In theory, economics is a positive-sum game. The growth of one country doesn’t make the rest of the world poorer.
Still, Former Fed chairman Paul Volcker argues that the rise of China and other emerging economies pose a challenge to the US.
“I don’t know how we accommodate ourselves to it. You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do,” Bloomberg quotes him as saying in an interview with PBS’s Charlie Rose taped yesterday.
“I would like to think that given the history of the past, given the strength, actual and potential of the American economy, we can still provide a kind of indispensable element of leadership here. But it’s not going to be dictatorial, I’ll tell you that. It is very hard to herd these cats together.”
He also hit on themes he discussed last week, including his support for the Federal Reserve as the key financial regulator.