“Mike, I want to thank you for teaching me Forex. It was money well spent. I really appreciate it.”-Aaron
In Ukraine, the US deep state and its NGO accomplices follow a now-classic path to "peace" - promoting civil warfare, fragmenting countries and hyper-concentrating wealth so as to channel it to London, New York and other financial centers rather than allowing it to be invested at homeTruthout | Op-Ed
Sometimes, economists think that children’s books get things wrong. Dr. Seuss’s “The Lorax,” about the destruction of a forest by a greedy industrialist, “assumes that there is no economic system in place,” [Indiana State University’s John] Conant said. In a modern capitalist economy, he said, the trees “would get very valuable as they got scarce, and the person with the property rights would harvest them at an economically reasonable rate.”
By and large, the economic lessons in children’s books lean left of center. “I think the writers are not particularly sympathetic to or don’t understand how a market works,” said Gary S. Becker, the Nobel laureate who teaches economics at the University of Chicago. “It’s not easy to convey that to a child. It’s not always easy to convey it to grown-ups.”
Lord Turner, who is the former head of the United Kingdom Financial Services Authority and currently a Senior Fellow at the Institute for New Economic Thinking, pointed to continually rising levels of private debt as a key culprit holding back the recovery of the global economy.
Here’s this blog’s takeaway: It’s impossible to understand a dynamic, systemically integrated world using a static, fragmented curriculum.AlterNet
There was always a measure of hypocrisy but Official Washington used to at least pretend to stand for “democracy,” rather than taking such obvious pleasure in destabilizing elected governments, encouraging riots, overturning constitutional systems and then praising violent putsches.AlterNet
But events in Ukraine and Venezuela suggest that the idea of respecting the results of elections and working within legal, albeit flawed, political systems is no longer in vogue, unless the “U.S. side” happens to win, of course. If the “U.S. side” loses, then it’s time for some “shock doctrine.” And, of course, the usual demonizing of the “enemy” leader.
Ukraine’s ousted President Viktor Yanukovych was surely no one’s idea of a pristine politician, though it looks like there are few to none of those in Ukraine, a country essentially controlled by a collection of billionaire oligarchs who jockey for power and shift their allegiances among corrupt politicians.
But Yanukovych was elected in what was regarded as a reasonably fair election in 2010. Indeed, some international observers called the election an important step toward establishing an orderly political process in Ukraine.
But Yanukovych sought to maintain cordial relations with neighboring Russia, which apparently rubbed American neocons the wrong way.
One of those points is that the world’s largest financial firms have equity that is worth only about 4% of their total assets. As shareholders’ equity is the only real buffer against losses in these corporations, this means that a 4% decline in their assets’ value would completely wipe out their shareholders – taking the companies to the brink of insolvency.
In other words, this is a fragile system. Worse, the current regulatory treatment of derivatives and of funding for large complex financial institutions – the global megabanks – exacerbates this fragility.
AbstractWhy the Federal Reserve Failed to See the Financial Crisis of 2008: The Role of “Macroeconomics” as a Sensemaking and Cultural Frame
One of the puzzles about the financial crisis of 2008 is why the regulators were so slow to recognize the impending collapse of the financial system. In this, paper, we propose a novel account of what happened. We analyze the meeting transcripts of the Federal Reserve’s main decision-making body, the Federal Open Market Committee (FOMC), to show that they had surprisingly little recognition that there was a serious financial crisis brewing as late as December 2007. This lack of awareness was a function of the inability of the FOMC to connect the unfolding events into a narrative reflecting the links between the housing market, the subprime mortgage market, and the financial instruments being used to package the mortgages into securities. We use the idea of sensemaking to explain how this happened. The Fed’s main analytic framework for making sense of the economy, macroeconomic theory, made it difficult for them to connect the disparate events that comprised the financial crisis into a coherent whole. We use topic modeling to analyze transcripts of FOMC meetings held between 2000 and 2007, demonstrating that the framework provided by macroeconomics dominated FOMC conversations throughout this period. The topic models also show that each of the issues involved in the crisis remained a separate discussion and were never connected together. A close reading of the texts supports this argument. We conclude with implications for future such crises and for thinking about culture and sensemaking more generally.
