Clive Crook

In a new column for National Journal [link expires in two weeks], I argue that one of the most important gaps in the measures taken so far to revive the economy is the lack of effective action on loan foreclosures. For months now the Treasury and the Federal Reserve Board have been trying everything they can think of to stabilize the financial system and prop up the economy. You can criticize them for many things--for the regulatory failures that let this… More »

My new FT column:The Federal Reserve recently acknowledged that the risk of deflation in the US, though still small, has grown. Is policy correctly aligned to confront this risk? Not yet.With Japan as an example, nobody should need reminding that deflation is a uniquely dangerous prospect - but here is a refresher. Persistently falling prices increase the inflation-adjusted burden of debt. Insupportable debts are the core of the US economy's difficulties. If that… More »

Call it quantitative easing with a vengeance. The Fed's new programs--$200 billion in credit to support private purchases of securitized auto, credit-card and student loans; and $600 billion to buy mortgage-backed securities issued or guaranteed by Fannie and Freddie--constitute another dramatic widening of the Fed's remit. The new facilities are not brand new concepts, however: they add to existing schemes to support the commercial paper market (involving… More »

I find it encouraging that the Obama team is working on a much bigger fiscal stimulus than previously contemplated. I agree with Larry Summers on this: the dangers of being too timid are far greater than the risks of doing too much. A plan of at least $500 billion is warranted, as I argued here and here [subscription required]. But the composition of the stimulus is important, obviously. Boldness in mobilising the resources needs to be matched with restraint in… More »

As many correspondents have pointed out (some with an air of triumph that makes me question their loyalty), my column today accused Deval Patrick of being a Republican. A case in point: the Republicans should have gone into this election with a national plan for universal market-based healthcare (something that Republican governors in Massachusetts and California are trying to implement). If the Obama administration makes progress on this, it will be all the more… More »

My Monday column for the FT has some suggestions.In my view, the challenge for the party is not, as many argue, to decide whether it is a movement of social conservatives, of fiscal conservatives, or of soft libertarians. To win elections, the Republican party has to gather support from all of those groups. If any one faction comes to dominate the party - as social conservatives have lately threatened to - its prospects are diminished. To get along with each other,… More »

In a new column [link expires in a fortnight] for National Journal, I give some ground to the case for more aid for the Detroit Three. (I'll give Jonathan Cohn the credit, by the way: this is a great piece.) The point is that the bankruptcy process is impaired. Still, I think, the dire consequences of allowing GM to go bust are being exaggerated. Now, bailout advocates say, consider the consequences. A note on this by the Center for Automotive Research (which you… More »

Avoiding mortgage foreclosures ought to be a win-win proposition for the lenders and borrowers directly involved. It would also be good for the rest of us--for anybody with a stake in the housing market, or an interest in a faster economic recovery. When you recall that it was identified very early on as a key aspect of managing this crisis, it is disappointing that so little progress has been made, and the reasons for this are not altogether clear. Securitization… More »

What's another 5 percent here or there--well, 7 percent if you want to look at the S&P 500? I, for one, don't want to look. The stock market is now at its lowest since 1997. The flight from risk in credit markets continues unabated, with safe short-term interest rates now at zero. The end of the road for monetary policy? Not quite. What remains is "quantitative easing", which Fed vice-chairman Don Kohn referred to yesterday--and which the Fed is now conducting.… More »

Apparently not. The Inn Between's waitress is busy delivering the lunch special of breaded chicken, mashed potatoes and green beans to a stream of customers who work at different places but all seem to know one another. The banter is raucous and sustained, and when the conversation turns to a proposed federal bailout for U.S. automakers, there is little support for the idea. "I don't think they should bail them out because ... obviously something's not right in the… More »

I attended the Cato Institute's annual monetary conference. The Fed's vice-chairman, Don Kohn, gave the keynote address, and used it to emphasize that the central bank would not let the economy fall into a deflationary spiral (speech; Krishna Guha's report). The BLS released inflation figures for October, showing a seasonally adjusted drop in the CPI of 1 percent, the biggest since 1947. Even core inflation was negative last month. Stockmarkets crashed again. I… More »

I think choosing Hillary would be a mistake. Not because of Bill. The new administration can choose to use him or not, regardless. The "two for the price of one" stuff is ridiculous: they are not exactly chained together. Equally, if Hillary were the best candidate for secretary of state, it would be absurd to deny her the offer because of Bill's post-presidential connections. Scrutiny in future is really all that is required there. No, the problem is that she is… More »

Paul Collier's well-received book, "The Bottom Billion", advocated military intervention alongside economic aid to improve security and economic growth in some of the world's poorest countries. Iraq notwithstanding, the idea has caught on in official development circles--rhetorically, at any rate. In this review essay, Bill Easterly is unimpressed. By the time his tanks have rolled through, not much of Collier's thesis is left standing. Bill's article is… More »

A good piece by Jonathan Freedland about the years of Tory misery that followed Blair's landslide election victory in 1997, and what the Republicans might learn from them. Three different leaders; two more election defeats... Only then, staring oblivion in the face, did the slow stirrings of recovery begin. A senior Conservative official, Theresa May, had already warned that the Tories had to shed their image as "the nasty party" with few women or members of ethnic… More »

The timing of China's fiscal announcement this weekend is notable. It comes just ahead of the White House economic summit of G20 countries. As that meeting approaches, an outgoing US president, a not-yet-US-president, and a lame-duck US Congress are discussing a second stimulus plan costing maybe $100 billion to $200 billion--which might happen before the inauguration, or possibly not. Meanwhile China's government stuns global markets by promising to inject nearly… More »

[From Monday's FT]During the US presidential campaigning, neither candidate was about to let the financial crisis dictate a wholesale remake of his economic platform. As the markets crashed and the recession rolled in, every promise stood, however ancient its provenance, as though nothing had changed and dealing with the crisis was a separate issue. It took Barack Obama three days - from the election result to his first press conference - to think again.At said… More »

[From Saturday's FT]In the US presidential election of 1932 Franklin Roosevelt's campaign song was: "Happy Days Are Here Again". He won. Four years later, happy days had not returned: unemployment was down but still exceeded 15 per cent. That year, FDR was re-elected in a landslide that makes Barack Obama's victory look small. He carried every state but Vermont and Maine and more than 60 per cent of the popular vote. He led the Democrats to majorities of 334 to 88… More »

From tomorrow's FT:Barack Obama's campaign for the presidency will be seen as one of the most brilliantly planned and executed in the country's history. The challenges that will confront him as president do not rise to quite that level - the US does not face Nazi Germany or the Soviet Union, and it is not literally at war with itself - but they will suffice to be getting on with. What happens when an irresistible politician meets an immovable political or economic… More »

The best, most thorough, and most straightforward account of how Obama did it appears, aptly enough, on the website of Reader's Digest, written by my friend and former colleague Carl Cannon. For a supplementary reading on how my profession disgraced itself this year see Harold Evans (no knee-jerk conservative) in The Guardian. If the administration would like a blueprint for screwing up the next four years, John Judis has written it for them at the New Republic.… More »

A remarkable moment, and a truly amazing achievement. The result was not a surprise; even so, it will take a while to sink in. The country has crossed a threshold. A convincing and comfortable victory (in electoral-college terms, though far from a landslide in the popular vote). So much for the Bradley effect: an idea, let us hope, whose time has passed. Independents broke heavily in his favour, and he won support right across the country, from all demographic… More »