Financial System Failed the Test of the Marketplace
Roger Altman, CEO of Evercore Partners | May 15, 2008
Former Fed chairman, Paul Volcker, blames this year’s financial crisis on the lenders’ and investors’ attempting to revise the age-old fundaments of finance. ++ Despite the euphoric effect of bubbles, parties involved in the financial system must remember that the further a rubber band is stretched, the harder it will snap back into its former position. ++ Credit rating agencies, securities companies, and banking regulators must, in the future, not be lulled into complacency but rather remember this crisis and heed its example.
During his last Middle East Tour, President Bush will have to accept the failure of his policies in the region. ++ Since Bush undertook to revive peace negotiations between the Israelis and Palestinians at Annapolis in late 2007, no progress has been made. ++ The American hope for a Palestinian-Israeli agreement before the end of the year seems illusory. ++ The positions of Israeli negotiators are too different from the parameters set by Bill Clinton. ++ So far a three-way summit with Bush, Olmert, and Abbas isn’t even being considered.
Obama advocates leading open and direct negotiations with everyone, from Iran to Cuba. ++ His opposition to the Iraq war, his rational stance on Iran, and his “understanding of US imperialism” suggest he will reshape American foreign policy. ++ Yet Obama’s readiness to compromise does not apply to the Middle East. ++ Since Obama’s presidency would provide for high expectations, the predictable continuity of US policy in this region could prove especially disappointing for many members of the international community.
Some highly developed nations with bourgeoning service sectors are experiencing difficulties in adapting out-dated education policies to a more competitive, business-oriented world. ++ Scandinavian countries are leading a new trend in tackling these problems with a more democratized, less standardized system of education. ++ These tactics are proving effective for people entering a global workforce. ++ Furthermore, increased research and development spending is vital for the economies absorbing this new ‘knowledge-based’ generation of workers.
The US is making a bold, perhaps doltish, move by refusing to discuss a treaty aimed at preventing weapons in outer space. ++ China and Russia have warned that a countermove would be unavoidable to ensure their own security. ++ Many are urging the Pentagon to consider the historical consequences of expanding warfare to new frontiers. ++ In reality, however, defense contractors and military commanders are controlling the debate. ++ In any case, an arming of outer space could completely shift the earth’s current geopolitical character.
