Davos…. Here is some back of envelope calculations on why the power elite at Davos (depicted so well in Laurie Garrett’s recent public e-mail) are so mad at the US. It’s pure economics. The delayed recovery of the US (the only major economy in the world not mired in the muck) and the huge run up in oil prices has body slammed the global economy. I am fairly sure that the case could be made that this war has already cost the global economy ~2% in growth. On a $40 trillion combined GDP that is a $800 b loss, 3/4 of which is borne by people outside the US. That’s $133 in income for every man, woman, and child on the globe that is now gone forever. If the potential 5-10 year global stagnation (ala Japan’s situation) scenarios some economists are predicting come true as a result of this shock, we may see this “lost” growth extend across the decade. It may now be possible to become the Herbert Hoover of the global economy. [John Robb’s Radio Weblog]
I think this is only partially correct. I think the economy would be in serious trouble no matter what, because the system of global fiat currency appears to be approaching collapse. However, the war scare is certainly making things worse, and making bad things happen sooner than they otherwise would have. The war will provide a convenient scapegoat if the economic crisis comes close enough to the war, though.