There is, though, a third option here. It's to recognize that capitalism and real freedom aren't wholly compatible, and to look for economic institutions - of which a basic income is one - which better promote freedom. Libertarianism and Marxism have much in common.Of course, Libertarianism of the right and libertarianism of the left have a lot in common in that they both value freedom. Freedom entails rights, and rights entail responsibility. The disagree is over prioritizing rights and responsibilities.
Mason Gaffney has for years been describing the nature of economic rents and its relation to taxation. His key idea, which would have been uncontroversial prior to the rise of the neoclassical school, is that all taxes come out of rents (ATCOR). This means that a single tax on the rents earned from ownership of natural resources can always provide sufficient taxation revenue.This post shows how a land tax works, based on the work of Henry George.
For example, when we whittle our way through the production chain down to the landowner, who has one input, land, the neoclassical framing say that this owner rents their land inputs, which are compensated at their marginal contribution to production. Okay. So she rents off another person who owns the land, who we then model as renting from another person, and so on.
The buck never stops. [This involves the informal logical fallacy of reductio ad infinitum, or infinite regress, also called "turtles all the way down."]
That’s what happens when you conflate land and capital into a single input. They nee[d] to be treated differently because land is not an output of any production process, unlike capital.
When you allow the buck to stop at ownership of land and natural resources, you get a very different picture of the economy. One in which the taxation capacity of rents is not limited their current value. As Gaffney points out, when we “lower other taxes, the revenue base is not lost, but shifted to land rents and values, which can then yield more taxes”.MacroBusiness
Henry George made this argument concisely a mere 130 years ago when writing in 1881 about the fund from which taxation is drawn
The shadow banking sector is now integral to the global financial system. Its architects are constantly seeking to evade oversight and control through the use of offshore accounting and forbidding complexity. The regulatory reforms that followed the 2007-8 crisis are bound to be tested.Our Kingdom — politics and liberty in Britain
A new poll finds more Americans see China as their greatest enemy than any other country in the world.This is huge! It completely shifts the focus of national security. America is now back in the position of having to arm to fight on two major war fronts simultaneously, as the US faces off with Russia over its buffer zone and now China as well. A new Cold War is heating up.
Yet another Senate report, yet another bank is busted for tax evasion. The Senate permanent subcommittee on investigations has released a report on Credit-Suisse bank detailing their systemic offshore tax evasion of U.S. funds.Economic Populist
The following is reproduced from "An Essay on Post-Keynesian Theory: A New Paradigm in Economics", Al Eichner and Jan Kregel's 1975 Journal of Economic Literature article. Of course, the table being a summary, all entries are highly stylized.Thoughts On Economics
Yesterday in our class on A Tale of Two Depressions, we discussed Robert McElvaine’s notion of “moral economy” (which he introduces in chapter 9 of his book, The Great Depression: America, 1929-1941). The idea is that, during the first Great Depression, Americans were engaged in an intense debate between different moral economies (which McElvaine characterizes as the difference between the “cooperative individualism” of workers and the “acquisitive individualism” of businesspeople).
As I explained to students, all economic theories—for example, neoclassical, Keynesian, and Marxian theories—represent moral economies. And they arrive at very different conclusions concerning the justice or fairness of capitalism. Thus, for example, neoclassical economists argue that everyone gets what they deserve and, through the workings of the invisible hand, the result will be full employment.
In contrast, Keynesian economics is based on the proposition that, while everyone may get what they deserve (with the possible exception of coupon-clippers), it’s quite possible that will result in less-then-full-employment equilibrium, which then requires the visible hand of government intervention.
Marxian economists propose a third possibility: even if everyone gets what they deserve in markets, in production things are different (because of exploitation)—and the consequence, whether there’s an invisible or visible hand, is inequality and instability. In other words, the three economic theories represent radically different moral economies.These three major theories are not exhaustive of possible explanations and other theories are possible, such as proposed by institutionalists who hold that social, political and economic outcomes result from cultural convention and institutional arrangements reflective of the imposition of a class and power structure, but differently from Marx. Such theories, which are a combination of life science, social science and economics, are capable of explaining not only capitalism but other social, political and economic systems and their consequences historically as Marx sought to do. But they do it differently on the whole, even though they may make use of some of Marx's insights.
