Centrists Gone Radical!


Tim Fenrholz writes about Simon Johnson.

Paul Krugman writes about Bush's drive to war in Iraq:

"The Bush administration was obviously - yes, obviously - telling tall tales in order to promote the war it wanted: the constant insinuations of an Iraq-9/11 link, the hyping of discredited claims about a nuclear program, etc.. And the question was, should you stand up against that? Not many did - and those who did were treated as if they were crazy.

For me and many others that was a radicalizing experience; I’ll never trust "sensible" opinion again."

Here, Krugman points us to the new IMF report titled World Economic Outlook.

The New York Times reports on it here and here.

The I.M.F. projected a 1.3 percent decline in global economic activity for 2009,[first decline since WWII] down sharply even from the modest 0.5 percent growth it had projected in January. In the United States, still the "epicenter" of the crisis, according to the fund, economic contraction would be even greater, at 2.8 percent this year, with zero growth for 2010.
...
Mr. Blanchard said that the fiscal responses of several major countries had made "a gigantic difference."

"If there had been no fiscal stimulus across the world, world growth in 2009 would be 1.5 to 2 percent less," he said. "We would be in the middle of something very close to a depression."

One has to give props to China who enacted a $500 billion (converted) stimulus package. Japan also enacted one. The IMF puts bank losses from global economic crisis at $4.1 Trillion:

Of that amount, $2.7 trillion is from loans and assets originating in the United States, the fund said. That estimate is up from $2.2 trillion in the fund’s interim report in January, and $1.4 trillion last October.
...
Among European countries, the fund has already agreed to more than $55 billion in loans to Hungary, Serbia, Romania, Iceland, Ukraine, Belarus and Latvia. More may yet need to be bailed out.

On Tuesday, Colombia became the second Latin American country to seek aid, requesting $10.4 billion. Last Friday, the fund approved a $47 billion line of credit for Mexico, making it the first country to qualify for a loan from a program that extends credit to emerging economies that are considered well managed. Poland also said this week that it would seek a $20.5 billion credit line under that program.
...
In a twist that leaves some experts shaking their heads, the fund needs money from cash-rich developing countries, like China and India, to help more developed but strapped countries, like those in Eastern Europe.

Mark Weisbrot argues the IMF needs reform.