Robert Wade on Financial Crisis and Reregulation
I have long subscribed to Challenge magazine, a generally progressive and accessible US economic journal which I recommend highly to readers of this blog. Individual articles can be downloaded, for a fee of $25.
The current issue has an excellent piece by the LSE’s Robert Wade on the current financial crisis, which he sees as rooted not just in financial deregulation but also in a destructive interaction between an out of control financial sector and the unbalanced global economy. Most notably, Wade puts forward a fairly concrete agenda for regining in global finance through actions at the international and national level, including capital controls and establishment of a layer of publicly owned banks.
There’s also a good article in this issue on oil prices, arguing that speculation has clearly pushed up prices – not least because high futures prices induce OPEC and transnational corporate producers to hold back available supplies from the market.
http://www.metapress.com/content/l0j0w24234r5/?p=7cb5ca85b1bb492ca0a5305fbfab27f9&pi=0
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/20/AR2008082003898.html
Here is the Washington post article that raised some eyebrows last week on Speculation versus legitimate demand.
I am no commodity trading expert but I would like to get further into this area and see what others at the PEF think about such a fundamental issue that has wreaked havoc on our economy, through higher energy prices and the “dutch” disease effect it has had on our dollar.
The price of oil has ingrained itself within our economic fabric. With all the fluctuations, environmental issues, elasticities and all multitude of dynamics that this commodity has within the world economy, one would think that it would be a lot more clearer on how the functioning of these markets actually function. It would seem that letting these markets work within such shadowy spaces has allowed some quite undesirable speculative behaviour within the price setting mechanism.
These forces need to be exposed and documented. They need to be scrutinized and made public.
I am glad to see some new worthy items in such heavy vehicles as the this story that Andrew has posted and the newspaper article I am posting. We need more.
paul