Even the tepid post-2008 recovery has not been what it was cracked up to be, especially with respect to the Wall Street presumption that the American consumer would once again function as the engine of GDP growth. It goes without saying, in fact, that the precarious plight of the Main Street consumer has been obfuscated by the manner in which the state's unprecedented fiscal and monetary medic...Read More
David Stockman and the cult of gloom … We think of spring as a time of cherry blossoms and renewed hope, as we slough off the depths of winter and ease into the warmer months. These bright days seem a strange time to encounter the by-now widely circulated warnings of impending doom by Ronald Reagan's budget director, and current gadfly, David Stockman. In a long essay in the New York Tim...Read More
BRICS Regimes Forge New World Bank, Call for Global Currency … The governments and dictatorships ruling over the so-called BRICS countries — Brazil, Russia, India, China, and South Africa — agreed to set up a new world bank that analysts say could further marginalize the increasingly unstable U.S. dollar, possibly helping to eventually dethrone it as the global reserve currency....Read More
Economic Crisis Hits the Netherlands … The Netherlands, Berlin's most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs. – Der SpiegelDominant Social Theme: Northern Europe is doing really...Read More
Britain's debt mountain reaches £1.39TRILLION, equivalent to 90% of the entire economy, ONS reveals … Gross debt at the end of 2012 stood at £1.387trillion, up 7% on 2011 Vast sum is equivalent to 90% of GDP – up from38% a decade ago Figures used to compare UK to the rest of Europe Mounting debts reveal the devastating impact of the 2007 crash … Britain's debt...Read More
Obama administration pushes banks to make home loans to people with weaker credit … The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place. President Obam...Read More
The Washington Post's Ezra Klein and Neil Irwin of WonkBlog discuss central banking policy after the financial crisis and the opposing views about its role in the state of the economy. – The Washington PostDominant Social Theme: Nothing is wrong with what we have now.Free-Market Analysis: We must make a confession: We didn't read David Stockman's article in the New York Times unt...Read More
Developing World: Euro Loses Attraction as Reserve Currency … Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund. When the euro was first launched on Jan. 1, 1999, there were hope...Read More
The Trillion-Dollar Bureaucrat … He may be the most important central banker in the world. But is China's Zhou Xiaochuan really in charge? The longest-serving leader of a central bank of a major world economy is not to be found in Europe, or North America, or Japan. It is a 65-year-old man named Zhou Xiaochuan who was recently reappointed to the job he has already held for a decade, name...Read More
A time of unqualified promises … In Japan, newly appointed Bank of Japan Governor Haruhiko Kuroda will on Cyprus bank Wednesday convene a two-day policy meeting, his first after assuming office and pledging to do – again those words – "whatever it takes" to end years of deflation. While Kuroda's supporters would probably stress that "whatever it takes" is...Read More
David Stockman's Delusions: The Gold Standard Is Still a Really, Really Terrible Idea … Barbarous relics are relics for a reason … Have we been living in some kind of economic hellscape the past 80 years? … Now, the past five years have been brutal. And the five before that weren't great, either. But it seems hard to argue that the U.S. economy peaked in any way back in 1...Read More
Developing World: Euro Loses Attraction as Reserve Currency … Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund. When the euro was first launched on Jan. 1, 1999, there were hope...Read More
The Trillion-Dollar Bureaucrat … He may be the most important central banker in the world. But is China's Zhou Xiaochuan really in charge? The longest-serving leader of a central bank of a major world economy is not to be found in Europe, or North America, or Japan. It is a 65-year-old man named Zhou Xiaochuan who was recently reappointed to the job he has already held for a decade, name...Read More
A time of unqualified promises … In Japan, newly appointed Bank of Japan Governor Haruhiko Kuroda will on Cyprus bank Wednesday convene a two-day policy meeting, his first after assuming office and pledging to do – again those words – "whatever it takes" to end years of deflation. While Kuroda's supporters would probably stress that "whatever it takes" is...Read More
David Stockman's Delusions: The Gold Standard Is Still a Really, Really Terrible Idea … Barbarous relics are relics for a reason … Have we been living in some kind of economic hellscape the past 80 years? … Now, the past five years have been brutal. And the five before that weren't great, either. But it seems hard to argue that the U.S. economy peaked in any way back in 1...Read More
News Release – People's Bank of China swap line … Governor Zhou Xiaochuan met Governor Mervyn King today during Governor King's visit to Beijing. They agreed to facilitate discussions on the establishment of a reciprocal 3-year, renminbi (RMB)/sterling currency swap arrangement. The arrangement would be used to finance trade and direct investment between the two countries and t...Read More
Print Money. Mail Everybody a Check. Fight unemployment by giving money directly to American families … America has grown desperate for smart ideas to revive a flagging economy … Ben Bernanke himself famously argued years ago that a central bank should never run out of tools for fighting deflation and depression because, as a last resort, it could always drop cash out of helicopters. T...Read More
Three days that saved the world financial system … The BlackBerrys all started buzzing, just before dinner was to begin at the Palacio da Bacalhoa, a 15th-century estate outside Lisbon. The 21 men and one woman charged with charting the course of Europe's economy looked down to find startling news that evening of May 6, 2010. – Washington Post/ Adapted from "The Alchemists: Th...Read More
Stop Subsidizing Wall Street … Imagine if the United States had an airline industry in which the biggest carriers that fly both domestically and internationally received a larger government fuel subsidy than those flying only domestic routes. Unfair? Yes — and that's exactly how the U.S. financial system works. The fuel of the largest firms in our financial services industry is sub...Read More
Why We Need to Fix Our Health care … I think you should read both Brill's essay and Goldhill's book. There are actually some points of agreement about how to reform what everyone accepts is a badly functioning, almost crooked, marketplace for health care. (Goldhill, by the way, wants universal health care and thinks the government has a big role to play, so this is not an argument fo...Read More