The current economic crisis could help us to appreciate that many things are more central to our happiness than our ability to spend money on fashion, expensive watches, and fine dining. But the danger is that the potential for a real change in values will be co-opted, as has happened so often before, by those who see it as just another opportunity to make money.
MELBOURNE – Is the global financial crisis an opportunity to forge a new form of capitalism based on sound values?
So French President Nicholas Sarkozy and former British Prime Minister Tony Blair appear to think. At a symposium in Paris last month entitled “New World, New Capitalism,” Sarkozy described capitalism based on financial speculation as “an immoral system” that has “perverted the logic of capitalism.” He argued that capitalism needs to find new moral values and to accept a stronger role for governments. Blair called for a new financial order based on “values other than the maximum short-term profit.”
It is surprising how readily politicians of all parties – even strong ideological defenders of the unregulated market – accepted the idea that the state should bail out banks and insurance companies when they got into trouble. With the exception of a small number of ideologically committed defenders of free enterprise, few were willing to take the risks inherent in letting major banks collapse.
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China’s success in the next five years will depend largely on how well the government manages the tensions underlying its complex agenda. In particular, China’s leaders will need to balance a muscular Communist Party, setting standards and protecting the public interest, with an empowered market, driving the economy into the future.
The preference of some countries to isolate themselves within their borders is anachronistic and self-defeating, but it would be a serious mistake for others, fearing contagion, to respond by imposing strict isolation. Even in states that have succumbed to reductionist discourses, much of the population has not.
When the Bretton Woods Agreement was hashed out in 1944, it was agreed that countries with current-account deficits should be able to limit temporarily purchases of goods from countries running surpluses. In the ensuing 73 years, the so-called "scarce-currency clause" has been largely forgotten; but it may be time to bring it back.
Republican leaders have a choice: they can either continue to collaborate with President Donald Trump, thereby courting disaster, or they can renounce him, finally putting their country’s democracy ahead of loyalty to their party tribe. They are hardly the first politicians to face such a decision.
As the global economic recovery strengthens, and central banks move to raise interest rates, they need to improve their communication with the general public. To do that, they should follow the trail blazed by Donald Trump.
With talks on the UK's withdrawal from the EU stalled, negotiators should shift to the temporary “transition” Prime Minister Theresa May officially requested last month. Above all, the negotiators should focus immediately on the British budget contributions that will be required to make an orderly transition possible.
In recent decades, as President Vladimir Putin has entrenched his authority, Russia has seemed to be moving backward socially and economically. But while the Kremlin knows that it must reverse this trajectory, genuine reform would be incompatible with the kleptocratic character of Putin’s regime.
As a part of their efforts to roll back the 2010 Dodd-Frank Act, congressional Republicans have approved a measure that would have courts, rather than regulators, oversee megabank bankruptcies. It is now up to the Trump administration to decide if it wants to set the stage for a repeat of the Lehman Brothers collapse in 2008.