White House Summit on Financial Markets and the World Economy

New Nov 21, National Security Alert #2___The Epistemology of Ecolo-Techno-Political-Economic Morality…
New Nov 26, Desperate Measures by Desperate Policy Makers in Desperate Times: the Fed Moves to Radically Unorthodox Policies as Economy Is in Free Fall and Stag-Deflation Deepens
New Nov 25, Global Financial System – Calling for the Plumber!
New Nov 24, What Barack Obama Needs to Know About Tim Geithner, the AIG Fiasco and Citigroup Link
New Nov 22, The Deadly Dirty D-Words: “Deflation”, “Debt Deflation” and “Defaults”. And How Central Banks Will Have to Resort to “Crazy” Policies as We Have Reached Such Bermuda Triangle of a “Liquidity Trap”
New Nov 20, Advance Preview of "America's Defense Meltdown"
New Nov 17, Despite Treasury issuance, the U.S. debt-to-gdp ratio of 360% may be topping out, by D.Holt
New Nov 16, National Security Alert #1___The Epistemology of Economics…
New Nov 16, Fabius Maximus The US economy must go to Defcon 1 and Link
New Nov 15, The Meeting of No Meeting White House Fact Sheet: Agreements of G-20 Summit, Especially read the comments section...
New Nov 14, A most important post by Paul Davidson Reforming the World's International Money LINK
New Nov 12, The G20 Role In The Current Financial Crisis
New Nov 12, The Dismal Outlook for the US and Global Economy and the Financial Markets
Addition: "We interrupt regular programming to announce that the United States of America has defaulted"

Dear Colleague:

Henry Liu and I have written a brief note (see below) to the Heads of State who will be meeting on November 15, 2008 to discuss the international implications of the current financial Crisis . Henry believes that he will be able to get the ASIA TIMES to print it on Monday, November 10, 2008 as a Headline piece. The Asia Times is a global on line publication with a web visibility of over 2,000,000 daily of highly educated readership world wide, beating Bloomberg.com, WSJ.com, MSNBC.com., according to Marketleap.com. Presumably, other publications may also publish it in the EU. Perhaps among all our friends, we can recruit a public relation professional to help. Even Keynes needed Felix Frankfurter to introduce him to FDR.

Our note is as follows:

Open Letter to All Political Leaders attending the November 15 White
House Summit on Financial Markets and the World Economy

The Winter of 2007-2008 will prove to be the winter of economic
discontent and the beginning of the end of the belief that unfettered
global financial markets spread risk and promoted economic efficiency,
growth, and prosperity. For more than three decades mainstream
economists have preached, and politicians accepted, the myth of the
efficiency of markets, while burying any thoughts of John Maynard
Keynes's analysis of interconnection of financial markets and the
international payments system.

Those who do not study the lessons of history are bound to repeat its
errors. Economists forgot the events of the world-wide Great Depression
that followed the collapse of the unfettered U.S. financial markets that
were associated with the "Roaring Twenties" prosperity. Now history has
repeated itself with the deregulation of financial markets and banking
operations that occurred at the same time as the prosperity of recent
years that climaxed in 2008 with the Greatest Financial Market Crisis
since the Great Depression.

The U.S. sub prime mortgage problem that started in 2007 developed from
a small blip on the economic radar screen to a situation that has caused
the collapse of financial markets and threatened the viability of
financial institutions world wide as the contagion spread quickly via
the existing international payments system. If we are to prevent a
global Great Depression, it is time to restore Keynes's vision of how
the international payments system should work to permit each country to
promote a national full employment policy without having to fear balance
of payments problems or financial events that occur in other countries
from infecting the domestic banking and financial system.

Another Great Depression can be avoided if world leaders would
reconsider John Maynard Keynes's analytical system that contributed the
golden age of the first quarter century after World War II. The
undersigned have advocated for years a new financial architecture based
on an updated 21st century version of the Keynes Plan proposed at
Bretton Woods.

This new financial architecture will create (1) a new global monetary
regime that exists without currency hegemony, (2) global trade
relationships that support rather than retard domestic development and
(3) a global economic environment that induces each nation to promote
full employment and rising wages for its labor force.

Paul Davidson Editor, Journal of Post Keynesian Economics
Henry C.K. Liu, Visiting Professor of Global Development, Department of Economics, University of Missouri and Chairman of a New York based private investment group.

We hope you will be sympathetic to our message If you agree we invite you to support our message Let us know by sending both Henry and I an email saying you agree give us your name, title, and affiliation.

our email addresses are Paul Davidson: pdavidson@utk.edu
Henry C.K. Liu hliu@mindspring.com