In a USA TODAY story tied to the ascension of “technocrats” in Italy and Greece, Michael Szenberg, a distinguished professor of economics at Pace University’s Lubin School of Business, discusses whether economists make good leaders and whether our fiscally challenged times demand this kind of expertise.
As leaders of the European Union meet this week to try to resolve Europe’s debt crisis, economists will play a major role in the success or failure of efforts to prevent the region from lapsing into a deep recession.
From USA Today:
Italy will be represented by Prime Minister Mario Monti, an economist and former EU official who replaced the erratic and flamboyant Silvio Berlusconi last month. On Monday, Monti announced a $41 billion package of new taxes and spending cuts that’s designed to reduce the nation’s debt, the second-largest in the European Union.
Greece will be represented by Lucas Papademos, a former vice president of the European Central Bank, appointed interim prime minister last month. He’s negotiating a debt swap agreement with private lenders in hopes of preventing that country’s debt from ballooning to twice the size of its economy. Wednesday, Greek lawmakers approved an austerity budget extending deep spending cuts into next year.
Michael Szenberg, professor of economics at Pace University’s Lubin School of Business, argues that Monti and Papademos could be just what Europe needs. Both are unlikely to run for office when their terms expire, which makes them convenient scapegoats for the backlash against cuts in public programs, Szenberg says. “We all have to tighten our belts,” he says. “You blame them — the technocrats.”
Read full article here:
Economists hold big role in EU’s future – USATODAY.com.
Economist Michael Szenberg shares his thoughts on rescuing America, covering the deficit and restoring confidence with “The Investor’s Advocate” Steve Pomeranz, in an “On The Money!” radio interview broadcast to over one million listeners throughout Florida, Oklahoma, Indiana, New Hampshire and New York.
The position of the United States given both the high level of U.S. debt and its budget deficit within the framework of a globalized and interdependent world economy was the topic of discussion between Lubin Professor Michael Szenberg, Ph.D, and “On the Money” Host Steve Pomeranz, CFP.
If you were not among the over one million listeners who heard the interview initially when it aired on Friday, October 28, on one of these 9 radio stations, click HERE to listen to a podcast now.
Key points made and proposed by Dr. Szenberg include:
- The burning point at the present time is the high deficit and debt levels of the U.S. that affect the confidence in willingness and ability of the U.S. to maintain its leadership position, which is so crucially needed.
- China has substantially increased capabilities in terms of military and economic power. But it cannot match the power of the U.S. due to its lack of moral power.
- How do we improve the economic capabilities of the U.S.? Reducing sharply the deficit and debt levels will increase the most important component of economic development – confidence in the country.
- My proposal is for the U.S. President appearing in an extraordinary address, accompanied by leaders of both parties and representatives of every segment of the population – from multimillionaires like Warren Buffett, to blue collar workers. The address will focus on how to save America and prevent its decline similar to that of other civilizations in the past. The American exceptionalism will be reflected in the willingness of the people to contribute voluntarily part of their savings for the purpose of eliminating the public debt and reinforcing the confidence in the U.S.
- What unites all Americans irrespective of their affiliations is that we all want America to prosper.
The stalemate between Democrats and Republicans regarding a vote to lift the U.S. debt ceiling is giving gold a boost, and if an agreement is not reached before the August 2 deadline, many market watchers believe there would be a rush to buy gold and other hard assets. Economist Michael Szenberg discusses the potential impact on financial and commodity markets if the U.S. cannot raise its debt ceiling.
The bickering between the Democrats and Republicans over raising the debt ceiling has been bullish for gold.
Even if the debt ceiling is not raised, the U.S. would have money coming in to pay some obligations, but it would have to make choices on who gets paid and who doesn’t. That’s why it is considered a technical default.
Michael Szenberg, chair and distinguished professor of finance/economics at Pace University’s Lubin School of Business, said he believes that yields would likely spike under a default situation, but points out the rise is relative, noting that in the 1970s and early 1980s, bond yields were hovering around 20%. “The American economy is dealing with tremendous fragility, but this (debate) might take us in the direction we need to go,” Szenberg told Kitco News, a precious metals website which gets ONE MILLION hits a day.