The signals of unrest in Chile mounted for years amid corruption scandals, rising inequality, and new monopolies. The tax increase on public transport that sparked the protests was only the final straw.ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Tom Frank aptly characterized the Bush appointees that completed the destruction of effective financial regulation as “The Wrecking Crew.” It is important, however, to understand that Bush largely adopted and intensified Clinton’s war against effective regulation. Clinton and Bush led the unremitting bipartisan assault on regulation for 16 years. That produced the criminogenic environment that produced the three largest financial fraud epidemics in history that hyper-inflated the real estate bubble and drove the Great Financial Crisis (GFC). President Trump has renewed the Clinton/Bush war on regulation and he has appointed banking regulatory leaders that have consciously modeled their assault on regulation on Bush and Clinton’s ‘Wrecking Crews.’New Economic Perspectives
That idea, that the market ensures that only the most efficient prosper, is a central message of neoliberal ideology, and it has held UK and US governments under its sway since the time of Thatcher and Reagan. But that ideology contains a large and deep internal contradiction, which applies particularly to large firms like Carillion. To see what that contraction is, we need to talk about ordoliberalism and Ronald Coase.Asymmetrical powers enable rent extraction.
Ordoliberalism is widely known as the German version of neoliberalism. It too celebrates the benefits of the market. It, like neoliberalism, ignores many of the failures of markets that Colin Crouch eloquently outlines and which economists spend a lot of time studying. But ordoliberalism does recognise one potential problem with their market ideal which neoliberalism ignores, and that is monopoly. Crouch makes a similar distinction in talking about market-neoliberals and corporate-neoliberals.
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. — The Wealth of Nations 1.10.82Freedom entails responsibility, and responsibility depends on accountability.
Guy Standing’s The Corruption of Capitalism (Biteback Publishing 2017) is a powerful attack on rentier capitalism and, very explicitly, a call to revolt. It is very informative and the detailed factual descriptions that Standing puts before his readers are intended to make them angry. He succeeded with me and probably will with most readers. Standing is at his best describing the features of crony capitalism that are totally different from the neo-liberal story of free markets that justifies it. His charge is that neo-liberal economic policies are based on lies which he lists in order to describe what really happens....Corporate statism.
ECB advisory groups are used as lobby platforms by the financial industry, Corporate Europe Observatory’s newest report shows. Published today, “Open door for forces of finance at the ECB” reveals that the advisory groups counselling the European Central Bank have become largely dominated by representatives of some of the most influential global financial corporations. European parliamentarians are urged to act.
Like many other EU institutions, the European Central Bank (ECB) actively seeks external expertise for its policies - a total of 22 advisory groups provide ECB decision-makers with recommendations on all aspects of EU monetary policy. Likewise comparable to other EU bodies, however, there is a hefty industry-bias in many of these expert groups.
The new report unveils that 508 of 517 available seats across all groups have been assigned to representatives of private financial institutions. More than 98 per cent of advisors in these circles are therefore providing expertise with a touch of corporate spin. [Among all 144 entities with seats in an ECB advisory group, 64 do not even have an entry in the EU’s lobby register, the EU Transparency Register.]
Such figures raise the question whether, the membership in the ECB’s advisory groups is a covetable asset for the big private banks, where opportunities to influence programme decisions can come with multi-billion euro stakes for the industry....Corporate Europe Observatory - Exposing the power of corporate lobbying in the EU
WikiLeaks’ dump of messages to and from Clinton’s campaign chief offer an unprecedented view into the workings of the elite, and how it looks after itself.But, but, but, Putin!
Warren makes the remarks about the 12-nation trade deal, which still needs Congressional approval, to progressive activists in a video released Thursday by social change network CREDO Action.
The deal, Warren says in the video, "isn't about helping American workers set the rules. It's about letting giant corporations rig the rules—on everything from patent protection to food safety standards —all to benefit themselves."
