Director's Chair: Yanis Varoufakis - The Global Minotaur and The True Origins of the Financial Crisis. In this four-part INET “From the Director’s Chair” interview, INET Executive Director Robert Johnson talks with Greek economist Yanis Varoufakis about Varoufakis’s new book The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy. “The Global Minotaur” is Varoufakis’s metaphor that tells the story about “what went wrong in 2008 and why the world economy is finding it so hard to rediscover its poise after the debacle in 2008.” After refusing a multilateral, more democratic exchange regime post-WW II, the US eventually became the world’s buyer of last resort.
But how to finance America’s growing trade deficits? Feed the beast, says Varoufakis, drawing parallels to the story from Greek mythology about the Minotaur who had to be fed human sacrifices as tribute. Part 1: The Global Minotaur Part 2: Bankruptocracy Part 3: The Two Faces of the Crisis Part 4: Europe by (Mis)Design Click here to order Varoufakis's book, The Global Minotaur. Debating the future of capitalism - perspectives... Monopoly capital: an essay on the American economic and social order - Paul A. Baran, Paul Marlor Sweezy. Stagnation and the financial explosion - Harry Magdoff, Paul Marlor Sweezy. The triumph of nationalism. London, United Kingdom - "The battle for France has just started", declared a triumphant Marine Le Pen after her impressive score in the first round of the French presidential election. She immediately added that her party, the far right National Front, was ready to "defend French identity".
This "battle" is, however, much wider - and involves the same future of the European Union, and international relations too. In an historical era characterised by economic uncertainty, austerity plans and the perceived interference of international markets, the EU and Germany in national sovereignty, nations run the risk of strengthening domestic narrow nationalisms and experiencing the growth of extremist forces, along with the rise of old and new "resentment" between regional neighbours. Daniela Santanche - a possible new leader for the centre-right in the next general elections (and one of Berlusconi's favourites) - similarly praised Marine Le Pen and her policies. 'Fortress Europe'
Quiet politics. Image: Conspiracy, Edward Biberman (cover illustration, Quiet Politics) Pepper Culpepper's Quiet Politics and Business Power: Corporate Control in Europe and Japan sheds some very interesting light on one key question in contemporary western democracies: how do corporations and business organizations so often succeed in creating a legislative and regulatory environment that largely serves their interests? And, for that matter, why do they sometimes fail spectacularly in doing so, even while spending oceans of money in the effort to influence public policy?
The book is a careful comparative study of the development of corporate governance laws and institutions in France, Germany, the Netherlands, and Japan. It offers special focus on the institutions governing hostile corporate takeovers (very different across the four examples), but also takes on other issues of current interest, including executive pay. Quiet Politics and Business Power. Corporate Control in Europe and Japan Pepper D.
Culpepper, European University Institute, Florence Publication date:January 2011 248pages 17 b/w illus. 19 tables Dimensions: 234 x 156 mm Weight: 0.48kg In stock. The Fall of the House of Credit. How was it possible for problems in one relatively small sector in the global financial system - the American sub-prime mortgage market - to lead to the most serious economic crisis in living memory? In this book, Alistair Milne untangles the complex world of modern banking and examines solutions to the crisis. He shows how the banks misused their ability to securitize loans and, by borrowing short and lending long, exposed themselves to exceptional risks when asset prices started to fall. But it has been above all a collapse in trust and confidence, rather than poor lending decisions, which has fuelled the crisis.
Despite all the talk of 'toxic' assets, the book argues that most assets are sound and can be repaid. The imperative is to restore confidence through collective action involving asset purchases, guarantees and recapitalization. Failure to do so will mean that taxpayers will be carrying a crippling tax burden for generations to come. Political Economy of Structural Adjustment - Thomas Ferguson. To understand the financial crisis, read this book. Book Review If you only read one book about the financial crisis, read “The Fall of the House of Credit” by Alistair Milne, a professor of financial economics at Loughborough University in Leicestershire, UK, north of London. This book, which I have just discovered, will not satisfy your blood lust to make the bankers pay, but it is the best explanation I’ve seen of what happened to the credit markets in 2007-2008. The other 40 books I have read on the events of 2007-2008 typically analyze the mortgage markets or the unfolding of the crisis.
