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
Bloggingheads.tv, 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:
and
(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.)