This week on Moyers & Company, López, author of the newly released book, Dog Whistle Politics: How Coded Racial Appeals Have Reinvented Racism and Wrecked the Middle Class, joins Bill to talk about how racism has changed in America since the civil rights era. The dog whistle of racism, says López, is “the dark magic” by which middle-class voters have been seduced to vote against their own economic interests. Politicians have mastered the use of dog whistles – code words that turn Americans against each other while turning America over to plutocrats.BillMoyers.com
And yet, “dog whistle politics doesn’t come out of animus at all,” López tells Moyers.“It doesn’t come out of some desire to hurt minorities. It comes out of a desire to win votes. And in that sense, I want to start using the term strategic racism. It’s racism as a strategy. It’s cold, it’s calculating, it’s considered, it’s the decision to achieve one’s own ends — here, winning votes — by stirring racial animosity.”
But that overlooks the real hurdle in all this: German public opinion. Not only is the constitutional court one of the two holy institutions in Germany, the other being, of course, the Bundesbank. German public opinion is firmly imprisoned by the failure of Germany’s political leadership to explain to the German public that Germany itself has played a key role in causing the unresolved euro crisis. Germans firmly believe that their country is the ‘Musterknabe’ of the euro and that all would be well in the land of the euro if only everyone else became just like Germany – when nothing could be further from the truth.
Germany’s apparent success under the euro depended on others behaving differently. Forcing everyone to behave just like Germany is making matters worse today. Alas, this is not an appealing insight in a country of citizens sharing the belief that all countries of the world can become more competitive at the same time, with “competitiveness in stability” being the German holy grail; just as having all countries simultaneously run persistent current account surpluses is held possible, according to German math and accounting rules.
Nor has anyone enlightened the German public about the catastrophic consequences for Germany itself in case of euro breakup. As a result, Germans may be easily fooled by the fantasy of a “Gexit without pain” – which appears to be the promise held out by Germany’s growing anti-euro brotherhood.
For a start, then, try to educate the German public that quantitative easing is not a synonym for hyperinflation and euro bonds not a transfer union in disguise.Multiplier Effect
The big analytical difference between Foster and Magdoff and myself is that they see stagnation as inherent to capitalism whereas I see it as the product of neoliberal economic policy. Foster and Magdoff partake of the Baran-Sweezy [monopoly capital] tradition that recommends deeper socialist transformation. I use a structural Keynesian framework that recommends reconstructing the income and demand generation mechanism via policies that include rebuilding worker bargaining power, reforming globalization, and reining in corporations and financial markets.These views are not mutually exclusive, but in the end, reforming capitalism leads to a dead-end. It's possible to reform capitalism away from the neoliberal variety, but in the end, capitalism will be capitalism, that is, biased toward increasing capital share over labor share, saving and investment over worker income and consumption, therefore, supply over demand. Having superior power and the ability to capture governments, capital is destined to win over labor unless workers assert themselves against this institutional structure and are able to win. This is about power.
Larry Summers’ story of serial bubbles delaying stagnation has substantial similarities with both accounts but he avoids blaming either capitalism or neoliberalism. That is hardly surprising as Summers has been a chief architect of the neoliberal system and remains committed to it, though he now wants to soften its impact.This is the typical capitalist strategy of co-optation — give only as much as absolutely necessary to keep the system in place as it is while keeping it going. It's keeping the goose that lays the golden egg on life-support.
Money is currently produced by a ‘public-private partnership’ between the state and the financial sector, a partnership whose nature remains obscure to the great majority of the population. Is another distribution of knowledge – and hence of power – possible?Prime Economics
Between 1975 and 1976, the Church Committee published fourteen reports on intelligence gathering abuses by U.S. intelligence agencies.
In August of 1975, the Church Committee released its findings.
Senator Church went on NBC's Meet the Press after the findings were released, and said that, "In the need to develop a capacity to know what potential enemies are doing, the United States government has perfected a technological capability that enables us to monitor the messages that go through the air. Now, that is necessary and important to the United States as we look abroad at enemies or potential enemies. We must know, at the same time, that capability at any time could be turned around on the American people, and no American would have any privacy left such is the capability to monitor everything—telephone conversations, telegrams, it doesn't matter. There would be no place to hide."
