Toxic eurobonds that divide versus benign eurobonds that bind

, 06/01/2011

So, a eurobond of sorts is now being issued by the EFSF (the European Financial Stability Facility), to the initial tune of a mere €5 billion, as part of the Irish banks’ bail-out. The public is, thus, justified to be puzzled by the headlines of Germany’s insistence that no eurobonds will be issued in the […]

An exchange with a retired City of London banker on economics' role in bringing about the Crisis

, 05/01/2011

A retired City of London banker, who happens to be a remarkably charming man, sent me an email commenting on my recent piece in which I criticise economics in general and Paul Samuelson in particular. Jerry (for that is his name) suggested that (despite the economists’ fixation with weird models of little significance) we economists […]

They Don't Make Them Like They Used To! Why even the best post-war analytical economist ended up a tragic figure

, 04/01/2011

Previously I have written about the Econobubble (the handmaiden of the “real” Bubble) and the toxic theories of economists who were very recently rewarded with the Nobel Memorial Prize in Economics.  Following those tirades, a number of colleagues (and students) put it to me that economics is not what it used to be.  That once […]

Good riddance 2010, Welcome 2011

, 31/12/2010

No year is of course responsible for what we humans get up to during its course. But then again, the very concept of a year would not exist without us. In this sense, it is not illegitimate to farewell 2010 with a sense of outrage at what it brought us. So, what did it bring? Paul […]

The Joylessness of Happiness Economics

, 28/12/2010

Or why looking for happiness is not like looking for gold That money cannot buy happiness has been known at least since the Midas story gained currency in ancient Greece. What is new is that, after the Crash of 2008, what had hitherto passed as scientific economics (and the neoliberal policies that they supported) lost […]

A thought for Xmas Day: Faustus, Scrooge and Debt in the Age of Capital

, 25/12/2010

Some idle economic thoughts for Christmas day: In late 16th century, Christopher Marlowe told the story of Dr Faustus who famously contracted, using his own blood to sign on the dotted line, to sell his body and soul twenty four years hence to Mephistopheles. [i] In exchange he demanded, and secured, a long catalogue of […]

Quiz question

, 24/12/2010

Quiz: Who wrote the following  and when“To read the newspapers just now is to see Bedlam let loose. Everyone who hates social progress and loves deflation feels that his hour has come, and triumphantly announces how, by refraining from every form of economic activity, we can become prosperous again” ?

From Scrooge's rehabilitation to Scroogeonomics?

, 24/12/2010

Two days ago, I called for the rehabiliation of Ebenezer Scrooge. Today, in the FT, Martin Wolf goes one step further: he puts forward Scroogeonomics. I beg to differ. Scrooge offers  an excellent morality tale for our day and age. But not a blueprint for economic thinking. Then again, I am sure Martin Wolf knows […]

Striking Greece, Dithering Europe and the Modest Proposal

, 22/12/2010

I had posted here an interview of mine on the BBC World Service (World Business News) on the Greek government budget, the resulting strike and the prospects of austerity. I used the opportunity briefly to outline the Modest Proposal.  However, as the BBC updates this particular program ten times a day, the link seems to […]

Austerity? What austerity? In defence of Ebenezer Scrooge

, 21/12/2010

The figure of Ebenezer Scrooge is the only one that our societies allow their upstanding members to despise during the festive season. Of course, the point of the ritual admonition of Dickens’ Christmas Carol protagonist is to celebrate charity and the Christmas spirit by focusing attention on Scrooge’s remarkable Christmas Eve transformation (with the ghosts’ […]

Alternative Strategies for Exiting the Euro Crisis

, 19/12/2010

And why they do not measure up to the Modest Proposal The good news is that the debate we had to have about a year ago is, at long last, beginning. The bad news is that it is proceeding slowly and in often hopeless directions. The recent EU summit, for instance, decidedly refused even to […]

A late night discussion with Richard Holbrooke remembered

, 14/12/2010

It was summer of 2003. The setting was the island of Kos, a stone’s throw from the Turkish coast. Richard Holbrooke was participating at that year’s Symi Symposium organised by George Papandreou, then Greece’s Foreign Minister, currently Prime Minister. Though not a participant in that symposium (which also featured notables like Bill Clinton, Segolen Royal […]

Wikileaks' Precursor and Unsung Foe of Neoliberal Economics

, 11/12/2010

A tribute to Daniel Ellsberg, whose analytical work exposed the Achilles’ Heal of toxic economics forty seven years before the Crash of 2008, and whose courageous leaking of the Pentagon Papers stunned the world by exposing thousands of documents revealing the US government’s lies about Vietnam.


