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A Global Economic Stall?

Fear of stall-out in the world economy. We’ll look at what comes next.

In this Friday, June 1, 2012, file photo, Raul Rodriguez sweeps the trading floor of the New York Stock Exchange. The global economy’s foundations are weakening, one by one. The global economy's foundations are weakening, one by one. Already hobbled by Europe's debt crisis, the world now risks being hurt by slowdowns in its economic powerhouses. (AP)

In this Friday, June 1, 2012, file photo, Raul Rodriguez sweeps the trading floor of the New York Stock Exchange. The global economy’s foundations are weakening, one by one. The global economy's foundations are weakening, one by one. Already hobbled by Europe's debt crisis, the world now risks being hurt by slowdowns in its economic powerhouses. (AP)

It seemed again like maybe we were finally getting economic traction.  A slow but steady lift-off.  More jobs.  More hope.  Despite Europe.  Despite everything.  Then came Friday.  The jobs report – a bust.  The Dow, down 275 points and the market into red for the year.  China’s outlook, sagging.  India’s sagging.  And Europe’s not-so-slow-motion meltdown, positively terrifying.

This is no one’s happy rebound.  Far from it.  Investors are scrambling for shelter.  And if you’ve been out of work, watch out.

This hour, On Point:  Fear of a new stall-out in the world economy.  We’re trying to look ahead.

-Tom Ashbrook

 

Guests

Allen Sinai, chief global economist at Decision Economics.

Ken Rogoff, professor of public policy and economics at Harvard University. He’s the author of a new book, This Time is Different: Eight Centuries of Financial Folly.

From Tom’s Reading List

CNBC “June is picking up right where May left off — with a string bad economic news that is among the worst the market has ever seen.”

Wall Street Journal “Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe.”

Project Syndicate “The European Union is a voluntary quasi-federation of sovereign and democratic states in which elections matter and each country seeks to determine its own destiny, regardless of the wishes of its partners. But it should now be apparent to everyone that the eurozone was designed with a very different institutional arrangement in mind. Indeed, that design gap has turned out to be a major source of the monetary union’s current crisis.”

Photo: Rogoff and Sinai in Studio

Economists Ken Rogoff and Allen Sinai in studio (Josh Berlinger/WBUR)

Economists Ken Rogoff and Allen Sinai in studio (Josh Berlinger/WBUR)

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  • Roy Mac

    Yawn.  2 economists.  Perfectly certain about the future, desperately conflicted about the past.  Pardon me if I take a pass–or will there be jugglers later?

    • JustSayin

       Economist infomercial for a new book.  Today’s economists are just historians for a economic reality that they cannot predict or understand.

      • Don_B1

        The Chicago School of Economics has truly blown itself up with a fanatical clinging to an impossible attempt to make micro-economic theory work at the macroeconomic level.

        But those who have taken the developments of Fisher, Keynes and John Hicks that captures the way the world works when in a liquidity trap, where the interest rates cannot be lowered further to stimulate the economy.

        If you would only read it for something to disagree with, forget it, but otherwise a thoughtful and accurate history of the Euro-mess was presented by George Soros:

        http://www.georgesoros.com/interviews-speeches/entry/remarks_at_the_festival_of_economics_trento_italy/

        Everyone that is disappointed with the economy just needs to consult Keynesian economists (Krugman, DeLong, and Quiggin), who have been almost uniformly correct. There are claims that they are wrong, but those claims are on things they NEVER said, or things that have been twisted beyond recognition.

  • Yar

    I have asked this question before and never gotten an answer.  What is the economic reason for Jubilee?  Are we at a point where using some form of debt forgiveness makes economic sense? The rich need to realize they are pushing the poor toward revolution.  It is in everyone’s self interest to step away from polarization that fans the flames of civil unrest.  I would like to see a poll on the question: “Is America a governable country?”

    • JustSayin

      In general those who play by the rules would be very resentful if some individuals get a free pass. Like on loans or illegal immigration, etc.

      The problem here is ALL about the under-regulated lawless banks and government collusion. The American people under penalty of fine and imprisonment must pay into a system that they know is corrupt to it core, and yet those who are at the core of the corruption are prospering.

      The people must bow down and beg to borrow their own money back from this corrupt system that has caused massive unemployment, bankruptcy, homelessness, debt, etc… all while the grinning arrogant plutocracy explains that more deregulation and Crony capitalism as a kind of fiscal Astroglide for the American people. At some point the American people are going to stop listening to the Right/Left propaganda about how good it is to have the perverse plutocracy rape them over an over again.

    • http://riversong.wordpress.com/ Robert Riversong

      The reason is very easy to discover, as it was primarily a moral one. Biblical cultures were opposed to usury, which was a method by which those with too much wealth took advantage of those with too little, by charging interest on loans of otherwise unused money.

      It was recognized as a fact of all economies that wealth, primarily in the form of land, accumulated into fewer and fewer hands until most people could no longer make a living.

      So Jubilee was instituted as a religious event, to periodically cancel all debts and restore land to its original owner.

      Interestingly, Thomas Paine suggested a similar redistribution of wealth for America, in the form of an estate tax to pay for a one-time dividend to every young man at age 21, and an annual dividend to the elderly, the lame and the blind (the Social Security Administration recognizes Paine as the inspiration for Social Security).

      He (correctly) argued that the accumulation of wealth is not possible without the support of society and hence all wealth owes a debt to society. So this was not a charity program but an economic justice proposal.

    • Terry Tree Tree

      ‘Jubilee’ was done to the profit of the Wall Street Banksters! 
         THEY got forgiven for their ‘sins’ (CRIMES), and PAID exhorbitantly!

  • guest

    It’s the fossil fuels, stupid! High energy prices choke off growth, the lifeblood of our prosperity.

    • MadMarkTheCodeWarrior

       Oil futures speculation… once the train gets a’rollin, speculators go all in and take the steam out of the engine! … and we’ll do it all over again until regulators put an end to this nonsense.

      • JustSayin

        A literal pump and dump market. We all know who’s getting drilled baby, drilled.

    • Don_B1

       Energy prices, once high enough, will encourage the development of alternate non-fossil energy sources. This would be happening in spades if the development of fracked natural gas had not occurred.

      The problem is that if the alternate source is not ready when the price of the original source has reached the catastrophe point, there will be an interregnum that will be extremely painful. Fortunately a large part of the population has decided that the current gasoline prices are basically here to stay, as the current purchasing decisions for gasoline efficient cars shows.

      This switching between sources of energy can be a great source of growth, but at this point in its trajectory to full usage it has to be supported by the government.

      • Terry Tree Tree

        ‘Just coincidentally’ , the price of oil DROPS, when ANY renewable gets near coming on line!  Oil EXECUTEives SAY it isn’t planned, but it happens EVERY time!

  • AC

    it’s all these darn people shutting off their land lines and going wireless – but to be fair, demolition of a century’s worth of poles may keep one or 2 employed for a short period…
    or, we can keep blaming wall street, politicians and everyone but ourselves and we can whine away right here in an instant, no more letter to the editor required – for heaven’s sake, go wait in line at the bank and keep people employed!!

    just grumpy today, i’ve whined about overpopulation and the pro/cons of technology before so I’ll spare you all….

  • Travis Schuster

    In Latin America in the last decade, a number of left-leaning leaders have banded together to form a  trade pact entitled the ‘Bolvarian- Alternative” and or A.L.B.A. These nations include Venezuela, Cuba, Nicaragua, Ecuador, Bolivia, The Grenadines, Dominica, Antigua , St. Vincent and observing member Paraguay. In addition , El Salvador’s ruling F.M.L.N party has expressed interest in joining in the future. This alliance is an alternative to the U.S backed F.T.A.A. and has been very beneficial to poor countries. A new currency is being developed called the Sucre as well. While Venezuela with its oil wealth and President Chavez’s larger than life stature are the most visual component of this trade alliance, the other nations contribute a lot as well. My question is, with A.L.B.A weighing in on the Syrian crises on the side of Russia and China, as well as expressing strong support for the newly elected leftist party in Greece, could we actually be seeing an even bigger alliance of nations whom are forming to transcend the strong arm of both the U.S and the E.U on number of issues?This new alliance being those A.L.B.A nations along with Brazil and Argentina whom have left-leaning governments as well, along with Iran, Russia, China and possibly Greece. Once again could we be seeing a new alliance as the F.T.A.A as well as E.U dictates continue to hurt many countries.

    • http://gregorycamp.wordpress.com/ Greg Camp

       Led by Venezuela and Cuba?  Sounds like the old Communist Bloc during the Cold War.

      • Travis Schuster

         Perhaps it may sound like old Communist block but  Venezuela has a 5 percent GDP which is expected to climb to 7. Nicaragua is the strongest economy in Central America and Cuba thus far is getting through the ill effects of the 50 year Embargo of the U.S. Every leader has been re-elected in a landslide. With the exception of Cuba, A.L.B.A leaders are democratically elected, so in that sense it wouldn’t be communist block.

        • http://gregorycamp.wordpress.com/ Greg Camp

           You trust any election that Chavez was involved in?  And China has phenomenal economic growth, but I don’t what that kind of government.

          • http://riversong.wordpress.com/ Robert Riversong

            And you trust an election which was unconstitutionally decided by the Supreme Court or the two since that were distorted by large-scale voter purges and election fraud?

            President Carter said the last few US presidential elections wouldn’t meet the minimum standards for “free and fair”.

          • http://gregorycamp.wordpress.com/ Greg Camp

             An entirely unbiased source of commentary there, no doubt. . .

          • http://riversong.wordpress.com/ Robert Riversong

            The Carter Center is internationally recognized as unbiased.

            The Carter Center is a nongovernmental, not-for-profit organization founded in 1982 by former U.S. President Jimmy Carter and his wife Rosalynn Carter. In partnership with Emory University, The Carter Center works to advance human rights and alleviate human suffering. The Center is governed by a Board of Trustees, consisting of many prominent business persons, educators, former government officials, and eminent philanthropists. The Atlanta-based center has helped to improve the quality of life for people in more than 70 countries.

            In 2002, President Carter received the Nobel Peace Prize for his work “to find peaceful solutions to international conflicts, to advance democracy and human rights, and to promote economic and social development” through The Carter Center.

          • http://gregorycamp.wordpress.com/ Greg Camp

             Yes, and we all know what a meaningful thing the Nobel Peace Prize is.  You provide information about Carter’s organization that I already know.  That doesn’t make him any more credible.

          • Don_B1

             The “elections” of Chavez’s predecessors weren’t exactly clean either. And the vote counting in the presidential election of 2000 in Florida did not pass the smell test.

  • MadMarkTheCodeWarrior

    So the Magic Austerity Fairy has not yet blessed Europe with prosperity: markets are still constricting. The godlike job creators evidently feel tha the uncertainty borne of austerity is worse than the uncertainty borne of stimulus packages but call for more? Either that or the unfaithful European workers need to suffer more to purge them of any memory of Keynesian thought.

    The beatings will continue until moral improves!

    When you take fuel from the fire, it wanes.

    • Gregg

      “When you take fuel from the fire, it wanes.”

      So, cutting back a bit on government services is taking fuel from the fire? Isn’t the “fuel” for these services the taxpayers money?

      • MadMarkTheCodeWarrior

         Although the Right would like us to believe that the government cannot create jobs, it does indeed.