Church added that, "I don't want to see this country ever go across the bridge. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision so that we never cross over that abyss. That is the abyss from which there is no return."Truthout | Op-Ed
What is the precise connection between human surveillance, the collection of different forms of data and metadata, and a system of corporate capitalism? Many have argued that the increasing push to collect private information or metadata is for the sake of our national security, and only secondarily, about commercial interests. However, this line of argument would be much more persuasive if the boundary between government and corporate interests were clear and unambiguous. It is not. In fact, as corporate capitalism becomes globalized, the distinction between government power and corporate power is all but erased.
Given this, it is not difficult to imagine that the surveillance infrastructure designed and built by powerful communications and tech industries, and implemented and enforced by way of government institutions and bureaucratic systems, would tend to serve the interests of the corporation first and foremost, with governments playing a parasitic or subsidiary role. To properly address the question of whether government or corporate interests are at the center, we need to first think about how to visualize or articulate the boundary between public and private....
It is crucial to understand here that the free-trade zone of individual privacy is not merely the creation of a new capitalist commodity or the realization of an untapped potential for profit. At the human level of lived experience, the eradication of privacy also creates a widespread sense of impotence, powerlessness and apathy before powerful governmental institutions and corporate hegemonies. This state of affairs will be pivotally important in the furtherance of rampant capitalist exploitation. Why? Precisely because eradicating the private sphere is also extinguishing the possibility that individuals can act in concert to resist what is happening to them. The truth is that we discover and sustain our sense of solidarity and commonality with others when we grasp that we are unique and irreplaceable beings who need to relate to ourselves and to each other in both a private and a public way. The condition of possibility for individual reflection, for community, for acting in concert, is that the distinction between the private and the public remains inviolable. The corporate capitalist system has achieved its singular totalitarian purpose when it is able to violate the inviolable.Truthout | Op-Ed
Mr. Gross—by his own admission, a demanding boss—had long showed respect for Mr. El-Erian and indicated that the younger man eventually would take over the world's biggest bond firm. But one day last June, the two men squared off in front of more than a dozen colleagues amid disagreements about Mr. Gross's conduct, according to two people who were there.
"I have a 41-year track record of investing excellence," Mr. Gross told Mr. El-Erian, according to the two witnesses. "What do you have?"
"I'm tired of cleaning up your s—," Mr. El-Erian responded, referring to conduct by Mr. Gross that he felt was hurting Pimco, these two people recall.
NASA's IBEX and Voyager 1 missions have shattered all conventional ideas about the heliospheric boundary, the region separating our solar system from interstellar space. In 2009, the IBEX spacecraft created the first all-sky map of the boundary revealing an astonishing ribbon of energetic neutral atoms. According to scientists, it's still a big mystery.
I could hear Meet the Press on in the background at my house on Sunday and the reporters were discussing various means of reducing the budget deficit. I didn’t bother to sit down and listen, however, because I knew that none of it made any sense. All were based on the same false premise: federal government deficits represent a burden on the private sector.
They do not.Forbes
Pope Francis on Monday revolutionized the Vatican's scandal-plagued finances, inviting outside experts into a world often seen as murky and secretive and saying the church must use its wealth to help the poor.Reuters
Francis, elected nearly a year ago with a mandate for reform, used a document known as a Motu Proprio - Latin for "by his own initiative" - to implement immediate changes including appointing an auditor-general.
The document says the Church must see its possessions and financial assets in the "light of its mission to evangelize, with particular concern for the most needy".
A new Secretariat for the Economy will report directly to the pope and will be headed by Australian Cardinal George Pell, 72, currently the Archbishop of Sydney and a key proponent of financial transparency in a committee that advised the pope. A Church source said Pell would move to Rome.
Reactions to Mike Lofgren’s Essay on the Deep State (via Moyers & Company)The National Republican Congressional Committee (NRCC) has taken an odd course in the Florida special election to replace Republican Rep. Bill Young after his death in October of last year: The NRCC is bashing Democratic candidate Alex Sink for supporting Simpson-Bowles, a deficit reduction plan Republicans most often attack President Obama for abandoning or ignoring.BuzzFeed - Politics
"Alex Sink supports a plan that raises the retirement age for Social Security recipients, raises Social Security taxes and cuts Medicare, all while making it harder for Pinellas seniors to keep their doctors that they know and love," Katie Prill, a spokeswoman for the NRCC said, according to the Sunshine State News. "Sending Alex Sink to Washington guarantees that seniors right here in Pinellas County are in jeopardy of losing the Social Security and Medicare benefits that they have earned and deserve."
