Selasa, 20 September 2011

... Brianna Panzica :... Euro... 8 Ways to Avoid a Recession..>> ... The Great Bank Robbery....Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits. That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees. ..>> The Price of 9/11.>>..The Three Trillion Dollar War, the wars contributed to America’s macroeconomic weaknesses, which exacerbated its deficits and debt burden. Then, as now, disruption in the Middle East led to higher oil prices, forcing Americans to spend money on oil imports that they otherwise could have spent buying goods produced in the US...>>.The September 11, 2001, terror attacks by Al Qaeda were meant to harm the United States, and they did, but in ways that Osama bin Laden probably never imagined. President George W. Bush’s response to the attacks compromised America’s basic principles, undermined its economy, and weakened its security. The attack on Afghanistan that followed the 9/11 attacks was understandable, but the subsequent invasion of Iraq was entirely unconnected to Al Qaeda – as much as Bush tried to establish a link. That war of choice quickly became very expensive – orders of magnitude beyond the $60 billion claimed at the beginning – as colossal incompetence met dishonest misrepresentation...>>

8 Ways to Avoid a Recession

Posted by Brianna Panzica - Monday, September 19th, 2011

http://www.wealthwire.com/news/economy/1881

The words “recession” and “double dip” are code words for fear in today’s global economy. It seems everywhere you look, the danger of economic turmoil is looming.

And according to Nouriel Roubini, the economy’s stress level is hauntingly similar to the level seen on the brink of the last recession.

But Roubini provides a glimmer of hope in his Project Syndicate article, showing that there could be a solution. He urges nations and economies to comply with these eight ways to avoid a recession or worse in the article.

Number 1: Be careful with austerity measures.

[A]usterity measures, necessary to avoid a fiscal train wreck, have recessionary effects on output.

He recommends that other nations “provide short-term stimulus” to counteract the effects of these austerity measures, naming the U.S., United Kingdom, Germany, and Japan as the most capable of doing so.

Number 2: Try credit easing instead.

Quantitative easing should be combined with credit easing, especially in banks such as the Federal Reserve Bank, the Bank of Japan, and the Bank of England. And the European Central Bank should avoid increased interest rates for now.

N. Gregory Mankiw, back in 2007, advised that the Federal Reserve’s monetary expansioncould solve most of the problems. We have already found out that alone, that is not the solution.

Number 3: Strengthen eurozone banks and banking systems through public financing.

Roubini advises that a European Union-wide program is necessary. “[B]anks should be given some short-term forbearance on capital and liquidity requirements.”

Number 4: Solvent governments need liquidity provision.

Governments such as Spain and Italy need to restore their credibility.

Number 5: More action is needed for certain debt burdens, such as “debt restructuring, debt reduction, and conversion of debt into equity.”

Number 6: Nations need to restore their competitiveness to return to economic growth.

According to Roubini, one of the only solutions may be “exit from the eurozone by Greece and some other current members.” He recommends the drastic change of these countries going back to their national currency.

Number 7: Restore competitiveness in advanced economies.

The growth of new markets and their rising competition is pushing behind already advanced economies. These countries need to boost investments in areas that will lead to job and infrastructure growth.

Number 8: Emerging markets should do their part to aid the global market.

This would include a more rapid currency appreciation on behalf of China. Australian Treasurer and Deputy Prime Minister Wayne Swan agrees that this could solve many things.

China is appreciating the yuan against the dollar, but the pace at which this is occurring is too slow to make the expected impact.

Some of these solutions that Roubini’s Project Syndicate article suggests are quite drastic. Others would call for cooperation and agreement on behalf of many economies.

Only time will tell if our global economy band can together enough to apply these solutions. We'll be finding out sooner than later...

2011-09-19

How to Prevent a Depression

AMSTERDAM – The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers in 2008. The risks of an economic and financial crisis even worse than the previous one – now involving not just the private sector, but also near-insolvent sovereigns – are significant. So, what can be done to minimize the fallout of another economic contraction and prevent a deeper depression and financial meltdown?

