http://www.ft.com/world
The Financial Times of London’s (now commonly known as ‘FT’) World Page website is an adequate, though not among the best, compendiums of world headlines. It provides a decidely Anglo-American perspective on world affairs. While you’re there, however, also take a look at the ‘World Markets Data’ and the ‘Global Economy’ page — which can be found in the left menu. It provides a smartly presented, graphical outlay of Global Market and economic data — even some of the smaller World Markets.  http://markets.ft.com/markets/overview.a…)

President Obama Addressing Joint Session of U.S. Congress

President Obama, in his first address before a Joint Session of the U.S. Congress outlined the vision and policy priorities for his Administration. Prominently outlined as part of that vision for a 21st century America was a finely calibrated connection between the economic prosperity of the nation, and maintaining the U.S. position as the dominant global leader. The president remarked,

We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.

Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either. It is time for America to lead again

Clearly, whether or not the United States, under President Obama’s vision, maintans a leadership position in the world is heavily dependent upon how, or if the nation is able to respond effectively to its current economic challenges — fomented largely by un or under-regulated financial Markets, and the cowboy capitalism mentality of Wall St. In addition, his comments speak glaringly of a strain of ‘Economic Nationalism‘ — an inward looking, self-reliant, gobally competitive America.

What this might mean in terms of U.S. foreign policy and international relations is a tougher, stronger negotiating stand in defending U.S. global commerce interests and competitiveness; as well as U.S. economic security. This also implies a continuation of former President Bush’s Trade policy prediliction for ‘Bi-lateralism’ over Globalisation. Lastly, this tougher position on the nation’s economic security and competitiveness may contribute to a slow creep toward increased tensions with global trading partners over trade and international commerce issues, such as environmental and labor standards and ‘Rule of Law’ protections for private property rights; as well as foreign policy initiatives based on bi-lateral economic and financial markets issues. Look for increased work load for WTO lawyers and legal systems as an early sign of things to come.

 http://www.forbes.com/2009/02/18/depress…
Nouriel Roubini writing recently in Forbes magazine argues that the the current global financial crisis lays bare the failure and weaknesses of western-style capitalism, or the ‘Laissez-Faire’ paradigm. Traditionally, only emerging markets suffered severe economic shocks from such crises — and still suffer — from such problems. However, as current conditions are indicating, such sovereign risks as measured by the sovereign spread, is also starkly rising in many Western economies whose banks may be larger than the ability of the sovereign to rescue them: Iceland, Greece, Spain, Italy, Belgium, Switzerland and, some suggest, even the U.S. and U.K. It is an interesting read.

The ‘Finance and Economics’ section of the February 12 issue of the Economist magazine contains a compelling article that draws parallels between the current U.S. banking crisis and similar experiences by other rich nations — and more specifically in comparison to Japan’s experience. To paraphrase, history, it says, offers a rich array of banking crises from which policymakers can draw important lessons against which today’s rescue plans can be compared. Based on IMF data, since 1970 half a dozen rich-country crashes — from Japan’s slump after its property bubble burst in the late 1980s, to the Nordic bank crises in the early 1990s. All involved deep recessions, required massive government intervention to clean up bust banks, and led to big increases in public debt as economies shrank while government spending soared — episodes in which bad debts soared across the economy and much of the banking sector was insolvent — much like the current U.S. crisis.

But the speed of recovery differed dramatically; Japan endured a decade of economic stagnation, whereas South Korea returned to growth within two years of its 1997 banking disaster. Received wisdom holds that policy choices determined the pace of recovery. Sweden rebounded quickly because it acted fast: removing dud assets from banks’ balance-sheets, recapitalising weak banks and nationalising where necessary. Japan stalled for a decade because it took years to recognize the scale of its mess.

NOW back to the future: In his first Presidential news conference on February 9th, Barack Obama pointed to Japan as an example of what not to do. Its “lost decade”, he argued, was the consequence of “not act[ing] boldly or swiftly enough”.

