Daily Archives: May 30, 2014

Kenneth Rogoff is an Even Worse Criminologist than Economist

By William K. Black

Kenneth Rogoff, the creator of the fictional 90% budget deficit cliff, is back spreading new myths.  He has now ventured into white-collar criminology, without the benefit of any study of criminology.  The results are yet another embarrassment for Rogoff. The title of his article is “Paper money is unfit for a world of high crime and low inflation.”

I’ll leave his claim about removing the “lower bound” on central bank monetary policy to others.  I note only that he ignores the readily available (and superior) alternative of fiscal policy.

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Will the EU’s Austerity Prove as Radicalizing as the Washington Consensus?

By William K. Black

President Rafael Correa of Ecuador owes a triple debt to John Williamson, the economist who coined the term “the Washington Consensus” in a paper he first presented in 1989.  His paper is open about the focus of that consensus: Latin America.  Latin America was to be transformed through policies on which the United States Government, the International Monetary Fund (IMF), the World Bank, and the Washington “think tanks” had reached a consensus.  Those policies had four key components.

  • Require a sufficient stream of payments of interest by Latin American debtors to U.S. banks to ensure that the banks would not have to recognize large losses on their loans
  • Require Latin American nations to adopt austerity
  • Require substantial deregulation, and
  • Require substantial privatization

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