Brazil Can Do It Too!!!!!!
"All those people who thought we had no ability to govern this country will now learn that we can host the Olympics."
"The Brazilian people are good, generous and the country deserves it."
Brazilian President Luiz Inacio Lula da Silva
Friday, October 2, 2009
Saturday, September 19, 2009
Irving Kristol, Godfather of Modern Conservatism, Dies at 89
Barry Gewen
New York Times
September 18, 2009
Irving Kristol, the political commentator who, as much as anyone, defined modern conservatism and helped revitalize the Republican Party in the late 1960s and early ’70s, setting the stage for the Reagan presidency and years of conservative dominance, died Friday in Arlington, Va. He was 89 and lived in Washington.
He was commonly known as the godfather of neoconservatism, even by those who were not entirely sure what the term meant. In probably his most widely quoted comment — his equivalent of Andy Warhol’s 15 minutes of fame — Mr. Kristol defined a neoconservative as a liberal who had been “mugged by reality.”
It was a description that summarized his experience in the 1960s, along with that of friends and associates like Daniel Bell, Nathan Glazer and Daniel Patrick Moynihan. New Deal Democrats all, they were social scientists who found themselves questioning many of President Lyndon B. Johnson’s Great Society ideas. Mr. Kristol translated his concerns into a magazine. In 1965, with a $10,000 contribution from a wealthy acquaintance, he and Daniel Bell started The Public Interest. Its founding is generally considered the beginning of neoconservatism. “Something like a ‘movement’ took shape,” Mr. Kristol wrote, “with The Public Interest at (or near) the center.”
The Public Interest writers did not take issue with the ends of the Great Society so much as with the means, the “unintended consequences” of the Democrats’ good intentions. Welfare programs, they argued, were breeding a culture of dependency; affirmative action created social divisions and did damage to its supposed beneficiaries. They placed practicality ahead of ideals. “The legitimate question to ask about any program,” Mr. Kristol said, “is, ‘Will it work?’,” and the reforms of the 1960s and ’70s, he believed, were not working. Read More...
New York Times
September 18, 2009
Irving Kristol, the political commentator who, as much as anyone, defined modern conservatism and helped revitalize the Republican Party in the late 1960s and early ’70s, setting the stage for the Reagan presidency and years of conservative dominance, died Friday in Arlington, Va. He was 89 and lived in Washington.
He was commonly known as the godfather of neoconservatism, even by those who were not entirely sure what the term meant. In probably his most widely quoted comment — his equivalent of Andy Warhol’s 15 minutes of fame — Mr. Kristol defined a neoconservative as a liberal who had been “mugged by reality.”
It was a description that summarized his experience in the 1960s, along with that of friends and associates like Daniel Bell, Nathan Glazer and Daniel Patrick Moynihan. New Deal Democrats all, they were social scientists who found themselves questioning many of President Lyndon B. Johnson’s Great Society ideas. Mr. Kristol translated his concerns into a magazine. In 1965, with a $10,000 contribution from a wealthy acquaintance, he and Daniel Bell started The Public Interest. Its founding is generally considered the beginning of neoconservatism. “Something like a ‘movement’ took shape,” Mr. Kristol wrote, “with The Public Interest at (or near) the center.”
The Public Interest writers did not take issue with the ends of the Great Society so much as with the means, the “unintended consequences” of the Democrats’ good intentions. Welfare programs, they argued, were breeding a culture of dependency; affirmative action created social divisions and did damage to its supposed beneficiaries. They placed practicality ahead of ideals. “The legitimate question to ask about any program,” Mr. Kristol said, “is, ‘Will it work?’,” and the reforms of the 1960s and ’70s, he believed, were not working. Read More...
Friday, July 17, 2009
What went wrong with economics
Illustration by Jon Berkerly
Jul 16th 2009 From The Economist print edition
And how the discipline should change to avoid the mistakes of the past
OF ALL the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. A few years ago, the dismal science was being acclaimed as a way of explaining ever more forms of human behaviour, from drug-dealing to sumo-wrestling. Wall Street ransacked the best universities for game theorists and options modellers. And on the public stage, economists were seen as far more trustworthy than politicians. John McCain joked that Alan Greenspan, then chairman of the Federal Reserve, was so indispensable that if he died, the president should “prop him up and put a pair of dark glasses on him.” Read More...Wednesday, April 15, 2009
Uncertainty bedevils the best system
By Edmund Phelps
Published: April 14 2009 19:50 Financial Times
In countries operating a largely capitalist system, there does not appear to be a wide understanding among its actors and overseers of either its advantages or its hazards. Ignorance of what it can contribute has in the past led some countries to throw out the system or clip its wings. Ignorance of the hazards has made imprudence in markets and policy neglect all the more likely. Regaining a well-functioning capitalism will require re-education and deep reform.
