Greece depends on Germany. Australia depends on China. Puerto Rico depends on Washington, D.C. In economics it’s all about interdependence, which has many people wondering what debt crises and stock market troubles abroad mean for them. We’ll get an update on the economic news from Greece and China, and discuss the interconnectedness of the world’s markets.

Just How Fragile Is the Global Economy? 15 July,2015forum

Guests:
James Galbraith, economist, professor at the University of Texas at Austin and author of "The End of Normal"
Robert Kahn, senior fellow for international economics at the Council on Foreign Relations
Shawn Donnan, world trade editor for the Financial Times

  • EIDALM

    Fragile understates the current condition of the World economy , I rather use the word ruined to describe the world economy ,It is not just Greece ,but near most nations of the world are suffering and many are facing economical disaster ,or even collapse ,,,It all; started in the late seventies when about a dozen of people the so called neoliberals ,near all are graduates of university of Chicago who were students and followers of the prophet of doom Leo Strauss who believed all societies should ruled like bunch of sheep by the few elites who should hold all of the power and wealth….This group led by Milton Friedman ,Erick Greenspan ,Larry Summers ,David Ruben ,Ben Banake ,and the rest of them ,you know their names ,they came in power with Ronald Reagan and sold him on their voodoo economics ,Reaganomics ,and trickle down economy ,all were done to enrich their Wall Street and their multinational corporation ,while destroying the great American middle class and sending most Americans to the poorhouse ,and they used their influence on the U S government to spread their evil plans on other countries starting with Chile ,and spread it all across the globe and now we ended in this sad state of affair across the world.

  • EIDALM

    So from Reagan first day in office ,the Neoliberals led by Milton Friedman and Erick Greenspan started their plan of voodoo economics ,Reaganomics and trickle down economy . they shutdown American Factories and send them to Japan ,Korea ,China and elsewhere ,they outsourced jobs and destroyed unions ,they sold us on all of phony world trade deals ,all were made to enrich the Wall Street and multinational corporations while destroying the American middle class ,the free trade was never free ,and the fair trade was never fair ,they created their bubble after bubble economy and ,their Casino they call the stock market , ,all were to rob the American people out of their assets ,savings ,homes ,…all are done by their stranglehold on the U S government.

  • EIDALM

    Austerity does not fix the economy ,it destroy what is left of it .need to invest money back on the society to have more jobs which leads to more tax which leads to better economy.

  • thucy

    Even Nobel Prize-winning Paul Krugman is deriding the German demands upon Greece as tantamount to a coup:

    “The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”

    http://mobile.nytimes.com/blogs/krugman/2015/07/12/killing-the-european-project/?referrer=

    http://mobile.nytimes.com/2015/07/14/world/europe/sympathy-for-greeks-inspires-outraged-commentary-tagged-thisisacoup.html?referrer=

  • thucy

    I seem to recall the last TWO times Germany insisted it was a victim of its European neighbors. The first was after the Treaty of Versailles, when it defaulted on its debt (and Hitler eventually used German suffering to whip Germans into a war-like frenzy), and the second was in 1953, when 75% of Germany’s post-war debt had to be forgiven.

    Chancellor Merkel, have you no economic memory? How did Germany pay for its massive war machine post Treaty of Versailles? It sure wasn’t because they were making debt payments demanded by Europe.

    • Whamadoodle

      Reparations for World War One are NOT a “debt,” in the sense that Germany never borrowed that money, as Greece’s previous administration did. They were a punishment that the victorious allies declared Germany owed, because they declared Germany to be primarily guilty for the war (which is ridiculous, because it was plainly primarily a battle between Austria-Hungary and Serbia, which then spread to all the rest of the allies on both sides).

      It is true that 1) Germany should not insist on austerity, and 2) it did benefit from more lenient terms in 1953. But anyone thinking that Greece will see an economic miracle from that, similar to Germany’s roaring back after World War Two destroyed the entire continent’s production capacity is probably dreaming.

      Since that is unlikely, German calls for Greece not to default completely (but to restructure their debt instead) are actually more of a favor to Greece than to Germany, since Greece (and especially its pensioners, who will suffer from a Grexit, default and inflation, which will erode their savings and fixed income) will suffer badly from the sky-high interest rates that the bond markets will demand, following a default. For the bond markets, too, would be skeptical that a total default would be followed by Greece doing what Germany did economically in the 50s and 60s.

      Structural reforms, such as reforms of their clientelist economy, and strictly ending tax evasion, are needed in Greece.

