Both the British Chancellor, Alastair Darling and the shadow Chancellor, George Osborne, have been on the radio this morning, resisting the idea that interest rates are political. Instead they have argued, vehemently, that the Bank of England is independent, and that the Bank must decide whether or not to lower interest rates.
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 Wednesday 1st October, 2008
The massive deflation/de-leveraging of credit and debt that is now cascading through the banking system and rapidly deflating the value of housing and other assets in the Anglo-American economies will precipitate large-scale, global economic failure, for years to come.
19th September, 2008: My comment for the Guardian’s site, part of a debate on the Credit Crunch organised by the new economics foundation, of which I am a fellow…
Bankers have gone to great lengths to damage our confidence in the banking sector. And loss of confidence and trust on this scale can’t be fixed by banning a few short-selling speculators or by nationalising a bank here, an insurance company there. Nor is confidence restored when ministers meet up with bankers on the quiet, and grant them monopoly powers (as with Lloyds).
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.
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 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. Monday 21st July, 2008
Today sees the publication of a report – The Green New Deal – that I co-authored. Much of the analysis in these pages is reflected in the report. The Green New Deal highlights the fact that ‘easy money’ led to excessive consumption, which in turn led to the uprooting of forests and the burning of emissions to satisfy demands for goods and services. By easing up on excessive credit, and regulating finance we may also give the ecosystem a chance to renew itself, and to recover from this latest period of rapacious consumption. Published by the new economics foundation (nef) it highlights the similarities between today’s Credit Crunch and the Great Depression of the 1920s. The report draws on lessons learned in the 1930s about the risks of excessively de-regulated finance in causing major recessions, and calls for the kind of intellectual and political leadership shown by Roosevelt and Keynes, and so lacking today. The contempt in which these two great figures are held by most orthodox economists and neoliberal politicians is, in my view, but a reflection of their own analytical failure. It is this analytical failure that explains why central bankers, economists and finance ministers have failed to adequately predict and handle the Credit Crunch .
Their insolvency now threatens a global systemic financial crisis, and their taxpayer-funded bailout of shareholders, bondholders and an incompetent management exposes the hypocrisy of much neo-liberal cant. |
In the September 2003 edition of openDemocracy I wrote: 
Click here to read the full story in openDemocracy BOOKS:
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