An interesting article by Kemal Derviş, the VP of the Brookings Institute, on how identity politics are forcing politics away from economic policy to more harmful issues. I largely agree with Derviş’ analysis, but would like to add on one more point of analysis: the difference between what I would call ‘exclusive’ and ‘inclusive’ identity politics. While identity politics, as a whole, seem to be making things worse in politics, there is nothing wrong with fighting for equal rights along sex/gender/race lines. What is wrong, however, is fighting to exclude certain ethnicities and nationalities from the market and political process, which we are increasingly seeing across the developed world. A frightening development, indeed.
Tyler Cowen, an esteemed economics professor out of George Mason University, talks about how the economy might never return back to the pre-crisis normal. Rather, the current trend of under-performance indicates that the economy is making a permanent institutional adjustment after years of red flags. How do we respond to this? Cowen says that there might be no panacea to this development, and rather, any attempt to stop this transition or adjust to it is beyond policy making. Comparing how Germany and France adjusted to their economies over the previous decades, he suggests that by fighting this change we actually risk greater damage and lingering stagnation.
Good question. Read it and make your own decision.
Lamfalussy escaped communism in Hungary, and eventually became the president of the European Monetary Institute, the predecessor of the European Central Bank. While a huge advocate for integration, he also foresaw the problems the Euro would experience in absence of any serious fiscal and political integration. Rest in Peace.
Friendly Reminder: Most of the current major economic advisor were all taught by the same people, in essence all believe the same ideas/policies
Bernanke and Summers, two of the biggest names in economics, have been increasing their online presence by blogging. One topic they have been debating over is the global economy’s underwhelming performance. Summers believes we are in it for the long haul with ‘secular stagnation,’ as a result of population growth, decreasing investment in capital, and the resulting wage stagnation. Bernanke believes we are experiencing a collective ‘savings glut,’ as foreign nations like China undermine domestic interest rates with their high rate of savings, which in turn disincentivizes investment. Something not being discussed, however, is how they both had the same teachers, the same classes, and the of limit their assessment to their collective world view. That is a pretty big deal seeing how they, and their peers, are calling most of the economic shots.