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Breakingviews: Political failure broke the global economy

Monday, October 28, 2013 - 03:17

Oct. 29 - The inability of leaders to lead led to the policy mistakes that led to the global financial crisis, say Stephen King, Chief Economist at HSBC and Stephen Lewis, Chief Economist at Monument Securities

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We just wrapped up a conversation on the great monetary experiment. I'm rob Cox -- breaking views and it's my privilege to have with me. Two of our panelists Stephen King from HSBC and Stephen Lewis monument securities. Guys OK so we talked about a couple of you covered pretty much everything. But I think there are two things that popped -- Stephen is one thing you talked about was. The inability of politicians -- to lead to leaders lead. I think -- -- yet I assume -- referring to the dysfunction that we've seen all over the place starting in the United States. Some degree here in the UK and Europe make you could elaborate a little bit and both you can give a sense of how that's affecting utility get through this difficult period. -- seems to me that the political processes. In -- of the past twenty authority he has. Money is much more important that it be reelected. -- that you stability and so you politicians feel that they have to. Fully in its -- to have. The populace wants than most people to come up with pulses which may be right for the economy. Books. All they're driven by polls rather than principles and yes that the principles of being sacrificed to what the opinion polls telling them. Are you worried about that -- I am I think one of the problems that politicians they actually see the continuation of the growth rates that -- In the kind of golden age 1950s. And the twenty sentry. The reality is the growth rates they've lost 1015 is being marked on the case previously. -- equals politics and he promises you that appeared as if the good times -- wrote. That hasn't happened says that huge gap between economic reality -- promise. This -- have to be broken mystery to what's for the politician currently who's willing to make this tough decisions -- you'll support out there one of these risks that opposes the law. Competent dollar. Instrument exchange reserve currency mean this is I suppose also related to this what this. Absolutely because the US as a country which heavily destitute -- -- If it's thinking about the interest this domestic bases this disease progresses. The domestic sources who always -- everything was time so the risk of courses that says the US is at the break outputs and principals at Dulles. -- devalue the total foreign exchanges and that he should the this debt problem. To restore process because they wanted me most is this so he's given us what would be implications. It. Back. Well I think if that if the goal is dethrone us the that is sort of currency then we'd be entering very troubled period. And it -- it would be. Difficult -- traders to -- Which currency too old to settle at often -- and that is going to have. Damaging. Impact on the growth of we'll trade. So it is. Benefit the world trade overrule the headquarters of currency. But it would take a very long time in -- -- for news of currency to him --

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Breakingviews: Political failure broke the global economy

Monday, October 28, 2013 - 03:17

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