Must-reads….

Herewith, courtesy of Yves Smith, of Naked Capitalism, is the story of Larry Summers, and with it the story of  the collusion between US economists and the finance sector….and the associated degrading of economics as a profession. It’s by Matthew Skomarovsky on the Little Sis website: Evidence of an American Plutocracy: the Larry Summers Story.

Also thought readers would be interested in a piece on Haiti by Andrew Jack in the Financial Times this weekend, and in particular the views of one Gregory Brandt, most of whose views on trade liberalisation I share:

“Alexandre Abrantes, special envoy for the World Bank, cites the effects of the past US trade embargo and the Haitian government’s failure to implement competitive measures such as tenders for all public contracts. He also points the finger at local business leaders. “There are entrepreneurs but all they do is import.”

That view is shared by Denis O’Brien, a rare foreign businessman who is investing in Haiti. “Ten families control most of the economy here. They’ve got to be embarrassed into doing something.”

Gregory Brandt, one such leading local investor, who imports rice, rents warehouses and is planning a deep-sea port and economic zone in the north, dismisses the idea of a tight-knit elite unwilling to invest locally.

He says his family had food factories in Haiti but they were destroyed by price dumping by the US of tomatoes and chicken, leaving them “strongly decapitalised and slaughtered”.

He criticises trade liberalisation, which he says undermined Haitian agriculture, and points to heavy export duties, high taxes and the reluctance of the central bank to spend more of its surplus to build housing for the poor.

He, too, argues that Haiti has become a “republic of NGOs”, their logos rife in Port au Prince, the capital, while their money and activities have distorted the economy. That includes food and drug donations, which undermine sustainable local production, a culture of hand-outs driven by post-quake “cash for work” programmes, and free clinics that have driven private doctors to emigrate and sucked government staff into higher-paying non-profit jobs.”

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1 comment to Must-reads….

  • larry brownstein

    I have detested Summers for years and not just because of his ill-informed and possibly ill-intentioned remarks about the intellectual capability of women. His economic work is also mediocre.

    Notice the timing of his leaving Washington to return to Harvard with the emergence of some of the current revelations of his intellectual perfidy. He may have seen some personal writing on the wall, after all he isn’t an idiot, when the economists’ letter calling for an ethics code for economists was published.

    Even were such an ethics code to come into effect, it probably won’t be enough. The APA American Psychological Association) has had such a code for years, but it has some teeth. What sanctions can the AEA implement should individuals choose not to comply with the code?

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