Tag Archives: U.S. economy

Nobody gains from financial crises — except far-right extremists – Emil Verner

Assistant Professor of Finance, MIT Sloan School of Management, Emil Verner

From The Hill 

After a severe financial crisis, it’s common to see a surge in political polarization and in the popularity of populist parties, especially on the far right.

We’ve seen this decade after decade, and it’s clearly the case now around the world. Just look at the Law and Justice Party in Poland, Podemos in Spain and Jobbik in Hungary. The U.S. has certainly seen its share of political polarization, too.

This shift matters, as the emergence of far-right parties increases policy uncertainty and can threaten economic growth and democratic institutions. Those parties often bundle together radical economic platforms with xenophobic policies and racist rhetoric.

As a result, it’s important to understand whether (and how much) financial crises lead to increased support for extremist parties and why there is a connection.

In a recent study, my colleague and I analyzed these questions in the context of Hungary after the 2008 financial crisis. That country experienced a particularly severe household debt crisis starting in 2008 and a sharp increase in support for the far right.

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Firma invitada La lógica Trumpista choca con la lógica de la nueva economía–Steven Spear

MIT Sloan Senior Lecturer Steven Spear

MIT Sloan Senior Lecturer Steven Spear

From Retina

En las primeras semanas de la Administración Trump, han surgido dos polémicas separadas con asuntos concomitantes. Una es la supuesta protección del suelo estadounidense frente a una amenaza extranjera, en forma de una muy polémica prohibición de los viajes a EE UU de ciudadanos de siete países mayoritariamente musulmanes. La segunda es la intimidación de Trump a los fabricantes para que aumenten la presencia de sus fábricas en Estados Unidos y la reduzcan en el resto de lugares.

Implícitas en ambas cuestiones hay dos visiones claramente diferentes sobre cómo conseguir una seguridad y prosperidad duraderas para EE UU. Una postura es que competimos mediante la localización y la acumulación de cosas: recursos, instalaciones, y el acceso a ellas. La postura alternativa es que una ventaja sostenida depende de la superioridad sostenida en la generación, identificación y aplicación de buenas ideas en un mundo cada vez más globalizado.

Según el primer punto de vista, “transaccional”, la competitividad se apoya en la conservación de la ventaja posicional y mediante la construcción de barreras que eviten que molestos competidores tengan acceso a mercados y clientes a los que uno ya está intentando atender y para evitar que los clientes actuales se marchen a fuentes alternativas de bienes y servicios. Puede que no sea una coincidencia que alguien que construyó su carrera comercial en el sector inmobiliario, caracterizado por el mantra “localización, localización, localización”, tenga esta visión de la competencia.

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Dean David Schmittlein–Government, Business and Academia for Jobs


From CNBC Squawk Box 8/31/11

The government should be smart and strategic about the type of spending it will do, says David Schmittlein, MIT Sloan School of Management dean, who says if the government spends on innovative enterprise in America, it can put those dollars to better use.

Kristin Forbes among five leaders sharing ideas for creating jobs and reforming taxes

MIT Sloan Prof. Kristin Forbes

From the Boston Globe

My top priority if I was in charge: fundamental tax reform for individuals as well as consumers. Get rid of all the numerous deductions, exemptions, and special deals so that you could dramatically lower marginal tax rates while raising as much (if not more) money.

This would make our economy more efficient – raising growth and creating jobs. It would reduce uncertainty about future taxes and help stabilize our debt, allowing companies to invest and hire. It would keep companies and jobs in the US rather than moving to other countries with lower tax rates.

Given our unsustainable deficits, we will need to do a major overhaul of our tax code at some point. It will be difficult to grow and recover until the uncertainty about how we deal with our fiscal challenges is resolved, so fundamental tax reform would help our economy both in the short and long term.

See the full article in Money & Careers