        (pardon the repost of old text)
        Looking back at our history, the Pacific Railway Act of
        1862 financed the Transcontinental Railroad. The Federal Aid Highway Act of 1956
        created our transcontinental highway system fueling an explosion in growth. Prior to
        WWI, the federal government funded and thereby revived the US aircraft
        industry.

        Essentially, the entire computer
        industry was funded by… the DOD via DARPA
        and ARPA, NASA and others. These Agencies funded R&D throughout university
        systems all across the US. Prior to the 70’s the USG was the number 1 consumer
        of computer chips. Our Aircraft industry has
        benefited immensely from technology developed for DOD contracts.

        DARPA funded the development of the internet. GPS came from the USG. Gas turbine technology that
        powers many towns… USG R&D funding. Nuclear power… let’s not go
        there.

        So the Government cannot create jobs? Tell that to the
        tens of millions of workers employed directly or indirectly by the USG. Tell
        that to all of the servicemen, all of the people who make their food, clothing,
        weapons, vehicles, all the defense company employees, bridge builders,
        architects, civil engineers, construction workers, doctors and nurses. Tell that to the 500,000 government workers layed off
        during the Obama administration.

        That “the Government cannot create jobs” is a lie by the
        radical right. It’s a lie because they know it to be false yet they continue to repeat it to fan the flames of
        our frustration as they foster gridlock and demonstrate incompetence.

        • Sam Walworth

          If Govt is not creating jobs, then  why on earth are so many H1Bs flocking to the nation?

          Its not that our Economy is expanding at such an astronimical way that we NEED to have people from other countries come and help us, but rather its at the cost of our own people’s jobs they come here and stump us.

          The second argument would be, why are so many companies allowed to outsource almost everything to the whole world?

          I dont believe its Free Market, because, if it were, why would we be so eager to please the Communist Chinese and / or Socialist countries like India, Vietnam etc..

        • Gregg

          The government cannot pay a dime in salaries until they confiscate, print or borrow money that is not theirs. Ignoring that fact is perilous. Why isn’t it even a small factor in your thinking?

          • Victor Vito

            I think there is a fallacy involved in calling taxes an unlawful confiscation.

          • Gregg

            It’s lawful confiscation, printing and borrowing. I never said unlawful.

          • TFRX

            Yes, go to those Tea Parties or get booked on Fox News, and tell them in great detail the difference between what you mean and what they thought they heard.

            They are so primed to listen to your explanation.

          • jefe68

            You think playing with words hides the real meaning? Sorry but the very use of the word confiscation in context to taxation is all about your view point on taxes. You don’t want to pay them and yet you use the services that are pay for with them.  

          • Gregg

            It ultimately comes at the point of a gun, deny it.

          • http://riversong.wordpress.com/ Robert Riversong

            No one points a gun at you for non-payment of taxes and precious few even go to jail.

          • TFRX

            Confiscate?

            I miss the real-world right-wingers. Guess they’ve all been battered into submission.

          • Gregg

            The word fits.

          • http://www.jobwaltz.com JobWaltz.com

            They love big government. They love it when other people pay for it. Welcome to NPR.

          • MadMarkTheCodeWarrior

            Choosing to ignore historical facts dooms one to repeat the mistakes of one’s predecessors.

            Gregg, you choose to qualify taxation as confiscation.

            If you believe that without law or law enforcement, you won’t be systematically screwed by businessmen. If you don’t want roads to drive on, if you don’t want to be assured to some degree that the food you eat won’t kill you, that the chemicals you put on your skin won’t destroy your skin. If you don’t need your beaches, or your fishing business or your seafood to be protected from oil companies. If you don’t believe that you need your water protected from poisoning by oil companies, chemical companies or giant pig farms. If you don’t believe that you need police or fire protection. If you don’t believe that you need the armed services to try to protect our interests… you don’t need any government at all. You don’t even need the US Constitution.

            History shows us what happens when there is no law or regulation. Pushed to the brink of starvation, we are little different from the Romans or the Nazis. Fascism could arise in America. Wait… McCarthyism… that was just a glimpse of our inner demons. Dubya’s torture memo! We now are tortures. We have yielded the moral high ground.

            The wealthy derive substantially more benefit from our government than we do by virtue of the net wealth that the US of A protects, yet Dubya gave them a tax break. They pay less than half the taxes on the proceeds of gambling that we as individuals do working in offices, on assembly lines, or in ditches.  That ain’t right: that’s wrong… And Ronald Reagan said effectively that.

          • jefe68

            You know what’s interesting, Gregg sounds like an anarchist in some ways. 

          • Gregg

            Where do you guys get this stuff? Who said I don’t want laws or government services? It’s okay if they confiscate a little and the rich should pay more as they do. It’s fine. They still MUST confiscate it before they can spend it.

          • http://riversong.wordpress.com/ Robert Riversong

            Except only on very rare occasions does the IRS seize money from your bank account. Most people pay taxes voluntarily.

            If the payment is voluntary, then there is no confiscation.

          • http://www.jobwaltz.com JobWaltz.com

            “If you believe that without law or law enforcement, you won’t be systematically screwed by businessmen.” Why would anyone participate in a system where they are screwed by unscrupulous cheating businessmen? Wouldn’t some honest operators win out over persistent fraudsters?

          • jefe68

            That you think that paying taxes is a confiscation of your money really sums it up. It’s the height of immaturity to think that you could survive doing what you do without the infrastructure, police, fire departments, and all the other things that taxes pay for.

            Government is not perfect and the perfection that you seem to be looking for does not exists. your answer is less government or the absurd idea of smaller government.
            Whatever that means.  

          • http://riversong.wordpress.com/ Robert Riversong

            Small government is hardly an absurd idea – it was what this nation was founded on.

            It has grown unwieldly both because of the innate tendency for any institution to enlarge its power and in response to the growing power and corruption of the private sector. 

          • Don_B1

             So why does government exist if it confiscates the money of its citizens? Government provides what the majority of its citizens want it to provide. Just because some are so rich they do not need government for some functions does NOT mean that the less well-off do not need it for those functions.

          • http://riversong.wordpress.com/ Robert Riversong

            Actually, very few Americans are happy with what they get in return for their taxes, but pay them out of a sense of necessity or fear.

            It’s actually the wealthy who rely on government services far more than most.

          • TFRX

             ”very few Americans are happy with what they get in return for their taxes”

            Strictly speaking, is that because too many of them are low-information citizens?

            It seems one can’t throw a barbecue in a Red state without its white people whining about their tax load (and all the dogwhistles about waste and social programs that implies); that “not being happy” flies in the face of how many red states are “tax debtors” to Washington, and how many blue states are “tax donors”.

            And, as always, I’d add the tangent that “relying on government services” for a multimillionaire includes a heaping helping of “not having to go everywhere in an armored limosine or have machine-gun-toting guards outside the mansion”.

            I’d hate to think that after the 1930s our uberlords are running an experiment to see exactly what the riffraff (which includes me and maybe you) will put up with.

          • http://riversong.wordpress.com/ Robert Riversong

            The “services” that the wealthy get from government are the tax breaks, credits, subsidies, minimal regulatory framework, and 
            an open door in Congress that allows them to accumulate and sustain their wealth and power.

            The rest of us get potholed roads, crumbling bridges, an inadequate rail system, police brutality, discriminatory courts, and overflowing jails.

          • Don_B1

             Some of the biggest benefits are the ability to enforce a contract and to travel freely about and work at what interests one. These are disproportionately enjoyed by the rich.

            But as with all people the rich take these benefits for granted and then perceive the benefits of others as undeserved if they “arrive” differently or in compensation for earlier slights.

          • http://riversong.wordpress.com/ Robert Riversong

            The rich are the ones who demand their “entitlements”, while the poor simply ask for justice and are turned away.

          • http://riversong.wordpress.com/ Robert Riversong

            How is the constitutional printing or coinage of money a confiscation of something the government doesn’t own?

            If government borrowing is confiscatory, then so is any private borrowing, which is absurd. The only confiscation is the interest charged by the borrower.

            How is constitutional taxation for the common defense and the general welfare any more confiscatory than required dues when you join any other club or society?

  • Victor Vito

    This would all be very interesting as an experiment, if people’s livelihoods were not at stake.  How far can people in America and elsewhere be pushed, shoved, and stepped on before they will lash out?  How long will people believe that there are not enough wealth and resources in the world so that the elderly can retire with dignity, and the poor can receive medicine?  I am a loving person who has begun to hate the people who orchestrate this travesty against the huge majority of people so they can orbit in avarice.

    Eventually, revolution will be less scary than the reality that THEY are offering. 

    • Gregg

      There is nothing “loving” about making people believe lunch is free.

      • Victor Vito

        How about there is enough lunch for everyone?

        • Gregg

          There is.

          • http://riversong.wordpress.com/ Robert Riversong

            Then why do 1 in 6 Americans go to bed hungry every day?

  • http://banicki.biz/ steve banicki

    The Eurozone, created on January 1, 1999 and doomed to fail from the beginning, is comprised of seventeen independent nations. These nations have their own President or Prime Minister along with their own Congress or Parliament. The elected officials are responsible for looking out for the best interest of their nation and its citizens. This responsibility takes precedent over any agreement made with the Eurozone and its members..

    Unlike the United States, each member of the Eurozone is not governed by the constitution of a “central government”. The Eurozone does not have a central bank and each country does not have power to print its own money. More: http://bit.ly/FF1205de2

    • Sam Walworth

      Like it or not, if anything catastrophic happens across the Atlantic, the effects will be felt here as well and it will be hard.

      Secondly, somehow your comment suggests thats we are much better than Europe and wont have any issues or are not facing any issues at al, dont believe me? Just ask someone in CA or RI or IL or any other state which are in really bad economical shape..

      So, in a nutshell it doesnt matter what the Govt Policies are or were, the state of economy is almost in perils.

      • http://banicki.biz/ steve banicki

        I did not mean to infer that we have no problems. To the contrary we have plenty and they will get worse as the euro fails.  More:  http://bit.ly/FF1206cbc

        • Sam Walworth

          Oh ok..

          Well, we got our Prez to pass stimulus (against the will of GOP and many others) and the UK passed more Cuts and Tax Cuts, and guess who is slightly in better shape…

          I try to like the Center Right policies, sadly our Right is now Extreme Right, and almost on the verge of fanatic Right

  • Still Here

    Individuals cannot spend more than they earn indefinitely, and neither can nation states.  While countries/currency zones can print money in the short run, they need to right their balance of payments or risk an eventual loss of confidence in their currency. 

    • Victor Vito

      That’s fine.  Do you suggest that we cannot afford to care for the elderly and the sick?

      • Still Here

        Of course not, but tough choices will need to be made and promises broken. 

        • Victor Vito

          What do you call someone who doesn’t keep their promises?

          • Gstof

            A realist

          • Steve_T

             Politician?

          • jimino

            When it comes to those who have paid money in reliance on that promise, they are called guilty of fraud.  In short, a thief.

        • jimino

           Be honest.  Here’s what you are really saying to our elected officials:

          Yes, by all means break your promise to all of those citizens who paid into federal government programs with the assurance that their money would be handled competently and without corruption. 

          But never, ever, break the promise you made to Grover Norquist.

    • Don_B1

       Individuals have a finite life, too, while nation states have an indefinite lifespan. A state needs to be able to carry its debt and as long as it has the power of taxation and can print its money, it can do that. All that does not mean that its citizens will enjoy the results of high debt. But who is advocating that large deficits should continue forever? It is the people who want to use the current crisis to run from their responsibilities to the general welfare of ALL the people.

