Washington, DC – Over the last several weeks, the dollar’s depreciation against the euro and yen has grabbed global attention. In a normal world, the dollar’s weakening would be welcome, as it would help the United States come to grips with its unsustainable trade deficit. But, in a world where China links its currency to the dollar at an under-valued parity, the dollar’s depreciation risks major global economic damage that will further complicate recovery from the current worldwide recession. (more…)
Archive for the ‘Political Economy’ Category
Death by Renminbi
Monday, November 9th, 2009A Second Great Depression Is Still Possible
Monday, October 12th, 2009Over the past year the global economy has experienced a massive contraction, the deepest since the Great Depression of the 1930s. But this spring, economists started talking of “green shoots” of recovery and that optimistic assessment quickly spread to Wall Street. More recently, on the anniversary of the Lehman Brothers crash, Federal Reserve Chairman Ben Bernanke officially blessed this consensus by declaring the recession is “very likely over”. (more…)
Letter to the Queen: Why No One Predicted the Crisis
Thursday, July 30th, 2009Her Majesty The Queen
Buckingham Palace
London
SW1A 1AA
29 July 2009
MADAM,
In response to your question why no one predicted the crisis you have recently received a letter from Professors Tim Besley and Peter Hennessy, sent on behalf of the British Academy. They claim economists’ failure to foresee the crisis was the result of a “failure of the collective imagination.” That claim is tendentious and will mislead you. (more…)
Social Origins of the American Corporate Predator State
Wednesday, August 13th, 2008Jamie Galbraith’s recent book describes modern (Bush-Cheney) Republicanism as creating a “predator state”. Its predatory aspects are starkly visible in the gangs of corporate lobbyists who roam Washington DC, the Halliburton Iraq war procurement scandal, and the corruption and incompetence that surrounded the Hurricane Katrina relief effort. (more…)
Scapegoating Regulation
Friday, August 8th, 2008Many progressives now believe the age of Milton Friedman may be drawing to a close. Their hope is the current financial crisis has shown the costs and dangers of inadequate market regulation, thereby discrediting the anti- regulation philosophy of Milton Friedman and his Chicago School colleagues. (more…)
Re-thinking That ‘70’s Inflation Show
Monday, June 16th, 2008The Federal Reserve has recently received much criticism from economic conservatives who claim it has ignored inflation, thereby risking a rerun of the 1970’s inflation show. In response, renowned Princeton economist Paul Krugman has come to the Fed’s defense arguing today’s inflation is fundamentally different from that of the 1970s. (more…)
The Capture of Keynesianism
Monday, April 14th, 2008Communist revolutionary Che Guevara rapidly became an inspirational figure for revolutionary socialist change after his execution in Bolivia in 1967. Forty years later, Che lives on but his image now adorns t-shirts that have become popular fashion statements. This transformation reflects the extraordinary power of markets to capture and transform, turning an avowed enemy of the market system into a profit opportunity. (more…)
Demythologizing Central Bankers and the Great Moderation
Wednesday, April 2nd, 2008It is often said that the winners get to write history, which matters because the way we tell history frames our understandings. What is true for general history also holds for economic history, and the way we tell economic history affects our expectations and aspirations for the economy. (more…)
Winning the Edwards Vote
Monday, February 11th, 2008John Edwards’ exit from the presidential race puts his supporters up for grabs. Both Senators Clinton and Obama want those votes. Here’s how to win them.
The central plank of the Edwards’ campaign was restoring a prosperous and secure middle class, which requires ending wage stagnation and having wages again grow with productivity. This must be the central economic policy goal of any candidate wanting the Edwards vote. (more…)
Breaking the Neoclassical Monopoly in Economics
Thursday, February 7th, 2008For the past 25 years, the so-called “Washington Consensus†– comprising measures aimed at expanding the role of markets and constraining the role of the state – has dominated economic development policy. As John Williamson, who coined the term, put it in 2002, these measures “are motherhood and apple pie, which is why they commanded a consensus.†(more…)