links for 2008-11-17

• The Bailout’s Next 60 Days - Editorial - NYTimes.com
• If Detroit Falls, Foreign Makers Could Be Buffer - NYTimes.com
• G20 Summit: Just Disappointing or Potentially Dangerous? - Baseline Scenario
• Vista Rules! - The Big Money
• A New Era of Democratic Dominance? - Consider the Evidence
• Mass layoffs set to explode - News N Economics
• The anomalous fed funds market - Econbrowser

Comments

[hari]

Baseline Scenario - comments on G-20 Declaration - is absolute nonsense! Either the guy is pretending to understand what he is commenting on and/or unbelievably naive as to how Bretton Woods II shall finally come into formal existence under new Admin.

MT shld focus on some serious commentators rather than this bissare nonsense.

[anne]

http://krugman.blogs.nytimes.com/2008/11/16/fannie-freddie-phony/

November 16, 2008

Fannie Freddie Phony
By Paul Krugman

So I was listening to Arnold Schwarzenegger before doing "This Weak" round table, and he was mostly making sense — except for one thing. He asserted, as a simple matter of fact, that “government created the housing bubble”, because Fannie and Freddie made all these loans to people who couldn’t afford to pay them.

This is utterly false. Fannie/Freddie did some bad things, and did, it turns out, get to some extent into subprime. But thanks to the accounting scandals, they were actually withdrawing from the market during the height of the housing bubble — the vast majority of the loans now going bad came from the private sector.

Yet it’s now clear that the phony account of the crisis — that it’s all due to Fannie, Freddie, and nasty liberals forcing poor Angelo Mozilo to make loans to Those People — is setting in as Republican orthodoxy, part of what you have to believe to be a respectable member of the party.

[anne]

http://krugman.blogs.nytimes.com/2008/11/16/cars/

November 16, 2008

Cars
By Paul Krugman

Jonathan Cohn has the best statement I’ve seen * of the case for a rescue. No illusions — these are companies that, to a large extent, drove themselves into a ditch. If the economy as a whole were in reasonably good shape and the credit markets were functioning, Chapter 11 would be the way to go. Under current circumstances, however, a default by GM would probably mean loss of ability to pay suppliers, which would mean liquidation — and that, in turn, would mean wiping out probably well over a million jobs at the worst possible moment.

* http://www.tnr.com/politics/story.html?id=a4893b49-36df-4784-9859-2dfa3a3211bf

[calmo]

How can we open the door for you hari?
I'm just gonna kick it off the hinges for you RightNow!
Ok, the floor is yours:.....or do you want me to do the janitorial?...at my tender age?
Alright, that's all the suspense I can muster.
Whatyagot?

[anne]

http://www.nytimes.com/2008/11/18/business/18markets.html?ref=business&pagewanted=print

November 18, 2008

European Markets Slip After Inconclusive Summit
By DAVID JOLLY

Stocks fell in Europe after a summit in Washington failed to offer new remedies for the ailing global financial system and data showed that Japan’s economy fell into recession in the third quarter.

[I was expecting French chocolate, but that's just me.]

[anne]

http://angryarab.blogspot.com/2008/11/palestinians-are-younger-and-poorer.html

November 16, 2008

" 'The Palestinians are younger and poorer today than they were when we started the peace process in 1993,' he said. 'And I have never met a single poor Palestinian anywhere in the world except in the Palestinian territories. Every single Palestinian I know in America is a millionaire or a college professor, and I say that with deep respect, but when there is a conflict, when there is an absence of security, there is always an absence of opportunity.' " *

* Bill Clinton - http://www.google.com/hostednews/ap/article/ALeqM5gs0k9kOnhB930ny1kWwUAwo-7LlwD94FFQ180

-- As'ad AbuKhalil

[Not that a former President is likely to meet poor people of any sort other than in a specially selected audience.]

[hari]

Calmo - I take it our host is not convinced ( or that's what I suspect) of way forward with globalized financial markets. He chose first, Dani, who is a critique of WTO globalization. So, he has to find arguments to support his (own) thesis and tenure, at Kennedy (bla bla!). This second one today, threw me off the curve principally because of the nonsense (language) when the Declaration is broken down with specific +50 agenda items - to follow up - under BO Admin next year. The concensus agreement was incredible in terms of its detailed breakdown of agenda items....

IMHO G-20 Summit was a watershed in globalization politics - Brazil, China, India argued against protectionism!
Forced their language to be taken seriously and avoided getting confused with GBrown's fiscal policy coordination. Neither did Germany and (some) EU reps consider fiscal policy coordination realistic. Meaning it will definitely have to reflect individual country domestic macroeconomic conditions, etc. There is no panacea - as far as fiscal policy is concerned - for globalized coordination.

[anne]

Hari:

The G-20 Summit was a watershed in globalization politics - Brazil, China, India argued against protectionism! Forced their language to be taken seriously and avoided getting confused with Gordon Brown's fiscal policy coordination. Neither did Germany and (some) EU reps consider fiscal policy coordination realistic. Meaning it will definitely have to reflect individual country domestic macroeconomic conditions, etc. There is no panacea - as far as fiscal policy is concerned - for globalized coordination.