First, we must accept that austerity measures, necessary to avoid a fiscal train wreck, have recessionary effects on output. So, if countries in the eurozone’s periphery are forced to undertake fiscal austerity, countries able to provide short-term stimulus should do so and postpone their own austerity efforts. These countries include the United States, the United Kingdom, Germany, the core of the eurozone, and Japan. Infrastructure banks that finance needed public infrastructure should be created as well.

Second, while monetary policy has limited impact when the problems are excessive debt and insolvency rather than illiquidity, credit easing, rather than just quantitative easing, can be helpful. The European Central Bank should reverse its mistaken decision to hike interest rates. More monetary and credit easing is also required for the US Federal Reserve, the Bank of Japan, the Bank of England, and the Swiss National Bank. Inflation will soon be the last problem that central banks will fear, as renewed slack in goods, labor, real estate, and commodity markets feeds disinflationary pressures.

Third, to restore credit growth, eurozone banks and banking systems that are under-capitalized should be strengthened with public financing in a European Union-wide program. To avoid an additional credit crunch as banks deleverage, banks should be given some short-term forbearance on capital and liquidity requirements. Also, since the US and EU financial systems remain unlikely to provide credit to small and medium-size enterprises, direct government provision of credit to solvent but illiquid SMEs is essential.

Fourth, large-scale liquidity provision for solvent governments is necessary to avoid a spike in spreads and loss of market access that would turn illiquidity into insolvency. Even with policy changes, it takes time for governments to restore their credibility. Until then, markets will keep pressure on sovereign spreads, making a self-fulfilling crisis likely.

Today, Spain and Italy are at risk of losing market access. Official resources need to be tripled – through a larger European Financial Stability Facility (EFSF), Eurobonds, or massive ECB action – to avoid a disastrous run on these sovereigns.

Fifth, debt burdens that cannot be eased by growth, savings, or inflation must be rendered sustainable through orderly debt restructuring, debt reduction, and conversion of debt into equity. This needs to be carried out for insolvent governments, households, and financial institutions alike.

Sixth, even if Greece and other peripheral eurozone countries are given significant debt relief, economic growth will not resume until competitiveness is restored. And, without a rapid return to growth, more defaults – and social turmoil – cannot be avoided.

There are three options for restoring competitiveness within the eurozone, all requiring a real depreciation – and none of which is viable:

· A sharp weakening of the euro towards parity with the US dollar, which is unlikely, as the US is weak, too.

· A rapid reduction in unit labor costs, via acceleration of structural reform and productivity growth relative to wage growth, is also unlikely, as that process took 15 years to restore competitiveness to Germany.

· A five-year cumulative 30% deflation in prices and wages – in Greece, for example – which would mean five years of deepening and socially unacceptable depression; even if feasible, this amount of deflation would exacerbate insolvency, given a 30% increase in the real value of debt.

Because these options cannot work, the sole alternative is an exit from the eurozone by Greece and some other current members. Only a return to a national currency – and a sharp depreciation of that currency – can restore competitiveness and growth.

Leaving the common currency would, of course, threaten collateral damage for the exiting country and raise the risk of contagion for other weak eurozone members. The balance-sheet effects on euro debts caused by the depreciation of the new national currency would thus have to be handled through an orderly and negotiated conversion of euro liabilities into the new national currencies. Appropriate use of official resources, including for recapitalization of eurozone banks, would be needed to limit collateral damage and contagion.

Seventh, the reasons for advanced economies’ high unemployment and anemic growth are structural, including the rise of competitive emerging markets. The appropriate response to such massive changes is not protectionism. Instead, the advanced economies need a medium-term plan to restore competitiveness and jobs via massive new investments in high-quality education, job training and human-capital improvements, infrastructure, and alternative/renewable energy. Only such a program can provide workers in advanced economies with the tools needed to compete globally.

Eighth, emerging-market economies have more policy tools left than advanced economies do, and they should ease monetary and fiscal policy. The International Monetary Fund and the World Bank can serve as lender of last resort to emerging markets at risk of losing market access, conditional on appropriate policy reforms. And countries, like China, that rely excessively on net exports for growth should accelerate reforms, including more rapid currency appreciation, in order to boost domestic demand and consumption.

