The Dollar versus the Euro

Triple Crisis blogger Matias Vernengo published the following working paper for the Levy Economics Institute of Bard College on why the dollar is not currently threatened as the dominant international currency.

Hegemonic Currencies during the Crisis: The Dollar versus the Euro in a Cartalist Perspective

Conventional wisdom has suggested that the US dollar is on the verge of loosing its hegemonic position in international monetary markets at least since the 1960s with the seminal work of  Robert Triffin. In fact, many authors believe that the collapse of the Bretton Woods system was  the proof of the weakness of the dollar. The creation of the euro in 1999, and to a lesser extent the spectacular rise of China, consolidated the view that the dollar’s days as the key international reserve currency were numbered.

Read the full working paper at the Levy Economics Institute of Bard College.

Good News on the Right to Food

Timothy A. Wise

Those of us advocating for changes in global and national policies on food and agriculture just got some good news. The UN Human Rights Council just renewed for another three years the mandate of Olivier De Schutter as the UN’s Special Rapporteur on the Right to Food.

If you haven’t followed De Schutter’s work since the 2007-8 food price spikes brought renewed attention to the issues of hunger and agricultural development, he has been a clear and uncompromising voice for change. His rights-based approach has taken him well beyond the withering rise of hunger to the roots of the global crisis, linking climate change, agribusiness concentration, commodity speculation, and the ongoing debates of industrial versus agro-ecological development.

Read the rest of this entry »

Recovery: The Global Green New Deal

Jomo Kwame Sundaram, re-posted from the World Policy Institute’s World Policy Blog, a Triple Crisis partner. The World Policy Journal, in its Spring 2011 issue, asked nine global experts – including Esther Duflo and Triple Crisis blogger Timothy A. Wise, among others – to provide short answers to the journal’s “big question”: What policy fixes or new innovations are needed to sustain the global economic recovery? Jomo K.S.’s answer follows. Read all the responses here.

In the 1960s and 1970s, the Green Revolution dramatically increased crop yields and food production in wheat, maize and rice. It was an achievement that would have been impossible without considerable financial support from governments, international institutions, and philanthropists. Yet, 40 years later, we need a second Green Revolution for other food crops, especially water-stressed food agriculture in arid areas. The key is finding a way to finance it that will sustain, rather than threaten, the global economic recovery.

Read the rest of this entry »

Budget Fallacies: Why the Ryan Plan Won’t Work

Triple Crisis blogger Jeff Madrick published the following opinion article in The New York Review of Books Blog on the flawed assumptions underlying Congressman Paul Ryan’s budget proposal.

Among the economic fallacies embraced in Congressman Paul Ryan’s budget proposal, two are particularly egregious: that getting rid of Medicare will reduce health care costs and that enacting yet further tax cuts for the rich will spur growth and investment.

Critics on the left are up in arms because Ryan’s proposal to force Medicare recipients to buy private insurance will raise the amount those now under 55 will pay when they are old enough to get Medicare by an average of $6,000 a person. In other words, critics say, we are trying to cut health care costs—and supposedly reform it through more privatization—on the backs of future elderly Medicare recipients.

But the Ryan plan won’t reduce health care costs. As Peter Orszag, the former White House budget director, told me recently, the bipartisan Congressional Budget Office calculates that overall health care spending will go up as Medicare recipients are forced to buy private insurance, since private insurance has far higher administrative expenses than Medicare. Health care expenditures, as Orszag nicely puts it, are not being reduced on the backs of seniors, they are being raised on the backs of seniors.

Read the full article at The New York Review of Books Blog.

Ecological scarcity, poverty and development

Edward B. Barbier

The Triple Crisis Blog is pleased to welcome Edward B. Barbier, John S. Bugas Professor of Economics at the University of Wyoming, as a regular blogger.

In my recent book, Scarcity and Frontiers: How Economies Have Developed Through Natural Resource Scarcity, I have argued that the world is entering a new era, the “Age of Ecological Scarcity”.  The main development challenge of this era is the implications for global poverty.  Exacerbating the problem is that, compared to past eras in human history, economic growth through exploiting abundant “frontiers” of land and natural resources will no longer be the means to improve the livelihoods of the poorest human populations.

Read the rest of this entry »

Crunch time arrives for WTO talks

Triple Crisis blogger Martin Khor published the following opinion article for the Third World Network on the WTO’s April 29 meeting to decide whether to continue, suspend, or end the Doha trade talks, which are not likely to be complete before the 2011 deadline.

