I have become increasingly less hopeful about prospects for a rapid recovery from the global recession. Coordinated fiscal expansion ($5 trillion) by the world’s leading governments arrested the downward slide, but failed to produce a healthy rebound. The current frustration is summed up by The Economist’s recent cover headline: “Grow, dammit, grow.” There are two … Continue reading The Wars of Austerity

Russia is said by many to lack a “civil society.” But it partly makes up for this by having a rather interesting public sphere, in which serious topics do get debated, and where glimpses of the great are not entirely confined to televised snippets. The first fortnight in September saw successive meetings of two major … Continue reading Russia Debates Its Future

The “laws of holes” are as unforgiving as the laws of physics. If you find yourself in a hole and want to get out, the first thing you do is to stop digging. If you confront a number of holes to fix and want to know which to fix first, you choose the one which … Continue reading Fixing the Right Hole

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 … Continue reading Consolidators versus Stimulators

For decades, Keynesianism was associated with social democratic big-government policies. But John Maynard Keynes’s relationship with social democracy is complex. Although he was an architect of core components of social democratic policy – particularly its emphasis on maintaining full employment – he did not subscribe to other key social democratic objectives, such as public ownership … Continue reading Keynes and Social Democracy Today

“Through the contrivance and cunning of stock jobbers there hath been brought in such a complication of knavery and cozenage, such a mystery of iniquity, and such an unintelligible jargon of terms to involve it in, as were never known in any other age or country.” Jonathan Swift’s eighteenth-century barb resonates in today’s world of … Continue reading The Price of Clarity

With Labour trailing the Conservatives slightly in opinion polls, the British election on May 6 could well produce a “hung” parliament, in which neither major party obtains a majority and the Liberal Democrats hold the balance of power. Depending on which party wins more seats, either Labour’s Gordon Brown or the Conservatives’ David Cameron will … Continue reading Britain’s No-Win Election?

Dramatic challenges, and mediocre responses: that is the history of the European Union. All too rarely does the EU rise to the level of events, which is why Europe is fading economically and geopolitically. The 1958 Treaty of Rome, which established the European Economic Community, was Europe’s great leap forward. But the decision to create … Continue reading The Naked Euro

Two alternative approaches dominate current discussions about banking reform: break-up and regulation. The debate goes back to the early days of US President Franklin D. Roosevelt’s “New Deal,” which pitted “trust-busters” against regulators. In banking, the trust-busters won the day with the Glass-Steagall Act of 1933, which divorced commercial banking from investment banking and guaranteed … Continue reading The Big Bank Fix

How real is the danger of inflation for the world economy? Opinion on this matter is divided between conservative economists and official bodies like the IMF and OECD. The IMF and OECD project very low inflation rates over the next few years. But former US Federal Reserv e Chairman Alan Greenspan warns of inflationary dangers. … Continue reading The Bogey of Inflation