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Diane Coyle – Keynote Address

July 3, 2014 Leave a comment

GDP CoyleJust attending the New Zealand Association of Economists 55th Annual Conference and it was great to hear Diane Coyle present as one of the Keynote speakers. I was originally alerted to her work by Geoff Riley – an economics teacher at Eton College and co-founder of the Tutor2u website – while I was on a Fellowship. He recommended her book ‘The Soulful Science’ back in 2007. The book aims to show how the discipline of economics has changed over the last decade and brings together economic growth and human behaviour.

Her talk was based on the research into her new book GDP: A Brief but Affectionate History. She goes right back to the Domesday Book which was a manuscript record of how much each landholder in England and Wales had in land and livestock, and what it was worth. This was completed in 1086 on orders of William the Conqueror. Further mentions of Adam Smith and Karl Marx and what they tended to focus on as an economic indicator. Interesting to note that Holland has included prostitution in its GDP calculations and that the Italian statistical body recently announced that it will include prostitution, drug trafficking, and alcohol-and-tobacco in its calculation of GDP. However Italy is just complying with international accounting standards and reporting illegal economically productive activity is required under European Union rules. But as it is part of the informal economy how do you actually measure drug deals, prostitution etc and therefore its contribution to a country’s GDP?

There is also the intangible economy – how do you measure the output of Vodafone v Skype? Also how are sustainability, variety and innovation measured? If her talk was anything to go by her book seems well worth it.

Categories: Growth Tags:

Diane Coyle in Auckland

June 30, 2014 Leave a comment

NZAE ConfThis year the annual conference of the New Zealand Association of Economisst takes place at the Auckland University of Technology from the 2nd – 4th July. One of the keynote speakers is Diane Coyle from the UK who runs the consultancy Enlightenment Economics. She also has a great website called ‘The Enlightened Economist’ in which she reviews economics and business books. She is the author of several books, including recently:

GDP: A Brief and Affectionate History (Princeton University Press, 2014 forthcoming),
The Economics of Enough (Princeton University Press 2011)
The Soulful Science (2007),

She also edited ‘What’s the Use of Economics: Teaching the Dismal Science after the Crisis’ self-questions economics by economists of a discipline that did not anticipate the crisis and has barely changed since despite its self-evident shortcomings.She was previously Economics Editor of The Independent and before that worked at the Treasury and in the private sector as an economist. She has a PhD from Harvard.

Below is a link to the conference website:

NZAE Annual Conference

Categories: Eco Events Tags:

Flash Boys – Michael Lewis’ new book

April 6, 2014 Leave a comment

Here is a video from a PBS interview with Michael Lewis talking about his new book “Flash Boys: A Wall Street Revolt.” Much of the stock market trading that occurs today is done with computer servers, completing hundreds of millions of orders in a system known as high-frequency trading. Author Michael Lewis has made this practice the subject of his latest book.

Click below to view an adaptation from The New York Times magazine.
The Wolf Hunters of Wall Street

Diane Coyle in Auckland

January 24, 2014 Leave a comment

NZAE ConfThis year the annual conference of the New Zealand Association of Economisst takes place at the Auckland University of Technology from the 2nd – 4th July. One of the keynote speakers is Diane Coyle from the UK who runs the consultancy Enlightenment Economics. She also has a great website called ‘The Enlightened Economist’ in which she reviews economics and business books. She is the author of several books, including recently:

GDP: A Brief and Affectionate History (Princeton University Press, 2014 forthcoming),
The Economics of Enough (Princeton University Press 2011)
The Soulful Science (2007),

She also edited ‘What’s the Use of Economics: Teaching the Dismal Science after the Crisis’ self-questions economics by economists of a discipline that did not anticipate the crisis and has barely changed since despite its self-evident shortcomings.She was previously Economics Editor of The Independent and before that worked at the Treasury and in the private sector as an economist. She has a PhD from Harvard.

Below is a link to the conference website:

NZAE Annual Conference

Categories: Eco Events Tags:

Smarter Spending

January 21, 2014 Leave a comment

Happy MoneyA recently released book that I read in the holidays entitled “Happy Money” provides new research into the science of spending. The authors (Liz Dunn and Mike Norton) explain how you can get more happiness for your money by following five principles:

1. Buy Experiences

Owning material things from expensive homes to luxurious cars turn out to provide less happiness than holidays, concerts and special occasions.

