Economic Articles from 2018
Most ‘Wealth’ Isn’t the Result of Hard Work. It Has Been Accumulated by Being Idle and Unproductive
By Laurie Macfarlane
Posted March 26, 2018
One of the basic claims of capitalism is that people are rewarded in line with their effort and productivity. Another is that the economy is not a zero sum game. The beauty of a capitalist economy, we are told, is that people who work hard can get rich without making others poorer.
Last week The Times reported that during the past three months alone, baby boomers converted £850 million of housing wealth into cash using equity release products – the highest number since records began. A third used the money to buy cars, while more than a quarter used it to fund holidays. Others are choosing to buy more property: the Chartered Institute of Housing has described how the buy-to-let market is being fuelled by older households using their housing wealth to buy more property, renting it out to those who are unable to get a foot on the property ladder. And it is here that we find the dark side of the housing boom. More…
Benefits of a Public Bank for Cities and Municipalities
by Mike Krauss, Steve Snyder and Nancy Goldner
Posted March 25, 2018
The American people in cities and communities throughout our nation need a strong local banking industry, free of the destructive practices of Wall Street.
Local banks distribute the sustainable and affordable credit our local economies need. Local banks working in partnership with public banks are able to lend additional funds and, in contrast to Wall Street, their profits do not depend on reckless risk taking.
The result: a more democratic and prosperous local economy in which the benefits are shared by all. And it is within reach. Across the nation, in more than twenty states and a growing list of municipalities, support is growing for the creation of public, “partnership” banks, based, in part, on the model of the hugely effective Bank of North Dakota. More…
Time To Eliminate Your Wall Street Tax?
By Rudy Avizius
Posted March 22, 2018
Most homeowners can relate to this. Let’s suppose that you have taken out a mortgage for $100,000. By the time you have completed paying off your mortgage, it will probably have cost you well over $200,000. The cost of the interest payments exceeds the original cost of the home. These interest payments are money that you and your family no longer have to spend on your needs.
The same principle applies when a school district, municipality, county or other entity wishes to do a repair, a capital improvement or infrastructure project. The costs of these projects can easily double or even triple due to the interest charges. It almost seems insane, but we pay more to the financiers of these projects than to those who provided the materials and labor for the project. This does not even include the fees imposed by the bank on the borrowers.
In California, the long awaited new Bay Bridge span was recently completed at a cost of $6.4 billion, which was 4 times over the initial projected costs. What most Californians don’t realize is that the total cost of the bridge will eclipse $13 billion when interest payments are considered over the life of the loans or bonds. So when we talk of projects costs doubling or tripling, it is not hyperbole.
So exactly where does all this interest and fee money go when it leaves the community? More…
Also published in OpEd News, March 2018
Also published in Market Oracle, March 2018
Also published in Popular Resistance, March 2018
Also published in Resilience, March 2018
Also published in Nation of Change, March 2018
Also published in Independent Voter Network, April 2018
How to Set the Economy on Fire
by Nomi Prins
Posted March 18, 2018
There’s been lots of fire and fury around Washington lately, including a brief government shutdown. In Donald Trump’s White House, you can hardly keep up with the ongoing brouhahas from North Korea to Robert Mueller’s Russian investigation, while it already feels like ages since the celebratory mood over the vast corporate tax cuts Congress passed last year. But don’t be fooled: none of that is as important as what’s missing from the picture. Like a disease, in the nation’s capital it’s often what you can’t see that will, in the end, hurt you most.
Amid a roaring stock market and a planet of upbeat CEOs, few are even thinking about the havoc that a multi-trillion-dollar financial system gone rogue could inflict upon global stability. But watch out. Even in the seemingly best of times, neglecting Wall Street is a dangerous idea. With a rag-tag Trumpian crew of ex-bankers and Goldman Sachs alumni as the only watchdogs in town, it’s time to focus, because one thing is clear: Donald Trump’s economic team is in the process of making the financial system combustible again. More…
42 People Own the Same Wealth as the Bottom 3.7 Billion, Says Report
by Amanda Froelich
Posted March 12, 2018
Repeat after me: “I am free.” Now, say it again with conviction. Can you? Probably not. This is because the world we collectively share is anything but fair, and this is largely due to an imbalanced distribution of wealth. If you are doubtful, perhaps a new report by Oxfam will convince you. In their recent report, entitled “Reward Work, Not Wealth“, the non-profit organization reveals that 82 percent of the wealth created in 2017 “went to the richest one percent.”
According to the report, 2017 “saw the biggest increase in the number of billionaires in history.” 42 people now “own the same wealth as the bottom 3.7 billion people,” says the report. The trend is nothing new, but is becoming more noticeable as “the richest one percent continue to own more wealth than the whole of the rest of humanity.” More…
By Joseph Williams
Posted March 6, 2018
My trip from the middle class into the ranks of the homeless began with a ticket of sorts. I came home one afternoon in 2013 from another fruitless job search to find a summons taped to the front door of my $2,000-a-month apartment in suburban Washington, D.C.
Show up in housing court on the assigned date with the back rent, it read. Or be prepared to find another place to live.
I didn’t think about it then—I was too busy trying not to freak out—but I was about to enter the world of eviction, a portal to poverty that is a largely unseen but growing part of the nation’s housing landscape. What used to be primarily a scourge among the working poor is becoming a fact of life for the shrinking middle class. More…
Why China Is Running Circles Around America
by Ellen Brown
Posted March 5, 2018
“One Belt, One Road,” China’s $1 trillion infrastructure initiative, is a massive undertaking involving highways, pipelines, transmission lines, ports, power stations, fiber optics and railroads connecting China to Central Asia, Europe and Africa. According to Dan Slane, a former adviser in President Trump’s transition team, “It is the largest infrastructure project initiated by one nation in the history of the world and is designed to enable China to become the dominant economic power in the world.” In a Jan. 29 article titled “Trump’s Plan a Recipe for Failure, Former Infrastructure Advisor Says,” he added, “If we don’t get our act together very soon, we should all be brushing up on our Mandarin.”
On Feb. 12, Trump’s own infrastructure initiative was finally unveiled. Perhaps intending to trump China’s $1 trillion megaproject, the administration has now upped the ante from $1 trillion to $1.5 trillion, or at least that’s how the initiative is billed. But as Donald Cohen observes in The American Prospect, it’s really only $200 billion, the sole sum that is to come from federal funding. More…
Money creation and inequality – an underexposed topic for monetary reformers
by Lino Zeddies
Posted March 4, 2018
It is beyond doubt that the current money system has a huge impact on the distribution of power and wealth and heavily contributing to systemically worsening inequality. Even though there is growing public awareness and debate about the problem of inequality, so far the focus has been on the distribution of existing money and wealth, while the distributive effect of how and for what purpose money is created in the first place, seems to be a complete blind spot.
To raise awareness for these neglected dynamics, this article provides in the following an overview of the several direct and indirect channels through which the current money system worsens inequality and how a sovereign money reform could improve matters. Some of the mechanisms might seem at first glance not to be connected with bank money creation but it can be argued that they are part of the current money systems logical unfolding and would probably not, or to a much lesser extent, exist in a sovereign money system. More…
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