The risks ahead are not just of a mild double-dip recession, but of a severe contraction that could turn into Great Depression II, especially if the eurozone crisis becomes disorderly and leads to a global financial meltdown. Wrong-headed policies during the first Great Depression led to trade and currency wars, disorderly debt defaults, deflation, rising income and wealth inequality, poverty, desperation, and social and political instability that eventually led to the rise of authoritarian regimes and World War II. The best way to avoid the risk of repeating such a sequence is bold and aggressive global policy action now.

Nouriel Roubini is Chairman of Roubini Global Economics, Professor of Economics at the Stern School of Business, New York University, and co-author of the book Crisis Economics.

You might also like to read more from Nouriel Roubini or return to our home page.

2011-09-02.

The Great Bank Robbery

http://www.wealthwire.com/news/economy/1881

NEW YORK – For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. For banks that have filings with the US Securities and Exchange Commission, the sum stands at an astounding $2.2 trillion. Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.

That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees.

Such transfers represent as cunning a tax on everyone else as one can imagine. It feels quite iniquitous that bankers, having helped cause today’s financial and economic troubles, are the only class that is not suffering from them – and in many cases are actually benefiting.

Mainstream megabanks are puzzling in many respects. It is (now) no secret that they have operated so far as large sophisticated compensation schemes, masking probabilities of low-risk, high-impact “Black Swan” events and benefiting from the free backstop of implicit public guarantees. Excessive leverage, rather than skills, can be seen as the source of their resulting profits, which then flow disproportionately to employees, and of their sometimes-massive losses, which are borne by shareholders and taxpayers.

In other words, banks take risks, get paid for the upside, and then transfer the downside to shareholders, taxpayers, and even retirees. In order to rescue the banking system, the Federal Reserve, for example, put interest rates at artificially low levels; as was disclosed recently, it also has provided secret loans of $1.2 trillion to banks. The main effect so far has been to help bankers generate bonuses (rather than attract borrowers) by hiding exposures.

Taxpayers end up paying for these exposures, as do retirees and others who rely on returns from their savings. Moreover, low-interest-rate policies transfer inflation risk to all savers – and to future generations. Perhaps the greatest insult to taxpayers, then, is that bankers’ compensation last year was back at its pre-crisis level.

Of course, before being bailed out by governments, banks had never made any return in their history, assuming that their assets are properly marked to market. Nor should they produce any return in the long run, as their business model remains identical to what it was before, with only cosmetic modifications concerning trading risks.

So the facts are clear. But, as individual taxpayers, we are helpless, because we do not control outcomes, owing to the concerted efforts of lobbyists, or, worse, economic policymakers. Our subsidizing of bank managers and executives is completely involuntary.

But the puzzle represents an even bigger elephant. Why does any investment manager buy the stocks of banks that pay out very large portions of their earnings to their employees?

The promise of replicating past returns cannot be the reason, given the inadequacy of those returns. In fact, filtering out stocks in accordance with payouts would have lowered the draw-downs on investment in the financial sector by well over half over the past 20 years, with no loss in returns.

Why do portfolio and pension-fund managers hope to receive impunity from their investors? Isn’t it obvious to investors that they are voluntarily transferring their clients’ funds to the pockets of bankers? Aren’t fund managers violating both fiduciary responsibilities and moral rules? Are they missing the only opportunity we have to discipline the banks and force them to compete for responsible risk-taking?

It is hard to understand why the market mechanism does not eliminate such questions. A well-functioning market would produce outcomes that favor banks with the right exposures, the right compensation schemes, the right risk-sharing, and therefore the right corporate governance.

One may wonder: If investment managers and their clients don’t receive high returns on bank stocks, as they would if they were profiting from bankers’ externalization of risk onto taxpayers, why do they hold them at all? The answer is the so-called “beta”: banks represent a large share of the S&P 500, and managers need to be invested in them.

We don’t believe that regulation is a panacea for this state of affairs. The largest, most sophisticated banks have become expert at remaining one step ahead of regulators – constantly creating complex financial products and derivatives that skirt the letter of the rules. In these circumstances, more complicated regulations merely mean more billable hours for lawyers, more income for regulators switching sides, and more profits for derivatives traders.

Investment managers have a moral and professional responsibility to play their role in bringing some discipline into the banking system. Their first step should be to separate banks according to their compensation criteria.