[Nicely done; seeming lack of coordination is disappointing to analysts who are beyond understanding interests other than America's or Britain's and possibly disappointing to investors who wish a direct coordinated rescue.]

[hari]

On a light side, I thought the G-20 menu supplied by GWB (host) was tastefully chosen given presence of King Abdullah and Hu Juntao and (Sikh) Manmohan Singh. No beef was served!
I envied the wine selection specially the red @ $300/bot. My lamb roast normally takes nothing less than a St Emillion with high tanin...and lots fresh pressed garlic and whatnot.

Thanks for opening the door, calmo.

[anne]

http://angryarab.blogspot.com/2008/11/new-tv-aired-tape-of-bush-toasting-king.html

November 15, 2008

New TV * aired a tape of Bush toasting King `Abdullah in Washington and wondered if the Saudi religious police saw that.

* Beirut

-- As'ad AbuKhalil

[An ordinary person toasting or being toasted in Saudi Arabia would not have fared the least well, but Kings are Kings.]

[kthomas]

hari, I've always admired your optimism.

The G20 was a joke. Reminds me of the UN.

We just view things based on the unemployment numbers and the size of the growing bread lines in America.

China and India can go jump from a cliff with thier clamoring about protectionism. Especially China.

[calmo]

thanks....the details you bring hari (the $300 wine...but also the 'no beef' [well GWG iznot going to swallow that veganburger...so did he go hungry?]
Lemme start here, my courteous, somewhat experienced, (somewhat elderly), somewhat (in)sensitive friend, somewhat diplomatic colleague, putting the hinges back on the door:[c]almo - I take it our host is not convinced ( or that's what I suspect) of way forward with globalized financial markets.Mark is a master at leading the horses (frisky ponies like you and even old nags like me!) to the water, and not so much drowning us init with "ways forward".
Tis an art I appreciate...knowing some frailties of me own, you know?
I take it back, I am not an old nag. I am a stubborn mule who sees nothing but the theatre in global political forums...the language you yourself use here is telling (I cannot help myself)IMHO G-20 Summit was a watershed in globalization politics - Brazil, China, India argued against protectionism!
Forced their language to be taken seriously and avoided getting confused with GBrown's fiscal policy coordination. Unlike say just bombing suspected terrorist positions in an otherwise sovereign country, "force" in global political forums means taking your shoe off and beating it on the podium (Now you're talkin calmo! ...and forceably!! )[Ok, one more crack from you and we're sending a virus to your URL!]
I have big ears...and maybe there is something between them but today, I'm having trouble sorting out the "bla bla" as you have it from "the watershed in globalization politics".
Seriously, I am NOT having a fun day.

[Barkley Rosser]

hari,

Regarding the dinner, Hu Jintao and Malik Abdullah would have no problem eating beef. Pork is the problem for Abdullah, but lamb would be OK for anyone not a vegetarian.

Given that GWB is a teetotaler (supposedly), his toast was almost certainly with a non-alcoholic beverage, who knows maybe even with the cardomam coffee so beloved by the Saudis.

On a more serious note, Niall Ferguson in WaPo today says that the main problems with the conference were due to GWB. He opposed a coordinated fiscal stimulus ("the US has already done enough," and he is opposing any further such stimulus here); he opposed a new international regulatory entity, with the call for "colleges of supervisors" (regulators from specific countries dealing with specific multinational financial firms) being the substitute, and also opposing any enhancement of the IMF as a possible international financial regulator.

Regarding protectionism, apparently the big fight on that was at the dinner Friday night, which went on until 11 PM due to this fight. It was Sarkozy who was opposing the ban on any protectionist moves for a 12-month period (although some say an auto bailout in the US would be such, as is the tax rebate for exporters in China, clearly the two big players on this one), with many fearful of Obama on this matter. I was at a major conference on Friday, where there were a number of leading figures from around the world, including China and Brazil, and the fear of protectionism coming out of the US was very strongly expressed.

[hari]

Thanks Barkley - that was informative indeed specially on trade protectionism. However CBS 60Mins with BO makes it more or less clear that he's prepared for deficit financing stimulus programme to get the economy going during next two years, if required.

It'll have an impact on credit...globally...who will buy the treasuries?

[anne]

So that we understand, because understanding can be better than not understanding, Niall Ferguson (be still my heart) is the regretful British imperialist (regretful because the British have lost the empire) who would only have America be the imperialist to replace the regretted British. Ferguson never has found a manner of American grasping for control over what will not be controlled that is not be admired. So the regret of Ferguson at the international economic conference was only that America was not sufficiently imperial.

Now to reluctantly return to getting Iraq and Afghanistan done right for Ferguson while waiting for a President sufficiently British (Etonian).

