Category Archives: Social policy

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part III– Why Today’s Fiscal Squeeze Imposes Needless Austerity

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”

The financial sector promises that privatizing roads and ports, water and sewer systems, bus and railroad lines (on credit, of course) is more efficient and will lower the prices charged for their services. The reality is that the new buyers put up rent-extracting tollbooths on the infrastructure being sold. Their break-even costs include the high salaries and bonuses they pay themselves, as well as interest and dividends to their creditors and backers, spending on stock buy-backs and political lobbying.

Public borrowing creates a dependency that shifts economic planning to Wall Street and other financial centers. When voters resist, it is time to replace democracy with oligarchy.

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Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II – The Financial War Against the Economy at Large

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings.

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Banks Deeply Involved in FBI-Coordinated Suppression of “Terrorist” Occupy Wall Street

If you’ve been following the story of the official response to Occupy Wall Street, it was apparent that the 17 city paramilitary crackdown was coordinated; it came out later that the Department of Homeland Security was the nexus of that operation. The deep FBI involvement is a new and ugly addition to this picture.

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Lynn Parramore: Orcs v. Goblins: Crazed Republicans Turn on Each Other in Ugly Fiscal Cliff Battle

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

Fear gripped Middle Earth. The little people looked nervously toward the horizon, wondering if their few remaining possessions would be snatched away by marauding bands of goblins and orcs.

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Bill Black: Kill the “Fiscal Cliff” Instead of the Economy

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

Here’s the short version of why austerity is a self-destructive response to the Great Recession.

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Top Tax Expert Confirms Our Doubts About Occupy Wall Street’s Debt Buying/Forgiveness Scheme

As readers may recall, we expressed serious reservations about the tax consequences of a program launched by Strike Debt, an Occupy Wall Street working group, to buy distressed consumer debt from debt collectors and forgive it. These concerns have been confirmed by a top tax expert, Lee Sheppard. Sheppard not only describes how the scheme has the potential to harm the borrowers that Strike Debt wants to help, but also points out how their initiative runs afoul of IRS rules for not for profits.

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Michael Hoexter: “Deficit” is the Wrong Word and Concept

By Michael Hoexter, a policy analyst and marketing consultant on green issues, climate change, clean and renewable energy, and energy efficiency. Cross posted from New Economic Perspectives

From the MMT account of monetarily sovereign government budget deficits, one can conclude that budget deficits are for the most part a critical, positive driving force in the world economy, at least if one endorses the idea, as is the common assumption of many, that economic growth is a good thing. However, the way the concept of “deficit” is handled by the rest of the economic profession, by the media and by the public, one gets exactly the opposition impression: “deficits” are to be avoided or, alternatively, temporarily indulged in only to be expunged later on.

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Externalities and the Dubious Defenses of Gun Enthusiasts

We featured a post earlier this week by Michael Olenick that argued that the time had arrived to charge gun owners for the true cost of gun ownership, which he reckoned to be plenty high. In fact,, it’s not hard to demonstrate the social costs of readily available guns exceed private benefits, and that argues for strict controls rather than taxation as a remedy.

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Bill Black: Let’s Celebrate the Failure of the July 2011 Great Betrayal

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

In July 2011, President Obama and Speaker Boehner reached an agreement in principle on a deal crafted to inflict $4 trillion in austerity by raising taxes modestly, slashing social spending, and beginning to unravel the safety net. The deal would have been a disaster for America. Unemployment was 9.1%. The deal would have thrown us back into a recession and caused unemployment to surge. Recessions and increased unemployment cause tax revenues to fall and increase demand for social services (e.g., for unemployment compensation) – they produce large deficits. Austerity kills jobs and frequently increases deficits. The Eurozone is the latest demonstration of this fact.

We should, therefore, all be celebrating the failure of the July 2011 austerity deal.

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Michael Olenick: The Lesson of Newtown – Time to Charge for the True Cost of Gun Ownership

By Michael Olenick, a regular contributor on Naked Capitalism. You can follow him on Twitter at @michael_olenick

Twenty children the same age as my daughter and her friends, plus another six adults trying to protect them, lie dead, murdered by guns. I understand that a deranged murderer pulled the trigger, and that he could have theoretically gone on a killing rampage with knives, but it is hard to believe so many could or would have been dead before the police arrived. Guns killed these people.

Rather than parsing the Second Amendment one more time there is an easier approach, one typically favored by conservative gun owners for other public policy issues: end cost-shifting. Force those who chose to own guns to bear the full cost of the mayhem their hobby unleashes.

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Your Humble Blogger Discusses the Fiscal Cliff with Bill Moyers and Bruce Bartlett

I had fun in this conversation with conservative Bruce Bartlett, even though he stole some of my best lines (like Obama not being a liberal). Bartlett is in exile from the Republican party for saying things like Keynesian deficits stimulate the economy (after doing research and finding he couldn’t debunk it based on data) and unions help promote higher wages.

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Mirabile Dictu! EU Gets Tough on Banker Pay, Proposes Strict Bonus Limits

Bankers are now hoist on their own austerity petard. The fact that ordinary citizen all across the Eurozone are seeing lower incomes, lower levels of social services, and can expect only more of the same seems to have led to a sudden outburst of resolve to make sure that bankers take the pain along with everyone else.

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How Many People Will Die if We Raise the Medicare Age to 67?

By Matt Stoller, a fellow at the Roosevelt Institute. You can follow him at http://www.twitter.com/matthewstoller.

In a 2009 speech on the floor of the House of Representatives, Alan Grayson said that the Republican health care plan consists of two steps. One, don’t get sick. Two, if you do get sick, die quickly. Raising the Medicare age to 67 is the same sort of plan for those who wind up uninsured, and we can take a stab now at how many they will be and how many will die.

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