Sunday, May 1, 2016

Voices from Berkeley

When I spent eight months in Berkeley in 2008 I saw in the corridors of the University of California academics of the calibre of Barry Eichengreen and Robert Reich. This week-end I had the occasion of knowing about their opinions on the economic and political crises of the recent past (which started precisely those months in 2008). I have been reading most of the book by Eichengreen "Hall of Mirrors" and I watched on the BBC the interview of Reich in the program Hard Talk. "Hall of Mirrors" is a fantastic book on the parallels between the Great Depression of 1930s and the Great Recession of 2008. It deals with experiences at both sides of the Atlantic in both historic episodes. It has many lessons, which I could apply to my own interests. For example, when talking about the crisis in Ireland, he explains that the fact that it was a small country did not help in disentangling the collusion of interests between politicians, bankers and regulators (this is a useful insight for those thinking that the independence of small nations will automatically increase democratic quality). Or he explains that in the UK the conservatives took advantage of the crisis to push their small government agenda, driving a campaign to eliminate a large number of public agencies. Or how central banks added responsabilities on financial supervision to those on monetary policy, but creating internal walls to separate both functions, to reduce the conflicts of interests among them. I would have found the last two insights useful when I was working on a paper on the merger of regulatory agencies in Spain (but now this paper has already been accepted by a journal). The interview of journalist Stephen Sackur with Robert Reich discusses the campaign between Bernie Sanders and Hillary Clinton. Reich has endorsed Sanders but says that he will vote for Clinton if she is finally the nominee. He calls for the Democraric Party to channel the energies of the anti-establishment movement led by Sanders and that has its origins in the Occupy Movement. If Hillary Clinton wins the presidency and accepts large parts of the platform of Sanders it will be more difficult to argue that socialdemocracy faces an international terminal crisis.

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