After telling readers that the Eurozone leadership looks to be suffering from “dulled reaction times…so out of line with market events that even if they were to snap our of their stupor now, it would be too late,” news reports suggest that they have finally roused themselves.
Or have they?
Read more...This Real News Network interview with economist Bob Pollin of the Political Economy Research Institute in Amherst, Massachusetts focuses on the deficit cutting impasse in Washington and what is needed to create jobs.
Read more...Despite the collapse of the supercommittee deficit talks on Monday, both parties are almost certain to keep trying to come up with some sort of deal, if for no other reason as to keep their views in the spotlight.
This segment on the Real News Network provides a useful discussion of the politics and practicalities of cutting military budgets.
Read more...This post originally appeared on Credit Writedowns Editorial note: this article is neither a policy recommendation or a prediction. Rather, this articles looks to outline one potential outcome of the current policy choices in the European sovereign debt crisis, building upon the discussion from three recent articles “Deflationary crisis responses”, “Predicting the future of policy […]
Read more...Yves here. I’m putting myself in the rather peculiar position of taking exception to a guest post. One might argue as to why I’m featuring it. Das gives an articulate but nevertheless fairly conventional reading of views of market professionals about the US debt levels. For instance as you’ll see, it conflates state government deficits (which do need to be funded in now skeptical markets) with the Federal deficit. And this sort of thinking, due to fear of the Bond Gods, is driving policy right now.
In addition, he posits that depreciation of the US dollar continues apace. I’m always leery of what amount to trend projections. Complex systems often have unexpected feedback loops. There is an interesting question of whether markets have over-anticipated QE3. In addition, the dollar has fallen to the point where it is becoming attractive for manufacturers to repatriate activities. But given the loss of managerial “talent” (and here I mean people who know how to run operations, not executives) and infrastructure, there will be a marked lag before the weakened dollar produces the next leg up of domestic production.
By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)
Extortionate Privilege…
Given the magnitude of the US debt problem and the lack of political will, the most likely policy is FMD – “fudging”, “monetisation” and “devaluation”.
Read more...By Mark Ames, the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine. Cross posted at The eXiled
Another Monday, another “deficit crisis” panic. If you haven’t got the feeling yet that you’re being played like a sucker over this alleged “deficit crisis,” then let me help you cross that cognitive bridge to dissonance. It comes in the figure of the recently-deceased William Niskanen, the embodiment of how Reaganomics and the Koch brothers’ libertarian movement were joined at the hip.
This is a brief story about how the 1% transformed this country into a failing oligarchy, and their useful tools, starting with A-list libertarian economist William Niskanen, Chicago School disciple of Milton Friedman, advocate of the rancid “public choice theory.”
Read more...Cross-posted from Credit Writedowns Marshall Auerback was on Fox Business last week talking about the European sovereign debt crisis. He said he is very concerned not just about the national solvency problem in the euro zone but also about the debt deflationary policy remedies now being implemented across the whole of the euro zone. He […]
Read more...Cross-posted from Credit Writedowns The most important debate of our lifetimes is now ongoing. For many, the answer will be existential. First, the question: Should the ECB “write the check’ for the euro area national governments? In thinking about the answer to this all-important question, I prefer to shift the focus by changing the verb […]
Read more...Dean Baker is co-founder of the Center for Economic and Policy Research. He previously was a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D. in economics from the University of Michigan. His latest book, The End of Loser Liberalism, has recently been released to download free of charge on the CEPR website.
Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.
Philip Pilkington: The problems we currently face are without doubt, as you say, purely demand-based. Certainly all the evidence I’ve seen – from both sides of the pond – leads to this conclusion too. I know that in the book you say that this too is part of evading the real problems underlying the crisis. As you’ve said in the previous part of the interview, these are largely to do with seriously unbalanced income distribution and a lack of purchasing power among workers. You’ve said in the book that these problems have been generated by the ‘trickle-up’ or ‘supply-side’ economics theories that became popular in the 1970s and were implemented thereafter.
Do you think that your profession – and, for that matter, those commentators and policymakers that they have trained – are ignorant of the problems you highlight in the book because they are so beholden to supply-side theories or do you think that they use their supply-side theories as an ideological mask to make political arguments? If the former is the case, then how on earth has economics become such an irrelevant and dogmatic discipline? And if the latter is the case the how has the profession become so corrupted?
Read more...Cross-posted from Credit Writedowns. Follow me on Twitter at edwardnh for more credit crisis coverage. Disclaimer: This piece on the impact of Italy’s potential insolvency on the sovereign debt crisis is not an advocacy piece. It is supposed to be an actionable prediction of what I see as likely to occur. That said, see link […]
Read more...Cross-posted from Credit Writedowns. Follow me on Twitter at edwardnh for more credit crisis coverage. Disclaimer: This piece on the impact of Italy’s potential insolvency on the sovereign debt crisis is not an advocacy piece. It is supposed to be an actionable prediction of what I see as likely to occur. Last week we witnessed […]
Read more...Cross-posted from Credit Writedowns. Follow me on Twitter at edwardnh for more credit crisis coverage. Here’s an interpretation of the euro zone I have been meaning to discuss. I touched on it in the update to my post on how austerity in Europe works. In a fixed exchange rate environment like the euro area, you […]
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland In waking a tiger, use a long stick. – Mao Tse-tung Well, it looks like it could finally be happening. The Chinese housing bubble could well be bursting right before our eyes. The bubble has long been present for all to see, with news […]
Read more...I am going to fill in a few posts for Yves while she is away on conference. Here’s one that is a thought piece I wrote last week at Credit Writedowns. It is a mental model of the economy I am toying with based on some comments the modern monetary theory folks have made to […]
Read more...It is interesting to see how the popular desire for Occupy Wall Street to issue demands is leading various pundits and experts to boil down and update their views on what really needs to be done to fix the financial and political systems. (Note we are of the minority view that OWS is being shrewd in not acceding to pressure to reduce its desire for broad-based change to soundbites and an easily-to-digest program.
Bill Black give his usual forthright views on this segment on Real News Network. Enjoy!
Read more...