Commentary: Is The Nation State Obsolete In A Global Economy?

The U.S. and Japan battle to the brink over trade in autos and auto parts. The dollar tanks, and central banks struggle to defend its value. The Mexican peso crashes, and the U.S. cobbles together a rescue package. Leaders are learning that the global economy is a messy place, where events easily spin out of control. What's more, what one leader thinks is the best domestic policy often doesn't matter, since international considerations swamp the best-laid plans. The economic sovereignty of nations is eroding, and it hurts. "The ultimate resource of a government is power," observes Neal Soss of economic consultants Soss & Cotton Enterprises LP, "and we've seen repeatedly that the willpower of governments can be overcome by persistent attacks from the marketplace."

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