Richard Duncan on FT

[oddlots]

The interview doesn't do him justice, but the whole thing's not a bad introduction to his thinking:

http://ftalphaville.ft.com/blog/2010...nymore-duncan/

I'd forgotten about his "Dollar Crisis: Causes, Consequences, Cures." It was an excellent, simple analysis of how the breakdown of the monetary regime in 73 set in train the events that led to the GFC.

I'm not surprised to see him echoing EJ's claim that the west needs to shake off the hangover of the debt-orgy years and get back to its knitting. Sort of surprised to see him endorsing continuing government stimulus. Not someone to dismissed lightly IMHO.

[medved]

Re: Richard Duncan on FT

Sort of surprised to see him endorsing continuing government stimulus. Not someone to dismissed lightly IMHO.

He is right. If not for the gov't intervention, the financial crisis would turn into Great Depression and complete breakdown of the society. Gov't will continue to intervene and take away people's savings, this part is clear. The question is, how this is going to be spent. And, again, he is correct that repeating Japanese scenario is not the way to go.

I disagree that US can create some new super-duper high tech industry to improve its job market. US and other debtor countries will now support protectionism and this will help to preserve jobs (to a degree).

Protectionism will increase international tensions and US will benefit from this. Besides increasing its military (more jobs!), US will continue to get subsidies from its allies (Europe, Japan) and clients (Middle East, Taiwan etc.).

US will lose its financial leadership. Everybody understands, it is now just another big debtor, not "financial wizard" anymore. OTOH, it has many other things to sell, outside of the tall tales of "free market" and "strong dollar".