The Euro Bailout Plan Does Not Solve the ProblemThe bold measures taken by the Eurozone countries, the IMF and the US are to be applauded only in that the plan buys time for the restructuring of the Eurozone. It provides adequate liquidity in the near-term, and from the European perspective, is unorthodox indeed. By allowing the European Central Bank to buy [...] [ Continue Reading.. ]The Periphery of the Eurozone Should Redenominate this WeekendAs each day passes, and I watch and read about events in Europe, I grow increasingly frustrated. The Eurozone as it exists today is doomed, and if it isn’t soon dismantled, it risks derailing the worldwide now underway. Watching the Greek parliament pass an austerity bill for me was analogous to watching the [...] [ Continue Reading.. ]The US Should Buy Euros to Prevent Negative Effects on USI normally wouldn’t call for the US Government to intervene in foreign exchange markets, but I think we are posed with a difficult and unusual problem. Also, I don’t mean simple swap lines, but rather an increase in US international reserves is required. My personal view, as I have expressed on a number [...] [ Continue Reading.. ]Europe’s Fiscal and Monetary CrisisFor more than a year I have been arguing that the peripheral countries of Europe should leave the Eurozone. It was a political creation, without the wherewithal to adapt to the various and changing needs of the peripheral members. We are finally seeing that come to fruition with a vengeance. From [...] [ Continue Reading.. ]Dodd’s Banking Bill: What It Might Mean?There has been a lot of discussion in recent weeks about Senator Dodd’s proposed banking reform legislation, which differs in some ways from the House version. The key issue is, what does it mean? First, anyone who argues they understand all the ramifications of the bill are kidding you. His original bill [...] [ Continue Reading.. ]The Federal Reserve Should Not Be HawkishIt is pretty clear the recession is over. It is over because business inventories and spending on computers and software investment have risen rapidly. Consumer spending wasn’t and isn’t at center stage in the downturn nor the turnaround, at least not yet. We have also benefitted by a significant improvement in net [...] [ Continue Reading.. ]The Art of Governing: HealthcareAs my readers know, I have no specific preference for the overall structure of healthcare reform, with a few important caveats. When I worked on the Global Commission on Aging, I became familiar with systems around the world. All of them have problems of one sort or another. What is important to [...] [ Continue Reading.. ]Greece: The Final FrontierIt is not news to anyone that Greece is struggling with a fiscal crisis of major proportions. Unfortunately this is not the first time this has happened. In fact, Greece had to receive special assistance from the European Union (EU) in the early 1990’s, along with Italy, because its domestic debt was turning [...] [ Continue Reading.. ]A V-Shaped Recovery is Increasingly LikelyWe have the latest GDP estimates for 4Q09. They were quite good to say the least, even far better than this optimist expected. The economy grew at an annual rate of 5.7%, far above the long-term trend rate. As you know, I always like to look behind the numbers to see where [...] [ Continue Reading.. ]The Dynamic Duo: Bernanke and GeithnerFor my long-term readers, you know that when I first met Bernanke as a Federal Reserve Governor I found him the least impressive of all the Federal Reserve Governors I had ever met. He seemed to lack the market savvy necessary to do the job right. I was told he was an academic [...] [ Continue Reading.. ]
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