This post provides links to some interesting articles I have read over the past few days that you may also enjoy.
• Andrew Bary (Barron’s): A pessimistic assessment, especially for Europe, June 1, 2009.
An interview with Niall Ferguson. The Harvard professor and media star is cautious on the global economic outlook – and bleak about Europe.
• Niall Ferguson (Financial Times): A history lesson for economists in thrall to Keynes, May 30, 2009.
The policy mistake has already been made – to adopt the fiscal policy of a world war to fight a recession. In the absence of credible commitments to end the chronic US structural deficit, there will be further upward pressure on interest rates, despite the glut of global savings. It was Keynes who noted that “even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist”. Today the long-dead economist is Keynes, and it is professors of economics, not practical men, who are in thrall to his ideas.
• Paul Krugman (The New York Times): Reagan did it, May 31, 2009.
There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers – men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.
• Paul Sandison: Outlook – The BG (Bernanke-Geithner) bubble of March-May 2009 and the aftermath, June 1, 2009.
• Floyd Norris (The New York Times): Credit relief may not last long, May 28, 2009.
• The Economist: Drowning, not waving?, May 29, 2009.
Don’t get too excited about some recent brighter economic news.
• Gillian Tett (Financial Times): Recovery not as easy as U, V, W, May 28, 2009.
• Paul Krugman (The New York Times): The big inflation scare, May 28, 2009.
Suddenly it seems as if everyone is talking about inflation. Stern opinion pieces warn that hyperinflation is just around the corner. And markets may be heeding these warnings: Interest rates on long-term government bonds are up, with fear of future inflation one possible reason for the interest-rate spike. But does the big inflation scare make any sense? Basically, no …
• Samuel Brittan (Financial Times): Inflation can act as a safety valve, May 28, 2009.
As Keynes and others have observed, workers accept more readily a real wage cut arising from a rise in the general level of prices than an actual reduction in what they are paid.
• Anatole Kaletsky (Times Online): America sneezes and the world is germ-free, May 28, 2009.
The financial crisis has emboldened countries such as Brazil and South Africa. The global balance of power is shifting.
• Elana Schor (The Washington Independent): Government taps bailout contractors with conflicts of interest, May 29, 2009.
As the Wall Street bailout nears its first anniversary, the controversy over giving public money to private banks has become public knowledge. But an equally risky aspect of the financial rescue has flown largely under the radar: the government’s reliance on private contractors – many with potentially significant conflicts of interest – to help revive the stalled economy.
• Philip Stephens (Financial Times): The real cure for Britain’s political malaise, June 1, 2009.
Local government has been left to wither. As Whitehall has provided the money, it has micro-managed spending. Voters have been stripped of the right to make local choices.
• Chuck Jaffe (Marketwatch): The house that Jack built, May 29, 2009.
Time is on your side, Vanguard’s Bogle tells investors.
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