Tag: Politics

Yanis Varoufakis on fiscal waterboarding and Ponzi austerity

Yanis Varoufakis had a long interview on RT’s Boom Bust yesterday going into detail behind his political candidacy and what he expects SYRIZA to do regarding the unsustainable debt burden that the Greek government now has. Overall, despite his problems with the eurozone’s institutional structure, Yanis believes Greece leaving the eurozone would be a catastrophe for the simple fact that it does not have a currency and any attempt to leave would be seen as a prelude to a massive devaluation, inviting capital flight on a grand scale. This would be a catastrophe for the Greek banking system and wider economy.

QE is fiscal policy

QE is fiscal policy

By Frances Coppola A new paper by Johnston and Pugh of the legal department of the University of Sheffield discusses the legality and the effectiveness of QE and its relatives, including the ECB’s OMT “whatever it takes” promise. The background to this is the German Constitutional Court’s ruling that OMT amounts to monetary financing of government deficits and is therefore […]

Some brief thoughts on framing the war in Ukraine

As the war in Ukraine moves to the center of global consciousness, I think it is important to remember the various actors’ positioning, constraints and likely agendas. As much as we would like to know ‘the truth’, the reality is always that beyond a core set of known facts, any situation is subject to interpretation based on positioning, constraints and agendas. And to the degree these factors make for focus on very different sets of data points, it makes it hard to reach common ground in a negotiated agreement.

The political economy of the military conflict in Ukraine

The political economy of the military conflict in Ukraine

The geopolitical situation regarding the conflict in Ukraine has escalated considerably due to the downing of a passenger jet from the Netherlands to Malaysia. Given the visceral and gruesome nature of the events now unfolding, domestic political opinion throughout the West is now a major force in this conflict. However, given the political economy in Russia and the United States in particular, the potential for de-escalation is small. The potential for the conflict to now have wide-reaching economic impacts has grown. In the analysis below I explain how the political economy in the U.S. favours President Obama taking an increasingly hawkish position and how the political economy in Russia favours President Putin also maintaining an aggressive stance regarding Ukraine. In addition, the airline massacre also means that the EU will be galvanized into supporting tougher sanctions against Russia, with the potential of a tit-for-tat response.

The ECB easing decision could lead to a major break with Germans on policy

The ECB easing decision could lead to a major break with Germans on policy

Summary The ECB did the expected this morning and lowered interest rates enough to send bank deposit rates at the ECB into negative territory. The ECB also met market expectations with an additional easing measure by implementing an LTRO with lending to household and business strings attached. Though these actions were expected, they are unprecedented, and, for that reason, dramatic. […]

On Tim Geithner and my US bailout post-mortem

On Tim Geithner and my US bailout post-mortem

Yesterday, I wrote up a piece at the New York Times’ Room for Debate forum about the legacy that Tim Geithner left behind, given his recent memoir “Stress Test”. The question was : “Did the government miss a historic opportunity to reshape the financial system — or was its moderate approach correct?” I recommend you read the other answers from […]

Why the ECB will become more activist in June

Why the ECB will become more activist in June

I am skipping the news links today to go right to the daily commentary. I want to continue my thoughts on what’s happening in Europe and why I think the ECB will become more activist. There are a number of policy options on the table for the ECB including continuing to stand pat. But given both what ECB board members are saying and what the Lisbon Treaty defines as the ECB’s mandate, I believe we are about to see a big shift in policy toward greater activism. I’ll explain why below.

Some thoughts on Ukraine, part 1

Some thoughts on Ukraine, part 1

It is about time I did a long-form political economy piece because a lot of what is occurring in emerging markets is of that ilk. The political economy dominates the economics of the issues in a way that makes discussing markets and economics very much related to politics. Here I want to concentrate on Ukraine because I believe it has become an important point of conflict for the future geopolitical landscape.