Even in the drafting process industry representatives could exert influence—but there was no voice to represent American workers or consumers, she says. "A rigged process produces a rigged outcome," she says.
One specific provision of the deal drawing Warren's ire (as it has before) is the "wonky-sounding" Investor State Dispute Settlement, or ISDS.
"This is the part that gives a huge boost to big multinational companies when they want to challenge a country's laws they don't like," she says. They do that not through courts but "industry-friendly arbitration panels staffed with corporate lawyers." Faced with potential billions in fines, "some countries will just back down and change their regulations," she says.
"Workers, environmentalists, and human rights advocates don't get the right to use ISDS; only big corporations do. That's a rigged system," she says. Warren cites specific examples of ISDS challenges— last year when Canadian taxpayers got stuck with a $300 million bill after the country said a company couldn't expand of a quarry off the coast of Nova Scotia, and when Keystone XL company TransCanada used the ISDS provision of NAFTA to seek $15 billion from the U.S. for its rejection of the pipeline.
With ISDS in the TPP, Warren says, "It will be open season on laws that make people safer—but cut into corporate profits."
Report suggests 'some giant corporations—and their executives—have decided that following the law is merely optional'…
This is the damning verdict of Sen. Elizabeth Warren's (D-Mass.) report released Friday, Rigged Justice: How Weak Enforcement Lets Corporate Offenders Off Easy (pdf).Common Dreams
Via the WSJ:
Federal prosecutors and the top U.S. commodities regulator have asked banks to turn over information in connection with a broad probe into whether their traders rigged auctions on government debt, according to people familiar with the matter.
Banks are in the process of providing details to prosecutors at the Fraud Section at the Justice Department, as well as investigators at the Commodity Futures Trading Commission, the people said.Across the Curve
All this poses the question. Why, then, haven't we seen state help to create what Robert Shiller has called financial democracy?
It's certainly not because of a commitment to laissez-faire: the massive implicit subsidy to banks tells us that the state is very happy to intervene in the financial system.
Instead, the answer was pointed out by Marx: the state serves the interests of capitalists, not the people. And financial capital would rather financial markets consisted of rent-seeking than of enhancing aggregate welfare. Crony capitalism has encouraged financialization (pdf), not financial democracy.
In this sense, a well-functioning market economy requires that the state be freed from the grip of capitalists. In some respects it is capitalism that is the enemy of a market economy, and Marxism that is its friend.Stumbling and Mumbling
In Chapter 24 of The General Theory of Employment, Interest and Money, Concluding Notes on the Social Philosophy towards which the General Theory might Lead, John Maynard Keynes confronted the issue of the “arbitrary and inequitable distribution of wealth and incomes” in capitalist economies. The argument he advances in that Chapter of his 1936 book contains guidelines for the progressive left that some just cannot seem to grasp. In short, governments (as our agents) do not need the savings of the rich to ensure that society prospers. There was another interesting contribution in 1946 from the American statistician and economist – Beardsley Ruml – who wrote that “Taxes for Revenue are Obsolete”. The progressive left would be advised to study his work and stop building political policy platforms on the claim that governments needs to make the rich pay their fair share of taxes so that adequate public services and infrastructure can be provided. The incomes and taxes paid by the rich are largely irrelevant to the capacity of a national, currency-issuing government to provide first-class public services and infrastructure. It is time to re-frame the debate and the way in which progressive political forces state their policy aspirations….According to functional finance, the purpose of taxation is to control inflation rather than fund government that is a currency sovereign.
So the government might impose taxes:
1. To control inflation.
2. To redistribute purchasing power from the rich to the poor (high income to low income).
3. To alter the allocation of resources away from undesirable ends – such as tobacco taxes.
4. To provide some hypothecated public transparency for major projects/programs.
So from a functional finance perspective, taxation must be designed to advance these purposes and the public discussion must be about the idea of public purpose and never about raising revenue.
