The Fed's Cash Machine - The Atlantic (May 2009)

The Fed's Cash Machine - The Atlantic (May 2009): "As the housing collapse has turned into a financial crisis, and the financial crisis into an economic calamity, the government has tried furiously to keep the country free of breadlines and trash-can fires. Two of its interventions—the $700 billion bank bailout known as TARP and the $787 billion stimulus package—have inspired levels of partisan acrimony and journalistic scrutiny befitting a war vote. But neither of those initiatives, expensive as they are, approach the civic munificence displayed by the Federal Reserve."

The Quiet Coup - The Atlantic (May 2009)

The Quiet Coup - The Atlantic (May 2009): "Becoming a Banana Republic

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people."

National Journal Online - The K Street Conundrum: 'So Damn Much Money'

National Journal Online - The K Street Conundrum: 'So Damn Much Money': "It's an old and established idea, and the people that do it are not inherently bad people at all. The problem is the money and how dependent everybody has gotten on it."

FT.com / UK - Warning on crisis threat to democracy

FT.com / UK - Warning on crisis threat to democracy: "German voters could turn to extremist parties in this year's election unless there is an independent inquiry into the financial crisis, an ally of Angela Merkel, the chancellor, has warned.

'You should not underestimate the huge feeling of injustice among the people about what is happening, and it will only get worse,' Albert Rupprecht, chairman of the parliamentary committee that oversees the government's bank rescue action, told the Financial Times. 'If we cannot explain why the crisis took place, confidence in the economic system, the market, even democracy could collapse.'

Mr Rupprecht called for an inquiry modelled on the US investigation of the September 11 2001 attacks. 'We do not need a witch hunt or an inquisition tribunal, but we need to identify who or what was responsible for the crisis. We should not leave this to the populists.'"

FT.com / UK - Waterford Wedgwood to hasten overseas production

FT.com / UK - Waterford Wedgwood to hasten overseas production

Silver Linings - Martin Walker - The American Interest Magazine

Silver Linings - Martin Walker - The American Interest Magazine: "Detroit as we have known it is doomed; how we re-engineer the place for a sustainable future, rather than how we rescue its failed business model, symbolizes the way the economic crisis can be used rather than simply endured. Sometime over the next ten to thirty years, we will shift from a carbon-heavy to a carbon-lite economy and very dramatically reduce our reliance on fossil fuels. We will have to re-engineer our current energy, transport and probably our industrial systems.

Some of the implications of this may well be useful, if we are wise enough not simply to refurnish old infrastructure but leap over it to a new technological generation."

This is going to change more than our economic and industrial systems. The way American capital, manufacturing systems, managerial personnel and tastes spread around the world in the 20th century (as those of the British had done in the 19th century) is likely to be followed by their Chinese, Indian and Brazilian and Arab heirs in the future. Confucian values, Bollywood films, Islamic finance and haram rules of hygiene will simply be the most visible of the deep and subtle subversions that will challenge the Enlightenment universalism that Westerners, and particularly Americans, had assumed to be graven forever into the human DNA.

Maybe there is a fourth change on the way, a psychological shift that ought to be familiar to most of us from our parents and grandparents. The value system of the “Greatest Generation”, those who grew up in the 1930s, was distinctive. They believed in thrift, in collective action, in the ability and duty of government to do the right thing, and in the need for solidarity and self-sacrifice. And those values, expressed in the language and metaphors of the Bible—which was perhaps rivaled only by the Constitution as their common cultural heritage—comprised the message that Franklin Roosevelt delivered in his 1933 Inaugural Address:

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit. Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits.

Friedman - The Price Is Not Right - NYTimes.com

Op-Ed Columnist - The Price Is Not Right - NYTimes.com: "the premise that the distinction between the G-20 and the Copenhagen climate change negotiations is totally artificial. They are just flip sides of the same global problem — how we as a world keep raising standards of living for more and more people in ways that will not, as a byproduct, have both the Market and Mother Nature producing huge amounts of toxic assets.

The old system, which has reached its financial and environmental limits, worked like this: We built more and more stores in America to sell more and more stuff, which was made in more and more Chinese factories powered by more and more coal that earned more and more dollars to buy more and more U.S. T-bills that got recycled back to America in the form of cheap credit to build more and more stores and more and more houses that gave rise to more and more Chinese factories. ..."

FT.com Ask the expert -Stephen Roach

FT.com / Markets / Ask the expert - The future of capitalism: "Stephen Roach: The demise of capitalism is greatly exaggerated. As the free-enterprise system survived the Great Depression of the 1930s, I have little doubt it will reinvent itself and endure the current crisis. Yet we can and must do much better in making market-based capitalism a safer, more stable and sustainable system. There has been a major systemic failure of the model that has held the world together since the 1930s.

Governance, or the lack thereof – both within the private sector as well as by those charged with regulation and oversight – proved to be the weak link in the chain. As a first priority, that shortcoming now needs to be addressed head on.

In one key respect, that is already happening: Wall Street is being turned inside out right before our eyes."

Cover story: 'After capitalism' by Geoff Mulgan | Prospect Magazine April 2009 issue 157

Cover story: 'After capitalism' by Geoff Mulgan | Prospect Magazine April 2009 issue 157: "Capitalist materialism has undermined the incentives for people to have children, sacrificing income and pleasure for the hard grind of family life. (And meritocracy further encourages parents to lavish their ambitions for advancement on just one or two children.) Hence the sharply reduced birthrates across Europe and among white Americans. At some point the resulting demographic imbalances threaten to undermine the generational contract which any society depends on, with a growing group of the elderly demanding ever more from a shrinking group of younger workers. The collapse of the savings rate—to around zero by 2007 in the US when it needs to be closer to 30 per cent to cope with ageing, is a stark symptom of a capitalism that has lost the ability to protect its own future."

Lives of Poverty, Untouched by China’s Boom - New York Times

Lives of Poverty, Untouched by China’s Boom - New York Times

Cover story: 'After capitalism' by Geoff Mulgan | Prospect Magazine April 2009 issue 157

Cover story: 'After capitalism' by Geoff Mulgan | Prospect Magazine April 2009 issue 157: "what might come after capitalism?

Only a few years ago that question had been parked, deemed about as sensible as asking what would come after electricity. Global markets had pulled China and India into their orbit, and capitalism’s triumph appeared complete, with medievalist Islam and the ragged armies that surround the G8 summits jostling to be its last enfeebled competitor. Multinational companies were said to command empires greater than most nation states, and in some accounts had won the affiliation of the masses through their brands.

Yet the lesson of capitalism itself is that nothing is permanent—“all that is solid melts into air” as Marx put it. Within capitalism there are as many forces that undermine it as there are forces that carry it forward."

Wired 12.09: Let a Thousand Reactors Bloom

Wired 12.09: Let a Thousand Reactors Bloom