The Modest Proposal will stem the European crisis without breaking any rules, without having the core countries pay one euro for the debts and losses of the periphery, and without any further diminution of national sovereignty.
Read more...Yves here. Bill Black shellacks a New York Times article that gives a big dose of unadulterated neoliberal propaganda supporting austerity. To give you a sense of the intellectual integrity of this piece, it including citing a Peterson Institute staffer without cluing readers in to the fact that the Institute has what is left of the middle class in its crosshairs.
Black stresses that one of the major lies behind the continuing for more, better hairshirts for long-suffereing Europeans is that the explosion in debt levels in Europe was the result of overly-generous social safety nets. In fact, as in the US, the tremendous rise in government debt levels was the direct result of the crisis. Tax revenues collapsed due to GDP whackage (and the costs continue as GDP is well below potential). And any economist worth their salt will also say that social safety nets ameliorated the severity of the damage, that those automatic stabilizers increased government spending when it was needed most, at the depth of the implosion, and prevented a spiral into a much deeper downturn.
Read more...Some older readers might recall that during 2010-2013 politicians and the media manifested great anxiety over the unmanageable level of the deficit and a disastrously high public debt. So how has that movie ended?
Read more...Corruption in the construction industry meant that spending in Obama’s stimulus package was skewed toward people less likely to stimulate the economy: Owners and immigrants.
Read more...Fed tapering was widely expected to push up US yields. Instead, US yields have fallen since the beginning of the year, raising the question of whether we’re seeing a new version of the Greenspan 2005 conundrum. Interestingly, a successful explanation of this new conundrum cannot just rely on a flight to safety explanation as it also needs to rationalize why 5-year yield and 10-year yield have diverged over the same period.
Read more...In the wake of the crisis, forward guidance has become a prominent tool of monetary policy. This column argues that central banks should go a step further, communicating to the public the internal policy debate that goes into monetary policy formation – especially regarding uncertainty. Since policy is determined contingent on a range of possible outcomes, forward guidance would become more effective by explicitly communicating how policy would respond along this uncertain path.
Read more...To understand trade dynamics in the modern world we must appreciate the financial dimension, which modern economists do not.
Read more...Why is Europe re-nationalizing the link between banks and governments? Why has the crisis failed to produce a Hamilton or an FDR?
Read more...Is the “Consumer Confidence” index really a good proxy for the health of “the economy”?
Read more...ECB President Mario Draghi is recognizing that the recovery in the Euro area remains uniformly weak.
Read more...I don’t know that I’d go so far to say it was Paul Krugman-induced, but the French government has been dissolved, primarily because two senior ministers dared speak the unspeakable and criticize Francois Hollande’s continued commitment to austerity, in the face of evidence of its failure.
Read more...It is with great pleasure that I received the news from Finland that my Global Minotaur: America, Europe and the Future of the World Economy has just been published in Finland by the good people of Vastapaino Publishers. (Click here for their site.)
My Preface to this Finnish edition follows:
Read more...Railway privatization was sold to the public on the basis it would “provide better value for money for the public who travel by rail.” Who could have predicted it wouldn’t work out?
Read more...An intriguing paradox of our age is that the global economy is becoming increasingly local, with super-productive cities driving innovation and growth nationwide. This has generated a discussion as to whether local land use policies, which restrict the housing supply in high productive metro-areas, should be constrained by central governments to limit their negative externalities on overall growth.
Read more...This post first ran on January 7, 2013 By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller Throughout much of the United States, cell phone service is terrible (so is broadband, […]
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