Capitalism is not the “free market” or laisser faire – a system of zero government “plus the constable”. Capitalist systems function less well without state protection of investors, lenders and companies against monopoly, deception and fraud. These systems may lack the requisite political support and cause social stresses without subsidies to stimulate inclusion of the less advantaged in society’s formal business economy. Last, a huge social insurance system, with resulting high taxes, low take-home pay and low wealth, may not hurt capitalism. More...
Published: April 14 2009 19:50 Financial Times
In countries operating a largely capitalist system, there does not appear to be a wide understanding among its actors and overseers of either its advantages or its hazards. Ignorance of what it can contribute has in the past led some countries to throw out the system or clip its wings. Ignorance of the hazards has made imprudence in markets and policy neglect all the more likely. Regaining a well-functioning capitalism will require re-education and deep reform.
Capitalism is not the “free market” or laisser faire – a system of zero government “plus the constable”. Capitalist systems function less well without state protection of investors, lenders and companies against monopoly, deception and fraud. These systems may lack the requisite political support and cause social stresses without subsidies to stimulate inclusion of the less advantaged in society’s formal business economy. Last, a huge social insurance system, with resulting high taxes, low take-home pay and low wealth, may not hurt capitalism. More...
Monday, April 6, 2009
From Bubble to Depression?
By STEVEN GJERSTAD and VERNON L. SMITH, Wall Street Journal
Bubbles have been frequent in economic history, and they occur in the laboratories of experimental economics under conditions which -- when first studied in the 1980s -- were considered so transparent that bubbles would not be observed.
We economists were wrong: Even when traders in an asset market know the value of the asset, bubbles form dependably. Bubbles can arise when some agents buy not on fundamental value, but on price trend or momentum. If momentum traders have more liquidity, they can sustain a bubble longer.
But what sparks bubbles? Why does one large asset bubble -- like our dot-com bubble -- do no damage to the financial system while another one leads to its collapse? Key characteristics of housing markets -- momentum trading, liquidity, price-tier movements, and high-margin purchases -- combine to provide a fairly complete, simple description of the housing bubble collapse, and how it engulfed the financial system and then the wider economy. Read More...
Bubbles have been frequent in economic history, and they occur in the laboratories of experimental economics under conditions which -- when first studied in the 1980s -- were considered so transparent that bubbles would not be observed.
We economists were wrong: Even when traders in an asset market know the value of the asset, bubbles form dependably. Bubbles can arise when some agents buy not on fundamental value, but on price trend or momentum. If momentum traders have more liquidity, they can sustain a bubble longer.
But what sparks bubbles? Why does one large asset bubble -- like our dot-com bubble -- do no damage to the financial system while another one leads to its collapse? Key characteristics of housing markets -- momentum trading, liquidity, price-tier movements, and high-margin purchases -- combine to provide a fairly complete, simple description of the housing bubble collapse, and how it engulfed the financial system and then the wider economy. Read More...
Why this will not be a normal cyclical recovery
By Roger Altman
Published: April 5 2009 19:23 Financial Times
The rare nature of this recession precludes a cyclically normal US recovery. Instead, we are consigned to a slow, painful climb-out, as are nations such as Japan and Mexico that depend on US demand. The implications for US policy include a likely second round of stimulus, much more federal capital for the banking system and stunning budget deficits that will slow key initiatives for President Barack Obama, such as healthcare and energy reform.
What is unusual is that this is a balance-sheet driven recession, centred on the damaged financial condition of both households and banks. These weaknesses mandate sub-normal levels of consumer spending and overall lending for about three years. More...
Related Article: The London summit has not fixed the crisis
Published: April 5 2009 19:23 Financial Times
The rare nature of this recession precludes a cyclically normal US recovery. Instead, we are consigned to a slow, painful climb-out, as are nations such as Japan and Mexico that depend on US demand. The implications for US policy include a likely second round of stimulus, much more federal capital for the banking system and stunning budget deficits that will slow key initiatives for President Barack Obama, such as healthcare and energy reform.
What is unusual is that this is a balance-sheet driven recession, centred on the damaged financial condition of both households and banks. These weaknesses mandate sub-normal levels of consumer spending and overall lending for about three years. More...
Related Article: The London summit has not fixed the crisis
Sunday, April 5, 2009
G20 Communique - Apr 2 London Meeting
We have today therefore pledged to do whatever is necessary to:
- restore confidence, growth, and jobs;
- repair the financial system to restore lending;
- strengthen financial regulation to rebuild trust;
- fund and reform our international financial institutions to overcome this crisis and prevent future ones;
- promote global trade and investment and reject protectionism, to underpin prosperity;
- build an inclusive, green, and sustainable recovery. Read More
Annex to Communique:
DECLARATION ON STRENGTHENING THE FINANCIAL SYSTEM
DECLARATION ON DELIVERING RESOURCES THROUGH THE INTERNATIONAL FINANCIAL INSTITUTIONS
Progress Report on the Actions of the Washington Action Plan
Sunday, March 29, 2009
The Future of Capitalism Discussion
Watch several discussions on the future of Capitalism hosted by Financial Times Editor Lionel Barber.
