Global Economic Intersection - Opinion Blog

The Sick Man Is Europe

Archidev Ghosh — Wed, 22 May 2013 05:32:50 +0000

The Pew Global Attitudes Project has its annual report out. It confirms what all European already know: disillusionment with the way the European institutions function. Democracy is a nice word, but in Europe, it is not one man one vote. The European parliament is too weak to go after the commission. The troika sits in many countries, potentially blocking legislation that would help those most affected and the ECB has stressed its mandate as far as it goes but can not do any more. Here is a vital passage:

Thin Ice: An Assessment

Admin — Tue, 21 May 2013 21:05:36 +0000

A Review of the Documentary "Thin Ice" produced by Oxford University, United Kingdom, Victoria University of Wellington, New Zealand (VUW), and London-based DOX Productions.

Written by Charles McKenna

Editor's note: The trailer for the documentary can be viewed at the end of this article.

Scientists have just released the results of new work that broadens their database and provides more accurate estimates of expected temperature rise due to climate change. Their recent conclusion: Past estimates of global warming have severely underestimated the actual temperature rise we are likely to experience.

The Arrogance of Power

Archidev Ghosh — Tue, 21 May 2013 07:22:49 +0000

by Ajay Shah, ajayshahblog

Yu Hua has a great piece in the New York Times titled In China, Power is Arrogant where he says:

Several of these rules have since been revoked, but their wacky and arbitrary nature demonstrates the arrogance of power in China. One can imagine all too easily their creators — sitting in comfortable armchairs, drinking high-grade tea and smoking fine cigarettes — discussing the issues at hand as if they were purely intellectual abstractions, never considering how ordinary people might react. That people will be unhappy is no cause for concern because, for so long, the power of the state has trampled on individual rights. Only when rules are so onerous that they stir actual protest do higher-ups take notice: “You guys are just making a mess of things,” they’ll tell their bureaucrat underlings.

Niall Ferguson: Four Reasons Why the U.S. Is Failing

Archidev Ghosh — Mon, 20 May 2013 07:07:30 +0000

by Robert Huebscher, AdvisorPerspectives.com

Niall Ferguson is the champion of anti-Keynesian economists. Last week, he explained why America’s pursuit of Keynesian policies is leading to disastrous consequences.

Ferguson gave four symptoms of U.S. degeneration as evidence that Keynesian policies have created underlying weaknesses.

Ferguson, a professor at Harvard, gave the opening talk at last week’s Strategic Investment Conference in San Diego, hosted by Altegris Investments and John Mauldin. His remarks were based on his newly released book, The Great Degeneration: How Institutions Decay and Economies Die.

Five Reasons Why We Should Eliminate School Loans

Archidev Ghosh — Sun, 19 May 2013 19:24:59 +0000

by Rodger Malcolm Mitchell, www.nofica.com

Elizabeth Warren may be the best senator in Congress — or at least the most honest. Expect to see her attacked from both sides of the aisle.

She continues to castigate the Obama adminsitration (and she’s a Democrat!) for not punishing the crooked banks (all the big banks are crooked) for criminally defrauding millions of Americans out of trillions of dollars, while continuing to stuff their own pockets.

Naturally, Obama avoids this subject (as do the Republicans) like it were poop in the punch bowl. For politicians, the banks are too big (i.e. too big as contributors) to jail.

France and Pension Reform - A Sick Headache

Archidev Ghosh — Sun, 19 May 2013 07:06:17 +0000

Written by Hilary Barnes

France has been given by the European Commission an extra two years to get its budget deficit down to 3 % of GDP, but on condition that it implements reforms that will improve its longer term budget outlook.

Top of the list is to get the national pension system under control, currently running a deficit of about 0.7 % of GDP and set to rise to almost 1 % of GDP by 2020 or even earlier, and getting steadily larger thereafter.

This will be a tough nut to crack for the present socialist government under President Francois Hollande. No socialist government in the past 30 years has dared to reform the system, leaving it to conservative governments to patch it up.

US Guns: What Should Be Done?

Archidev Ghosh — Fri, 17 May 2013 22:52:37 +0000

Written by Elliott Morss, Morss Global Finance

Introduction

Like bombs, guns are dangerous: in 2011, 87 people were shot every day - 54 suicides, 30 homicides. In addition, 851 people were shot unintentionally, like what happened a week back - a 5-year old boy who was given a gun as a present by his parents and unintentionally shot his 2-year old sister.