, 10/12/2010

By popular demand, here are the answers to the 12 multiple choice questions on the euro crisis.

Twelve multiples choice questions for teaching the eurozone crisis to macroeconomic beginners

, 09/12/2010

My good friend and colleague Gary Dymski (Economics Professor at University California, Riverside) has sent me 12 multiple choice questions that offer a wonderful training ground for macroeconomic novices. It would be interesting to make our European political leaders take it. How well do you think they would do?

If greed did not cause it, what did?

, 07/12/2010

On Monday 6th December, I gave the keynote speech at a conference near Brisbane, Queensland (Australia) on the theme of Risk Management after the crisis. I was warned that the large audience of  professionals (corporate lawyers, chartered accountants, risk managers etc. – people whose jobs I do not really understand) were tough cookies; that nothing […]

The Worst Case Scenario for the Eurozone

, 05/12/2010

And so the nightmare continues. Are we heading for the worst case scenario? To answer this, we must first work out what that is.

Antisemitism's handmaidens

, 02/12/2010

I was recently sent a book that warmed my heart and disturbed my soul. It is entitled Antisemitism: Real and imagined: Responses to the Canadian Parliamentary Coalition to combat antisemitism, edited by Michael Keefer (Waterloo Ontario: The Canadian Charger, 2010). Before I share my thoughts occasioned by reading it, a full disclosure is important: 

The Art of the Possible: Or how to blend Eurobonds with Maastricht

, 02/12/2010

Gavyn Davies, in today’s FT (click here) suggests, as we do in our Modest Proposal, that eurobonds are preferable in the fight against the vicious circle facing the eurozone than the current strategy of loaning bankrupt states money they cannot repay under the offered terms. He writes: “[T]he ECB may eventually come to prefer…for the […]

The ECB's expensive folly: A new Maginot Line

, 01/12/2010

Behind the scenes the European Central Bank (ECB) is struggling to construct a barrier that will prevent the firestorm which started in Greece from breaching the Iberian defences and, eventually, from turning to Italy. It is only right and proper that the ECB should try to accomplish this. The only trouble is that the barrier […]

Cutting our noses to spite our faces

, 30/11/2010

The trouble with austerian logic is that it is grossly illogical. It does not even make sense in terms of the logic of microeconomics, let alone that of macroeconomics. Consider the current conundrum facing Greece and Ireland, the eurozone’s set of failed states (so far): Both countries have been forced to slice 10% off government […]

Stiffen your lip Wolfgang!

, 29/11/2010

In today’s Financial Times, Wolfgang Munchau identifies correctly the problem with the current EU strategy for arresting the euro crisis (click here for his article). His proposed solution is also on the ball. Indeed, it is, in substance, very, very similar to our Modest Proposal. However, though he identifies the problem and the essence of […]

Empty threats

, 27/11/2010

25th April 2010: Traders “will Lose Their Shirts’ Betting Against Us.” George Papakonstantinou, Greece’s Finance Minister a week before Greece declared effective bankruptcy and ran for cover into the steely bosom of the IMF-EU loan agreement. 26th November 201: “I should warn those investors who are short selling Spain that they are going to be […]

What will it take to stop the domino effect on its tracks before it reaches Spain and Italy?

, 25/11/2010

Richard Milne asks in today’s FT (click here for the article): What will it take to stop the domino effect on its tracks before it reaches Spain and Italy? He considers two ideas: One is a form of ECB “quantitative easing” under which the ECB massively accelerates its purchases of Spanish and Italian bonds in […]

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