A Financial 9/11

By Miliband, David | Newsweek International, April 6, 2009 | Go to article overview

A Financial 9/11


Miliband, David, Newsweek International


Byline: David Miliband

After 2001, the foreign policies of many countries were shaped in response to the terrorist attacks of September 11, which had wrenched minds back to the imperative of national security. Today those foreign policies are again being reshaped--but this time by the economic crisis. And the changes will be as profound as those wrought by 9/11.

An economic crisis does not kill and maim in the same way as do terror attacks. In the current case, its impact will be more diffuse, more long-term and less visible. But the effects may be just as far-reaching, stretching across more countries and covering more aspects of nations' lives, not just security.

The history of past crises shows that our fate will be determined less by the event itself than by how we respond. The U.S. Smoot-Hawley Tariff Act of 1930 is an often-quoted example of how a mismanaged recession was turned into a depression. By contrast, the financial crashes and panics of the early part of the 20th century sparked a wave of institutional innovations, with changes to central banking, labor and competition laws, and consumer safety regulation.

In the current case, the wrong response is clear: to pander to protectionism, defer action on climate change, turn inward and succumb to extremism. Such warnings a year ago would have sounded alarmist. Today, with governments struggling to hold on to power--those in Latvia, Iceland, Hungary have already fallen--they feel all too real.

But while the crisis is giving new momentum to the politics of fear, it is also giving new energy to the politics of hope. What the legal scholar Roberto Unger calls "false necessities" no longer constrain our thinking. Old orthodoxies have crumbled, leaving space that either progressives or reactionaries can fill. To ensure they prevail, progressives must address the deep economic, environmental and political imbalances that gave rise to the current mess.

Economic imbalances between rich and poor created the market in subprime mortgages as banks lent to people who could not afford to repay loans. Growing global financial imbalances between countries with surpluses and those with deficits depressed interest rates and created the demand for risky securities.

Americans are now beginning to save more. China is boosting domestic consumption. Certain risky financial services look less attractive. But some imbalances will not correct themselves. In fact, the gaps between rich and poor, within and between countries, may be exacerbated. That is why governments need to rebalance the relationship between the state and markets to create a fairer, more equal distribution of rewards. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Financial 9/11
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.