Monthly Archive for December, 2010

Living to Disorderly Default Another Day

Published on December 28, 2010 in News. 0 Comments

In The Economist

Talk of a European default continues to rumble around the market ahead of the European Council’s December 16-17 meeting.

For now the European Central Bank has held the euro zone together by purchasing members’ bonds and providing liquidity to beleaguered banks. Although such stopgap solutions, like case-by-case bail-outs, are the path of least political resistance, the effort to avoid defaults at all costs could prove calamitous.

Argentina’s recent default is illustrative. As in Europe today, Argentine politicians ruled out restructuring debts that looked unmanageable. Domingo Cavallo, Argentina’s respected finance minister, even took to the pages of the Financial Times to call the idea “ludicrous” and promise that “Argentina will not be lured by the call of the sirens”. And so throughout 2001 the country attempted increasingly desperate manoeuvres—two IMF loans, a short-for-long securities “megaswap” and finally zero-deficit budgeting—to stave off default.

To read more…

The Great Recession & the Great Depression

Published on December 26, 2010 in News and Newsletter. 0 Comments

By Peter Temin, in B Net

In the depths of the Great Depression, John Maynard Keynes wrote that “[pjractical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”1 This acute observation is applicable to our current Great Recession as well. In fact, the newly discredited ideas are not all that different from the old, suggesting that Keynes may have overestimated people’s ability to learn from their mistakes.

I pursue the parallels between these two watersheds in recent economic history along three paths : the causes of the crises and their relation to economic theory ; the spread of the crises on a global scale; and, finally, recovery- at least as far as we can see it at this point. As Karl Marx famously said, history repeats itself “the first time as tragedy, the second as farce,”2 a criticism that also fits our current condition.

To read more…

Products of Slavery: Revealing Child and Forced Labor in Supply Chains

Published on December 21, 2010 in News and Newsletter. 0 Comments

From Information Aesthetics

Products of Slavery [productsofslavery.org] is an online visualization that takes the data (PDF) from a report of the U.S. Department of Labor on child and forced labor worldwide, and makes it open and accessible. Investigations show that more than 122 different products are made using child or forced labor in more than 58 countries.

The website is part of Anti-Slavery International‘s ongoing campaign, as it aims to work with businesses to eradicate slavery in private sector supply chains. The interactive map shows the types of products that are produced in specific countries using child labor, forced labor or both. The quantitative data is accompanied with what is called here as “facts”: moving personal quotes from affected people that illustrate the meaning and story behind this data.

For more…

The Euro at Mid-Crisis

Published on December 19, 2010 in News and Newsletter. 0 Comments

By Kenneth Rogoff, in Project Syndicate

Cambridge – Now that the European Union and the International Monetary Fund have committed €67.5 billion to rescue Ireland’s troubled banks, is the eurozone’s debt crisis finally nearing a conclusion?

Unfortunately, no. In fact, we are probably only at the mid-point of the crisis. To be sure, a huge, sustained burst of growth could still cure all of Europe’s debt problems – as it would anyone’s. But that halcyon scenario looks increasingly improbable. The endgame is far more likely to entail a wave of debt write-downs, similar to the one that finally wound up the Latin American debt crisis of the 1980’s.

To read more…