  • Still Here

    Please ask Rogoff:

    1) What lessons can be learned from the fiscal policy response to the recession of the early 1920s in the US?

    2) Krugman seems to believe the Fed can tolerate a little bit of inflation in order to stimulate economic growth by pulling consumption forward.  Is there any evidence to suggest the Fed can grow inflation in a controlled manner over an extended period of time?

    3) Assuming the Fed can stimulate inflation, given the huge, structural imbalances in the global balance sheet, what is the potential for stagflation?

    Thanks

  • John in Amherst

    As long as a disproportionate share of the world’s GDP is going into the hands of a relatively small number of super rich people, there will not be enough buying power in the general public to fuel a sound economy.  The income / economic disparity problem that is bedevils the US is also suppressing the economic growth of Europe, India and China, and, by extension, the rest of the world. 
    Human nature is to fall back on conservative xenophobia when faced with large-scale threats and hardships, at least up to a point where there is nothing left to lose.  Economic insecurity strikes fear into the minds of the public, and this fear is being manipulated successfully by moneyed interests (corporations and individuals, abetted by an ever more sophisticated and global media) to maintain the status quo, i.e.: keeping us on a track where the rich are getting ever richer while the middle class shrinks to the vanishing point.  Our will to institute necessary changes is being hamstrung by the small numbers of people who benefit from the current system world-wide.  It would be nice if there was a way out of this mess that did not involve a cataclysm that paves the way for profound change, but it appears ever less likely that such a course exists.
    World war, global environmental catastrophe, plague, total economic collapse, etc. – do we really have to hit a Malthusian reset button to get back on a more cooperative track? 

    • John in Amherst

       ”Free Markets” do not have to operate in the absence of rules that help
      to insure that they remain “free”.  We accept rules in our sports
      competitions, even in war.  The ultimate responsibility in a free market
      is for the buyer to
      beware.  In order for the buyer to beware, the buyer has to 1.) fully
      know & understand what is going on and 2.) have a range of choices. 

      Without rules that prevent monopolies, protect against fraud and
      deception and safeguard the health of the environment and individuals,
      the “free market” devolves into a mechanism for a select few to exploit
      everyone else.

    • John in Amherst

       The show’s competing pundits argue about fixes – stimulate or not to stimulate? 

      Pouring stimulus into a system that is dysfunctional at its core will not work.  There is a lot of capital pent up in banks
      and in the fortunes of very rich corporations and people that would
      otherwise be flowing in the economy, were the rules of the game changed a
      bit.  (China being a special case, were the government and a few of its chosen billionaires hold an incredible amount of wealth, but the fundamental problem remains: wealth stagnating in too few hands). We don’t need to just stimulate, but to reformulate the economy along lines that insure wealth dose not collect in ever more concentrated spots. 

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Everyone freely admits that infinite growth is not possible. No one wants to admit we may have hit the ceiling. 2 inherent components of capitalism are boom and bust. We have never gotten away from this. Never will. Welcome to global bust.

    The big question is – will we have a quick and very ugly crash (hard crash) before we can start growing again? Or a very long and protracted period of global deflation (soft crash)?

    • Victor Vito

      I think there is a constituency on the right that adheres to the “infinite growth paradigm”.

    • William

      I wonder if the current economic downturn is just part of the normal “creative destruction” that capitalism is known for?

    • http://riversong.wordpress.com/ Robert Riversong

      At least half the world believes that endless economic growth is possible – and our birthright. And you seem to be one of them, asking whether we will grow again after a hard crash.

      “No one wants to admit we may have hit the ceiling”

      I’ve been saying that for several years, since the 2008 crash. We have hit the economic ceiling because we have hit peak everything that our economy is built upon. The growth paradigm is dead, but still walking like a zombie.

  • AC

    i am seriously concerned for panhandlers; they need smartphones with the square app.
    who the heck uses cash anymore? people that cook their books or launder money? i’m always suspicious of cash only places.
    they thank me tho, when i apologize and inform them ‘plastic only’……

    https://squareup.com/

    • http://gregorycamp.wordpress.com/ Greg Camp

       Sometimes, it’s good not to leave a paper trail.

  • John in Amherst

    “Free Markets” do not have to operate in the absence of rules that help to insure that they remain “free”.  We accept rules in our sports competitions, even in war.  The ultimate responsibility in a free market is for the buyer to
    beware.  In order for the buyer to beware, the buyer has to 1.) fully
    know & understand what is going on and 2.) have a range of choices. 
    Without rules that prevent monopolies, protect against fraud and deception and safeguard the health of the environment and individuals, the “free market” devolves into a mechanism for a select few to exploit everyone else. 

    • Lee

      I would say that “buyer beware” is a kind of rule.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Our growth has been dependent on ever increasing debt – so when you get to the day creating more debt is no longer possible, the current debt has to be reduced or paid, and the whole system falls apart. Currently Greece is in the spotlight, but eventually every country with huge debt will have its day. Ours is coming.

    • http://twitter.com/AkilezHeel Akilez

      I am just waiting.

      • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

        Look at government spending through the world, especially our current trillion + deficit budgets – they are throwing more and more debt into this bigger and bigger hole delaying the inevitable.

        • TomK in Boston

          OK, “oldman”, I guess you better give up your SS and medicare and whatever else you’re getting that the society provides to the elderly. It would be better for you to be on the street with a tin cup than us running up that big bad 1.56% interest rate debt to support you, right?

          • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

            People will, I’m not looking forward to it.

            At any interest rate, how debt is too much? Currently we haven’t paid down any debt in many, many years. And what happens when rates go up?

    • TomK in Boston

      Howling about debt is just a class warfare tactic. OMG! Look at that bad ‘ol debt! You better give up real SS for a “privatized” wall st plan. You better trade real medicare for a ryan groupon, or the debt will get you!

       The giveaway that the debt hystericals don’t really care about the budget is that they all call for further tax cuts for the rich and the corporations, ie, for themselves and their oligarch patrons. Obviously, anyone who really wanted to balance the budget would start with raising taxes on the superrich.

       We can now borrow for 10  years for about 1.5%. That is lower than the previous record low in 1946. Open your eyes, people. If the debt was such a big deal we would not have record low interest rates. So many people confuse ideology with reality.

    • jimino

       So pay it off.  We have net assets of over $50 trillion so it shouldn’t be a problem.  Or do you have some other proposal for paying off current debt?

    • http://riversong.wordpress.com/ Robert Riversong

      Since government debt is created by simply conjuring money out of thin air, the debt can grow forever and more money conjured to pay the interest.

      Government debt is a fiction, except to the bankers who hold it and don’t want to lose their investment (as they soon will in Greece). 

  • Combs

    What is the solution to “Oops, we can’t reach SoundCloud”?
    I’ve uninstalled and reinstalled Google Chrome, updated to the latest Flash Player and Java versions and still no luck.

  • Lee

    Looking at individual countries and saying each country has a debt-hole to dig out of is missing the bigger picture.

    The global economy is a system with its own governance.

    The 1999 Seattle protest was in a sense more on target than the Occupy movement.

     When talking with Occupiers it occured to me that they were responding to local symptoms or the “fallout” but not to the root causes.

     
     

  • Sean

    Obama is stemming the tide.

    You think things are bad now?

    I hope you’ll never have to see America and the World with another Republican (especially Romney) as president!

  • Lee

    it’s not complicated.

    the game is over and people are pulling their money off the table.

    the losers are now having to deal with the fact that they have no more opportunities to double down.

    • Lee

      And the players are not just Europeans!

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    In the end anything that doesn’t get rid of the debt won’t fix it.

    • http://riversong.wordpress.com/ Robert Riversong

      The only way to pay down the debt is to increase tax revenues by growing the economy, which requires massive government spending at a time when the private sector is hoarding its cash and the common folk have nothing to spend.

      Austerity has never eliminated or reduced a deficit – it tends to do the opposite.

  • MadMarkTheCodeWarrior

    Seriously now, how does the right blame Obama for the malaise in Europe, China and India? My does he have a long reach.

    How does the right’s continue investment in their economic narrative do us any service? How is trying to address a problem with false premises lend anyone of any hope of resolution?

    How is trying to win political gain at any price an act of patriotism?

  • CampaignFinanceReform

    Why not put the banks with bad loans and mortgages into receivership?  Let the banks fail, but guarantee and transfer deposits to new nationalized (not private) banks.

  • Ellen Dibble

    So long as the financial markets function as the heart of the global commerce, pumping what it does through the arteries, we will have people with computers and algorithms betting either on profits or losses, to plump the invisible “money” with one or the other.  So it seems after several decades of that, the bill comes due, and globally, the price of plumping things up by pushing for exaggerated, um, evolution, is clear.  It’s like the economy on s steroids.  Yes, it has a cost.
        How do we pull the plug on Profits, this form of capitalism?

  • Jim

    the market unfortunately is too bullish and is not pricing in the Greek exit, Spain’s bond yield, China slowdown, the United States’ fiscal cliff, and problems with emerging market which is shown in Brazil and India’s economic shock.

    The G7 (and not the G8) should NOT blame it on Germany. Do you think the Germans should be responsible for continuous fiscal irresponsibility performed by European southern nations?

    Lastly, Bernanke simply cannot keep printing money. it is not working. we need fiscal policy that is currently politically inept especially with our so called (Republican) Congressional leaders. But when you have rich people running your country, these politicians will likely not have your interests.

  • http://gregorycamp.wordpress.com/ Greg Camp

     There are two problems for Europe:

    1.  Spending on the credit card

    2.  A federal currency without a federal fiscal policy.

    This is the same problem that America had during the period of the Articles of Confederation.  It’s the same problem that the Confederate States of America had.  Either the European Union goes back to being just a set of trade agreements, or it moves forward to a United States of Europe.  Otherwise, the disaster will continue.

    • Alan in NH

      Maybe the concept was too grand. Afterall, a lot of these nations have been bitter enemies in the not so distant past. Hard to rectify old national scale hates and resentments. It takes decades, maybe centuries. Maybe Europe should have striven for zones of cooperation instead of the huge agglomeration that is the Eurozone. Maybe the Eurozone will devolve into same.

  • AC

    i’m not sure how i feel about the oldest profession dying out……maybe it will be helpful towards stabilizing population…..???
    sigh, more jobs – gone forever…..

    http://articles.timesofindia.indiatimes.com/2012-04-19/science/31367140_1_prostitutes-brothel-android

    • http://gregorycamp.wordpress.com/ Greg Camp

      We’re almost there already.  It’s called the Internet.

      • AC

        i’ve already decided i’m blaming Obama for this….
        or Romney. Whatever/whoever is the next president – this will be their fault!

  • George

    Rogoff is suggesting Germany write a “blank check” with hopes of better behavior from its neighbors in the future.

    The argument against this is the same one implicit in the resistance to “short-term growth” policies in America … nobody believes that once things get better the debt will actually be repaid.

    George Fisher
    Boston

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    You can’t fix a debt problem with more debt.

    • http://riversong.wordpress.com/ Robert Riversong

      The government can, because it can always create more debt to pay off the old debt interest.

      Government debt is not the same as private debt. The United States has had a public debt since its founding in 1791. Debt as a share of the economy peaked just after World War II at 112.7% of GDP in 1945, but then fell as the economy grew. Today’s total government debt is 102% of current GDP.

