Looks like Paul Kedrosky has abandoned his brief flirtation with blogging in Bloomberg. May be, I am wrong. But, the last blog post by him in Bloomberg is from mid-June. I caught up with his Infectious Greed last night. It was time well spent. I came across a link to Michael Pettis’ forecasts for the rest of the decade where he walks the fine line between predicting China GDP growth falling to 3% by the end of the decade and not predicting a collapse of either the Chinese economy or society, consequently.
I also came across a link to a paper by Prof. Dani Rodrik presented at Jackson Hole where he questions the logic of automatic economic convergence of developing nations with that of the developed world.
Both Mr. Pettis’ post and Dani Rodrik’s paper resonate well with TGS. Indophiles would find plenty of references to India in the paper by Dani Rodrik.
Mr. George Magnus’ article in Bloomberg with the tantalising title – Give Karl Marx a chance – led me into the article. But the contents were disappointing. I doubt if they would address the problem of low employment and stagnant-to-declining wages in the US and in much of the rest of the developed world. How about asking all the Fortune 100 executives to abandon their bonuses and stock options and turn them over to workers and promising them GDP or employment warrants spread over the next decade, in return? You restore confidence through inspirational acts of heroism, selfless and moral leadership and not through Keynesian pump-priming in a debt-heavy society.
The point on the limitations of Keynesian intervention has been well made by the Chief Executive of Tullett Prebon in his blog post – which reproduces the letter he had written to the FT (ht: Zero Hedge). He correctly reminds people that Keynesian solutions did not solve the problems of the Great Depression (World War II ended it).