Y376 International Political Economy March 19, 2012

Thomas Friedman  New York Times since 1981  Three-time Pulitzer Prize winner  Israel Bureau Chief  Major Books:  From Beirut to Lebanon (1989)  The Lexus and the Olive Tree (1998)  The World is Flat (2005)  Hot, Flat, and Crowded (2008)

Chimerica  Niall Ferguson idea Niall Ferguson idea Niall Ferguson idea  Friedman: “… We in America built more and more stores, to sell more and more stuff, made in more and more Chinese factories, powered by more and more coal, and all those sales produced more dollars, which China used to buy more and more U.S. Treasury Bills, which allowed the Federal Reserve to extend more and more easy credit to more and more banks, consumers and businesses…” (p. 4)

Iceland’s Banks and Melting Ice  In 2003, three biggest banks in Iceland had assets of $140 billion, bigger than Icelandic GDP  : growth of banking fueled big jump in incomes, real estate and stock prices  October 2008 collapse left Icelandic citizens holding the bag Video

Collapse of the Wilkins Ice Shelf  Wilkins Ice Shelf in the Antarctic crumbled in January 2009  Scientist blamed global warming for the collapse of this and nine other ice shelves in Antarctica video

What Happened? (Friedman’s explanation)  The trend to deregulation (especially under Reagan)  End of the Cold War  9/11  “And when the bugle sounded we heard the call: ‘Go shopping.’” ( p. 35)  “…the biggest danger America faces today is not so much that it will suddenly nosedive…it will undergo a gradual but very real erosion of its strengths and assets as a country…” (p. 41)