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Toxic Asia
The highest level of human growth, according to Abraham Maslow, is that of transcendence. Transcendence, for Maslow, encompasses the need to rise above the interests of the self, to find fulfillment in helping others reach their potential (Jean Lipman-Blumen, The Allure of Toxic Leaders: Why We Follow Destructive Bosses and Corrupt Politicians—and How We Can Resist Them (Oxford: Oxford University Press, 2005), p 129). Continue reading
The key to the environmental crisis is beneath our feet
The Green New Deal resolution that was introduced into the U.S. House of Representatives in February hit a wall in the Senate, where it was called unrealistic and unaffordable. 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
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
‘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
Desperate central bankers grab for more power
Conceding that their grip on the economy is slipping, central bankers are proposing a radical economic reset that would shift yet more power from government to themselves. Continue reading
The key to a sustainable economy is 5,000 years old
We are again reaching the point in the business cycle known as “peak debt,” when debts have compounded to the point that their cumulative total cannot be paid. Student debt, credit card debt, auto loans, business debt and sovereign debt are all higher than they have ever been. As economist Michael Hudson writes in his provocative 2018 book, “…and forgive them their debts,” debts that can’t be paid won’t be paid. The question, he says, is how they won’t be paid. Continue reading
Neoliberalism has met its match in China
When the Federal Reserve cut interest rates on July 31 for the first time in more than a decade, commentators were asking why. According to official data, the economy was rebounding, unemployment was below 4%, and GDP growth was above 3%. If anything, by the Fed’s own reasoning, it should have been raising rates. Continue reading
The cheapest way to save the planet grows like a weed
Planting billions of trees across the world is by far the cheapest and most efficient way to tackle the climate crisis. So states a July 4 article in The Guardian, citing a new analysis published in the journal Science. Continue reading
What I saw at the (American) Revolution
The funders would say Trump mangles the Constitution even worse than he does the English language.
In September 1993, Bill Clinton came to Congress to deliver an address on health care reform. But the wrong speech was in the teleprompter. This would have been an epic calamity for the current occupant of the executive mansion but President Clinton adroitly ad-libbed and remained on topic for some ten minutes while the problem was fixed. Continue reading
How to pay for it all: An option the candidates missed
The Democratic Party has clearly swung to the progressive left, with candidates in the first round of presidential debates coming up with one program after another to help the poor, the disadvantaged and the struggling middle class. Proposals ranged from a Universal Basic Income to Medicare for All to a Green New Deal to student debt forgiveness and free college tuition. The problem, as Stuart Varney observed on FOX Business, was that no one had a viable way to pay for it all without raising taxes or taking from other programs, a hard sell to voters. If robbing Peter to pay Paul is the only alternative, the proposals will go the way of Trump’s trillion dollar infrastructure bill for lack of funding. Continue reading
Libra: Facebook’s audacious bid for global monetary control
Payments can happen cheaply and easily without banks or credit card companies. This has now been demonstrated—not in the United States but in China. Unlike in the US, where numerous firms feast on fees from handling and processing payments, in China most money flows through mobile phones nearly for free. In 2018, these cashless payments totaled a whopping $41.5 trillion; and 90% were through Alipay and WeChat Pay, a pair of digital ecosystems that blend social media, commerce and banking. Continue reading
The American Dream is alive and well—in China
Home ownership has been called “the quintessential American dream.” Yet today fewer than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes. Continue reading
The bankers’ ‘power revolution’: How the government got shackled by debt
The U.S. federal debt has more than doubled since the 2008 financial crisis, shooting up from $9.4 trillion in mid-2008 to over $22 trillion in April 2019. The debt is never paid off. The government just keeps paying the interest on it, and interest rates are rising. Continue reading
The next state-owned bank—California or Washington?
As public banking gains momentum across the country, policymakers in California and Washington state are vying to form the nation’s second state-owned bank, following in the footsteps of the highly successful Bank of North Dakota, founded in 1919. The race is close, with state bank bills now passing their first round of hearings in both states’ senates. Continue reading
Understanding the American dictatorship
The American dictatorship is by the aristocracy of the country’s 585 billionaires, and has been scientifically proven beyond any doubt, now, not only in the classic Gilens and Page study, which examined thousands of bills in Congress and their money-backers and their ultimate outcomes (passage or failure to pass), during the studied period, 1981-2002. But also another (though less rigorous) study suggests that this control of the U.S. government by America’s billionaires is getting even worse. So, America is clearly a dictatorship, by America’s aristocracy. Continue reading
Why is the Fed paying so much interest to banks?
When Mary Poppins was made into a movie in 1964, Mr. Banks’ advice to his son was sound. Banks were then paying more than 5% interest on deposits, enough to double young Michael’s investment every 14 years. Continue reading
Monetary policy takes center stage: MMT, QE or public banks?