Investors have used ethical grounds in the past – excluding, say, tobacco companies or corporations abetting apartheid in South Africa – and have been successful in generating pressure on the underlying stocks. Investing in banks constitutes a double breach – ethical and professional. Investors, and the rest of us, would be much better off if these funds flowed to more productive companies, perhaps with an amount equivalent to what would be transferred to bankers’ bonuses redirected to well-managed charities.

Nassim Nicholas Taleb is Professor of Risk Engineering at New York University and the author of The Black Swan. Mark Spitznagel is a hedge-fund manager. The authors own positions that profit if bank stocks decline in value.

You might also like to read more from Nassim Nicholas Taleb and Mark Spitznagel or return to our home page.

Reprinting material from this website without written consent from Project Syndicate is a violation of international copyright law. To secure permission, please contact distribution@project-syndicate.org.

The Price of 9/11

Joseph E. Stiglitz

2011-09-01

The Price of 9/11

http://www.project-syndicate.org/commentary/stiglitz142/English

NEW YORK – The September 11, 2001, terror attacks by Al Qaeda were meant to harm the United States, and they did, but in ways that Osama bin Laden probably never imagined. President George W. Bush’s response to the attacks compromised America’s basic principles, undermined its economy, and weakened its security.

The attack on Afghanistan that followed the 9/11 attacks was understandable, but the subsequent invasion of Iraq was entirely unconnected to Al Qaeda – as much as Bush tried to establish a link. That war of choice quickly became very expensive – orders of magnitude beyond the $60 billion claimed at the beginning – as colossal incompetence met dishonest misrepresentation.

Indeed, when Linda Bilmes and I calculated America’s war costs three years ago, the conservative tally was $3-5 trillion. Since then, the costs have mounted further. With almost 50% of returning troops eligible to receive some level of disability payment, and more than 600,000 treated so far in veterans’ medical facilities, we now estimate that future disability payments and health-care costs will total $600-900 billion. But the social costs, reflected in veteran suicides (which have topped 18 per day in recent years) and family breakups, are incalculable.

Even if Bush could be forgiven for taking America, and much of the rest of the world, to war on false pretenses, and for misrepresenting the cost of the venture, there is no excuse for how he chose to finance it. His was the first war in history paid for entirely on credit. As America went into battle, with deficits already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax “relief” for the wealthy.

Today, America is focused on unemployment and the deficit. Both threats to America’s future can, in no small measure, be traced to the wars in Afghanistan and Iraq. Increased defense spending, together with the Bush tax cuts, is a key reason why America went from a fiscal surplus of 2% of GDP when Bush was elected to its parlous deficit and debt position today. Direct government spending on those wars so far amounts to roughly $2 trillion – $17,000 for every US household – with bills yet to be received increasing this amount by more than 50%.

Moreover, as Bilmes and I argued in our book The Three Trillion Dollar War, the wars contributed to America’s macroeconomic weaknesses, which exacerbated its deficits and debt burden. Then, as now, disruption in the Middle East led to higher oil prices, forcing Americans to spend money on oil imports that they otherwise could have spent buying goods produced in the US.

But then the US Federal Reserve hid these weaknesses by engineering a housing bubble that led to a consumption boom. It will take years to overcome the excessive indebtedness and real-estate overhang that resulted.

Ironically, the wars have undermined America’s (and the world’s) security, again in ways that Bin Laden could not have imagined. An unpopular war would have made military recruitment difficult in any circumstances. But, as Bush tried to deceive America about the wars’ costs, he underfunded the troops, refusing even basic expenditures – say, for armored and mine-resistant vehicles needed to protect American lives, or for adequate health care for returning veterans. A US court recently ruled that veterans’ rights have been violated. (Remarkably, the Obama administration claims that veterans’ right to appeal to the courts should be restricted!)

Military overreach has predictably led to nervousness about using military power, and others’ knowledge of this threatens to weaken America’s security as well. But America’s real strength, more than its military and economic power, is its “soft power,” its moral authority. And this, too, was weakened: as the US violated basic human rights like habeas corpus and the right not to be tortured, its longstanding commitment to international law was called into question.

