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If no globalization, what's the alternative? Massive protectionism? How will that help?

What's necessary to make globalization work? Transparency and enforcing regulations. However, the banks and other rich and powerful people want none of that. Also, Cameron and others are afriad to stand up to them and actually do their jobs.

EDDY S The trouble was that all financial institutions were showing 'debts owing' as part of their capital, and then lending it out all over again!

There is always a place for someone crying 'Woe and destruction' and sure a lot of it is eventually true. The earth will come to an end! Meanwhile we should all live within our means.
Seriously governments only know how to run an economy crying for More Groth! It must end by definition. Meanwhile getting a handle on world overpopulation would be a fine start!

I fear Gordon Brown is so tribally political that he would use the IMF headship role to play politics with the world economy, particulalry if he can score points of his own country's government. We need a credible, seasoned expert, not a historian of economics.

I believe globalisation is exaggerated, we have always been in competition with the rest of the world.
It's used as an excuse to drive down wages and conditions and to force through the interests of the financial and banking class at the expense of the rest of us.
How many jobs have really been lost to globalisation, not many is the answer.

Its yet another Neo-liberal banking con trick.

Seriously governments only know how to run an economy crying for More Groth! It must end by definition. Meanwhile getting a handle on world overpopulation would be a fine star
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The truth is David that in the years leading to the crash, it was not overspending governments that crashed the system, but overspending companies and individuals.

Banks were allowed to lend extravagantly in an era of deregulation thanks to the Groupthink of neocons and neolibs, which said "governments should not regulate as the market is all-knowing". And so the debts were passed on to the financial markets through securitisation and collateralised bonds until the music stopped, and everyine stopped buying. Crash!!!!!!!

It is a spectacular turn of events that so many are denying and others forgetting this. We took decades to forget about the disaster of neoliberalism post-1929, a matter of a couple of years to forget the causes of 2007-8.

@Pierre
....Debt should only be entered into to support/build infrastructure, that way we get value and the politicians cannot buy votes....

That is single entry book keeping. In double entry book keeping the capital that you build must payback value. Otherwise it will rot.

Swatandra, funny in my case my wife and I decided how many children we could raise , feed and educate properly, and used contraceptives to acheive our results. The world population is growing at over one and a half million every week, food prices are rising. In Europe in the middle ages, families did not raise children as 'spares',they did it because family planning was unavailable. Often a hard cold winter would limit the numbers!

US and Europe debt crisis are due to over spending and printing of money. To solve the problem there are many ways such as
- Print more money to pay and force the creditors to accept the revised term through financial, politic and military power.
- Rob the fortune of the creditors by creating financial crisis in creditors’ countries through speculation in currencies, shares and commodities markets.
- Selling off properties and resources to pay creditors.
- Create job opportunities and make their citizens work harder to generate more products and services to pay.
Of course the first 2 methods are easier than the rest and implemented most of the time and will continue to be used in the future unless the creditors become stronger and smarter.

RK
ob, the truth is that, during boom the governments need to continue following austerity measures and not fall for "end of boom & bust" assumption. What do you mean Banks 'were allowed to'? I think that speaks volumes about how you view the world...typical oh I want to control everything. But Can you? Soviets tried, what happened?
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Rk, what a ramble.
First: during boom the governments need to continue following austerity measures..
I'll be generous and assume you mean that governments should be cautious during booms so they have funds for the bust period.
Then yes. They should, and especially a govt of the Left. The Left has a history of understanding that markets boom and bust: Far Left Marx predicted it all, and explained minutely how it would happen thru competitive industries investing in advanced technology to produce better products for market share, rather than in more wealth- and profit-producing labour and so losing profits until crash! ...or more moderate LeftKeynes who explained that people are more emotional than rational, and over-extend themselves in boom times until financing is impossible and crash! that followed by emotional fear and lack of borrowing, investment or spending by the populace leading to an even greater slump than is necessary.

For a chancellor of the "left" to call end to boom and bust was frankly ignorant of the left. Brown became a neoliberal's wet dream, and the nightmare of the Left.

If you meant that austerity should be permanent, you're a fool.

and second: What do you mean Banks 'were allowed to'? I think that speaks volumes about how you view the world...Soviets blah blah

Yes, banks should not have been allowed to. They should have been regulated; constrained by the cold steel hand of government from disastrous short-term proft-taking at the expense of the people, and ultimately the whole economy.
President FDR in the 1930s passed a law to constrain banks, which was lifted in the 1990s. Not one bank went bust in over half a century under that regulation in the US.
After it was lifted, it took a decade for hundreds - yes hundreds - to go bust, including one of the world's biggest Lehmans (others would have gone and the world have suffered a far worse slump but for bailouts).

