Talking Points for Asia Trip
- America has only one president at a time.
- The genius of the British Empire was that Britain used its time as the world's hyperpower to make a world in which Britain could live comfortably after other superpowers had arisen.
- Richard Cheney and George W. Bush are not geniuses.
- Barack H. Obama and Joe Biden ate not fools.
- In the United States we--that is, my faction within the Democratic Party--have lost the argument over whether trade is good for America's middle class.
- This is very frustrating: trade is good for America's middle class.
- But the era of increasing globalization has also been an era of rapidly-increasing income inequality--and people think that there is a connection.
- So for the next decade free trade will have to be sold within the U.S. as part of broader foreign policy--free trade as a soft-power tool for security and global environmental goals.
- Nevertheless, the Obama-Biden administration is certain to be better on free trade than the Cheney-Bush administration.
- Since 1844 and the Westminstet debate over the renewal of the Bank of England charter, it has been accepted doctrine that avoiding deep depression requires that central banks keep financial assets from collapsing.
- At least one price is too important to be left to the market.
- Delicate issues of moral hazard: seek also to minimize "Greenspan puts."
- Kindleberger: the lender-of-last-resort must always arrive, but its arrival must never be relied on in advance; this is a tricky business.
- Usually central banks can manage asset prices in a crisis sufficiently by managing the price of duration--buying safe but longer-term assets in exchange for cash that served as reserves and means of payment.
- Sometimes not: default, risk, information. What then?
- Government spending.
- Tax cuts.
- Danger: debt accumulation can crack government's status as provider of safe assets...
- Bernanke--and Trichet, and King
- Making it up as they go.
- All the issues of global imbalances we used to worry about remain.
- As do all the long-run global warming issues.
- As do all the long-run global aging issues.