In Afghanistan and Iraq, the US and its allies knew that long-term victory required winning hearts and minds. But mistakes in the early years of those wars complicated that already-difficult battle. The wars’ collateral damage has been massive: by some accounts, more than a million Iraqis have died, directly or indirectly, because of the war. According to some studies, at least 137,000 civilians have died violently in Afghanistan and Iraq in the last ten years; among Iraqis alone, there are 1.8 million refugees and 1.7 million internally displaced people.

Not all of the consequences were disastrous. The deficits to which America’s debt-funded wars contributed so mightily are now forcing the US to face the reality of budget constraints. America’s military spending still nearly equals that of the rest of the world combined, two decades after the end of the Cold War. Some of the increased expenditures went to the costly wars in Iraq and Afghanistan and the broader Global War on Terrorism, but much of it was wasted on weapons that don’t work against enemies that don’t exist. Now, at last, those resources are likely to be redeployed, and the US will likely get more security by paying less.

Al Qaeda, while not conquered, no longer appears to be the threat that loomed so large in the wake of the 9/11 attacks. But the price paid in getting to this point, in the US and elsewhere, has been enormous – and mostly avoidable. The legacy will be with us for a long time. It pays to think before acting.

Joseph E. Stiglitz is University Professor at Columbia University, a Nobel laureate in economics, and the author of Freefall: Free Markets and the Sinking of the Global Economy.

You might also like to read more from Joseph E. Stiglitz or return to our home page.

You might like:

You must be logged in to post or reply to a comment.
Please log in or sign up for a free account.

BartekBartek 08:23 01 Sep 11

Could it be that you meant 18 veteran suicides per year? Per day seems a somewhat high number.

All in all, an interesting article, as most of the things you write - however, you could suggest less "conspiracy theories" (I mean your suggestion that the Fed hid anything by "engineering" the housing bubble). Then you wouldn't run the risk of not being taken seriously.

williemc1 09:09 01 Sep 11

Suggested conspiracy or not. The fed under Greenspan actively aquiesed to "excessive Exuberance" while looking the other way on hedge funds and dirivatives. No duty based or even consequentialist based ethical sets of understanding could allow for the Feds tacit complicity under Greenspan.

myerscpa 10:08 01 Sep 11

From the time Professor Stiglitz put forth his estimate that the wars would cost $3-5 trillion, which was probably ten times higher than most people's "gut feel," I have continued to be impressed by our inability to get out in front of the "true costs" of the Bush administration's mistakes. In fact, it's hard to get into the "same magnitude." The excessive depth of the Great Recession flows from mistakes on conducting and financing the war by the Bush administration. That is at least a couple trillion more in "opportunity costs." Then there has been trillions of dollars of underinvestment by both government and industry in the US economy. The "negative dividends" from this underinvestment will last long into the future.

A new field in strategic studies needs to be opened: strategic economic failure. Strategic economic strength was the great hallmark of America's participation in World War II and the legacy of the long-lasting postwar prosperity. The Bush administration has now presented us with the flip side of the coin: massive economic failure followed by a legacy of economic weakness in a more highly competitive world.

Economic forces shape the flow of historical events as surely as the Grand Canyon channels this year's flow of the Colorado River.

gonzalezrg 10:14 01 Sep 11

Another piece of wisdom from Stiglitz "President George W. Bush’s response to the attacks... weakened its security." Supported by facts and logic - NOT! Almost as farcical as the Nobel's awards to Obama or Stiglitz - you decide which had less facts and logic behind it.

nuksukow 12:24 02 Sep 11

Why hasn't such a large amount of spending acted as a counter-cyclical fiscal stimulus? World War II cost somewhere around 4 trillion in 2011 dollars, and the Depression was an uglier situation than our current prolonged recession. If the cost of these endless wars truly has exceeded that of World War II, why do we have no positive economic effects to show for it? Furthermore, how do economists call war spending wasteful and detrimental (and I absolutely agree with that point), but then turn around and say more fiscal stimulus at home is needed? How do they cite World War II as curing the Depression, but then turn around and call our extremely costly adventures in the middle east a drag on the economy?

Archie_ 01:19 02 Sep 11

@nuksukow - Probably because most of that money is leaving the United States into another country.

