A second big American interest-rate cut in a fortnight, alongside an economic stimulus plan that united Republicans and Democrats, demonstrates that US policymakers are keen to head off a recession that looks like the likely consequence of rising mortgage defaults and falling home prices. But there is a deeper problem that has been overlooked: the US economy relies upon asset price inflation and rising indebtedness to fuel growth. (more…)
Archive for February, 2008
John Edwardsâ€™ exit from the presidential race puts his supporters up for grabs. Both Senators Clinton and Obama want those votes. Hereâ€™s how to win them.
The central plank of the Edwardsâ€™ campaign was restoring a prosperous and secure middle class, which requires ending wage stagnation and having wages again grow with productivity. This must be the central economic policy goal of any candidate wanting the Edwards vote. (more…)
For the past 25 years, the so-called â€œWashington Consensusâ€ â€“ comprising measures aimed at expanding the role of markets and constraining the role of the state â€“ has dominated economic development policy. As John Williamson, who coined the term, put it in 2002, these measures â€œare motherhood and apple pie, which is why they commanded a consensus.â€ (more…)