January 3, 2011
As the world took a year-end look at its financial health, Watson Institute Faculty Fellow Mark Blyth weighed in on matters of global, US, UK, and even gender economics.
In a column in the Huffington Post on “The Real Reason that the Bailouts May Not Work,” Blyth wrote that Wall Street has deviated from doing “Gods work” – capital formation – creating a business model that may now have run its evolutionary course.
As for year-end reports about smaller US banks on the brink of failure, Blyth was less concerned. "If Citibank and Bank of America were going under, that would be a problem. … The bailout was meant to deal with a global systemic crisis. It was not to make sure that some bank in Utah with dodgy commercial real estate would be okay," he was quoted in a separate Huffington Post report.
When hopes were raised elsewhere that women will drive an economic recovery, Blyth countered that they still earn less than men, even if they reportedly now face better employment prospects, so “don't hold your breath for heart-pumping consumer spending."
He added elsewhere on the Huffington Post: "As for major threats, those are the impending debt ceiling vote and the future of the Eurozone, which, if it blows up, will depress global demand considerably."
In the UK, meanwhile, Blyth analyzed the political fallout from austerity policies in an interview in Brazil’s daily, Folha, pointing out that neither the Conservative Party nor the Liberal Democrats with whom they are now in coalition had been elected on the basis of such policies.
And Blyth’s final word, for Wall Street employees who are expected to go without bonuses this year: "If your base is already four times the median income, it's really hard for me to feel sorry for you," he told another Huffington Post columnist.