[anne]

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/16/AR2008111601736_pf.html

November 17, 2008

Team 'Chimerica'
By Niall Ferguson - Wasington Post

Future historians, I suspect, will look back on Saturday's anticlimactic G-20 gathering in Washington less as Bretton Woods 2.0 and more as a rerun of the London Economic Conference of 1933. Back then, representatives of 66 nations completely failed to agree on a concerted international response to the Great Depression. The fault lay mainly with the newly elected U.S. president, Franklin D. Roosevelt, who vetoed European proposals for currency stabilization.

This time around, it wasn't the newly elected Democrat but the outgoing Republican who wielded the veto. Even before his counterparts reached Washington, President Bush made it clear that recent events had done nothing to diminish his faith in free markets and minimalist regulation. Over the weekend, it was the United States that resisted European calls for a new international regulatory body, opposed significant redefinition of the International Monetary Fund's role and showed no interest in the idea of a global stimulus package.

A real opportunity has been missed.

Just as happened in the 1930s, what began as an American banking panic has now escalated into a global economic crisis. And just as happened in the 1930s, a lack of international coordination has the potential to turn a recession into a deep and protracted depression.

The problem that seems scarcely to have been discussed over the weekend is that each national government is currently responding to the crisis with its own monetary and fiscal measures. Some central banks have already slashed official rates to close to zero. Some treasuries have already launched multibillion-dollar bailouts and stimulus packages. The devil lies in the different timing and magnitudes of these measures. The absence of coordination makes it almost inevitable that we will see rising volatility in global foreign exchange and bond markets, as investors react to each fresh national initiative. The results could be nearly as disruptive as the protectionist measures adopted by national governments during the Depression. Now, as then, a policy of "every man for himself" would be lethal.

At the heart of this crisis is the huge imbalance between the United States, with its current account deficit in excess of 1 percent of world gross domestic product, and the surplus countries that finance it: the oil exporters, Japan and emerging Asia. Of these, the relationship between China and America has become the crucial one. More than anything else, it has been China's strategy of dollar reserve accumulation that has financed America's debt habit. Chinese savings were a key reason U.S. long-term interest rates stayed low and the borrowing binge kept going. Now that the age of leverage is over, "Chimerica" -- the partnership between the big saver and the big spender -- is key.

In essence, we need the Chinese to be supportive of U.S. monetary easing and fiscal stimulus by doing more of the same themselves....

[anne]

What is interesting is that with President Roosevelt, from 1993 on, America became increasingly stable and began to recover from the Depression even with Roosevelt taking America off the gold standard. International currency stabilization was what the London Economic Conference of 1933 was about, and what Roosevelt fortunately rejected, a rejection that Keynes commended Roosevelt for. Interesting as well is that individual countries of varying industrial scope or development were able to recover from the Depression through proper implementation of domestic policy.

As for America trade restriction, that had already come with Hoover with the Smoot-Hawley tariff of June 1930.

[hari]

Anne - People's Daily has series of articles today dealing with G-20 Summit and its Declaration. Below a few brief headlines -

*G-20 Summit - prelude to reformation of IMF & international finance.*

[hari]

Asia Times (Nov 8) - An Open Letter from Henry C.K.Liu, Chinese American commnetator on economics, addressed to G-20 Summit in washington, D.C. last weekend.

NB. It seems there are othere's (in US) who signed this letter. People's Daily is using it for its own editorial commentary on Declaration of G-20 Summit.

[I don't know if you can get a copy of it, Anne.]

[anne]

http://www.cbpp.org/11-17-08fa-stmt.htm

November 17, 2008

USDA Report on Hunger
By Stacy Dean

Even before the current economic downturn, some 13 million households, containing 36.2 million people, lacked access to adequate food at some point in 2007 because they didn’t have enough money for groceries, according to today’s release. These figures are a slight increase over the findings for 2006, but given the dramatic weakening of the economy in recent months, the number of “food insecure” households has likely grown considerably in 2008.

Food stamp caseloads — an indicator of those struggling to afford a basic diet — grew by nearly 2 million people between January and August 2008 (the most recent month for which we have data). The economic downturn also has coincided with a sharp increase in food prices, both of which have undoubtedly exacerbated hardship for many low-income families.

The report included three noteworthy findings.

* About 4.7 million of the 13 million food insecure households in 2007 had very low food security, with household members skipping meals or taking other steps to reduce the amount they ate because of a lack of resources. The size of this group and its share of the overall population have risen steadily over the past decade.

* The number of children with very low food security rose by over 60 percent, to 691,000.

* The number of food insecure seniors living alone rose by 26 percent, to 783,000.

Over the 2005-2007 period, food insecurity was greatest in Mississippi, New Mexico, Texas, Arkansas, and Maine. In addition, the new data likely understate food insecurity because they don’t include homeless individuals or families....

[More American kids went hungry last year]

http://www.msnbc.msn.com/id/27771447/

More American kids went hungry last year

USDA: Number jumped 50 percent in 2007, which is almost 700,000 children
Associated Press updated 54 minutes ago

WASHINGTON - New government figures show that almost 700,000 children went hungry in America at some point in 2007.

