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August 16, 2011

Latest Posts from Economist's View

Latest Posts from Economist's View

"This isn't Hard"

Posted: 15 Aug 2011 10:08 PM PDT

How to cure the unemployment problem?:

This isn't hard. Hire people to build things with the free money the world is offering us.

links for 2011-08-15

Posted: 15 Aug 2011 10:01 PM PDT

Would a Requirement to Balance the Budget over the Business Cycle Improve Fiscal Policy?

Posted: 15 Aug 2011 11:34 AM PDT

This just posted:

Balance the Budget -- but Tie it to the Business Cycle

I toy with the idea of a requirement to balance the budget over the business cycle, but can't overcome reservations and fully endorse it.

Roubini: Is Capitalism Doomed?

Posted: 15 Aug 2011 10:08 AM PDT

Nouriel Roubini says that if things don't change, capitalism is in trouble:

...Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). ...
Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world's middle classes are feeling the squeeze of falling incomes and opportunities.
To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.
The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts. ...
The alternative is – like in the 1930s - unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.

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