      The problem is not so much the debt, as the ability of the tax base to expand to continue to pay off the interest.

  • AC

    i’m listening and learning, but at the same time, i feel like i’m listening to people handling paper play money …….

    • http://gregorycamp.wordpress.com/ Greg Camp

      I’ll trade you Greece and Italy for Ireland and a “Get out of jail free” card.

      • Lee

        Let’s flip the board and start again

      • AC

        no way, Greece has already mined most of it’s natural resources!
        lol

        • http://gregorycamp.wordpress.com/ Greg Camp

           It still has some beautiful buildings on it.

  • Kay

    So what your guests are trying to articulate is: Obama’s hatred of capitalism is destroying the global economy. We must lower corporate tax rates, and deregulate everything, before it’s too late…

  • Walterwz

    There is no hope. Complete crash is inevitable. Those in control simply will not face the fact that Finance based economy is a FAILURE. 

    When will people wake up to the fact that this collapse is nothing more and nothing less than failure by design.

    It is called Disaster Capitalism for a reason.

  • Lee

    only God has an unlimited credit card

    • http://riversong.wordpress.com/ Robert Riversong

      God made man just like the Fed makes money – out of thin air. But then God wanted to create some interest, so he made Eve.

      Anyway, Moses invests but Jesus saves.

  • Sofia Perez

    Ken Rogoff, on and on, with the wrong analogy.  Where would Germany have been through the early and mid 2000s without the Eurozone. The German government is just trying to squeeze the cost of what they will ultimately choke up (because they are going nowhere witout the Eurozone). Meanwhile, the damage in Italy and Spain is just getting worse and worse. Germany is benefitting from a currencly that is considerably lower vis a vis non-Eurozone trading partners than it would be without the sovereign debt crisis and is selling debt well below what they would without the debt crisis. They have benefitted more than anyone else from the bad architecture of the Euro, and are just dragging this out to reap the current benefits.

    Eurobonds are the only option for Germany (even if they like to drag out the current situation) and everyone else.  

  • Yar

    My God, your guests are whistling through the graveyard.  The US is sustainable on consumerism?  What, our consumerism is funded on Chinese credit.  10 percent of our country produces, and the other 90 percent consumes.  That is nowhere close to sustainable.  How do you define sustainable, for the economic collapse to come after you die?  If you are 75, maybe. But only if you are a smoker.  

    • TomK in Boston

      It’s not “chinese credit”, despite what the corporate media tells you. We owe most of the dreaded debt to ourselves, ie, “the debt” is actually some widow’s income. Furthermore, the 10 year rate is now 1.56% which is a negative real interest rate. The big bad debt is worth a big yawn.

      • Yar

        Tom you are correct, we have used a combo of quantitative easing and bank bailouts to hide the fact that China is pulling back from the US.  My point is that we cannot consume our way out of debt.  Too few in our society do anything of value.  Selling health insurance or practicing medicine does little to pay the farmer who grows your food.  Our economy seems to expect to trade back-rubs for haircuts forever.  Someone has to produce the stuff we consume.  We must trade with them for something that they need or want.  We don’t know the meaning of sustainability.  In a couple of weeks Bill McKibben may take a stab defining sustainability, he has blinders on as well.

        • http://riversong.wordpress.com/ Robert Riversong

          Bill McKibben is one of the clearest visionaries alive today.

          But any definition of sustainability that includes either limited or even zero-growth is doomed to failure.

          We have so far exceeded the planet’s carrying capacity that only degrowth will offer any chance of survival.

      • http://riversong.wordpress.com/ Robert Riversong

        As of February 2012, $5.1 trillion or approximately 50% of the US debt held by the public was owned by foreign investors, the largest of which were China and Japan at just over $1 trillion each.

  • TomK in Boston

    Europe is a nice test of austerity economics. Here’s a simple  reality-based suggestion. If all the budget cuts in europe produce good results, maybe ryan hunger games economics is a good idea. If things get worse in europe, maybe Keynes was right.

    It’s interesting how the corporate media sell the story of how europe’s problems are due to big socialist bureaucracies, while the countries that are doing the best have big gub’mint and high taxes like Sweden.

  • readsome

    The majority of us have already been so decimated by prior years recession (why don’t they just call it what it is, a depression)…. The real estate market has collapsed, we’ve lost what little, if any, equity we had in our homes.  Our retirement plans tanked, we have little hope of retiring any time soon, social security and medicare are threatened even though we and our employers have paid into them for decades of our working lives. True unemployment and underemployment are at near record levels, and what few jobs there are seem to not provide living wages or benefits.  Do I worry about yet another collapse in Europe – not really, except for just further instability…..seems like we are heading for a global readjustment….. interesting that the wealthy and the large global banks have somehow continued to reap record profits.

  • AC

    i agree with that caller..

  • Chris

    Oil will flow forever because God loves America.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Until the debt goes away, all these theories, plans, etc. are just nonsense – and excuses to create more debt.

    • http://riversong.wordpress.com/ Robert Riversong

      Debt doesn’t go away – it just gets rolled over.

  • Rex

    I can’t listen to this guy’s voice. It sounds like it’s about to break. Until the next hour…

  • Guest

    Why don’t we just say that debt holders won’t get paid?  It would mean that lots of 401k accounts will be hit, but we could all get back onto good footing.

  • Chris

    Energy returned on energy invested

    Doesn’t quite work out with shall oil.

    • http://riversong.wordpress.com/ Robert Riversong

      Or even with shall not oil.

  • Stephen Marshall

    Comments here have glanced at the central issue, but I have never heard an on-point economist confess the physical impossibility of perpetual growth, and the fact that failure is built-in to the economic system when banks issue the money and everyone expects to pay them back.

    I find it tragically comic that the discussion always revolves around whether to pay the banks and how, or to spend money to restore the economy. Unfortunately, both roads lead to hell. You can never do either, no less both.

    The alternative, derisively spoken of as “printing money”, is for sovereign states to reclaim their right to SPEND money into existence. When the need to repay banks and pay interest is absent, economies are more sustainable and stable, and money creation is governed by people who actually accountable to the electorate.

    • http://riversong.wordpress.com/ Robert Riversong

      The problem with printing money is that it’s inflationary unless the economy can keep up with the monetary expansion.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Sustainable growth requiring ever increasing debt is not sustainable.

  • Mike in PA

    inflation helps the banks and the central governments.  it does absoltely nothing for the poor and middle class.  it trickles down and increases the costs of necessities while wages and job opportunities stagnate.  “they”, meaning the fed, the big banks, and the government have been causing inflation for at least a decade. 

    please explain the counterpoint.

    • TFRX

      A little inflation helps people who owe debt pay it back. That’s sort of been the norm all along, up until the point that we can buy everything we need with cash outright.

      Entities who are owed money are very interested in this not happening. No inflation is very good for their balance sheet, theoretically speaking, as their future income (at a fixed amount) is worth more. The catch is, this stops working when their debtors can’t pay anything.

    • jefe68

      Inflation right now is at 2.3% and has been low for the last few years.  What’s your point besides the anti fed angle.

  • Chris

    Who cares about future generations. F*ck them. That’s what these two (and the elite) say.

  • Lee

    China was growing fast, but as we stop buying they stop growing.

    Your guests keep trying to retreat to the comfort of national boundries.

  • AC

    why did both the guests pooh pooh the technological singularity that is occurring? i don’t think that’s wise. now i’m not sure i believe them at all…..

    • Joan Davidson

      AND the great discovdry by???which one of Tweedle Dee? FRACKING will save us all?????

      • AC

        i don’t understand?

  • masaccio

    Flood the economy with money? We’ve been doing that through qualitative easing. It means buying up worthless assets, salvaging the interests of the rich and saving them from their criminal stupidity and greed, and dumping the losses on the rest of us.

    This is just more of the same garbage economics that caused the Great Crash from the same people who cheered on deregulation of the financial sector.

  • Matthew

    The problem with printing money is that has a greater impact on food and energy prices, actually hurting the middle and lower income citizens and slowing growth.

  • Ellen Dibble

    It seems to me that mathematically, with so much debt (assuming that debt is all investment in productive things), what actually happens is basically inflation.  You balance everything out, as if there were a global bankruptcy.  And the result is currencies that are rebalanced.

  • Strobaffa

    I don’t see how your guest can simply say the stimulus didn’t work when we know the stimulus was half hearted at best.  Also, I would like to know what he would say about all the jobs that were saved because of the stimulus. 

    • TomK in Boston

      The stimulus worked, at least according to real economists. And as you said, ti saved a lot of public sector jobs which are now being rapidly lost. The >600,000 public sector layoffs are a huge drag on the recovery.

      • William

        Public sector workers have to be paid by taking money out of the private sector so reducing the number of public sector workers is a good thing.

        • TomK in Boston

          Is that voodoo econ script #23 or #33?

          • William

            Notice that the sun still comes up with all those fomer public sector layoffs? Amazing huh?

  • Mjbjr

    I feel ok.  I have nothing, so nothing to loose except the health of my family and the ability to keep us all warm, dry and fed.  A break down and restructuring could be good provided it doesn’t turn into utter chaos which has it’s own set of concerns

  • Lee

    I love how these guests assume the listeners are taking their cues from the experts.

    The experts who never saw this coming.

    • Joan Davidson

      Thanks Lee, you answered my query. Where WERE they and WHO ARE THEY?

      • Lee

        They are robots.

  • Chris

    People, day after day, week after week, month after month, year after year we are sold the propaganda by the tools of the elite like these two that their way is best.

    Don’t believe it. A better world is possible. 

    Turn you back on their system and you can make your life better then the crumbs they throw to you.

    • Joan Davidson

      Right, about those two. Where were they 3-4 years ago?Another set of twins. Hey “experts” where WERE you? suddenly you know it all and …huh?

    • Bubba

      STARVE the BEAST !!

  • Vtcheflw

    Ignoring peak oil is the epitome of stupidity.  Oil shale is
     great?   Have you not seen the repercussions?  The way the guest on today’s show think is type real problem we face.

  • Muriel

    Can you talk about the Scandinavian models.  Why are Scandinavian countries not collapsing like other western economies.  What are they doing right and should we try to emulate them?

    Their populations are fairly small but it seems to me that their societal models include not having huge gaps between the big earners and the ones at the other end and the acceptance that people will have to pay more in taxes to get services all of it within the context of market economies.  In Denmark for example, college is free.  Students are even subsidized to go to college!  The happiness level of people there is very high! 

    • Chris

      The only problem with the Scandinavian countries is they export their surplus people. Many Scandinavians have to leave because their isn’t enough “good jobs”.

      America is importing skilled people H1-B visas among others even as we have 25 million unemployed.

    • jefe68

      Denmark do not use the Euro as a currency.
      Although they are part of the European Union.

      • TomK in Boston

        Exactly. They have their own currencies AND they have strong governments that actually collect taxes. The USA worked better when we had high taxes at the top so it’s no mystery.

    • Tina

      AND they have healthy, growth-oriented economies.  Iceland took a wrong turn a while back, but learned their lesson, apparently.  YES!  In every regard, we should be looking at the Scandinavian economies and societies, yet those in power here never do.  We do not even have to re-invent the wheel, we just have to look at how their social democracies work and take them as serious models!  Thank you!  Maybe if everyone who agrees would call their senators and congresspeople, maybe we could see a change over time as more and more people saw the strengths and flexibilities of the Scandinavian systems, though our political parties ARE both different than the social democrats of Scandinavia (and even THEY get voted out sometimes!).  How to actually achieve this change:  I consider this an extremely important question!

