Dubai, again

Rosa Brooks:
But even ultra-affluent Dubai is fragile these days. You see, this gem of the postmodern, globalized economy doesn't really produce anything of value -- its oil accounts for only about 5% of gross domestic product. Its economy relies on services, tourism and ... that's about it, actually. Those elaborate hotels, malls, amusement parks and skyscrapers? Heavily leveraged -- built out of the shifting sands and the same intoxicating thin air that sustained Wall Street until recently.

And Dubai may be going down. The oil-rich neighbors that helped finance its boom have seen oil prices plummet, and worldwide, credit for speculative real estate projects is drying up. On Wednesday, the Dubai Financial Market closed lower than at any time in nearly four years; down 61% this year. Sooner or later, even the suntanned loafers here are going to feel the pinch.

I'm tempted to cheer, but unfortunately, the pain won't be confined to the super-rich.

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