Category Archives: Economy

GOP ‘plot to gut Social Security behind closed doors’ gains steam in Senate Covid-19 talks

‘With seniors most at risk from Covid-19, we need to be increasing Social Security's modest benefits, not creating secret commissions to cut them.’

A proposal by Sen. Mitt Romney to establish congressional committees with the specific goal of crafting legislative “solutions” for America’s federal trust fund programs has reportedly resurfaced in GOP talks over the next Covid-19 stimulus package, sparking alarm among progressive advocates who warn the Utah Republican’s bill is nothing but a stealth attack on Social Security and Medicare. Continue reading

Another bank bailout under cover of a virus

Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.

When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the act actually said was that the next time the banks failed, they would be subject to “bail ins”—the funds of their creditors, including their large depositors, would be tapped to cover their bad loans. Continue reading

Could the current serious economic recession evolve into a full-fledged global economic depression?

So far, it can be said that central banks and governments in most advanced economies have acted correctly to prevent the economic lockdown of large segments of the economy from turning into a total economic disaster. They have, at least, saved the day. Continue reading

Trump regime hardliners want Social Security and Medicare eliminated

Social Security and Medicare are insurance programs, not welfare—funded by equal worker-employer payroll tax deductions. Continue reading

The Trump administration’s “monstrous idea”: Direct payments in exchange for cuts to Social Security benefits

‘Donald Trump and his administration will stop at nothing to cut Social Security.’

Suddenly concerned about the growing national debt now that corporations have secured access to trillions of dollars in COVID-19 bailout funds with little oversight, Trump administration officials are reportedly considering several proposals purportedly aimed at reducing government spending—including a pair of plans that would provide Americans with cash payments in exchange for delays or cuts to their Social Security benefits. Continue reading

Crushing the states, saving the banks: The fed’s generous new rules

Congress seems to be at war with the states. Only $150 billion of its nearly $3 trillion coronavirus relief package—a mere 5%—has been allocated to the 50 states; and they are not allowed to use it where they need it most, to plug the holes in their budgets caused by the mandatory shutdown. On April 22, Senate Majority Leader Mitch McConnell said he was opposed to additional federal aid to the states, and that his preference was to allow states to go bankrupt. Continue reading

A universal basic income is essential and will work

A central bank-financed UBI can fill the debt gap, providing a vital safety net while preventing cyclical recessions.

According to an April 6 article on CNBC.com, Spain is slated to become the first country in Europe to introduce a universal basic income (UBI) on a long-term basis. Spain’s minister for economic affairs has announced plans to roll out a UBI “as soon as possible,” with the goal of providing a nationwide basic wage that supports citizens “forever.” Guy Standing, a research professor at the University of London, told CNBC that there was no prospect of a global economic revival without a universal basic income. “It’s almost a no-brainer,” he said. “We are going to have some sort of basic income system sooner or later ….” Continue reading

COVID-19 and the war on cash: What is behind the push for a cashless society?

Cash may well become a casualty of the COVID-19 pandemic. Continue reading

Was the Fed just nationalized?

Did Congress just nationalize the Fed? No. But the door has been cracked open for that possibility.

Mainstream politicians have long insisted that Medicare for All, a universal basic income, student debt relief and a slew of other much-needed public programs are off the table because the federal government cannot afford them. But that was before Wall Street and the stock market were driven onto life-support by a virus. Congress has now suddenly discovered the magic money tree. It took only a few days for Congress to unanimously pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be doling out $2.2 trillion in crisis relief, most of it going to Corporate America with few strings attached. Beyond that, the Federal Reserve is making over $4 trillion available to banks, hedge funds and other financial entities of all stripes; it has dropped the fed funds rate (the rate at which banks borrow from each other) effectively to zero; and it has made $1.5 trillion available to the repo market. Continue reading

How to prepare for the Trump recession

The global coronavirus pandemic has put our economy in free-fall. Continue reading

Debt forgiveness and nationalization are the answers to the economic crisis

The US airline companies have bankrupted themselves by buying back their stock in an enrichment scheme for CEOs and board members. With the impact of the virus on their revenues, Congress is handing them a $50 billion bailout. Instead of being bailed out they should be nationalized. Continue reading

‘This is a trap’: Progressives sound alarm as GOP attempts sneak attack on Social Security in coronavirus stimulus plan

‘Senate Republicans are using the coronavirus crisis as a cynical cover to attack our Social Security system.’

