5th December 2008

Have fretted for weeks about the heroic  Obama’s economic appointments.  Refuse to go along with the knee-jerk ’sell-out’ accusations. Was really pleased about Tim Geithner – whom I  met when he backed not just Jubilee 2000, but also a battle I fought at the IMF (with Prof. Kunibert Raffer) to draft an international insolvency framework for insolvent countries.  Geithner did call it right in a roundabout way in  speeches made at the Fed before ‘debtonation day’ (9 Aug 07). But worry about the influence of Robert Rubin (who did not call the crisis at all) and Larry Summers, who as the Herald Tribune noted ‘helped tear down the regulatory walls between banks, brokerages and insurance companies and freed them to trade in unregulated and little-understood derivatives worth trillions of dollars”.  And then John Gapper wrote this brilliant piece about Rubin in the Financial Times yesterday: ‘Time to give something back, Bob.‘ Quotes from the piece follow.

Read post »

4th December 2008

‘Financial writers’ and establishment economists seem to live in a different world.  They often bring to mind bats, hanging upside down in the cavernous, soaring rafters of a barn, analysing the world from a great distance, and upside-down. Take one Diana Henriques – described as a ’senior financial writer for the New York Times‘.  She was on the Rachel Maddow Show on US TV last night, reviewing the gargantuan $700 billion bail-out of US banks.  In defence of the opaque and unaccountable activities of the Treasury team dishing out taxpayer largesse she said this: “No-one could lay out a war-game for this (crisis) in advance”. (Ehem, correction: some were well prepared, and could have.)  But it was the next remark that took my breath away:

Read post »

4th December 2008

I wrote this post yesterday, and then accidentally deleted it….Trying again.

Readers might know that the British Queen visited the London School of Economics recently and asked Professor Luis Garicano, director of research why,  if the hole in the international economic system was so large… “everyone missed it?´ A very good question to ask of the LSE’s neo-liberal faculty.  Yesterday she opened the new session of Parliament and proposed restraining binge-lenders along with binge-drinkers.  Not a moment too soon – for binge-lending continues, but only to the chosen few.

Read post »

1st December 2008

Watching our British politicians squabble and spin this last week over the Pre Budget Report – while Rome burns –  was depressing. Why are our politicians so off-beam? Why does their response to this crisis seem so petty and botched?

The answer may lie in their ties to the finance sector. The fact is we are experiencing what will be a prolonged Bankers’ Depression – born in the City of London, not in the US sub-prime market. Neither of our major political parties is willing to admit that; to analyse the crisis in those terms and therefore to lay the blame on the finance sector and to rein it in. They are too compromised.

Read post »