These are valuable parts of the story but do not explain how US subprime became a worldwide financial earthquake. “The Fall of the House of Credit” is one of only two books I know that dissect the freezing of the credit markets – which is where the destructive panic occurred and where reforms need to focus, but don’t. The other book is Yale University Prof.
To RepoWatch readers, this is a familiar story. From Milne: Short-term borrowing Further key points. The 2007/8 financial crisis. Slapped by the Invisible Hand: Gary B. Gorton. "Think you know what caused the collapse of Wall Street? Gary Gorton, the Sherlock Holmes of the financial crisis, has news for you. "--Robert Hahn, Founder of the AEI Center for Regulatory and Market Studies "Slapped by the Invisible Hand is essential to understanding the deep weakness in the banking sector that led to the financial crisis. Like consumer banks before the Great Depression, the 'shadow banking market' is vulnerable to runs and panics and hysteria, and we are all, in turn, vulnerable to it. By looking beyond this financial crisis to the systemic flaws that make us vulnerable to all sorts of crises, Gary Gorton has created a necessary guidebook for what's happened, and what needs to be done.
"--Ezra Klein, Washington Post "Gorton has produced the clearest account yet of what has happened...Slapped By the Invisible Hand is not a conventional retrospective. "It's must-reading for anyone who wants to understand the recent economic unpleasantness. " "Think about it. *Slapped by the Invisible Hand*
Economic Theory. International Political Economy / IR - reading... A Brief Review of Econned. By cactus A Brief Review of Econned I have read the first few chapters of by Yves Smith, that’s about where I re-evaluate and decide whether its worth reading through the first 80% of the book. When the answer is yes, I usually re-evaluate the 80% mark. As a result, I don’t always get all the way through a lot of books I pick up. Time is a valuable commodity. Anyway, I’ve gotten far enough to decide that not only is it worth going forward, I will be finishing this one. Now, its impossible to avoid discussion of the people involved in making the meltdown process happen, and little bits of gossip are what make a book readable.
In that regard, its like Barry Ritholtz’ , another book worth reading. What went wrong with finance? ECONned: How Unenlightened Self Interest Damaged Democracy and Corrupted Capitalism: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism: Amazon.co.uk: Yves Smith. There are many good reviews of the book published already and I don't want to repeat them. But I think there is one aspect of the book that was not well covered in the published reviews and which I think is tremendously important and makes the book a class of its own: the use of neoclassical economics as a universal door opener for financial oligarchy. I hope that the term "econned" will became a new word in English language. Neoclassical economics has become the modern religion with its own priests, sacred texts and a scheme of salvation. It was a successful attempt to legitimize the unlimited rule of financial oligarchy by using quasi-mathematical, oversimplified and detached for reality models.
Economics is essentially a political science. The key to the success of this nationwide looting is that people should be brainwashed/indoctrinated to believe that by some alchemical process, maximum level of greed results in maximum prosperity for all. The political economy of bubbles. On Short-Termism and the Institutionalization of Rentier Capitalism.
Andrew Haldane and Richard Davies of the Bank of England have released a very useful new paper on short-termism in the investment arena. They contend that this problem real and getting worse. This may at first blush seem to be mere official confirmation of most people’s gut instinct. However, the authors take the critical step of developing some estimates of the severity of the phenomenon, since past efforts to do so are surprisingly scarce. A short-term perspective is tantamount to applying an overly high discount rate to an investment project or similarly, requiring an excessively rapid payback. Most recently, in 2011 PriceWaterhouseCoopers conducted a survey of FTSE-100 and 250 executives, the majority of which chose a low return option sooner (£250,000 tomorrow) rather than a high return later (£450,000 in 3 years).
This table illustrates in a more concrete fashion how investment myopia leads to projects with longer-term results being misrated: 13 Bankers. Republic, Lost: How Money Corrupts Congress—and a Plan to Stop It. David Graeber’s Debt: My First 5,000 Words. In the final lines of his introduction to Debt: The First 5,000 Years, David Graeber writes that “[f]or a very long time, the intellectual consensus has been that we can no longer ask Great Questions.”
