November 10, 2010 Senator Alan Simpson and Erskine Bowles appeared to have largely ignored economic reality in developing the proposals they presented to the public today. The country is suffering from 9.6 percent unemployment with more than 25 million people unemployed, underemployed, or who have given up looking for work altogether. Tens of millions of […]
Subjects Archives: Political Economy
Germany: Greens Rise as the Left Party Struggles . . . with Itself
Using ropes, some young people descended halfway from railroad bridges to force the train to stop. Others hastily grabbed stones out from under the tracks and in this way prevent their use. Far more, young and old from all over Germany, simply sat down on the tracks until police carried them away. Banners and witty, […]
The Fed and the Great Recession That Won’t Go Away
In the shadow cast by mass media coverage of elections in which under 40% of eligible citizens voted, the Federal Reserve recognized what the candidates could or would not. The capitalist crisis is still upon us, shows few signs of fading soon, and provides strong hints that it might get worse. So despite record cash […]
A Modest Proposal for Overcoming the Euro Crisis
It is now abundantly clear that each and every response by the eurozone (EZ) to the galloping sovereign debt crisis has been consistently underwhelming. This includes the joint EZ-IMF operation, back in May, to “rescue” Greece and, in short order, the quite remarkable overnight formation of a so-called “special vehicle” (officially the European Financial Stability […]
Strong Unions Are the Best Hope inside Capitalism: Interview with Michael D. Yates
The San Jose Mine incident in Chile has brought back old questions about labor and capital. About those questions, raised by the 33 miners’ struggle to survive, I interviewed Michael D. Yates, Associate Editor of Monthly Review. Yates was for many years professor of economics at the University of Pittsburgh at Johnstown, USA. He is […]
Taking the Measure of Rot
I gave this talk at a very good conference, New Deal/No Deal, at Berkeley’s Institute for Research on Labor and Employment, on October 29. The panel chair was Michael Reich, who was the main organizer of the conference along with Richard Walker of the geography department. The dual themes were reflecting on the New Deal […]
Wages and Deflation in Japan
Wages and Depressions Sooner or later any bubble bursts, leading to falling asset prices as investors flee to safe liquidity. Distress selling and debt liquidation by the market participants follow. For Irving Fisher (1933), it is of key importance that an asset price deflation leads — via falling asset prices and a distorted financial […]
The Currency War
Everyone is talking now of the “currency war” that seems to be breaking out among the world’s leading economies, each working for a depreciation of its currency vis-à-vis the others. The effect of a currency depreciation is to enlarge the exports of the country undertaking such a depreciation and to reduce its imports, since its […]
The Impact of Income Distribution on the Length of Retirement
Social Security has made it possible for the vast majority of workers to enjoy a period of retirement in at least modest comfort without relying on their children for support. The average length of retirement has increased consistently since the program was started in 1937. However, the increase in the normal retirement age from 65 […]
The IMF and Economic Recovery: Is Fund Policy Contributing to Downside Risks?
Introduction The IMF’s most recent World Economic Outlook (WEO) projects world economic growth will slow, from 4.8 percent in 2010 to 4.2 percent next year. Throughout the report, there are numerous concerns expressed about the “fragility” of the global economic recovery. The Acting Chair of the Executive Board states that “[t]he recovery is losing momentum […]
Kirchner Rescued Argentina’s Economy, Helped Unite South America
The sudden death of Néstor Kirchner today is a great loss not only to Argentina but to the region and the world. Kirchner took office as president in May 2003, when Argentina was in the initial stages of its recovery from a terrible recession. His role in rescuing Argentina’s economy is comparable to that of […]
Chronicles of Insurrection: Tronti, Negri and the Subject of Antagonism
Once I went to May Day. I never got workers’ festivities. The day of work, are you kidding? The day of workers celebrating themselves. I never got it into my head what workers’ day or the day of work meant. I never got it into my head why work should be celebrated. But when I […]
The Econobubble Revisited
In a recent article, I discussed the 2010 Economics Nobel Prize in rather unflattering terms. However, nothing beats the decision to award the 1997 Economics Nobel to Robert Merton and Myron Scholes for developing “a pioneering formula for the valuation of stock options.” “Their methodology,” trumpeted the Nobel committee, “has paved the way for economic […]
Economics, Ideology, and Imperialism
Prof. Prabhat Patnaik, eminent Marxist economist, taught in CESP-JNU (Centre for Economic Studies and Planning, Jawaharlal Nehru University) over the last four decades. He has been one of the most outstanding economists in India and a great teacher. He has retired from JNU recently. On the occasion of his farewell, the students of CESP […]
Ten Theses on New Developmentalism
On May 24 and 25 of 2010, a group of economists sharing a Keynesian and structuralist development macroeconomics approach convened in São Paulo to discuss ten theses on New Developmentalism — the name that some of them have been using for some years to describe the national development strategy that middle income countries are today […]
G20: The United States and Neo-mercantilism
Here comes the travail of crisis. The more they talk about coordination, the more it becomes necessary to concentrate on the conflicts revealed by the very talk of coordination. The G20 finance ministers’ meeting, held in South Korea on Friday, has already been mortgaged by the case opened by US Treasury Secretary Timothy Geithner regarding […]
The Paradox of Capitalism
John Maynard Keynes, though bourgeois in his outlook, was a remarkably insightful economist, whose book Economic Consequences of the Peace was copiously quoted by Lenin at the Second Congress of the Communist International to argue that conditions had ripened for the world revolution. But even Keynes’ insights could not fully comprehend the paradox that is […]
French Protesters Have It Right: No Need to Raise Retirement Age
The demonstrations that have rocked France this past week highlight some of its differences from the United States. This photo, for example, shows the difference between rioting in baseball-playing versus soccer-playing countries. In the U.S., we would pick up the tear gas canister and THROW it — rather than kick it — back at the […]
Playing the Currency Blame Game
The slanging match over currency and monetary policies at the annual Fund-Bank meetings, held over the second weekend of October, points to the disarray in global economic governance. While the US sought to mobilise IMF support for an effort to realign exchange rates and ensure an appreciation of the renminbi in the wake of China’s […]
The Myth of Expansionary Fiscal Austerity
Introduction Recently governments, economists, and international financial institutions have been debating the merits of further fiscal stimulus to combat the Great Recession versus fiscal austerity or “adjustment” — that is, higher taxes and/or lower government spending — to combat budget deficits. Some supporters of austerity have gone as far as arguing that fiscal adjustment could […]
