European leaders are preparing to unveil their plans for addressing the sovereign debt crisis that’s threatened to tear apart the eurozone. Both France and Germany are expected to push for changes to the eurozone treaty, including centralized oversight of national budgets and tighter reins on debt. In a speech on Thursday, French President Nicolas Sarkozy said radical changes are needed in order to save the euro. Sarkozy’s address came after central banks, including the U.S. Federal Reserve and European Central Bank, took coordinated action to prevent a credit crunch among European banks. For more on the developing crisis in Europe and its implications worldwide, we are joined by economist and professor Richard Wolff. He is the author of several books, including "Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It." "The Fed is recognizing that another bailout is needed," Wolff says. "All the steps taken over the last few years to try to cope with this crisis of our capitalist system haven’t worked, and so we’re now again on the brink of a crisis, and again public money and public institutions are bailing out a private banking system and a private enterprise system that is not working and is not solving its own problems." Wolff continues, "The fundamental question is, you’ve got to deal with an economic system that isn’t working... You’ve got to take big steps that change the way this economic system works, or find a new system... It’s as though we have a dysfunctional economic system coupled to a now dysfunctional political system, and instead of fixing each other, these two systems are making each other in a kind of a spiral downturn." [original here]
Richard D. Wolff, Emeritus Professor of Economics at University of Massachusetts, Amherst, and visiting professor at New School University. He is the author of several books, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It.