In earlier pieces, I have reflected on how we have handled other known killers: cigarettes, alcohol, motor vehicles, and overeating. I have also documented how many deaths have resulted because certain drugs are illegal. This article explains how lessons learned from our efforts to control these other killers apply to guns.

Alternative fur Deutschland?

Archidev Ghosh — Thu, 16 May 2013 22:20:33 +0000

by Dirk Ehnts, Econoblog101

Since the world seems to be interested in Alternative für Deutschland I have translated some of their demands into English. It’s all from the programme which they posted on their website. I selected only a few which I thought interesting:

Walter Young: A Self-Made Man!

Frank Li — Thu, 16 May 2013 05:03:02 +0000

Written by Frank Li

Walter Young is the owner and CEO of Emery Winslow Scale (EWS) Company, headquartered in Seymour, Connecticut.

Walter is 91 years young. As far as I know, he is the senior-most active CEO in the scale industry, as well as in America. His life story is both legendary and ordinary, but uniquely American ...

Europe: Spreading the Pain

Archidev Ghosh — Wed, 15 May 2013 06:06:34 +0000

Terminal Velocity, Part 8

by Adam Whitehead, KeySignals.com

Like his former MIT colleague Stanley Fischer, Mario Draghi hinted that their former MIT colleague's "Helicopter" will soon be taking off, in his most recent ECB press conference; but was quick to opine that it won't be flying in Europe^[i]. In doing so, he provided more support to the thesis in Terminal Velocity (4)^[ii], that "the Eurozone, faced with the prospect of break-up, as the Germans refuse to pick up the tab for fiscal union without a global bank run, provides the lowest fruit on the tree to be picked this summer". Draghi has gone even further than Fischer, by creating the necessary conditions for a fully blown European bank run. He has created these conditions by going one better than Bernanke and moving beyond the "Zero Bound"; to the "Negative Bound", where lenders and depositors pay financial institutions to take their money^[iii]. The thought of paying a shaky European bank to take one's deposits, after what happened to depositors in Cyprus, apparently seems like a reasonable quid pro quo to "Super Mario".

A Reversion to A Dickensian Variety of Capitalism

Archidev Ghosh — Tue, 14 May 2013 21:19:38 +0000

by Jayati Ghosh, Triplecrisis.com

(This piece first appeared in The Guardian, 16 April 2013)

Since her death, many eulogies of Thatcher have spoken of her as a revolutionary. Thatcherism (along with the associated Reaganomics) is seen as a radical transformative agenda that changed the face of economy and society. But seen from the developing world decades later, much of this agenda appears familiar, in the form of structural adjustment policies that have been forced upon different countries at different times by international institutions.

Skills, Education and Employment

Archidev Ghosh — Tue, 14 May 2013 06:43:59 +0000

by John Mauldin, Thoughts from the Frontline

I am writing part of this week's letter in the rafters of a huge auditorium as I watch 1100 liberal art graduates at a major university receive their degrees. (I long ago made a promise to be here.) This was an expensive education, and the graduates are smart; yet when you ask them what their plans are, all too often you hear that they have not been able to find jobs or are opting to continue with school, often borrowing yet more money to do so, as they see no other viable options.

Anarchy In The US

Archidev Ghosh — Tue, 14 May 2013 06:16:23 +0000

by Dirk Ehnts, Econoblog101

The New Yorker carries an interesting article on David Graeber, Occupy Wall Street and anarchy. I have read the first one hundred plus pages of “5,000 years of debt” and found them enlightening. Brad DeLong read on and found a seemingly endless list of flaws, irritating the author who apparently was struck dumbfounded on what he perceived as personal attacks. The author writes about a new book on anarchy by James Scott:

As Usual, “No One” Saw The Shrinking Budget Defecate

Archidev Ghosh — Mon, 13 May 2013 21:51:28 +0000

by Lee Adler, Wall Street Examiner

Rising government revenue from tax collections and bailout paybacks are shrinking the federal deficit faster than expected, delaying the point when the government will reach the so-called debt ceiling and altering the budget debate in Washington.

via Falling Deficit Alters Debate – Yahoo! Finance.

I sent the following email to the Wall Street Journal’s Damian Paletta, the author of this piece regarding the old “unexpected” refrain.