  • Chemist150

    How about tougher financial regulations for the Federal Government so they don’t continue to destroy the increase in money supply that is intended to allow growth be usurped by debt obligations that exceed the increase in money supply needed for growth!

  • EIDALM

    All trade agreements enriched the Wall Street and multinational corporations ,while the whole world community had near economical collapse ,in the case of NAFTA we lost tens of millions of jobs in the U S but in Mexico, it caused the demise of all family owned farms and family owned businesses which lead to the loss of tens of millions of jobs that lead to the current drug war and made Mexico near a failed country ,as well as to the mass floods of immigrants across the border to the U S ,NAFTA also lead Mexico near failed country.

  • Ian

    Why we just brush off Puerto Rico situation? How come we can easily critiqued Europe and China and problems closer to home that we help to caused we just ignored!!!

  • EIDALM

    As a business owner I felt and was more aware of the harm of all of these trade agreements more than most …through those and other bad economical decisions in the U S my 30 million dollars of annual sales was damaged and became shadow of itself ,the same happened to tens of thousands of small businesses in the U S …Small businesses are the basckbone of the middle class.

    • Whamadoodle

      But enough from the rest of us! What does EIDALM think about it all?

      • EIDALM

        I believe were all sold out by the Wall Street .and their stranglehold on our government .

  • EIDALM

    When Eid’s TV opened for business in 1973, 98% of the consumer
    electronics sold in the United States were made in the U.S.A. Today almost all
    of it is manufactured overseas.

    The foreign corporations who dominate the American market today
    had inferior products before the 1970s. They invaded the marketplace, first
    by imitating American products and then by hiring top managers, engineers, and
    salespeople away from American companies, such as Zenith and RCA. They lured
    them by offering them much higher salaries and benefits. They paid them
    enormous premiums over their former salaries so far as to obtain know-how
    trade secrets, dealer lists and other proprietary information.

    Once the foreign producers achieved significant penetration of
    the American market, they began to engage in price fixing schemes, primarily
    by offering much larger profit margins to the dealers who agreed to sell only
    at the corporate set “list prices” and by refusing to supply products to
    dealers who sold at a discount, for instance, an RCA TV with a wholesale price
    of $300 sold for $350 while, equivalent imported sets that wholesaled for $150
    could only be sold at $500 according to the “list pricing” scheme.

    Sales people were instructed to disparage American products as
    they were pressured to promote imports with much higher profit margins, and
    even given commissions directly from the manufactures. American made TV demo
    models were connected to deficient signals to make them appear second rate.
    Outright lies were told about the products under comparison, such as the claim
    that only the imported sets had the state-of-the-art “one gun” color picture
    tubes.

    By the early 1980’s, Eid’s achieved gross sales twice that of
    the nearest Bay Area competitor. In 1984, one major foreign manufacturer,
    whose products accounted for millions of Eid’s annual sales, demanded that Eid
    stop discounting below the corporate list prices, or face being cut off from
    further supplies. This company made good on this threat after Eid refused,
    going so far as to pressure alternative distributors not to supply Eid’s TV
    with their merchandise.

    Other major brand name electronics companies were recruited in
    this effort to stop Eid from discounting, along with several of the regional
    retail competitors, in effect forming a market controlling cartel against
    Eid’s TV. They went so far as to rent a fake storefront across the street
    from Eid’s TV, whose only purpose was to disparage Eid and his products. They
    never intended to back up the store with actual product. After Eid obtained
    several hundred color sets against the wishes of one large foreign
    corporation, bullet holes appeared in his store windows, and profanity
    graffiti was painted in front of his house on Euclid Avenue. He was forced to
    spend nearly one million dollars on security services in order to protect his
    family and employees. No governmental enity would do anything to stop these
    practices, even though they were overt violations of the laws against
    restraint of trade.

    When Eid spent hundreds of thousands of dollars seeking
    protection from Federal and State courts to stop the foreign companies and
    their greedy retailers from interfering with his business, Eid did not get
    much help even after winning many suits filed against them. It only made them
    more angry and more determined to destroy Eid and his electronic empire. At
    the same time because of the large amount of money spent by these foreign
    companies and their lobbyists in Washington D.C., the Antitrust Laws were
    weakened by many and unjust rulings by Federal Courts “Judge Bork.” There
    went any hope for correcting these wrongs as well as making any consumer
    electronics in America.

