the declining of consumption and investment, the rising of unemployment rate was necessarily happening. That’s making the gross national product decline.
So the fiscal policy has his inevitability. It can make the social economy getting rid of the depression by means of the multiplied effect of the government. (Especially in the premise of liquidity trap, the government spending would not make the interest rate arising.). Nevertheless, the fiscal policy has its limitations. This is a kind of extremity and the debt must be paying. The tremendous bond interest is more often than not making a country mired in a debt crisis. Those countries owning the hard currency shouldn’t worry about the capability of payment, but those minority countries relying on the foreign exchange reserves to maintaining their stability must make both ends meet.
Moreover, the ideology evaluation, this financial tsunami flooded the New Right which prevailing our society over 20 years, arousing the revival of the Social Democracy. The young people living in a society which pursuit the maximizing of interest, celebrating of the capitalism and cherishing the possessive individualism have to face the shack of transition in the economic thought.
Ideology is just a kind of means, not an objective. What we call the universal moral principle is merely an instrument for vested interests to make their money in some way. The victory of Neoliberialism is establish in the collapse of Soviet Unions, Japan’s bubble economy, China’s economy reform, the Latin American Debt Crisis and American Hegemony. So to speak, Neoliberialism is a kind of blend of religious conservatism and market fundamentalism. Personal liberty has submitted to the authority of ideology of government. This is much more appropriate for calling to the freedom of TNCs and global economy.
The Social Welfare and efficiency, the Proletariat and Bourgeoisie, the equality and liberty seems never come to a compromise. From the perspective of the history, the twenty years after the great depression in 1930s is the golden time for Social Democracy and Keynesian. Marginalizing by the stagflation in 1970s, the rising of Reganism or Thatchersim and the toppling of Soviet Unions made the Social Democracy passing away in its policy “from cradle to grave”. Economic theory always lagged the development of economic society, and every big crisis generated the new generation theory. This time will be the world of Social Democracy? I don’t think so.
What time we can walk on the way what Anthony Giddens speaking “The Third Way”, it will not only take times but need the inclusion. The investment of education, capital regulation, social equality have supported fully by Michael Porter and Ohmae Kenichi were also what the social camps insisted. Since we have the consensus that the global economy should have a structural adjustment, then we can take this crisis to a lesson before the great tsunami submerges the humanity by the greedy ideology.











A version of this article appeared in print on December 31, 2008

Patty said...

To economic crisis of American, Haider Khan has optimistic expectation for future.
Meanwhile, Obama won president election; most people of American were thunderous applause. I wear the same shoes in Haider Khan, I think Obama not only can change the politic for ethnic, but also restructure the economic in American. Further, good atmosphere broadly transfer to the countries in the world.
In the article, Khan explains the cause of economic depression and he emphasizes restructure or liquidates like economic depression since WWI. I think restructure is a great idea, but today we are no longer as we have been and we don’t stuck seriously in economic like before. Therefore, we need government to interrupt in world that lot of people is like to be miser or it road to disaster of economic depression.
I like US government three basic policies. First, they learn animal spirits of Keynes. It ease burden of people, but it arise the US burden, reduce the monetary value aboard and competitive capability in the global if the policy fall. Second, spent money similarly and tax cuts. Governments think it can prove the employee rate. However, I don’t think so. They just keep the extra money in their package, it can’t stimulate the liquate money. I don’t know what the policy advocate based on. It based on the experience or the new idea we created. No matter what it based on, in fact, it do didn’t practice in part of zone. So far as to third, we discuss at begin.
Finally, I inspect deeply the important of learning. The government provide perfect education to the young generation that make them know how deal with and keep touch the social and change properly. Everybody is happiness lived in.

Alan Wu said...
This comment has been removed by the author.
Alan Wu said...

