For more than half a century, the United States has held the reins of the world’s most powerful economic institutions. By design, Washington has long dominated decision-making at both the International Monetary Fund and at the World Bank — responsible, respectively, for big loans to states and economic development. At the same time, domestic institutions within the U.S., like the Treasury Department, have also exerted significant influence in the economies of foreign lands. The ideology underpinning much of this leverage — based on free markets and limited government intervention — was for a long time known formally as the Washington [...]
At the London G-20 Summit in April, British prime minister and host Gordon Brown asserted that “The Washington Consensus is over.” With the struggling U.S. economy pulling much of the world down with it, the “Anglo-Saxon model” is now deemed flawed. Dirigiste tendencies are in, with U.S. President Barack Obama embracing a government-funded “stimulus” package whose numbers are well in excess of his high-spending predecessor. Washington itself is moving away from the formula — consisting of fiscal discipline, market-set interest rates, competitive exchange rates, liberalisation of trade and investment regimes, deregulation and privatisation — to which it lent its name. [...]
MARDAN, Pakistan — Zeeshan Khan, a 17-year-old engineering student, says he knows who Pakistanis blame for what has become the largest migration in their country’s history. “These people are coming due to the bombing,” he said, gesturing to the thousands of refugees milling around the Mardan refugee camp. “Due to the jet artillery, the F-16s, the heavy weapons. All our houses are destroyed.” More than 900,000 people have left their homes in and around Swat valley in the last few weeks, adding to a total of 1.4 million people displaced so far by fighting between the Pakistani Army and militants. [...]