  • Lee

    OK Spain, stop sleeping and get to work.

    • Tompmiller

      Again, it is incorrect that Spaniards work less per day, and instead take naps. The person that called in was wrong on the work hours. Typical work day is from 9 am until 7 pm to 9 pm, with a 2-3 hour lunch. However, many professionals work through much of the lunch time, still leaving late.

  • AC

    watch out ‘big pharma’ researchers, here go your jobs!!
    http://youtu.be/R-2Xw-GNkUQ

  • AC

    YAY!! thank you caller!!!

  • AC

    give me a tax break, i’m creating jobs for my robots!!!

  • Lee

    OK robots, stop sleeping and get to work.

  • Jill

    Let’s be like Spain and have less stuff.  I need more naps!

    • Tompmiller

      Again, it is incorrect that Spaniards work less per day, and instead take naps. The person that called in was wrong on the work hours. Typical work day is from 9 am until 7 pm to 9 pm, with a 2-3 hour lunch. However, many professionals work through much of the lunch time, still leaving late.

  • Joan Davidson

    Whoever that guy was,, from Vt.? me too, from Vermont and also have spent much time in SPAIN lived there,visited there AND while true that  people may take 2-3 hours  their mid-day (3-5 usually) for lunch and siesta BUT they begin work before we do here AND THEY STAY UNTIL AFTER 7 PM. SO again a distortion.It needs to be corrected.

    • Goldbug

      I love Spain!

    • Tompmiller

      Exactly my thought. The person probably did not notice that banks, stores, etc. are open until 7pm, and often until 9pm, in bigger cities, like Madrid. Per day work hours are the same or longer than in the US. Total days off are much more than in the US, and public benefits are much better, so more expensive, which are the issues. Not that people are by definition lazier. Professional Spaniards involved in the global or pan-European economy, work just as much, often on “days off”. 

  • Dan

    It is too bad I did not get on the show. After the initial interview about what I wanted to say the interviewer said I would be on, I had a great point. Five miniutes later he said sorry now they didn’t have enough time.   My point:  Who owns the central banks? ( including federal reserve) Why can we not have conversation about who owns these central banks and what their motives are, who they hand money to and what industries they support. JFK talked about secret scoceities and if one is willing to take a couple of steps in to the rabbit hole it would not take long to discover there are direct links between central banks, secret sceocieties, and the only country in the world that is allowed to have a citizen of there country hold high office in the USA.

    Some presidents have tried to bring this to light, most have been killed.  If we (humanity) are too afraid to demand full exposure of the few that pull the strings, then we will get what is comming to us, by these very people.

    • http://gregorycamp.wordpress.com/ Greg Camp

      How many Dan Brown novels have you read?

      • Dan

        0, When using basic unafraid reasearch the picture could not be more clear. 

        • http://gregorycamp.wordpress.com/ Greg Camp

          Uh huh, care to offer any evidence for that?

          • Dan

            Look in to the orgin of central banks, and money lending. Follow the trail. Realize the power of central banks to wage war and the facts that support this.  Illumitati, Bildaberg along with many other “secret” groups have overwhelming power in western civilization. This has been a fact for a long time, it is only recently many people have realized, through research that there comes a point at which soo much circumstantial evidence piled up in to a giant mound outweighs an anthill of talking points that keep the general population calm.

            Facts are facts, stories are STORIES! Research!

          • http://riversong.wordpress.com/ Robert Riversong

            Only recently? The history of the central banks is common knowledge and the “conspiracy” groups from the Trilateral Commission to Bilderberg have been known about for decades. People in power have always come together to discuss strategy and policy.

            But there are no “illuminati” or aliens running the planet.

          • Theeleggedtable

            Do some research on the JP Morgan bank charter and the threats which where made against the Republic in its infancy. 

    • http://riversong.wordpress.com/ Robert Riversong

      “and the only country in the world that is allowed to have a citizen of there country hold high office in the USA.”

      And just who or what are you referring to here? Obama the Kenyon?

  • Lee

    OK, let the rich sleep undisturbed.

  • TomK in Boston

    It’s funny listening to this guy talking about how the market will “call our bluff” eventually. Do you realize that the voodoo economists have bombarded us with dire forecasts of skyrocketing interest rates for many years now? They have been wrong over and over again and they never change their story, because they care about ideology rather than economics. Now they jsut say “some day”. Right, some day interest rates will rise. Now the 10-year T-bond is 1.56%, lowest since 1946. We should operate in the real world: there’s never been a better time to spend and borrow.

  • J__o__h__n

    Obama had a mandate last time.  Mitch McConnell didn’t care. 

    • Dee

      And the GOP war hawks in Senate and House and in the Right Wing Think Tanks in Washington pushed for a surge in the troops in Afghanistan when the American people wanted a draw of their forces there..(As they 
      had wanted in Iraq in 2008 too.) Thus I imagine, there will be payback at the polls for this also…Dee

    • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

      McConnell and other Republican theives in Congress have made no secret of their desire to destroy Obama, even if it damages the Nation in the process.

      I CALL THIS TREASON!

    • Victor Vito

      I hate it when people misspell the Senator’s name!  It is Mitch McMarbles.

  • Tina

    If workers are charged INCOME TAXES, are companies charged
    INCOME TAXES FOR THE WORK THAT THEIR ROBOTS DO?

    This would make sense to do: 1)  it might discourage some of the replacement of workers with robots; 2)  it would raise money for unemployment funding, at the very least.

    Maybe something like this is already in place?  

    • Lee

      This a GREAT idea!

    • Tina

      By the way, my computer froze up as I was trying to post my post, above.  Spooky:  did robots hear by thoughts and take revenge?!???

      • Lee

        Robots can be ugly.

         I once witnessed a pack of robots at Cranbrook tackle another robot and cut his hair for acting too “human.”

        • Victor Vito

          Now THAT’S funny!!!

  • Lee

    Jubilee.

    Undermine all confidence in  our system?

    What confidence?

  • Chris

    TAX THE CRIMINAL RICH. 

    TAX THE TREASONOUS MULTI-NATIONAL CORPORATIONS.

    • Still Here

      All caps makes this even more laughable than it otherwise already is.

      • Chris

        Yeah Still Here. I know that you are a shill for them so carry on.

  • Dee

    Re: suppression of income growth by the Rich & the GOP….

    John, 

    I agree what we are seeing today is suppression of economic growth by the rich and I would add the sabotaging of the 
    American economy by the scumbags in the GOP Leadership. 

    i suspect we have all seen or heard of reports of the rich sit-
    ting on their money and refusing to help out the American economy & indeed the people who helped build their wealth. 

    Just last week I read in the New York Time how the scumbags
    in the GOP leadership wrote a clause into the extension of the unemployment benefits (and payroll taxes)in February to throw many of the unemployed off the rolls in June….

    Just in time to dampen Obama’s re-election bid…All the while the rich and corporate America continues to receive Bush era tax cuts they don’t need…Shocking isn’t it? 

    You would think some of them would break away from this 
    corrupt and immoral mindset by now and condemn the GOP 
    and Wall Street. But I have seen no such organized political
    effort –even along the Warren Buffet /Secretary Lines…..

    I have no doubt if the Rich & the GOP achieve their collective goal and Romney wins the election – the middle Class & work ing class will feel they have nothing to lose in opposing GOP spending cuts and Wall Street’s indifference with another storming of the Bastille in this country…..Dee

    Storming of the Bastille In France 
    http://en.wikipedia.org/wiki/Storming_of_the_Bastille

  • masaccio

    Can’t you find economists who haven’t proven themselves to be dead wrong?

    • Chris

      I know. It’s like hearing how highly paid retards or shills for the criminal elite as the case may be.

  • HeidiFox

    I’d like to see some austerity in campaign financing.  Sinking money into 30 seconds ads that distort the truth may seem like a good investment to those who benefit, but reallocating those funds to growing the economy would help business and individuals.     

    • Still Here

      Advertising does expand the economy, so try again.

      • Chris

        You try again.

        Billionaires are buying this election and there is no reason ads shouldn’t be RUN FREE OVER PUBLIC AIRWAYS.

        • Still Here

          Billionaires only get one vote, same as you.

          Ads cost money, to create and buy time, I’m not sure what you’re talking about.

          • Chris

            Trying to be dense?

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            And succeeds BRILLANTLY.

      • jimino

         But government spending on bridges and roads does not.  Right?

        • Still Here

          Runaway government borrowing hurts economic growth as we are now witnessing.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            As does runaway theivery on Wall Street.

          • Still Here

            Please, one is real, the other a figment of your pathetic, warped mind. 

          • Still Here

            Apparently it got that way from your preoccupation with guys’ underwear no doubt.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            You are replying to yourself…what a moron.

          • Still Here

            You’ve added great insight into the causes of your addled mind.

          • jefe68

            Yeah, all that speculation and gambling is based on reality.

            What’s pathetic are your responses, weak insipid inanity.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            Exactly. Please do not expect much from a closed minded bot who only  vomits forth Republican talking points, and has NEVER had an original thought.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            As I have said:  Glass House, Rocks…you of all people should avoid nasty comments.

          • Pete

            All spending is good for the economy. It is the hording of money by the 1%’ers don’t spend that hurts the economy. It is money that was earned by the workers who spend lots and distributed to the elite who think they’re worth the obscene salaries and bonuses for stealing.
            The deficit will be paid when the money is fairly distributed for value instead of fame. The economy will grow, there will be less demand on government wellfare, more people will be paying taxes, and we’ll have a surplus.
            PAY THE WORKER not the elite and famous. 

      • HeidiFox

        True, advertising employs people who generate the ads, and campaign advertising employs the consultants and media buyers and generates revenue for the networks, cable companies, and other media outlets. Advertising that sells products keeps people employed in the industries manufacturing those products.  

        But campaign advertising is selling a candidate.  There is no long term growth generated from campaign advertising, except possibly to those who “buy” the candidate.  As you indicated in your response to Chris, billionaires get only one vote.  It doesn’t cost anything to vote for the candidate of your choice, so why spend so much money?  Someone thinks it is a smart investment….

      • SomeGuyNamedMark

        We can expand the economy via political advertising?  Brilliant!

        Of course that is money that could’ve been spent on investments, purchases, etc.

  • Pierre Demers

    I don’t believe any economist knows or understands what is going on in the economy. First; What is the economy? The economy is the measure on the exchange of goods and services executed by the exchange of money. The rate that money changes hands is the measure of the strength of the economy. All the talk about how much money is in the banks, government stimulus, lower taxes, deductions etc don’t mean a thing unless there is a healthy exchange of goods and services. The remark that business cost is mainly labor cost is partially right. All business cost is labor cost, the cost for the floor sweeper to the CEO. Yes, the CEO is labor cost. It is his job and unfortunately the value of the services that he contributes are no where’s near the value of his salary and bonuses. That cost of labor is shunted from the market place, thus as their salaries increse, the market for goods and services decrease up to ten fold, thus jobs to supply the market.
    Ultra high salaries of all kinds, exectutive salaries, pro-athlete, TV celebrities, university executives, you name them who collect million dollar compensation for adding very little value are destroying our economy by reducing the market place and these compensations must be eliminated.
    On way to do this is to modify the tax laws by not allowing ipayments to any individual that exceeds that of the president of the USA to be a tax dedutible expense. Ultra high salaries would come from profits and not costs. You bet that salaries would be set on value not status.
    With a strong economy the solution to all the other issues would have a chance of ucceeding.

