(A neo-Keynesian won the Nobel Economics prize, remember?)
But this Globe bit on Gordon Brown, 'The man who saved the world banking system', really was quite good.
Two weeks ago, the best thing that was said about British Prime Minister Gordon Brown was that he might be persuaded to resign before his tepid and inarticulate leadership brought the Labour Party to a decimating defeat at the hands of the Tories.Well, said Nobel Prizewinner for one. Me, for another. The idea that government can intervene to improve or save an economy may be anathema to Friedmanites, but to people who understand the economic insights of the 21st century, it only makes sense that the invisible hand of the market may need to be gripped by the visible hand of government every once in a while.
Today, he will arrive at a financial-crisis summit in Brussels as the most influential leader in the world, and possibly the most admired.
The French newspaper Le Monde called the normally morose Scot - who has suddenly taken up the habit of smiling - a "European superhero," its conservative competitor Figaro called him the world's greatest financial mind, and Swedish media have taken to calling him "Flash Gordon."
His bailout of the British banking system through a taxpayer buyout of major banks has been imitated in the past 48 hours by a dozen other countries, including the United States, which invested $250-billion (U.S.) in banks yesterday. While taxpayers may be less happy when the full cost of these bailouts hits their tax bills, and it is not yet fully certain that the strategy has worked, most observers agree he has staved off a full-blown depression.
Mr. Brown, a man whose obsessive devotion to the minutiae of financial management has previously been a source of ridicule, is getting all the credit.
At a briefing yesterday he said he wants to take this triumph to a new stage today, by rebuilding the entire world economic order with the launch of new institutions to replace those that have regulated world finance since the Bretton Woods conference launched the modern financial system in 1944.
"We are in the first financial crisis of the new global age," he said. "We need to recognize that if risks are globalized, then responsibilities have to be globalized as well. ... What we are asking is that we set up a new international financial architecture for the global age."
He proposed not only major reforms to the International Monetary Fund and the G7 group of industrialized nations so they can respond better to global capital flows and crises, but also the creation of a whole new set of institutions and regulations designed to replace national finance-regulation bodies in dozens of countries with a fully international system.
Last week, such an idea would have been laughable, especially from Gordon Brown, a left-wing leader in a world dominated by conservatives. But analysts feel that he has become so influential this week that he may well end up accomplishing at least part of his huge goal.
"I myself find it kind of jaw-dropping: Gordon Brown has become the man who saved the world banking system, and now he might become the man who redesigned the international financial system," said Will Hutton, an economist whose work has influenced Mr. Brown's Labour Party since 1997. "Who would have dreamed of it?"
But, hey, don't take my word for it:
Mr. Brown also won begrudging praise yesterday from David Cameron, the leader of the opposition Conservatives, who said he fully supported the bailout program, and from U.S. President George W. Bush, whose officials have eagerly adopted it. And Paul Krugman, the U.S. academic and writer who was awarded the Nobel Prize in economics this week, has devoted himself to lavish praise of Mr. Brown's new ideas.See? And he has a new "Brown doctrine" too:
Sounds good to me. Good show, Mr. Brown. Good show.
British Prime Minister Gordon Brown outlined a five-point program yesterday to reform the world's financial system. He hopes the principles will be the basis of a new set of global institutions to replace those that have governed international finance since 1944. This will be proposed in Brussels today and tomorrow.
Banks must fully disclose key information globally, not just nationally. Accounting standards will have to become international, and they must extend to the credit-insurance market, which has been heavily criticized.
A worldwide effort is needed to end conflicts of interest, such as those involving rating agencies that receive fees from the firms they rate. Worldwide limits also need to be placed on pay and bonuses in banks, so that they reflect actual results and are no longer able to distort business practices.
All members of company boards must hold full responsibility for the company's risk, and must not be able to walk away from their institutions. This will require international supervision.
To create "a system with solvency and liquidity," there must be "adequate protection through the economic cycle" to prevent speculators from distorting markets when they are rising and short positions from having undue impacts when markets are falling.
New institutionsThe new system of banking co-operation will need "a new international financial architecture for the Global Age." New institutions will provide "an effective global early warning system for the world economy, to alert us to the risks at hand," and "globally accepted and supervised standards of regulation" and the cross-border supervision of global corporations.