They are handing Europe's trouble spots over to the technocrats.
In Greece, taking the helm from career politician George Papandreou is Lucas Papademos, who has a degree in physics from the Massachusetts Institute of Technology and taught economics at Columbia University. He was a senior economist at the Federal Reserve Bank of Boston and the chief economist of the Bank of Greece.
Later, before serving at the European Central Bank, Papademos became the governor of the Bank of Greece, which shall be called BOG in honor of the economic morass in which Greece finds itself.
Monti, who taught economics at the University of Turin, was an adviser to Goldman Sachs and was president of Bocconi University. He is a charter member of several think tanks.
In the interest of time, Monti's Cabinet is expected to be comprised "mainly of technical experts rather than politicians," The New York Times reported Monday.
The president of Italy, Giorgio Napolitano, has called for broad support for economic policies that support the euro -- likely punishing austerity measures to reduce the country's debt as quickly as possible. That means, from a political point of view, members of Parliament in Rome will be corralled into quick, group decisions that will give Monti swift implementation of economic reforms.
Monti said he would take over "with a sense of urgency," which will play well with investors. The idea, he said, was to rebuild the country economically without giving up "social equity."
In Washington, nobody is considering handing the White House over to former Treasury Secretary Lawrence Summers, Harvard University Professor Kenneth Rogoff or Joseph Stiglitz, who won the Nobel Memorial Prize in Economic Sciences in 2001.
In Washington, the country has the so-called "supercommittee" working out details of a 10-year overhaul of the country's budget with the aim of reducing spending or raising taxes in order to trim an overload of debt.
Here's an economic prediction: The six Democrat and six Republican lawmakers in the room will emerge from their discussions without any golf dates between them. We're talking animosity and stalemates. This is as easy to predict as a sunset or a sunrise. Reports already claim that any suggestions of tax hikes proposed by Democrats are being stonewalled by their counterparts.
This amateurish performance will be followed by automatic budget cuts that will embarrass both parties -- cuts in social benefits and defense. The deadline of Nov. 23 will be the first date of 12 public relations campaigns for the members.
Expect investors to take the news hard. Expect credit rating agencies to be taking notes.
In international markets Monday, the Nikkei 225 index in Japan added 1 percent and the Shanghai composite index in China gained 1.9 percent. The Hang Seng index in Hong Kong rose 1.9 percent and the Sensex in India lost 0.4 percent.
In Australia, the S&P/ASX 200 index gained 0.1 percent.
In midday trading in Europe, the FTSE 100 index shed 0.4 percent while the DAX 30 in Germany lost 0.7 percent. The CAC 40 in France lost 1 percent and the Stoxx Europe 600 lost 0.7 percent.
|Additional Analysis: Economic Outlook Stories|
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