USA And The Future Of The World

[acharya]

Le Figaro, France

One More Effort, Mr. Obama



By Gaëtan de Capèle

While the rest of the world is setting to work to clean the Augean stables and sweep away the old order, the U.S. – where the catastrophe originated – is stalling and dragging its feet.

Translated By Merl Storr

4 September 2009
Edited by Louis Standish
France - Le Figaro - Original Article (French)

Nicolas Sarkozy has been mocked greatly during the past year for his crusade against the excesses of the financial sector, which in his view have led the world to the edge of the abyss. Media pundits made fun of his “posturing,” which seemed to be about handing over a few convenient scapegoats to the court of public opinion, the better to hide politicians’ own failings in the run up to the crisis, not to mention their inability to resolve it. Sarkozy’s attacks on the extravagant earnings of market high-flyers; his denunciation of a financial sector, which is over-inflated and out of control; his assaults on the tax havens which provide safe refuge for fraudsters and a base of operations for shady dealing: all were dismissed as “hot air” in financial circles and among the opposition, who were secure in the belief that business would be booming again once the storm had blown over.

That was a serious misjudgment. The world is changing, and the letter to the Swedish presidency of the European Union, co-signed by Nicolas Sarkozy, Angela Merkel and, most significantly, Gordon Brown, has set the final seal on the end of an era. We surely never thought we’d see the day when the guardian of the temple of the city himself would demand in writing “binding rules” to control bankers’ pay, forbid the payment of guaranteed bonuses, discourage speculation by placing new restrictions on financial institutions and close down institutions that pose a systemic risk to the banking sector, among other things. This is not just a reform of the global financial system – it’s a revolution.

Britain’s extraordinary conversion to the hard line maintained by Paris and Berlin will be presented to the rest of the EU in a few days time. All of these proposals will then be discussed at the G20 Pittsburgh Summit at the end of September. All that’s needed now is the support of Barack Obama, and the project to place financial capitalism on a moral footing will be underway.

The financial sector itself has expressed a desire for such a moral footing – but it has to be said that it doesn’t seem to be in much of a hurry about it. Even as we are preparing to celebrate, if that’s the word, the anniversary of the collapse of Lehman Brothers, which the start of an earthquake that almost destroyed the global banking system, Wall Street is already falling back into its old habits. After shelling out billions of dollars to save the banks, Washington has failed to react to the return of exorbitant bonuses, much to the incredulity of the American people. While the rest of the world is setting to work to clean the Augean stables and sweep away the old order, the U.S. – where the catastrophe originated – is stalling and dragging its feet.

Barack Obama was elected at the height of the financial crisis, and has never minced his words about the disasters caused by a financial sector gone mad. Will he refuse to accept the moral responsibility which history has placed on his shoulders? With three weeks to go to the Pittsburgh Summit, Europe is not going to give him the option.