An exercise that they suggest is to think of purchases you’ve made to increase your happiness. Consider one purchase that was a tangible object that you could keep – iPhone, clothes etc. Then think of a purchase you made that gave you a life experience – holiday, concert or a meal out. Remembering the experience brings to mind friends and family, sights etc. Which of these purchases made you happier?

2. Make it a Treat

For residents in a city with famous tourist sites there is the inclination to never visit them as they are always there. When something is always there people are less likely to appreciate it. However limiting our access to something may renew our capacity for pleasure. Rather than giving up something completely the authors advocate turning our favourite things into treats – afternoon Cappuccino. This also applies to driving a luxury car – research has shown that driving a luxury car provides no more happiness than an economy model.

3. Buy Time

By getting other people to do those dreaded tasks money can transform the way we spend our time, freeing us to pursue our passions. A lot of people fail to use their money to buy themselves a happier time. When people focus on thier time rather than their money, they act like scientists of happiness, choosing activities that promote well-being. For companies this principle entails thinking about compensation in a broader way, rewarding employees not only with money, but with time.

4. Pay Now, Consume Later

Today with the availability of credit access to goods is instantaneous. However by putting this powerful principle in reverse – paying first and taking delivery later – you can buy more happiness as delaying consumption allows spenders to reap the pleasures of anticipation without a short period of happiness. Holidays provide more happiness before they actually occur. Research shows that waiting for something – a chocolate – makes it taste better when we get it.

5. Invest in Others

Bill Gates and Warren Buffet pledged the majority of their wealth to charity and they are very happy with that decision. New research shows that spending on others provides a bigger happiness boost than spending on yourself. Investing in others can make individuals feel healthier and wealthier.

Categories: Behavioural Economics Tags:

A2 – Developing Economies and the Global Financial Crisis.

August 13, 2012 Leave a comment

Just completing the Unit 6 of the A2 course and updating my notes on the current issue of debt hangover from the Global Financial Crisis. The FT recently reported that there are worrying signs of private sector credit in emerging economies.

Turkey Brazil Russia - private sector credit in year to April 2012 up 20%.
China – private sector credit in year to April 2012 up 15%.
Poland – private sector credit to GDP 49%

This is seen as inevitable if an economy is going to grow but there needs to be investment in capital which will ultimately increase a country’s productive capacity and long-term development. However a lot of this borrowing has gone into consumer goods rather than capital infrastructure projects. This is especially worrying in Brazil as the transport system needs a major overhaul if it is going to cope with the demands of the Olympic Games in 2016. According to the FT misdirected credit can produce two damaging consequences:

1. When too much money is directed into the housing market bubbles can occur – subprime for instance and more recently China.
2. Poor credit allocation can harm economic growth, both in the short and in the long term.

Although China and Brazil has loosened monetary policy this needs to be accompanied by a process that ensures it is directed to where it is most needed. Jeffrey Sachs in his book “End of Poverty” talked about how a country needs six major kinds of capital:

1. Human capital: health, nutrition, and skills needed for each person to be economically productive

2. Business capital: the machinery, facilities, motorized transport used in agriculture, industry, and services

3. Infrastructure: roads, power, water and sanitation, airports and seaports, and telecommunications systems, that are critical in-puts into business productivity

4. Natural capital: arable land, healthy soils, biodiversity, and well-functioning ecosystems that provide the environmental services needed by human society

5. Public institutional capital: the commercial law, judicial systems, government services and policing that underpin the peaceful and prosperous division of labor

6. Knowledge capital: the scientific and technological know-how that raises productivity in business output and the promotion of physical and natural capital

Figure 1 shows the basic mechanics of saving, capital accumulation, and growth. We start on the left-hand side with a typical household. The household divides its income into consumption, taxation, and household savings. The government, in turn, divides its tax revenues into current spending and government investment. The economy’s capital stock is raised by both household savings and by government investment. A higher capital stock leads to economic growth, which in turn raises household income through the feedback arrow from growth to income. We show in the figure that population growth and depreciation also negatively affect the accumulation of capital. In a “normal” economy, things proceed smoothly toward rising incomes, as household savings and government investments are able to keep ahead of depreciation and population growth.
Source: The End of Poverty: How we can make it happen in our lifetime by Jeffrey Sachs (2005).

