Editorials

You would think that abysmal growth and jobs data, the first-ever downgrade of U.S. debt and heart- stopping gyrations in the financial markets would impel political leaders to at least take a second look at some of their assumptions about restoring confidence in the U.S. economy.

Bank of America and Citigroup stood out for all the wrong reasons in Monday’s market meltdown. Shares of the two banks led the decline amid new doubts about the quality of the assets buried on their balance sheets.

Financial markets can create their own dangerous dynamic, as Warren Buffett pointed out after Standard & Poor’s downgraded U.S. debt securities on Aug. 5. Buffett was on the mark.

Ever since Fidel Castro seized power in Cuba in 1959, the U.S. has sought to undermine his rule. It hasn’t worked. Perhaps officials in Washington should consider adapting the more successful strategy pursued to undermine communism in Eastern Europe.

We’ll find out soon enough what the markets will make of the decision by Standard & Poor’s to downgrade its rating of U.S. sovereign debt to AA+ from AAA. But the early response from the people who matter most in the controversy -- the Asian and European nations that Hoover up Treasuries -- seems to show a score of: U.S. 1, S&P; 0.

The Pentagon says it can handle the $325 billion in cuts that will be required during the next decade as part of the deal that ended the debt-ceiling crisis. But not a penny more.

Global markets have issued a vote of no confidence in the management of the world’s two largest economies, the U.S. and the euro area. To regain credibility, leaders on both sides of the Atlantic need to recognize the magnitude of the crisis they face.

Across the Arab world, centuries of authoritarian traditions are crumbling. Unfortunately, the bitter truth is that the West has been almost absent in the creation of a new Arab order, unlike its deep involvement in Eastern Europe after communism’s collapse.

With a drawdown of 33,000 U.S. surge troops now under way, and plans for all U.S. and NATO combat forces to exit Afghanistan by December 2014, the fate of the civilian mission -- the diplomats and aid workers -- in Afghanistan is uncertain.

The U.S. Congress may have narrowly avoided a government-debt disaster, but financial troubles are resurging across the Atlantic. If European leaders can’t find the political will to implement the drastic measures needed to stem their crisis, markets could soon put them in an untenable position.