Throw in excessive debt, public and private, and you’ve got the ingredients of the recipe.
Welcome to the party, IMF-pals.
Viva la Nation State. Nwo sucks. Exile the Fabians.
To us "neoliberal" points to people like Lester Thurow (who wrote The Zero Sum Society), i.e. liberal supporters of capitalism who believe it needs to be more highly regulated and augmented by large safety nets for those who don't fare well in a capitalist economy.
Internationally "neoliberal" means the economics of Margaret Thatcher and Ronald Reagan, i.e. relatively unconstrained free markets with less regulation and smaller safety nets.
There will be confusion. Freepers will hate anything with the word "liberal" in it, but how can we hate something associated with Thatcher and Reagan?
There are those conservatives who lean neocon and/or libertarian who are very supportive of everything that Reagan tried to accomplish and only wish that he could have gone further in deregulating the economy, lowering taxes, etc. However, there are those of us who lean more to paleoconservatism that are skeptical of the supposed benefits or even possibility of a totally free market.
So Freepers who are happy to be called neocon or libertarian on FR should be happy to be called neoliberal in the international context.
Those of us who are more skeptical won't want to associate ourselves with any "neo" philosophy even if it was pushed by a Reagan administration infested by neocons or a Thatcher administration that accepted atrocities such as the NHS as a given.
M. Friedman argued that floating exchange rates were preferable to fixed as floating allowed another way for imbalances to be balanced. As it is, Greece, Puerto Rico, etc., would have to actually fix the underlying problems with their economy, which they’re not going to do. With floating exchange rates, they could inflate away their debts, and those who foolishly bought their bonds would suffer.
The bailout solution didn’t work, as it hasn’t in the past. The bailout solution is for the IMF or some other such lenders to provide loans conditioned on reforms sufficient, in a few years, to bring the debtor country’s budget into balance. That is, loans plus austerity. But, it is a phony austerity. The debtor countries go on for years with little or even no progress toward balance. The deficit disease spreads from basket-case countries to marginal countries.
The “capital controls” solution is to restrict financial flows. Supposedly, Greece and Germany will share the same currency, as will the U.S. and P.R., but there will be controls on the financial transactions between Greece and Germany, and the U.S. and P.R.
Capital controls are part of the “policy options” of countries like communist China. Not open and democratic countries. We are sliding into serfdom, so the crony capitalists as our masters.
“I rejected NAFTA and GATT as bad before the election, but embraced them as good after the election.”
-Hillary Clinton’s husband