Of course, there is only two alternatives aren't there big man? Free marklet capitalism or Stalinist Sovietism.

Grow up you neoliberal child! Your childish group think that markets should be free from any interference because they see all has been proven spectacularly wrong with the world's deepest financial crisis since the First World War.

And you still believe?

You're pathetic.

The banks must be controlled, because unregulated markets are not free.

They imprison us into following the crowd into debt or being left behind: 1980s to 2008 to enormous private sector debt (British private sector debt equals 250% of GDP, public sector: 58%.)

thru
And I did not support the NewLab govt in office, nor voted them in 01 or 05.

'Save for a rainy day' - current Conservative policy appears to contradict this principle. We are currently experiencing a rainy day - cutting public spending will not solve the problem as OBR growth forecasts rely on private debt increasing. This is unsustainable and cannot lead to a rebalancing of the economy, which requires individuals to deleverage.

Governments should spend in a downturn when interest rates are low and when the paradox of thrift holds; especially as credit spreads are still historically high, which combined with a lack of domestic demand is holding private sector investment in capital and labour. However, governments must save in an upturn. The last government made a mistake by overspending amidst a boom in tax revenues; but two wrongs do not make a right.

Countercyclical not procyclical.

Addressing the main point of the article: sensible financial sector regulation is needed not unfettered capitalism; moral hazard is a major problem.

In my view any uncertainty at the margins is probably best understood in the common sense, by the common sense and for the commons sense. Thus said; making the most of expansionary austerity in the short term means we have to put up with testing times in order to get ahead of the curve, later on ie in the long term.

Personally, I like to think this means that at best we can reclaim the so-called margins for the common good, including all that discretion we would normally put to good use at the margins when necessary and appropriate to avoid any frustrations and to keep things buzzing along nicely.

However, in my view the most important question of today is about the so-called extra mile, notably mentioned by the head of Tata. Just thinking about this question, and where it's coming from seems to me a very good way to look at the questions about globalisation generally and how it is supposed to expand all our freedoms as citizens without fear or favour, in the end;

Now I know the term extra mile can be found in the Bible and most people look into it and accept the Biblical story about going the extra mile at face value. But on this occasion I prefer to refer to the bit of the same book where Jesus asks the question as to which son is most obedient, in the parable about the two sons Matt 21:28-32 . I have always found this parable hard to understand because the end is so surprising - but in the context of margins/discretion/ globalisation/ going the extra mile - I reckon it may turn out to be a profoundly useful way to help deal better with all kinds of clumsy and awkward situations.

Judging by the poor state of finances in many countries world wide, plus the ever-growing numbers of individuals / families experiencing financial problems, perhaps the real problem is that although humans have the capacity to plan ahead for the future, they tend to be notoriously poor at doing so. Hence people tend to overspend when times are good, not realising that at some point in future their income may drop. It's happened to individuals, families, businesses and governments.

But it can also be said it's not a new concept - one of the earliest written Judeo-Christian texts contains an example of an Egyptian minister who ordered the construction of barns so excess grain harvested during years with decent weather could be used to feed the population during years with terrible weather.

Never mind the backstory about dream interpretation - I wonder to what extent that tale has been used as a parable of wise resource allocation and planning for the future...

We have this philoshpy that money generated from growth will trickle downwards to benefit all in society ? hmmm well i`m thinking the only thing that trickles downhill in this world is poverty .. human`s by nature have become greedy, greed is good it would seem .. the whole system needs turning upside down for a while ... life has become a lottery, i`m lucky , i was born in northern England so i can comment here but still realise i have no answers just comments .. paygap

Gordon Brown argues that we have not properly addressed the cracks and friction in the global economy. I don't think Gordon's the man to be asking? Britain failed, because of our over reliance on the financial service industries, combined with our acceptance of de-industrialisation. We should of being enjoying the best of both worlds, but because of our appalling lack of quality management and politicians, we aren't, and in all honesty, i can't see things improving with this bunch. We need our politicians to stop thinking globally and start thinking nationally, after all we can't solve the problems of the world by ignoring our own.