TripleCrisis

What History, and the Budget, Bodes for the Tea Party

Mark Blyth and Akim Reinhardt, Guest Blogger

The results are in from the US midterms and as expected the outsiders are the new insiders. Tea Party candidates continue to make inroads. Rubio and Paul succeeded where O’Donnell and Whitman failed, but the momentum is theirs. From this point on the Democrats’ nightmare is that for the next two years these ‘no-compromise’ Republicans will produce policy gridlock and blame the Democrats for it. The anger that brought them to power will build in the face of a staled economy and a stalled Congress, and more such candidates will be elected in 2012, possibly even a President bearing their mark. But even if this happens will they really be able to radically alter American politics and the trajectory of federal spending? It is perhaps worthwhile then to look back upon similar ‘outsider’ eruptions in American politics to ask if the Tea Party really will mark a sea change in American politics.

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Spotlight G-20: Fed Bashing at the G-20: A Return to the Gold Standard Anyone?

Gerald Epstein
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

A strange thing happened on the way to the G-20 meetings: world elite opinion has turned against the Federal Reserve’s “quantitative easing” (QE) program, the only significant “Keynesian” macroeconomic policy being implemented anywhere in the face of massive unemployment in much of the developed world; and this criticism is garnering some support from strange places, including among some progressive economists. With all the hub-bub, the mercantilist policies of Germany and China and the pre-Keynesian Gold Standard-like stance of the European Central Bank (ECB), are getting a virtual free ride. Meanwhile, the true villain is escaping scrutiny all together: the elite consensus that there is too much sovereign debt in the world and so there cannot be any more fiscal expansion.

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Spotlight G-20: Hot Money Creating Havoc in the Global Economy

Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Part two of Triple Crisis blogger Kevin Gallagher’s interview with the Real News Network on why many developing countries are adopting capital controls as a countermeasure to the Fed’s proposed quantitative easing and why the IMF is supporting them.

Watch part one of the interview at the Real News Network. Read more on Gallagher’s work on capital controls and foreign investment.

Spotlight G-20: What We're Reading and Writing

What we’re reading:
Rodrik: Don’t Count on Global Governance
Akyuz: IMF Should Focus on Crisis Prevention
South Centre: Some Key Issues Missing from G20 Agenda
The Economist: “Running the world economy: Finally a talk shop worth having.”
Financial Times: G-20 Fails to Agree on Trade and Currencies
Bridges Trade Weekly: WTO, OECD, UNCTAD Urge Cooperation at G-20

What we’re writing:
Gerald Epstein: It’s Time to set Ethical Standards for the Economics Profession
Jeff Madrick and others: Rules of Our Society Should Not Be Bought and Sold
Ilene Grabel: Global Governance and Development Finance in the Wake of the Financial Crisis

Spotlight G-20: What We’re Reading and Writing

Spotlight G-20: Global Economic Cooperation: The Alternative to Agreed Rules is Anarchy, Not a Free Market

Michael Prowse, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Whenever liberal policymakers make a serious plea for global economic cooperation, it elicits a knee-jerk reaction from conservatives. Don’t interfere with free markets which require freely adjusting exchange rates.

Tim Geithner’s proposed numerical targets for current account deficits and surpluses met just this response. And Chinese communists, ironically, allied themselves with traditional conservatives. Cui Tiankai, a Chinese deputy foreign minister and leading G-20 negotiator, said the 4 per cent proposed ceiling for surpluses and deficits harked back “to the days of planned economies”.

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Spotlight G-20: Quantitative Easing: Crippling Costs for Developing Countries

Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

In response to his opinion article in the Guardian, Triple Crisis blogger Kevin Gallagher was interviewed by the Real News Network on the consequences of the Fed’s proposed quantitative easing and its implications for G-20 leaders currently trying to prevent a “currency war” at the Seoul summit.

Read more on Gallagher’s work on capital controls and foreign investment.

Spotlight G-20: Rebalancing the world economy: implications for Asia

In October 2010 Triple Crisis Blogger Kevin P. Gallagher interviewed Dr. Nagesh Kumar, Chief of the Macroeconomics division of the UN Economic and Social Commission for Asia and the Pacific. With capital controls and global economic rebalancing high on Thursday and Friday’s G-20 agenda, Kumar illuminates the specific challenges Asian-Pacific economies face and potential strategies for maintaining economic growth.

Gallagher: It must be interesting to be working in Thailand, the epicenter of the 1997 financial crisis, while formulating policies to prevent and mitigate financial crises in Asia in the aftermath of the current crisis. How has Thailand and the East Asia region in general been affected by the crisis and how does that contrast with the 97 crisis?

Kumar: When this crisis hit the world economy, everybody was impacted. Yet because the Asia-Pacific region had experienced such a severe crisis in 1997, Asian nations had made their financial systems relatively more prudent, so they were less severely impacted. So the financial system remained intact– there were no collapses of banks like in many Western countries.

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Spotlight G-20: We Need Global Keynesianism

Matías Vernengo
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

The expectations for the meeting of the world leaders where huge, but when they gathered no agreement was reached on currency wars, commodity prices or demand stimulus. As it should be clear, I am not making a prediction about the forthcoming G-20 meeting, but just recalling the failed London Economic Conference, held in the summer of 1933, at the peak of the Great Depression. Contrary to conventional wisdom, which argues that the conference failed because it was unable to reestablish a credible Gold Standard, the main mistake in London was the incapacity to provide a framework for global expansion, in part as a result of British incapacity, in part as a result of American unwillingness as noted by Charles Kindleberger.

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Spotlight G-20: The G-20 Summit Dodges Real Reform

Martin Khor
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article on the crucial financial reform issues left out of Thursday and Friday’s G-20 agenda.

The G-20 leaders are meeting at a moment of new turmoil in the global economy. Yet important structural factors that underlie the renewed crisis are absent from the agenda of the G-20 summit in Seoul.

The hopes of a rapid global economy recovery have recently been dashed by the sovereign debt problems in several European countries, the gyrations in currency exchange rates, volatility in capital flows, and the war of words over “competitive devaluations”.

A new South Centre report argues these recent problems reflect the lack of international mechanisms to prevent financial crises that now threaten to spill over into the trading and economic systems.

Read the full article at the Guardian.