    The foreign corporations spent millions to influence the
    coverage of these issues in the news media, effectively suppressing stories
    concerning their anti-competitive practices while obtaining favorable and
    misleading reviews of their own products imports were granted the prized “top
    rated” label even when they were known to contain serious design flaws and
    manufacturing defects. Glowing reports about foreign made TV sets sometimes
    appeared in American magazines even before they were actually offered for
    sale. As a result, the whole American consumer electronics industry was
    destroyed.

    The foreign manufactured products that are offered for sale may
    be inexpensive, but they are of low quality and designed to be simply thrown
    away rather than repaired. The objective is destroy American manufacturing
    and dealer services as well, in order to keep the U.S.A. from ever producing
    competitive products again.

    Today the U.S.A. has recorded trade deficits of hundreds of
    billions of dollars with Japan and China; their agents of influence spend
    hundreds of millions of dollars to lobby agencies of government.

    Many past U.S. Trade Representatives, Senators, and Congressmen
    have obtained high paying jobs with foreign owned corporations; some of them
    even worked for these foreign competitors before entering U.S. government
    service.

    If the American consumer continues to settle for a marketplace
    controlled by a handful of huge corporations all selling the same throwaway
    junk, the consumer will find that “choice” is an illusion, and that all the
    decisions have already been made.

    Today American consumers continue to mindlessly accept this
    state of affair, and assume large chains offer lower prices when in fact most
    of the businesses today utilize the bait and switch tactic. If closely looked
    upon, we find that all name brands are sold at the same price at most chain
    stores.

    Remember whenever you buy foreign made products your allowing
    your neighbor to lose his job, and maybe the next job lost will be your own.

  • EIDALM

    Please read carefully, while most Americans are suffering from
    the terrible economy with lots of unemployed and under employed, the
    fact is the U S now as a whole is richer than ever but the money was
    shifted up to few hand on the top mostly the wall street people and
    their multi national corporations and what IS even worse is that these
    identities are not recycling the money back into the system as they did
    in the past to create jobs which generate taxes…No money have been
    invested into the society including schools , small businesses . cities
    ,counties. And so on to create jobs.

    Up to the year 1980 the US
    had great and very comfortable middle class, but from then on, few
    people who called themselves economists including Milton Freedman ,Erick
    Green span ,David Ruben ,and few other took over the U S economy and
    use their influence and money to sell the American people bill of goods
    which amounted to what all of us now know as voodoo economics which
    pretty much destroyed the US economy and with that it put an end to the
    great middle class the country once enjoyed .

    They did that by
    selling people on what the y called trickle down economy and Reaganomics
    as mean to create jobs but in fact what happen was exactly the opposite
    and it destroyed jobs instead but their real intention was to have tax
    cuts for the wall street and their wealthy friends as well as multi
    national corporations .

    To maximize the profit of the wall street
    they shutdown factories including the US steel all of consumer
    electronics companies including R.C.A. ,Zenith , and twenty others, as
    well as the Automobile companies who were weakened and many went out of
    business, they allowed foreign companies to take over theses great
    American companies. They even let Japanese ,Korean, and other foreign
    companies to use price fixing schemes to make their products more
    profitable which constituted unfair practice with the American
    manufactures and most went out of business as result. with that tens of
    millions of American jobs were lost. They also exported jobs and use the
    misleading term outsourced, and most of these exported jobs are done by
    slave labor in China, India, and many other countries. They even went
    further by firing top experts and scientists who created and made the
    Silicon valley and bought people mostly from India on Hi and EI2 visa
    who took over the jobs of the American scientists but work for much less
    wages. They also coerced the government into international trade like
    G.A.T. and N.F.T.A. which did lots of harm to the U S economy as well as
    that of Mexico.

    They created the bubble after bubble economy
    including the saving and loan scandal where millions of Americans lost
    their life savings. They used all kind of fraud to create the real state
    bubble that led to millions of Americans to lose their homes and near
    decimate the US economy.

    They have used their casino other wise
    called the Stock Market to rob the American people of their life time
    savings, in their planned and periodical crash., many of my friend lost
    lots of money including Emy Peterson who lost over one half million in
    the last stock market crash.

    The only way to fix the U S economy
    is to invest all the money back into the society to create millions of
    living wage jobs and put an end to the monopoly of the wall street

  • Beth Grant DeRoos

    Why would Prime Minister Alexis Tsipras who is a leader/member of the Socialist party and was elected by the people of Greece based in large part because he is a socialist choose the capitalistic EU bailout, rather than leave the EU and probably get Greece back on track in much less time than it would take to pay off even 10% of what Greece would owe the EU in this bail out?

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