The Fear Index – if you’re a Wall Street algorithm and you’re five microseconds behind, you’re a loser.

March 22, 2012 2 comments

Robert Harris’ latest book, “The Fear Index,” stars a hedge fund driven by an algorithm run wild. In researching his book he went to observe a hedge fund in London. Basically it was a room full of computers and in the course of 20 minutes he watched one computer made $1.5m by itself. The interview below with Paul Solman of PBS is quite revealing when you consider the lengths that some will go to get a competitive edge on their opponents. In the book they develop an algorithm that can predict the markets by analysing the incidence of fear-related words on the Internet, trends on Facebook, Twitter, the sense of a mood. Although Harris thought that this was original he subsequently found out it has been going on for sometime. Bloomberg News feeds are digitalized and go straight into the machine, and buzzwords are picked out, “panic, rumor, fear, slump.” A few milliseconds could be the difference between success and failure in the markets.

The extent that these traders will go to in extreme. In the U.S., high-frequency firms represent only 2 percent of the 20,000 or so trading firms operating today. But they now account for nearly three-quarters of all trades. And the average time a stock investment is held these days is 22 seconds. If time is money, microseconds are now millions. In a recent TED talk on cutting-edge technology, tech whiz Kevin Slavin wowed the audience by describing buildings now being hollowed out in Lower Manhattan. Why? So that high-frequency trading firms can move in and get as close as possible to New York’s point of entry for the Internet at a so-called carrier hotel in Tribeca. You can view his complete TED Talk by clicking here. A great quote that he made was as follows:

Just to give you a sense of what microseconds are, it takes you 500,000 microseconds just to click a mouse. But if you’re a Wall Street algorithm and you’re five microseconds behind, you’re a loser.

Keynes 1926 pamphlet could have been written today.

February 28, 2012 Leave a comment

Diane Coyle runs a blog called “The Enlightened Economist” which is very good for reviews of recently published economics books. One of her recent posts talked of the republished 1926 pamphlet by John Maynard Keynes – ‘The End of Laissez Faire’. Though Keynes states that an economy should be free of government intervention he suggests that government can play a constructive role in protecting individuals from the worst harms of capitalism’s cycles, especially concerns about levels of unemployment. Diane Coyle produces a quote (see below) from the book which is ironically similar to what is the anti-capitalist sentiment today. She also suggests that we need to go beyond the state versus market debate and recongize that the two type of systems need to work together to alleviate problems such unemployment, externalities, uncertainty, well-being etc.

“Many of the greatest economic evils of our time are the fruits of risk, uncertainty, and ignorance. It is because particular individuals, fortunate in situation or in abilities, are able to take advantage of uncertainty and ignorance, and also because for the same reason big business is often a lottery, that great inequalities of wealth come about; and these same factors are also the cause of the unemployment of labour, or the disappointment of reasonable business expectations, and of the impairment of efficiency and production. Yet the cure lies outside the operations of individuals; it may even be to the interest of individuals to aggravate the disease.”

He then goes on to say

“I believe that the cure for these things is partly to be sought in the deliberate control of the currency and of credit by a central institution, and partly in the collection and dissemination on a great scale of data relating to the business situation, including the full publicity, by law if necessary, of all business facts which it is useful to know. These measures would involve society in exercising directive intelligence through some appropriate organ of action over many of the inner intricacies of private business, yet it would leave private initiative and enterprise unhindered. Even if these measures prove insufficient, nevertheless, they will furnish us with better knowledge than we have now for taking the next step.”

Holiday reading

December 23, 2011 Leave a comment

Here are some books that might be of interest for the holiday period. I am off to the beach and out of internet range for 3 weeks. Will resume normal service on 15th January. Have a merry xmas and a happy new year.
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This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth Rogoff

This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes–from medieval currency debasements to today’s subprime catastrophe.

The Darwin Economy: Liberty, Competition, and the Common Good by Robert H. Frank

Who was the greater economist–Adam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of economics.

The Price of Civilization: Economics and Ethics After the Fall by Jeffrey Sachs

The world economy remains in a precarious state after the recent global recession – where quick fixes were implemented instead of sustainable solutions to systemic problems. Jeffrey Sachs argues powerfully for a new co-operative, common-sense political economy, one that stresses practical partnership between government and the private sector, demands competence in both arenas and occasionally insists on carefully chosen public and private sacrifices. In this new era of global capitalism, Sachs believes that we have to forget partisanship and solve these enormous problems together, clinically and holistically, just as one would approach the eradication of a disease.

