Analysis

Negotiations

The new German government will be called upon, at a highly critical time for the global and European economy, to draw up a new economic and political strategy not only for Germany but also for the EU/Eurozone. The outcome will be the result of formal negotiations between the Social Democratic Party (SPD), the Green Party, and the liberal Free Democratic Party (FDP). But there’s one more partner who, though less widely discussed, will be crucial to the negotiations: the Federation of German Industries (BDI).

Manufacturing Stagnation

$5.3 trillion of US federal government stimulus and relief spending have returned the economy to its pre-Covid growth trajectory. But that growth trajectory was hardly robust—either before or after the 2008 financial crisis. Nor was the slow decay of GDP growth rates unique to America. In the aggregate, the seven largest rich economies—the G7, composed of the US, Japan, Germany, France, Britain, Italy and Canada—saw growth in real per capita gross domestic product (GDP) slip by more than half from the 1980s to the 2010s.

The Diverging Gap

On June 11, leaders at the G7 summit signed the Build Back Better World (B3W) Partnership, an agreement which commits signatories to meet the infrastructure needs of low- and middle-income countries. The deal is an explicit response to China’s Belt and Road Initiative (BRI), which, since 2013, has gained the support of more than 60 countries and dedicated over $500 billion of funding to thousands of projects.

Uneven Channels

This year’s Conference of the Parties (COP), opening October 31, is hosted by the United Kingdom, whose agenda-setting privilege as host has made private finance a central focus of the 2021 meeting. The UK ambition to center the City of London as a hub for a growing green finance industry dates back to at least 2010, when the “Capital Markets Climate Initiative”

Gas and Labor

The United Kingdom is in the midst of a protracted crisis in the supply of petrol. In the face of a plummeting sterling and severe disruptions to essential public services, military tanker drivers have been deployed to transport fuel to the country’s 8,380 petrol stations.

How Schools Lie

No matter how talented, hard working, and committed a student is, if financing falls through, the dream of obtaining higher education can be dashed. But much of the financial data that prospective students receive is misleading. In the cost information offered to prospective students, higher ed institutions consistently underestimate the non-tuition costs of attending college, and overestimate the amount of incoming aid from grants and scholarships.

Legitimacy Gap

We live in the age of the central bank. The financial crisis of 2008 and the COVID-19 crash of 2020 have made visible the central role of the US Federal Reserve and its overseas counterparts in the international financial system.

Built Trades

As the American economy reopened in the first half of 2021, reports of a “labor shortage” spread throughout US industries. But there was one sector where employer panic about hiring was old news: the massive and decentralized US construction industry.

Path Persistence

What is the legacy of the First Globalization of the late nineteenth- and early twentieth-centuries on the economic fortunes of countries during the Second Globalization? To what extent have countries’ positions in the international economic order been persistent across the two globalizations, with some trapped at the bottom and others comfortably on top?

Repressing Labor, Empowering China

Though the lockdown in 2020 threw many workers out of work, the big fiscal stimulus, fueled by government debt and an unprecedentedly large monetary expansion, offered stimulus checks and elevated unemployment benefits to millions of Americans.

Preferred Shares

In one of her first statements as Treasury Secretary, Janet Yellen said that the United States faced “an economic crisis that has been building for fifty years.” The formulation is intriguing but enigmatic. The last half-century is piled so high with economic wreckage that it is not obvious how to name the long crisis, much less how to pull the fragments together into a narrative.

Hysteresis & Student Debt

The geographic character of the Great Recession of 2008–2009 is, by this point, well-known. While everywhere in the United States experienced a sharp increase in unemployment, some areas suffered disproportionate exposure to subprime mortgages and the consequent bursting of the housing bubble, and some experienced the cyclical downturn more harshly than others, with larger shares of local employment in harder-hit industries.

The Crisis Canal

Why did the Ever Given capture our collective imaginations? At the end of its week in the spotlight, the poet Kamran Javadizadeh wrote: “I too am ‘partially refloated,’ I too remain stuck in the Suez Canal.” Two fluorescent yellow-vested construction workers with an excavator—lego-like compared to the gargantuan hulk of the vessel—attempted to wrench the giant ship from the sand bank. Dredgers and tugboats aided by rising tides finally refloated the massive freighter, launching it back on its voyage from Yantian to Rotterdam.

Reconstruction Finance

Like the world system as a whole, segregated cities in the United States have their own finance driven core-periphery dynamics.

Risks and Crises

For a long time, Bagehot’s rule, “lend freely, against good collateral, but at a high rate,” restored the Fed’s control over the money market and helped end banking panics and systemic banking crises. This control evaporated on September 15, 2008, with Lehman Brothers’ collapse.

Democracy or the Market

The problem of democratic representation has always turned on the question of the “have-nots”—that is, not only those without wealth and property, but also those marginalized on the basis of race, ethnicity, gender, origin, religion and education. Even in a world of full-fledged democratic rights, the democratic game tends to break in favor of the “haves.”

Revolution, Reform, and Resignation

Some time in 1991 I was invited to give a talk to the Andalusian Confederation of the Spanish Socialist Worker’s Party (PSOE). Afterwards, the secretary of the confederation walked me back to my hotel. I asked him why there was a widespread atmosphere of demoralization within the party. He answered “Nos hicieron hablar un idioma que no era el nuestro”: “They made us speak a language that was not ours.”

François Mitterrand’s Austerity Turn

The history of French socialism is filled with famous and heroic dates: 1789; 1848; 1871 1936; 1968. But less well remembered is another date of great significance: 1981. It was in May of that year that the French left achieved its greatest electoral triumph of the postwar era, with the election of Socialist Party (PS) leader François Mitterrand as President of the Republic.

Transitions

It’s been some time since the term “transition” was fully incorporated into day-to-day usage in contemporary Spanish. It refers to the process of political change that began during the second half of the 1970s, a process which transformed Spain from the Franco dictatorship to the parliamentary monarchy that governs the country today.

The Italian Left After Keynesianism

In 1977, Eric Hobsbawm published a book of interviews with Giorgio Napolitano, a leading figure in the Italian Communist Party (PCI)’s gradualist wing, the miglioristi. Hobsbawm proclaimed himself a “spiritual member” of the PCI and intended this book to depict the path it was beating in between Leninism and social democracy. Yet his efforts appeared rather frustrated by Napolitano’s vocabulary.

Inflation, Specific and General

Concerns over a generalized “inflation” loom in the recovery. Yet the prices that most heavily factor into the cost of living for US workers—housing, health, and education—have already been rising for decades. The question we should be asking is whether the extension of the welfare state is the cure for, rather than the cause of, these trends.