in the region should build on the strengths of that economic model rather than dismantle it altogether. Bello believes that the fundamental lesson of the Asian crisis "is that there was not too much state intervention but too little." He says that deregulation of the banking and financial sectors in some Asian economies during the 1980s led to increased corruption. Affects on the U.S.The U.S. was largely unaffected by Asia's simmering crisis until October 1997, Hong Kong, a key investment center for U.S. business, faced economic risk. The Hang Seng index on the Hong Kong Stock Exchange fell more than 23% over a four-day period, which caused great concern among many foreign investors. As stated earlier, on October 27, U.S. stock markets reacted by falling as well. They quickly rebounded, but their decline foreshadowed the impact that Asia's economic troubles could continue to have on the U.S. Asias increased globalization has helped boost U.S. trade, but many economists say that it has also made the world economy more vulnerable to regional economic crises. The main concern among U.S. investors is the possible long-term impact of the Asian crisis. Weaker Asian currencies will likely mean that Asian goods will drop in price, making them appear cheaper to foreign consumers. These products will then be more attractive, thus making the previously attractive domestic products less attractive. As cheap Asian-made goods flood the U.S. market, domestic industries could lose some business. Job losses might result. At the same time, Asian countries may be less willing to buy U.S.-made goods because a strong dollar would make them appear more expensive to U.S. producers. That could lead to a larger U.S. trade deficit. On the other hand, consumers might benefit from the Asian crisis since imported goods--electronic imports in particular--would become cheaper. That may force U.S. businesses to cut their prices and improve productivity in order to be...