That number was up more than 50 percent from the year before and reached its highest point since 1998.

The Agriculture Department’s annual survey of food security, released Monday, also shows that more than 36 million adults and children struggled against hunger last year. That’s up by 700,000 since 2006. These are people who either didn’t have enough money for food or access to enough food aid to maintain active healthy lives.

Almost a third of these people, or nearly 12 million, had what the government calls “very low food security.” That means they had a substantial disruption in the amount of food they typically eat.

[anne]

http://henryckliu.com/page174.html

November 7, 2008

Open Letter to World Leaders attending the November 15 White House Summit on Financial Markets and the World Economy

The Winter of 2008-2009 will prove to be the winter of global economic discontent that marks the rejection of the flawed ideology that unregulated global financial markets promote financial innovation, market efficiency, unhampered growth and endless prosperity while mitigating risk by spreading it system wide. For more than three decades mainstream neoliberal economists have preached, and regulators have accepted, the myth of the efficiency of unregulated markets, ignoring the critical lesson provided by John Maynard Keynes’s analysis of interconnection of financial markets and the international payments system.

Those who do not learn the lessons of history are bound to repeat its tragedy. Neoliberal economists in the last three decades have denied the possibility of a replay of the worldwide destructiveness of the Great Depression that followed the collapse of the speculative bubble created by unfettered US financial markets of the “Roaring Twenties”. They fooled themselves into thinking that false prosperity built on debt could be sustainable with monetary indulgence. Now history is repeating itself, this time with a new, more lethal virus that has infested deregulated global financial markets with “innovative” debt securitization, structured finance and maverick banking operations flooded with excess liquidity released by accommodative central banks. A massive structure of phantom wealth was built on the quicksand of debt manipulation. This debt bubble finally imploded in July 2007 and is now threatening to bring down the entire global financial system to cause an economic meltdown unless enlightened political leadership adopts coordinated corrective measures on a global scale.

The US sub-prime mortgage problem that started in 2007 has developed predictably to a morass that has caused the abrupt failure of interconnected financial markets and threatened the viability of financial institutions worldwide as contagion spread at electronic speed via an antiquated, dsyfunctional international payments system.

To arrest the global financial meltdown, much can be learned from Keynes’s vision of how the international payments system should work to permit each country to promote a national full employment policy without having to fear balance of payments problems or to allow financial incidents in other countries to infect the domestic banking and non-bank financial systems.

Another Great Depression can be avoided if world leaders would reconsider John Maynard Keynes’s analytical system that contributed to the golden age of the first quarter century after World War II. The undersigned and others have long advocated a new international financial architecture based on an updated 21st century version of the Keynes Plan originally proposed at Bretton Woods in 1944.

This new international financial architecture will aim to create (1) a new global monetary regime that operates without currency hegemony, (2) global trade relationships that support rather than retard domestic development and (3) a global economic environment that promotes incentives for each nation to promote full employment and rising wages for its labor force.

Paul Davidson
Editor, Journal of Post Keynesian Economics
Visiting Scholar, Schwartz Center for Economic Policy Analysis, The New School, New York

Henry C.K. Liu
Visiting Professor of Global Development, Department of Economics, University of Missouri-Kansas City

[anne]

http://henryckliu.com/page174.html

November 7, 2008

Open Letter to World Leaders attending the November 15 White House Summit on Financial Markets and the World Economy

The Winter of 2008-2009 will prove to be the winter of global economic discontent that marks the rejection of the flawed ideology that unregulated global financial markets promote financial innovation, market efficiency, unhampered growth and endless prosperity while mitigating risk by spreading it system wide. For more than three decades mainstream neoliberal economists have preached, and regulators have accepted, the myth of the efficiency of unregulated markets, ignoring the critical lesson provided by John Maynard Keynes’s analysis of interconnection of financial markets and the international payments system....

Paul Davidson
Editor, Journal of Post Keynesian Economics
Schwartz Center for Economic Policy Analysis, The New School, New York

Henry C.K. Liu
Department of Economics, University of Missouri, Kansas City

[Typepad curiously enough will not allow the full letter to be posted.]

[anne]

http://www.nytimes.com/2008/11/18/world/middleeast/18maliki.html?hp&pagewanted=print

November 18, 2008

Iraq Quietly Fires Its Anticorruption Officials
By JAMES GLANZ and RIYADH MOHAMMED

The dismissals, which were confirmed by senior Iraqi and American government officials, come as estimates of Iraqi corruption soar.

[Oh.]

[Patricia Shannon]

Anne, could it be some kind of hacking by the Republicans?

[Patricia Shannon]

Of course I'm joking. At least, I hope I am.

[Patricia Shannon]

The comment about hacking was in regards to typepad not taking all of the article Anne tried to post.

In regard to "Iraq Quietly Fires Its Anticorruption Officials", it shows that Bush's aim to bring U.S. ways, i.e., those of the ultra-elite, to Iraq is meeting its goal.