TED Talk – Inequality by ‘Spirit Level’ author

November 4, 2011 1 comment

Here is a TED Talk by Richard Wilkinson who is the co-author of “The Spirit Level – Why More Equal Societies Almost Always Do Better”. The books focuses on how inequality in a country is conducive to unhealthier, unhappier, greater obesity, higher crime rates etc. However critics have said it lacks substantive data – can we say that because New Zealand has a bigger income gap than Greece that it has greater social problems? Richard Wilkinson goes through a lot of the graphs and data that he mentions in the book.

Categories: Inequality Tags: ,

Tim Harford aka “Undercover Economist” in Wellington, NZ

June 28, 2011 Leave a comment

Tim Harford is currently in Wellington attending the New Zealand Association of Economists annual conference. He will present the McMillan Lecture, on Wednesday 29 June, drawing from his work as The Undercover Economist on the economic motivations of everyday behaviour. In his new book ‘Adapt‘ Tim Harford argues that the process of innovation is bogged down in the sheer complexity of the modern world.

Good ideas are suffocated by bureaucracy while bad practices and dangerous errors flourish in dysfunctional markets. To find solutions to some of the big problems – climate change, financial instability, global poverty – we must go back to basics, examining the circumstances in which ingenuity has broken through in the past, and then considering how to replicate them.

The starting point is evolution. Harford cites compelling statistical evidence that the way companies have risen and fallen throughout history neatly resembles Darwinian selection. Clusters of bankruptcies occur amid periods of relative stability in a pattern that can be accurately mapped, albeit on a different time scale, on to patterns of extinction in the fossil record. Computer models that simulate how the fittest species mutations survive can also accurately predict likely survival rates for new businesses in the marketplace. This is a bit of an ego blow to swaggering executives who think their tremendous commercial acumen is what has saved them from ruin and earned them their fat bonuses. Luck and timing are just as important, if not more so. Guardian Weekly

Below: Tim Harford launches his book at the RSA

Categories: Behavioural Economics Tags:

Scorecasting – loss aversion and home field advantage

May 12, 2011 Leave a comment

Just finished reading the book Scorecasting by University of Chicago behavioural economist Tobis Moskowitz and Sports Illustrated writer Jon Werheim. Although predominately based on the main sports in the US it does make for interesting analysis of the behaviour of players and officials during certain periods of a competitive game. They mention the fact that the strike zone in baseball gets smaller when there are two strikes on the batter. The strike zone is smallest when there are two strikes and no balls and largest when there are three balls and no strikes. However there were two areas that were particular interesting:

1. When golfers try to make a birdie they are less successful than when they line up the extact same putt for par.

Researchers found that professional golfers display a more aggressive behaviour on par versus birdie putts. When they missed birdie putts they tended to leave the ball short of the hole. Tiger Woods said that “Anytime you make big par putts., I think it’s more important to make those than birdie putts. You don’t ever want to drop a shot. The psychological difference between dropping a shot and making a birdie, I just think it’s bigger to make a par putt.” Why should golfers behave in this way as it is your final round total that counts and does it matter how you get there? According to the authors it is all about Loss Aversion and when they are threatened with the dropping of a shot they tend to try harder

2. What is driving the home field advantage? – for example from the Spanish Premier League La Liga

Three Spanish economists, all soccer fanatics, studied the behaviour of officials’ conduct during home games. They looked at 750 matches from the premier league in Spain and found that:
* when the home was winning referees shortened the extra time on average by 2 mins
* when the home team was losing referees added to the extra time on average by 4 minutes
* when the score was level the average injury time was correct – around 3 minutes.
* when a team was ahead by 2 goals or more there was no bias at all. Adding additional time to a game that has a clear favourite is unlikely to change the outcome and therefore accrue much benefit, so why risk the potential cost of being told off by superiors for playing too much time.

When 3 points were introduced for a win, injury time increased notably.

The researchers also found the exact same injury time bias, in favour of the home team, exists in the English Premier League (remember the post on Fergie Time), Italian Serie A league, the German Bundesliga, the Scottish league, and even MLS in the US.

