The Business Law Spot
Friday, October 31, 2014
The Argentine bond default mess and the endless litigation over Argentina's efforts to negotiate some sort of settlement has led a lot of people to renew discussions over creating an international law for sovereign bankruptcy. In her recent article, Elaine Moore states that a desire for a more orderly process is at the heart of these discussions. Maybe. I think it is more likely that a lot of people are looking at the extent to which US courts are being used to apply US law to allow creditors to dictate policy decisions to sovereigns, and they would like an alternative.
IMF Gets Religion?
The International Monetary Fund (IMF) has long been the global stormtrooper for budget cuts, tax hikes, and radical austerity programs. The IMF has held country after country hostage to its Austro-Chicago orthodoxy.
Which makes Larry Summers's recent report about the IMF's latest World Economic Outlook a stunner. It seems the IMF (and Summers for that matter) has finally gotten what anyone with more brains than a turnip has known since the New Deal: If you need to jump-start an economy, the government should borrow money and spend it on infrastructure; you are almost guaranteed a net return.
At last, some sense in economic policy. We might finally get some alternatives to austerity before we destroy every economy on the planet. Of course there are still plenty of political prostitutes like Otmar Issing out there preaching the same, old Austro-Chicago Kool-Aid (If Issing wants to see where his "ideas" lead, he need look no further than Hungary and dumpster fire Orban is creating. But Issing has already done that and isn't going to let reality get in the way of his bought and paid for opinion. Hence my calling him a prostitute.). But maybe the light at the end of the tunnel isn't just an oncoming train.