Stock markets collapsed in Asia and Europe earlier today, leading to losses here. President Bush spoke from the Rose Garden this morning to urge calm, but shares fell both during and after his remarks. The global financial architecture is disintegrating as economies deleverage, and no bailout, rescue, or emergency plan seems able to restore calm. So we need to begin thinking about the geopolitical consequences of a worldwide depression. Let’s quickly run through what has already been said. The decrease in global economic activity will lead to further declines in energy prices. Their drop will inevitably weaken the Russian, Venezuelan, and Iranian economies, and this development could reduce the threats posed by Putin, Chavez, and Ahmadinejad. At the same time, the United States will no longer be able to afford such a large...
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