Opinion

Chrystia Freeland

Davos prescriptions for the U.S. economy

Chrystia Freeland
Jan 25, 2013 16:30 UTC

DAVOS, Switzerland – Get ready for a new elite consensus on the U.S. budget deficit. One of the functions of the World Economic Forum – decide for yourself whether this is a virtue or a vice – is to give the plutocrats a venue for figuring out their party line. Think of it as crowdsourcing for the 0.1 percent.

For a long time, the conventional wisdom among this crew has been that the deficit and the debt were the United States’ chief economic problems. That’s why I wasn’t surprised when Martin Sorrell, the head of the global communications giant WPP, referred to the deficit as the country’s most important economic issue at a breakfast discussion he moderated at the forum this week. The conversation was off the record, but when I asked Sorrell if I could quote his comment, he happily doubled down: Not only was the deficit the United States’ most important economic woe, it was the most important economic issue in the entire world.

“This is the world’s gray swan,” Sorrell told me, in a play on the idea of unpredictable, powerful “black swan” events, popularized by the financial scholar Nassim Nicholas Taleb.

Most of the panelists (disclosure: I was one of them) at the WPP conversation agreed with Sorrell – but that Davos consensus may be on the verge of shifting. One of the most convincing signs of that switch came from an interview I did here with Lawrence H. Summers, a Harvard University economist and a monthly columnist for Reuters.

Summers, as he put it himself, is hardly a radical – his resume includes stints as secretary of the Treasury, president of Harvard, and President Barack Obama’s chief economic adviser. He is also an academic economist in excellent standing: Summers was one of the youngest tenured professors at Harvard and a recipient in 1993 of the John Clark Bates Medal, which is awarded every two years to the best economist under 40.

Interview with Christine Lagarde at the IMF

Chrystia Freeland
Jan 18, 2013 16:27 UTC

Managing Director of the IMF Christine Lagarde sat down for an interview with Chrystia Freeland yesterday, January 17th, following the IMF’s New Year Press Briefing.

CHRYSTIA FREELAND:

Thank you for joining me, Madame Lagarde.

CHRISTINE LAGARDE:

My pleasure.

CHRYSTIA FREELAND:

One of your themes as we enter 2013 is that financial reform must continue.  And you have just said that you’re concerned, you see a waning commitment to financial reform.  What do you see going on?

CHRISTINE LAGARDE:

I see a lot of pressure coming out of the industry.  Which is clearly part of their job.  They will naturally lobby to support more flexible, more accommodating regulations.  I think, you know, the financial sector is so particular and so special because of the confidence factor associated with it and the role played by the authorities sometimes in order to support that sector, that it warrants stronger regulations.

Finding economists’ common ground

Chrystia Freeland
Jan 11, 2013 15:41 UTC

This is a tough time for experts. Empowered by the Internet and embittered by the sour economy, many people doubt the wisdom of expert elites. Journalism sometimes casts further doubt by seeking polarized positions that can draw an attention-grabbing debate, or by taking refuge in he-said-she-said accounts to avoid the harder job of figuring out who’s right.

Now one tribe of specialists – economists – is striking back. Concerned that the great unwashed have come to see all economic proposals as being equally valid, the University of Chicago Booth School of Business has led an effort to figure out what economists agree on, where they diverge and how certain they are about their views.

To do that, the Booth school called on reputable economists to join its panel of experts. Each week, the panelists are asked whether they agree or disagree with a particular economic idea.

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