Respond to "Can Obama Do It?"
By Alan Wu
December 31,2008
This article is talking about the impact of economic depression. For readers, the writer use plain English to explain what’s going wrong with the economy and why it will happen. He also point out the way that how to solve these problem.
In this time, we knew, is a globalization era. Because of this, our lives become more convenient, communication and information widespread around the world. However, the problems also become globalize. The economic depression, the writer mentioned, is a prior problem that must to solve it, because it affect our livelihood and the future of the world.
The US as we know is the largest economy and most powerful in the world. But after the past years of arrogant abuse of political, military and economic power, the US is going exhausted and falling down in the economic depression swirl.
Economic depression, in writer words, means over private business development. The hyper-bubble in financial assets and real-estate led many firms to wildly exaggerate their likely future profitability and overvaluation. For this they borrowed money to build many factories, shopping centers and office buildings, but the consequence is that create heavily debt burdens and lack of consumption. Finally the price of all assets and commodities become falling or getting worse.
For solving this problem and stop getting worse, the writer proposes three basic policy areas that lead government to rebuild the fundamental structure of economy. The three policy areas means public intervention of the economy, including rebuild economy, ease and liquidate debt burdens, stimulus the mass-consumption, create new jobs and achieve the better life goal.
In sum, the writer makes clear that the end of the private development, this is the time for public intervention of the economy. That means government or state leader must acknowledge taking control about it, they should make a precise plan to build the green investment. Therefore for American people, Obama must achieve the challenge. His victory in the president-elect brings high expectations of progressive change in the US, the people’s life will getting worse if he can not do it. He must know that people still in distress and create better life if he wants to get it down.
Safe the economy is priority for the US; it is also our leader or government must do it. However on the contrary, except the economic problem, our government still falls into the Corruption and lots of quarrel between the two parties. Many people in this land are affected by those quarrels; they become quarrelsome and more radical. Now it’s the time stop those quarrels, the government and people must acknowledge the real prior problem that must to solve it.
The corruption event impacts our life and mind, the economy has last almost eight years no improvement. For more competition in the world and make a good life, we must put the debate away and work together in those critical problems.

Unknown said...

Respond to "Can Obama Do It?"
By Simon Chen
January 02.2009

Dear Dr.Khan
When I read your writing that I think about "Dream change" with American dream.
In the past,we think economic development is the most important thing no matter west or east,but now is time for chang our dream,right?First chang is about military-industrial complex become green industrial.Military-industrial development have a long time.The military-industrial complex is war's attachment. Let war to disappear in th world that
we'll have more time to do anothing.
SO I think Dr. khan you have a great dream,economic maybe is a dilemma but we can change,because we still live in the world.

yi-hsiu,chen said...

Respond to “Can Obama Do It?”
By Yi-hsiu,Chen
Published: January 03, 2009


This comment is full of confidence for Obama who is the president-elect in United States. Especially, the comment referred the “green economics” issue is what I am interested in. The policy may help change present economic condition although we do not know the probability it will carry out. At least, the policy may create an opportunity of working. It's truth that the unemployment rate has already risen to 6.5 percent and will keep rising. However, government needs more effective fiscal policies with a long-term perspective.

In my opinion, due to globalization, it is a truth that economic recession affects the whole world. So, the government’s policy is playing an important role in the present economic condition. Can Obama do it? From this comment, the author referred some economic points that also are just what we expected.

aromazhen said...

This comment analyze the America's economy,politic,and the whole country.I think this is not only the domestic problem,but the global issue.So the America's problem and solve way will affect the global's future.The America should take "green economy"seriously,because this will the point of the global policy.In the future,the issue of environmental protection should be the most important thing to everyone,and the America especially.Because the U.S. is the developed country,and she destroy the enviroment most.So now,she should take the lead to the global.If she could be the model,I think the world will be better! The Obama create the impossible history,noe is his time to show himself,and demonstrate he can do it!

JuiReiHuang said...

The acceleration of industrialization and the prosperity of transnational trade benefit our society a great deal for over a century. But with the speeding up of economic development and the globalization today, people are now facing more and more economic problems such as inflation and unemployment which have already lead to a serious impact on our daily life.
Undoubtedly, the United States plays a crucial role in international society, but after 911 incident and the sub-prime mortgage in recent years makes America’s economy slide downward more sharply than ever before. To put it more explicitly, lots of banks and insurance companies hiding the truth that they can’t absorb their deficits anymore. As a consequence, the investors have lost their money during this economic tsunami and it also cause into a critical damage all over the world like Iceland and South Korea.
In this article the author mentions lots of solutions for financial crisis such as injecting new money into the market, setting effective policies to stimulate domestic consumption or even cut taxes. Moreover, the writer brings up an idea which called “Green Development Project”. I strongly agree with this concept because it can not only solve the problems we are facing now but also makes unemployment rate lower in the future. Personally speaking, government control may be useful in the long-term, but we cannot lose sight of that market-orientated economy requires our confidence in economic rules. However, I think not only Obama but also every countries leaders over the world should take a precise step in this hard time.
To sum it up, we should adopt an optimistic attitude, overcoming the temporary recession and cultivating a prosperous future.

Jennifer Wu said...

The author says that the Federal Reserve can keep pumping money into the system and cut tax, it would be short term measures to ease the debt burdens and stimulate the economy. However, it will deepen the budget deficits. For the long term, tax system can be modified.

He mentions many solutions to the credit crunch, debt burdens and shrinking consumption, but he doesn’t refer to how to reform the financial system which caused a serious financial crisis. In addition, establishing new global and regional institutions operating not for the interests of partial groups and nations, in fact, it’s not easy to implement especially when in hard time because of the humanity of self-interest. Some interest groups, politicians and giant corporations have great power to influence policies, they can’t give in easily.

