Proof That the Top 0.1% Create Crashes
by Jeff Nielson
Posted May 13, 2016
Our markets and economies are marched up and down in “bubbles” and “crashes”, with the duration of these cycles of financial crime now seeming to be fixed at about once every eight years. As the dust settles after each of these eight-year operations, the Fat Cats at the very, very top are found to have gotten much, much wealthier, while almost everyone else ends up significantly poorer.
With this pattern of crime now being obvious, and the pattern of “winners” and “losers” being equally obvious, it doesn’t require a rocket scientist to suspect that the Winners have been orchestrating these bubbles and crashes. It is obviously considerably easier to be on the winning side of your (supposed) gambling, when you know in advance what will transpire in the Game. More…
The Proper Purpose of Money
by David Korten
Posted May 8, 2016
Let’s start with a simple truth. The efforts of economists to justify them notwithstanding, speculation, usury, and accounting manipulation serve no beneficial economic or social purpose. There is no legitimate reason to allow them and certainly no justification for supporting them with public subsidies from the Treasury Department and the Federal Reserve.
Money is only a claim on wealth, so making money without producing anything of value is creating claims on the wealth created by others and is an invisible form of theft. More…
“Not true and they knew it”: What Rahm Emanuel’s Wall Street craze cost Chicago
by David Dayen
Posted May 7, 2016
Chicago’s struggling public school system had a golden chance to reap billions. Here’s where it went wrong. The city of Chicago and its public school system could recoup potentially billions of dollars in overpayments from complicated, unjust deals inked with Wall Street banks, if they pursued legal action or demanded enforcement from federal regulators. But Rahm Emanuel, the current mayor, has refused to chase this opportunity, despite the city’s drastic fiscal outlook and the effect on citizens. By contrast, his opponent in the April 7 mayoral run-off election, Jesus “Chuy” Garcia, appears far more likely to take action against a powerful financial sector Emanuel has relied on for campaign contributions.
Beginning over a decade ago, Wall Street banks sold municipalities, school districts, water systems and public hospitals across the country on obscure financial instruments, pitching them as a way to borrow more cheaply than plain-vanilla municipal bonds. But just as homeowners were swindled into loans they couldn’t afford during the housing bubble, local governments suffered a similar fate. More…
Bank of North Dakota Soars Despite Oil Bust: A Public Banking Blueprint for California?
By Ellen Brown
Posted May 6, 2016
In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nation’s only state-owned depository bank, was more profitable even than J.P. Morgan Chase and Goldman Sachs. The author attributed this remarkable performance to the state’s oil boom; but the boom has now become an oil bust, yet the BND’s profits continue to climb. Its 2015 Annual Report, published on April 20th, boasted its most profitable year ever.
The BND has had record profits for the last 12 years, each year outperforming the last. In 2015 it reported $130.7 million in earnings, total assets of $7.4 billion, capital of $749 million, and a return on investment of a whopping 18.1 percent. Its lending portfolio grew by $486 million, a 12.7 percent increase, with growth in all four of its areas of concentration: agriculture, business, residential, and student loans. More…
How Capitalism and Racism Support Each Other
By Richard D. Wolff
Posted April 29, 2016
The burdens of capitalism’s instability falls much harder on employees than employers, and much harder upon some employees than others. Capitalism thus always faced a basic legitimation problem. How could it justify its unequal distributions of income, wealth and the burdens of its systemic instability among the people whose condition of being “free and equal” capitalism was supposed to guarantee?
One of the major means of managing this legitimation problem has been an ideology of race (alongside other ideologies centered around concepts such as “productivity” and “meritocracy”). Capitalism repurposed race and racism. By dividing human beings, conceptually and practically, into intrinsically different subgroups, capitalism’s defenders could explain and justify why its economic benefits (e.g. the status of employer rather than employee) and burdens (unemployment, poverty etc.) were so unequally distributed (both within countries and globally). More…
How Systems Break: First They Slow Down
by Charles Hugh Smith
Posted April 22, 2016
Complex systems like ecological food webs, the brain, and the climate all give off a characteristic signal when disaster is around the corner. The key insight here is that financial systems and indeed economies function as natural systems. The dominant systems do not operate in a vacuum; beneath the surface dominance of one system are many other systems that are suppressed by the dominant system.
The signal, a phenomenon called ‘critical slowing down,’ is a lengthening of the time that a system takes to recover from small disturbances, such as a disease that reduces the minnow population, in the vicinity of a critical transition. It occurs because a system’s internal stabilizing forces—whatever they might be—become weaker near the point at which they suddenly propel the system toward a different state. More…
New Report Finds Many Large, Profitable U.S. Corporations Pay No Federal Income Taxes
By Andrew Emett
Posted April 19, 2016
Between 2008 and 2013, General Electric, Boeing, and Verizon paid no federal income taxes. During that period, these three companies amassed more than $102 billion in combined profits, yet they ended up receiving over $4.1 billion in income tax rebates from the IRS.
According to a report last year from U.S. PIRG (Public Interest Research Group) Education Fund and Citizens for Tax Justice, nearly 75% of Fortune 500 companies tucked away $2.1 trillion in accumulated profits offshore to avoid paying U.S. income taxes. In 2014, at least 358 of these massive corporations maintained 7,622 tax haven subsidiaries throughout Panama, Bermuda, Ireland, Luxembourg, the Netherlands, Switzerland, and other havens. More…
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