Strip Greenspan of Knighthood, says Albert Edwards of SocGen. Amen to that.
Raghuram Rajan provides a good overview of how the Western world came to rely on debt-funded growth. Inexplicably, he refuses to identify his own stance in the piece. It is not that difficult to infer. He should have been explicit. But, his proposed solution that liberalisation of services sector in continental (Southern) Europe and reliance on innovation and productivity sound theoretically nice. But, doing them is going to be harder. One thing, economic prosperity is not a linear thing that can be extended into eternity. It is cyclical. Even if a nation engaged in victorious conquests on a regular basis, there would be limits to economic growth.
GMO folks have been active in FT. Edward Chancellor is cautious – and rightly so – in acknowledging the effectiveness of the actions of the European Central Bank in avoiding a liquidity crisis. He is cautious – and not rightly so – in not counting its costs.
Veteran Jeremy Grantham looks at the egregiously unequal society that the United States has become.
Marshall Auerback argues that the elephant in the room is Spain and not Italy. Sounds quite probable.
Economic growth may not be perfectly linear, but its crests and troughs do fluctuate around an ever-rising line. This conclusion of the New Growth Theory seems right. So, are you arguing for the Malthusian theory when you say that economic prosperity is cyclical?
No, I am not. I do not know enough to argue for it or against it. It may appear to be an ever-rising line given our (still) finite (even if long) horizons.