Wednesday, March 25, 2009
Reform the International Monetary System
Zhou Xiaochuan, Governor, People's Bank of China (PBC)
The outbreak of the current crisis and its spillover in the world have confronted us with a long-existing but still unanswered question,i.e., what kind of international reserve currency do we need to secure global financial stability and facilitate world economic growth, which was one of the purposes for establishing the IMF? There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system. The above question, however, as the ongoing financial crisis demonstrates, is far from being solved, and has become even more severe due to the inherent weaknesses of the current international monetary system. More...
Courtesy: People's Bank of China
Related Article: US willing to look at China currency proposal (Financial Times)
The outbreak of the current crisis and its spillover in the world have confronted us with a long-existing but still unanswered question,i.e., what kind of international reserve currency do we need to secure global financial stability and facilitate world economic growth, which was one of the purposes for establishing the IMF? There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system. The above question, however, as the ongoing financial crisis demonstrates, is far from being solved, and has become even more severe due to the inherent weaknesses of the current international monetary system. More...
Courtesy: People's Bank of China
Related Article: US willing to look at China currency proposal (Financial Times)
Monday, March 16, 2009
SA retail investment a glimpse of what’s coming
By Kuthula Matshazi
RECENTLY, there have been concerns about South African businesses, especially supermarket retail chains flooding the Zimbabwe market with their goods.
This has been necessitated by the situation in Zimbabwe where there had been, in some instances, real and in other cases artificial shortages of basic foodstuffs.
In times when these shortages were acute, South Africa and Botswana became our shopping centres. As a business response to market demand, and exploiting the proximity of Zimbabwe to South Africa and the cordial political relations that we share, these businesses provided Zimbabwe with basic commodities. More...
Related Article: FINANCIAL REGIME CHANGE?, Robert Wade
New Left Review 53, September-October 2008
Courtesy: New Left Review
RECENTLY, there have been concerns about South African businesses, especially supermarket retail chains flooding the Zimbabwe market with their goods.
This has been necessitated by the situation in Zimbabwe where there had been, in some instances, real and in other cases artificial shortages of basic foodstuffs.
In times when these shortages were acute, South Africa and Botswana became our shopping centres. As a business response to market demand, and exploiting the proximity of Zimbabwe to South Africa and the cordial political relations that we share, these businesses provided Zimbabwe with basic commodities. More...
Related Article: FINANCIAL REGIME CHANGE?, Robert Wade
New Left Review 53, September-October 2008
Courtesy: New Left Review
Fed to Buy $1 Trillion in Securities to Aid Economy
By EDMUND L. ANDREWS, The New York Times
Published: March 18, 2009
WASHINGTON — The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.
The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.
The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments. More...
Related Articles:
The Geithner plan explained - Audio (Financial Times)
A Test of Will (The Economist)
Published: March 18, 2009
WASHINGTON — The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.
The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.
The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments. More...
Related Articles:
The Geithner plan explained - Audio (Financial Times)
A Test of Will (The Economist)
U.S. to Toughen Finance Rules
By DAMIAN PALETTA, Wall Street Journal
The Obama administration, moving with increasing speed, has inked the main contours of its plan to revamp financial-market oversight -- changes that will ripple through the economy, affecting everything from the operations of international banks to consumer protection.
The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.
Proposed Changes
Treasury Secretary Timothy Geithner will soon outline proposed changes in financial regulation. They are expected to include:
An enhanced role for the Federal Reserve to monitor and address broad economic risks.
Changes to the way banks are overseen to prevent lenders from shopping among regulators for the easiest supervision.
More transparency and stricter rules for the way money flows between banks.
Tougher capital requirements for big banks.
Consolidation of consumer-protection enforcement. Read More...
The Obama administration, moving with increasing speed, has inked the main contours of its plan to revamp financial-market oversight -- changes that will ripple through the economy, affecting everything from the operations of international banks to consumer protection.
The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.
Proposed Changes
Treasury Secretary Timothy Geithner will soon outline proposed changes in financial regulation. They are expected to include:
An enhanced role for the Federal Reserve to monitor and address broad economic risks.
Changes to the way banks are overseen to prevent lenders from shopping among regulators for the easiest supervision.
More transparency and stricter rules for the way money flows between banks.
Tougher capital requirements for big banks.
Consolidation of consumer-protection enforcement. Read More...
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