And as he put it in a guest post over at Savage Minds: The aim of the book was to write the sort of book people don’t write any more: a big book, asking big questions, meant to be read widely and spark public debate…[T]he credit crisis —and near collapse of the global economy in 2008—afforded the perfect opportunity. In the wake of the disaster, it was as if suddenly, everyone wanted to start asking big questions again. Even The Economist, that bastion of neoliberal orthodoxy, was running cover headlines like “Capitalism: Was It A Good Idea?” It’s a hard book to review, though, because it’s doing several irreducibly different things at once (which I’ll try to lay out in as logical a fashion as I can manage). Now, the long version. Manias & Panics - READING / Resources.
The Bifurcated Society. In-depth analysis on Credit Writedowns Pro. You are here: Economy » The Bifurcated Society By Rick Bookstaber Unless there are slaves to do the ugly, horrible, uninteresting work, culture and contemplation become almost impossible. Human slavery is wrong, insecure, and demoralizing. An article in the New York Times last week made note of the lower mobility in the work force: “Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. There is less mobility in the work force because the computers are not simply displacing jobs, they are taking out the middle. Because they take out the middle, it is a lot harder to pursue the American dream by working your way up the ladder. Futurists have seen this coming for along time, sort of. When God closes one door, He opens another We have had an axiomatic view that when technology uproots us from jobs it opens up new ones, and the new ones are even better in pay and in job satisfaction.
The Outsourcing Masses. A Point of View: The endless obsession with what might be. 26 December 2011Last updated at 01:47 The Berlin Wall did not mark the end of grave clashes as many thought it would If we can stop thinking about what the future might bring and embrace the present for what it is, we would be a lot better off, writes John Gray.
It's been some time now since history didn't end. Twenty-odd years ago, when the Berlin Wall was coming down, there were many who believed that there would be no more serious conflicts. The American writer Francis Fukuyama, who promoted the idea of the end of history in the autumn of 1989, declared that the chief threat in future would be boredom. A new era, different from any before, had arrived. Of course it hadn't. In any realistic perspective the idea that a single event - however large - could mark the end of human conflict was absurd. They were swayed by a myth - a myth of progress in which humanity is converging on a universal set of institutions and values. Something similar seems to be happening today.
Life's framework. Mason Lse Lecture Jan 2012. Shift Magazine » Analysis Book Review » Why it’s Kicking Off Everywhere. Democracy in the mirror. Why is democracy something people should strive for? And how are we doing with ours? Consider first the fundamentals. Why is there a role for democracy in any circumstances? Fundamentally democracy is a form of group decision-making.
Political institutions are needed in circumstances in which decisions must be made that affect all members of a group. Each member of a group has his or her own set of preferences about choices that affect the group; so there needs to be a process for arriving at a set of social preferences -- a social choice function. Democracy requires designing a set of arrangements through which each person's preferences will have equal weight in determining the ultimate decision. In addition to the aggregation of individual preferences, democratic values consider as well the circumstances under which the members of a group form their beliefs and preferences. So how does the US democracy measure up on these criteria? So how about the formative benefits of democracy? . The second death of politics. The recent rise of technocratic governments in Italy and Greece is the culmination of a process that has been unfolding in Europe over the last 20 years. Since the collapse of the Soviet Union and the subsequent triumph of neoliberal ideology, there has been a trend toward de-politicisation, a wholehearted embrace of the neoliberal order apparently devoid of a viable and promising alternative.
Politics died its first death in celebrations of a growing consensus that communism was a thing of the past, sealed by Francis Fukuyama's diagnosis of the end of history. Apparently lacking a clear enemy, neoliberalism was ready solemnly to declare its worldwide hegemony. To be sure, we also observed flashes of political polarisation in the post-9/11 world.
It is, in the first instance, this crisis of ideology that explains much of what is going on in Europe (and, to a lesser extent, in the United States) today. Technocratic regimes 'Politics without politics' Acemoglu and Robinson: Why Nations Fail. What a piece of work is a man - macrobusiness.com.au | macrobusiness.com.au.