Topic #2

http://www.nytimes.com/2011/12/04/magazine/adam-davidson-european-finance.html?pagewanted=all

The financial crisis in Europe doesn’t have many people in the U.S concerned at this point in time. As the article states American exports to Eurozone countries only amount to 3 percent of the U.S overall economy but a financial bailout in Europe could cause a Lehman Brother’s like problem. Lehman Brothers Holdings Inc. was the fourth largest investment banks in the U.S before 2008 when the company filed for a chapter 11 bankruptcy. This created a financial panic in the banking world because essentially no one knew what to do and there was a freeze on the financial system because of all the uncertainty. This example shows exactly what Europe is trying to avoid.

I like how the article breaks down the problems with Europe and compares them to what we have experienced in the U.S. It explains how like California, Italy has experienced bad governing which has led them into a financial crisis. Mississippi is like Greece and other smaller Eurozone countries that have been living off of richer countries to keep their economies afloat. The richest country in the Eurozone is Germany which is compared with Wall Street here in the U.S. None of the struggling countries share a bailout plan which in essentially means they may be on their own.

The people who are risking the most and will be suffering the most are the citizens in the poorest countries of the Eurozone. If their economies go under, imports and exports will be effected which would lead to lower wages for workers. With depression like characteristics people could be forced out of their homes. Hypothetically, if these countries had chosen a neoliberalism type of government maybe this situation wouldn’t have happened. Believing in neoliberalism means a country believes in promoting privately owned companies and believing that “the people” run the economy.

Without having been controlled by big business or having big shot government officials running the country, making sure their pockets are full and everything is to their liking before the people’s has led to the demise of these country’s economies. Having an economy run by citizens of a country may or may not be the best idea but obviously something hasn’t been working which has led to the decline of the poorest countries in the Eurozone.

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