Besides the short term measures in emergency, the long sighted projects he says, taking the green public investment programs and promoting the qualities of education are very vital. It must take a long time to execute and continue for the future of sustainable development. Furthermore, the government doesn’t always need to take all the responsibilities for the financial crisis, it can in concert with private sectors and supervise them actually.

Jennifer Wu said...

The inflation has already started since the subprime mortgage had swept every corner of the globe. As we can see from the experinces we have been through, the inflation is succedded by deflation, it will be the circulation if the government hesitate a second, and the big depression will have the chance to hit us again.

The United States is a country that encourage its citizens to livea a life of pleasure. But with more and more loans from banks and credit cards, these sectors can no longer absorb the deficits, so the economy will drop as well. The government had to do something about it, they lowered the interest rate of banks that will stimulate its people to invest and spend more money to animate its economy.

The author of this article asserts the little use of the Federal Reserve and the inportance of the intervention of the government into the economy. Actually I think Federal Reserve is the primary sector in assisting government working out a resolution. The author seemed to emphasize on the long term measures of promoting the economy, but I think short term measures are as important as long term, because the government must inject confidence immediately into people, thus the people will have the willingness to invest as well as spend their money.

Jennifer Lu said...

The inflation has already started since the subprime mortgage had swept every corner of the globe. As we can see from the experinces we have been through, the inflation is succedded by deflation, it will be the circulation if the government hesitate a second, and the big depression will have the chance to hit us again.

The United States is a country that encourage its citizens to livea a life of pleasure. But with more and more loans from banks and credit cards, these sectors can no longer absorb the deficits, so the economy will drop as well. The government had to do something about it, they lowered the interest rate of banks that will stimulate its people to invest and spend more money to animate its economy.

The author of this article asserts the little use of the Federal Reserve and the inportance of the intervention of the government into the economy. Actually I think Federal Reserve is the primary sector in assisting government working out a resolution. The author seemed to emphasize on the long term measures of promoting the economy, but I think short term measures are as important as long term, because the government must inject confidence immediately into people, thus the people will have the willingness to invest as well as spend their money.

Lin Yui Shan said...

After several decades hegemonic status, the U.S. face a brand new challenge.
The world stagnation has totally collapsed not only the world economy but also the American domestic economic development. The American domestic economy has became some kinds of world economic index. The economic disaster made the U.S. government notice that they're no more unbeatable, in fact, they're afraid of this situation will fall into a stagflation.

The victory of Barack Obama has created a new perspective, the American people choose a unprecedented president that stride across the racial discrimination. It shows the people in America want change this circumstance, and the consequence of the election provided the chance. We can not expect the assume office of Barack Obama can immediately solve this problem, but it still give us some hope to change this situation. To solve this disaster, the U.S. government should not hesitate anymore, they should take action to prevent the stagnation become worse. They must adjust the economic plan, like stimulating the investment and something else. Also, they should let the people feel more confident to go through this depression.

Summer Huang said...

The US became the global hegemony for decades, but face challenges frequently in these years. For example, the rising China and the depression of global economy, they all influence the US hegemony position. Because of the overvaluations of assets in the US, after that, brings the global financial disaster. Barack Obama should face the tough problem. And his economic stimulus package about cut tax and expand the investment of the domestic infrastructure , whether its can rescue the US economic crisis or not, we can test and verify in the future.

Government should to interfere the domestic economy with active movement, and also should to make the long-term projects to strengthen economy and solve problems. I prefer to the Green Development Project in this article, it will create more opportunity for jobs. Because of the victory of Barack Obama ,he creates the miracle in the US. In the new age, we should pay
more attention to some issues that we ignored before, like healthcare and education. From now, we will pay more expectations to the brand new government.

cathy kao said...
This comment has been removed by the author.
cathy kao said...

Barack Obama,as the US new president, is now facing many awkward problems; The most serious one is the economic depression. US is at its difficult timing, some people said if America can not get through this period of time, The whole country will no more the world hegemony, then be taken by China. This is what Obama may quickly take response to the people who have high expectation to him.
Not only American but also the whole world are watching him, because, the US domestic problem can influence the global market, the economic tsunami just happened like this.
I think development project is a good idea because it can create job opportunities and that is what people most wanted, they just want some money to support their life, if government can not provide this basic promise, the whole country will collapse, furthermore, the international economic also in a terrible mess.

Vera said...

