Thinking Citizen Blog — Mario Draghi: “History’s Greatest Central Banker” (Paul Krugman)
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: Mario Draghi (1947 — ): “History’s Greatest Central Banker” (Paul Krugman)
Mario Draghi resigned as Prime Minister of Italy last week — a job he had held since February 2021. He will serve as caretaker Prime Minister pending the outcome of the upcoming election. He had previously served as President of the European Central Bank from 2011 to 2019 and prior to that as Governor of the Bank of Italy from 2006 to 2011. Was he really history’s greatest central banker? Today, the summary of a recent article by New York Times pundit and Nobel laureate Paul Krugman. Do you agree with Krugman’s analysis and conclusion? Experts — please chime in. Correct, elaborate, elucidate.
BIGGER THAN PAUL VOLCKER, BIGGER THAN BEN BERNANKE (Paul Krugman)
1. “As president of the European Central Bank, Mario Draghi saved the euro. In my estimation, this makes him history’s greatest central banker, outranking even the former Fed chairs Paul Volcker, who brought inflation under control, and Ben Bernanke, who helped avert a second Great Depression.” (Krugman)
2. “In a way, then, it wasn’t surprising that last year Draghi was brought in to lead Italy’s new coalition government — often labeled “technocratic,” but actually more a government of national unity, created to deal with the aftermath of the Covid-19 pandemic.”
3. “In a properly functioning democracy, nobody should be indispensable, but Draghi arguably was, as the only person with the prestige to hold things together.”
NB: “But even he couldn’t pull it off. Facing what amounted to sabotage by his coalition partners, Draghi simply resigned, creating fears that the coming election will put antidemocratic right-wing populists in power.”
JUST THREE WORDS SAVED THE EURO
1. “In July 2012, as E.C.B. chair, he said three words — “whatever it takes” — that were taken as a promise that the bank would supply cash as needed to countries in crisis.
2. “And the mere promise was enough.”
3. “Spreads plunged, and the crisis went away.”
IS ITALY DIFFERENT? OR IS ITALY’S FUTURE OUR FUTURE?
1. “Italy’s political fragmentation — and the apparent inability of the center-left to get its act together despite the clear and present danger from the right — may bring authoritarian parties to power sooner than elsewhere.”
2. “But maybe not all that much sooner: It’s not at all that hard to see how American democracy could effectively collapse by 2025.”
3. “Italy may well represent the West’s future. And it’s bleak.”
NB: “The Italian crisis has very little to do with fiscal profligacy or general incompetence; as I said, it’s all about the rise of antidemocratic forces, which is happening all across the West.” Do you agree?
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, 11/17/20
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all