Category Archives: Economy

The global banking game is rigged and the FDIC is suing

Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. Continue reading

Another fraudulent jobs report

The March payroll jobs report released April 4 claims 192,000 new private sector jobs. Continue reading

The Federal Reserve has no integrity

As we documented in previous articles, the gold price is driven down in the paper futures market by naked short selling by the Fed’s dependent bullion banks. Some people have a hard time accepting this fact even though it is known that the big banks have manipulated the LIBOR (London Interbank Overnight Rate—London’s equivalent of the Fed Funds rate) interest rate and the twice-daily London gold price fix. Continue reading

Banking union time bomb: Eurocrats authorize bailouts and bail-ins

On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins”—the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed. Continue reading

Warren’s post office proposal: Palast aims at the wrong target

Investigative reporter Greg Palast is usually pretty good at peering behind the rhetoric and seeing what is really going on. But in tearing into Senator Elizabeth Warren’s support of postal financial services, he has done a serious disservice to the underdogs—both the underbanked and the US Postal Service itself. Continue reading

The stone that brings down Goliath?

Richmond, Calif., and eminent domain

In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorgan Chase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands. Continue reading

Global capitalism has written off the human race

Economic theory teaches that free price and profit movements ensure that capitalism produces the greatest welfare for the greatest number. Losses indicate economic activities where costs exceed the value of production, thus investment in these activities is curtailed. Profits indicate economic activities where the value of output exceeds its cost, thus investment increases. Prices indicate the relative scarcity and value of inputs and outputs, thus serving to organize production most efficiently. Continue reading

Usurious returns on phantom money: The credit card gravy train

The credit card business is now the banking industry’s biggest cash cow, and it’s largely due to lucrative hidden fees. Continue reading

Should the minimum wage be raised?

Some years ago when I was Business Week’s columnist an up-and-coming academic economist published his conclusions that raising the minimum wage did not cause unemployment. An implication was that labor unions did not cause unemployment by forcing up wages. Continue reading

Why is the Fed tapering?

On January 17, 2014, we explained “The Hows and Whys of Gold Price Manipulation.” In former times, the rise in the gold price was held down by central banks selling gold or leasing gold to bullion dealers who sold the gold. The supply added in this way to the market absorbed some of the demand, thus holding down the rise in the gold price. Continue reading

Enough is enough: Fraud-ridden banks are not L.A.’s only option

“Epic in scale, unprecedented in world history.” That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud. Continue reading

Why the Trans-Pacific Partnership is a bad idea

H. Ross Perot, the independent candidate for US president in 1992, said if NAFTA, the North American Free Trade Agreement, were passed you would hear a “giant sucking sound” as jobs left the US for Mexico. Continue reading

How economists and policymakers murdered our economy

The economy has been debilitated by the offshoring of middle class jobs for the benefit of corporate profits and by the Federal Reserve’s policy of Quantitative Easing in order to support a few oversized banks that the government protects from market discipline. Not only does QE distort bond and stock markets, it threatens the value of the dollar and has resulted in manipulation of the gold price. Continue reading

America in denial: Width and breadth of today’s poverty

Last week, I read Daniel Weeks’ article, “Poverty vs. Democracy in America,” which appears in The Atlantic’s January 2014 issue. As much as I respect Weeks’ advocacy for trying to clean American politics with the clear baptismal waters of democracy, and the many valid points he brings forth in this article, I feel very strongly that we, Americans, are time and again totally missing the point. Mr. Weeks included! Continue reading

No jobs for Americans

The alleged recovery took a direct hit from Friday’s payroll jobs report. The Bureau of Labor Statistics reported that the economy created 74,000 net new jobs in December. Continue reading

The case of the missing recovery

Have you seen the economic recovery? I haven’t either. But it is bound to be around here somewhere, because the National Bureau of Economic Research spotted it in June 2009, four and one-half years ago. Continue reading

Happy birthday, NAFTA

“I believe we have made a decision now that will permit us to create an economic order in the world that will promote more growth, more equality, better preservation of the environment and a greater possibility of world peace. We are on the verge of a global economic expansion that is sparked by the fact that the United States, at this critical moment, decided that we would compete, not retreat. In a few moments, I will sign the North American Free Trade Act into law. NAFTA will tear down trade barriers between our three nations. It will create the world’s largest trade zone and create 200,000 jobs in this country by 1995 alone. The environmental and labor side agreements initiated by our administration will make this agreement a force for social progress as well as economic growth.” Continue reading