Guardian journalist Luke Harding says paragraphs of his writing mysteriously disappeared while working on his latest book 'The Snowden Files.'Bizarre. Much more to the story than the headline implies.
Perhaps the best way to prove the tyrannical intentions of the globalizers is to start with their own words. If we look at the manifestoes and comments issued by the various business consortiums, industry groups, and individual corporations, we find the unvarying demand that all government action be subordinated to the corporate profit prerogative, and that no other value be allowed to interfere with this.Volatility
This is why I call corporations and their intent totalitarian. My definition of this term: A powerful person or entity is relentless in pursuit of an imperative, at every moment wants to enforce the domination of that imperative to the fullest extent possible, and refuses to recognize the right of any other value to exist at all. A totalitarian may or may not be willing to “tolerate” the existence of something purely extraneous. But where there’s any conflict between the corporate domination imperative and any other value, it’s taken for granted there can be no compromise. The non-corporate value must submit, if necessary to the point of its own extinction. As the historical record makes clear, this is true of all human values – health, happiness, prosperity, culture, tradition, religion, morality, simple human decency and fairness. None of these can coexist with corporations. In the long run these must all go extinct, if corporatism continues to exist.
Many researchers do in fact note that decreasing labour share, and therefore increasing capital share, of national income has been a global trend since the 1970s. What few say however is that this is trend is a result of policy choices informed by neoliberal ideology. We certainly could have avoided this trend if we desired. It was simply a matter of different policy choices. And to reverse the trend is also very simple, should be desire to do so.
In a mere technical sense, reversing the trend couldn’t be easier. Off hand I can think of dozens of policies; from inheritance taxes, greater public transparency of personal income data (including trusts), land taxes, improving the power of shareholders in the determination of executive pay, grants of land or capital for public service, and more. The options are limitless.MacroBusiness
The barrier to change is modern realpolitik. Those at the top have captured the political process, partly by capturing the media. Any change will entail a massive redistribution of wealth from those who bankroll the political parties, to those with the least resources, the least education and the least interest.
This article provides more depth to some comments I made in"MMT and Constraints". I explain why developed countries should allow their currencies to float, which is the policy stance advocated by Modern Monetary Theory (MMT). It is probably a good idea for developing countries to float their currencies as well, but they face inherently difficult policy problems that I do not know enough about to comment on. The implication of advocating a free-floating currency is that I do not see the "external constraint" as being a serious issue, or at least an issue that policy makers can hope to do anything useful about.Bond Economics
In that previous article, I made some quick comments in response to an assertion by Thomas Palley that the "foreign exchange market constraint" is very important for countries other than the United States. Since he did not explain that assertion, I was unable to offer a very detailed criticism. My response was too short, and drew some comments. I expand my explanation here.
I will first explain why I do not think that there is a significant external behavioural constraint on policy makers; but an accounting constraint obviously exists.
I will also note that what I am writing is my opinion, and does not necessarily reflect the views of the economists who developed MMT. I think that poorer countries face some difficulties with free-floating currencies, a view with which they may not agree.
G20 vows to add $2 tn to world economy to lift growth (via AFP)As much as half of all the food produced in the world – equivalent to 2bn tonnes – ends up as waste every year, engineers warned in a report published on Thursday.So much for efficiency of markets. Add this to chronic unemployment and boom-bust cycles.
The UK's Institution of Mechanical Engineers (IMechE) blames the "staggering" new figures in its analysis on unnecessarily strict sell-by dates, buy-one-get-one free and Western consumer demand for cosmetically perfect food, along with "poor engineering and agricultural practices", inadequate infrastructure and poor storage facilities.
In the face of United Nations predictions that there could be about an extra 3 billion people to feed by the end of the century and growing pressure on the resources needed to produce food, including land, water and energy, the IMechE is calling for urgent action to tackle this waste.
The idea that a buffer stock of employed citizens be created by the government as a kind of 'employer of last resort' is not a new concept but I've been wondering exactly how old an idea it is. I at the same time was reading exerts from my copy of Thomas Paine's "Rights of Man" 1791 for a completely unrelated reason, and came across this section which sketches an outline of what such a program might look like (at his time). I know of no other such outline (be they from a political persuasion as below or an economic persuasion) written earlier than this (consider this a challenge!)....
