EconomicCrisis.US

The United States could experience strong growth as it comes out of the current economic downturn, a senior advisor to US President Barack Obama told the Financial Times on Sunday.

‘I still hold out hope it will be a V-shaped recovery. It might not be the most likely scenario but it is not as unlikely as many people think,’ Christina Romer told the newspaper.

Ms Romer, chairman of the president’s council of economic advisors, said an influx of stimulus spending would be pumped into the economy this summer and fall.

‘We always knew we were not going to get all that much fiscal impact during the first five to six months. The big impact starts to hit from about now onwards,’ she told the Financial Times.
Read the rest of this entry »

ONE of the most important lessons from the global financial crisis has been that many households have far too much debt — especially in the US where the average borrower’s mortgage is now worth an astonishing 95 per cent of the value of their home.

And the only genuine policy solution is the development of external markets in housing equity — or “shared equity” — that borrowers could use in combination with traditional debt finance.

With this in mind, President Barack Obama’s recently announced $US75 billion ($A94 billion) housing plan is a long-term policy disaster insofar as it merely treats the symptoms of this crisis in an extremely costly manner via crude short-term interest rate relief — and does nothing at all to prevent the next generation of US borrowers experiencing exactly the same problems in the future. In fact, it can be argued that it only creates a higher tax burden for tomorrow’s taxpayers.
Read the rest of this entry »

Worried about the global economic crisis? It’s all in your head, says a leading financial expert.

And that’s the problem, according to Jeff Gates, author of the highly-regarded Democracy at Risk: Rescuing Main Street from Wall Street, a sequel to The Ownership Solution: Toward a Shared Capitalism for the 21st Century, which was described by one reviewer as “the best book on economics for a generation,” and praised by Ralph Nader as “a Capitalist Manifesto, a blueprint for spreading the benefits of capitalism more equitably.”

In an interview with Japan’s Kansai Time Out magazine, Gates, a former counsel to the U.S. Senate Committee on Finance (1980-87), identifies the source of the current economic crisis as a “shared mindset” into which we have been induced to put our faith, to the grave detriment of the majority — but to the immense benefit of a very few.
Read the rest of this entry »

The current economic crisis has fuelled waves of anger around the world. Prime targets are the top bankers and stock market dealers who epitomise the rampant, ultra-free market policies of the last 20 years. Backed by their political accomplices, they gorged themselves while workers’ conditions worsened, and finance capital drove down living standards in the neo-colonial countries. LYNN WALSH argues that behind the obscene greed lie more fundamental reasons for today’s global turmoil.

THE FINGER OF blame points to greedy bankers and financiers. They are seen as responsible for the financial meltdown that has triggered a world-wide slump. A wave of fury swept the US when 80 directors of the American International Group paid themselves $165 million in bonuses after being bailed out by taxpayers to the tune of £173 billion. “Do the leaders of Wall Street want to set off an anti-capitalist political tidal wave across the United States that will sweep them away forever? It’s certainly starting to look that way”. (Martin Sieff, UPI.com, 16 March)
Read the rest of this entry »