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by Jack Rasmus
TeleSUR, March 31, 2016
JackRamus, April 1, 2016
April 2, 2016
As U.S. presidential candidate Bernie Sanders has gained momentum in the presidential primaries, the attacks on his proposed economic programs have grown proportionally.
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by Ellen Brown
Featured Writer
Dandelion Salad
webofdebt.com
January 18, 2013
The trillion dollar coin actually represents one of the most important principles of popular prosperity ever conceived: the creation of money by sovereign governments, debt-free.
Last week on “The Daily Show,” Jon Stewart characterized the proposal that the White House circumvent the debt ceiling by minting a trillion dollar coin as an attempt to “just make shit up.”
by Michael Hudson
Featured Writer
Dandelion Salad
http://michael-hudson.com
May 14, 2012
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Paul Krugman is widely appreciated for his New York Times columns criticizing Republican demands for fiscal austerity. He rightly argues that cutting back public spending will worsen the economic depression into which we are sinking. And despite his partisan Democratic Party politicking, he warned from the outset in 2009 that President Obama’s modest counter-cyclical spending program was not sufficiently bold to spur recovery.
These are the themes of his new book, End This Depression Now. In old-fashioned Keynesian style he believes that the solution to insufficient market demand is for the government to run larger budget deficits. It should start by giving revenue-sharing grants of $300 billion annually to states and localities whose budgets are being squeezed by the decline in property taxes and the general economic slowdown.
by Philip A. Farruggio
Featured Writer
Dandelion Salad
May 6, 2012
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I’m sorry, but I am convinced beyond reproach that we are all part of some giant dream. I mean, this cannot be real! All one has to do is what I just did this Tuesday morning; channel surf all the so called news talk shows on the boob tube. I started out with Imus, quite appropriately, on the Bloomberg business channel. After all, Donny baby has been a shill for the super rich and famous for decades. His right wing crew of phony blue collar rebels, with the ghosts of ”Rudy Rudy, USA USA” echoing in the background is enough to give any rational person agita. Continue reading
by Chris Hedges
Featured Writer
Dandelion Salad
Truthdig
Oct. 24, 2011 Continue reading
https://dandelionsalad.wordpress.com/
by Prof Michael Hudson
Global Research
September 29, 2010
It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, nationalistic U.S. politicians and journalists are blaming it for America’s declining economic power.
I realize that balance-of-payments accounting and international trade theory are arcane topics, but I promise that by the time you finish this article, you will understand more than 99% of U.S. economists and diplomats striking this self-righteous pose.
New York Times columnist and Nobel economist Paul Krugman comes to the Hudson Union Society to talk about the aftermath of the global economic crisis.
He discusses what it will take to make a full recovery, and explores how issues ranging from cap and trade legislation to healthcare reform will affect America’s economy. Continue reading
http://cspanjunkie.org/
October 20, 2008 BBC World
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Socialists say Barack Obama is not
Kucinich Questions Wall Street “Bonuses”
Behind the Panic: Financial Warfare and the Future of Global Bank Power
No More Investment Banks – Turn Them Into Public Utilities By Mike Whitney
Sept 22, 2008
McDeregulation
Keith reports on McCain’s support of deregulation for the health insurance industry and Wall Street. Johnathan Alter weighs in.
heathr456
Sept. 15, 2008
Keith reports on the crisis coming out of the financial markets today and Paul Krugman weighs in.
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Bushed!
Tonight’s: Unitary Executive-Gate, Stop Giving Me Such Good Material-Gate and GOT-Gate.
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The Wall Street crisis and the failure of American capitalism
Lehman, Bear, Freddie, Fannie: What Does It All Mean??? by Josh Sidman
Capital Punishment: Lehman on its way to the Gallows? By Mike Whitney
Marc Faber about Lehman Brothers bankruptcy
By Arthur Donner & Doug Peters
ICH
01/01/07 “The Star“
“What we’re seeing (in the U.S.) isn’t the rise of a fairly broad class of knowledge workers. Instead, we’re seeing the rise of a narrow oligarchy: Income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite … It’s time to face up to the fact that rising inequality is driven by the giant income gains of a tiny elite, not the modest gains of college graduates.” – Paul Krugman, New York Times, Feb. 27, 2006.
In the mid-1990s, the Wall Street Journal delivered the classic insult to this nation when it called Canada an honorary Third World country.
Indeed, at that time Canada’s economy was coming out of a period of relative difficulty.
Our balance of payments was shaky, the federal government had posted a long string of budget deficits and the Canadian dollar was weak.
Adding to these economic woes, as of the mid-1990s, Canada also had a long history of posting substantially higher inflation rates than in the United States.
Now, however, the trade and fiscal deficits situation has been turned on its head, with the United States incurring huge fiscal deficits and borrowing enormous amounts of foreign capital to balance its hefty international trade deficit. In fact, in a relatively short time span, the U.S. has become the largest debtor nation in the world.
And as Paul Krugman and many other economists have pointed out, U.S. income disparity is obscenely large and increasing, while higher education is not overcoming the polarization of income and the shrinking of the middle class.