Barack Obama won the unprecedented victory and became the first interracial president of the U.S, but he would face the tough economic problems when he took office. The author points out some key points about depression in the first place, and he also thinks the economy needs the government takes decisive policies. I hold same point of view with author, for example, recently, when the most authoritative and skillful corporation-GM confronted the crisis of bankruptcy, people hoped government to put money into GM to save jobs of the former employees. Put aside its effect, public intervention could prevent the situation getting worse at least.

In this way, the U.S. government brings three policies:First, the Federal Reserve pumps money to reflate the economy. Second, Congress and White House launch other economic programs. Finally, the U.S. government liquidates the debts with other countries.

Only the list above isn’t enough, U.S. government also should get more investment in “green public invest program”, for instance, investing in the energy technologies, which includes finding repairing energy to avoid running out resources. I also agree with author’s opinion, paying more attention to people, especially the education, which is the foundation stone of economy and society of a nation.
The economic disaster destroys not only the U.S, but the whole world, every country around the world should well prepared to overcome it.

Maggie Shier said...

Dear Dr. Khan,
I think that you have unique opinion on the American economy situation or even the situation of global economy. And you mention about some methods and analysis to improve the economic predicament of America, in the same time, is also the problem and challenge of the world, offering every reader a direction to think.
In this era of globalization, the economic systems from all parts of the world are being combined and influenced each other closely. We look forward to not only our own national’s stability of economic and society simply, but also realize that under the influence of globalization, every country is no longer single and independent individual.
Even there are a lot of uncertainties and challenges in the future, however, I believe that after the implementation of these good policies, global economy will have very great improvement, and global economic system will be more stable and prosperous.

Maggie Shier

Marisol said...

It is indeed the biggest problem to the new president of the US that facing the present global situation that so bleak. Sub-prime Mortgage is likely the first portent in the economic depression, then, it is still continued. Up to the present, we can’t see the end in the panic. As for the biggest economy in the globe, economical withdraws also causes the whole world to fall into darkness.

We may see from the television there are a lot of enterprises receive the influence in the economic recession, reducing staff and the production suspension is the topic which at present most often hears. However, the economist consider that is not the worst phase presently, instead of informing the people, the economic depression will continue and worse.

As for Barrack Obama, he created his own history at the right time. People all over the world witnessed this unbelievable moment, and gave this interracial president great hope. People expect this newly elected President of the United States can lead not only the U.S. but also the whole globe to walk through this dark era.

In my viewpoint, reducing taxes and supporting the enterprise made the burden heavily to government. Maybe we should consider some better ways to face the economic depression.

Anonymous said...

Now most of people just thinking about how to increase citizens consumption but they forget that wouldn’t help in a long term. If the fundamental element didn’t change the problem will just recycle but never renovate; the same situation was also happened in Taiwan. Maybe some of enterprises really shatter countries economic like automobile industry, but most of people did not benefit by those enterprises. Now the government need to spend a lot money to succor those enterprises but why didn’t use those money to help more citizens. Those enterprises really need fundamental restructuring, if not; they should be abandoned. Only when fundamental had been restructured, these enterprises could start to benefit to America. Taiwan has been trade with America since long times ago, I believe that our products are much more better than China. So I hope that America could import more products from Taiwan. And I hope that American economy would soon being better and make global economy being better.

謝孟堅 said...

For now, the scenario of the economic depression in United States affects the globle finance. And the new govrnment of US has expected in if they can uplhold the globle economic system or not. The America's hegmonic status is shaking, it probably would affect some regional problems, remapping of IGOs, and the other international affairs. But in the short-term, the effect of world economic would still reflect powerfuly. So the subprime mortage storm, unregulated derivatives and the other domestic flaw make the world stuck in deperssion. That's mean, if US can recovery it's own financial hole, the world will recovery as well.
The article point out the main aspect. The three basic policy referred by the article is a direction that the new government can consider about it. Rather than rebuild bubbles.

Chris said...
This comment has been removed by the author.
Chris said...

After this presidential election, Obama have to confront a financial crisis comparable to the Great Depression. Not only U.S have high unemployment rate, but also the world. Otherwise, the phenomenon shows a part of citizens unable to make ends meet in economic. Obama has to take solution about the economical problem of citizens.
The policy that can saved this situation was proposed by Obama, is “reduce taxes”, and it is attempted to finish. Many people assent to this policy, even though I thought the policy possibly gets lower effect compares with other economic stimulus. The policy just could solve the present condition, maybe it is not the best method for long-term prospect. Because we may face the huge national deficit in the future, and possibly make deficit spending. I hope that government can found the better way to solve the problem.

Japanism said...