Tucked inside Senate Republicans’ gargantuan coronavirus stimulus package is a provision that progressives are warning could significantly damage Social Security’s funding in the short-term and empower right-wing lawmakers to make even deeper cuts to the vital program in the future. Continue reading

In times of crisis, how to prevent an economic meltdown and avoid privatizing profits and socializing losses

Here we go again: Another financial bubble burst and another financial crisis threatening to disrupt the real economy! This time the trigger is the health pandemic of the coronavirus crisis, the most serious in a generation, which is paralyzing the real economy and triggering crashes in the financial sector. Continue reading

Socialism to the rescue after Fed’s bazooka fails

In what is being called the worst financial crisis since 1929, the US stock market has lost a third of its value in the space of a month, wiping out all of its gains of the last three years. When the Federal Reserve tried to ride to the rescue, it only succeeded in making matters worse. The government then pulled out all the stops. To our staunchly capitalist leaders, socialism is suddenly looking good. Continue reading

The Federal Reserve dictatorship runs amok against savers

No real explanations by the Fed; it just dictates. It is a government of its own inside our government—the epitome of corporate socialism.

If you are a saver in a money market account or in a bank, you’ve already noticed your dwindling interest income as interest rates have been at their lowest in modern American history. Well, brace yourself. Your saving account has just become little more than a lock box, thanks to the supreme dictatorship of the Federal Reserve. Continue reading

A proposal for real coronavirus ‘stimulus’

On March 12, the New York Federal Reserve announced a $1.5 trillion injection of money into the US financial system. Three days later, it cut its benchmark interest rate to zero and announced it would be buying at least $500 billion in government bonds and another $200 billion in mortgage securities. Continue reading

Economic effect of coronavirus could be revolutionary

Coronavirus and globalism will teach us vital lessons. The question is whether we can learn vital lessons that do not serve the ruling interest groups and ideologies. Continue reading

The Fed’s baffling response to the coronavirus explained

When the World Health Organization announced on February 24 that it was time to prepare for a global pandemic, the stock market plummeted. Over the following week, the Dow Jones Industrial Average dropped by more than 3,500 points or over 10%. In an attempt to contain the damage, on March 3 the Federal Reserve slashed the fed funds rate from 1.5% to 1.0%, in their first emergency rate move and biggest one-time cut since the 2008 financial crisis. But rather than reassuring investors, the move fueled another panic sell-off. Continue reading

Mexico’s President AMLO shows how it’s done

While U.S. advocates and local politicians struggle to get their first public banks chartered, Mexico’s new president has begun construction on 2,700 branches of a government-owned bank to be completed in 2021, when it will be the largest bank in the country. At a press conference on Jan. 6, he said the neoliberal model had failed; private banks were not serving the poor and people outside the cities, so the government had to step in. Continue reading

The Fed protects gamblers at the expense of the economy

Although the repo market is little known to most people, it is a $1-trillion-a-day credit machine, in which not just banks but hedge funds and other “shadow banks” borrow to finance their trades. Under the Federal Reserve Act, the central bank’s lending window is open only to licensed depository banks; but the Fed is now pouring billions of dollars into the repo (repurchase agreements) market, in effect making risk-free loans to speculators at less than 2%. Continue reading

Neoliberal economics destroyed the economy and the middle class

According to official US government economic data, the US economy has been growing for 10.5 years since June of 2009. The reason that the US government can produce this false conclusion is that costs that are subtrahends from GDP are not included in the measure. Instead, many costs are counted not as subtractions from growth but as additions to growth. For example, the penalty interest on a person’s credit card balance that results when a person falls behind his payments is counted as an increase in “financial services” and as an increase in Gross Domestic Product. The economic world is stood on its head. Continue reading

