BarroMetrics Views: Larry Summers and The European Crisis
Firstly my apologies for a somewhat mixed publication recent. My aim is to publish at least a short blog Monday to Friday. This goal has been derailed, mainly due to rather difficult problem involving a crashed hard disk and restoration of my data files. Add to this the fact that my new ’school’ is taking far more time than I planned for, and you have my reason for not getting as much done as I would like.
Turning to today’s subject.
If we ever had any doubts that the US was heading towards at least a long-term recession, you need only read the article in FT by Senior Economic Advise, Larry Summars (http://www.ft.com/intl/cms/s/
The recommendations seem to be founded on two principles:
- Governments have an unlimited ability to spend money they don’t have (quantitative easing) and
- The effects of loose money policies can be solved by more of the same.
I only have one word to describe that article: unbelievable.
To take an example for another era and another country. Dr Jim Cairns, Treasurer, during the later days of the Whitlam Government in Australia (1972 to 1975). I recall a headlines in the Australian that quoted Dr Cairns with his message to the effect that ‘there was a new economics in town, Governments could spend any amount of money because Government was the source of funds’. Well, the late 1970’s and early 1980’s proved just how wrong that was.
With the policies of the learned politicians and academics we have at out helm, I guess we’re going to see again the lessons of the late 1970s and early 1980s.
Refer this blog post to a friend or colleague…
