Wednesday, September 15, 2010

Today's Best Reads

1--Eichengreen: Competitive Devalution to the Rescue, Economist's View

2--EPI: State and Local Public Employees Undercompensated, Economist's View

3--It’s Demand, Stupid, Paul Krugman, New York Times (great chart proves employers motivated by final sales not taxes, regulation etc)

4--Driving Another Nail Into the Coffin of the New Deal, Alan Nasser, counterpunch

Excerpt: "What is most significant about last Wednesday’s speech is its reassertion of Obama’s adamant rejection of New Deal liberalism. There was a flat-out dismissal of direct government creation of jobs: “I’ve never believed that government’s role is to create jobs or prosperity…I believe it’s the private sector that must be the main engine of our recovery.” There will be no public works programs. Not because they haven’t worked in the past; the WPA was a transcontinental project and employed vast numbers, and no one denies its success. Nor because of lack of need; we are in precisely the sort of situation which Keynes correctly identified as requiring government to take on the responsibility for creating useful employment. Such is the position of the most estimable of liberal economists, including Joseph Stiglitz, James Galbraith and Robert Kuttner. Obama sneeringly dismisses them as “the professional left”.

5--Goldman: Fed May Announce New Asset Purchases in November, Wall Street Journal (Goldman predicts fed will initiate another $1 trillion QE program)

6--Philly Fed Index shows contraction in September, calculated risk (Uh oh, manufacturing is headed south)

7--Greece: The Lady doth protest too much, Yves Smith, naked capitalism (Greece still on track for restructuring debt)

8--The Eurozone's autumn hangover, Nouriel Roubini, Project Syndicate (Roubini gives the EU a 1-in-3 chance of surival)
Excerpt: "Germany’s temporary success is riddled with caveats. During the 2008-2009 financial crisis, GDP fell much more in Germany – because of its dependence on collapsing global trade – than in the United States. A transitory rebound from such a hard fall is not surprising, and German output remains below pre-crisis levels.

Moreover, all the factors that will lead to a slowdown of growth in most advanced economies in the second half of 2010 and 2011 are at work in Germany and the rest of the eurozone. Fiscal stimulus is turning into fiscal austerity and a drag on growth. The inventory adjustment that drove most of the GDP growth for a few quarters is complete, and tax policies that stole demand from the future (“cash for clunkers” all over Europe, etc.) have expired."

9--Report Blames Big Banks for Payday Loan Growth, Wall Street Journal (The poor get shafted once again)

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