Two years after the onset of the financial crisis, the US economy still looks very bad. The reason is that the US crisis is not only the result of a real estate bubble and the resulting crisis in the financial sector, but also of a more fundamental lack of competitiveness. The US economy needs a profound restructuring, and there is no simple way to achieve that.

International investors are panicking. The EU and IMF have bailed out Greece, then Ireland and everybody's guess is that Portugal or maybe even Spain may be next. After the bail-out, these countries are in for a long and tough period of austerity and low growth. Is the Argentinian default a decade ago a better alternative?

Joining a stronger currency as the dollar or the Euro seemed for a moment to create economic miracles for many small countries in Europe and Latin America. Now after the financial crisis, this looks more as a road to trouble.

If the financial crisis has brought us something good, it is that it has exposed the ignorance with which the economy has been treated by the media. The downside of it is that few seem to have noticed, and that the economic journalists don't seem to have learned anything from it. This is particularly clear when looking at the way news about the stock market and the housing market are treated.

As the financial markets imploded in late 2008, crisis packages of some sort were implemented in most countries to soften the impact of the financial melt-down on the real economy. There has been no thorough discussion about these crisis measures, as the crisis packages because of the urgency generally were hastened through parliaments. It is of course too early to assess the impact, but they have undoubtedly been working to some extent, increasing demand and hence detaining somewhat the fall in production and employment

Denmark, in the seventies and eighties the sick country of Northern Europe with high unemployment and deficits everywhere, has made an impressive come-back during the last decade. Low unemployment, surplus on the public finances, surplus on the current account. Government debt was practically paid back in 2007. Reasonable – even if unimpressive - growth rates. Looks like a small miracle, doesn't it?

As the financial crisis unfolds in the developed world and starts impacting in the developing countries, the question arises naturally: is this just one more cyclical crisis, even if an unusually nasty one, or is there something deeper wrong about the way the “system” is working? This is hardly a new question, as this has been asked as long as capitalism has existed as the dominant system, and cyclical crises have always been an inherent part of its way of functioning. The long period of relatively stable economic growth we have witnessed in the developed world since the mid eighties had led many to believe that serious crises were part of the past, arguing that globalisation paired with more sophisticated financial markets had diminished or even eliminated this cyclical tendency.

The financial sector is at the centre of the present crisis, and it is - like the crisis from the bursting of the internet bubble in 2000, but unlike other recent financial crises – principally “made in USA” and exported to the rest of the world.

The global imbalances and the bubbles in the credit and housing markets that have been building up during the last decade have been noticed by many, and many had predicted that this would not be viable in the medium to long term. But as it often happens, the way this lack of viability expressed itself came as a surprise for almost everybody.

Everybody has probably heard about Venezuelan President Hugo Chávez' weapon deals. Tanks and anti-air missiles from Russia, warships from Spain, training jets from China, air defence systems from Belarus. The US has expressed its concern that Venezuela is provoking an arms race in South America. Its actions could endanger regional stability the US says. Really? Venezuela is number 5 in Latin America in military spending, both in absolute terms and as percentage of GDP. The Latin American leaders in military spending are two close US allies: Colombia and Chile, which in relative terms spend almost three times what Venezuela does.