The US recovery, the Long Depression and Pax Americana

Revised figures for growth in the US economy in the second quarter of this year were released yesterday. Most analysts were pleased as the rise in real GDP in Q2 2-14, was revised up from a 4.0% annualised rate to 4.2%. The drop in real GDP for the first quarter of this year was confirmedContinue reading “The US recovery, the Long Depression and Pax Americana”

Getting out of a Jackson Hole

Every August, the great and august among central bankers and strategists of the world economy meet as guests of the Kansas City Federal Reserve for an economic symposium at Jackson Hole, Wyoming, a ski resort under the Teton mountains. After the planes, helicopters and limos have transported them all to the luxurious lodge, the participantsContinue reading “Getting out of a Jackson Hole”

Capitalism: stagnation or hypochondria?

Are the major capitalist economies now stuck in a state of long-term stagnation? The idea that capitalism has been in a ‘secular stagnation’ since the end of the Great Recession was first raised by Larry Summers, the former Treasury secretary under President Clinton, ex Goldman Sachs economist, then Harvard University scholar and general all-round superContinue reading “Capitalism: stagnation or hypochondria?”

The myth of the return to normal

The latest economic data for the main capitalist economies is not encouraging for the optimists that the world economy is set to resume normal service. Last week, we had the first estimate for US GDP for the period April to June (see my post, https://thenextrecession.wordpress.com/2014/08/01/the-risk-of-another-1937/ ). The US economy has been the better-performing top economyContinue reading “The myth of the return to normal”

Inequality – the mainstream worry

The argument that rising inequality in the US and the other major capitalist economies, as expressed in the work of Thomas Piketty and others (see my posts https://thenextrecession.wordpress.com/2014/04/15/thomas-piketty-and-the-search-for-r/ ; https://thenextrecession.wordpress.com/2014/05/19/david-harvey-piketty-and-the-central-contradiction-of-capitalism/ and https://thenextrecession.wordpress.com/2014/05/24/piketty-data-and-the-scientific-method/), was the major cause of the global financial collapse and the Great Recession, continues to gain traction.  As Paul Krugman put it only last week:Continue reading “Inequality – the mainstream worry”

Ukraine: a rock and a hard place

The news that Ukraine PM Yatsenyuk has resigned shows that, while the fighting continues in eastern Ukraine between the Ukraine armed forces and the Russian-backed separatists, the crisis in the Ukraine economy is worsening. Even before the separatist struggle erupted, Ukraine was suffering from a flight of capital as rich Ukrainians spirited their money out,Continue reading “Ukraine: a rock and a hard place”

Gaza – the prison economy

Think of a prison.  It’s overcrowded; it lacks modern facilities and it is a daily struggle for the prisoners to survive.  The prison wardens are well equipped for security. Their governors come and go. Some are ‘liberal’ and try to reach a harmonious relationship with the prisoners and even improve conditions, although they do notContinue reading “Gaza – the prison economy”

The risk of another 1937

Financial markets responded to the news of US economic growth jumping to a 4% annual rate in Q2 2014 by selling off. The reason was that faster growth in the economy would imply an earlier move by the Federal Reserve to raise interest rates and ‘normalise’ monetary policy. The Fed’s monetary policy committee said itContinue reading “The risk of another 1937”

Abenomics: raises profitability… and misery

In June 2013, I poured cold water on the positive views expressed by the likes of Paul Krugman on PM Shinzo Abe’s plans to turn the Japanese economy round through a mixture of Keynesian monetary and fiscal stimulus and neoliberal ‘supply-side measures – the so-called three arrows of reform in ‘Abenomics’ (https://thenextrecession.wordpress.com/2013/06/11/abenomics-a-keynesian-neoliberal/). I reckoned that Keynesian policies did notContinue reading “Abenomics: raises profitability… and misery”