World to US: Drop Dead

So it seems that US leadership isn't dead - on the current financial crisis, it appears the US government is going to have to take care of things on its own.

Matt Eckel at Foreign Policy Watch has some uncharacteristically nationalistic angst as a result:

I understand that we haven't exactly been making friends and kissing babies over the last eight years, and I understand that schadenfreude would seem to dictate letting the United States stew in its own problems at the moment, but this is a global economy, and expecting our government to do all the financial heavy lifting (especially when we may actually end up bailing out foreign banks in order to maintain systemic integrity) is free-riding of a rather irritating kind

The flip side to this is not all bad - at least the US is firmly in the driver's seat in crafting a response, like it or not.

As Eckel too admits, I don't know enough about finance to have much useful to say on the details. But on the politics of it, there are clearly problems with the US crafting, and payinf for, a solution on its own to problems that are fundamentally global.

True, the proximate cause of the curren mess seems to have been faulty US regulations and oversight. But foreign citizens shared in the benefits when times were good, and look likely to share in the costs now that they're not.

That would have been a good argument for having in place some kind of standing international agreement or mechanism to deal with this current debacle.

But there was no mechanism of any place in kind at all, let alone an international one. So it looks like the US is going to have to suck it up and pay for this on its own unless the wizards at the Treasury can come up with something to lure in the rest of the world. If there's a good alternative out there, I haven't read about it.

But the mismatch in responsibilities, costs, and benefits across countries, as well as within them, seems like a pretty obvious place to look to fix things after this crisis is past and it's time to start reworking the system so it's less vulnerable. If I were a European, I don't know how comfortable I would be with my government sitting out the worst crisis of a generation and hoping the US Congress would figure things out on its own.