I wanted to say this another day on another article here, but technology and time failed me, so here goes: I always find it interesting or strange (not quite sure which) the replies this kind of an article (an article about very serious US domestic issues) generates from commentators in the US. It's outright agreement or outright rejection. And I somehow feel that there seems to be a lack of joiner, someone (an importantly large portion) that could find middle ground.

There is no other nation as proud as the US in the world at this time.

Charlesst 06:10 02 Sep 11

$5 Trillion is a little hard to relate to. It's about 10% of the total fixed assets in the US. Imagine destroying every building, including all the houses, in the three states of New York, New Jersey and Connecticut, and you get the picture. Don't forget to tear up all the roads, railroads, powerlines, etc. Or you can think Illinois, Indiana, and Ohio. Or Texas, Louisiana and Arkansas. Eat your heart out, America. Show those Islamists!

ChumBucket 06:23 02 Sep 11

Joe, Joe, Joe, a learned economist, but a bit fuzzy on history. World War I and II were equally funded with deficit spending and only monetized years later with tax increases amidst a growing domestic and world economy. But this isn't really an economic post at all, is it? It's just another, thinly veiled partisan attack on the Bush administration to absolve the Obama administration of any responsibility for our current economic plight. Shouldn't this better be posted on the website of the New York Times?

tovangar2 09:05 03 Sep 11

Actually, what's happened is exactly what Osama Bin Laden planned: the bankruptcy and fall of the United States. It worked with the Soviet Union. A simple trap.

LillithMc 07:27 04 Sep 11

Surprising so many comments from those who can not accept or imagine the scope of Stiglitz's article. What he describes is a generation of damage caused by one President over 8 years. It was unnecessary, misguided and, sadly, exactly what Osama expected. Also surprising was the misunderstanding of why WWII created the American Empire with its massive manufacturing base while Bush's Wars beggered the US destroying the Empire. The economy moved overseas. "Opportunity Cost" is what we lost when we decided it was more important to move wealth to the top and let the rest "eat cake". We are only at the beginning of the drama seen at least by one wise man, Professor Stiglitz. Thank you, Sir.

javablonde 08:03 05 Sep 11

@BartekBartek: Are you kidding? His statistic is correct about suicides: Approximately 18 veterans commit suicide per day. Fact.

http://www.armytimes.com/news/2010/04/military_veterans_suicide_042210w/

www.veteranstoday.com/2011/09/03/2011-suicide-prevention-week/

Franz 06:14 06 Sep 11

“[Bush his war] was the first war in history paid for entirely on credit.”

I would contest this statement. Warfare is by nature fought on credit; be it vassalage or the machinations of the bond market. It only is the kind of credit that varies every time.

There other more interesting historical parallels however. How about this one; President Bush is like Charles VIII (1470 – 1498) of France, better known to his contemporaries as Charles the Affable. Georg was certainly affable to say the least.

The similarity does not end with the nickname however. Charles also lacked the dignity of a true leader. He was but a chess piece used by hidden forces beyond the scope of the public. Charles also, was foolish and clumsy. He was illiterate and partial to infantile chivalrous fantasies.

In the Bush years the American presidency was finally reduced to a regal facade similar to a French court, that of Charles VIII. This court lacked the raison d’état of the Ancient Regime nor represented republican and democratic principles of our present day.

To make the comparison between the French King and Bush complete, the following history. For it were Charles’s courtiers who made him believe he could lead an army and invade Italy with impunity. Sinister whispers convinced the king that the war would finance itself. At least the war’s objective, Naples, would fill the royal coffers again. Banking on booty and conquest, advised by individuals in the position to gain by armed conflict, and gratifying his own chimera’s to become a real warrior. Charles plunged France into a military adventure that left the country bankrupt.

Despite the fact that France was the principle power of Europe at the time. The vast fortune it had cost to build the first modern siege train proved too much, and the French military might became self-defeating in its own monstrosity.

Most poetically, Charles’s War even gave birth to a new disease, the French disease better known today as syphilis. This modern disease was brought by Italian and Spanish explorers from the West Indies, a far away continent, filled with the riches that later gave rise to the Habsburg Empire. The Spanish champion of the sixteenth century that would start two years after Charles his death.

