By Roger Scher

Source: drawn from

Over the last three decades, Center-Right and Center-Left reformers around the world have identified the key elements of country success.

Four principles of economic policy emerge from a study of this reform record.

In an effort to derive lessons for the U.S. today, this article considers programs implemented since the 1990s by governments we could call centrist.

This article will assess the record of governments led by these Center Left leaders:

  • German Social Democrat Gerhard Schröder,
  • U.K. Labour leader Tony Blair,
  • and, U.S. Democrats Bill Clinton and Barack Obama;

And, by these Center Right leaders:

  • Spain’s former…

In the class I teach on Country Risk at NYU, this month we convened a model corporate Country Risk Committee, to review the “firm’s” largest country exposures in China, Germany and the U.S., among other countries.

Here are five cool charts and tables the students and I discussed.


China suffers from a debt overhang. As the country has powered ahead as an exporting and innovation juggernaut, it has also experienced excessive credit growth resulting in bad debts.

Credit is “Total Social Financing” (TSF), including bank loans (>60% of total), shadow banking, corporate bonds & equities, govt bonds, etc., a metric the Chinese authorities track. IMF forecasts. Sources: IMF Article IV reports & WEO, Scher GE presentation 2015, Haver

The chart above shows that when credit (the green line) grows faster than GDP (the red line), then credit-to-GDP (the blue bar) rises…

Source: IMF WEO, April 2021. General Government Debt (federal, state, local), 2019

Thank you all who have subscribed to my Substack newsletter, Country Success… IT’S FREE…

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In my latest post, I comment on President Biden’s impressive speech before Congress last week, arguing that his economic plan should be anchored to lessons learned from reformers around the world, from Center Left to Center Right.

Partner with me…

The Net International Investment Position — what the U.S. owes the rest of the world — ain’t lookin’ good…

By Roger Scher

Although this post is a bit wonkish, please don’t stop reading it till the end because there is a really cool chart there…

Ok, full disclosure, this chart at the end is a bit busy — too busy in fact — and challenging to decipher. It will be worth the wait, however, because it is chock full of information about what is driving America’s excessive borrowing abroad, how long this has been a problem, and what can be…

The Biden team is doing a good job on pandemic rescue & green investment, but should do more to protect the job-creating multilateral trade & investment system the U.S. helped erect after WWII…

By Roger Scher

WTO data

American Jobs Plan

Quick out of the gate, the Biden administration has done a commendable job funding health care and the prudent opening of schools, replacing aggregate demand, down due to the pandemic, helping the neediest and reducing inequality, and now rolling out an infrastructure plan, fully funded, that would drive productivity and GDP growth higher.

Well, nearly fully funded.

First, the higher corporate taxes are back-loaded…

The House Select Committee on Modernization unanimously approves biennial budgeting — a prudent step toward strategic planning & fiscal discipline...

US Treasury, image from CBO website

By Roger Scher

A Brookings Institution blog post this month reported that the Select Committee on the Modernization of Congress was reauthorized by Congress on January 4, 2021, extending its remit through 2023. The Select Committee was established in January 2019 to recommend how Congress could become “more effective, efficient and transparent”.

In Ten Point Plan: Strategic Planning for the U.S., my co-author Lucila Broide and I recommended in 2020 that: “Congress should permanently authorize and adequately fund and staff…

He might point to the U.K.’s 1947 currency crisis as a sign of what’s to come…

General Government Debt (GGD): central govt plus states and locals. Sources: UK from IMF database; US from CBO, Federal Reserve, IMF, and author calculations

“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts,” said Sherlock Holmes to Watson in A. Conan Doyle’s, “A Scandal in Bohemia”.

“If there is one common theme to the vast range of [financial] crises we consider in this book, it is that excessive debt accumulation, whether it be the government, banks, corporations, or consumers, often poses greater systemic risks than it seems during a boom.” From Carmen Reinhart’s & Kenneth Rogoff’s book, This Time is Different, Eight Centuries of Financial Folly.


Be careful with the minimum wage

US minimum wage (today): $7.25, US (Bernie Sanders proposal): $15; Germany (govt coalition): $11.98, Germany (Finance Minister Scholz, SPD candidate for chancellor): $13.75. Germany’s US$ equivalent is at 3Y avg exchange rate 2018–20 of 1.146 US$ per euro. At weaker US$, 1.199 seen on 3/11/21, Germany’s US$ equivalents were $12.53 & $14.39 respectively. German govt’s min. wage hike to be done in steps thru 2022; Sen. Sanders proposes in steps thru 2025. Sources: BIS and news reports.

If you’re going to raise the minimum wage, stay inside of Germany’s (and other U.S. competitors’) minimum wage. See chart above. If reducing inequality is your goal, there are better ways to do it.

Inequality in the U.S. is a big problem. Income and wealth distribution are heavily skewed in favor of the rich, poverty levels are higher than in most advanced countries, and racial inequalities persist, notably in education and economic opportunity. See charts at the end of this note.

Democrats in the Senate offered an amendment last week to President Biden’s Covid relief bill which would raise the…

The Reichstag building, 2017 “Ansgar Koreng / CC BY-SA 3.0 (DE)

Are there lessons for the U.S. today from the breakdown of democracy in Germany in the 1930s?

By Roger Scher

We often turn to Germany in the early nineteen-thirties for lessons about what causes democracy to fail. Following the January 6, 2021 attack on the U.S. Capitol, can Americans learn something from this history?

Some readers react strongly to such a comparison, so it is important to state up front that this essay is in no way meant to brand anyone on the American political scene today as similar to history’s most murderous totalitarian regime.

Still, it is useful to…

Roger Scher

Roger teaches political economy at NYU, is the former Head of Country Risk at GE, & co-author of Ten Point Plan for the U.S. (

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