Why is America to be blamed for the present financial crisis?

Some excerpts from a recently written piece by Nobel laureate, Joseph Stiglitz

We all know that the current global financial crisis has had its roots in the American mortgage market. That was just the beginning. There were quite a few other reasons / contributory factors that led to the present sorry state of affairs -- all because of America. If you are asked to list them out, can you do a better job than this one from Joseph Stiglitz?

America exported its toxic mortgages around the world, in the form of asset-backed securities. America exported its deregulatory free market philosophy, which even its high priest, Alan Greenspan, now admits was a mistake. America exported its culture of corporate irresponsibility – non-transparent stock options, which encourage the bad accounting that has played a role in this debacle, just as it did in the Enron and Worldcom scandals a few years ago. And, finally, America has exported its economic downturn.

In spite of all this the world still loves America! Why? Why does pumping money into America make sense? Even for the third world countries?

Remarkable as it may seem, America, for all its problems, is still seen as the safest place to put one’s money. No surprise, I suppose, because, despite everything, a US government guarantee has more credibility than a guarantee from a third-world country.

What's been wrong with the IMF policies?

Traditionally its recipes included fiscal and monetary contraction, which would only increase global inequities. While developed countries engage in stabilizing countercyclical policies, developing countries would be forced into destabilizing policies, driving away capital when they need it most.