Douglas Rediker: All Related Content

Since the global financial crisis began, one of the major surprises has been the continued resilience of the U.S. dollar - despite attacks on the "American-style capitalist model," financial sector weakness, and record U.S. government deficit spending. The dollar today represents almost two thirds of the world's official currency reserves. Its holders presumably believe that it will remain highly liquid, relatively stable in value, and supported by prudent economic policies by the U.S. Treasury and Federal Reserve.

With the London Summit rapidly approaching, I urge participants to take bold steps to address the fundamental structural issues in global finance that have, in part at least, led to the current economic crisis. I recognize that there remains a debate between those who believe that the current economic environment compels a dramatic rethink of the foundations, systems and structures upon which the global economy operates, and those who believe that such sweeping reforms are both unnecessary and politically impossible.

Talk of the financial crisis and the stimulus package often involves furious debate about the deficits that caused it or those that are likely to result from it. There's discussion of current-account deficits, trade deficits and, of course, budget deficits. But there are other more global deficits created by this crisis that may prove even more central to the future of America's role in the world. They include deficits of capital, ideology, creativity and attention.

Washington DC -- Douglas Rediker, director of New America Foundation's Global Strategic Finance Initiative, testified before the U.S. Senate Committee on Foreign Relations today on the foreign policy implications of the financial crisis.