After finishing reading this article, the US faces an uphill battle to undo the errors of the past and to build a better future for all. The deflation and a huge trade deficit may cause global of the economy collapsed . American government have to think a way to resolve these problems.
Through launching innovative public investments in renewable energy and instituting sustainable green community development that will address both America’s current and future needs.
How to revive the economy will be the first challenge for Obama to overcome these problems, the result will depend on the wisdom of Obama and his aides.

Frankie said...

When the election of America's president finished,Obama wined the election.Everyone in the world all watch him what can he do for the world economic crisis. When the unemployment rate has already risen to 6.5 percent and will keep rising.The economic depression will appear,it does not only affects America but also the global. I think Obama has to be active and resolute to overcome the economic problem. America'goverment has to plan more policies to slove the problem,such as stimulate consumption, develope the new production,but when America develope the economic that should get the point in the enviroment portectation,it is necessary. I think Obama can do it,hope the world economic will progress.

windy said...

This article pointed out American faced some challenges currently.Most this problems are economic problems.For example,American faced unemployment rate has already risen to 6.5 per cent and will keep rising.It is very important problem and have to solve right now.And just like the article said,American is the biggest market in the world,if American economic system had collapsed,the world financial market would have a bad future.Most of all,world economic now is a global market,financial problem is not just domestic problems but also whole world problems。So I hope Obama ,the new American government ,will solve most problems and make the world market can be flourish again.

吳培宏 said...

The article referred to Obama was elected President of the United States, and the economic crises met at present of U.S.A. is the biggest challenge that he faces to.
The author makes recommendations about the green public investment bill, hoping to improve the difficult position of economy.
I agree with the author’s ideas, and I also hope that Obama can do it to help America tide over its difficulties.
From:Pei-Hung, Wu

張瀚洋 said...

For will not allow it to cause because of financial turmoil bankruptcy to the enterprise manufacturer's sponsor, some because of shoulding use to have the enterprise of the requesting of project to reach need the request for improving, just can sponsor to it.Otherwise just only having a sponsor will not reach too great result.

And this financial turmoil's injury toward the United States will be thus big, among them the of reason, also is the American's consumption habit should have a change, consumption should in the self and of the capability range, be not loan to consume, even compensate a loan with the loan.

Tax reduction to whether the United States will have to help or notPeople probably will have more money and can turnover or compensate a loan, but I feel that the help none is so big.The opposite pecuniary aid develops the green industrial rate of the increment employment and reduce carbon emissions, all helpful to environment, unemployed population.

tellcarlson said...

In ordinary situation, market will handle the questions, but not this time.This is it, We are now suffering the greatest economy descent and the risk of collapse of financial system. There is no way to offer a effective stimulus without goining into deeper deficit. But it’s better than watching the destruction of world economy.Trillions of dollars finance are not slowing the collapse, so put more and faster.
As the world leader, Barack Obama have a chance to correct the bad habbits of american- spent more than they produced by borrowing, and to restore confidence to Americans and to the world. However the United States cannot do it alone.Europe, China, Brazil would have to make efforts due to the size of their economies.
The world simply need a new growth industry,the crisis might speed up the develop of green industrial.
This article point out the right way with some advice.

AlexQQ said...

U.S. financial crisis has now evolved into a worldwide economic crisis, even in Taiwan, the export and manufacturing industries has also been a considerable degree of combat, how to deal with the crisis the United States and the world economy has become Barack Obama is currently the most important issues and challenges.

Before over-freest economy in the situation created, and now must be made through government intervention to save. Let the Federal Reserve to use monetary policy to improve your economic situation is feasible, but I doubt very much that the possibility of green economy programs; just the Kyoto Protocol has not yet been approved by Congress on how to promote green public investment plan?

However, the creation of a "resolution trust corporation," the proposal is indeed true that is now up to Obama and his team how to do.

Unknown said...

It’s very interesting to read your article. The issue about Obama is very popular now. But not everyone can point out something. You point out the problem analysis and put forward the concrete policy proposal. By reading your article, I widened my worldview. I have know more about America’s economic problem. Now Obama have to confront a financial crisis, and no matter what he will do, it must be a very huge influence for the global economic. I really hope that America can go out the difficult position by Obama’s leadership.

Sally said...

This article, the author discussed American economy present situation. After the subprime mortgages, American economy started the intense turbulence, and it caused the phenomenon that the global finance also had the great depression. Therefore, how to save American economy is the biggest challenge for present economist.

The article also mentioned that the American needs to improve the manner which they spend, reduces the credit card、family and enterprise loan. The author suggested that the Obama government have to invest the green industries, and it not only can reduce the environment pollution, and also increase the employment opportunity. I had learned in the chemical class that some scientists had research and development new style vehicle, was substitutes for the petroleum energy by the water. If it really succeed, so that could solve the problem which the petroleum was insufficient, and also reduce the carbon dioxide the emissions. And in the future, you think that this is so cool to drive car just add water!

