Economic Articles from 2017
Intra-elite Warfare: Oligarchs Succeed! Only the People Suffer!
By Prof. James Petras
Posted June 8, 2017
On a scale not seen since the ‘great’ world depression of the 1930’s, the US political system is experiencing sharp political attacks, divisions and power grabs. Executive firings, congressional investigations, demands for impeachment, witch hunts, threats of imprisonment for ‘contempt of Congress’ and naked power struggles have shredded the façade of political unity and consensus among competing powerful US oligarchs.
Intense political competition and open political debate have nothing to do with ‘democracy’ as it now exists in the United States.
In fact, it is the absence of real democracy, which permits the oligarchs to engage in serious . The marginalized, de-politicized electorate are incapable of taking advantage of the conflict to advance their own interests. More…
Twelve Reasons Why Globalization is a Huge Problem
by Gail Tverberg
Posted June 8, 2017
Globalization seems to be looked on as an unmitigated “good” by economists. Unfortunately, economists seem to be guided by their badly flawed models; they miss real-world problems. In particular, they miss the point that the world is finite. We don’t have infinite resources, or unlimited ability to handle excess pollution. So we are setting up a “solution” that is at best temporary.
Economists also tend to look at results too narrowly–from the point of view of a business that can expand, or a worker who has plenty of money, even though these users are not typical. In real life, the business are facing increased competition, and the worker may be laid off because of greater competition.
The following is a list of reasons why globalization is not living up to what was promised, and is, in fact, a very major problem. More…
The Federal Reserve Must Go
By Michael Snyder
Posted June 7, 2017
It isn’t by accident that we ended up 20 trillion dollars in debt. In 1913, a bill was rushed through Congress right before Christmas that was based on a plan that had been secretly developed by very powerful Wall Street bankers. G. Edward Griffin did an amazing job of documenting the development of this plan in his groundbreaking book “The Creature from Jekyll Island: A Second Look at the Federal Reserve”. At that time, most Americans had no idea what a central bank does or what one would mean for the U.S. economy. Sadly, even though more than a century has passed since that time, most Americans still do not understand the Federal Reserve.
The Federal Reserve was designed to create debt, and of course the Wall Street bankers were very excited about such a system because it would make them even wealthier. Since the Fed was created in 1913, the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent. So the Federal Reserve is doing what it was originally designed to do. In fact, it has probably worked better than the original designers ever dreamed possible. More…
What if People Owned the Banks, Instead of Wall Street?
By Jimmy Tobias
Posted June 2, 2017
From Seattle to Santa Fe, cities are at the center of a movement to create publicly owned banks.
Public banks have a long, though subterranean, history in the United States that stretches back to the days of Benjamin Franklin, who helped establish a public land bank in Pennsylvania to provide cheap loans to small farmers. Even today many public institutions, from the Federal Deposit Insurance Corporation to the Small Business Administration to the Federal Housing administration, are essential components of America’s banking system. But there’s only one true public bank in this country and it’s not in Washington or New York or some coastal liberal enclave. It’s in North Dakota, where it has survived and thrived for nearly a century. More…
How We Can Stop the Globalization That’s Bleeding Us Dry
By Shah Gilani
Posted May 31, 2017
Earlier this week, I showed you how, after a generation of running amok, financialization of the U.S. economy is close to killing – forever – the once-mighty American middle class.
Well, these forces have “help.” Globalization, the long-armed henchman of financialization, is an insidious contributor to the widening income gap and wealth inequality in the United States. It’s essentially another nail in the coffin of the middle class.
Here’s the thing: It’s possible to stop both of these disasters before it really is too late. Here’s what we need to do to arrest and reverse this crony capitalist-engineered nightmare. More…
What a State-Owned Bank Can Do for New Jersey
by Ellen Brown
Posted May 24, 2017
Phil Murphy, the leading Democratic candidate for governor of New Jersey, has made a state-owned bank a centerpiece of his campaign. He says the New Jersey bank would “take money out of Wall Street and put it to work for New Jersey – creating jobs and growing the economy [by] using state deposits to finance local investments … and … support billions of dollars of critical investments in infrastructure, small businesses, and student loans – saving our residents money and returning all profits to the taxpayers.”
A former Wall Street banker himself, Murphy knows how banking works. But in an April 7 op-ed in The New Jersey Spotlight, former New Jersey state treasurer Andrew Sidamon-Eristoff questioned the need for a state-owned bank and raised the issue of risk. This post is in response to those arguments, including a short refresher on the stellar model of the Bank of North Dakota (BND), currently the nation’s only state-owned depository bank. More…
Where Automation Poses the Biggest Threat to American Jobs
by Alana Semuels
Posted May 24, 2017
Economists expect that millions of American jobs are going to be replaced by automation in the coming decades. But where will those job losses take place? Which areas will be hardest hit?
Much of the focus regarding automation has been on the Rust Belt. There, many workers have been replaced by machines, and the number of factory jobs has slipped as more production is offshored. While a lot of the rhetoric about job loss in the Rust Belt has centered on such outsourcing, one study from Ball State University found that only 13 percent of manufacturing job losses are attributable to trade, and the rest to automation.
A new analysis suggests that the places that are going to be hardest-hit by automation in the coming decades are in fact outside of the Rust Belt. More…
If China Can Fund Infrastructure With Its Own Credit, So Can We
By Ellen Brown
Posted May 22, 2017
While American politicians debate endlessly over how to finance the needed fixes and which ones to implement, the Chinese have managed to fund massive infrastructure projects all across their country, including 12,000 miles of high-speed rail built just in the last decade. How have they done it, and why can’t we?
A key difference between China and the US is that the Chinese government owns the majority of its banks. About 40% of the funding for its giant railway project comes from bonds issued by the Ministry of Railway, 10-20% comes from provincial and local governments, and the remaining 40-50% is provided by loans from federally-owned banks and financial institutions. Like private banks, state-owned banks simply create money as credit on their books. (More on this below.) The difference is that they return their profits to the government, making the loans interest-free; and the loans can be rolled over indefinitely. In effect, the Chinese government decides what work it wants done, draws on its own national credit card, pays Chinese workers to do it, and repays the loans with the proceeds. More…
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