In The News

Mounting US Debt Burden Threatens Poorer Nations

David Dapice March 2, 2009
US prices ballooned, and then burst. Now the government must borrow heavily once again to stave off an abrupt collapse in values and demand. Such heavy borrowing, 12 percent of the country's GDP this year, depends on the willingness of other countries to buy US debt. But solvent countries and sovereign wealth funds are nervous about their own stockpiles and the health of the global economy:...

Will Services Provide Our Salvation?

Hamish McRae February 18, 2009
Some industries center on necessities and conventional wisdom might suggest that those companies might be less devastated by economic crisis. Even as auto manufacturers lay off workers, companies like Domino’s Pizza hire extra employees. Unfortunately, many of the new service jobs pay less than the old manufacturing positions, explains Hamish McRae in a column for the Independent, adding there is...

Testing Times: Collapse of European Industry Worse than Expected

February 13, 2009
An onslaught of bad news continues to hit Europe, with protests about economic troubles on the rise. Some European leaders, like French President Nicolas Sarkozy, resort to nationalist and protectionist approaches. Meanwhile, the European Union’s current president, Czech Republic Prime Minister Mirek Topolanek, stresses the need for “adherence to the rules,”including continued trade among the EU...

Another Fine Mess

February 3, 2009
As European banks receive another round of government assurances, the purpose of funding is to insure toxic assets and stimulate lending. Despite protests from some quarters of society, these bailout packages, by shifting default risk from the banks to the governments that back them, have kept fear of bank runs at bay, according to an article in the Economist. Still, not enough credit is flowing...

US and China: Grappling Over Economic Rescue – Part II

Edward Gresser February 2, 2009
With the rest of the world looking for leadership in emerging from economic crisis, how to stimulate the growth in China and the US has become the most urgent task. Other nations expect the pair to coordinate policy and do what they can to unfreeze credit, restore stable growth and ease unbalances. Currency rates are one of the ways to moderate swings in global growth and trade flows, explains...

American Power Is on the Wane

Paul Kennedy January 16, 2009
The US has the most to lose in the current economic crisis, with growing debt, as Washington continues to churn out so-called stimulus packages. Yale historian Paul Kennedy warns that, in addition to the risk of wasting these fiscal packages on aging industries and dubious lobbyist causes, there is little chance that domestic investors can afford to cover the debt. The stimulus packages rely on...

Chinese Exports and Imports Continue to Shrink

Keith Bradsher January 14, 2009
China’s exports and imports continue to decline, setting up a scenario for more job losses and possible social unrest, reports Keith Bradsher for the New York Times. The sharp decline follows reduced consumer spending in the US and the West, down even for the holiday month of December. The global credit crunch also contributes to the decline: “Chinese suppliers have become more wary of shipping...