Averting a Greek Tragedy – For Now Jayati Ghosh

The citizens of Greece are not the only ones who have been watching the tense negotiations between the new government in Athens (led by the radical party Syriza) and the European Union (led de facto by the Germans).  Not just in Europe, but everywhere in the world, people are watching with bated breath this most recent skirmish, part of a battle in what may turn out to be a protracted war between democracy and finance. Because this current struggle is really about much more than whether Greece should  continue with its fiscal austerity programme or the contradictions of remaining within…

Insolvency Protection and Fairness for Greece: Implementing the Raffer Proposal Kunibert Raffer

The financial crisis in Greece and the 'austerity measures' being imposed on the country has lead to disastrous results for the economy. Contrary to mainstream prescriptions that seek to bailout big financial institutions at the expense of the real economy, an alternative proposal that was originally proposed by the author has gained much credence. The ''Raffer Proposal'' (also known as the Fair Transparent Arbitration Procedure (FTAP)) has been endorsed and propagated by many noteworthy economists, NGOs, and the Jubilee Movement. This article espouses the basic tenets of the Proposal and explains how it can help resolve the Greek crisis. Implementing_Raffer_Proposal (Download…

Insolvency Protection and Fairness for Greece: Implementing the Raffer Proposal Kunibert Raffer

The financial crisis in Greece and the ‘austerity measures’ being imposed on the country has lead to disastrous results for the economy. Contrary to mainstream prescriptions that seek to bailout big financial institutions at the expense of the real economy, an alternative proposal that was originally proposed by the author has gained much credence. The “Raffer Proposal” (also known as the Fair Transparent Arbitration Procedure (FTAP)) has been endorsed and propagated by many noteworthy economists, NGOs, and the Jubilee Movement. This article espouses the basic tenets of the Proposal and explains how it can help resolve the Greek crisis. Insolvency_Protection…

Time to End the Madness C.P. Chandrasekhar

May brought home to the world evidence of the popular rejection of the irrational pursuit of austerity amidst recession in Europe and elsewhere. One telling signal was the victory of Francois Hollande in the French Presidential run-off, making this the first presidential victory for the Left since 1988 and only the second occasion when an incumbent French president has not been re-elected. Nicolas Sarkozy’s defeat may partly be the result of his excessively flamboyant style and arrogance. But it is largely the consequence of his willingness to collaborate with German Chancellor Angela Merkel in pushing for fiscal consolidation across Europe…

A Simple Proposal to Resolve the Disruption of Counterparty Risk in Short term Credit Markets Jan Kregel

In the middle of September of 2008, a year after the subprime crisis broke, US government officials announced the imminent collapse of US financial markets that would lead to conditions similar to those during the Great Depression. The cause was that the lending channels in the economy were "clogged" with impaired securitized mortgage-backed assets on the balance sheets of financial institutions.  The feared result is that non-financial business would not be able to fund productive activities that support growth and employment. They recommended a solution in which the US government would take impaired securitized mortgage assets off the balance sheets…

Return to Public Control, even if it’s not yet Renationalisation

There is growing evidence that the part-privatisation or sale of public utilities in the 1990s by governments that said they could no longer afford to put down money, neither ensured a cheap or efficient service for customers nor did it free governments of the burden of subsidy. The bluntest admission of the growing disenchantment with private-control of utilities and services has been voiced by New Zealand's Deputy Prime Minister Jim Anderton. Taxpayers in New Zealand, the United States and Britain have bailed out flopped companies or those teetering on the brink of bankruptcy. New Zealand's flag carrier, Britain's partly-privatised air traffic…

Argentina’s Collapse Incited the Largest Default in History Joseph Stiglitz

Pundits agree this is merely the latest in a string of bail-outs, led by the International Monetary Fund (IMF), that squandered billions of dollars and failed to save the economies they were meant to help. Some claim the IMF was too lenient while others say it was too tough. And some see the problem as self-inflicted through profligate and corrupt spending by Argentina .Such attempts at blame-shifting are misguided: The default can be seen as the result of economic mistakes made over a decade. Understanding what went wrong provides important lessons. The problems began with the hyper-inflation of the 1980s.…

Argentina : A cautionary tale from South America Jayati Ghosh

The comprehensive mess in Argentina today almost defies belief. At the turn of the year, the financial and economic collapse was near total, with banks closed, the state of the currency (and even its very existence) in some doubt, rapidly increasing unemployment, decline in almost all public services and shortages of liquidity that threatened access to basic food and necessary goods for survival for much of the population. cautionary_tale (Download the full text in PDF format)