Categories: Behavioural Economics, Sport Tags:

Holiday Reading

April 15, 2011 Leave a comment

Now that the Term has come to a close here in New Zealand below are some books that may take your interest for the holiday period. I am also on holiday and will be out of internet range till Saturday 23rd April – I’ll be back on deck then.

Griftopia by Matt Taibbi
He is a writer for Rolling Stone and talks about the unravelling of the US economy with special mention of Goldman Sachs.

The Spirit Level by Richard Wilkinson and Kate Pickett
The books focuses on how inequality in a country is conducive to unhealthier, unhappier, greater obesity, higher crime rates etc. However critics have said it lacks substantive data – can we say that because New Zealand has a bigger income gap than Greece that it has greater social problems?

Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won
by Tobias J. Moskowitz
Tobias J. Moskowitz
Much like the highly successful Freakonomics it looks into some of the preconceptions surrounding sport, using statistics and other empirical evidence to reach some interesting conclusions.

Fergie Time – Behavioural Economics and Sport

March 23, 2011 1 comment

A recently published book entitled “Scorecasting: The Hidden Influences Behind How Sports Are Played And Game Are Won” is, I am informed, an absorbing read on the behavioural economics of sport. Recently reviewed in The Economist, the book uses sport to test economic theories about decision-making. The objectives of those in sport is easily measurable and the results of each game is extremely clear – win, draw, loss. They discuss home advantage and discovered that the home team win:
- 54% of games in Major-league Baseball
- 60% of cricket
- 63% English Premier League
- 69% in American College Basketball

Fergie Time
Research shows that referees are more likely to favour the home team with penalties and yellow and red cards. Furthermore, if the home team is winning there is less stoppage time added on but quite the contrary if the home team is losing – that is they add more stoppage time. The added or reduced time at Old Trafford when Man Utd are trailing/drawing or winning is know as Fergie Time – named after Alex Ferguson the manager at Manchester Utd.

But the authors of the book suggest that referees are not biased but they tend to rely on crowdsourcing, picking up the mood of the crowd when making their decision. Economists refer to this as Anchoring which refers to people’s propensity to be exceedingly infuenced by external factors (eg. the crowd). But when a home crowd is taken away there is a different set of results. Becasue of crowd violence 21 games in the Italian League where played to empty stadiums. In these games the home bias declined by:
- 23% on fouls called
- 26% for yellow cards
- 70% for red cards

This was more prevalent in soccer as they are many more decisions to be made by the referee than in other sports.

Loss Aversion and Golf
The authors also look at golf and found that players tend to care more about saving par rather than, a similar-sized gain, making a birdie. This doesn’t make sense as it is the number of strokes over the course of 18 holes is what counts.

Categories: Behavioural Economics, Sport Tags:

“Financial Crisis is not over” – Michael Lewis

February 7, 2011 Leave a comment

Michael Lewis is the author of an excellent book on the financial crisis entitled “The Big Short”. Here he was interviewed by Bloomberg last week and suggests that there is still concerns over the robustness of financial markets and adds his thoughts on the Irish economy. Stories of Bank of Ireland employees chasing Polish workers back to their homeland to collect parking fines – the Poles had left their cars at the airport carpark when they returned to Poland. Some useful economic jargon in the interview also.

In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker). The short seller borrows shares and immediately sells them. He then waits, hoping for the stock price to decrease, when the seller can profit by purchasing the shares to return to the lender.

The Big Short: Inside the Doomsday Machine
The Big Short is a 2010 non-fiction book by Michael Lewis about the build-up of the housing and credit bubble during the 2000s. It describes several of the key players in the creation of the credit default swap market that sought to bet against the bubble and thus ended up profiting from the financial crisis of 2007–2010. The book also highlights the eccentric nature of the type of person who bets against the market or goes against the grain. The work follows people who believed the bubble was going to burst, like Meredith Whitney, who predicted the demise of Citigroup and Bear Stearns; Steve Eisman, an anti-social hedge fund manager; Greg Lippmann, a Deutsche Bank trader that created the first CDS market by matching buyers and sellers; the founders of Cornwall Capital, who started a hedge fund in their garage with $100,000 and built it into $120 million when the market crashed; and Dr. Michael Burry, an ex-neurologist who created Scion Capital despite suffering from blindness in one eye and Asperger syndrome. Wikipedia

