Robert Johnson Rob Johnson is the Director of the Project on Global Finance at the Roosevelt Institute and is a regular contributor to NewDeal 2.0, which runs his "FinanceSeer" column. He serves on the United Nations Commission of Experts on Finance and International Monetary Reform. Previously, Dr. Johnson was a managing director at Soros Fund Management, where he managed a global currency, bond and equity portfolio specializing in emerging markets. He was also a managing director at the Bankers Trust Company. Dr. Johnson has served as chief economist of the U.S. Senate Banking Committee under the leadership of Chairman William Proxmire and was senior economist of the U.S. Senate Budget Committee under the leadership of Chairman Pete Domenici. Dr. Johnson was an executive producer of "Taxi to the Dark Side," an Oscar-winning documentary produced and directed by Alex Gibney. Dr. Johnson is a member of the Development Advisory Board of the Baseball Hall of Fame in Cooperstown, N.Y., and is the former president of the National Scholastic Chess Foundation. He currently sits on the Board of Directors of the Economic Policy Institute and the Institute for America's Future. Dr. Johnson received his Ph.D. and M.A. in Economics from Princeton University and a B.S. in both Electrical Engineering and Economics from the Massachusetts Institute of Technology.

Double Dip and Dysfunction

Double dip or stagnation? Whatever you call it, we seem to be headed for a downward spiral.

Standin at the crossroad babe
risin sun goin down
Standin at the crossroad babe
eee eee eee, risin sun goin down
I believe to my soul now,
Poor Bob is sinkin down

–”Crossroad Blues“, by Robert Johnson (1936)

We’ve been hearing a lot lately about the possibility of a double-dip recession. I do not know if we will actually go to a double dip or just substandard growth given the high level of underutilized human resources. But that is beside the point.

It is a very sad feeling, one that I had…

Japan’s example. Does it apply to our current challenge?

Author Mark Weisbrot examines Kenneth Rogoff’s arguments in favor of deficit cutting, but doesn’t find anything convincing. Read the full article:

No Convincing Economic Arguments Against Further Stimulus Spending

By Mark Weisbrot

This article originally appeared on The Guardian.

In much of the world, including the United States and Europe, a debate is taking place about whether the government’s first responsibility should be to reduce unemployment — which is at elevated levels — or to reduce government deficits and debt. Many of the arguments for deficit reduction are simplistic, based on ignorance, or ideologically-based. For example, there are inappropriate comparisons of government to household…

BP Bashing and Obsequious Officials on Finance

As I read the article below I can only wonder what forces of fundraising and deference stopped our national leaders from “taking the hide off” of Wall Street’s leaders after they did a multi-trillion dollar “financial spill” onto the world economy in 2008. Instead, they tiptoed to this very moment to avoid strong legislative reform and looked helpless amidst a monster bonus pool sent to the bailout beneficiaries. We were all told we were too rash, or that we could not let Wall Street collapse or they would take us down with them. We were scolded by JPM’s CEO Jamie Dimon,…

When Fools Rush In: 1937 Revisited

History repeating itself? Larry Elliot, economic editor at The Guardian, reminds us that on the question of the deficit, “Roosevelt heeded the same sort of warnings we are hearing today - a big mistake.” He goes on:

The Germans are doing it. The Greeks, the Spanish and the Portuguese believe they have no choice but to do it. George Osborne believes it is his patriotic duty to do it. Around the world, cutting budget deficits has become the priority for policymakers fearful that rising debt levels will leave them at the mercy of capricious financial markets.

Mervyn King has applauded the return…

Buying the Rules

If you want to know how the final finreg bill will be devised, you will want to read the latest on the Open Secrets blog. From “Financial Reform Bill to Be Finalized by Members Who Benefit from Wall Street Cash“:

Democratic and Republican leadership in both the House and Senate have named 43 individuals to a conference committee tasked with hammering out the final version of the Congress’ financial regulatory reform legislation.

These members comprise just 8 percent of Congress, but the group has been far more likely to benefit from Wall Street’s cash.

Out of every $100 that Wall Street interests have…

A most serious question of representation

Brad Delong asks a few pertinent questions about the sinister calm in our nation’s capital as jobless Americans suffer:

“Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are…

Matt Taibbi takes on David Brooks over populism

What are we supposed to think of David Brooks when 99.8 percent of the population is mad at the banks and he tries to reframe it as some sick deviance called “populism”?  All of the MBAs at Columbia and the hedge fund managers, and the PhD economists are now suddenly populists and have come off of their moorings? David Brooks just cannot seem to look power in the eye without sucking up.

Taibbi reams him out and he deserves it. Click here to read article.

Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt…

Kakutani’s Kowardice

At the Daily Howler, Bob Somerby decodes the snotty condescension that substitutes for a real review of the book. Looking down her nose, Michiko Kakutani just cannot stick to the economics. Is it “populist” to have a distaste for Too Big to Fail and the Lemon Socialism of Heads Big Banks Win and Tails the Taxpayer loses??? I do not know of one hedge fund manager or Ivy League educated policy official who will argue in favor of such an environment. Perhaps Kakutani stands alone above us all, financiers and scholars included, with our dirty and unwashed distaste for subsidies…

FCIC hearings must shatter the ’sociopathic nature’ of Wall Street

Reporting live from the hearings, Rob Johnson argues that the FCIC hearings must challenge Wall Street to reexamine its role in society.

The Hearings of the Financial Crisis Inquiry Commission began belatedly this morning. Carrying a structure of decision making that appears to be designed to make it hard to get things done, Chairman Phil Angelides has a gargantuan task before him. The first session, which is a beginning, did have moments of import. Angelides acquitted himself well when he reminded Goldman Sachs CEO Lloyd Blankfein of the fact that there were people on the other side of the losses, particularly…

Reviving Confidence in the American Economy - China, Investment and the Deficit Hawks

Rob Johnson explains how the U.S. can regain competitiveness and revitalize its economy.

Since the early 1980s, rises in the living standard of middle class United States citizens have not kept up with the gains in labor productivity. Wages in the middle class have been close to flat. At the same time, consumer spending continued to grow abetted by innovations in consumer finance that supported ever-higher levels of consumption for any level of income. The credit crisis of 2008-9 has ended and unmasked the contradictions inherent in this unstable system and also in the international commercial system that has relied upon…