On Friday, November 14, The New School for Social Research’s Schwartz Center for Economic Policy Analysis hosted a conference on the domestic and international consequences of the U.S.-led recession. The event was organized by Economists for Peace and Security, the Charles Leopold Mayer Foundation Initiative for Re-thinking the Economy, and the Levy Economics Institute.

The current crisis of subprime mortgages, mortgage-backed securities, credit derivatives, and failing investment banks is deeper and more severe than any since the New Deal. Conference participants discussed how the crisis originated in the United States— the center of the global system—and how cascading problems emerge when the world loses confidence in the system that supports the valuation of the global-reserve currency.

The conference brought together an exceptional international group of close observers of the financial system, including James K. Galbraith, Joseph Stigltiz, Warren Mosler, Allen Sinai, Jeff Madrick, Teresa Ghilarducci, and many others to consider the larger implications for U.S economic policy and for the international financial and monetary system (IFMS).

Panel discussions took an explicit account of the deep political nature of the IFMS and its effect on international security relations and peace in the world.  Four specific themes were prominent: the nature of the current crisis; economic policy challenges facing the United States; the design of a new domestic financial architecture; and the blueprint of a new international financial architecture, if and as it becomes needed.