Wednesday, August 20, 2014

A “Jubilee” Economic Program from the Northeast

A cohort of experts on economics believes that the world needs more infrastructure, mortgage restructuring/forgiveness, and global re-balancing and de-levering, in order to avert economic catastrophe and restore the world economy to growth.

One of them, Richard Vague, recently (July 15, 2014) published a book, “The Next Economic Disaster:  Why It’s Coming and How to Avoid It.”  You can purchase it at Amazon at:

Mr. Vague, a very perspicacious and adroit banker, was recently a guest on, where he was interviewed about this book by NonzeroFoundation President Robert Wright, the humane, polymath, and brilliant principal host of the show.  You can watch that interview at:

Richard Vague also co-authored a piece along these lines with Robert Hockett, a law professor at Cornell University Law School.  You can find it here:

It’s called “Debt, Deflation, and Debacle:  Of Private Debt Write-Down and Public Recovery”

Professor Hockett also co-authored a related piece with Daniel Alpert of Westwood Capital and Nouriel Roubini, Professor of Economics, New York University.  It’s called “The Way Forward:  Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.”

You can find it at:

The message contained in these documents boils down to a call for more infrastructure, the restructuring of private debt (debt forgiveness, or “Jubilee”) with the banks absorbing their losses over 30 years, and “global reforms that can begin the process of restoring balance to the world economy and can facilitate the process of debt de-levering in Europe and the United States.”

Your correspondent spoke by phone this morning with Robert Hockett about the political state of play regarding the adoption of such a “Jubilee” economic program, one calling for more spending on infrastructure, private debt-restructuring/forgiveness, and “global reforms that can begin the process of restoring balance to the world economy and can facilitate the process of debt de-levering in Europe and the United States.“

 He said that implementation of these reforms was being spearheaded by municipalities such as Richmond and San Francisco, California, and Newark and Irving, New Jersey, where local officials contemplate using their power of eminent domain to take over properties and restructure their private mortgage debt.

He didn’t think Congress would act on these policy recommendations, as it was “paralyzed” by partisan gridlock.

So far, he thought, there had been “no serious federal effort” along the lines he and his fellows were recommending. 

He expressed disappointment in President Obama, saying that he lacked “the courage of his convictions,”   He said he thought that the President “intellectually agrees” with their argument and that he’d vote for it as a Senator, but that, as President, “I don’t think in his heart of hearts” he’s committed to winning over the country and the Congress to this vision.  “He’s so disdainful and disinclined.” 

While distancing himself from any support for the substance of President Reagan’s policies, Hockett expressed admiration for the way the Gipper, when confronted by a recalcitrant Tip O’Neill leading the Democrats in Congress, “pushed forward,” urging people to write letters, trying to sway “public opinion” that eventually brought the Democratic Congress around to passing the Republican President’s proposed legislation. 

“Obama just doesn’t have that spine.” 

Queries sent to President Obama and Senator Warren

Etopia News has reached out to the Office of Massachusetts Senator Elizabeth Warren, and to the White House, asking for comment on the proposals put forth by Richard Vague, Robert Hockett, Daniel Alpert, and Nouriel Roubini.  There’s been no response from either of them yet.

As an added inducement to respond, there were attached to the White House inquiry links to video footage from the Etopia Collection featuring excerpts from an August 8, 1995, interview with Barack Obama before “you guys could pronounce my name,” as he puts it today, in hopes that they might reach the President’s own eyes and ears and give him a chance to recollect about who he was 19 years ago.  You can watch them, too, at:


(Sincere thanks to Sherle Schwenninger, who directs the New America Foundation's Economic Growth and American Strategy Programs. He is also founding director of the World Economic Roundtable, a program that brings together thought leaders from business, finance, and public policy in regular meetings to remap the global economy after the Great Recession.  He facilitated the connections that made this article possible.)

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