It is a set of policies formulated between 15th and 19th streets by the U.S. Treasury, and World Bank. Countries should focus on stabilization, liberalization, privatization.

There is a clear and strong link between the economy's present woes and the Iraq war. The war was at least one of the factors contributing to rising oil prices - which meant Americans were spending money on imported oil, rather than on things that would stimulate the american economy. Hiring Nepalese contractors in Iraq, moreover, doesn't stimulate the American economy in the way that building a school in America would do - and obviously doesn't have the long term benefits.

The IMF is a more complicated issue. I think there is a broad sentiment among both the left and the right that the IMF may be doing more harm than good. On the right, there's the view that it represents a form of corporate welfare that is counter to the IMF's own ideology of markets. But anybody who has watched government from the inside recognizes that governments need institutions, need ways to respond to crises. If the IMF weren't there, it would probably be reinvented. So the issue is fundamentally reform.

When you're facing the threat of recession, you need to have an expansionary monetary and fiscal policy. Pre-Keynesian, Hooverite views are dead everywhere except on 19th Street in Washington.

I'm writing from New Zealand - a country that decided from the beginning that the War was wrong, and chose not to participate in Iraq War.

Fortunately, America remains a robust democracy, where most individuals are not afraid to speak out. What we have done in Iraq has, however, compromised out standing as an advocate of basic human rights - the prime minister of one country responding to criticism of America for its human rights put it, it was liking having Dracula guard the blood bank. The loss of America's moral standing has been one of the great losses of this war.

For that to happen, growth has to be very strong. To get back to normalcy, we will have to have extended growth of more than 3 percent. That's not in the cards.