In The News

The Death of the Washington Consensus?

Kevin Gallagher October 15, 2008
US officials over the past two decades insisted that free trade without limits tend to provide more benefits than costs for American and other consumers. Princeton economist Paul Krugman won the Nobel prize for economics, not for his columns for the New York Times, but for his study of international trade and his stance against trade without limits. Krugman has long insisted that government...

The Virus of Greed

Nayan Chanda October 1, 2008
Global commerce depends on an odd combination of desires, the pursuit of profits and a need to please diverse customers. “The search for ever higher returns has driven traders and financiers ever since humans have learned to exchange goods or sought to grow their wealth through investments,” explains Nayan Chanda, editor of YaleGlobal in his regular column for Businessworld. Financiers on Wall...

Financial Troubles Humble US

Bob Davis September 29, 2008
A credit crisis combined with immense US government, corporate and personal debt has left the country with a cash-flow problem. The Bush administration and US Congress present a $700 billion government rescue for flailing financial institutions, but that plan depends on someone purchasing US Treasury bills to pay the bill. If foreign investors were to reject such Treasury notes, interest rates...

Can Asia Rescue the Global Economy?

Linda Lim September 29, 2008
During the 1997-98 Asian financial crisis, US financial experts lectured Asians to accept good governance, transparency and free-market outcomes while avoiding drastic government intervention. Asian nations indeed tightened their belts, saving funds and seeking out safe havens for funds, including US Treasury bills. “This inflow of foreign lending conveniently enabled the Bush administration to...

Keeping Up With China's Olympic Shine – Part II

Alexandra Harney September 24, 2008
China has become known as factory to the world – as manufacturers invested in factories to take advantage of a labor force that accepts low wages and a government with minimal environmental standards and even less enforcement. Shoppers like low prices while the companies enjoy immense profits. China, indeed the entire world, pays a heavy price for manufacturing firms gathering in a place with...

Paulson’s Moment of Truth

September 18, 2008
With major firms imperiled, the US government has had to up-end its economic policies by intervening and extending rescues to private investment banks, government-sponsored lenders and a major insurance firm. The bail-outs have added to US debt while deflating value of the US dollar. By refusing to bail out investment bank Lehman Brothers, US Treasury Secretary Henry Paulson signaled that...

Wall Street Dodges a Bullet, How About Next One?

David Dapice September 17, 2008
Low interest rates prompted many investors and homeowners to pour savings into real estate and homes. Investors, convinced that prices could not fall, purchased debt packages including mortgages based on ample credit with little down payments. Prices for homes and investments soared, with the total value of US housing going from about $12 trillion in 2000 to more than $20 trillion in 2006. Now,...