Macroeconomics in action

 

Lots of things we’ve been discussing in class – at least in Miami – are found in this excellent article. I really recommend it to anyone who wants to understand this crisis a bit more.

Why America Needs an Economic Strategy

 

Whatever works now!

Very interesting last week’s issue of Business Week. From the design of the cover – and the smart title “The future of Kapitalism”, with the “K” – to the inside stories, the magazine suggests that the intervention of the state in the economy might be here to stay – at least for a while. I find it a little bit sensationalist… Same way everybody said a couple of months ago that the price of oil would be over $200 soon and that we should get used to high prices of gas… (Oil prices are around $60 today) However, of course, that $ 700 billion bailout plan was essential to help the economy.

During class, some friends were against it, they said “let Wall Street crash” etc. I don’t think it’s that simple. To me, this plan was the lesser of two evils. If the plan wasn’t approved, we would be in a much worse shape now…

There is also an excellent article from Michael Mandel where he talks about the credit crunch. What seemed to be an ascendent curve for productivity, he says, might have been an illusion caused by excessive lending. In fact, if the world’s economy was doing so well, why incomes were going down? I’ve been here in the U.S for 8 years and I can tell: my buying power has come down big time over the years…