[anne]

[The refusal of Typepad to post the complete but short letter by Davidson and Liu makes no sense, since there are no links in the letter.

Hari suggested the post * in support of a return to a Bretton Woods-Keynesian style monitoring or regulating of international capital flows.

* http://henryckliu.com/page174.html]

[anne]

http://www.nytimes.com/2008/11/18/world/asia/18china.html?hp=&pagewanted=print

November 18, 2008

General Hints That China's Navy May Add Carrier
By ANDREW JACOBS

The acquisition of an aircraft carrier would surely stoke tensions with the U.S. military and its allies in Asia.

[America has how many aircraft carriers and China has none, but we are threatened nonetheless by the prospect of China having a carrier. Possibly.]

[Patricia Shannon]

Anne, that's because we are such a peaceful nation, our aircraft carriers pose no threat to other countries. (sarcasm)

[Barkley Rosser]

Regarding Ferguson, there is a curious disconnect here. In general he may be someone who complains about the US beign insufficiently imperialistic. However, here he seems to be arguing that the US, at least under Bush, is being imperialistic in a blocking sort of way, preventing, or at least slowing, agreement on various things that may be worthwhile, such as a coordinated fiscal stimulus or more globally coordinated regulation of the financial system.

I find it interesting that the Peoples' Daily may be quoting the letter from Davidson and Liu. Davidson attended the conference I was at late last week, and was strongly pushing the original "Keynes Plan" for Bretton Woods that was not adopted due to Harry Dexter White. It calls for an international clearing unit (could be an upgraded SDR) with a stronger global central bank, with the most controversial part of the package being that creditor nations would bear the onus of adjustment, or at least part of it, for structural imbalances of the balances of payments. It was certainly this last proviso that led White to reject the plan in favor of what was passed.

Davidson has long defended this part of it on the grounds that it really is in the interests of the surplus nations, and gives the Marshall Plan as an example where the US did that adjusting and gained from it. Of course, those were extraordinary circumstances, but Davidson made this argument again in public last Friday. A curious point noted by several observers, including Ping Chen of China, is that at the moment China may in fact be doing this to some extent, with its strong fiscal stimulus plan and its allowing some appreciation of the yuan/rmb against the dollar, although it has also proposed a tax rebate for exporters that pushes in the opposite direction.

[anne]

Barkley Rosser:

"I find it interesting that the Peoples' Daily may be quoting the letter from Davidson and Liu. Davidson attended the conference I was at late last week, and was strongly pushing the original "Keynes Plan" for Bretton Woods that was not adopted due to Harry Dexter White. It calls for an international clearing unit (could be an upgraded SDR) * with a stronger global central bank, with the most controversial part of the package being that creditor nations would bear the onus of adjustment, or at least part of it, for structural imbalances of the balances of payments. It was certainly this last proviso that led White to reject the plan in favor of what was passed...."

* Special drawing right

[anne]

http://krugman.blogs.nytimes.com/2008/11/17/after-the-stimulus/

November 17, 2008

After the Stimulus
By Paul Krugman

For the coming year, and probably well beyond, the economy will be on life support — sustained by massive fiscal stimulus. (Either that, or we'll be in a very deep slump.) But eventually the economy will have to come off life support. What will take the place of the stimulus?

I don't really know the answer, but one thing that may be useful is to compare the sources of demand in 2007 with those over a longer period. Here's a table showing C (consumer spending), N (nonresidential investment), R (residential investment), G (government purchases), and NX (net exports) as percentages of GDP in 2007 and on average over the period 1979-2007.

2007 - Average

C (70.3) (66.7)
N (10.9) (11.3)
R ( 4.6) ( 4.5)
G (19.4) (19.4)
NX (-5.1) (-2.4)

Sources of demand

What stands out is the combination of high consumption and a large trade deficit. By 2007 residential investment had already fallen to normal levels, and nonresidential investment was also fairly normal.

Consumption probably isn't going back to a 2007 share of GDP — savings are back. So what will fill the gap, once the stimulus is gone? Housing? Not for a long time. Business investment? Hard to see why. The natural thing would be to trade lower consumption for a smaller trade deficit.

But that's going to be hard if the rest of the world is also in a slump, and in particular if emerging markets are facing currency crises.

What all this suggests — and it's a very rough cut — is that our emergence from the era when massive fiscal stimulus is needed may hinge crucially on getting the world financial situation, not just our own, under control.

[anne]

http://krugman.blogs.nytimes.com/2008/11/17/fannie-freddie-data/

November 17, 2008

Fannie Freddie Data
By Paul Krugman

Some readers have asked for data showing that Fannie and Freddie did not play a key role in the housing bubble. Mark Thoma has a good picture, link here. *

The two lines to track are the ones at the top. One shows the share of mortgages accounted for by S&Ls, the other the share accounted for by agency-backed pools — i.e., Fannie/Freddie mortgages. Fannie and Freddie did get very big in the 90s, basically filling the hole left by the S&Ls. But they pulled back sharply after 2003, just when housing really got crazy.

