Dear Sir, Martin Wolf ("Asia's Revenge", 9 October) brings up again the "savings glut" theory to try to partly exonerate Western financiers from their follies. While Asia's mercantilist policies, and their very real desire to no longer have capital account deficits are very real, their savings "glut" has been fully created by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive evidence of asset bubbles; in fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the West lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few. The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted prosperity of the past years in the West was essentially fake.
Martin Wolf ("Asia's Revenge", 9 October) brings up again the "savings glut" theory to try to partly exonerate Western financiers from their follies. While Asia's mercantilist policies, and their very real desire to no longer have capital account deficits are very real, their savings "glut" has been fully created by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive evidence of asset bubbles; in fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the West lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few. The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted prosperity of the past years in the West was essentially fake.
As an alternative opening, how about:
The "savings glut" theory which Martin Wolf resurrects (...) fails to address the root cause of the financial crisis: the reckless dereliction of central bankers and financial leaders in the performance of their duties. "Ideas or the lack of them can cause disease." - Kurt Vonnegut
I think it's hard to make the case that the saving glut has been created by the policies of the West. (hard does not mean impossible, but we'd be talking about a chain event. It's not the immediate consequence by any mean).
On the other hand, that it fails to address the root cause is clear enough. You would have had a bubble, Asia or no Asia, with those negative real interest rates for so long, coupled with next to no taxation on the proceeds of capital. "The womb that spawned that thing is fertile yet"
ok, updated version
Dear Sir, The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) fails to address the root cause of the financial crisis: the reckless dereliction of central bankers and financial leaders in the performance of their duties. While Asia's mercantilist policies, and their very real desire to no longer have capital account deficits are very real, their savings "glut" has been fully created by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive evidence of asset bubbles; in fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the West lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few. The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted - and very unequally shared - prosperity of the past years in the West was essentially fake.
The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) fails to address the root cause of the financial crisis: the reckless dereliction of central bankers and financial leaders in the performance of their duties.
While Asia's mercantilist policies, and their very real desire to no longer have capital account deficits are very real, their savings "glut" has been fully created by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive evidence of asset bubbles; in fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the West lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few.
The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted - and very unequally shared - prosperity of the past years in the West was essentially fake.
Dear Sir, The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) fails to address the root cause of the financial crisis: the reckless dereliction of duty by central bankers and financial leaders in the performance of their duties.
The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) fails to address the root cause of the financial crisis: the reckless dereliction of duty by central bankers and financial leaders in the performance of their duties.
Do completely ignore my comment above.
I need coffee. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Dear Sir, The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) fails to address the root cause of the financial crisis: the reckless dereliction of duty by central bankers, politicians and financial leaders. While Asia's mercantilist policies, and their desire to no longer have capital account deficits are very real, their savings surplus has been largely created and fed by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive asset bubbles whose existence they denied against all evidence until the last minute. In fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the Anglo-Saxon world lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few. The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted - and very unequally shared - prosperity of the past years in the West was essentially fake, as the current crisis reveals the hard way.
While Asia's mercantilist policies, and their desire to no longer have capital account deficits are very real, their savings surplus has been largely created and fed by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates despite massive asset bubbles whose existence they denied against all evidence until the last minute. In fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by other parallel policies such as labor market deregulation. Fundamentally, people in the Anglo-Saxon world lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few.
The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted - and very unequally shared - prosperity of the past years in the West was essentially fake, as the current crisis reveals the hard way.
The "savings glut" theory which Martin Wolf resurrects ("Asia's Revenge", 9 October) is a dangerous attempt to find mitigating factors to what is the root cause of the financial crisis: the reckless dereliction of duty by central bankers, politicians and financial leaders. While Asia's mercantilist policies, and their desire to no longer have capital account deficits, are very real, their savings surplus has been largely created and fed by policies in the West. Central Banks, led by Alan Greenspan's Fed, maintained absurdly low interest rates for too long despite massive asset bubbles whose existence they denied against all evidence until the last possible minute. In fact, these bubbles were a desired result, as they allowed for massive profits by the financial sector, and made it possible to hide from the general population the stagnation of their incomes caused by parallel policy measures such as labor market deregulation. Fundamentally, people in the Western hemisphere lived above their means. Together, these policies created an appearance of prosperity for all (GDP was up, on the back of strong income growth at the top) while effectively organising a vast transfer of wealth from the many to the few.
The Asians were happy to tag along, as it allowed them to develop their infrastructure and economies, but it is unfair to blame them for the fact that the much touted - and very unequally shared - prosperity of the past years in the West was essentially fake, as the current crisis reveals the hard way. In the long run, we're all dead. John Maynard Keynes