  • Nbrockway

     http://krugman.blogs.nytimes.com/2012/04/24/rogoffs-bad-parable/

    Disappointing to see you have on two fellows whose views are complementary to each other’s, and wrong.  Above is a link to Krugman taking apart part of Rogoff’s analysis.  BTW, Rogoff has been quoted as agreeing with Krugman at least regarding the issue of debt/GDP triggers of crises in the short term.  But I would have had more confidence in your show today had you had a Keynesian on….
    Nancy Brockway

    • Still Here

      Please, Krugman had a whole hour a couple weeks ago to spout his big government garbage.

      See BBC for Rogoff looking sensible while Krugman senile.

      http://www.youtube.com/watch?feature=player_embedded&v=FFgJ9C4cJQs

      • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

        You, of all people, should not comment about others spouting “garbage”.  Any and all of your posts smell worse than Romney’s magic underware.

        • Still Here

          What is it with you and guys’ underwear?  Not that there’s anything wrong with that but I think you’re in the wrong forum.  You certainly never add anything to this one.

          • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

            What I always add is calling your monolithic and robotic lies and propaganda what they are. Simply that.

    • Gregg
      • jimino

        Those who are not fools.

        Those interested in hearing from someone who has been correct in the past.

        And, I would suggest, those who would not make England the vanguard of a global depression.

        • Gregg

          Funny, I would say the opposite. Krugman’s views are entirely dependent on who is in office. Anyone who has followed he the past decade knows he is far too partisan to be taken seriously.

          • jimino

             Gregg, you are absolutely wrong.  Krugman has criticized all the bad ideas implemented by both parties, including Clinton, Bush, and Obama, and both sides of Congress.  He, along with Joseph Stiglitz and Dean Baker, to name just a couple, is one of the few principled economists with a national voice.  AND, unlike anyone you can name that disagrees with his views, he has actually been right about how those ideas work in the real world economy.

          • Gregg

            Jimino, I just don’t want to argue about Krugman. My opinion is different. I can prove it in a half dozen comments and 1000 words but what’s the point?

            Doc’s funeral was in a little church in Deep Gap. I wasn’t there but the turnout was incredible from what I hear. I don’t know the ultimate truths but his wholesome, Christian  life seemed to have served him well.

      • jefe68

        A lot of people do. The world is bigger than your backyard.

        • Gregg

          Now that’s a hoot! Do you realize how far from my backyard the NYT is? Or This blog? They are a couple of my regular haunts. Meanwhile, if you have not seen the studied sober criticisms of Krugman throughout journalistic and economic spheres and weighed them accordingly then you are the one trapped behind the high fences of your own ideological prison.

    • Dee

      I agree Tom should have had Paul Krugman on the show 

      Why should we accept what those two economists say 
      at this point? We know little about their views and sus-
      pect them to express more right wing agenda…Dee

      P.S. Thanks for the Paul Krugman link–He is so honest and sincere–everything the above two economists are lacking in….Dee

      • http://www.jobwaltz.com JobWaltz.com

        Krugman is a partisan lunatic.

    • gilscotheron

       Krugman , haha perhaps you missed Rogoffs point about doubling down on the stimulus it is a mathematical suicide 8% of a falling GDP to 16%.  The debt is too great to service with Professor Ikea Prize’s plan.

  • John in Amherst

    The show’s competing pundits argue about fixes – stimulate or not to stimulate? 
    Pouring stimulus into a system that is dysfunctional at its core will not work.  There is a lot of capital pent up in banks and in the fortunes of very rich corporations and people that would otherwise be flowing in the economy, were the rules of the game changed a bit.  We don’t need to just stimulate, but to reformulate the economy. 

  • Still Here

    Lib whiners sucking from the government’s teat are plentiful today. 

    • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

      So too are closed minded, out of touch RIGHT WING NUTS, who post the same Republican lies OVER AND OVER AND OVER.

      • Still Here

        You must be the leader of the motely crew, truly the most pathetic of all the Obama sheep. 

    • Bernie 123

      Libs are the ones actually working for a living, starting companies, creating art and science, making do with little, etc.. Its the soft conservative’s who actually feed from the government trough – i.e. the military-industrial complex, the bond traders (on US Treasuries), the medical-industrial complex, the religious-industrial-education-government complex, etc. Conservatives are too fearful to try anything new or start a company without a government handout or cost-plus contract.

      • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

        I think you should add:  conservatives love WAR. They have never met a WAR they didn’t like, and didn’t want to send other people’s kids to die in. Or to spend other people’s money to fund their criminal defense contractors and lobbyists.

        While they LOVE war, they pray to thier false god of PEACE. Such hypocrisy.

    • Sam Walworth

      So, what is the alternate solution? Is it good? is it better?

      If yes, please explain.. how, may be in a nutshell.

      We are so eager to brace Small Government at all levels, No Regulation at all levels, dont we?

      I love the time, when East India company had come to India for business and they did a fantastic job in that..

      No regulations, no government and yes.. they believed corporations are people, hence they had army too..

      Second example is Irish potato famine, where in irish farmers’ produce had to be sold at market price which made potatoes out of the reach of the many dying kids  and yet again it was told that Market would sort everything out..

      Lets do that again…let market sort everything out.

    • SomeGuyNamedMark

      As opposed to conservative whiners who are happy to take their corporate handouts, disability checks, military spending, etc.

      • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

        And payoffs from corporate lobbyists.

    • Zero

      Why are the most productive states blue?  Why do counties with the highest property value vote blue?  Why do the states with the best universities vote blue?

      Why is the South fat and poor?

  • Bob Letcher

    I don’t see how political economists can hope to understand the ongoing economic “troubles” by listening through only their right  (-wing) ear, no matter how intently they appear to be trying.  How about a bit through some left(-wing) ear.

    What might they hear?  One possibility might be Michel Aglietta, arguing his “Theory of Capitalist Regulation”.   In his 1976 book, Aglietta argue that the surprising thing about capitalist eeconomies is not that they face occasional crises, but that they are ever free of crises–and that what stability there might be comes about as a chance occurrence.

    Throw in a corollary of the Law of Requisite Variety: The regulator of a system must be at least as comples as the system it is intended to regulate–which i mentioned in my posting last week.

    • Pierre Demers

      The role of capitalism to to corner the market.
      Our big businesses have already done that and now they spread the fruits of their victory only to a few elite. They spend lots of money paying their cronnies, basically paying lots of money for very little value, a practice that true capitalism abhors and defeats the strength of capitalism. The market place is tumbling and pretty soon  there won’t be any money to pay the ultra big salaries. Unfortunately, before that happens; there will be revolution.

  • Eternalist

    Yes, let’s trust the same economists who could not predict a housing bubble or recognize incompetent forecasting leading up to 2008. Economists are about as accurate as meteorologists predicting weather more than 2 days out. 

    What does my magic 8ball have to say? ..Ask again later

    • Zero

       Pray tell, who would know more about economies than economists? 

  • Bernie 123

    I’m not sure if Ken or Allen brought this up – but he mentioned that shale gas is going to save our economic problems for decades to come. Probably not true. The amount of gas and oil recoverable has been oversold. I’m guessing the cost will come back up as additional fracking efforts becomes necessary. What may happen is that the republicans will stamp out any chance for alternatives like wind and solar to catch up – therefore the consumer will get stuck paying for higher gas and oil costs. On the other hand - the republicans may get rid of the EPA so protection and remediation costs may be minimized.

    • http://riversong.wordpress.com/ Robert Riversong

      Fracking is already exempt from the Clean Air and Clean Water acts – otherwise it would not be economically feasible.

      • Still Here

        Hardly exempt, it completely complies.  

        • http://riversong.wordpress.com/ Robert Riversong

          July 29, 2011 
          Prohibited from regulating hydraulic fracturing under the Safe Drinking Water Act, the EPA took to the air yesterday, proposing federal regulations to reduce smog-forming pollutants released by the fast-spreading approach to gas drilling.

          If approved as currently written, the rules would amount to the first national standards for fracking of any kind, the EPA said. The agency sets guidelines when companies inject fluids underground for various purposes, but in 2005 Congress prohibited the EPA from doing so for fracking.

          The new EPA proposal would limit emissions released during many stages of natural gas production and development but explicitly targets the volatile organic compounds released in large quantities when wells are fracked. Drillers would have to use equipment that captures these gases, reducing emissions by nearly 95 percent, the EPA said.

          On April 17, 2012, the U.S. Environmental Protection Agency responded with new air emission regulations for the oil and gas industry under the Clean Air Act. Most notably, one of these new regulations governs air emissions from natural gas fracking wells, including emissions of greenhouse gases. Air emissions from natural gas wells were not previously subject to federal regulation.

          A recent Congressional investigation has found that 32 million gallons of diesel fuel have been illegally injected into the ground as a fracking chemical in 19 different states from 2005 to 2009. Diesel fuel is believed to be particularly damaging to water supplies, and because of this, remains the only fracking chemical still regulated under the UIC program of the SDWA.

          Despite their claims that the chemicals used in the fracking process is safe, some drilling companies have consistently refused to provide a comprehensive list of the chemical additives used in fracking fluid.

  • http://riversong.wordpress.com/ Robert Riversong

    What economists can’t understand, because it’s too far outside the scope of their discipline, is that global human civilization is at the end of an energy era, with peak everything (diminishing available resource supply) and the maximization of entropy, or irreversible disorder, chaos and dissipation – in the form of institutional breakdown, ecological collapse, species extinctions, and climate change.

    Towards the end of any technological energy paradigm, social institutions become more complex, more centralized and more frantically trying to outrun an exponentially-accelerating process of the conversion of usable material/energy into chaos (pollution, social breakdown, etc).

    We are in the endgame of the global economy and its resource, energy and technology base. Neither time nor entropy can be reversed (except locally, by creating “islands of order within a sea of disorder).

    As technologies and institutions become more complex, they are more prone to multiple simultaneous failures and systemic collapse. Both our fossil-fueled technologies and our resource-fueled economies are at the point of inevitable break down, failure, and collapse. There are no more fixes, as all “solutions” merely increase the complexity and through-put of the system and accelerate entropy and breakdown.

    If we were truly Homo Sapiens Sapiens (knowing or wise), we would be discussing how to shift to the next, more sustainable, more steady-state, and devolutionary economic, social and political system, which reverses complexity and centralization (of technology, power, control and wealth).

    • http://riversong.wordpress.com/ Robert Riversong

      What’s up with your adolescent trolling? Still have nothing useful to add to the conversation?

      Ted Kaczynski actually had a very thoughtful critique of modern civilization. But, clearly, he misdirected his destructive impulses – he should have sent a package to you if he really wanted to improve the world.

      For those who actually give a shit about these issues, the above ideas come from one who is pretty close to god: Jeremy Rifkin, author of the groundbreaking 1980 book Entropy and now the consultant to the European Union on transitioning to the Third Industrial Revolution, based on a post-fossil fuel energy environment.

      • http://profile.yahoo.com/PQOCSU3NJ5J6SSQBEM5YBFCPZY Jason__A

        You tell me that you are avowed admirer of a serial killer, and send death threats to someone you do not know….and YOU have the gall to ask me what I contribute of value?  Totally laughable.

