Essays
A New World Architecture
Twenty years after the fall of the Berlin Wall and the collapse of communism, the world is facing another stark choice between two fundamentally different forms of organization: international capitalism and state capitalism. The former, represented by the United States, has broken down, and the latter, represented by China, is on the rise.Hope for the Roma
Hated, alienated, and shunned as thieves and worse, the Roma have for too long been easy and defenseless targets for disgruntled racists in Hungary, Romania, Slovakia, the Czech Republic, and other European countries. The Roma, as a people, reaped next to nothing from the prosperity that the former East Bloc countries have enjoyed since the fall of the Berlin Wall.The People’s Sovereignty
Sovereignty is an anachronistic concept originating in bygone times when society consisted of rulers and subjects, not citizens. It became the cornerstone of international relations with the Treaty of Westphalia in 1648. During the French Revolution, the king was overthrown and the people assumed sovereignty.Do Not Ignore the Need for Financial Reform
The philosophy that has helped me both in making money as a hedge fund manager and in spending it as a policy oriented philanthropist is not about money but about the complicated relationship between thinking and reality. The crash of 2008 has convinced me that it provides a valuable insight into the workings of the financial markets.The Three Steps to Financial Reform
The Obama administration is expected today to propose a reorganisation of the way we regulate financial markets. I am not an advocate of too much regulation. Having gone too far in deregulating - which contributed to the current crisis - we must resist the temptation to go too far in the opposite direction. While markets are imperfect, regulators are even more so. Not only are they human, they are also bureaucratic and subject to political influences, therefore regulations should be kept to a minimum.
One Way to Stop Bear Raids
In all the uproar over AIG, the most important lesson has been ignored. AIG failed because it sold large amounts of credit default swaps (CDS) without properly offsetting or covering their positions
Peripheral Care Should be the Central Concern
The forthcoming Group of 20 meeting is a make-or-break event. Unless it comes up with practical measures to support the less developed countries, which are even more vulnerable than the developed ones, markets are going to suffer another sinking spell just as they did last month when Tim Geithner, Treasury secretary, failed to produce practical measures to recapitalise the US banking system.
We Can Do Better Than a ‘Bad Bank’
The Obama administration should come out of the gate with a comprehensive economic program that has two pillars in addition to a fiscal stimulus package. One would prevent housing prices from overshooting on the downside by making mortgages cheaper and more available and reducing foreclosures to a minimum; the other would enable banks to resume lending by adequately recapitalizing them.The Right and Wrong Way to Bail Out the Banks
According to reports in Washington, the Obama administration may be close to devoting as much as $100bn of the second tranche of the troubled asset relief programme funds to creating an "aggregator bank" that would remove toxic securities from the balance sheets of banks.
The Crisis & What To Do About It
The salient feature of the current financial crisis is that it was not caused by some external shock like OPEC raising the price of oil or a particular country or financial institution defaulting. The crisis was generated by the financial system itself. This fact-that the defect was inherent in the system -contradicts the prevailing theory, which holds that financial markets tend toward equilibrium and that deviations from the equilibrium either occur in a random manner or are caused by some sudden external event to which markets have difficulty adjusting.