Paul Volcker’s long shadow

Former Federal Reserve Chairman Alan Greenspan called Paul Volcker “the most effective chairman in the history of the Federal Reserve.” But while Volcker, who passed away Dec. 8 at age 92, probably did have the greatest historical impact of any Fed chairman, his legacy is, at best, controversial. Continue reading

‘A national disgrace’: Trump proposes Social Security change that could end disability benefits for hundreds of thousands

‘Donald Trump and his advisers know that this will kill people, and they do not care. Every current and future Social Security beneficiary must band together to defeat this horrific proposal, or else all of our earned benefits will be next.’

Activists are working to raise public awareness and outrage over a little-noticed Trump administration proposal that could strip life-saving disability benefits from hundreds of thousands of people by further complicating the way the Social Security Administration determines who is eligible for payments. Continue reading

A holiday comeback for Toys ‘R’ Us?

Retail workers are organizing to make sure private equity firms can’t make money by putting people out of work.

For many years, Giovanna De La Rosa enjoyed working at Toys ‘R’ Us—especially during the holiday shopping season. “I loved bringing joy to families and to children,” she shared at a recent congressional hearing. “I watched so many of the local kids grow up over the years while shopping in our store.” Continue reading

Report details how Social Security has become rigged for the wealthy while leaving behind those it was designed to help

‘The program's become less progressive,’ said Jim Roosevelt, a former Social Security Administration official and grandson of FDR.

The benefits of Social Security, a program designed to help vulnerable and low-income people, have since the 1980s become increasingly skewed toward the wealthy due to demographic shifts and soaring inequality, according to a new report. Continue reading

Waiting on the wealthy

Low-wage jobs catering to the wealthiest Americans are now growing twice as fast as other jobs.

Are you there yet? Continue reading

Is the run on the dollar due to panic or greed?

What’s going on in the repo market? Rates on repurchase agreements (“repo”) should be around 2%, in line with the fed funds rate. But they shot up to over 5% on September 16 and got as high as 10% on September 17. Yet banks were refusing to lend to each other, evidently passing up big profits to hold onto their cash—just as they did in the housing market crash and Great Recession of 2008-09. Continue reading

Can an economic stat help narrow our grand economic divide?

Egalitarian-minded economists are pushing for a ‘GDP 2.0’—and getting some lawmaker help.

Why do so many Americans deeply distrust government? One part of the reason, two top economists suggested to a key congressional committee this week, just might be the most basic—and familiar—of the economic statistics the federal government produces. Continue reading

Workers stuck ‘paying the ultimate price’ as GE freezes pensions for 20,000 employees

‘GE hired a new CEO last year with a pay package worth up to $300 million.’

Workers are stuck “paying the ultimate price for executives’ poorly-timed deals,” said Our Revolution on Monday after General Electric announced it was freezing the pensions of roughly 20,000 employees with salaried benefits. Continue reading

‘Stunning rebuke to predatory Wall Street megabanks’ as California Gov. signs law allowing creation of public banks

‘The people of California just went up against the most powerful corporate lobby in the country—and won.’

California Gov. Gavin Newsom on Wednesday signed into law historic legislation that would allow the state’s cities and counties to establish public banks as an alternative to private financial institutions, a move advocates hailed as a “stunning rebuke to the predatory Wall Street megabanks that crashed the global economy in 2007-08.” Continue reading

The disaster of negative interest rates

President Trump wants negative interest rates, but they would be disastrous for the U.S. economy, and his objectives can be better achieved by other means. Continue reading

Trump’s economy revealed

Donald Trump and his enablers are hoping that a strong economy will help the American people look past the damage they are doing to the country. That’s why Trump is constantly crowing about job numbers and the stock market in order to paint a rosy picture of the economy. Continue reading