Is there a correlation between the internet and the current American/ global financial crisis? Yes, and I would like to prove it to you today. First, let us set the premises. What has happened that have resulted to the financial crisis and what will be the likely actions of states affected by this crisis. I have taken Francis Fukuyama's article in Newseek this October to provide a reason for the crisis occurence. Indeed, the meltdown of American finacial system is unprecedented in history. As Fukuyama sees it, it is the end of Reaganism and Tacherism, also referred to as the NewRight. The New Right rests on deregulaltion, privatization, and liberalization of the economy. These have become the core principles of the "WashingtonConsensus" implemented by the US, UK, IMF, and WB.
The absence of effective regulation over the derivatives and futures trading in Wall Street is generally acknowledged as the reason behind the excesses that have led to currentfinancial meltdown. Hence, as Fukuyama says, Reaganism and Tacherism have failed.
As to be expected, the pendulum will swing to the opposite side of theWashington Consensus. The bailout and rescue package of many governments is a return to regulation. The government must see to it that the injection of capital will stimulate the financial sector again. The government decision to buy stocks in the financial sector means that the government will acquire equity in these banks. This is "partial nationalization" as described bysocialists in Europe.
What is clear now is that the governments of the US, EU,Japan and ANZ are all moving away from the New Right.
At this juncture, let me share with you the article of Paul Kedrosky entitled "the first disaster of the internet age." In this article he showed how internet has contributed much to the acceleation of financial markets, businesses that contributed to the current financial crisis. According to Kedrosky, because of the free information in the internet it was utilized by the genious in wallstreet to increase global credits further. just a quick note, 3 trillion of global credit while there are only 8oo billion of dollars circulating to pay for the debts. So, what can you assess from this stats? Where will we get the money to pay for such unsurmountable debts? Maybe at the end of the day, we might have a cashless society.
To tie this up, we have seen the concomitance of internet to the current financial crisis. Kedrosky suggests however,"The Internet, of course, is just a technology, to be used for good or ill. Is there a technological fix that would help prevent a similar mess? One of the ways of averting the next crisis is to make the Internet better at consolidating information. Right now when you go to financial sites you are deluged with information about stocks and major market indices, plus some news headlines, and on and on. What if, instead, you saw something akin to the dashboard of a car—with dials and knobs corresponding to what's going on in credit markets, derivatives, commodities and stocks. Instead of giving endless tables—the sort of thing that used to clutter newspapers—imagine heat charts (red is bad, green is good) and simple graphs. The financial dashboard would interpret information: here is what is currently working properly in financial markets, here is what isn't, and here is what you should be terrified about. If you want to know more you can click and find out. A well-designed dashboard will at least make sure you know enough not to be surprised."
