Austerity Kills: How the EuroCrisis is Being Used to Break the Social Contract
One aspect of the Eurocrisis that has not gotten the attention it deserves is the way it is destroying not just jobs, but the very underpinnings of society.
Read more...Category Archives: The destruction of the middle class
Tom Ferguson: How Wall Street Hustles America’s Cities and States Out of Billions
Yves here. While the municipal swaps fiasco may seem like old news, this piece discusses a post-crisis type of swap which is even more appalling. The old scam was to talk local and state authorities who would have been far better served with old-fashioned fixed rate financing into doing floating rate financing and entering into a series of swaps to get a fixed rate deal, with a supposed improvement in funding costs. The problem is that many of those floating rate deals were auction rate securities, and when that market failed in early 2008, the borrowers were doubly hosed. The ARS went to penalty rates. In addition, payments on the swaps often kicked up shortly thereafter (due to the slow-motion failure of monoline guarantors, which was the hidden trigger behind both events. The downgrade of the monolines de facto downgraded the municipality, which led to increased payments on the swaps).
The latest scam is more appalling. Municipal authorities would borrow fixed rate, then enter into a variable rate swap on the side. Earth to base, no responsible manager wants uncertain funding costs on a long-term capital investment. This is tantamount to the owner of a candy store borrowing money at a fixed rate from his bank to finance an expansion of his business, then betting at the racetrack to try to lower his costs. Not surprisingly, many of these swaps have proven to be costly time bombs.
By Tom Ferguson, Professor of Political Science at the University of Massachusetts, Boston. Cross posted from Alternet
Many powerful interests have jumped at the opportunity to use the crisis to eviscerate what’s left of the welfare state.
Read more...Whatever Happened to Natchez? How to End the Nightmare of Jobless America
Yves here. It is frustrating to watch the refusal of the officialdom to deal with a persistent, high level of unemployment. Ronald Reagan was more concerned and more aggressive when unemployment breached 8%. By contrast, pundits provide excuses for the Administration’s passivity by blaming joblessness on structural unemployment, when various studies have debunked that (one simple proof: if unemployment were structural, you’d expect to see tight job markets in some sectors/job types and slack in others, but when you cut the data, you find high unemployment across the board).
This article helps to puncture some of the misperceptions about unemployment in America and provides some practical ideas.
Read more...Steve Levitt: Like a True Chicago Boy, Likes People to Go to Jail so Markets Can Be Free
Yves here. Readers reacted positively to the inaugural report of the S.H.A.M.E Project on Malcolm Gladwell. S.H.A.M.E. , stands for “Shame the Hacks who Abuse Media Ethics.” Its approach is to provide information about the background and funding sources of well-recognized journalists and pundits so that the public will be in a better position to recognize bias and hidden agendas in their reporting and analysis.
This second report is on the widely-read economist Steve Levitt
Read more...Wisconsin Recap: Thanks to Obama, American Left Lies in Smoldering Wreckage
By Matt Stoller, a fellow at the Roosevelt Institute. You can follow him on Twitter at http://www.twitter.com/matthewstoller.
On Tuesday, Wisconsin Republican Governor Scott Walker humiliated his Democratic opponent, Tom Barrett, by easily turning back a popular recall attempt sponsored by unions and liberal activists. The numbers in the election, which were supposed to be close, were ugly, in favor of the Republican. But this wasn’t just any Republican, Scott Walker is THE Republican, the politician who made his governorship a referendum on a hard right agenda, in a blue state.
Read more...Why is Paul Krugman Misrepresenting the Demise of a Wall Street Funded, Right Wing, Entitlement-Bashing Front Group?
Paul Krugman’s partisanship has become so shameless that we are giving him the inaugural Eric Schneiderman Decoy Award for his post “Things Fall Apart“. The Schneiderman Decoy Award goes for exceptional achievement in turning one’s good name over to particularly rancid Obama Administration initiatives.
Read more...Barack Obama, the Great Deceiver
Barack Obama swept into office on a tide of giddy enthusiasm. His “Hope and Change” was a pledge to reverse Bush era policies, including socialism for the rich, adventurism in the Middle East, and attacks on civil liberties. He announced his intention to serve as a transformational leader, invoking Abraham Lincoln, FDR and Ronald Reagan as role models. Despite the frigid temperatures, people poured into Washington, DC to hear his inauguration speech, wanting to be part of a remarkable passage.
Those times of heady promise are now a cruel memory….
Read more...Colleges as Merchants of Debt
Student loan debt slavery is even worse than you probably thought.
Read more...Yes Lab Gives US Trade Negotiators “Corporate Power Tool” Award
The Yes Lab is a is brainstorming/training effort associated with the Yes Men to help activists subject people in positions of influence to well deserved ridicule. Aquifer highlighted their latest project, which was infiltrating an award ceremony for a trade group in Dallas and bestowing their own prize.
Read more...Bill Black: New York Times Reporters Embrace the Berlin Consensus and Ignore Krugman and Economics
Yves here. Black does yeoman’s work in describing the bias in the New York Times’ Eurocrisis reporting
Read more...What Can Americans Learn from the Eurocrisis
At the risk of looking like NC has become the “all Michael Hudson, all the time” channel, we’re featuring his latest talk with Real News Network. He discusses how and why candidates make promises to ordinary people that they promptly repudiate when they assume office.
Read more...Dan Kervick: The Political Economy of Citadella
Yves here. Readers seem to like Kervick’s storytelling format, and he seemed to take NC readers’ suggestion to heart regarding making it a bit more compact next time.
By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives
Imagine a world and a society in which 500 people own everything – absolutely everything.
Read more...The Bankruptcy “Reforms” of 2005: Creation of a New Debtor’s Prison?
An article by law professor Linda Coco, “Debtor’s Prison in the Neoliberal State: ‘Debtfare’ and the Cultural Logics of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” (hat tip Michael Hudson) is a an informative, if disheartening, overview of the significance of the bankruptcy law reforms implemented in 2005.
One might cynically observe that after 25 years of making it easier for consumers to borrow and encouraging them to load up, banks realized that they might have too much of a good thing and realized they needed to improve their ability to extract payments from the credit junkies they had created.
Read more...How did Quebec Students Mobilize Hundreds of Thousands for Strike?
It’s telling that the fact that hundreds of thousands of people in Quebec have been striking for over two months has gone virtually unreported in the US.
Read more...Lynn Parramore: Why the Rich Are Sending Pets on a Diamond-Studded Trip to the Afterlife
I live in Manhattan, where signs of the New Gilded Age scream from the windows of deluxe pet spas and boutiques hawking crystal-studded dog collars. The biggest emerging trend of all? That would be giving dead pets the star treatment.
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