The president of the World Bank recently issued a statement suggesting that America’s days as an unchallenged economic superpower might be numbered and that the Dollar was likely to lose it’s favored position. Additionally, it was suggested that the euro and Chinese renminbi would assume bigger roles in the world’s economy. The World Bank, which is financed by governments around the globe, has no say over the economic policies or large nations or over currency matters.
While World Bank president, Robert B. Zoellick’s comments might seem unusual, his experience as a trade representative and deputy Secretary of State provide a creditable backdrop. When you dig deeper into his comments, he’s clearly taking a shot at Obama’s financial policies and the role of the Federal Reserve. His underlying comments suggest that the U.S. government will struggle as it tries to strengthen the financial system. This is the same government, through lax and failed policies, has allowed the country to fall into one of the worst recessions in history. What Robert B. Zoellick is alluding to is the government has a poor record of accomplishment in fixing anything, so why should they start now? Given the growth potential in the international markets, especially in China, Zoellick’s comments seem well founded. While Obama and the government wrestle with ways to improve our economy, growth is well underway around the world. Is Obama playing for the short-term or long-term? Does he understand that U.S. economic growth depends on the free market system with incentives to grow business, not more government policies and higher taxes? The jury is still out but maybe Robert B. Zoellick knows more than we think.
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