Saturday, October 11, 2008

Middle East Suggests that the U.S. is Losing its Superpower Status

Sources: Middle East Jubilant over Wall St. Woes, Financial Times; Is This the End of US Capitalism?, Al Jazeera English

Although many stock markets in the Middle East have been negatively affected by the credit crisis, the region has taken the financial crisis in the West as an opportunity to gloat.

Many national representatives in the Middle East, especially in nations counted as enemies of the United States, claim that the global financial crisis is a sign that the United States has lost its superpower status. In addition, some have advocated the doubtful theory that the financial turmoil in the U.S. stems from the huge cost of financing the War in Iraq, rather than a collective regulatory failure to deal with excessive risk-taking in the banking sector.

Moreover, many in the region assume that the apparent failure of the liberal policies adhered to in the United States vindicates their view that the state must play a central role in the economy. Specifically, a Syrian official noted that this crisis has provided support for their social-market economy, which includes strong state control of the Syrian central bank.

Since those promoting more state-centric policies are using the failures of the U.S. market-based system as support for their beliefs, it follows that it will likely be harder for those promoting liberal policies in the region to find support.

Although several Middle Eastern nations have proclaimed the financial crisis as evidence of the end of the United States’ position in the world, many American economists agree that is unlikely, as the position of the U.S. dollar has yet to move.

Discussion: Do you think that the financial crisis marks the beginning of the end of the U.S. as the leader of the free world? Do you think that the nation’s reaction to the credit crisis evidences the end of U.S.-style capitalism? Do you think that the crisis will deter Middle Eastern nations from pursuing liberal economic policies?

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