Capitalism
Growth in a Buddhist Economy
I have just returned from Bhutan, the Himalayan kingdom of unmatched natural beauty, cultural richness, and inspiring self-reflection. From the kingdom’s uniqueness now arises a set of economic and social questions that are of pressing interest for the entire world. Bhutan’s rugged geography fostered the rise of a hardy population of farmers and herdsmen, and [...]
Why Growth is Good
Economic growth is slowing in the United States. It’s also slowing in Japan, France, Britain, Italy, Spain, and Canada. It’s even slowing in China. And it’s likely to be slowing soon in Germany. If governments keep hacking away at their budgets while consumers almost everywhere are becoming more cautious about spending, global demand will shrink [...]
Angela Merkel: The World’s ‘Most Valuable Leader’
Forget Barack Obama. Forget the Hu Jintao/Wen Jiaboa duo, or David Cameron or Vladimir Putin. Germany’s Chancellor Angela Merkel is the world’s most important leader. The latest report showing Germany’s economy growing at a blistering annual rate of nearly 9%, well into recovery from a US-made economic collapse, is just further evidence of the obvious. Despite [...]
Gordon Gekko Reborn
In the 1987 film Wall Street, the character Gordon Gekko famously declared, “Greed is good.” His creed became the ethos of a decade of corporate and financial-sector excesses that ended in the late 1980’s collapse of the junk-bond market and the Savings & Loan crisis. Gekko himself was packed off to prison. A generation later, [...]
Running a permanent Fiscal Deficit?
Recently, The Independent ran a tabloid-style headline warning that the true UK net debt-GDP ratio was not 60% but a colossal 285%, a figure that includes new ONS estimates of future state pension and off-balance PFI obligations. Why is this misleading? Because if we count a stream of future obligations in the stock of current [...]
Consolidators versus Stimulators
All intellectual systems rely on assumptions that do not need to be spelled out because all members of that particular intellectual community accept them. These “deep” axioms are implicit in economics as well, but, if left unscrutinized, they can steer policymakers into a blind alley. That is what is happening in today’s effort, in country [...]
The Market Confidence Bugaboo
A specter is haunting Europe – the spectre of “market confidence.” It may have been fear of communism that agitated governments when Karl Marx penned the opening line of his famous manifesto in 1848, but today it is the dread that market sentiment will turn against them and drive up the spreads on their government’s [...]
Reforming Finance
Ten areas of financial reform are regarded as being essential to re-establish the two basic functions of the banking sector, namely, extending credit to households and the business sector, and connecting investors to entrepreneurs. Pure trading and speculating should, meanwhile, be discouraged to the maximum degree possible. The project of seriously re-regulating the financial sector [...]
The Perfect Storm?
In early 2009, Paul Krugman gave a series of lectures at the London School of Economics on the global economic crisis in which he warned about the danger of a ‘perfect storm’ hitting the economy. The scenario he sketched was that of a fragile recovery in 2010-11 being hit by an inflationary spike, leading to [...]
Inside-out: Goldman Scandal shows who the real Insiders are
The financial world has been rocked – just as it appeared to be recovering its poise – by the news that the US financial market regulator, the SEC, has accused Goldman Sachs, the most masterful of Wall Street’s masters of the universe, of fraud. Investigations into Goldman are being launched in Britain, Germany and other [...]
Discussion on “Bankers: The real Terrorists?”
Social Europe Chief Editor Stephen Haseler took part in a discussion with Jagdish Bhagwati (Columbia University) and Peter Ghavami (Troika Dialogue Investment Bank) on Russia Today’s Crosstalk programme discussing the subject: “Bankers: The real Terrorists?” Apart from the rather strange title it was a lively discussion.
Good Capitalism… and what would need to change for that
The ongoing financial crisis points unmistakably to the glaring weaknesses of the present economic system. An event that seemed relatively manageable in economic terms – the real estate bubble in the United States – has brought the globalised economy to the brink of a new depression, reawakening memories of the world economic crisis of 1929. [...]
