by Ann Pettifor This is a short piece that appears in the Guardian today, 27 March 2009.
“Next week, at the G20 summit, G8 leaders will work very hard to defend and fortify globalisation – an economic system that has brought about the first flly synchronised global economic failure.
Even as they plan the meeting, the G8 seem to have run out of steam. There are suggestions that enough has been done to defend globalisation and steer the global economy back to stability. The remedies considered adequate are: unfettered capital mobility (with limited regulation); inflation targeting; substantial bail-outs of the finance sector; the bolstering of the IMF and its policies: free trade in the face of global trade imbalances, and partial, if inadequate, fiscal stimuli.
In other words, the tried-and-failed policies that prolonged the Great Depression and that will inevitably fail again.
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Posted by Maz Kessler 24th March, 2009
There’s a short profile of Ann in this month’s Ecologist, which discusses Ann’s contribution to the Green New Deal and her work with the churches on Operation Noah.
We’re still waiting for the full article from the Ecologist, but here’s a scan.
Also here’s Ann’s recent blog post “Wall Street, Geithner and Defunct Economics Threaten Obama’s Leadership”.
Debtonation Readers: This is the full version of my latest blog for Huffington Post:15th March, 2009
Once a-ponzi time, millions worshiped at the feet of the Wizards of Finance. These Wizards preached an economic religion that promised security and an abundance of riches from the ‘Emerald City’ — Wall St.
Investors following this religion were led to believe that they could make capital gains effortlessly and endlessly.
To make these gains, it was argued, there was no need for protection from the authorities. 401(k) plans were safe in the hands of the Wizards. There was also no need for investors to engage in hard work: to invest in research; to engage more labor; to sweat at making goods or delivering services.
There would be no need to save. Money would be made effortlessly.
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Ched Myers first introduced me to the concept of Sabbath Economics in a formative piece he wrote for Sojourners Magazine in May June, 1998 – ‘ God Speed the year of Jubilee’.
It began with these words:
“We read the gospel as if we had no money,” laments Jesuit theologian John Haughey, “and we spend our money as if we know nothing of the gospel.” Indeed, in most North American churches today, it is exceedingly difficult to talk about economics. This topic is more taboo than politics, more even than sex—a subject with which our churches have recently become all too preoccupied. Yet no aspect of our individual and corporate lives is more determinative than the economy. And few subjects are more frequently addressed in our scriptures.
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There is a lively debate in the comment section of this blog on QE, credit creation, the difference between credit and cash, and so forth. Thank you to all those commenting. Understanding how money is created is fundamental to an understanding of this financial crisis.
As a response to one of the commenters I inserted a few paragraphs from my book…But thought it might be more appropriate to insert it here. So herewith – on one condition: that you all buy ‘The Coming First World Debt Crisis’ Palgrave, 2006.
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by Ann Pettifor 10 March, 2009
Over dinner at a prominent newspaper the other evening, journalists mused over the threat of inflation. They were not the first to do so. Many people, some of them influential, are warning of the threat of inflation.
Prominent amongs these are commentators and journalists, even economists, that do not understand the nature of bank money. They invariably confuse it with the tangible stuff that appears as notes (printed) and coins (minted). As a result, they believe that what the Bank of England is doing is printing billions of these notes. Naturally such a misconception leads them to assume that we are threatened now by the sight of Mervyn King pushing a wheelbarrow stashed with billions of pound notes around the City of London – followed by the spectre of inflation.
If ever you meet up with such a scaremonger, here’s a counter point to put to them.
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by Ann Pettifor 9th March, 2009
Professor Victoria Chick, Emeritus Professor of Economics at University College, London, a disciple of Keynes, true to his monetary policies, and whose advice and wisdom I lean on, has written in with some apposite comments. She writes:
” QE is not new, only the name is. It used to be called expansionary open market operations, and was routine.
“And why does the press refer to QE as printing money when the BoE does it – but not when banks do it – as they do every day? ”
She is incensed by the misleading media coverage of QE – and I assume she includes the Financial Times’ analysis in that.
by Ann Pettifor 9th March, 2009 David Williams writes helpfully in response to the blog below on QE: “Thanks for your recent explanation of the meaning and impact of Quantitative Easing, which I found really useful. But I think it contains a statement that means the exact opposite of what you want it to mean.
You wrote, “The second myth to dispel is that QE is not about ‘printing money’. “ Surely the widespread myth that you want to dispel is that QE is about printing money. Unless I’ve understood even less than I usually do!”
David, I am grateful to you. You are quite right. The myth that I am trying to dispel is that QE is about printing money. It is not.
by Ann Pettifor, 9th March, 2009. The Archbishop of Canterbury has today dramatically altered the terms of political debate on the financial crisis.
As one of those invited to dine with him and advise on his speech, I am delighted.
He has framed the debate correctly and fairly and squarely aimed responsibility at “governments committed to deregulation and to the encouragement of speculation and high personal borrowing (that) were elected repeatedly in Britain and the United States for a crucial couple of decades”, he said. “Add to that the fact of warnings of some of the risks of poor (or no) regulation, and we are left with the question of what it was that skewed the judgment of a whole society as well as of financial professionals.”at de-regulators and those that elected.
For more on the speech go to the Guardian.
The Guardian also has an editorial with this insight: “For their part, Christians in this country used to be much more openly engaged in economic questions. There was the Faith in the City report of 1985, which attacked the social effects of Thatcherism so boldly that Norman Tebbit angrily dismissed it as Marxism. And around the turn of this decade there was the Jubilee debt campaign. But this is a trail that has gone cold. It may be that Dr Williams has been cowed by his self-professed lack of economic expertise, or perhaps he has been distracted by the Anglican communion’s internal battles over the position of gays and women. Whatever the reason, it is to be hoped that this weekend is followed by more interventions – and not only from the Church of England. When it comes to economic policy at least, Gordon Brown was wrong: this is a very good time to be a novice. Many of the experts’ assumptions have fallen apart, and the argument over how to put them together again should be open to all.”
Could not have put it better myself.
by Ann Pettifor, 9 March, 2009.
My latest blog for the Huffington Post uses the analogy of piracy…which worried me a little. But as I wrote, found the relevance of the analogy more and more appropriate…Anyway, here it is for this blog’s valued readers.
” Somali Pirates were condemned when they hijacked tankers, took sailors hostage and demanded million-dollar ransoms. But their demands were a drop in the bucket compared to the ransoms demanded by Wall Street.
And the Somalis were kinder to their hostages than Wall Street is to millions of unemployed Americans. For while the Somalian pirates returned hostages unharmed, bankers, fraudsters and failed insurers continue to harm the US administration and hold millions of Americans hostage. The latter are being stripped effectively, of pensions, savings, livelihoods and jobs.
The Pentagon ordered the US Navy to apprehend Somalian pirates. However there has been no such ‘Counter Piracy Execute Order’ from the White House or US Treasury and aimed at Wall St. buccaneers. On the contrary. The US Treasury, like the British government, is capitulating to the pirates of the finance sector with a haste and a timidity that is unseemly, and if I may say so, unmanly.
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Welcome to my blog about the financial crisis. I'm Ann Pettifor, author and analyst of the global financial system, and co-author of the Green New Deal. I predicted an Anglo-American debt-deflationary crisis back in 2003, and am known for my work on sovereign debt and international finance, including Jubilee 2000. Currently a fellow of the