Simon Wright said...

Actually, as before talk about that Obama is the first African president of American history .It has the important simple for the time, that mean it’s time to say goodbye to white, even pretentious leading way of economy, diplomacy, military etc .
The new trend of American between with old of American, must be have big conflict.

But, quickly coming soon that the policy for save economy of American, the one way is investing money in employment market for helping people whose lose ability and hope to see an overflow of procreation will be better. The other way, reduceing taxes to reduce the economy stress that government gave it to people. The series of policy it’s kind for people to keep in money. But, it’s make the treasury of American more less or the country between with internation would change their attitude and give any help?The proportion about welfare of policy and many kind of expense in Internal country come to change or not? Add that U.S. dollars be come cheaper. The quality of life by people would be lower or not? Could it make any investment to be brought up?

The American government take this way to provoke and save national economy in short time. But if the power not take a longer, it would be die more quickly and to affect the other development in internation or internal?

Only talking about Obama’s high votes maybe it means winner, but if media and an opposition party couldn’t unite together. It be come the problem can not ignore.

stanley said...

I think Obama creat a new america dream. When he won the election,everyone wants him everybody needs him.And looking what Obama face with?Wow~terrible economic crisis,a lots people got fried.These problems seems to be very hard to handle.Now i think say to much mean nothing,time will talk.Let me use Obama's victory speech.This victory alone is not the change we seek. It is only the chance for us to make that change. And that cannot happen if we go back to the way things were.That's the true genius of America: that America can change. Our union can be perfected. What we've already achieved gives us hope for what we can and must achieve tomorrow.God bless you. And may God bless the United States of America.

stanley said...
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Deron said...

I thought that this is the current most important subject lies in revives the American state of business simultaneously also agreed that discovers in the economic structure the question, is not the enterprise operation itself destroys, but is possibly the welfare systems. Allowance. Salary proportion and realistic social not symbol.

However facing financial storm's influence, the globalized phenomenon will have the decline inevitably, then, even more pulls closer the global culture the difference, for example China. Europe even Southeast Asia, has the run-up circumstance.

How processed the economic problem is effectively the Obama election most important task, the American believed most he could be able to achieve, but the world people actually anticipated that the life might have the improvement the financial order which collapsed gradually destroys.

Unknown said...

Regarding this hundred year rare financial storm、the Obama government proposed three new deals、the first support enterprise pull through and prevented the business failure、the second item was the tax cut、the third item advocates the green industry. Regarding the support enterprise、the government should have the planed support、and should request the enterprise to make the improvement only then to support. But cut tax in a big way reduced The US government's income、regarding the American every year's deficit was the very big burden、should probably have the coordinated sets of measures. But advocated that the green industry has the help regarding present's global warming's question、and the subsidization green industry can in cut the unemployment rate and the environmental protection.

Teresa said...

It have been about an year after sub-prime mortgage bursted out.We are all aware that the globe economic crisis has been getting worse and expending to every aspects beyond that we can imagine.

Consumerism is the people of the United States always hail as a major ideology in thire economic environment.They build the economic market on over-wasting、over-producing and over-expending and it made people's debts increasing rapidly and also made the consequences severe.Although, government of the United States called for the bailout to rescue the firms in financial difficulties,it still won't help a lot.Much worse,I had read an article which said we are underestimating the number of the debts,it's much more than the researchers' assessment.To recover from the depression,my opinions are to reduce the controlling of invisible hands and restore people's confidence toward the economic market.

I approved of the perspectives of the author ,he thinks the low point will endure for a while but if we endeavor to develop a social accounting matrix which means it will help to enlarge the market of employment and stimulate economic growth.However we don't want to see that after we make a lot of efforts on improving the depression but eventually in vain.So we can't ignore that the significant of cooperation within domestic or with other countries.After all, we are all of the citizens of the globe village.

Hayden said...

In my opinions, the author evaluates the situation which no matter in America or around any corner of the world is still under control. How can he talk about things with solid confidence. What makes he believe that America will remain hold the domination. I think this economic crisis struck America so hard and weaken the power of affection of the United States.

So we shouldn't just concentrate on what American do or not to do; instead, in order to integrate and stimulate the economic, we should cooperate with each other and distribute powers to countries which have abilities to stop the chaos expending.

阿鬼 said...

