Prieur’s readings (June 29, 2009)
This post provides links to a number of thought-provoking articles I have read over the past few days that you may also find of interest.
• Joseph Stiglitz (The Nation): A global recovery for a global recession, June 24, 2009.
As developed countries struggle to ensure a quick recovery, they need to think of the effects of their actions on developing countries. It is time to begin the restructuring of our global economic and financial system in ways that ensure that the fruits of prosperity are more widely shared and that the system is more stable. This task will not be accomplished overnight. But it is a task that must be begun, now.
• Philip Stephens (Financial Times): Co-ordination falls away as the global crisis abates, June 26, 2009.
There was a surprising degree of co-operation on the international response to the crisis in financial markets. But the restoration of calm has been the signal for cracks to appear about what to do next. The danger is that, without the glue of shared adversity, governments will fall to bickering again.
• Samuel Brittan (Financial Times): “Green shoots” debate misleads policymakers, June 25, 2009.
It is highly likely that we will have before long a quarter or two of stable output. The interesting question is where we go from there.
• George Magnus (Financial Times): State support is vital in times of crisis, June 25, 2009.
Rising government bond yields have sparked debate between economists and historians over the risks of excessive government borrowing. The dangers are real, but not imminent.
• Simon Johnson (The Atlantic): The quiet group, May 2009.
The crash has laid bare many unpleasant truths about the US. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government – a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the US, it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
• Alan Greenspan (Financial Times): Inflation – the real threat to sustained recovery, June 25, 2009.
For the best chance for worldwide economic growth we must continue to rely on private market forces to allocate capital and other resources. The alternative of political allocation of resources has been tried; and it failed. Private market forces are our best hope.
• James Fellows (The Atlantic): Dr Doom has some good news, July/August 2009.
Nouriel Roubini, the New York University economist who accurately forecast the bursting of the housing bubble and the resulting economic contraction, has become famous for his pessimism – he has been the gloomiest of the doomsayers. Which is what makes his current outlook surprising: Roubini believes that the Obama administration’s policy makers – and especially the much-maligned Tim Geithner – have gotten a lot right. Pitfalls may still abound, but he is now projecting an end to the recession, and he sees growth ahead.
• Jamie Dimon (The Wall Street Journal): A unified bank regulator is a good start, June 27, 2009
The steady restoration of stability is an important step forward for the financial system and the economy. By instituting needed changes in how financial institutions operate and are regulated, I’m confident that the system will once again play its vital role, efficiently and safely providing the capital and credit upon which our nation’s economic growth depends.
• Andy Xie (Caijing.com.cn): Fear the dark side of China’s lending surge, June19, 2009.
Banks loans designed to spark economic recovery have been channeled into asset speculation, doing more harm than good.
Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.