The 700 Billion bailout failed to pass the lower and more democratic house (national character rather than federal) with those in tight electorates voting against. Despite this the fed pumped 630 Billion into the system anyway and markets still fell. The banking system is too big for one nation-state - even a hyper-power with the reserve currency - to effect. The money flows are simply too large.
It most likely means that the only way a nation-state can recapitalize failing institutions is by nationalization and taking over the assets like the US did AIG. This is not politically acceptable in the US, and rightly so, as it is considered socialism, however it leaves the other alternative that these bank fail via the free market and the remaining stronger banks and investment houses survive and expand in that environment.
This can mean economic turbulence within a voting cycle, and that means politics will get involved. Unfortunately for the US the republican party is without leadership and the White House is distrusted by Congress. (more)
Another data point for a state having no legitimacy unless it takes a social democratic approach. Nathanial Fink describes the counter-insurgency campaign in Afghanistan:
Consider, for example, the question of roads. When U.N. teams begin building new stretches of road in volatile Afghan provinces such as Zabul and Kandahar, insurgents inevitably attack the workers. But as the projects progress and villagers begin to see the benefits of having paved access to markets and health care, the Taliban attacks become less frequent.Non-state actors gain their political legitimacy in the same way. Hezbollah and Hamas both have social democratic and judicial components which not only replaces a weak state but helps keep it out of those areas. Hezbollah is the second largest employer in Lebanon. It runs hospitals, orphanages, discount pharmacies and garbage collection. All of those are services which governments in Australia provide. (more)
Just prior to the Second Punic War, Rome's greatest diplomatic weapon was its military projection and the Pax Romana it could provide. Rome did not conquer so much, as city-states and kingdoms willingly placed them self into the Pax Romana and allowed Roman military projection to protect their borders and interests. Spain was largely conquered in this way, as was Greece.
In 221 BC Rome had provinces in Sicily and Sardinia. To their west was the military power of Carthage, and to their east the fractured remnants of Alexander's Macedonian Empire. Both of whom could threaten, not Rome's military power, but its Pax Romana. We see a different Senatorial policy from this point on, which was also reflected in Publius Cornelius Scipio Africanus' military policy toward Carthage. It was not enough for Carthage to be beaten, it had to be beaten so well that it was in permanent submission and not able to threaten Roman military projection - ie Pax Romana.
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From TheAustralian;
Al Queda to establish an Islamic State in Iraq
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Where do the analogies between Rome and an Australian Republic coincide. Pax Romana was real, and Italy did benefit from the Roman commercial and civil view of citizenship and half-citizenship. Prior to Roman dominance of Italy there was constant warring between city-states, tribes, towns and the immigration of Gauls from the north. Rome's military extension halted the incursion of this violence - this is the Roman Peace or pax Romana.
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A jot; John Robb has a an interesting statement
that contrasts the nation-state with the market-state
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Is social democratic organisation the only way an elected government can maintain their legitimacy against intrusion from non-state movements? (more)
