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<DIV style="FONT-SIZE: 12pt; FONT-FAMILY: times new roman, new york, times, serif"><FONT face=Arial size=2>----- Forwarded Message -----<BR><B><SPAN style="FONT-WEIGHT: bold">From:</SPAN></B> John Fullerton <jfullerton@capitalinstitute.org><BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> Robert Searle <dharao4@yahoo.co.uk> <BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Tuesday, 3 January 2012, 23:00<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> What's Wrong With the Debt Debate<BR></FONT><WBR>
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<div><FONT face=calibri color=#111111 size=5><B>What's Wrong With the Debt Debate<BR></B></FONT><FONT face=calibri color=#333333 size=2>by John Fullerton</FONT></div>
<div><FONT face=calibri color=#333333 size=2>This former banker, and now sustainability investor and humble blogger, will not offer grand predictions for 2012. Forecasting in a world of rising uncertainty suggests a lack of understanding about uncertainty. Instead, inspired by my holiday reading, <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=694&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Debt: The First 5000 Years</A> by anthropologist David Graeber, I will take up the debate about the debt, and offer an uncomfortable third view: jubilee (in some form) is inevitable.</FONT></div>
<div><FONT face=calibri color=#333333 size=2>The debt debate as it rages on can be summarized as the “Krugman view” versus the “austerity view” (the latter having too many advocates both at home and in Europe to associate it with a person). The less popular Krugman view rests on a belief in Keynesian economics (“</FONT><FONT style="FONT-SIZE: small; FONT-FAMILY: calibri; TEXT-DECORATION: none" color=#5987c6><A style="FONT-SIZE: small; FONT-FAMILY: calibri; TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=686&qid=66192" target=_blank rel=nofollow>Keynes was Right</A></FONT><FONT face=calibri color=#333333 size=2>") that governments must increase deficit spending during slumps, and then tighten the spigot during booms, providing an automatic stabilizer to the economy. Failing to do so in times like the present turns recessions into depressions. This view rejects the
analogy of government finances to household finances, since governments can, and do, print money. Krugman points to long-term interest rates in the United States and Japan being at historic lows as vindication that the market says he’s right — markets understand deficits don’t matter in the short run (at least when a country issues debt in its own currency).</FONT><SPAN style="FONT-SIZE: small; COLOR: rgb(51,51,51); FONT-FAMILY: calibri"> </SPAN></div>
<div><FONT face=calibri color=#333333 size=2>Read more at the <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=696&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Future of Finance Blog</A>. </FONT></div></TD></TR>
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<div><FONT face=calibri color=#111111 size=5><B>Talking about the Future of Manufacturing with Mike Locker</B></FONT></div>
<div><FONT face=calibri color=#333333 size=2>After having been written off as a declining, noncompetitive sector, manufacturing is now rising on the radar screens of American policymakers, social justice advocates, and a new breed of environmentalists who see it as both a catalyst for economic revival and as offering the solutions to many of our ecological and societal ills.</FONT></div>
<div><SPAN style="FONT-SIZE: small; COLOR: rgb(51,51,51); FONT-FAMILY: calibri">Last week, as part of our research for the upcoming <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=688&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Field Guide to Investing in a Resilient Economy</A> study on the <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=689&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Chicago Manufacturing Renaissance Council</A> project and the organization that supported its creation, <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=690&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>The Center for Labor and Community Research</A>, we visited with <A style="TEXT-DECORATION: none"
href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=691&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Mike Locker</A> at his offices near Zuccotti Park. Mike is a long-time advisor to manufacturers and labor on corporate restructuring and buyouts, serves on the board of the CLCR, and has worked closely with <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=692&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>Dan Swinney</A>, the visionary behind both the CLCR and the CMRC.</SPAN></div>
<div><SPAN style="FONT-SIZE: small; COLOR: rgb(51,51,51); FONT-FAMILY: calibri">“We have to do manufacturing more productively and more sustainably,” Mike said. “We must do it in a way that does not contribute to environmental disaster but in a way that contributes to environmental success. There has to be good pay and benefits associated with it. We are now at the outer limits of the reconstitution and reconfiguration of what we mean by manufacturing. It is an exciting time.”</SPAN></div>
<div><FONT face=calibri color=#333333 size=2>Read more at <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=693&qid=66192" target=_blank rel=nofollow></FONT><FONT color=#5987c6>This Week at Capital Institute</A>.</FONT></div></TD>
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<div><FONT face=calibri color=#eeeeee size=3><B>What We're Reading </B></FONT><BR><FONT face=calibri color=#cccccc size=2>In his new book <I>Debt: The First 5000 Years</I>, anthropologist David Graeber shows that for more than 5,000 years, since the beginnings of the first agrarian empires, humans have used elaborate credit systems to buy and sell goods—that is, long before the invention of coins or cash. It is in this era, Graeber argues, that we also first encounter a society divided into debtors and creditors.<BR><BR></FONT><A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=694&qid=66192" target=_blank rel=nofollow></I></FONT><FONT face=calibri color=#5987c6 size=2><I>Debt: The First 5,000 Years</A></div>
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<div><B style="FONT-SIZE: medium; COLOR: rgb(238,238,238); FONT-FAMILY: calibri">Quote of the Week </B></div>
<div><FONT face=calibri color=#cccccc size=2>“We might summarize our present human situation by the simple statement: In the 20th century, the glory of the human has become the desolation of the Earth. And now, the desolation of the Earth is becoming the destiny of the human. From here on, the primary judgement of all human institutions, professions, and programs and activities will be determined by the extent to which they inhibit, ignore or foster a mutually enhancing human-Earth relationship.”<BR><BR>-Thomas Berry<BR><FONT size=+0></FONT></FONT></div><FONT face=calibri color=#cccccc size=2><FONT size=+0><FONT face=calibri color=#cccccc size=2><FONT size=+0><BR></FONT></FONT></FONT></FONT>
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