Pulse: Global


The Strategic Importance of Brazil

I am sharing my new article on Brazil's military relationship with the PRC, and the strategic importance of Brazil to the region, and as a partner to the U.S.  My work is based on interactions during a recent trip to Rio de Janeiro to teach a seminar and participate in an event conducted by Brazil's prestigious Naval War College. This work is originally published through the ejournal Global Americans. 

EconVue Spotlight | A Big Week in Washington

There were three big stories out of Washington this week. President Trump’s trip to Asia has nearly overshadowed news of Congress’s proposed tax changes, and for the first time since G. William Miller, the Federal Reserve will be led by a non-economist.

10-Year Retrospective: Lessons 7, 8, 9 | Three more Lessons! That's the Lot

7. Neglect of international causes

This is the most fatal flaw, as it is the one least understood  by economists, governments or bankers.

My interpretation of the crisis emphasises its international dimensions – not only in the rapid spread of the crisis but also in its root causes (see Lesson 3).

Yet this perspective is still denied, derided or ignored.

10-Year Retrospective: Lesson 6 | The State has Rewarded Bad Behavior and Bad Banks

How has the state punished the financial industry for its crimes,  corruption and anti-social behaviour?

By showering it with subsidies, privileges,  perks and by offering it protection from an angry public. And by reducing its profitability and capacity to change by piling new regulatory layers and requirements.

And this remains true not just of the UK and US. It is true of European countries as well.

There is no incentive to improve their behaviour.

10-Year Retrospective: Lesson 5 | Banks have not Regained Public Trust

This is another unavoidable lesson. Banking has not been reformed by actions taken by the state, central banks or regulators since the crisis. Indeed they have set back the prospects for improvement.

There were two main strands in the policy response to the crisis. One was monetary policy – the experiment in QE, discussed in Lessons 1-3. The other was regulatory.

Banking industry leaders have resisted all efforts to reform. That shows that in the current state of society, banking can be regulated – raising costs to society – but not restructured.

EconVue Spotlight | US Irrational Exuberance vs China's Minsky Moment

The big story this past week has been the pomp and circumstance of China’s 19th Party Congress and its centerpiece, President Xi Jinping’s lengthy speech. In spite of many columns of analysis, there have been no public surprises. You’ll find my favorite article below, “Why Do We Keep Writing About Chinese Politics As If We Know More Than We Do?”

The IMF and the Minsky Moment

10-Year Retrospective: Lesson 3 | Why Reform Must be International

Gradually, inch by painful inch, the central bankers are losing their clothes – the comforting ideology that has enveloped them like a warm garment for more than a generation. This is the ideology, or “regime”, of central bank independence and inflation targeting (CBI+IT). Oh, how shy they are! Look how they hold onto any scraps!

EconVue Spotlight | What's Next for The World Economy

Last Sunday I gave a speech at the Adlai Stevenson Center on Democracy. The center website quotes Adlai Stevenson, who twice ran for president in the 1950's: "A free society is a society in which it is safe to be unpopular." Never was that more true or more apt than today.

10-Year Retrospective: Lesson 2 | Central Banks into Milch Cows

A leading economist has predicted that central banks will not remain independent much longer. His forecast was made  at  a Bank of England conference called to celebrate – yes – 20 years of independence. Guests included Mrs Theresa May, the Prime Minster. It was opened by the Governor, Mark Carney, who drew a different, but equally startling, lesson from the crisis.

Willem Buiter, chief economist of Citi, put up two slides where he declared that:

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