Re: Danby seminar: Mexico, Malaysia, and the Perils of Liberalization

[Warren Mosler <mosler@xxxxxxxx>]

>

(snip)

> In this context the main flaw in neoliberal
> reform may be that it underestimates the
> institutional task involved in achieving its
> laissez-faire ideal.  In a political economy
> of implicit guarantees, capital inflows and
> financial liberalization only encourage private
> irresponsibility at public expense.
>

Exactly, and IMF bailout $ are roughly equiv. toUS deficit spending, or
at least lending.  With the
US running 'overly tight' fiscal, the pressure is on!
Deficit spending or its equiv. will be forced one
way or another, unless there is a drastic shift in
the world wide desire to net save $.  If anything,
that desire seems to be increasing, as the success
of an lcd cb is measured by its pile of $ reserves.
Note that Indonesia let its currency drop rather
than let go of a single $ of reserves for stabilization
purposes.



> Best, Colin



--
Warren Mosler
Director of Economic Analysis
III Finance

http://www.warrenmosler.com