The launch of the European economic and currency union is changing the political and economic landscape of Europe and may affect other parts of the financial world. In time, it may even modify the world dollar standard and give rise to a bicentric dollar-euro standard, which is the hope and dream of most Europeans.
In most cases, it is difficult to rein in a government's spending and taxing. It is the nature of government to expand its functions and imposts, even if there is no mandate to do it. This is the nature of democracy today, tomorrow, and yesterday. Any tax or office--no matter how ridiculous or cumbersome--will always find pals in Congress.
In its original meaning, "crisis" signifies a turning point that can either lead to improvement and recovery or to more severe deterioration. In the case of Argentina, with the future of the Argentinean people in mind, one must hope for the abandonment of its interventionist economic system, with its reliance on a bureaucratic apparatus and its self-chosen dependency on foreign credits.
Debt is great on the way up. You buy a house or buy stocks and they rise and your debt stays the same, accruing as it does some interest rate that is well below the rate of your advancing stocks and appreciating home. But when prices fall, debt becomes a very cruel master.
Since it takes some time to say for sure that we are in recession, by the time we know we are in recession, we are already most of the way through it. This time, it took eight months--from March until November 2001--to determine we were in a recession. Here we are, in December 2001, and there are some signs that we may soon start to recover.
Even without the war, we are doing everything wrong that the Hoover-Roosevelt-McDonald governments and the Strong-Norman bankers did in the 1930s, after their long decade of easy money and paper prosperity imploded under the weight of too much debt and too great a strain on real capital resources.
While the politicians and their media allies prattle on about "winners" and "losers" in the Microsoft antitrust case, they miss the larger story, one that has become a typical American tale: the ongoing assault of the Leviathan State upon the once free and productive business sector.
The publication of David DeRosa's latest book is all the more timely given the financial crises and stock market crises that littered the 1990s. The problem with DeRosa’s book, however, is that his solution offers no hope for stabilizing the system. Nicolas Bouzou reviews In Defense of Free Capital Markets.
Is there any merit to the popular definition of recession? Why must it be two quarters of negative growth and not one, or perhaps three? Frank Shostak gives another view and assesses the prospects for recovery.
One of Franklin Roosevelt's many schemes to "save capitalism from itself" in the 1930s was the creation of the Federal National Mortgage Association, known today as Fannie Mae. Created in 1938 as part of the Reconstruction Finance Corporation, Fannie Mae's original mandate was to purchase Federal Housing Administration loans.
