Now that we have recovered a bit from the shock of having wrecked our economy, our journalists are going to be treating us to a constant stream of articles reminding us of how dumb we were, notably by comparing us to smarter people in other countries. http://www.nytimes.com/2008/12/20/business/20nocera.html is a painful example of what is surely going to be a flood of similar articles. While the U.S. was pouring most of its cash into real estate speculation, India was discouraging the application of its precious capital to this non-productive use. Indian banks financed factories and business expansion. Americans not only financed unproductive construction here in the U.S. but also financed real estate deals in India that the banks there were prevented from touching. Now India is on the verge of making a $2500 car while the average American is looking at paying $2500 in extra federal income tax every few years for the privilege of bragging that GM and Chrysler never had to go through Chapter 11.
[We cannot soften the pain by arguing that India impeded economy growth by forcing banks to be conservative. The CIA Factbook says that India had real GDP growth of 9% last year; the number for the U.S. was 2% (much of that absorbed by our population growth rate of 0.9%, so per-capita GDP growth was minimal).]