A few items about the G20 meetings have been languishing on my desk (or rather as tabs in my browser). It is time to liberate them (and my browser) by turning them into a blog post. But first: on deficits, etc.:
On deficits: Our intern Julie Herlihy put together a deficit page for the D&S website, listing all of our articles on budget deficits from the past few years.
Also on deficits: Former D&S editor Abby Scher had a piece at Truth-Out earlier this month about activism in New York for more progressive taxation.
On other topics: Simon Johnson on the Dodd-Frank Financial Reform Law (aka the new finance reform law), here; hat-tip to Tim Sullivan of United for a Fair Economy. And Nouriel Roubini on why there will be a double-dip recession, here; and a Financial Times piece on the Basel Committee's initial proposals for international banking regulation, here. We will be covering Basel for the magazine and for the new edition of Real World Banking and Finance, due out in October.
Now, on to the G20--I will keep this brief, because some of these are stale:
The alarming news from the G20 (aka the Group of 20 Finance Ministers and Central Bank Governors) meetings late last month in Toronto was that Europe seems to be forging ahead with the plan of initiating austerity measures to deal with the European debt crisis. Several related items (some not so related):
Here is Paul Jay, head of the Real News Network, arguing that this is a very bad idea.
And here is Paul Jay interviewing Bob Pollin, D&S pal and head of the Political Economy Research Institute; Bob also argues that this is a very bad idea and could lead to a double-dip.
Here is the Financial Times' Martin Wolf sounding similarly pessimistic about the G20's policies, and comparing them to the children's game "Pass the Parcel." (I don't remember that one...)
Meanwhile, most Europeans polled seem to have drunk the deficit-reduction Kool-Aid, the Financial Times reported last week:
The survey also indicates that a majority of people in the European Union’s five largest countries disagree with the decision of governments to let their budget deficits rise in order to combat the financial crisis that erupted in 2008.
But in Spain, according to The Guardian's Martyn Richard Jones, is having "a Socialist moment" in response to its economic woes.
And the New York Times reported just yesterday that after all the fuss in the bond markets about Europe's debt crisis, "Debt Worries Ease in Europe."
Spain held an auction of 15-year bonds last week that went off without a hitch, raising 3 billion euros, or about $3.8 billion, at a relatively favorable interest rate of 5.116 percent. That was up from 4.434 percent on a debt sale in late April, though the latest one was far more heavily subscribed.
Also last week, Moody’s Investors Service downgraded Portugal’s credit by two notches, citing the nation’s debt burden and poor growth prospects, a sign that the country’s underlying problems are not over. Yet investors, rather than punish assets linked to Portugal’s economy, seemed to take the news in stride.
Go figure. Let's see whether that keeps Europe's leaders from proceeding with potentially disastrous, double-dip-inducing austerity measures.
--Chris Sturr