Yes, we can. When you say it louder, what in your mind? New government will make a new age? Or new government have same trick? I think your article clearly talk about actions and policy, but what really interesting me is a critical question. If all these policies are not work? or they just make it worse?
It’s hard to say, what kind of policy in what kind of country can make it work, and maybe this can’t apply to everywhere. So if we rely on everything which government offered, sometime slow and unpredictable. First, U.S. government set their economy FREE for a long while. At same time world economic basic rule by Wall street and their digital screens. White House has their official announcement called “Republican”. They print their Founding Fathers to make world peace.
When the payback time comes, they draw all of us in their storm. Now they want supports, then they want take new rules, I am not so agree with that policy should take by some who, a effective policy should give to someone who have real sight. We can’t afford another mess. At same time we can build a New World Order or New World Ordinary…
Yes, we can. May God bless who have the great power.

賴弘章 said...

I feel the world's economic is influence by the U.S. very much.
If the American's economic is not well,then the world's economic also not well.We cna figure out from this disaster about financial crisis.
So the American's influence is very big also.If American grow up then the world is grow up,too.

Andy said...

Talked about the worldwide basis economic crisis and US's economic crisis, also talked about US's for long the economic system not to improve with some flaws .No one can profess with certainty the inevitability of a global economic collapse; but the consequences of denial and hesitation could prove grave. Even if chances are small that the worst will happen---and in this case chances for a bad outcome have been increasing--- it seems reckless to gamble. Taking strong measures now would save both the US and the world economy from a possible meltdown.

Obama said the economic and financial crisis confronting the United States and the world demanded the "sound judgment and fresh thinking" his new team would bring to bear on problems as great as any since the Great Depression in the 1930s.

The president-elect expressed confidence the nation would pull out of the economic morass.

Jessica Chang said...

The U.S. has been one of the largest economies in the world. Since the globalization, any act or policy that the U.S. makes would affect other states directly or indirectly. Therefore, the financial crisis is not only a big challenge for the U.S., but for the whole world.
Obama has to face difficult situation now. For instance, many companies lays off employees massively, the number of unemployment rate is keeping rising, and the spending ability is keeping reducing. The difficult situation for the new president Obama is an opportunity to show his wisdom of leadership. Obama's next step is not only about the future of the U.S., it's about the world.
In my opinion, a crisis sometimes is a turn for the better. I agree this article talking about the idea of “green economics”. Now we should create more new areas to rise job opportunities.

Hui-chun,Chen said...

The Obama’s government will face the great problem which is the economic challenges. Because the globalization, American’s problem can effect other countries, more, it can destroy other countries’ economic systems. I agree with the author’s opinion to solve the problem, and I think the most important thing is to solve the high unemployment rate. The green public investment program may just one of the ways for government to provide job opportunities. The government must to help rebuild the whole financial architecture, and to settle the problems had been existed long time in the global economic system. What we need is that more effective fiscal policies with a long-term perspective, and should avoid to make the same mistake. After all, in my opinion, change is a good thing. It’s mean we have chance to change the situation.

Tracy Li said...
This comment has been removed by the author.
Tracy Li said...

I think the author saw the America’s economy in a pessimistic way. Sometimes we will seek a worst prediction to prevent the outcome may let us down. In my own opinion, the green intervention program may be an option to solve the economic crisis which the U.S. is facing now. Since the green economic program has it limitation to the domestic economy of U.S., we can not expect it to be the only method of reducing the depression in the domestic or global market.
Obama needs to address more policies to confident the people; besides, we do not have another global monetary to replace the U.S. dollars. Perhaps Obama can consider the three policies which the author said in this article. First, the Federal Reserve could keep pumping money to reflate the economy and excite of business leaders. Second, Congress can launch another stimulus responsible public spending and quick-acting tax cuts. Last but not the least, the US government with the other countries may have to restructure much of the current debt burdens. What mentioned above is all about how to maintain the U.S. market running effectively, because it can influence the global economic market. Therefore, I am hoping Obama and his team can be the perfect partner in saving people from this depression crisis.

Claire Chang said...

Senator Barack Obama created America’s historic election. Senator Barack Obama has achieved the “impossible dream” of becoming the first interracial president of the US. However, this election is the end. Senator Barack Obama faces on the new challenges. This challenge is the economic problem. This economic problem had great upon the globalization.
The unemployment rate is keep rising. Senator Barack Obama has to set up a new policy of the America’s economic. America’s policy will influence in the whole world. With a properly designed economic strategy, many new economic opportunities can be created. Obama take the first important step of green public investment programs, to revitalize the economy and galvanize all good citizens for the arduous climb towards an economy which will truly serve all the people. I think green public creates job’s opportunity. Economy will become better in the world.

foxy said...

In this article, the author point out several reasons of this harsh situation that the US is currently struggling with.

For decades of the procession for globalization, there are bittersweet for world economy. At the first six years of this century, the US and most countries of world shared this beautiful gains of prosperous economic development.

