[Bush] talked [at the UN] about terrorism and terrorist regimes, and about governments that allegedly support terror. He failed to notice that the delegates sitting in front of and below him were shaking their heads, smiling and whispering, or if he did notice, he was no longer capable of reacting. [...]

“Absurd, absurd, absurd,” said one German diplomat. A French woman called him “yesterday’s man” over coffee on the East River. There is another way to put it, too: Bush was a laughing stock in the gray corridors of the UN.

The American president has always had enemies in these hallways and offices at the UN building on First Avenue in Manhattan. The Iranians and Syrians despise the eternal American-Israeli coalition, while many others are tired of Bush’s Americans telling the world about the blessings of deregulated markets and establishing rules “that only apply to others,” says the diplomat from Berlin.

But the ridicule was a new thing. It marked the end of respect.

The article continues,

Is it only President George W. Bush, the lame duck president, whom the rest of the world is no longer taking seriously, or are the remaining 191 UN member states already setting their sights on the United States, the giant brought to its knees? UN Secretary General Ban Ki Moon referred to a “new reality” and “new centers of power and leadership in Asia, Latin America and across the newly developed world.” Are they surprised, in these new centers, at the fall of America, of the system of the Western-style market economy?

The fall of America? We were always taught, as citizens of any great empire in history, that our global empire would last forever. The American middle class rules the world, right? Not anymore — the middle class is disappearing, and the UN Secretary General is already talking about “new centers of power.”

I don’t know if any news agencies are reporting about this kind of pessimism in Europe. Obama, though, at least recognizies America’s fall from grace. Does he see how bad it really is?

The banking crisis in the United States has shaken many things in recent days, not just the chancellor’s affection for America and the respect the rest of the world once had for the US as an economic and political superpower. Since the US investment bank Lehman Brothers plummeted into bankruptcy two weeks ago, the financial crisis has developed a destructive force of almost unimaginable strength. The proud US investment banks with globally recognized names like Merrill Lynch and Goldman Sachs have all gone bankrupt, been bought up or restructured. The American real estate market has essentially been nationalized. And the country’s biggest savings and loan, Washington Mutual, has failed and been sold at a loss.

In light of the almost daily reports of losses in the financial sector, it seemed almost secondary to note that the disaster had also turned into one of the biggest criminal investigations in American history. The Federal Bureau of Investigation (FBI) is already investigating 26 large financial corporations as well as 1,400 smaller companies and private citizens for possible fraud.

Economists now characterize what began two years ago with falling prices in the American real estate market as the biggest economic disaster since the world economic crisis of the 1930s. No one knows whether and how the meltdown of global financial markets, which would have grave consequences for the world economy, can still be prevented.

And now, of all times, the world is faced with a preeminent power that no longer seems capable of leading and a US president who is not even able to unite his divided country in an hour of need.

For weeks, Bush ignored the crisis, insisting on the strength of the market and telling Americans: “Everything will be fine.”

Indeed — we might finally be reaching the point at which Americans are no longer pacified by such platitudes. We are in a new America.

This is no longer the muscular and arrogant United States the world knows, the superpower that sets the rules for everyone else and that considers its way of thinking and doing business to be the only road to success.

A new America is on display, a country that no longer trusts its old values and its elites even less: the politicians, who failed to see the problems on the horizon, and the economic leaders, who tried to sell a fictitious world of prosperity to Americans.

It’s a very long series of articles, but take the time to read it: The End of Arrogance.

Representative Adam Putnam of Florida, the No. 3 House Republican, said Pelosi’s “speech cost us votes” because it set a “partisan tone,” a reference to her comment before the vote blaming Bush administration policies for the crisis.

Democrats voted 140 to 95 in favor of the legislation, while just 65 Republicans backed the bill and 133 opposed it. Bloomberg.com

If so, what did that look like?

“Bush’s policies got us into this mess.”

Joe Blow Republican replies, “That’s a personal and party insult! I’m voting ‘no’!”

I’m not sure whether the bailout is a great idea, but I’m a little nervous about the alternative. On the other hand, I’ve a feeling that this is only a plan to get us through November 2008. With banks failing throughout Europe, this crisis is taking on a semi-global dimension, so I’m not sure buying bad debt in America will do much good at all in a globalized economy.

Besides, I’m not sure that $700 billion is really a significantly large number:

The Dow Jones-Wilshire 5000 folks say the stock market lost $1.2 trillion in value today. Year-to-date, the figure is $4.2 trillion. [...]

If the stock market closes tomorrow unchanged, this will be the third-worst month for the S.&P. 500 since World War II. The two months that were worst marked panicky lows, so perhaps there is hope. (NYT)

Bets for tomorrow? I’m thinking we’ll see another significant drop. Maybe the index will drop a cool 1k in a day?

US Treasury Secretary Henry Paulson said after meeting members of Congress that legislation would be required to help rid US banks of their bad assets.

He said this was at the heart of the rescue plan, which will be worked out over the weekend.

BBC NEWS | Special Reports | US pledges financial rescue plan

It’s taken years of mismanagement and lack of oversight and regulation to create this problem and our noble leaders are planning on solving it over the weekend?!

Anyone who wasn’t worried before this announcement should be now.

Socialism, 21st Century Style - Floyd Norris - Business - New York Times Blog.

A colleague once bemoaned the lack of solidarity concerning the war in Iraq compared to that in World War II.

There are a lot of differences, cultural and otherwise, and the cultural differences have a lot to do with what happened in Vietnam. Even without Vietnam, though, there are enough differences between the US of 1941 and the US of 2008 to explain compellingly why we were more united in the effort 60+ years ago than we are now — and none of these reasons has anything to do directly with the war itself.

Certainly there are important differences regarding the nature of the wars: Hitler was not hiding his ambition to conquer Europe; Iraq was, at the very least, not being blatantly aggressive. But that is not the fundamental difference.

The main difference is economic.

The economic reason people were so united was that we had to pay for the war somehow — then and there. We bought war bonds; we conserved; we preserved; women took men’s jobs; we skipped vacations.

The Second World War was an expensive proposition. It was even more expensive considering the fact that America had just suffered the Great Depression. It was still more expensive considering the fact that America the dollar was still based on the gold standard, and all that money had to back by something other than loans and good intentions, as it is today. So when we built a plane or manufactured a round of ammunition, it ultimately had to be backed with gold. The government could not just print off money or get a loan. It had to pay for all the materials outright.

James McGovern explained it thusly in The Boston Globe

Currently, we are paying for the war in Iraq not through the normal budget process but by borrowing and increasing the national debt - by putting the costs onto the national credit card. Every morning, countries like China and India buy up this debt, further weakening our economy and our national security. (Globe)

Not so in 1941. If we went to war, we paid for it.

That’s why World War II stimulated the American economy — because real money, backed by gold — was changing hands. The current war does nothing to stimulate the economy because we’re only getting loans to pay for it.

The only way to change this is to get America back on the gold standard. However, this is all but impossible: most American’s don’t even know that we’re no longer on the gold standard, and even if they did, most wouldn’t want to return. “Why, we have enough to pay for with gas at $3.30 a gallon!”