The latter point is somewhat surprising, since most Western democracies see the elimination or reduction of economic inequality as a good idea. Indeed, it is a generally accepted principle that the underlying causes of economic inequality based on such non-economic differences as race, gender, or geography should also be minimized or eliminated.
In other words, there is a strong predilection in most Western countries to level the economic playing field as much as possible. This seems not to be the case in the United States.
The United Nations publishes a Human Development Index that ranks countries in terms of life expectancy, literacy, education and standard of living. The latest published data were based on 2005 statistics. The U.S., despite its vast wealth and power, placed only in the 12th position among industrial countries. The top four countries were Iceland, Norway, Australia and Canada. These top four countries still pay some lip service to income distribution as an important economic and social goal.
Ironically, the U.S. today has many more features in common with Third World status than Canada ever did back in the mid-1990s.
What is usually meant by a Third World economy? A half-century ago, the term was associated with the economically underdeveloped countries of Africa, Asia, South America and Oceania. The common characteristics of these Third World countries were high levels of poverty, income inequality, high birth rates and an economic dependence upon the advanced countries. Third World countries were simply not as industrialized or technologically advanced as Western countries.
But what are some of the distinguishing characteristics of contemporary Third World countries? They go beyond these nations’ fiscal position or undue concentration on natural resource exports.
The glaring features today include poverty, lack of democratic institutions, controlling oligarchies and the unequal distribution of income and wealth. In other words, the few enjoy a rich lifestyle while the many share subpar incomes and poverty.
Another characteristic of Third World countries is that a major portion of their fiscal expenditures is allocated to the military. In many Third World countries, the military is controlled by an elite or a small collection of the wealthy.
Finally, in many Third World countries one finds that leadership is passed from one generation to the next, often via a close relative.
Guess what country we are talking about now?
Arthur Donner and Doug Peters are Toronto-based economists.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
By Paul Krugman
Truthout
The New York Times
Go to Original
Friday 14 December 2007
On Wednesday, the Federal Reserve announced plans to lend $40 billion to banks. By my count, it’s the fourth high-profile attempt to rescue the financial system since things started falling apart about five months ago. Maybe this one will do the trick, but I wouldn’t count on it.
In past financial crises – the stock market crash of 1987, the aftermath of Russia’s default in 1998 – the Fed has been able to wave its magic wand and make market turmoil disappear. But this time the magic isn’t working.
Why not? Because the problem with the markets isn’t just a lack of liquidity – there’s also a fundamental problem of solvency.
Let me explain the difference with a hypothetical example.
Suppose that there’s a nasty rumor about the First Bank of Pottersville: people say that the bank made a huge loan to the president’s brother-in-law, who squandered the money on a failed business venture.
Even if the rumor is false, it can break the bank. If everyone, believing that the bank is about to go bust, demands their money out at the same time, the bank would have to raise cash by selling off assets at fire-sale prices – and it may indeed go bust even though it didn’t really make that bum loan.
And because loss of confidence can be a self-fulfilling prophecy, even depositors who don’t believe the rumor would join in the bank run, trying to get their money out while they can.
But the Fed can come to the rescue. If the rumor is false, the bank has enough assets to cover its debts; all it lacks is liquidity – the ability to raise cash on short notice. And the Fed can solve that problem by giving the bank a temporary loan, tiding it over until things calm down.
Matters are very different, however, if the rumor is true: the bank really did make a big bad loan. Then the problem isn’t how to restore confidence; it’s how to deal with the fact that the bank is really, truly insolvent, that is, busted.
My story about a basically sound bank beset by a crisis of confidence, which can be rescued with a temporary loan from the Fed, is more or less what happened to the financial system as a whole in 1998. Russia’s default led to the collapse of the giant hedge fund Long Term Capital Management, and for a few weeks there was panic in the markets.
But when all was said and done, not that much money had been lost; a temporary expansion of credit by the Fed gave everyone time to regain their nerve, and the crisis soon passed.
In August, the Fed tried again to do what it did in 1998, and at first it seemed to work. But then the crisis of confidence came back, worse than ever. And the reason is that this time the financial system – both banks and, probably even more important, nonbank financial institutions – made a lot of loans that are likely to go very, very bad.
It’s easy to get lost in the details of subprime mortgages, resets, collateralized debt obligations, and so on. But there are two important facts that may give you a sense of just how big the problem is.
First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels.
Second, there was a tremendous amount of borrowing into the bubble, as new home buyers purchased houses with little or no money down, and as people who already owned houses refinanced their mortgages as a way of converting rising home prices into cash.
As home prices come back down to earth, many of these borrowers will find themselves with negative equity – owing more than their houses are worth. Negative equity, in turn, often leads to foreclosures and big losses for lenders.
And the numbers are huge. The financial blog Calculated Risk, using data from First American CoreLogic, estimates that if home prices fall 20 percent there will be 13.7 million homeowners with negative equity. If prices fall 30 percent, that number would rise to more than 20 million.
