In The News

Bailing Out Economies

Nayan Chanda August 1, 2008
Capital is mobile, seeking profit, and it moves to countries where the returns are higher, with no regard for immobile workers, explains Nayan Chanda in his column for Businessworld. Flush with cash, foreign investors in search of safe havens invested in bonds issued by US government-sponsored mortgage lenders, Freddie Mac and Fannie Mae. With the bonds not as safe as advertised, the US...

Too Big to Fail?

Peter S. Goodman July 24, 2008
The US has long been wary about moral hazard in financing – the fact that any expectation of rescues can increase risk-taking behavior. In the past, US capitalists urged stern measures, expecting companies and countries to pursue risks and accept losses if their ventures failed. As an economic recession looms, the US government increasingly engages in its own interventions, including a measure to...

McCain's Economic Plan: Tax Cuts vs. Balanced Budget

Michael Cooper July 18, 2008
Candidates for president must demonstrate they are responsible with taxpayers' money. Early on, Senator John McCain voted against Bush administration tax cuts and has long argued in favor of balancing the massive US budget deficit. But as the presumptive Republican nominee, McCain has since argued in favor of making the tax cuts permanent. US government spending is on a roll, with the war in...

Globalized Inflation

Joachim Fels June 20, 2008
Intricate connections between global economies – including trade treaties, exchange rates and foreign investment – prevent individual nations from completely controlling how their individual economies are molded. Low US interest rates have fueled a credit crisis and inflation so drastically as to render ineffective any region’s effort to staunch inflation. The inability of other regions, like...

The Health Care Trap

Richard Smith June 17, 2008
The wealthiest countries spend lavishly on health care. The growing expenditures create entrenched health-care systems that provide an increasing share of employment in those nations. Technological innovation – from development of new drugs to life-saving equipment – in the health-care sector, unlike other industries, tends to make prices rise rather than fall, explains Richard Smith in an essay...

Act Now to Prick the Oil Price Bubble

Meghnad Desai June 6, 2008
Analysts give plenty of reasons for the price of oil to climb – including increased demand from China and India, unrest in Nigeria, conflict in the Middle East, increased costs associated with exploration, limited refinement capacities. But these events are not new or sudden and probably don’t fully account for the steep increases, explains Meghand Desai, professor with the London School of...

Real Message Is Clear

Jennifer Hewett April 30, 2008
China’s boom has filled its coffers with lots of cash. Some nations, including Australia, want to slow the fast pace of China’s foreign investment – taking time to assess consequences. The most recent takeover target is West Australian iron-ore producer Midwest by China's Sinosteel, and the latter could be on the hunt for other iron-ore producers, reports Jennifer Hewett for the Australian...