BERKELEY – One disturbing thing about studying economic history is how things that happen in the present change the past – or at least our understanding of the past. For decades, I have confidently taught my students about the rise of governments that take on responsibility for the state of the economy. But the political reaction to the Great Recession has changed the way we should think about this issue.
OXFORD – Just when it seemed that America’s “Homeland Security state” could not get more surreal, the United States Transportation Security Administration has rolled out a costly Scylla and Charybdis at major airports: either you accept dangerous doses of radiation and high-resolution imaging of your naked body, or, worried about the health risks of cumulative radiation, you opt out of the new full-body x-ray machines (rapidly dubbed “porno-scanners”).
ACCRA – When you fly into Takoradi, Ghana’s fourth largest city and an industrial and commercial center, one of the first things you notice are the oil rigs along the coast. It is a panorama that is increasingly characteristic of modern-day Africa.
CAMBRIDGE – As the United States and European economies continue to struggle, there is rising concern that they face a Japanese-style “lost decade.” Unfortunately, far too much discussion has centered on what governments can do to stimulate demand through budget deficits and monetary policy. These are key issues in the short term, but, as every economist knows, long-run economic growth is determined mainly by improving productivity.
BRUSSELS – For decades, the world has complained that the dollar’s role as global reserve currency has given the United States, in a term usually attributed to Charles de Gaulle but actually coined by his finance minister, Valery Giscard d’Estaing, an “exorbitant privilege.” As long as exchange rates were fixed under the Bretton Woods system, the nature of that privilege was clear: the US was the only country that could freely determine its own monetary policy. All others had to adapt to the policy dictated by the US.
BAGHDAD – The Obama administration’s Iraq policy is in chaos. Seven months after Iraq’s national elections, the United States has publicly denied taking sides in the wrangling over who will be prime minister. Privately, however, the US is backing the incumbent, Nouri al-Maliki.
WASHINGTON, DC – German Finance Minister Wolfgang Schäuble likes to criticize other governments, including that of the United States, for their “irresponsible” policies. Ironically, it is the German government’s loose talk that has brought Europe to the brink of another debt crisis.
PALO ALTO – On top of the devastation caused in Haiti by the January earthquake, Hurricane Tomas this month, and the subsequent dislocations, exposure, and malnutrition, the country is now experiencing an accelerating cholera outbreak. At least 8,000 people are currently in hospital, and the death toll is near 600 from this waterborne bacterial disease. And, given the widespread unavailability of clean water, basic sanitation, and medical facilities, those numbers are sure to increase.
TOKYO – For 30 years after World War II’s end, Vietnam claimed the global spotlight. Its victories over France and the United States were the defining wars of independence of the post-colonial era. But ever since those immortal scenes of US army helicopters hovering above the abandoned US embassy in Saigon in 1975, Vietnam has mostly slipped from the world’s consciousness.
BRUSSELS – Two years after the world economy suffered a nervous breakdown in the wake of the collapse of Lehman Brothers, global financial markets remain unsettled, and the recovery that started so vigorously in 2009 seems to be stalling.