That translates into a lot of losses, and explains why liquidity has dried up. What’s going on in the markets isn’t an irrational panic. It’s a wholly rational panic, because there’s a lot of bad debt out there, and you don’t know how much of that bad debt is held by the guy who wants to borrow your money.
How will it all end? Markets won’t start functioning normally until investors are reasonably sure that they know where the bodies – I mean, the bad debts – are buried. And that probably won’t happen until house prices have finished falling and financial institutions have come clean about all their losses. All of this will probably take years.
Meanwhile, anyone who expects the Fed or anyone else to come up with a plan that makes this financial crisis just go away will be sorely disappointed.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
By Paul Krugman
ICH
11/24/07 “New York Times“
“What were they smoking?” asks the cover of the current issue of Fortune magazine. Underneath the headline are photos of recently deposed Wall Street titans, captioned with the staggering sums they managed to lose.
The answer, of course, is that they were high on the usual drug — greed. And they were encouraged to make socially destructive decisions by a system of executive compensation that should have been reformed after the Enron and WorldCom scandals, but wasn’t.
In a direct sense, the carnage on Wall Street is all about the great housing slump.
This slump was both predictable and predicted. “These days,” I wrote in August 2005, “Americans make a living selling each other houses, paid for with money borrowed from the Chinese. Somehow, that doesn’t seem like a sustainable lifestyle.” It wasn’t.
But even as the danger signs multiplied, Wall Street piled into bonds backed by dubious home mortgages. Most of the bad investments now shaking the financial world seem to have been made in the final frenzy of the housing bubble, or even after the bubble began to deflate.
In fact, according to Fortune, Merrill Lynch made its biggest purchases of bad debt in the first half of this year — after the subprime crisis had already become public knowledge.
Now the bill is coming due, and almost everyone — that is, almost everyone except the people responsible — is having to pay.
The losses suffered by shareholders in Merrill, Citigroup, Bear Stearns and so on are the least of it. Far more important in human terms are the hundreds of thousands if not millions of American families lured into mortgage deals they didn’t understand, who now face sharp increases in their payments — and, in many cases, the loss of their houses — as their interest rates reset.
And then there’s the collateral damage to the economy.
You still hear occasional claims that the subprime fiasco is no big deal. Even though the numbers keep getting bigger — some observers are now talking about $400 billion in losses — these losses are small compared with the total value of financial assets.
But bad housing investments are crippling financial institutions that play a crucial role in providing credit, by wiping out much of their capital. In a recent report, Goldman Sachs suggested that housing-related losses could force banks and other players to cut lending by as much as $2 trillion — enough to trigger a nasty recession, if it happens quickly.
Beyond that, there’s a pervasive loss of trust, which is like sand thrown in the gears of the financial system. The crisis of confidence is plainly visible in the market data: there’s an almost unprecedented spread between the very low interest rates investors are willing to accept on U.S. government debt — which is still considered safe — and the much higher interest rates at which banks are willing to lend to each other.
How did things go so wrong?
Part of the answer is that people who should have been alert to the dangers, and taken precautionary measures, instead blithely assured Americans that everything was fine, and even encouraged them to take out risky mortgages. Yes, Alan Greenspan, that means you.
But another part of the answer lies in what hasn’t happened to the men on that Fortune cover — namely, they haven’t been forced to give back any of the huge paychecks they received before the folly of their decisions became apparent.
Around 25 years ago, American business — and the American political system — bought into the idea that greed is good. Executives are lavishly rewarded if the companies they run seem successful: last year the chief executives of Merrill and Citigroup were paid $48 million and $25.6 million, respectively.
But if the success turns out to have been an illusion — well, they still get to keep the money. Heads they win, tails we lose.
Not only is this grossly unfair, it encourages bad risk-taking, and sometimes fraud. If an executive can create the appearance of success, even for a couple of years, he will walk away immensely wealthy. Meanwhile, the subsequent revelation that appearances were deceiving is someone else’s problem.
If all this sounds familiar, it should. The huge rewards executives receive if they can fake success are what led to the great corporate scandals of a few years back. There’s no indication that any laws were broken this time — but the public’s trust was nonetheless betrayed, once again.
The point is that the subprime crisis and the credit crunch are, in an important sense, the result of our failure to effectively reform corporate governance after the last set of scandals.
John Edwards recently came out with a corporate reform plan, but it didn’t receive a lot of attention. Corporate governance still isn’t regarded as a major political issue. But it should be.
Paul Krugman is Professor of Economics at Princeton University and a regular New York Times columnist. His most recent book is The Conscience of a Liberal.
© 2007 The New York Times
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
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“A Generalized Meltdown of Financial Institutions” By Mike Whitney
by Richard C. Cook
Dandelion Salad
November 11, 2007
Strange events are taking place in the U.S.
By August 2007, a lot of very smart people were reading the tea leaves, convinced that the upper echelons of the U.S. government had their own hidden reasons for forecasting an event even more heinous than the attacks of September 11, 2001.
Dandelion Salad 