Warning: gloat alert!

The world is all atwitter with this current economic crisis, from Roubini to Summers, and I’ve been reading it all with a bit of a smile on my face. Yes, we were hit too, but not as badly as some. The power of planning.

What’s amusing to me, though, is how the strident rationalisations ring out. Some schmuck academic who obviously earns more than his IQ can handle at Counterpunch wants to tell me how hard done by, how “wounded”, he was by his association with Madoff. No sympathy here. Bankers say it’s not all their fault, where was the government and its regulations? Well, considering you were instrumental in dismantling the Glass-Steagall Act during Clinton’s tenure as Prez, guys, I’d say pretty much where you wanted it to be. In the toilet.

And financial high-flyers are committing suicide left, right and centre and, you know what, I think it’s too good for them. Typical of them to lord it over everybody when times were good (these people are insufferable at social events) and then take the easy way out — leaving their families and companies high and dry — when times are bad.

The big investment banks ran the whole MBS/CDO/over-leveraged assets fiasco like a boys’ club. After all, there was never any due process involved. It was just one old white guy talking to another old white guy. (I presume Vikram S. Pandit, CEO of Citigroup, got a “Pass” card.)

China and the United States are now stuck in a deadly embrace that will destroy both their economies if either tries to pull out of the diabolical relationship. (Insert “coitus interruptus” joke of choice here.) It’s not a victory in the classic leftist sense, but you gotta grab what little joys you can from life.

There are still unanswered questions about how Europe’s banks got hit so hard by Mad Madoff, while the US ones escaped unscathed (suffering mortal wounds from other instances of “friendly fire”). And I would suggest Ben Bernake should be flogged for his comment that the meltdown is all the fault of “developing countries”, but he’d probably enjoy it too much.

So where’s the silver lining, you ask? It’s there for everyone else. For a change. All the other little countries who were “developing” rather than “developed”, as Ben would like to say, who were considered too immature a market to be let in on the “big boy” deals. It’s for the countries who managed to resist the seductive come-hithers of the investment banks, and were too small for the Fed to bother with. Now is our/their time to shine.

I know a lot of you haven’t been following this whole fracas closely, so please forgive me for the boring economic news, but I find this terribly interesting, as well as being — in the long-term — potentially wonderful.

Here’s how I see it. This depression, too, will pass. And what’s after that? Well, what’s after that (I’m hoping) is a world that belongs to the “developing” nations that the West so often sneers at. My feeling is that where you have: (a) a good manufacturing base, (b) a diversity of resources, and (c) a fiscally conservative central bank ruling the roost, a standout recovery is inevitable. Here is also where I must disagree with Nouriel Roubini, someone I have utter respect for, when he looks askance at the banks of Central Europe (although I agree with him that the countries of Eastern Europe — such as Estonia, once the poster-child of neoliberalist thinking, and Latvia — are now rock bottom). I think he’s being taken for a ride by analyst reports from Western banks that would like every other financial institution in the world to be in the same hole they’re in. The point is, Central European banks have been notoriously conservative with regards to their investment and lending policies (I’ve been telling J that for well on 10 years now), and I think they’ll bounce back in no time. There may be a few tatters around the edges, inevitable in this day of international financial coupling, but the fundamentals are strong. Or, at least, I believe them to be.

This is a golden opportunity for the smaller nations of the world to resist the blandishments of those who would ultimately do them harm(*), and stand strong. All they have to lose is their future prosperity.

(*) I think Jeffrey Sachs should be tried for economic crimes against humanity myself. And then we can start on the Chicago School of Economics, and move swiftly onto the IMF (issuing bonds, but with no financial problems? Really, IMF?) and the World Bank.