Jeremy Warner: The buck doesn't just stop with the US

Outlook Perhaps it is the new administration, or simply the credit crunch, but the usually sizeable American Davos contingent is notable by its absence this year. One of those who has made the trip is President Bill Clinton. He has been standing in for an absent Larry Summers, the new US deputy Treasury Secretary, at a number of sessions. Now, he was prepared to eat a bit of humble pie, openly admitting that the Chinese are right to blame the entire crisis on the US. Since the crisis started in America, this seems unarguable enough, but is Mr Clinton's full-frontal admission of American guilt entirely correct?

The former US president blames the crisis on the absence of a coherent American strategy for the economy post the technology bubble of the 1990s. Instead, all the economic growth went into finance, housing and consumerism, the benefits of which turned out to be largely illusory.

Yet these bubbles weren't entirely made-in-America phenomena. To a large extent, they were created by the capital surplus countries of the developing world, and particularly China. In essence what was happening was that the Chinese were lending the Americans the money to buy Chinese imports and inflated real estate.

There is zero evidence here at Davos of the Chinese accepting the part that these capital and trade imbalances played in stoking the crisis. Nor does Mr Clinton seem to accept it either.

In his view, the US economy will never emerge from its present mess without support from the export-dependent, savings-rich countries of the developing world. China is seen as one of the main buyers of the Treasury bills that will finance the Obama fiscal stimulus and thereby get Americans buying Chinese goods again.

In other words, the crisis is to be treated with the same medicine that helped cause it in the first place. Is this really the only way out? As ever, the politicians speak with forked tongue.

The "buy American" policy that accompanies the fiscal stimulus will deliberately exclude Chinese infrastructure imports such as steel. Mr Clinton says we are all in this crisis together, so the world had better deal with it together too. Again, fine words. Regrettably, the reality could all too easily be an undignified descent into self-interested, beggar-thy-neighbour trade and financial protectionism.