In this Smart Talk video series, Andrew Mazzone interviews new Greek Finance Minister Yanis Varoufakis and President of Common Ground NYC Scott Baker and debate current global economic issues.
Debate Topic: Current and Global Economic Issues
Date: November 09 ,2013
Location: Henry George School of Social Science and Lyndon B. Johnson School of Public Affairs, University of Texas, Austin, USA
Host: Andrew Mazzone – President of Henry George School of Social Science
Guests : Yanis Varoufakis – Economist, Professor of University of Texas at Austin, USA, Professor of University of Athens, Greece
Yanis Varoufakis is a Greek economist and is the new Finance Minister of Greece after he was elected to the Greek parliament, representing Syriza. He took office in the new government of Alexis Tsipras on January 27, 2015.
Scott Baker – President of Common Ground NYC, NY State Coordinator of Public Banking Institute, Opednews Blogger/Senior Editor, Huffington Post Blogger, Author
In 1945, America was a dominant power in the world with 50% of the manufacturing capacity of the world. The world was on its back and therefore the U.S. had to step in and switch from its protectionist system it had to more of a globalist free-trade system.
New dealers following the 1929 stock market crash realized that by just simply fixing exchange rates, massive capital flows were created leading to instability. Therefore, to fix this there was a need to regulate for capital flows and recycle the surpluses. These surpluses were being recycled by the U.S. mainly between 1950 and 1965 and approximately near 70% of the American profits and surpluses were recycled primarily to Western Europe and Japan. All of these actions performed were known as the Bretton Woods agreement.
The Bretton Woods agreement, however, collapsed in 1971 due to the surpluses being converted to deficits. This system collapsed because of the abusement of the exuberance that the U.S. had post World War II, with the thinking that the success of would continue. This abusement lead to the printing of dollars to support the Vietnam War and the Great Society program. It turned out, however, that the costs for supporting these events were underestimated leading to the creation of a deficit.
As the deficit grew, the situation reversed as the U.S. was taking into its territory the net export of Europe, Japan, and even China when before the U.S. was exporting more than importing. The productivity was not as it used to be before the Bretton Woods agreement collapse so as a result there was wage deflation and jobs were being lost. The working and middle-class people were being affected the most from this decline in productivity.