So from a functional finance perspective, taxation must be designed to advance these purposes and the public discussion must be about the idea of public purpose and never about raising revenue.…Bill Mitchell – billy blog
It’s a mistake, therefore, to think of ALEC primarily in terms of its documented association with Charles and David Koch. Rather, it’s an organization that facilitates intimate and discreet lobbying opportunities where donors have access to a self-selecting set of willing accomplices drawn from the nation’s fifty state legislatures. Those lawmakers are often pampered on donors’ dimes at the organization’s gatherings. And all of it is tax deductible for the companies because ALEC turns what would ordinarily be lobbying expenses into ‘scholarships’ for state lawmakers to further their educations. So if you’ve ever wondered why voter ID laws, so-called ‘right to work’ laws, attacks on private and public sector unions, attacks on clean air standards and sustainable energy, pro-charter school bills, attacks on college accreditation and teacher certification, laws proposing to centralize rulemaking on energy, pollution, power plants, state pension investments, tort reform, or food labeling seem to pop up in different state capitals seemingly simultaneously, with the identical legalese backed by the same talking points and even the same expert witnesses, ALEC is often the reason.If Walker is elected, it won't be Scott Walker that's really POTUS, but rather Alec Walker.
And now, heading into 2016, one of the group’s most high profile alumni is Scott Walker. It’s possible that no American politician who holds office today has worked harder to successfully advance ALEC’s agenda than Walker. And no previous candidate for the White House has ever owed so much to ALEC at the outset of his campaign.….
Four qualities have distinguished republican government from ancient Athens forward: the sovereignty of the people; a sense of the common good; government dedicated to the commonwealth; and resistance to corruption. Measured against the standards established for republics from ancient times, the American Republic is massively corrupt.
From Plato and Aristotle forward, corruption was meant to describe actions and decisions that put a narrow, special, or personal interest ahead of the interest of the public or commonwealth. Corruption did not have to stoop to money under the table, vote buying, or even renting out the Lincoln bedroom. In the governing of a republic, corruption was self-interest placed above the interest of all—the public interest.
By that standard, can anyone seriously doubt that our republic, our government, is corrupt? There have been Teapot Domes and financial scandals of one kind or another throughout our nation’s history. There has never been a time, however, when the government of the United States was so perversely and systematically dedicated to special interests, earmarks, side deals, log-rolling, vote-trading, and sweetheart deals of one kind or another.
What brought us to this? A sinister system combining staggering campaign costs, political contributions, political action committees, special interest payments for access, and, most of all, the rise of the lobbying class....
The question is: By adhering to its highest principles and ideals, will America continue to have the moral authority to lead all people of goodwill? The answer remains to be seen. And that answer will have much to do with whether we have the courage to drive the money changers from the temple of democracy and recapture government of the people, for the people, and by the people.
In addition to the rise of the national security state, and the concentration of wealth and power in America, no development in modern times sets us apart more from the nation originally bequeathed to us than the rise of the special interest state. There is a Gresham’s law related to the republican ideal. Bad politics drives out good politics. Legalized corruption drives men and women of stature, honor, and dignity out of the halls of government. Self-respecting individuals cannot long tolerate a system of election and reelection so dependent on cultivating the favor of those known to expect access in return. Such a system is corrosive to the soul....Time
Earlier this year, the Federal Communications Commission voted to ease the way for cities to become Internet service providers. So-called municipal broadband is already a reality in a few towns, often providing Internet access and faster service to rural communities that cable companies don’t serve.
The cable and telecommunications industry have long lobbied against city-run broadband, arguing that taxpayer money should not fund potential competitors to private companies.
The telecom companies have what may seem like an unlikely ally: states. Roughly 20 states have restrictions against municipal broadband....
As the New York Times detailed last year, state attorneys general have become a major target of corporate lobbyists and contributors including AT&T, Comcast and T-Mobile.ProPublica
The presidential campaign of Bernie Sanders — an anti-Russia, Israel-supporting politician from Vermont — revives an archaic feud among leftists. The old debate about “sewer socialism” is back.