So who drove the bubble? The blue line, “asset-backed securities issuers.” Notice, by the way, that these were not depository institutions — and therefore not subject to the Community Reinvestment Act.

Once again, the whole Fannie/Freddie/liberal mandates story is phony.

* http://economistsview.typepad.com/.shared/image.html?/photos/uncategorized/2008/09/24/gse.gif

[anne]

http://delong.typepad.com/sdj/2008/11/lessons-from-th.html

Lessons From the Great Depression Blogging
By Brad DeLong

Private investment recovers to 1929 levels by 1937, as New Deal policies take effect [Graph]

I have never been able to make any sense at all of the right-wing claim that the New Deal prolonged the Great Depression by creating a "crisis of confidence" that crippled private investment as American businessmen feared and hated "that Communist Roosevelt." The crisis of confidence was created by the stock market crash, the deflation, and the bank failures of 1929-1933. Private investment recovered in a very healthy fashion as Roosevelt's New Deal policies took effect.

The interruption of the Roosevelt Recovery in 1937-1938 is, I think, well understood: Roosevelt's decision to adopt more "orthodox" economic policies and try to move the budget toward balance and the Federal Reserve's decision to contract the money supply by raising bank reserve requirements provide ample explanation of that downturn. * And once those two factors had run its course the continuation of Roosevelt's policies was no obstacle to an investment recovery driven by war-related exports monetary expansion produced by capital flight from Europe.

You can argue--and I occasionally do--that had the Supreme Court not ruled the National Industrial Recovery Act unconstitutional it would have exerted a significant drag on medium-run economic recovery. But the Supreme Court did rule the NIRA unconstitutional, 9-0, Brandeis voting alongside MacReynolds.

* http://www.jstor.org/pss/1927330

August, 1938

The Downturn of 1937
By Sumner H. Slichter

[anne]

So that we understand what Niall Ferguson has always been about....

http://select.nytimes.com/search/restricted/article?res=F0071FF6385E0C748EDDAD0894DB404482

April 27, 2003

The Empire Slinks Back
By NIALL FERGUSON

Wheresoever the Roman conquers, he inhabits. -- Seneca

Iraq has fallen. Saddam's statues are face down in the dust. His evil tyranny is at an end.

So -- can we, like, go home now?

You didn't have to wait long for a perfect symbol of the fundamental weakness at the heart of the new American imperialism -- sorry, humanitarianism. I'm talking about its chronically short time frame. I wasn't counting, but the Stars and Stripes must have been up there on the head of that statue of Saddam for less than a minute. You have to wonder what his commanding officer said to the marine responsible, Cpl. Edward Chin, when he saw Old Glory up there. ''Son, get that thing down on the double, or we'll have every TV station from here to Bangladesh denouncing us as Yankee imperialists!''

An echo of Corporal Chin's imperial impulse can be heard in the last letter Cpl. Kemaphoom Chanawongse sent home before he and his Marine unit entered Iraq. Chanawongse joked that his camp in Kuwait was like something out of ''M*A*S*H'' -- except that it would need to be called ''M*A*H*T*S*F'': ''marines are here to stay forever.''

But the question raised by Corporal Chanawongse's poignant final joke -- he was killed a week later, when his amphibious assault vehicle was blown up in Nasiriya -- is, Are the marines in Iraq ''to stay forever''? No doubt it is true, as President Bush said, that the America will ''honor forever'' Corporal Chanawongse and the more than 120 other service personnel so far killed in the conflict. Honored forever, yes. But there forever? In many ways the biggest mystery about the American occupation of Iraq is its probable duration. Recent statements by members of the Bush administration bespeak a time frame a lot closer to ephemeral than eternal. As the president himself told the Iraqi people in a television broadcast shortly after the fall of Baghdad: ''The government of Iraq and the future of your country will soon belong to you. . . . We will respect your great religious traditions, whose principles of equality and compassion are essential to Iraq's future. We will help you build a peaceful and representative government that protects the rights of all citizens. And then our military forces will leave.''

What the president didn't make entirely clear was whether the departing troops would be accompanied by the retired Lt. Gen. Jay Garner and his ''Office of Reconstruction and Humanitarian Assistance,'' newspeak for what would once have been called Omgus -- the Office of Military Government (United States). Nor was he very specific about when exactly he expected to see the handover of power to the ''peaceful and representative government'' of Iraqis.

But we know the kind of time frame the president has in mind. In a prewar speech to the American Enterprise Institute, Bush declared, ''We will remain in Iraq as long as necessary and not a day more.'' It is striking that the unit of measure he used was days. Speaking less than a week before the fall of Baghdad, Paul Wolfowitz, the deputy secretary of defense, suggested that Garner would be running Iraq for at least six months. Other administration spokesmen have mentioned two years as the maximum transition period. When Garner himself was asked how long he expected to be in charge, he talked about just three months.