The differences among key countries in the World Trade Organisation’s Doha trade talks are so wide as to be unbridgeable in at least one major area, and the time has come to decide on what to do about the talks – to continue trying to get a deal this year, to admit failure and close the talks, or something in between.

This seems to be the message coming out of the 600-plus pages of a document issued by the WTO on 22 April, that contain reports on the state of play of the negotiations in nine issues, plus assessments by the Director General Pascal Lamy.

On 29 April, the WTO will meet to hear what delegations have to say about the reports and the latest crisis-like situation.

The failures in recent weeks to make progress have deepened the impasse.  The inescapable conclusion is that these talks will not complete in 2011, the deadline set by political leaders.

Read the full article at the Third World Network.

Maintaining Employment Through the Crisis

Diana Tussie

The cost of active labor policies – policies to preserve employment in an economic downturn – have become an important part of global discussions to manage the crisis.  A widely held myth is that experience with active labor policies resides in OECD countries and that these are very costly to replicate for cash strapped countries in today´s circumstances.

In fact Latin America has accumulated experience in several areas of active labor policies. Argentina was an early starter during its own crisis in 2001 with incentives to keep people busy. The economic meltdown had left skyrocketing unemployment, widespread social scars but also some lessons. Thus the Global Recession found Argentina with muscles flexed, as Pablo Trucco and I show in a recent paper.

Read the rest of this entry »

To make the IMF relevant will take more than a new leader

Triple Crisis blogger Jayati Ghosh published the following opinion article in the Guardian on the string of recent IMF failures and whether the organization’s rethink on capital controls is the start of major reform.

In appearing to veto Gordon Brown’s chances of becoming the next head of the International Monetary Fund, David Cameron says the organisation needs someone who “understands the dangers of excessive debt, excessive deficit”. But if that is all the new person understands, then he or she will make little difference to an institution badly in need of real reform.

For years the IMF has been caught wrongfooted during almost every major global economic event. Before the great recession of 2008 it was an international institution on life support: ignored by most developing countries; derided for its failure to predict most crises and then for its counterproductive responses; even called to book by its own auditors for poor management of its own funds.

The IMF encouraged financial liberalisation that pushed many countries to crisis, and became famous for congratulating bubble economies on healthy and sound financial management (Thailand in 1997; Argentina in 1999; most recently Ireland and Iceland in 2008) – often just months before their spectacular financial crashes. Its policy prescriptions were widely perceived to be rigid and unimaginative, applying a uniform approach to very different economies.

Read the full article at the Guardian.

To make the IMF relevant will take more than a new leader

Triple Crisis blogger Jayati Ghosh published the following opinion article in the Guardian on the string of recent IMF failures and whether the organization’s rethink on capital controls is the start of major reform.

In appearing to veto Gordon Brown’s chances of becoming the next head of the International Monetary Fund, David Cameron says the organisation needs someone who “understands the dangers of excessive debt, excessive deficit”. But if that is all the new person understands, then he or she will make little difference to an institution badly in need of real reform.

For years the IMF has been caught wrongfooted during almost every major global economic event. Before the great recession of 2008 it was an international institution on life support: ignored by most developing countries; derided for its failure to predict most crises and then for its counterproductive responses; even called to book by its own auditors for poor management of its own funds.

The IMF encouraged financial liberalisation that pushed many countries to crisis, and became famous for congratulating bubble economies on healthy and sound financial management (Thailand in 1997; Argentina in 1999; most recently Ireland and Iceland in 2008) – often just months before their spectacular financial crashes. Its policy prescriptions were widely perceived to be rigid and unimaginative, applying a uniform approach to very different economies.

Read the full article at the Guardian.

Nuclear Waste, Yucca Mountain, and Fukushima: “This is not a place of honor”

Alejandro Nadal

Suppose you had to deliver a complex message alerting future societies about a horrific manmade danger. Assume furthermore that you had to ensure your message would survive the ravages of time in order to deliver this warning to generations well into the future, say 10,000 years from today. How would you design a message for future societies that may not necessarily speak our language or share our cultural references?

Although this may sound like science fiction, finding an answer to this question was the task of a group of experts convened in 1993 by Sandia Laboratories of the US Department of Energy (DoE). Their mission was to design a marking system informing potential intruders from future societies about the dangers of radioactive material stored in the Waste Isolation Pilot Plant (WIPP) at Yucca Mountain, Nevada. The group was formed by archeologists, linguists, anthropologists and experts in materials sciences.

Read the rest of this entry »