But it's time to face the real world. The success of this development was merely an illusion, based on overestimated, overinvested and overvalued real-estate and stock-market,too many resources were put into wrong business section.

The author thought this as a signals for deep economic structural restructuring and a chance to transfer to green economy. To sum up, we all know trouble doesn't come with single reason, here the author has clarify us the situation, and crisis is the turning point, so as the author mentioned, it's the kind of chance that we the people and new president must now fight for.

Baron ( Chen,Po-Chung) said...
This comment has been removed by the author.
Baron ( Chen,Po-Chung) said...

First I must thank the author to propose that the so penetrating original opinion, has provided an explicit path for American future president. This time American presidential election, no matter who wins can face immediately to so the hardship economical difficult problem. I thought that if Solves such economic problem, must return to the gold standard the system. US's economic potentiality many constructions in the imagination wealth and the value, therefore creates the enormous danger. The government should control the financial transaction strictly, in many historical lessons, we knows many financial commodity.

Next, the author also shifts to an earlier time munitions industry the part. I thought that The US government many sources of income are the munitions industries, but solves the economic problem story depending on the war, may peep from two world wars knows. Therefore the munitions industry is the indispensable promotion. The economical plan, will obtain benefits takes the automobile industry the support. I want to cause the unemployment rate to reduce, those who make one anticipate, the US this time aids three big cart yards the relief documents, whether can bring the US back to the historical unchanged will be the most important service.

muyichin said...

Can Obama Do It?
The collapse of global economy not only a signal of the market, but also psychology. The threshold of each family having a car from the auto industry is good, however, capitalism chase capital accumulating unduly, and large enterprise merger small company result in the situation of supply of car over demand. The economical system have some problem from the opportunistic way of manage finances, earning more money through every way, the urge of substance exceed economical ability.

Green development project try to solve problems of energy resources and environmental protection, the investment of health insurance and education are perfect proposal, but if it can execute or not are based on the power of Obama’s government. Perhaps the problem of economy is from psychology. It becomes better if exempt from tax of destitute people, and to be confident of nation’s leader.

echo said...

The economic recession is coming,Obama wined the election.He is American president.He has to do more important thing is maintain the economic.when everyone worry about the emplyement still rising,many people have no work,I hope Obama can stimulate the world economic let more people find better work opportunity and the world become progress and the world peace whether the view of the expert is better or worse,we are optim to expect that future be good.

Jimmy said...

From the second-class mortgage after, keep on developing of world financial crisis spread international community.
I think a global financial turmoil, is no longer only and only depend on an American president and then can handle of, now should what to ask be, the leaders all round the world can do what, do for the world economic system that will soon dump some what kind of effort.
Ba in Europe right away after the set of new policy measure, for develop financial system in the United States or not still need to be observed, not only is only up and down the effect that the United States is waiting for a new government, even all countries also all prepare to examine the United States that the crisis processing done are for financial crisis in the world.
Even if the new policy brings a hope, but Obama should want to particularly notice of, probably how urge the public finance measure of all countries to match with mutually, rather than each of all countries its government, make the effect reduced half, matter doubly achievement half.
Consequently, the financial turmoil that volunteers to help to let this spends smoothly, this should be is seen as the force of American have to stand out to do of thing.

Yu-Hsun Lin said...

I'm glad that I have this opportunity to read your significant comment about how to deal with the economic crisis in the United State.
As you mentioned that some of the economic program might rescue the United State’s crisis, but I think it will only solve the domestic level of the economic crisis in the United State. There still will have other problems around every where in this globalization era of the world. I'm very interested in your Green Economy Program of this article. Liberal-institutionalism, one of the international relations theories, said that we now living in a complex interdependence environment. All of the actors under the international system will affect by interaction between each others. Under this circumstance, maybe it is the time to produce a new international organization to solve the collective economic crisis.
In the beginning of 90th, The United Nations Development Programme published the Human Development Report. In this report, it mentioned that human security will be the most important program for international security studies in the future. The human security involved economic, healthy, political, environment and even the food problems. The United State can construct a new international organization that will particularly to solve the human security problem. Then this new organization not only can rescue the United State’s domestic economic crisis but also can deal with the global problems and as the article said under the way of Green Economic. I am deeply hope that the United State to do this way. There are no doubts that the most powerful actor in present world is United Stated. Small countries also have a new change to provide their view then more close to the international society, for instance, Taiwan.

stacy said...

i think Obama can lead Amerian to
cross over the River and into the new world which the whole world people have so long waited for in this hard circumstance-great depression.

Undoubtedly,the United States still plays a important role in international society.Obama steadily reiterates the vital
importance of economic issues.Obama and his group will try their best to plan strengthen the ecconomy.
The Problem