Don’t you think Machiavelli would smile with a mix of contempt and recognition at Georg and his invasions? While an Islamic Savonarola preaches the scourge of God, and the Chinese send their conquistadors out into a new world?

JerryLapell 06:07 07 Sep 11

Why is the money wasted if spent on "weapons that don't work against enemies that don't exist?"

Paul Krugman just told us that we could improve the current global economy if we all went to work defending ourselves against enemies that didn't turn out to exist after all.

The truth is, I'm a serious fan of Mr. Stiglitz's work, and I think Bush was a terrible president who really took us down the wrong road with the Iraq war.

But, enough with the double standards of nonsensical fiscal stimulus, and the patent nonsense of Keynesianism already.

Building weapons that don't work to fight an enemy that doesn't exist is _exactly_ what the economy needs. And so are rising health care expenditures and natural disaster repairs.

ecsd 11:01 07 Sep 11

I don't think the invasion of Afghanistan was warranted either. The Taliban at first wanted proof that there was a reason to extradite Bin Laden, but later with US pressure had actually offered Osama Bin Laden on a platter - and were refused at the same time the US claimed the Taliban were not cooperating. The war in Afghanistan was preplanned and was launched regardless of the facts. There is no reason to believe any narrative concerning threats from the region as justifications for a war; it was all preplanned, just waiting for a suitable excuse. It had, in fact, almost nothing to do with "terrorism", and I believe that 9/11 was an inside job in any case. See "The Face of Imperialism" by Michael Parenti.

duncanshume 06:45 08 Sep 11

Osama said in 2004 that his objective was to bancrupt the US. Courtesy of the American presidents since then he seems to be well on the way to achieving that objective! American's moral authority internationally has been lost while they have lashed out blindly in all directions. In all probability the vast expenditures will not have resulted in any improvement in security. Osama was a terrorist, the US tried to use its army for the fight, they could have learned in Vietnam that would be a waste of time. Osama played a good game, the US lost the battle and the war.

rastanplan 08:09 09 Sep 11

I am not a spoke person for Mr. Kruhgman or Keynesianism, but people are mixing arguments without looking or trying to understand themodels.

Fiscal stimulus is recomended in an economy facing a demand problem, i.e. recession economics, where government substitutes the lack of private demand (since agents prefer liquidity and don't invest nor consume) putting idle resources to work.

Krugman defends that, since US is facing a liquidity trap, this is the only way to return to growth.

Until the finantial crises our economy wasn't facing demand shortage, hence it was stupid to recomend a fiscal stimulus, who under this conditions would infact crowd-out, since agents had no problem investing and were paying a higher interest rate because government competitive using the same pool of resources.

stourleyk 01:31 12 Sep 11

@ bartek- 20% of US suicides each year are veterans. Roughly 30,000 suicides a year X 20%, /365.

@chumbucket-In October 1917 Congress responded to the call for higher taxes with the War Revenue Act. Federal tax policy was highly contentious during WWII, with President Franklin D. Roosevelt battling a conservative Congress, but everyone agreed on the need for high taxes to pay for the war. Joe, Joe, Joe (see, I stutter too) said the Bush War was entirely financed by borrowing. Your argument refutes the point that deficit spending was not used in WWI and WWII, a claim that Joe does not make. Sorry, Chum, but that's a strawman argument. The question is: Were taxes raised in part to pay for Bush War as they were raised in part for WWI and WWII? The answer is no. Bush War was funded entirely on credit just as Joe, Joe, Joe says.

iamatthew 12:46 16 Sep 11

@BartekBartek, Joseph Stiglitz' opinions _are_ taken seriously - that's why he's a professor at Columbia University and a Nobel Laureate in Economics.

...Which also means that he's learned to check his facts before publishing them, to be sure they're right - all you needed to do was use Google to verify his assertion that 18 veterans killed themselves per day. This data is on the US 'Army Times' website:
http://www.armytimes.com/news/2010/04/military_veterans_suicide_042210w/

...and he doesn't even mention that there are 950 attempted suicides per month by veterans.

A heavy price in both blood & treasure.

ZA&dunia

Selasa, 20 September 2011

8 Ways to Avoid a Recession

The Price of 9/11

Joseph E. Stiglitz

Tidak ada komentar:

Posting Komentar