Category Archives: Economy

Keynes is dead; long live Marx

Many liberal economists envisioned a new dawn of Keynesianism in the 2008 financial meltdown. Nearly six years later, it is clear that the much-hoped-for Keynesian prescriptions are completely ignored. Why? Keynesian economists’ answer: “neoliberal ideology,” which they trace back to President Reagan. Continue reading

Colonization by bankruptcy: The high-stakes chess match for Argentina

Argentina is playing hardball with the vulture funds which have been trying to force it into an involuntary bankruptcy. The vultures are demanding what amounts to a 600% return on bonds bought for pennies on the dollar, defeating a 2005 settlement in which 92% of creditors agreed to accept a 70% haircut on their bonds. A US court has backed the vulture funds; but last week, Argentina sidestepped its jurisdiction by transferring the trustee for payment from Bank of New York Mellon to its own central bank. That play, if approved by the Argentine Congress, will allow the country to continue making payments under its 2005 settlement, avoiding default on the majority of its bonds. Continue reading

Cry for Argentina: Fiscal mismanagement, odious debt or pillage?

Argentina was the richest country in Latin America before decades of neoliberal and IMF-imposed economic policies drowned it in debt. A severe crisis in 2001 plunged it into the largest sovereign debt default in history. In 2005, it renegotiated its debt with most of its creditors at a 70% “haircut.” But the opportunist “vulture funds,” which had bought Argentine debt at distressed prices, held out for 100 cents on the dollar. Continue reading

Don’t be fooled: Banks still too big to fail

Analyzing a government report is like eating and digesting a meal—better to take it slowly than gobble quickly and suffer the possible consequences. Continue reading

Defining away economic failure

Redefinition is America’s most powerful factor of production

Last week’s government guesstimate that second quarter 2014 real GDP growth will be 4% seems nonsensical on its face. There is no evidence of increases in real median family incomes or real consumer credit that would lift the economy from a first quarter decline to 4% growth in the second quarter. Continue reading

You can’t taper a Ponzi scheme: Time to reboot

One thing to be said for the women now heading the Federal Reserve and the IMF: compared to some of their predecessors, they are refreshingly honest. Continue reading

Did the other shoe just drop?

Black Rock and PIMCO sue banks for $250 billion

For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans. Continue reading

The deteriorating economic outlook

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news. Continue reading

Asset price inflation and inequality

It is now common knowledge that the U.S. economy has, in recent years, been experiencing extremely uneven developments. While the financial sector has been enjoying enormously high rates of growth, the real sector is mired in stagnation or dismal growth rates. Accordingly, while the financial oligarchy is reaping the lion’s share of this fantastic growth of asset-price inflation, the overwhelming majority of citizens are suffering from the systematically declining standards of living. Continue reading

The looming foreclosure crisis: As the Fed runs out of bullets, local governments are stepping in

Former Assistant Treasury Secretary Paul Craig Roberts wrote last month that real US GDP growth for the first quarter of 2014 was a negative 2.9%, off by 5.5% from the positive 2.6% predicted by economists. If the second quarter also shows a decline, the US will officially be in recession. That means not only fiscal policy (government deficit spending) but monetary policy (unprecedented quantitative easing) will have failed. The Federal Reserve is out of bullets. Continue reading

Virtual economy’s phantom job gains are based on statistical fraud

And more fraud is in the works

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality. Continue reading

Affluence Economics: Low-inflation and “fool” employment

Numbers don’t lie, the saying goes, but the have-liars are doing their numbers on the gullible have-nots. And although mathematics is an exact science, it can be used as a practical tool by inexact social scientists working for those trying to influence people at the civic or individual level, call it politics or more accurately, persuasive deceit. Continue reading

How DC’s political intelligence biz made fat cats fatter

Looking over the last few weeks of news, if you would seek a single headline that sums up the Hulk-like grip in which corporate America holds the US Congress, this might be it: “Eric Cantor’s Loss a Blow to Wall Street.” Continue reading

A new recession and a new world devoid of Washington’s arrogance?

