Sunday, October 26, 2008

Economist warns a successive defaults by many smaller countries

David Smick, author of “The World Is Curved” (a counter-argument to Thomas Friedman’s “The World Is Flat”) has a column in The Washington Post today warning that entire countries could soon go bankrupt, and take down several major European banks with them. He mentions specifically Pakistan, Hungary, Belarus and the Ukraine, and even South Korea, suffering from major export losses. Iceland has already had to be rescued.

The column appears on p B03 of “The Washington Post” Outlook section today, link here. It is titled “If Entire Countries Go Broke, We’ll Go With Them.”

He also mentions that several European banks have assets greater than their corresponding country’s GDP.

Of course, it’s clear that a default by Pakistan poses grave security problems since it has small nuclear weapons. South Korea could obviously be jeopardized again by the North.

1 comment:

Anonymous said...

Similar to David Smick's book, a counterfoil to Friedman's "The world is flat", so also there is a small, but interesting book, by Aronica and Ramdoo, "The World is Flat? A Critical Analysis of Thomas Friedman's New York Times Bestseller," which offers a counterperspective to Friedman's theory on globalization.

Interestingly enough, the book written about two years back, discusses in the following chapters,
"Debt and Financialization of America"
"America"s Former Middle Class"
"A Paradigm Shift for America" with prescriptions for the future

the debt ridden American society, deregulated financial institutions, mortgage crisis and other related issues, with clear pointers to the economic crisis gripping US today. For more information regarding the same, check this out:

This is a small book compared to the 600 page tome by Friedman, and aimed at the common man and students alike. As popular as the book may be, some reviewers assert that by what it leaves out, Friedman's book is dangerous. The authors point to the fact that there isn't a single table or data footnote in Friedman's entire book.

"Globalization is the greatest reorganization of the world since the Industrial Revolution," says Aronica.

You may want to see
and watch
for an interesting counterperspective on Friedman's
"The World is Flat".

Also a really interesting 6 min wake-up call: Shift Happens!

There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation