Global Financial Capitalism: Not Working
By Scott Galupo ? The American Conservative July 19, 2012 The International Monetary Fund issued a warning that will no doubt send deflation hawk Paul Krugman into a #facepalm. The Washington Post reports:
Europe could suffer a dangerous bout of deflation if regional officials, including those at the European Central Bank, do not move quickly to support the continent?s banks and the wider economy, the IMF warned Wednesday. Using some of its most ominous language yet, the usually understated IMF called the euro zone 'unsustainable in its current form'.
In testimony to Congress last month, Fed Chairman Bernard Bernanke explained how the Eurozone crisis acts ?as a drag on our exports? and weighs heavily on U.S. financial institutions. And this week Reuters reported on National Association for Business Economics survey data that suggests 'American companies are scaling back plans to hire workers and a rising share of firms feel the European debt crisis is taking a bite out of their sales.' Meanwhile, at his Foreign Affairs blog, trade deficit watchdog Clyde Prestowitz writes today:
The weaknesses of the whole global system are now becoming excruciatingly apparent. China has been urged by the G-20 and has committed to rebalancing and focusing on domestic consumption led growth. But consumption accounts for only 35 percent of China?s GDP and is not large enough to be an engine of growth in the short term.
Click here to read the entire article at the American Conservative