There is truth to that analysis. (Read more…
 http://www.economist.com/finance/display… )

 http://www.economist.com/
The daily rag-of-choice for the G-8 mindset as far as mainstream global business and economic thinking goes. Typically sardonic and decidedly critical and pessimistic in outlook about most global economic thinking falling outside of the status-quo, but it stays abreast of critical world economic developments.

 http://www.rgemonitor.com/
This is Nouriel Roubini’s Global Economic Monitor website. It’s the shizzle as far as global economic and market intelligence websites go. It’s a subscription site, but you can still get objective insight and perspective on global markets from the lead-ins.

President Obama & PM Stephen Harper of Canada.

Many, yet, do not grasp the intrinsic connection between the economy, global financial Markets and foreign policy. If ever there were a great example of ‘Economic Foregin Policy’ at work, it was displayed today in President Obama’s first foreign trip to visit our northern neighbor, Canada. The primary focus of the President’s first official, diplomatic visit was the economic relationship between Canada and the U.S., and the North American Free Trade Agreement (NAFTA), a tri-lateral agreement governing the terms, structure and procedures of trade and economic cooperation between the three nations composing North America. The trip also focused on coordinating both the U.S. and the Canadian economic stimulus and recovery plans, renewable energy programs and global security challenges.

Notably accompanying the President were, among others, Larry Summers, the chairman of the National Economic Council; and Dennis McDonough, Director of the National Security Council — which recently issued an edict stating that ‘Economic Security’ was among the top three security threats facing the U.S.

Precisely speaking, United States ‘economic foreign policy’ has two major functions. First, to nuture, facilitate and advance a “free-market economy” and American private enterprise; and next, to promote, project and protect America’s trade, commerce, business and economic security interests abroad.

Next to national security, economic security is perhaps the single most important issue facing America today. In fact, the National Security Agency, in it’s 2009 Estimate, ranked the risks to the American economy as one of the top three national security risks facing the nation. While economics is often considered a domestic policy issue, the importance of American economic interests in driving U.S. foreign policy should not be overlooked, nor underestimated. With the emergence of an increasingly complex, transnational and interrelated global economy, America’s economic hegemony has been challenged by rising powers, as well as by more coordinated European allies. Today, economic policy revolves around developing cohesive strategies designed to augment our ability to remain globally competitive in the face of the emergent economies of India, China, Brazil and, sometimes, Russia.

One recent example of ‘Economic Foreign Policy’ is the 1994 North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico. It was the most ambitious Economic Foreign Policy initiative since the Marshall Plan. Despite some well-placed criticisms, it has since become the sine qua non of spurred economic growth on the North American continent, creating a free trade zone comprising of all three nations. Well received, for the most part, by the business sector, this groundbreaking and controversial economic pact, helped to displace jobs out of the U.S. and has contributed to lowering or stagnating U.S. wages. This has had a direct impact the decline of the U.S. dollar; on spending by American consumers — the largest component of U.S GDP; as well as impacting America’s economic standing in the world. Yes, Economic Foreign Policy matters greatly.

Fixing Global Finance
By Martin Wolf (Johns Hopkins University Press, 2008)
 http://jhupbooks.press.jhu.edu/ecom/Mast…
The latest book from FT economics columnist, Martin Wolf, explains why global imbalances cause financial crises—including the one ravaging the U. S.  right now — and outlines the steps for confronting this destructive cycle. Reviewing global financial crises since 1980, Wolf lays bare the links between the microeconomics of domestic financial markets and the macroeconomics of the Global Economy.

This week’s (7 Feb 2009) issue of the ‘Economist’ magazine has a brilliant cover story — not about the emergence, but rather, the return of economic nationalism led, unfortuantely, by the former Bush administration’s penchant for protectionist ‘bi-lateralism’. It’s an interesting peice set in context of an emerging consensus on Capitol Hill that weak money-center U.S. banks must be recapitalized, while financially dysfunctional “zombie” banks ought to be nationalized, cleaned-up and resold to investors for a tidy profit to a cash strapped federal government. Hmmm… See pg 68-70.  http://www.economist.com/opinion/display…)