Search

Begin New Search Topic Economics Political Geography United States

711. The Crisis and Fix Cycle

Author:
John H. Makin
Publication Date:
02-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The global financial and economic crisis that emerged in August 2007 has entered a dismaying fourth phase. The January 17–18, 2009, weekend edition of the Financial Times, which has been a major chronicler of the crisis and its many aspects, laid out a frightening timeline of an accelerating and intensifying oscillatory cycle of crisis and failed policy response that started just fifteen months ago. Each phase begins with a shock and ends with a seemingly decisive policy measure meant to contain or “fix” the crisis. Each phase is shorter than the previous one and culminates in a much larger policy response. Throughout the crisis, the losses of financial institutions have steadily grown at an accelerating pace as the underlying conditions in the financial sector and, since September 2008, in the underlying global economy deteriorate more rapidly. Such a disturbing pattern must be truncated by a large, coordinated global policy response to arrest the accelerating erosion of the market capitalization of multinational banks and insurance companies that has resulted.
Topic:
Debt, Economics, Markets, and Political Economy
Political Geography:
United States

712. Inflation Is Better Than Deflation

Author:
John H. Makin
Publication Date:
03-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
As the global financial and economic crisis has grown increasingly dire—the deterioration just since the November U.S. election is breathtaking—market participants and policymakers alike have looked to three past crisis models as part of an intensifying search for ways out of the current crisis. First, the Great Depression of the 1930s is being examined ever more closely for possible lessons now that commentators have moved past an under- standable reluctance to mention that experience as relevant to today's situation. Second, the Scandinavian financial crisis of the early 1990s, which included a proactive move toward bank nationalization by the Swedish government, is also widely discussed. Finally, many allusions have been made to the disquieting parallels between today's U.S. experience and that of Japan during its “lost decade” (1991–2001) of recession and deflation, especially after 1998.
Topic:
Economics and Markets
Political Geography:
United States and Japan

713. The Fed Battles Deflation and Class Warfare

Author:
John H. Makin
Publication Date:
04-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
On March 18, Federal Reserve chairman Ben Bernanke intensified the important battle against global deflation with a commitment to expand the Fed's balance sheet by an extra $1.15 trillion. With some luck and persistence, that step could boost growth by a percentage point or more and, even more important, substantially reduce the risk of deflation.
Topic:
Economics, Markets, and Political Economy
Political Geography:
United States

714. The Waning of U.S. Hegemony—Myth or Reality? A Review Essay

Author:
Christopher Layne
Publication Date:
07-2009
Content Type:
Journal Article
Journal:
International Security
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Over the next two decades, international politics will be shaped by whether the international system remains unipolar or is transformed into a multipolar system. Can the United States sustain its primacy? Or will the emergence of new great powers reorder the distribution of power in the international system? If U.S. power is waning, will power transition dynamics result in security competitions and an increased possibility of war? In particular, what are the implications of China's rapid ascent to great power status? If the United States is unable to preserve its hegemonic role, what will happen to the security and economic frameworks that it took the lead in creating after the end of World War II and that have provided the foundation for the international order ever since? In a world no longer defined by U.S. hegemony, what would become of globalization and the open international economic system that the United established after World War II and expanded after the Cold War ended? This essay reviews five publications that grapple with these questions: Stephen G. Brooks and William C. Wohlforth, World Out of Balance: International Relations and the Challenge of American Primacy; Parag Khanna, The Second World: Empires and Influence in the New Global Order; Kishore Mahbubani, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East; National Intelligence Council, Global Trends 2025: A Transformed World; and Fareed Zakaria, The Post-American World.
Topic:
Economics and War
Political Geography:
United States, China, and Asia

715. The Great Crash, 2008

Author:
Roger C. Altman
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
The financial crisis has called into serious question the credibility of western governments and may precipitate an eastward shift of power.
Topic:
Economics and Government
Political Geography:
United States, Europe, and Washington

716. A Balanced Strategy: Reprogramming the Pentagon for a New Age

Author:
Robert M. Gates
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
The Pentagon has to do more than modernize its conventional forces; it must also focus on today's unconventional conflicts -- and tomorrow's.
Topic:
Development, Economics, and Governance
Political Geography:
Afghanistan, United States, and Iraq

717. The Making of a Mess: Who Broke Global Finance, and Who Should Pay for It?

Author:
Harold James
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
The current economic crisis may have one winner: the Chinese financial model, which -- together with the IMF -- holds the keys to fixing the problem.
Topic:
Economics and Globalization
Political Geography:
United States and Europe

718. The Japan Fallacy: Today's U.S. Financial Crisis Is Not Like Tokyo's "Lost Decade"

Author:
Richard Katz
Publication Date:
03-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
The financial crisis of 2008 need not usher in a replay of Japan's "lost decade" of the 1990s. The current crisis is the result of correctable policy mistakes rather than deep structural flaws in the economy.
Topic:
Economics and Political Economy
Political Geography:
United States and Japan

719. A New Information Infrastructure for Financial Markets

Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Information about prices and quantities of assets lies at the heart of well-functioning capital markets. In the current financial crisis, it has become clear that many important actors-both firms and regulatory agencies-have not had sufficient information. Distributed by the Center for Geoeconomic Studies, this Working Paper proposes a new regulatory regime for gathering and disseminating financial market information. The authors argue that government regulators need a new infrastructure to collect and analyze adequate information from large (systemically important) financial institutions. This new information framework would bolster the government's ability to foresee, contain, and, ideally, prevent disruptions to the overall financial services industry.
Topic:
Economics, Government, Industrial Policy, International Trade and Finance, and Markets
Political Geography:
United States

720. Economic Conditions and U.S. National Security in the 1930s and Today

Author:
Martin S. Feldstein
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
This paper comments on the experience of the U.S. economy in the 1930s, its lessons for managing the current economic downturn, and the relation of U.S. economic conditions to our future national security. Some of the conclusions are: (1) Although the current recession will be long and very damaging, it is not likely to deteriorate into conditions similar to the Depression of the 1930s. Policy makers now understand better than they did in the 1930s what needs to be done and what needs to be avoided. (2) The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. (3) A well-functioning system of bank lending is necessary for economic expansion. We have yet to achieve that in the current situation. (4) Raising taxes, even future taxes, can depress economic activity. The administration's budget proposes to raise tax rates on higher income individuals, on dividends and capital gains, on corporate profits and on all consumers through the cap and trade system of implicit CO2 taxes. (5) Inappropriate trade policies and domestic policies that affect the exchange rate can hurt our allies, leading to conflicts that spill over from economics to impair national security cooperation. Reducing long-term U.S. fiscal deficits would reduce the risk of inflation and thereby reduce the fear among foreign investors that their dollar investments will lose their purchasing power. (6) The possibilities for domestic terrorism and of cyber attacks creates risks that did not exist in the 1930s or even in more recent decades. The scale and funding of the FBI and the Department of Homeland Security is not consistent with these new risks.
Topic:
Economics, International Trade and Finance, Terrorism, and Financial Crisis
Political Geography:
United States