        I think you need to be under the watchful eye of a competent medical professional who specialized in psychotic episodes.

        • http://riversong.wordpress.com/ Robert Riversong

          I’ve just reported you, FAX68, NPR listener and efe68 to WBUR/On Point and am about to report you all to the police, since one of you just called the school where I teach warning them that I am “dangerous”.

          This is not just childish and unethical behavior, but has now crossed the line into criminal conduct. 

          • Guest

            Good Job! Some of these posters are way over the line and certainly need to be reported. Please report back on these idiots, when you can. Keep up the good work. Thanks.

    • Davidgrg117

       I don’t agree with you that the only way for us now is to “circle the wagons”, that man as a species has reached the plateau of its existence, that we now gather and think in terms of just surviving day to day. The buzz-word is to be on just “sustainable” mode. That is buying into a belief that we should just lie-down and die. We should be very,very careful buying into this thinking that is being promulgated like wild-fire globally. Should we gather now at the wake of humanity and read the tombstone..Here lies the “spark-of-life of Human-kind”. YOU CHOOSE to put that SPARK OF LIFE to rest.

      • http://riversong.wordpress.com/ Robert Riversong

        Nothing I said suggests “circling the wagons” or giving up.

        Try reading it again without your blinders on.

    • SomeGuyNamedMark

      You have some interesting points, too bad some people react with childish tantrums in their comments.  You must’ve hit a nerve.

      The fact that a consumer economy, like pretty much all major ones today, depends on perpetual growth to thrive means that resource consumption will perpetually accelerate in spite of attempts to create sustainability.  It is a self defeating system.

      No form of life has ever escaped the twin boundaries of overpopulation and resource limits.

      • http://riversong.wordpress.com/ Robert Riversong

        Thanks. I’m glad that someone understands and appreciates the limits to a finite planet (and the infantilism of some respondents here).

        • bellavida

          I agree about the limits of the resources of the planet.  In fact, just this weekend we attended a 5 year-old birthday party for my daughter’s classmate. In addition to the heated in-ground pool with giant slide, what child also needs an inflatable jumpy house, genuine Hawaiian dancers to show the guests how to hula dance in a plastic grass skirt, and an enormous three-tiered cake as big as most wedding cakes I’ve seen.  The actual birthday child refused to participate in any of the activities, she almost seemed bored.  I looked at all the tossed hula skirts, plastic coconut drink cups and leis scattered around the patio that will all end up in a landfill.  I told another parent this at the party and she said to me you sound like you are jealous and bitter towards people that make a lot of money and anyway it’s all cheap and made in China, as if this forgives the wastefulness. My daughter got a homemade from scratch chocolate cake and some authentic pozole both made by her mom for her birthday, which she shared with family and close friends.  I enjoy your posts Robert!

          • http://riversong.wordpress.com/ Robert Riversong

            Thanks for sharing the story. It demonstrates two important things: 1) the extraordinary amount of excess and waste that the wealthy generate, and 2) that all the excess does not make anyone happy – in fact, quite the opposite.

    • http://profile.yahoo.com/5BK5ZRHNYEOEITWKOFOVJJPM2I Jinshun

      I would like clarification on your point here. Are you saying that our next technological, economic, energy, and political models should be shifting towards making technology and energy more readily available, with wealth and political power evenly distributed?

      • http://riversong.wordpress.com/ Robert Riversong

        I think it will have to be a much more fundamental shift than just that.

        Since we are reaching the limit of the planet’s carrying capacity, only a dramatic economic devolution will offer any chance of continuing the human saga for many more generations.

        We will need to reduce human population, but that will likely happen on its own through catastrophes of all sorts, including a possible global pandemic.

        Technology will have to be both decentralized and radically simplified, using no more than human or animal power of the daily “allowance” from the sun along with some geothermal and tidal power. We will rediscover the Appropriate Technology movement of the 1970s and the Small is Beautiful ethic of E. F. Schumacher.

        The entire concept of wealth will have to be revised to mean the inherent value of land and nature, neighbors and community, and personal skills and abilities. Money will either become local or a thing of the past, as direct trade, barter and time banks take over. Debt will be eliminated, as we can no longer rob the future to pay for the present. We will return to a gift economy, in which each person contributes to the good of the whole and each is given what they need but no more.

        It will be a materially simpler world but a far richer one in terms of what really matters.

    • Gregg

      I don’t think the end game is near. I figure we’re good for a while, at least through that Zager & Evans song. One thing’s for sure, doom and gloom always sells, always has.

      • http://riversong.wordpress.com/ Robert Riversong

        That’s funny, cuz it seems to me that hope (typically false hope) has been the salesman’s potion since time immemorial.

        • Gregg

          True enough, touche’.

  • MB

    Great topic, and overall good to see that people at least seem willing to ask some tough questions about the future of the global economy, and our entire socioeconomic system.  I encourage you, Mr. Ashbrook, to continue to look deeply into this topic, but broaden the points of view.  Your two guests today are too steeped in neoclassical economic dogma, which is too flawed to be of any help, and will only worsen our situation if followed.

    While the flaws are too great to enumerate here, and frankly a waste of time to address, in my opinion, I would like to recommend some alternative perspectives: Herman Daly, Charles Hall, Juliet Schor, Charles Eisenstein, Margrit Kennedy, Peter Victor, Peter Brown, David Korten, David Bollier, Alanna Hartzok, Riane Eisler, Gar Alperovitz, to name a few.  And the folks at Steady State Economics.

    The problem is not in resolving an economic crisis.  The problem lies with a requirement for a new economic system.  Industrial capitalism is inherently instable, and will exploit and consume peoples and nature (and ultimately even itself) until we have no world worth living in.  State socialism is essentially the same process, but the elites are within the state, rather than within the banks and corporations.  Either system, based on the primacy of the market society and fictitous commodification of people and planet, requires endless growth to provide benefit.  The only way this system can realize human well-being is through ever-expanding the pie, which is impossible on a finite planet.  At its core, the current problem is that capital has no stable investment, and has invented “novel” ways of generating (fictitious) wealth, through various obscure financial instruments.  Even if growth were possible, it would not solve the issues we face, as the benefit will not be spread widely, growth in the financial sector does not produce anything of real value, and growth will never provide the jobs we require.  At its core, the current problem is also that while we have money (and little need for austerity in the short term), in the long term,  energy and resource scarcity will forever change our economic system.  The system is and will be changed forever, as the age of exuberance draws to a close.

    The danger we must consider is the instability of the change; the way people experience change.  Our work must be to develop some sense of stability, even while we recognize that the future will be a low-energy economy, very different from what we have now.  Karl Polanyi’s analysis in 1944 is still relevant.  He recognized that the capitalist market economy is forever instable, and will precipitate countermovements which seek to insulate people from the destructive forces of free-market ideology.  The danger for us is in these possible countermovements, which include a more authoritarian political system here in the US.  We have all the pieces already in place, including a cultural fetish for militant nationalism, and this authoritarian response is unfortunately a real possibility.

    This is why we need an economy that is embedded within society, not the other way around.  The Occupy movement is essentially a movement for economic democracy.  We need an economy within democracy, within society, within biophysical limits.  Most Americans have little understanding of how to participate in democracy, however, and probably wouldn’t recognize it if it occupied your local public park.  Democracy is slow, and requires time.  Fortunately, rather than everyone becoming “more Germanic” and “productive”, as your guests suggest, in the future, we will have more time for the things that really matter, and we’d be better off if we would begin the transition to system that provides well-being with substantially less economic activity and work-time.  A democratic economy, neither free-market nor centrally planned, but organized through democratic processes, is possibly the safest and most stable way through the required transition to a sustainable society.  I encourage you to make some time to go deeper into this discussion.

    • Bruce

      Excellent points…as with the Riversong post below. I would add a few other authors to your list who have dealth with the need for a paradigm shift of one kind or another:

      –Thomas Friedman, who in a NY Times Op-Ed piece entitled “The Inflection Is Near?” asks if the collapse in 2008 represents something more fundamental than a deep recession, and instead signifies that our whole 20th century growth model is unsustainable economically and ecologically.  The scenario he describes is that of a society seduced by growth-mania and hyper-consumerism “hitting the wall [after the housing bubble burst] when both Mother Nature and the Market say NO MORE!”  For decades economists like Herman Daly have been discussing the potential consequences of ignoring the natural limits to growth.  Interestingly, in Daly’s earlier work at Louisiana State University there is an uncanny portent of many of the disastrous consequences of Hurricane Katrina for the population of New Orleans and the Gulf Coast. 

      –Amitai Etzioni, who discusses how the crisis in 2008 may yet lead to a transformation of society as we discard the old neoclassical growth model and look to replace our obsession with acquisition and consumerism.  In a New Republic article entitled “Spent,” Etzioni explores the need for a cultural change that embraces communitarian and transcendental values including mutuality, service, art, contemplation, etc.–values consistent with aspirations that are neither labor nor capital intensive. 

      Among the neoclassical orthodoxy, of course, these voices are considered heretical as is Joseph Stiglitz I suppose.  However, I believe Stiglitz’s focus on information asymmetry, monopoly power and inequality would also contribute greatly to our understanding of the inherent flaws within the neoclassical economic growth model and the need to reform/replace it with a construct that offers something more sustainable. 

  • K and C

    Dear Mr. Ashbrook,
    I listened intently today to your show particularly when you and your guests broached the subject of taxation of middle class and the rich; and the upcoming election. We are in the middle of researching an increase of almost 60% in our health insurance premiums. This investigation has been taking place for over a year. What we have uncovered has been referred to as a breach of fiduciary responsibility on those who should have had oversight on the fund. The problem lies with the fact the it is a “self funded plan” or this is what we have been told. We have met with CT state senators, the CT state health commissioner, and the state CT Attorney General and two Assistant Attorneys General(and many more). What we have also uncovered is that our town is not the only town whose self funded plan has virtually gone bankrupt. We have been told to hire a lawyer to fight this case. (A major problem associated with this is that no one has jurisdiction over municipalities who have chosen to operate a self funded plan. The state employees are overseen by the Comptroller’s office so interestingly, they are safe.) We cannot afford to hire a lawyer and fund a forensic audit and due to what we believe is a breach of the town’s ethics policy and a conflict of interest, our efforts to bring about union support is being squashed at the state level. We would like to meet with you to share our documentation. The npr website suggested this is the best way to make initial contact. Please email us at the following address if you would like us to forward a summary of this issue.  kladd@charter.net  Thank you for your consideration. K and C

  • http://www.jobwaltz.com JobWaltz.com

    On Point once again only presents Keynesian point of view that more intervention will fix the economy. Wrong wrong wrong. Please bring on Peter Schiff or someone from the austrian perspective to set things straight.

    • Roy Mac

      Sure, let’s get some Austrian voodoo into the mix; and bring along some Any Rand, too.  Hell, there’ll still be room for Timothy Leary and L Ron Hubbard!  It’s a BIG tent in this circus!

      • http://www.jobwaltz.com JobWaltz.com

        Austrian economists have credibility; they predicted the last financial crisis and that the “solutions” adopted would yield the desired results. Meanwhile the establishment and Keyensian cheerleaders have been wrong every step of the way. Google “Peter Schiff was right”. On Point has a responsibility to inform its listeners, not just reinforce the proverbial wisdom.