As alarm bells sound over the advancing destruction of the environment, a variety of Green New Deal proposals have appeared in the US and Europe, along with some interesting academic debates about how to fund them. Monetary policy, normally relegated to obscure academic tomes and bureaucratic meetings behind closed doors, has suddenly taken center stage. Continue reading
QE forever: The Fed’s dramatic about-face
“Quantitative easing” was supposed to be an emergency measure. The Federal Reserve “eased” shrinkage in the money supply due to the 2008-09 credit crisis by pumping out trillions of dollars in new bank reserves. After the crisis, the presumption was that the Fed would “normalize” conditions by sopping up the excess reserves through “quantitative tightening” (QT)—raising interest rates and selling the securities it had bought with new reserves back into the market. Continue reading
The Venezuela myth keeping us from transforming our economy
Modern Monetary Theory (MMT) is getting significant media attention these days, after Alexandria Ocasio-Cortez said in an interview that it should “be a larger part of our conversation” when it comes to funding the Green New Deal. According to MMT, the government can spend what it needs without worrying about deficits. MMT expert and Bernie Sanders advisor Prof. Stephanie Kelton says the government actually creates money when it spends. The real limit on spending is not an artificially imposed debt ceiling but a lack of labor and materials to do the work, leading to generalized price inflation. Only when that real ceiling is hit does the money need to be taxed back, and then not to fund government spending but to shrink the money supply in an economy that has run out of resources to put the extra money to work. Continue reading
The financial secret behind Germany’s green energy revolution
The most profitable and efficient way for national and local governments to finance public infrastructure and development is with their own banks
The “Green New Deal” endorsed by Rep. Alexandria Ocasio-Cortez, D.-N.Y., and more than 40 other House members has been criticized as imposing a too-heavy burden on the rich and upper-middle-class taxpayers who will have to pay for it. However, taxing the rich is not what the Green New Deal resolution proposes. It says funding would come primarily from certain public agencies, including the U.S. Federal Reserve and “a new public bank or system of regional and specialized public banks.” Continue reading
Universal Basic Income is easier than it looks
Calls for a Universal Basic Income have been increasing, most recently as part of the Green New Deal introduced by Rep. Alexandria Ocasio-Cortez (D-NY) and supported in the last month by at least 40 members of Congress. A Universal Basic Income (UBI) is a monthly payment to all adults with no strings attached, similar to Social Security. Critics say the Green New Deal asks too much of the rich and upper-middle-class taxpayers who will have to pay for it, but taxing the rich is not what the resolution proposes. It says funding would primarily come from the federal government, “using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks,” and other vehicles. Continue reading
This radical plan to fund the ‘Green New Deal’ just might work
With what Naomi Klein calls “galloping momentum,” the “Green New Deal” promoted by newly-elected Rep. Alexandria Ocasio-Cortez (D-NY) appears to be forging a political pathway for solving all of the ills of society and the planet in one fell swoop. It would give a House Select Committee “a mandate that connects the dots between energy, transportation, housing, as well as healthcare, living wages, a jobs guarantee” and more. But to critics even on the left it is just political theater, since “everyone knows” a program of that scope cannot be funded without a massive redistribution of wealth and slashing of other programs (notably the military), which is not politically feasible. Continue reading
Trump’s war on the Fed
October was a brutal month for the stock market. After the Fed’s eighth interest rate hike on September 26, the Dow Jones Industrial Average dropped more than 2,000 points and the NASDAQ had its worst month in nearly 10 years. Continue reading
Breaking with Wall Street: L.A. takes it to the voters
“Wall Street owns the country.” That was the opening line of a fiery speech by populist leader Mary Ellen Lease in 1890. Franklin Roosevelt said it again in a letter to Colonel House in 1933, and Sen. Dick Durbin was still saying it in 2009. “The banks—hard to believe in a time when we’re facing a banking crisis that many of the banks created—are still the most powerful lobby on Capitol Hill,” Durbin said in an interview. “And they frankly own the place.” Continue reading
Central banks have gone rogue, putting us all at risk
Central bankers are now aggressively playing the stock market. To say they are buying up the planet may be an exaggeration, but they could. They can create money at will, and they have declared their “independence” from government. They have become rogue players in a game of their own. Continue reading
How China’s mobile ecosystems are making banks obsolete
Giant Chinese tech companies have bypassed credit cards and banks to create their own low-cost digital payment systems.
The US credit card system siphons off excessive amounts of money from merchants, who must raise their prices to cover this charge. In a typical $100 credit card purchase, only $97.25 goes to the seller. The rest goes to banks and processors. But who can compete with Visa and MasterCard? Continue reading
Hiroshima revisited: Memorializing the horrors of war with 10 must-see war films
Nearly 73 years ago, the United States unleashed atomic bombs on the Japanese cities of Hiroshima and Nagasaki, killing more than 200,000 individuals, many of whom were civilians. Continue reading
Trump takes on the Fed
The president has criticized Federal Reserve policy for undermining his attempts to build the economy. To make the central bank serve the needs of the economy, it needs to be transformed into a public utility. Continue reading
A public bank for Los Angeles?
City council puts it to the voters
California legislators exploring the public bank option may be breaking not just from Wall Street but from the Federal Reserve. Continue reading
Why the billionaires love candidates such as Pete Buttigieg
Posted on November 12, 2019 by Eric Zuesse
Pete Buttigieg is by far the billionaires’ top darling amongst all of the Democratic candidates who are running for president, and his stand on healthcare is one of the major reasons for this. Continue reading →