When the U.S. Sneezes, the World Catches a Cold

Elba told me this saying in my first week here, but I didn’t really consider the meaning of this phrase until recently. One afternoon at lunch, we were discussing how Juan Carlos’ brother was having a rough time because he had a lot of cattle and depended on the sale of their milk. I asked why he was having a hard time and they said, “Because of the recession, of course!” Call me naïve, or stupid, but I didn’t realize other countries were having economic hardships as a result of the problems in the U.S. Turns out the saying is right- so many countries, especially China, depend on sales to the U.S. and when Americans aren’t able to pay, that means a loss for them.

Here are some facts from an article in Foreign Policy-

China: The world’s fastest-growing economy can’t help but be affected when the world’s largest economy slows down, since China relies on exports to the United States as one of its main sources of growth. In recent years, China has boasted double-digit growth. Officially, Chinese economists expect growth to slow down to 9 percent in the wake of a U.S. recession, but only if such a recession is mild, lasting two quarters. If the U.S. recession is severe—four quarters or more—and is centered on a faltering U.S. consumer who buys fewer Chinese goods, then China’s growth is likely to slow to 6 or 7 percent, a hard landing, indeed.

Latin America: Chile’s got copper; Brazil’s got minerals; Argentina’s got livestock and feed. They’ll have to scrounge to sell these and other commodities elsewhere if the United States and China isn’t buying as much as before. Prices of commodities could fall by 20 to 30 percent in a U.S. recession followed by a sharp economic slowdown. (http://yaleglobal.yale.edu/display.article?id=10398)

Further, people in third world countries like Haiti who were already struggling to get by on something like $2.00 a day are now facing extremely desperate situations.

It’s funny how I’ve been trained to think about everything going on in the U.S. for so long that I didn’t even consider the effects of our recession on other countries. I mean, we’re pretty self-centered in the U.S. Millions of people have died in the past few years in Darfur, but we might only see a 10 second clip about it on the news and then the reporter moves on to “top news” like Britney Spears not wearing underwear. We’ve clearly got to get our priorities straightened out. Further, as someone in a journalistic field, I’m a little embarrassed by the lack of quality journalism anymore. No wonder the public trust for journalists has significantly declined.

Well anyways, I’m just on one of rants again. I know this is all common knowledge for many people, but being in another country has made me consider things from others’ points of view. I also learned about the U.S. intervention in Chile with Allende in the 70’s but I won’t start talking about that now because no one would read it anyways!

I’ll just end with some food for thought. Every day I buy the newspaper here, and everyday I read something about Bush or Obama or something going on in the U.S. On the nightly news, it’s the same deal. The majority of Chileans are pretty well-informed on world happenings. Now, quiz for the day: Who can name the President of Chile without looking it up? Hmmm…