Political Economy

Politically the Fed is constrained. So this is the first salvo in a renewed easing campaign by the Fed. Right now everyone is acting like this isn’t QE. But I told you two months ago that it is.

This statement was issued to demonstrate coordinated global support in view of recent market turmoil.

The European Central Bank is now deciding how much liquidity to provide because it has received a quid pro quo from Italy that some analysts knew were necessary before the ECB would provide any liquidity. We will see soon whether this will…

Do I think this is a big deal? No. This move had been telegraphed for weeks. Moreover, the prospect of a double dip recession and a potential lost decade of debt deflation in the US is infinitely more important. The recent rally in Treasury…

The essence of classical free market economics was to restrict Executive power – in an epoch when war-making power was the major abuse of national interests. Just as the lower house of bicameral legislatures had taken over the power to…

Postmortems of last month’s European Union summit meeting have now turned to why the Greek debt rescue failed to restore investor confidence in the country’s finances. Many reasons are advanced: the failure to communicate clearly; the…

As Mr Zapatero put it on Saturday, when he announced the date of Spain’s general election, the decision “is in the country’s interest” since from now on there will be certainty, and “certainty is stability”. While it is quite possible that…

The widening European sovereign debt crisis is a direct result of this dangerous extend and pretend policy. Tomorrow we will see whether the ECB has the temerity to step in and start buying up Belgian, Italian and Spanish debt to stem the…

Michael Hudson and William Hartung make the argument that military spending was exempted from cuts in the debt ceiling deal because it had strong backers who protected it. They also reveal that the US debt ceiling was put into place to keep…

Unfortunately for President Obama, the economy is not doing well. And the cuts envisaged in this deal make that problem worse. From an electoral standpoint this is already becoming a problem in key swing states like Pennsylvania.