US speaks sense but no one listens
How the mighty have fallen! America used to be the world's chief financier - and financial adviser. But to hear the nasty reactions of European finance ministers on Friday, the US is now more of a problem than a solution.
Treasury Secretary Timothy Geithner was invited to a meeting of euro-zone finance ministries. Seeing how European officials have messed up in their handling of the financial crisis, what Geithner said actually made sense. He essentially said euro-zone countries needed to act with one voice to calm markets, and to put up much more money in whatever bailout programmes they had devised so far. They needed to demonstrate they have the will and means to prevent a systemic collapse, he warned.
European leaders, of course, have been doing the opposite, bickering among themselves and consistently reacting to market turmoil rather than anticipating it. There are serious talks in Germany about letting Greece default on its debts.
The official euro-zone reactions to Geithner? The finance ministers of Austria and Belgium said the Americans should shut up and listen. Jean-Claude Juncker, president of the finance ministers group, said it would be a waste of time to discuss bailout details with a non-member of the zone.
The world has changed. While Geithner talks sense, he is in no position to act on it. The US role in triggering the global crisis is irrefutable, its credibility seriously dented.
Shortly after the Asian financial crisis, Time magazine ran a famous cover titled 'The committee to save the world', featuring former Treasury chief Robert Rubin, his then deputy Larry Summers, and former Fed chairman Alan Greenspan. Now, the world would be happy if the US could just save itself.