In the early part of the 20th century, there was a broad movement of people in the United States who advocated the overthrow of capitalism. Among them were many revolutionaries like Eugene Debs, William Z. Foster, Lucy Parsons, and Paul Robeson.
However, there was another current of people who called themselves “socialists” but had no interest in revolution. They were called “sewer socialists.” The term originated in reference to Victor L. Berger, a “socialist” who ran on a platform of improving the city’s sewer system and eventually became the mayor of Milwaukee. The sewer socialists did not want to overthrow capitalism, but simply to be elected to local public office and improve government policy. They wanted to make a global system built on exploitation of people all over the world a little more comfortable for those living within the western economic centers.
The battle between these two poles of the left movement – with the revolutionary and anti-imperialist wing of socialism on the one hand and the “sewer socialist” wing on the other — played out on a global level. Commenting on the debate, Russian socialist revolutionary Vladimir Lenin described the trend this way: “The bourgeoisie of an imperialist ‘Great’ Power can economically bribe the upper strata of ‘its’ workers by spending on this a hundred million or so francs a year, for its superprofits most likely amount to about a thousand million… this little sop is divided among the labour ministers, ‘labour representatives’… labour members of War Industries Committees… labour officials, workers belonging to the narrow craft unions…”
In the modern United States, it isn’t sewer socialism but “Vermont socialism” that plays the role of the ‘Labor Ministers.’ US Senator Bernie Sanders is running for president, and openly describes himself as a “socialist.” Despite using this word to describe himself, with many well intentioned anti-capitalist activists supporting him, Sanders’ platform in reality articulates a strategy for strengthening global monopoly capitalism and its expanding militarism....Crony capitalism and sewer socialism. I love it. Bernie is one of those "leftists" that mean well, but are centrists at best when it comes down to it.
I think a referendum was appropriate, but perhaps a month ago, not now. (1) The creditors never negotiated; they never horse-traded compromises. That was obvious from the beginning, and glaringly obvious when they responded to Syriza's final offer, which tiptoed across some red lines, with even more demands. It was always take-it-or-leave-it. Tsipras and Varoufakis were not honest with the Greek people, in my opinion, by repeatedly making optimistic statements -- they should have said "we can't negotiate with these guys" and put it to a vote right away....
As for the IMF, it was no secret that there has been a lot of tension between the technical staff and the politicians at the top. They have a policy, established after the Argentine fiasco, of not lending to insolvent states, but instead requiring writedowns from the creditors. Ah, but the creditors in the Greek case are the banks and governments that installed the IMF directors, so the policy is being flagrantly violated....Power politics and cronyism, hallmarks of the neoliberal order being imposed through globalization. Europe is only a test case.
Dear President Obama:
We know that you will see this letter. Although you certainly don’t have a subscription to The Salem News — where this letter first appeared — we are counting on the many vehicles of social media to make our letter go viral — and thus to be brought to your attention.
We are a collection of millions of Democrats, Republicans, independents, Greens, and many other persuasions, and we are joining our diverse voices together in an unusual act of solidarity to request that you take action to reduce the role of money in politics.
Specifically, we request that you issue an executive order that will require all federal contractors to disclose their political spending. That spending would include all contributions — including those now legally hidden — to officials in the executive or congressional branches. It would also include all lobbying of the two branches.
Corporations spend more than $1 billion a year donating to and lobbying Congress and the federal government, and they receive an average of almost $1 trillion a year in contracts. If the monetary relationships between corporations and Congressmen become exposed, we citizens will be able to clearly see the corruption, and perhaps will react against it.
Even the Supreme Court, in its controversial Citizens United decision, said that increased disclosure rules would be wise so that citizens can see if “elected officials are in the pocket of so-called moneyed interests.”
We understand that your order would not address all of the troublesome sources of money in politics. But it would be a substantive and useful start....The Salem News