  • Gregg

    It’s not too late, look at Wisconsin. We don’t have to settle for fat union government contracts when a real world “git’r dun” mentality will do t better and cheaper… big time. We don’t have to have a bunch of malcontents occupying squat. We certainly don’t need their ilk calling the shots. Global economic stall, Schlobal economic stall… who cares? America will be fine as long as the whiners don’t take over. They had a crushing defeat tonight.

    • http://riversong.wordpress.com/ Robert Riversong

      By “the whiners” you must mean the Banksters and CEOs who were whining for a taxpayer bailout for “accidentally” destroying the economy.

      • Gregg

        As I recall the “banksters” wanted no part of the  bailout. My feeling is TARP, as hideously as it was implemented, staved disaster. I’m not smart enough to know if the medicine was worse than the cure or vice versa.

        • http://riversong.wordpress.com/ Robert Riversong

          734 banks took $205 billion from 10/2008 to 12/2009. Must have been a hard pill to swallow if they didn’t want it.

          http://money.cnn.com/news/specials/storysupplement/bankbailout/ 

          • Gregg

            I remember BofA didn’t want it but was forced to take it. They weren’t the only one.

          • Still Here

            Everyone was forced to take it so the ones who really needed it didn’t face a run or worse.

          • http://riversong.wordpress.com/ Robert Riversong

            Of all the big US banks that managed to survive the global financial crisis, Bank of America and Citigroup
            were the two widely recognized to be at risk of failure in late 2008 – early 2009.

            BofA ruled out a way to improve its earnings: cutting manager and executive pay, as the Japanese banks did in their bubble aftermath. The path of least resistance is to charge customers more. BofA tried imposing a $5 a month fee on debit card users and $6 to $9 a month for an “Essentials” checking account.

            Now Bank of America, which last fall announced plans to lay off 30,000 workers, is about to go on a hiring spree – overseas.

            America’s second-largest bank is relocating its business-support operations to the Philippines. The move, which includes a portion of the bank’s customer service unit, comes less than three years after Bank of America received a $45 billion federal bailout.

            BofA follows other major banks – JPMorgan Chase, Citigroup and Wells Fargo – that have already relocated portions of their banking operations to the Philippines.

    • jefe68

      They sure did, and I new they would.
      In the 50′s and 60′s 40% of the work force was in a union, now it’s about 12%. What’s interesting to note in the 50′s and 60′s the Chamber of Commerce
      endorsed collective bargaining. Now they fight the very idea of it as if it’s the plague.

      The median job in this country pays now about $34,000 a year, if you have it full time and you have it all year.  That’s half the jobs in the U.S. that pay less than $34,000.  A quarter of the jobs pay less than
      the poverty line for a family of four, $22,000 a year.  It’s amazing in this wealthy country that so many jobs pay so little.  And, in real terms taking inflation into account, the wage for the median job only went up, according to the Economic Policy Institute, only 7% in 40 years, less than 1/5th of a percent a year.

      There are 103 million people who have incomes below twice the poverty line; that’s below $36,000 a year for a family of three.  A third of the American people are in this low wage category.  We have become, in
      significant ways, a low-wage country.

      Source: Interview with Georgetown Law professor Peter Edelman.

      http://economichardship.org/peter-edelman-on-why-its-so-hard-to-end-poverty-in-america/

      This is what we have here, this is what the people of Wisconsin voted for, they want to become Mississippi.

      • Gregg

        You are confusing private and public sector unions. There’s a huge difference.

  • twenty-niner

    Venture-fueled bubbles (or tech bubbles) pop and lead to recessions, which can be sharp, but they are typically v-shaped with swift recoveries. In the aftermath, you have things like railroads, modern steel production, and recently, the internet – huge advances in technologies and the creation of whole new industries and markets.

    Debt-fueled bubbles (like the most recent) pop and lead to lost decades, like Japan in the 90s and the current decade for us. Debt doesn’t fuel high-risk/high-reward or tech. It fuels same old same old. Done building suburbs? Issue more debt and build some exaburbs, and then the roads to connect the exaburbs and the strip malls along the way. When a venture bubble collapses, there is no collateral to worry about. The investors know the risks going in and are prepared to lose everything.

    When a debt bubble collapses, the entire system is put at risk. Assets become worth less than the paper backing them. The paper loses value. Banks stop lending, and the assets go further down and value; and repeat. More debt-based stimulus to recover from the last debt bubble is lunacy. We need a tech boom, venture funded, and the government can set the stage:

    Mandate that all federal installations (including military) be at least 50% powered via green energy sources by 2025, and that those sources be at least 80% made in the US. This will set the moribund domestic green-energy market on fire. Note that you could have done this four years ago instead of pouring cash into Solyndra to build panels just as the Chinese started dumping theirs. This was brain-dead policy. The government shouldn’t be involved in trying to pick winners; we already have venture-capital firms for that. It can however, use its power to create markets and conditions to spur growth, but that requires leadership and some street smarts, things which are sorely lacking in DC.

  • gilscotheron

    Until we clean house with our regulators we will not be done with the debt driven derivative interest rate swaps driven bailout of non productive synthetic market experiments. 

    The Days of the rent to own credit bubble economy are coming to an end as the largest increase in world money supply pauses farts and digests.

    As a nation we need to come together and decide how best to regulate the money supply beast.  Obviously poor credit risks laid off with ever complex maths is not the answer.

    Gary Genslers latest subgenius moment is to allow other countries the ability to legally control our banks  swaps business ?  What the what? any Bannana Republic with a typerwriter and a xerox machine can write gibberish on a piece of paper declare it law and we the united states will have to obey it ? what kind of a brain dead monkey has Obama put in position to regulate this morass?  it is beyond beyond to expect the American people to swallow this whole.

    I have been all for Obamas social contract keep your fists out of my women’s wombs allow gay marriage lets get some affordable health care  but he has done nothing but bend us over for economic rape and pillage by the 1%.

    The Dodd -Frank rule si an obtuse madlibs map of regulatory reform it is a nightmare where we are still filling in the blanks.
    Wehn the banks like JPM  who are huge market makers in Commodities can bankrupt one of the most important Clearing houses MF global and then demand that the customers pay.

    If a bank like JPM who has been naked short in these markets can basically just flip over the game board and scatter the pieces to the wind and the regulators screw American clients  who were playing there.  These are not free markets, the game is rigged, and not against other nations but against our own people this is a horror show.

    The entire Derivative bubble places 700 trillion dollars on top of a 70 trillion dollar weak kneed  and wobbly G10 sovereign debt crisis. This is the Cat int he hat economy look at me look at me look at me now I can balance a cup and a cake etc….

     This is the issue of our time to right the ship of fools who built this mess and get to work building the amazing econmy of things and real ides not make believe maths in a worm hole in Basel or on Jamie Dimons, bloomberg terminal.

    Lets clean this up and hold our leaders feet to the fire to make markets that we can all play in and are not destroyed by thing one and thing two.

  • Warren

    Europeans didn’t cut anything,they raised taxes.They raised taxes and their economies went south

  • AC

    o darn; i just got this news flash. I’ll post again i can see something relevant…::::
    http://singularityhub.com/2012/06/06/canon-camera-factory-to-go-fully-automated-phase-out-human-workers/

    also, for those who skip down and have an opinion that the chinese worker’s hands can move faster than the robot, pls do not give an opinion when the tear-jerker, ‘carpal-tunnel/joint abuse’ epidemic documentaries start rolling out!! :P

  • JoeMarfaTX

    Future show on the world economy (maybe with NPR’s Science Studio):
    SEMICONDUCTORS CAUSE WORLDWIDE RECESSION – PEOPLE ARE OBSOLETE
    The Advancement in Computer Chip Technology is leveling the Income Levels of Western Economies to
    2nd World Economies.

    A mobile phone has more computing capacity today than all the computers it took to land a man on the Moon. Machines can be run by the most basic of technologically trained. Skilled or semi-skilled trades aren’t relevant to build the things we want. America and Europe have been competing with bowl-of-rice-a-day wages for decades, without realizing it, since the advent of the semi-conductor.

    We don’t even need fighter pilots anymore, just people with joy sticks in their hands. The IBM computer that beat the Jeopardy champions isn’t artificial intelligence – it’s real intelligence.

    This is why the median income over the last 30 years in the US and Europe hasn’t increased. We have reached the point where  the wages we get cannot buy what we used to take for granted. Our buying power will buy food, shelter and clothing, but not much else.

    Conclusion:

    World standards of living will continue to approach the same relative level with Western economies sliding down to the World’s lowest common denominator.

    Bill Clinton used to say “It’s the (American) Economy Stupid”. Now it’s the Global Economy Stupid. The American Economy as a single entity doesn’t exist anymore. Politicians are debating how we can get American jobs back (meaning the prosperity we had 30-40 years ago)? Good Luck with that.

    The good news is the American Dream is still alive and well: FREEDOM. To speak without fear. We’re going to live like everybody did for 150 years in America. So what? That’ll be good enough for me and I’ll bet for a lot of other people.

  • Aaron

    Tom, your show is fabulous!  I love how respectful you are, how well-informed, and just plain friendly too!  Keep up the superlative work; we’re loving it!

    Allen Sinai and Ken Rogoff are the worst guests I’ve heard on the show!   Everything they say is ambiguous and murky.  They spoke for so long, and said nothing!  And on such an exciting topic.  ”Washington needs to get out of town”?!  What does that mean?  These guys are a total waste of Tom’s time, and ours!

    • Slipstream

       Huh?  Are you kidding me?  I like what you say about Tom, I’m a big fan – but I thought Rogoff and Sinai were being very clear, and very dire, in their comments. 

  • Pingback: What We Fail To Talk About When We Talk About The Reinhart-Rogoff Austerity Debacle | Cognoscenti

ONPOINT
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Apr 25, 2014
President Barack Obama and ASIMO, an acronym for Advanced Step in Innovative MObility, bow to each other during a youth science event at the National Museum of Emerging Science and Innovation, known as the Miraikan, in Tokyo, Thursday, April 24, 2014. (AP)

Guns in Georgia. Obama in Asia. Affirmative Action. And Joe Biden in Ukraine. Our weekly news roundtable.

Apr 25, 2014
In this Saturday, Aug. 11, 2012 file photo, employees of the New Hampshire state health department set up a temporary clinic at the the middle school in Stratham, N.H., to test hundreds of people for hepatitis C related to an outbreak at nearby Exeter Hospital. A new drug, Sovaldi, is said to successful treat more than 90 percent of Hepatitis C patients. (AP)

Super expensive miracle drugs. How much can we afford to pay?

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Apr 24, 2014
A Buddhist monk lights the funeral pyre of Nepalese mountaineer Ang Kaji Sherpa, killed in an avalanche on Mount Everest, during his funeral ceremony in Katmandu, Nepal, Monday, April 21, 2014.  (AP)

A Sherpa boycott on Everest after a deadly avalanche. We’ll look at climbing, culture, life, death and money at the top of the world.

 
Apr 24, 2014
Senate President Pro Tem Darrell Steinberg, D-Sacramento, left, talks with Sen. Ed Hernandez, D-Covina at the Capitol in Sacramento, Calif., Monday, April 21, 2014. Hernandez proposed a constitutional amendment that would ask voters to again allow public colleges to use race and ethnicity when considering college applicants. The proposal stalled this year after backlash from Asian Americans. (AP)

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