The FP Survey: Follow the Money

What's wrong with the world economy? We asked top experts to fill in the blanks -- and they had a lot to tell us.

JAN/FEB 2012

THE BIGGEST THREAT TO THE GLOBAL ECONOMY IS …

Politics. —Daron Acemoglu • Economic stagnation in wealthy countries. —Tyler Cowen • In the short run, a trifecta: the euro, the gridlock in the U.S. Congress, and the slowdown in China. —Daniel Bradlow • Anti-market bias. —Bryan Caplan • Procrastination. —Peter Diamond • Short-term thinking. —Esther Dyson • A euro meltdown. —Dean Baker • Ideology- and myopia-driven austerity as a response to recession. —Vincent Crawford • Tax-cut fanatics. —Jeffrey Frankel • The bond market. —Andy Sumner • Overconfidence in technocrats. —Arnold Kling

MY OUT-OF-THE-BOX SUGGESTION TO REVIVE THE GLOBAL ECONOMY IS …


Have the Fed guarantee the debt of Greece, Italy, and other debt-troubled countries in the eurozone. —Dean Baker • A global fund for small cash transfers to the world's poorest billion people. —Andy Sumner • Wipe out debts. —Daron Acemoglu • Require candidates for national office to pass ninth-grade tests on arithmetic, history, and geography. —Jeffrey Frankel • Double down on science. —Tyler Cowen • A government lottery where winners have mortgages, student loans, or other debt paid off. —Mark Thoma • We don't need "out-of-the-box" solutions; we need "head-out-of-the-sand" ones. —Adam Hersh • Pray. —David Smick

BARACK OBAMA'S BIGGEST ECONOMIC MISTAKE HAS BEEN …

Letting Larry Summers go. —Gary Hufbauer • Not dealing with the housing market by restructuring mortgage debt. —Daron Acemoglu • Not reorganizing the big banks. —David Smick • Trying too hard to find common ground with an opposition that won't compromise on any terms. —Vincent Crawford • His entire fiscal policy. —Tyler Cowen • Bringing Romneycare to the entire country. —Bryan Caplan • Appointing Timothy Geithner as Treasury secretary. —Daniel Bradlow • Assuming office in January 2009. —Jeffrey Frankel

OCCUPY WALL STREET IS …

A collective howl of pain and rage against the grotesquely wealthy and the failures of governance in rich countries. —Daniel Bradlow • A hopeful sign that we are ready for out-of-the-box solutions. —Esther Dyson • A misdirected tantrum. —Philip Levy • Driven by real economic angst, but plagued by confusion. —David Beckworth • Mostly on target and surprisingly effective. —Vincent Crawford • A harmless pastime for unemployed youth. —Gary Hufbauer • Reasonable complaints about crony capitalism plus self-righteous economic illiteracy. —Bryan Caplan • An incoherent jumble, a policy Tower of Babel. —Irwin Stelzer • A necessary convulsion. —Abhijit Banerjee • A fad. —Andy Sumner

BY ELECTION DAY 2012, THE U.S. ECONOMY WILL BE …

Doing better, at least in a short-run sense. —Abhijit Banerjee • Improving, but leaving many people behind. —Arnold Kling • Limping along, with unemployment declining but still around 8 percent. —Daron Acemoglu • Only slightly healthier than now. —Valerie Ramey • As weak as it is today. —Dean Baker • Stronger -- and more unequal -- than most voters realize. —Adam Hersh • At best no better than it is now and at worst in another recession following the collapse of the eurozone. —David Beckworth • Blamed for the outcome. —Jeffrey Frankel

ECONOMISTS SHOULD BE PAYING MORE ATTENTION TO …

How political barriers against better policies can be overcome. —Daron Acemoglu • How people actually behave rather than how they are idealized to behave. —Abhijit Banerjee • The shortcomings of the central banks. —David Beckworth • The massive benefits of open borders. —Bryan Caplan • Corporate governance. —Peter Diamond • The fact that macroeconomic theory went up a blind alley some 20 years ago. —Jeffrey Frankel • The importance of women for strong economies. —Adam Hersh • Trade in medical services. —Dean Baker • Creeping protectionism across the global economy. —Gary Hufbauer • The possibility that America and Europe could suffer a prolonged, Japanese-style post-bubble stagnation. —Philippe Legrain • The impediments to job creation for young people. —Valerie Ramey • China's vulnerable shadow financial system. —David Smick • Reality. —James D. Hamilton

 SUBJECTS:
 

BEINGTHERE

7:42 AM ET

January 4, 2012

Obama's biggest mistake(s)

Who can name just one?
1. Lack of leadership with Congress.All that posturing on his part (as well as theirs') was trumped-up. Voters/taxpayers see this.
2. Lack of leadership in calling on corporate titans to help get the economy moving - months ago. This man is the President of the United States. Business leaders should have been willing to follow him - had he known how to lead.Now he's trying to appeal to the middle class, and we're not buying it. We can't afford it. We can't afford to buy anything!
3. Going belly-up about the Afghan surge. Gates, Mullen and the self-serving, career-focused Petraeus had their way with him. Obama finally got his sea legs and is actually making good on a campaign promise to get the U.S. out of those numbing wars. Down side: many days, lives and billions of taxpayer dollars short.

 

F1FAN

9:28 AM ET

January 4, 2012

If I had to pick just one?

Tim Geithner.

 

KUNINO

4:25 PM ET

January 4, 2012

Six of the top 11 experts ...

Six of the top 11 experts say the top threat to the global economy is, or includes, the US congress. Might be right, might be wrong. But interesting. None seem to see congress shining a light toward better days.

Also interesting is the limited nature of the questions FP posed to its sages. Most interested readers could provide more that don't imply that nothing was wrong in the American economy until 2007.

 

AWARENESS

4:59 PM ET

January 6, 2012

The answer is very simple. (I)

TAKING care of people is just plain silly.

But caring about people, should be the foundation of a ecomomy, period!

This will bring a economy where mostly ass-holes suffer, whether it be a bank or a single handed person.

Some atheists say the do not believe, but believing in the ALMIGHTY signature is just too much. In fact it is something from our prehistorical past.

The signature, in the first instance(haha), has no meaning whatsoever.
Give for example a three week delay, and let a appointed government official "key"(haha) the contract ( hey! a new created job) .
What you get is a reliable customer and bank or whatever , with legal assets.
No PAIN no GAIN is life, but not with money................................

 

UMBRARCHIST

2:25 PM ET

January 21, 2012

Economic Math

Yeah Right! Do cars wear out in South America? Does physics work the same way all over the planet?

It's 42 years after the Moon landing. Can't economists compute and report the depreciation of automobiles? Have they figured out that planned obsolescence is going on in automobiles? Oh yeah! They don't talk about it so it must not be real.

They don't say much about the Net Domestic Product either, only the GROSS.

They depreciate capital goods. Physics must work differently for durable consumer goods. A $30,000 car is just like a $3 hamburger because economists ignore the depreciation of all consumer goods.

NDP = GDP - Depreciation

http://www.toxicdrums.com/economic-wargames-by-dal-timgar.html