100 years is enough: Time to make the Fed a public utility

December 23, 2013, marked the 100th anniversary of the Federal Reserve, warranting a review of its performance. Has it achieved the purposes for which it was designed? Continue reading

Manipulations rule the markets

The Federal Reserve’s announcement on December 18 that beginning in January its monthly purchases of mortgage-backed financial instruments and US Treasury bonds would each be cut by $5 billion is puzzling, as is the financial press’s account of the market’s response. Continue reading

Occupying the NEED Act

More than 5 years into the economic crisis created by Wall Street, recovery is a nothing but a meaningless word, mouthed by politicians. Yet just two years ago a bill was placed before the last Congress: the National Emergency Employment Defense Act (the NEED Act) Continue reading

‘Rank hypocrisy’: WTO deal bows to wealth, squashes the poor

US and EU called out for protecting their own subsidies while demanding world's poorest citizens be pushed back into starvation

In announcing a final agreement in Bali, Indonesia on Saturday morning, head of the World Trade Organization Roberto Azevedo, said: “For the first time in our history, the WTO has truly delivered.” Continue reading

Amend the Fed: We need a central bank that serves Main Street

December 23 marks the 100th anniversary of the Federal Reserve. Dissatisfaction with its track record has prompted calls to audit the Fed and end the Fed. At the least, Congress needs to amend the Fed, modifying the Federal Reserve Act to give the central bank the tools necessary to carry out its mandates. Continue reading

More misleading official employment statistics

The payroll jobs report for November from the Bureau of Labor Statistics says that the US economy created 203,000 jobs in November. As it takes about 130,000 new jobs each month to keep up with population growth, if the payroll report is correct, then most of the new jobs would have been used up keeping the unemployment rate constant for the growth in the population of working age persons, and about 70,000 of the jobs would have slightly reduced the rate of unemployment. Yet, the unemployment rate (U3) fell from 7.3 to 7.0, which is too much for the job gain. It seems that the numbers and the news reports are not conveying correct information. Continue reading

When savings interest rates go negative

What is more frightening than the loss of your money? Since most people have, some meager amount held in some form of a financial institution, the prospect of the banksters’ cabal placing a charge against your account for the mere privilege of maintaining a deposit, is horrible. The Business Insider warns, In The Future, You May Have To Pay The Bank To Hold Your Money, and raises a very dreadful prospect. Continue reading

The money changers serenade: A new plot hatches

Former Treasury Secretary Timothy Geithner, a protégé of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus, and is on his way to his fortune. Continue reading

The dying dollar

Federal reserve & Wall Street assassinate US dollar

Since 2006, the US dollar has experienced a one-quarter to one-third drop in value to the Chinese yuan, depending on the choice of base. Continue reading

The road to demonetization: Learning to say, ‘Enough!’

Even people who are not demonetarists, people who have not heard of it or who cannot conceive of a world without money, can act in today’s capitalist and market socialist societies in ways that reflect the values that a successfully demonetized society needs. Continue reading

Public banking in Costa Rica: A remarkable little known model

In Costa Rica, publicly-owned banks have been available for so long and work so well that people take for granted that any country that knows how to run an economy has a public banking option. Costa Ricans are amazed to hear there is only one public depository bank in the United States (the Bank of North Dakota), and few people have private access to it. Continue reading

Hidden taxation

Inflation is, in fact, nothing more than taxation of everyone at a rate not announced by the government but estimated by its citizens. This inflationary process of printing money out of nothing and then using it to pay debts is camouflaged by calling it monetizing the debt. [1]. It is illegal for individuals to do it. Continue reading

Paying the toll on the economic highway

The political coma of the U.S. government induced by Congress and its failure to represent those who elect it can ultimately be traced to the unfair and complex system of income taxation. Better for the country and more equitable for its taxpayers would be a toll tax on the movement of all money along the nation’s economic highway. Continue reading

Ireland: Ground zero for the austerity-driven asset grab

The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15th and 16th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated. Continue reading

Debt and deficit as shock therapy

When Naomi Klein published her ground-breaking book The Shock Doctrine (2007), which compellingly demonstrated how neoliberal policy makers take advantage of overwhelming crisis times to privatize public property and carry out austerity programs, most economists and media pundits scoffed at her arguments as overstating her case. Real world economic developments have since strongly reinforced her views. Continue reading