If -- as more and more commentators claim -- America has embarked on a new age of empire, it may turn out to be the most evanescent empire in all history. Other empire builders have fantasized about ruling subject peoples for a thousand years. This is shaping up to be history's first thousand-day empire. Make that a thousand hours.

Let me come clean. I am a fully paid-up member of the neoimperialist gang. Twelve years ago -- when it was not at all fashionable to say so -- I was already arguing that it would be ''desirable for the United States to depose'' tyrants like Saddam Hussein. ''Capitalism and democracy,'' I wrote, ''are not naturally occurring, but require strong institutional foundations of law and order. The proper role of an imperial America is to establish these institutions where they are lacking, if necessary . . . by military force.'' Today this argument is in danger of becoming commonplace, at least among the set who read The National Interest, the latest issue of which is practically an American Empire Special Edition. Elsewhere, writers as diverse as Max Boot, Andrew Bacevich and Thomas Donnelly have drawn explicit (and in Boot's case, approving) comparisons between the pax Britannica of Queen Victoria's reign and the pax Americana they envisage in the reign of George II. Boot has gone so far as to say that the United States should provide places like Afghanistan and other troubled countries with ''the sort of enlightened foreign administration once provided by self-confident Englishmen in jodhpurs and pith helmets.''

I agree. The British Empire has had a pretty lousy press from a generation of ''postcolonial'' historians anachronistically affronted by its racism. But the reality is that the British were significantly more successful at establishing market economies, the rule of law and the transition to representative government than the majority of postcolonial governments have been. The policy ''mix'' favored by Victorian imperialists reads like something just published by the International Monetary Fund, if not the World Bank: free trade, balanced budgets, sound money, the common law, incorrupt administration and investment in infrastructure financed by international loans. These are precisely the things Iraq needs right now. If the scary-sounding ''American empire'' can deliver them, then I am all for it. The catch is whether or not America has the one crucial character trait without which the whole imperial project is doomed: stamina. The more time I spend here in the United States, the more doubtful I become about this.

The United States unquestionably has the raw economic power to build an empire -- more, indeed, than the United Kingdom ever had at its disposal....

[anne]

"Let me come clean. I am a fully paid-up member of the neoimperialist gang."

The only concern Ferguson has had, as so carefully explained was to do the British empire right and permanently with America. That there are moral costs, human costs, has always been as nothing to Ferguson save for the evoking of the proper heroes of imperialism for the sake of imperialism. That the suitable heroes are dead and cannot speak for the imperial venture themselves is of no concern as long as there is a Ferguson to speak so imaginatively for them.

That Ferguson should criticize this definitively imperial Administration in any way is only a matter of frustration with the ventures not having gone quite as the British once envisioned but went as poorly then too however much that is forgotten.

[anne]

http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=726492

November 13, 2008

In Chronic Condition: Experiences of Patients with Complex Health Care Needs, in Eight Countries, 2008
By Cathy Schoen, Robin Osborn, Sabrina K. H. How, Michelle M. Doty, and Jordon Peugh

Synopsis

A 2008 survey of chronically ill adults in Australia, Canada, France, Germany, the Netherlands, New Zealand, the United Kingdom, and the United States found major differences in health care access, safety, and efficiency, with U.S. patients at particularly high risk of forgoing care because of costs and experiencing errors or inefficient, poorly organized care.

[Julio]

"The policy ''mix'' favored by Victorian imperialists reads like something just published by the International Monetary Fund, if not the World Bank"

So, the guy is not all wrong, is he ;-)?

Second-rate British comedians have produced an endless stream characters like this, in skits parodying the old days. Hard to believe he's getting published.

And "Chimerica"? Is he being obscurely clever? or does he have the mother of all tin ears?

[anne]

http://select.nytimes.com/search/restricted/article?res=F0071FF6385E0C748EDDAD0894DB404482

April 27, 2003

The Empire Slinks Back
By NIALL FERGUSON

The policy ''mix'' favored by Victorian imperialists reads like something just published by the International Monetary Fund, if not the World Bank: free trade, balanced budgets, sound money, the common law, incorrupt administration and investment in infrastructure financed by international loans. These are precisely the things Iraq needs right now. If the scary-sounding ''American empire'' can deliver them, then I am all for it. The catch is whether or not America has the one crucial character trait without which the whole imperial project is doomed: stamina. The more time I spend here in the United States, the more doubtful I become about this....

[Beyond ready parody.]

[Bruce Wilder]

Stamina? Is that like a strong stomach?

Personally, I prefer the French approach to aristocracy: lead with the guillotine, follow with national health insurance, fast trains, wine and cheese.

[anne]

http://ebooks.adelaide.edu.au/d/dickens/charles/d54tt/part1.html

1859

A Tale of Two Cities
By Charles Dickens

Recalled to Life

The Period

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

There were a king with a large jaw and a queen with a plain face, on the throne of England; there were a king with a large jaw and a queen with a fair face, on the throne of France. In both countries it was clearer than crystal to the lords of the State preserves of loaves and fishes, that things in general were settled for ever.

