Washington -- The American capital quivers to a drum-roll of small-town isolationism. This is crazy! The nations of the world are more closely tied, at more levels, than ever before. Americans need a government that can safeguard our interests at home and abroad as we navigate the challenging globalism of the years ahead.
To see the interconnectedness of today's world, just look at the way fallout from the collapse of Britain's Barings bank has helped unsettle our financial system. Here are just a few "transnational" aspects of this tale:
* The youthful Nicholas Leeson, a Briton who worked for a Barings subsidiary in Singapore, bet on slender shifts in the financial markets in Japan and elsewhere in Asia. After Mr. Leeson's losses became unmanageable, he fled to Germany, where local police apprehended him only after receiving a tip-off from a French reporter in Brunei.
* Bonn then received at least one extradition request, from Singapore, and may yet be met with others. In London, the venerable Baring Brothers Bank was plunged into bankruptcy; its remnants are to be bought by a Dutch conglomerate.
* Financial markets in Osaka and Singapore experienced a swift initial downswing in response to the Barings collapse, but seemed to bounce back within days. Investors in Europe took a few days longer to be rendered risk-shy by the Leeson affair. They started to leave markets in countries viewed as less sound, like Spain and Portugal, to consolidate their investing in the seemingly safer home of the German mark. In the process, they dented the peseta and the escudo, and even helped to spark the run on the dollar.
So how many countries' economies have been affected? At least five or six -- and counting.
Financial markets have always been to a certain extent transnational. But national barriers between the different markets have shrunk radically in recent years, and real-time communications have made all the major markets susceptible to one another's misfortunes. So what about the role of national governments? Note that in the whole sad tale of Nicholas Leeson, no national government played any role at all until, at the very end, Germany sent in its police to arrest him. It was even nongovernmental informants who provided the crucial tip that led to the arrest!
National governments and central banks have an evident role in regulating banks and traders who come under their jurisdiction. (A century ago, the Bank of England stepped in to save Barings when losses in Argentina brought it near to bankruptcy. This time, wisely, it let Barings die of its self-inflicted wounds.) With the globalization of financial markets, national governments also need to see that regulators coordinate closely with counterparts around the world.
But we need much more from our present-day governments than that. We need, first of all, a guiding body to strike a balance between citizens' always overlapping and frequently competing interests in the economic, strategic and humanitarian realms. And we need the kind of informed decision-making that reassures Americans that their interests will be protected in today's fast-shifting environment.
The wisdom that this requires can be gained only through sustained engagement with other countries by Americans from all walks of life -- including a robust, professionally staffed State Department.
The Baring family and its bank have long been players on the world stage. In 1803, they backed the financing of Thomas Jefferson's Louisiana Purchase -- a move that helped to transform the United States into a continental power whose people could imagine, for the next couple of centuries, that turning their back on the rest of the world was a real policy option. But if such a choice ever looked realistic (which I doubt), there is no way it looks realistic today. The manner of the fall of the Baring Brothers Bank should underline that truth.
Helena Cobban wrote this commentary for the Christian Science Monitor.