Plagued by the financial crisis that originated in the United States, the world economy has been thrown into chaos. While countries are battling the crisis, outgoing U.S. Treasury Secretary Henry Paulson has been playing a blame game.
Paulson said a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis. The current U.S. Federal Reserve Chairman Ben Bernanke is also part of the game. He sees savings from countries like China as a cause of the property bubble in the United States.
Their remarks made headlines but cannot change the facts. It is widely accepted that the U.S. low interest rate policy, which encouraged excessive spending and caused the sub-prime crisis, was at the root of the problem.
The Fed used this policy to save the country's economy from a contraction in the 1990s, when China and other emerging economies had no large trade surplus or savings.
Apparently, Paulson has mixed up cause and effect by suggesting that emerging economies pushed down U.S. interest rates.
Since former President Richard Nixon took the United States off the gold standard in 1971, the U.S. dollar has been the currency most used in international transactions.
The United States remains the world's largest economy and the status of dollar has not changed radically. China and other emerging economies were obviously not the leading powers in the global economy and therefore not able to cause the current crisis.
As the ancient Chinese sage Confucius said: "On seeing a man without virtue, examine yourself to be sure you do not have the same defects."
Even some American scholars agreed that internal problems, including over-spending, rampant use of financial derivatives and lack of market supervision resulted in a low savings rate and huge U.S. trade deficits.
The U.S.-borne crisis has hurt stock markets around the world. China's Shanghai Composite Index lost 65.4 percent last year, the seventh-largest decline among world markets. Iceland's OMX Index had the biggest loss of 94.4 percent.
Amazingly, there were no U.S. stock indices on the list of the top 20 losers. Although New York's three stock indices fell to the levels they were at 10 years ago, the drops were much smaller than markets elsewhere.
Analysts say U.S. investment institutions sell off overseas assets when facing a credit crunch at home, which results in disastrous withdrawals of foreign capital from some emerging markets. This was why the woes of the United States have inflicted pain on the world economy at large.
If we compare the U.S. economy to a car, emerging markets have somehow served as windshields amid the battering of the financial storm. Can we blame the windshields for the failure of a car?
Imbalances in global trade and investment did have a role in the crisis but were not at the root of the problem. Loose supervision that helped pump excessive dollars into circulation was the root cause.
When a morally upright person is mired in difficulties, he or she will engage in introspection rather than shift responsibility. China has moved to cope with the problem with a stream of measures and so have other large world economies.
It is not time to play a blame game. Regulators in the United States might not want to miss the chance that they failed to seize before the crisis, when property companies, investment banks and insurance companies juggled various financial products and Wall Street "elites" snatched tens of millions out of the bubble.