Apologies in advance . This is a long post. I am getting feedback from those who have read the Green New Deal (GND) (which I co-authored) complaining that the Keynesian policies espoused therein will simply drive us back to the 1970s, to militant trades unionism and ‘stagflation’. Their concerns need a response.
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In this big bad world of the Credit Crunch, powerful central bankers – civil servants all – have bent over backwards to help powerful and rich private bankers.
Open Democracy, 8th August, 2008 The balloon of irresponsible debt on which globalisation floated started to burst in August 2007. A year on from “debtonation day”, Ann Pettifor surveys the wreckage, pinpoints the culprits, and outlines the solutions. We now know that on 9 August 2007 – which I called “debtonation day“ – …..see this story on Bloomberg…. Money Market `Plagued’ by Libor That Fed Can’t Reduce Gavin Finch, Bloomberg, 8th August 2008. – A year after central banks started to pump trillions of dollars into the financial system to end a seizure in credit markets caused by subprime mortgages, cash is about as tight as
Have been listening to debates about the conflict in Georgia over the week-end. There has been much wailing and gnashing of teeth about Putin’s disregard for democracy. In a similar vein, western commentary about President Hu Jintao’s Olympic Games is never complete without some tut-tutting about democracy and human rights in China. Yet these leaders have in reality much in common with Alan Greenspan, former chairman of t he US Federal Reserve, who is held in the greatest esteem by western commentators. He came to London recently to promote his book, and I “It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management. In reality, the past decade has seen mounting global forces (the international version of The world is now faced by a terrifying prospect: large scale and systemic economic failure of a globalised, highly integrated economy, caused by the collapse of massive credit and asset bubbles. This credit bubble, created by the private, de-regulated or ‘liberalised’ finance sector, inflated other bubbles, notably in property, but also in dot.coms, stocks and shares, and more recently, commodities like oil. All these bubbles will burst. The deflation of credit will leave a vast stain of unpayable debt on the global economy which will lead to the deflation of asset, including property, prices and in turn to the deflation of prices of goods and services. Listen to Business Daily on the BBC World Service, live on Friday 8th August, 2008, 11.40am GMT, and via their website thereafter.
The World Service invited myself and Jim O’Neill, chief economist at Goldman Sachs on to the Business Daily programme today for what they hoped would be an intellectual punch-up. They were not disappointed. Prof. Jagdish Bhagwati had also been invited, but sadly was stuck in a traffic jam so unable to join us in the discussion, and instead was recorded separately… O’Neill started by positively mocking the ‘peak oil thesis’. Ho, Ho, Ho… never heard anything so crazy he said… He had just read a book by a Californian – with no geological or economic background – calling for transition economies, and had never read such rubbish! “Don’t tell me you believe that peak oil nonsense!” I explained that I had grown up in a gold mining town, whose inhabitants and owners believed that gold would pay their wages and dividends for ever… Not so, mining there dried up in the mid 1990s and iIt turned out that reserves of gold, like oil, are finite. Today, my home town, Welkom in the Orange Free State, is a ghost town. When I asked him why Saudi oil production numbers seemed stuck, and would not budge even under intense pressure from the US, he looked incredulous. |
In the September 2003 edition of openDemocracy I wrote: 
Click here to read the full story in openDemocracy BOOKS:
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