A final number for real US GDP growth in the first quarter of 2014 was released Wednesday. The number is not the 2.6% growth rate predicted by the know-nothing economists in January of this year. The number is a decline in GDP of -2.9 percent. Continue reading

Buying up the planet: Out-of-control central banks are on a corporate buying spree

When the US Federal Reserve bought an 80% stake in American International Group (AIG) in September 2008, the unprecedented $85 billion outlay was justified as necessary to bail out the world’s largest insurance company. Today, however, central banks are on a global corporate buying spree not to bail out bankrupt corporations but simply as an investment, to compensate for the loss of bond income due to record low interest rates. Indeed, central banks have become some of the world’s largest stock investors. Continue reading

More phantom jobs created—all in the wrong places

Education is not the answer

Last April, I saw a report that 83% of May’s college graduates did not have a job. I remarked that in my day most of us had 2 or 3 job or graduate school offers before we graduated. The latest payroll jobs report issued on June 6 proves that the April report was true. Continue reading

Interest rate puzzle

One of the biggest puzzles in the financial markets this year has been the considerable fall in interest rates, despite the Fed’s program of tapering or cutting back the Fed’s bond purchases known as Quantitative Easing. A year ago, when Fed Chairman Bernanke announced the possibility of tapering QE on May 22, 2013, the 10-year Treasury yield was 2.03%. The yield quickly moved up close to 3% after Bernanke’s taper comments, forcing the Fed to retract or “clarify” them. Since January 2014, however, when the Fed actually began tapering, the 10-year yield has steadily declined from over 3% to it’s current yield of just over 2.5%. Continue reading

Infrastructure sticker shock: Financing costs more than building it

Funding infrastructure through bonds doubles the price or worse. Costs can be cut in half by funding through the state’s own bank. Continue reading

Have you ever heard of the JOBS Act? Neither have many would-be entrepreneurs, especially women

The JOBS Act is a “game changer” that would allow “ordinary Americans . . . to go online and invest in entrepreneurs they believe in,” says President Obama. Continue reading

The wonders of the ‘free’ market

In 2010, Michelle Holmes and Wendy Chen, physicians and faculty members at Harvard Medical School, published an observational study in The Journal of Clinical Oncology that showed that women with breast cancer who took aspirin at least once every week were 50% less likely to die of breast cancer. Continue reading

More on Belgium’s purchases of Fed Treasuries

In response to our account of the mysterious large rise in Belgium’s Treasury purchases, The Fed is the great deceiver, it was suggested that the transaction would show up on the Fed’s balance sheet. However, the Fed is under no obligation to show the transaction. Continue reading

The Federal Reserve is the great deceiver

Is the Fed “tapering”? Did the Fed really cut its bond purchases during the three-month period November 2013 through January 2014? Apparently not if foreign holders of Treasuries are unloading them. Continue reading

Economic hate crime

“Any government with both the power and the will to remedy the major defects of the capitalist system would have the power and the will to abolish it altogether.” Continue reading

The fracking prostitutes of American colleges

Part 3 of 3 parts

Among the mission statements of the University of North Dakota Department of Geology and Geological Engineering is that it “strives to develop in its engineering graduates keen insight and abilities to design an environmentally sound and sustainable future for humanity.” Continue reading

Robbing Main Street to prop up Wall Street

Why Jerry Brown’s rainy day fund is a bad idea

There is no need to sequester funds urgently needed by Main Street to pay for Wall Street’s malfeasance. Californians can have their cake and eat it too—with a state-owned bank. Continue reading

The fracking prostitutes of American colleges

Part 2 of a 3-part series

Two of the reasons Pennsylvania has no severance tax and one of the lowest taxes upon shale gas drilling are because of an overtly corporate-friendly legislature and a research report from Penn State, a private state-related university that receives about $300 million a year in public funds. Continue reading

US economy is a house of cards

The US economy is a house of cards. Every aspect of it is fraudulent, and the illusion of recovery is created with fraudulent statistics. Continue reading

So much for economic fairness and progress

Here is a well reasoned and said article, “The Doctrine of Fairness: It is Time,” and my reaction: One can build the case the Great Depression of the 1930s proved unfettered capitalism does not work for long under normal conditions. Continue reading

The fracking prostitutes of American colleges

Part 1 of a 3-part series

Lackawanna College, a two-year college in Scranton, Pa., has become a prostitute. Continue reading

Wall Street greed: Not too big for a California jury

Sixteen of the world’s largest banks have been caught colluding to rig global interest rates. Why are we doing business with a corrupt global banking cartel? Continue reading

Israel bonds are a high risk investment

Inappropriate for US states and municipalities

One might argue against the sale of Development Corporation for Israel bonds, aka Israel bonds, to government entities in the USA because the proceeds fund Israeli violations of international law, particularly the colonization of the West Bank, and other activities which violate internationally accepted norms, to include maintaining Gaza as a vast open air prison. But although these policies are likely to have a negative impact on Israel’s credit rating in the future, it is the characteristics of the bonds themselves, chiefly their illiquidity, which should put them off limits for states and municipalities in the first place. Treasurers and pension fund managers who buy these toxic, illiquid obligations are putting taxpayers and retirees at risk. Continue reading

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