The Great Debate

By David Callahan
The opinions expressed are his own.

Pop quiz: What’s so bad about the financialization of the U.S. economy over recent decades?

If you’re like most people who are uneasy with the outsized power of finance, chances are you can’t boil down your concerns to a pithy sound bite. So why is there such ridicule of the protesters “occupying” Wall Street for lacking a coherent message?

Three years after the 2008 financial crisis, it is still hard to neatly encapsulate the problem with letting bankers and traders dominate American economic life. Once Congress passed the Dodd-Frank reform law last year, most political leaders and commentators moved on to other issues, leaving behind an unfinished debate about Wall Street’s influence.

Now, thanks to protests in New York and a growing list of other cities, this debate is percolating once more. And guess what: the supposedly incoherent protesters actually have a pretty strong critique of what is wrong with America’s financialized economy.

Angus Johnson, one of the most astute bloggers following the protests, wrote recently that if you think that the protesters have “no message, you’re not paying attention.” They clearly believe that there is “something seriously broken” in America’s economy and politics and that “an accelerating concentration of wealth and power in the hands of a small minority” is to blame.

– Neil Collins is a Reuters columnist. The views expressed are his own –

This rather odd chart from Monument Securities says something curious — http://graphics.thomsonreuters.com/commentary/INDEX-LINKED-CURVES.pdf. — It shows that British investors (or at least the buyers of UK Government index-linked gilts) are much keener to buy protection against inflation than the holders of French and U.S. government bonds.

A yield curve plots the return on bonds against their longevity, and this one shows that in all three countries, the short-dated index-linkers promise to be pretty dull investments.

Don Tapscott is chairman of the think tank nGenera Insight and the author of 13 books on the impact of the Internet on society. His latest book, Grown Up Digital: How the Net Generation is Changing your World, discusses the Obama campaign and its implications for democracy. The views expressed are his own.

When President Obama announced last month that he’ll ask ordinary Americans to help him change America, it didn’t take long for the influencers inside the Washington beltway to ring the alarm: What happens if ordinary Americans actually come up with some new ideas to run government? Will things get out of control? Will they become bullies who will force Obama and Congressional lawmakers to bend to their will?

To me, they sound a lot like the traditional marketers who are worried that they’re losing control over their brand. Both marketers and lawmakers are struggling to adjust to a digital world where consumers and voters now have powerful tools to talk back, and even influence the brand or the policy. So let me give the Washington lawmakers the same message I have delivered to the marketers: Let go. You can’t control everything. The genie has slipped out of the bottle and she’s not coming back. And I think this is a really good thing.

Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.

Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.

“I’m not saying its going to be easy, I’m just saying that there is a real opportunity for policymakers to focus on coming up with more innovative ways of financing economic development. In a way the crisis actually provides the African governments with the situation where they cannot rely on aid budgets coming through from the West.”

Thirty-first U.S. President Herbert Clark Hoover once said: "Blessed are the young, for they shall inherit the national debt."

Governments around the world are borrowing heavily to finance their fiscal expansion – unprecedented in size and scale – to prevent severe economic downturn.

However, outspoken independent economist Roger Nightingale thinks fiscal stimulus will not work.