Saturday, February 14, 2015

Hopeful Political/Economic Signs

  1. The new finance minister for Greece is a close friend and associate of one of my favorite economists -- James Galbraith.  From The Guardian:
Yanis Varoufakis, it is fair to say, was barely known not that long ago... In the space of three short weeks, he’s been christened Europe’s man of the moment...  As the politician tasked with saving Greece in this, its most difficult hour, what the radical, shaven-haired economist thinks, how he comports himself and what he says are not without consequence. Linked as it is to that of the eurozone, his country’s fate is intrinsically connected to the global economy...  
The luggage of his close friend, the renowned economics professor Jamie Galbraith, who has flown in from Austin where Varoufakis has spent the past three years as a visiting professor, are spread across the room...  Galbraith, with whom he co-authored A Modest Proposal – a tract that proffered various ideas to end the euro crisis, has been quoted as saying that Varoufakis is so sharp he will “be thinking more than a few steps ahead” in negotiations with Athens’ creditors...  
Without a hint of self-deprecation or doubt, he tells me early on that he is “moved by” an internationalist agenda and thus motivated by the concerns of Europe and the world...  “We’ve lost everything,” he says. “So we can speak truth to power, and it’s about time we do.”
A few days later I pass Varoufakis and Galbraith outside the ministry in Syntagma Square. It is late and both are walking in the pouring rain towards a taxi rank. I hear the Greek politician, rucksack on back, enthusing about the surge in his book sales. Despite it all, he is happy.

  1. Another one of my favorite economists is the new Chief Economist for the Democrats on the (U.S.) Senate Budget Committee, headed by Bernie Sanders of Vermont. From The American Prospect:
If there’s one indication of the radical new direction in which Sanders plans to take the Budget Committee, consider the most eye-popping minority staff hire so far. As his committee staff’s chief economist, Sanders chose Stephanie Kelton, a leading proponent of Modern Monetary Theory(MMT). It was Kelton who coined the term “deficit owl,”—in contrast to “deficit hawks” and “deficit doves”—to describe those, like her, who “don’t concede we need to balance [the budget] at all,” according to the Washington Post’s Dylan Matthews.
Matthews writes that “owls” such as Kelton and the University of Texas’s James K.Galbraith “see government spending that leads to deficits as integral to economic growth, even in good times.”
MMT has existed far outside the Overton window of fiscal policies pushed by either party.