It's happening in Ukraine, Venezuela, Thailand, Bosnia, Syria, and beyond. Revolutions, unrest, and riots are sweeping the globe. The near-simultaneous eruption of violent protest can seem random and chaotic; inevitable symptoms of an unstable world. But there's at least one common thread between the disparate nations, cultures, and people in conflict, one element that has demonstrably proven to make these uprisings more likely: high global food prices.Motherboard
Just over a year ago, complex systems theorists at the New England Complex Systems Institute warned us that if food prices continued to climb, so too would the likelihood that there would be riots across the globe. Sure enough, we're seeing them now. The paper's author, Yaneer Bar-Yam, charted the rise in the FAO food price index—a measure the UN uses to map the cost of food over time—and found that whenever it rose above 210, riots broke out worldwide. It happened in 2008 after the economic collapse, and again in 2011, when a Tunisian street vendor who could no longer feed his family set himself on fire in protest.
Bar-Yam built a model with the data, which then predicted that something like the Arab Spring would ensue just weeks before it did. Four days before Mohammed Bouazizi's self-immolation helped ignite the revolution that would spread across the region, NECSI submitted a government report that highlighted the risk that rising food prices posed to global stability. Now, the model has once again proven prescient—2013 saw the third-highest food prices on record, and that's when the seeds for the conflicts across the world were sewn....
The history of debt is a vast and consequential topic that remains understudied. So there is no way this book could live up to its title. Much work remains to be done before anyone could produce a satisfying summary of debt history in 400 pages, if that will ever be possible. Graeber’s book is however a remarkably original achievement, and even the hubric title is well chosen. The ultimate value of this work depends on its reception, and whether it becomes a departure for further critiques and research. Hopefully this book will someday be re-written in several volumes, but this is a good start for now.Many interesting comparisons and a good summary of the history and consequences of metallic versus credit money.
"We would rather reduce our growth rate a bit in order to protect the environment and never seek short-term economic development at the expense of the environment. We should never pursue a 'pollution first, treatment later' approach. "
But Big Oil Exec Rex Tillerson is fine with hydrofracking when it adversely affects others.
Fannie Mae is paying the U.S. Department of Treasury $7.2 billion, bringing its total dividend payments now to a level exceeding the total bailout it received.
“Obviously, it’s good news for taxpayers that Fannie Mae is profitable,” Chief Executive Officer Timothy Mayopoulos said during the earnings conference call.Fannie Mae will have paid the Treasury $121.1 billion when this dividend payment is made.
Since 2008, Fannie received $116.1 billion in government bailouts.
the federal government counts the money from quarterly profits as dividends instead of as a repayment of the bailout.
As of Sept. 30, 2013, the GSEs returned $185 billion to the Treasury
If U.S. antitrust enforcers decide to challenge the proposed $45 billion merger of Comcast Corp and Time Warner Cable Inc, it may be because of an idea with a funny-sounding name that has been gaining currency in government offices.
The idea is monopsony power, the mirror image of the better-known monopoly power but a concept that is just as old.
A monopoly is one seller with many buyers, while a monopsony (pronounced muh-NOP-suh-nee) is one buyer with many sellers. A textbook example is a milk processor that is the only option for dairy farmers to sell to, and that then forces farmers to sell for less.
Federal Reserve policy makers were repeatedly caught by surprise as the economy and financial markets collapsed around them in 2008, according to newly released transcripts of their meetings from that year.
If you believe, for some reason, that the Fed has special fortune-telling abilities, these records should disabuse you of that notion pretty quickly.
Repeatedly throughout that crisis year, the Fed took relatively hopeful views of the economy's fate, only to play catch-up when the situation got much worse than they expected, sometimes in a matter of just weeks or days.
To be fair to the Fed, the unfolding economic collapse took a lot of people by surprise. And the Fed did act fairly aggressively when it got around to acting. But these records are reminders that the human beings pulling the strings of the world's largest economy are no better than most other economists at predicting the future.
Technological fixes to time-honoured problems are all the rage these days. Bitcoin is meant to fix money, social media are seen as an antidote to Rupert Murdoch and assorted tyrants, networked robots are to help countries like Japan deal with demographic declines etc. Perhaps the largest claim is that the Internet has helped (or is about to help) democratise capitalism. Ten years ago that claim struck me as both fascinating and dubious. So, I sat down and wrote an article about it (circa 2004). Its gist: The Internet is a wonderful leveller. But democracy requires a great deal more than mere ‘levelling’.