It was the year of Our Lord one thousand seven hundred and seventy–five. Spiritual revelations were conceded to England at that favoured period, as at this. Mrs. Southcott had recently attained her five–and–twentieth blessed birthday, of whom a prophetic private in the Life Guards had heralded the sublime appearance by announcing that arrangements were made for the swallowing up of London and Westminster. Even the Cock–lane ghost had been laid only a round dozen of years, after rapping out its messages, as the spirits of this very year last past (supernaturally deficient in originality) rapped out theirs. Mere messages in the earthly order of events had lately come to the English Crown and People, from a congress of British subjects in America: which, strange to relate, have proved more important to the human race than any communications yet received through any of the chickens of the Cock–lane brood.

France, less favoured on the whole as to matters spiritual than her sister of the shield and trident, rolled with exceeding smoothness down hill, making paper money and spending it. Under the guidance of her Christian pastors, she entertained herself, besides, with such humane achievements as sentencing a youth to have his hands cut off, his tongue torn out with pincers, and his body burned alive, because he had not kneeled down in the rain to do honour to a dirty procession of monks which passed within his view, at a distance of some fifty or sixty yards. It is likely enough that, rooted in the woods of France and Norway, there were growing trees, when that sufferer was put to death, already marked by the Woodman, Fate, to come down and be sawn into boards, to make a certain movable framework with a sack and a knife in it, terrible in history. It is likely enough that in the rough outhouses of some tillers of the heavy lands adjacent to Paris, there were sheltered from the weather that very day, rude carts, bespattered with rustic mire, snuffed about by pigs, and roosted in by poultry, which the Farmer, Death, had already set apart to be his tumbrils of the Revolution. But that Woodman and that Farmer, though they work unceasingly, work silently, and no one heard them as they went about with muffled tread: the rather, forasmuch as to entertain any suspicion that they were awake, was to be atheistical and traitorous.

In England, there was scarcely an amount of order and protection to justify much national boasting....

[anne]

http://dealbook.blogs.nytimes.com/2008/11/17/sec-accuses-mark-cuban-of-insider-trading/index.html?ref=business

November 17, 2008

S.E.C. Accuses Mark Cuban of Insider Trading
By DEALBOOK

A complaint alleged that the billionaire entrepreneur sold stock in an Internet company based on nonpublic information.

[Funny people, really funny sorts of people.]

[hari]

Niall Ferguson - *I'm a fully paid member of neo-imperialist gang*.

What audacity (WP) to give such a (Whitehall) Mandarin your column to promote neocon imperalist America?

Anne - Grateful for reproduction of 2003 article by Ferguson. I'm always amazed at the ideological imprint of modern-day WP (also NYT). I've no idea what they're after?

[hari]

Barkley's commentary on Davidson/Liu article dealing with Bretton Woods II shld be seen in (historical) context. When I requested Anne to see if she could reproduce it for our thread - I had only one idea in mind - People's Daily was commenting on their revised version of *currency (ie.dollar) and its global hegemony (in trade tansaction).

Invariably dollar hegemony has hit Beijing hard now. And during EU-Asia Summit held recently (Oct) in Bejing the q' of revising IMF rules relating to currrency (hegemony) was seriously discussed with a view to creating a more level playing field - under Bretton Woods II.

I've a feeling we shall return to this theme again, and again, after this financial crisis is over, and negotiate a post-WWII Bretton Woods financial superstructure for 21st Century.

[anne]

http://select.nytimes.com/search/restricted/article?res=F0071FF6385E0C748EDDAD0894DB404482

April 27, 2003

The Empire Slinks Back
By NIALL FERGUSON

Let me come clean. I am a fully paid-up member of the neoimperialist gang. Twelve years ago -- when it was not at all fashionable to say so -- I was already arguing that it would be ''desirable for the United States to depose'' tyrants like Saddam Hussein. ''Capitalism and democracy,'' I wrote, ''are not naturally occurring, but require strong institutional foundations of law and order. The proper role of an imperial America is to establish these institutions where they are lacking, if necessary . . . by military force.'' Today this argument is in danger of becoming commonplace, at least among the set who read The National Interest, the latest issue of which is practically an American Empire Special Edition. Elsewhere, writers as diverse as Max Boot, Andrew Bacevich and Thomas Donnelly have drawn explicit (and in Boot's case, approving) comparisons between the pax Britannica of Queen Victoria's reign and the pax Americana they envisage in the reign of George II. Boot has gone so far as to say that the United States should provide places like Afghanistan and other troubled countries with ''the sort of enlightened foreign administration once provided by self-confident Englishmen in jodhpurs and pith helmets.''

[hari]

Anne - Ferguson's language alone is outrageous and racist when dealing with Afghanistan and South Asia.

Now you can understand why even Gordon Brown can't consider replacing Imperial Pound with Euro! Sacreligious - at best!