Category Archives: Macroeconomic policy

“Should America Kowtow to China?”

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Another Presidential junket to Asia and another one of the usual lectures from China, decrying our “profligate ways”. Today’s Wall Street Journal reports:, “China’s top banking regulator issued a sharp critique of U.S. financial management only hours before President Barack […]

Guest Post: “War ALWAYS Causes Recession”

By George Washington of Washington’s Blog. PhD economist Marc Faber predicts that the U.S. will launch a war to distract people from the bad economy. China’s largest media outlet – Sohu.com – wrote in October 2008 that the Rand corporation, a leading U.S. military advisor, lobbied the Pentagon for a war to be started with […]

“President Obama, deficit terrorism is not the answer!”

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Oh dear, there he goes again. After sensibly calling for a jobs summit to deal with the problem of rising unemployment, President Obama’s Herbert Hoover-like alter ego has re-emerged again to warn us again about the evils of government deficit […]

Guest Post: Confirmed – Defense Spending Creates Fewer Jobs Than Other Types of Spending

Yesterday, I pointed out that a study by one of the leading economic modeling companies shows that military spending increases unemployment and decreases economic growth. I have located (giant hat tip to Gordon) a paper by economist Robert Pollin published in 2007 by The Political Economy Research Institute at the University of Massachusetts, Amherst – […]

Unemployment insurance for the 21st century

By Edward Harrison of Credit Writedowns L. Randall Wray has a post up at New Deal 2.0 which puts forward an idea which is pretty innovative. I would label it a private sector replacement for unemployment insurance. It’s the kind of thinking that might bring Obama out of a policy cul-de-sac as the economy hemorrhages […]

Trouble looms in Ireland after debt cut two notches and deficits soar

Submitted by Edward Harrison of Credit Writedowns I am posting this in the interest of widening the discussion at Naked Capitalism to include some topics in Europe. Fitch, the credit rating agency, has just downgraded the sovereign debt ratings for the Republic of Ireland from AA+ to AA-. That is two notches and is proof-positive […]

Guest Post: Take the Power to Create Credit Away from the Giant Banks and Give It Back to the People

By George Washington of Washington’s Blog Many people – including former analyst for the U.S. Treasury Richard Cook – argue that credit is too important a function to be left to the private banks. Indeed, even after taxpayers have given trillions in bailouts, backstops, guarantees, and other gifts, the giant banks are still not lending […]

Bullish data, recoveries, crashes and the psychology of forecasting redux

By Edward Harrison of Credit Writedowns If you have been wondering whether a statistical recovery is at hand, today’s ISM manufacturing report should be the clincher. The report was definitely bullish with the ISM index rising to 55.7 and sub-components supporting the understanding that the manufacturing sector is expanding. This is quite a contrast to […]

Guest Post: Aggressive Fiscal Stimulus Spending Only Shortens Recessions by Two Quarters

By George Washington of Washington’s Blog. Keynesians argue that we must increase fiscal stimulus to prevent a full-scale depression. They argue that “deficit hawks” are wrong when they say that we can’t afford any more stimulus, and that worrying about debt in a crisis of this size is penny wise and pound foolish, given the […]

Guest Post: On, and Beyond, Deficits

By DoctoRx, who writes at EconBlog Review:Introduction A few days ago, Naked Capitalism kicked off a series of posts on government deficits with a first-of-two posts by me. My Debate on Deficits, was followed by posts by Marshall Auerback, Rob Parenteau and Dr. Edward Harrison. My initial post was itself a response to Dr. Harrison’s […]

Guest Post: Galbraith Says Administration’s Sole Goal is to Restore System of 5 or 10 Years Ago, But Confidence Won’t be Restored Unless Fraud Which Caused the Crash is Investigated

By George Washington of Washington’s Blog. As I have repeatedly written, the largest U.S. banks have repeatedly gone bankrupt due to wild speculation which was blessed by the Fed, and then the government covered up their bankruptcy. Indeed, the New York Times writes today about one of the too big to fails: Over the past […]

Guest Post: Conservatives and Liberals Agree: Proposed Bank Oversight Bill Will Make Things Worse

By George Washington of Washington’s Blog. When a liberal labor leader and a conservative financial policy analyst unite against something, you know that something is really bad (actually, I don’t believe in the whole false left-right dichotomy; I think its Americans versus those trying to steal our wallets and our rights, but that’s another story). […]

The choice is between increasing or decreasing aggregate demand

By Edward Harrison of Credit Writedowns. DoctoRx, Rob Parenteau and Marshall Auerback have each written articles here to bring clarity to some issues I first raised at the beginning of the month in my post, “The recession is over but the depression has just begun.” As I see it, the issue we are debating has […]

All Debt is Not Created Equal: Government Debt is NOT the Same as Private Debt

By Marshall Auerback, an investment strategist and analyst who writes for New Deal 2.0. A major shortcoming in an otherwise thoughtful post by DoctoRX on deficit spending is a traditional mistake in which analysts seek to analogise the expenditures of government with that of a private household or business. The government is sovereign. This fact […]

Guest Post: Big Banks Are NOT More Efficient

By George Washington of Washington’s Blog. I have repeatedly pointed out that big banks are not more efficient than smaller banks. For example, I previously noted that an article in Fortune concluded: The largest banks often don’t show the greatest efficiency. This now seems unsurprising given the deep problems that the biggest institutions have faced […]