Christmas reading

December 14, 2010 Leave a comment

Here are 3 books – with reviews from Amazon – that I would recommend for the holidays:

Whoops! Why Everyone Owes Everyone and No One Can Pay (John Lanchester)
We are, to use a technical economic term, screwed. The cowboy capitalists had a party with everyone’s money and now we’re all paying for it. What went wrong? And will we learn our lesson – or just carry on as before, like celebrating surviving a heart attack with a packet of Rothmans? If you want to know, but are the sort of person who finds it hard to tell the difference between a CDO, a CDS, an MBS, and a toasted cheese sandwich, John Lanchester has mastered the finer points of finance so you don’t have to. In “Whoops!” he explains, in language everyone can understand, what really happened – and what on earth we do next.

Ship of Fools (Fintan O’Toole)
Between 1995 and 2007, the Republic of Ireland was the worldwide model of successful adaptation to economic globalisation. The success story was phenomenal: a doubling of the workforce; a massive growth in exports; a GDP that was substantially above the EU average. Ireland became the world’s largest exporter of software and manufactured the world’s supply of Viagra. The factors that made it possible for Ireland to become prosperous – progressive social change, solidarity, major State investment in education, and the critical role of the EU – were largely ignored as too sharply at odds with the dominant free market ideology. The Irish boom was shaped instead into a simplistic moral tale of the little country that discovered low taxes and small government and prospered as a result.

The Economic Naturalist (Robert Frank)
Although printed in 2007, this is a fascinating and playful guide to how economics explains the simple but profound ideas that govern our world. Why do the keypads on drive-up cash machines have Braille dots? Why are round-trip fares from Orlando to Kansas City higher than those from Kansas City to Orlando? For decades, Robert Frank has been asking his economics students to pose and answer questions like these as a way of learning how economic principles operate in the real world–which they do everywhere, all the time.

I am using this book as additional reading for the Cambridge AS level economics course next year.

Anyone for cricket? Yes please – Alan Bollard

September 6, 2010 1 comment

You might have seen Alan Bollard on TV ONE Q+A programme yesterday morning. As well as talking about his new book “Crisis” he was questioned about the Job Summit in which he stated that it was to a certain extent “feel good” exercise and wondered its worth. Furthermore, he wasn’t impressed with some of the business leaders naivety with regard to economic policy.

Anyway he left the conference early to watch the 20/20 match in Wellington against India – he had taken part in the groups that were related to him. Click here if you are interested in the interview.

His book backgrounds the financial crisis and takes readers from the sub-prime catastrophe of 2007, through to the collapse of Lehman Brothers and onto the eventual recovery (???). He relays his experience in terms of the human behaviour under immense pressure in trying to deal with the worst downturn since the Great Depression of 1929. The book can be acquired through Amazon.

US Economy – where to from here?

September 3, 2010 Leave a comment

They cut interest rates, printed money and gave massive fiscal stimulus packages but still the outlook for the US economy is poor. With 9.5% unemployment – this figure is likely to be higher when the number of part-time workers are added – the economy is slowing considerably. Furthermore, as the unemployment benefit in the US is lower than European countries, this acts as a constraint on demand and in difficult times people tend to save rather than spend. From the meeting of the world’s central bankers in Jackson Hole (see posting on 29th Spetember) there are clear indications that another major shot of quantitative easing is just around the corner. However, there are those who see the problems of the US economy as too entrenched and argue that it is in serious trouble. Larry Elliott from the Gaurdian Newspaper wrote a book review of The Long Twentieth Century by Giovanni Arrighi in which he talks about ceratin prevalent issues including:
- the dominance of Wall Street
- the structural trade deficit
- the military’s overestimate of its abilty
- the switch from being the world’s biggest creditor to biggest debtor


All of which, Arrighi suggests, will lead to the demise of the American economy. Albert Edwards, an analyst at French bank Societe Generale who correctly predicted the Asian financial crisis, sees global equity markets at a new low and chances of another global recession in 2010. He refers to the current situation as unprecedentedly strong monetary and fiscal stimulus has led to unprecedentedly weak recovery. Ben Beranake will be aware of this and Japan’s lost decade and will do everything to keep the economy moving. Remember he did his PhD on the Great Depression but will need all his expertise to get the US economy back on track.

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