Primarily, it requires political institutions that enable the economically weak to have a decisive say on policy against the interests of the rich and powerful. Ten years later, I am re-visiting this question, under the shadow of a global crisis that made it even harder to convert an e’Demos into genuine e’Democracy. What follows is an updated version of the original paper.[1] (Click here for a pdf version or just read on.)Can the Internet democratise capitalism?
Henry Giroux on Resisting the Neoliberal Revolution (via Moyers & Company)....Chester Bowles, a Madison avenue advertising executive who would become governor of Connecticut in 1949, and would serve President Kennedy as Under Secretary of State, then as Ambassador to India.... wrote in a 1946 book, Tomorrow Without Fear, “that prosperity cannot continue unless enough income is being distributed to all of us—farmers and workers as well as businessmen.”....The plutocrats had had their opportunity, and they had blown it [just prior to the Great Depression]. America had given them everything they desired. The freedom to do whatever they wanted. The power to bend others to their will. And ever-grander fortunes as both incentive and reward. Americ choked on those fortunes. A maldistribution of income and wealth that severe the American economy simply could not swallow.
“Even with the most business-minded administration in our history, even with falling taxes and a government surplus, even with everything that businessmen thought they needed to insure continued prosperity,” Bowles reflected, “we could not duck that basic issue for more than a few tinsel-decorated years.”
Quoted in Sam Pizzigati, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.The scourge of neoliberalism
Andrew Bacevich on Washington’s Tacit Consensus (via Moyers & Company)I think it is safe to say that investor activity in the housing market has changed the face of real estate buying. Back when the crisis hit in 2007, some analysts were cheerleading the hedge fund crowd as a tiny blip in the market. It is hard to call it a blip when 30 to 40 percent of all purchases are going to investors for close to half a decade. A recent analysis from RealtyTrac found that the estimated monthly home payment for a regular three bedroom home (costs include mortgage, insurance, taxes, maintenance, and subtracting the income tax benefit) rose an average of 21 percent from a year ago in 325 US counties. What about household incomes? That is another story. So it is no surprise that we are largely becoming a nation of renters. It is also no shocker that young households are largely unable to begin household formation via buying a home. Many are living with parents well into “young” adulthood. For the first time in history, we had a six year stretch where we added more renter households than that of actual homeowners.Many details in this post.
Thanks to the fiscal cliff deal and the Affordable Care Act, the top 1% of taxpayers - and many in the top 3% as well - will have to pay a bigger tax bill come April 15.
Think Progress
Bad news for American families is great news for the financial industry, according to the real estate finance industry trade magazine CRE Finance World (CREFW).
Workers’ incomes will continue to decline and homeownership will become an ever more remote dream for the typical American, boosting demand for rental housing and pushing the cost of rent up, an article in the magazine’s new edition says. That will cause the market for rental housing securities — complex financial contracts backed by rental properties — to explode over the next year, Deutsche Bank analyst Harris Trifon writes.
Here is how it works these days: You start hearing about a big, national problem and then it becomes a drumbeat. First there are a few articles and columns mentioning that such-and-such is a problem. Then a number of articles appear, then a “study” from a “think tank” confirms the problem and sounds the alarm about how terrible it is, and then just as the issue seems to be the only thing you are hearing about a solution is presented. Of course, the solution always involves taking something away from you and giving it to some company or industry standing in front of a billionaire or three. The right question to start asking when you hear about these “problems” is which billionaire is driving this.Salon
Here are five-plus examples of billionaires who use their money to try to get us to think what they want us to think in order to enact a right-wing economic agenda.
Next week is going to be brutal [over two-thirds of the US].Alaska and the West Coast way above normal as jet stream shifts.
Democracy Now!
... the longer-term outcome may be—and I want to emphasize this, because nobody in the United States seems to want to pay attention to it—the outcome may be the construction, the emergence of a new Cold War divide between West and East, not this time, as it was for our generation, in faraway Berlin, but right on the borders of Russia, right through the heart of Slavic civilization. And if that happens, if that’s the new Cold War divide, it’s permanent instability and permanent potential for real war for decades to come. That’s what’s at stake.
