As the U.S. government steps in to rescue the financial system, Latin American leaders like Venezuela’s Hugo Chavez are taking this opportunity to criticize the free-market gospel, claiming that the U.S. free-market system has “collapsed.” David Rothkopf, joining other experts to discuss the issue, notes that these leaders now believe they can justify their leftist economic policies by pointing to the U.S. government’s recent takeover of Fannie Mae, Freddie Mac, and AIG.
Latin American governments that have not adhered to the free-market “Washington Consensus” in now feel a certain sense of vindication as the flaws of free-market fundamentalism have become increasingly evident. While most U.S. experts believe that some form of free-market system is still the best option for the future, there is an increasing consensus in favor or greater regulation. As Rothkopf sees it, this moment marks a watershed in economic philosophy, when the hands-off approach of the past 25 years will give way to a new era—one where greater a governmental role in the economy may even include some forms of economic regulation on the global stage.
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