[Anyone] the international impact of the bailout crisis

[anubis at laplaza.org]

US 'casino' mentality blamed for planet's meltdown


By ALAN CLENDENNING, AP Business WriterTue Sep 30, 5:21 PM ET

Astounded by the U.S. government's failure to resolve the financial crisis threatening the foundations 
of the global free market, fingers of blame are pointing at America from around the planet.

Latin American leaders say the U.S. must quickly fix the financial crisis it created before the rest of 
the world's hard-won economic gains are lost.

"The managers of big business took huge risks out of greed," said President Oscar Arias of Costa 
Rica, whose economy is highly dependent on U.S. trade. "What happens in the United States will 
affect the entire world and, above all, small countries like ours."

In Europe, where some blame a phenomenon of "casino capitalism" that has become deeply 
engrained from New York to London to Moscow, there is more of a sense of shared responsibility. 
But Europeans also blame the U.S. government for letting things get out of hand.

Amid harsh criticism is a growing consensus that stricter financial regulation is needed to prevent 
unfettered capitalism from destroying economies around the globe.

And leaders of developing nations that kept spending tight and opened their economies in response 
to American demands are warning of other consequences — a loss of U.S. influence globally and the 
likelihood that the world's poor will suffer the most from greed by the biggest players in global 
finance.

"They spent the last three decades saying we needed to do our chores. They didn't," a grim-faced 
Brazilian President Luiz Inacio Lula da Silva said Tuesday.

Even staunch U.S. allies like Colombian President Alvaro Uribe blasted the world's most powerful 
country for egging on uncontrolled financial speculation that he compared to a wild horse with no 
reins.

"The whole world has financed the United States, and I believe that they have a reciprocal debt with 
the planet," he said.

It's harder for European leaders to point the finger directly at the United States since many of their 
financiers participated in the recklessness. London was home to the division of failed insurer AIG 
that racked up huge losses on credit-default swaps, and many reputable European banks 
disregarded risk to load up on higher yielding subprime assets.

But the House's rejection Monday of the U.S. bank bailout proposed by Treasury Secretary Henry 
Paulson provoked a sharper tone and warnings that America must act. Though global markets on 
Tuesday recovered some of the ground they lost in a worldwide slide the day before, politicians from 
Europe to South America insisted the risk of a further plunge remains high.

German Chancellor Angela Merkel called on U.S. lawmakers to pass a package this week, saying it 
was the "precondition for creating new confidence on the markets — and that is of incredibly great 
significance."

In an unusually blunt statement from the 27-country European Union, EU Commission spokesman 
Johannes Laitenberger said: "The United States must take its responsibility in this situation, must 
show statesmanship for the sake of their own country, and for the sake of the world."

The crisis also has strengthened voices in France and Germany calling for EU regulations to eliminate 
highly deregulated financial markets, despite objections from Britain, which along with the U.S. is 
considered by some to practice a freer form of "Anglo-Saxon" capitalism.

"This crisis underlines the excesses and uncertainties of a casino capitalism that has only one logic 
— lining your pockets," said German lawmaker Martin Schulz, chairman of the Socialists in the EU 
assembly. "It also shows the bankruptcy of 'law of the jungle' capitalism that no longer invests in 
companies and job creation, but instead makes money out of money in a totally uncontrolled way."

The U.S. government's failure to apply rules that might have prevented the crisis is seen as a betrayal 
in many developing countries that faced intense U.S. pressures to liberalize their economies. In some 
developing nations, state enterprises were privatized, currencies were allowed to float against the 
U.S. dollar and painful measures were taken to bring down debts.

These advances are at risk now that credit is drying up. Countries with commodities-based 
economies are particularly vulnerable since more industrialized nations could reduce their demand 
for everything from soy to iron ore.

"It doesn't seem fair to me that those of us who endured so much hunger in the 20th century, who 
began to improve in the 21st century, should have to suffer due to the international financial 
system," Silva said. "There are going to be a lot of people going hungry in the world."

Just before meeting with Silva on Tuesday, Venezuelan leader Hugo Chavez said he believes a new 
economic order is in store for the planet.

"What's to blame? Imperialism, the United States, the irresponsibility of the United States 
government," said the self-avowed socialist and frequent U.S. critic. "From this crisis, a new world 
has to emerge, and it's a multi-polar world."

China's influence in the outcome of all this could be profound because it is a huge investor in U.S. 
debt. It is already calling for strict new international regulatory systems to apply to globalized 
financial markets.

Liu Mingkang, chairman of the Chinese Banking Regulatory Commission, said Saturday before a 
weeklong bank holiday in China that debt in the United States and elsewhere has risen to dangerous 
and indefensible levels.

The rest of the world is taking notice. Many newspapers made references Tuesday to China's 
increasing importance in global finance. In Algeria, a large cartoon on the front page of the 
newspaper El-Watan showed Uncle Sam at prayer: "Save us!" he says, kneeling before a portrait of 
China's Mao Zedong.

In London, Jane Ayerson, a 20-year-old Irish exchange student, said Europeans share the blame.

"The problem started with America, but banks here have been greedy, too," she said.

___

Associated Press writers Michelle Faul in Johannesburg, South Africa; Alfred de Montesquiou in 
Algiers, Algeria; Raf Cassert in Brussels, Belgium; Jane Wardell and David McHugh in London; and 
Marco Sibaja in Manaus, Brazil, contributed to this report.