November 28, 2012

Fighting Back Against Eurozone Tyrants

Dean Baker, Al Jazeera

AP Photo

The eurozone crisis countries still have not developed a workable strategy for countering the policies being imposed by the troika - the European Central Bank (ECB), the IMF and the European Union. Their main problem is not profligate government spending, as fans of data everywhere have long known; the problem is an imbalance in relative prices between the crisis countries and Germany and other northern countries. This imbalance is causing the crisis countries to run chronic trade deficits. Prior to the collapse of housing bubbles in the peripheral countries, this deficit was financed primarily through massive lending to the private sector in the crisis countries by banks in the northern countries. Since the collapse, the trade deficit has been largely financed with official lending...

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TAGGED: global economy, Eurozone


November 17, 2012
Prisons of Debt Paralyze the West
Cordt Schnibben, Der Spiegel
In the midst of this confusing crisis, which has already lasted more than five years, former German Chancellor Helmut Schmidt addressed the question of who had "gotten almost the entire world into so much trouble." The longer the... more ››
November 15, 2012
Asia's Rise Means Permanent Austerity for West
Martin Kettle, Guardian
Smart leaders should recognise that austerity in some form is the context for most of the foreseeable political options in countries like Britain. As a timely American book on this theme this year by Thomas Byrne Edsall argues,... more ››
November 24, 2012
States and Banks Locked in Bad Bargain
Stefan Kaiser, Der Spiegel
States and banks have made a deal with the devil. Banks buy the sovereign bonds needed to prop states up in the tacit understanding that the states will bail them out in a pinch. But experts warn that this symbiotic arrangement... more ››