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What does the Fed’s Jerome Powell have up his sleeve?
The real goal of Fed policy: Breaking inflation, the middle class or the bubble economy?
“There is no sense that inflation is coming down,” said Federal Reserve Chairman Jerome Powell at a November 2 press conference, — this despite eight months of aggressive interest rate hikes and “quantitative tightening.” On November 30, the stock market rallied when he said smaller interest rate increases are likely ahead and could start in December. But rates will still be increased, not cut. “By any standard, inflation remains much too high,” Powell said. “We will stay the course until the job is done.” Continue reading
Winning Georgia Senate seat, Sen. Raphael Warnock overcomes GOP push
More than 48 percent of Georgians voted for Herschel Walker, showing Republican loyalty in a battleground state.
In a stunning finale to 2022’s federal elections, Georgians reelected Sen. Raphael Warnock in a runoff that concluded Tuesday night, where the incumbent Democrat and Atlanta pastor defeated Herschel Walker, a football star who was handpicked by Donald Trump but was rejected by the Peach State’s diverse urban and suburban voters. Continue reading
How to green our parched farmlands and finance critical infrastructure
There are workarounds the U.S. can use to fund affordable housing, drought responses, and other urgently-needed infrastructure that was left out of the two recent spending bills.
Congress has passed two major infrastructure bills in the last year, but imminent needs remain. The 2021 Bipartisan Infrastructure Law chiefly focused on conventional highway programs, and the Inflation Reduction Act of 2022 (IRA) mainly centered on energy security and combating climate change. According to the American Society of Civil Engineers (ASCE), over $2 trillion in much-needed infrastructure is still unfunded, including projects to address drought, affordable housing, high-speed rail, and power transmission lines. By 2039, per the ASCE, continued underinvestment at current rates will cost $10 trillion in cumulative lost GDP, more than 3 million jobs in that year, and $2.24 trillion in exports over the next 20 years. Continue reading
Today’s Republicans: “Lincoln and Teddy Roosevelt are dead, long live Hitler and Mussolini”
The United States is in the same vulnerable position today as Weimar Germany was in the early 1930s. German democracy died amid acts of violence by Adolf Hitler’s Nazi Party. The United States now finds itself in a similar perilous position. The Republican Party under the Hitler-admiring Donald Trump eschews democracy and embraces fascism. Republican candidates for office this year are as violent, anti-Semitic, and racist as Hitler’s Nazi Brownshirts. Continue reading
Achieving self-funding local sovereignty as global food systems collapse
The solution to the current food crisis is small and local, including growing food locally. But how to fund local food co-ops without pricey loans from big banks?
“Deglobalizing” and “dedollarizing” have been much in the news. Reducing dependence on the global supply chain and the U.S. dollar are trends that are happening not just internationally but locally. In the United States, we have seen movements both for local food independence and to divest from Wall Street banks. The burgeoning cryptocurrency movement is another push to “dedollarize” and escape the international bankers’ control grid. Continue reading
The food shortage solution in your own backyard
While the global food systems we depend on come under increasing strain, there’s a solution to the growing crisis that most Americans can find in their own backyards–or front lawns.
A confluence of crises—lockdowns and business closures, mandates and worker shortages, supply chain disruptions and inflation, sanctions and war—have compounded to trigger food shortages; and we have been warned that they may last longer than the food stored in our pantries. What to do? Continue reading
The coming global financial revolution: Russia is following the American playbook
No country has successfully challenged the U.S. dollar’s global hegemony—until now. How did this happen and what will it mean?
Foreign critics have long chafed at the “exorbitant privilege” of the U.S. dollar as global reserve currency. The U.S. can issue this currency backed by nothing but the “full faith and credit of the United States.” Foreign governments, needing dollars, not only accept them in trade but buy U.S. securities with them, effectively funding the U.S. government and its foreign wars. But no government has been powerful enough to break that arrangement—until now. How did that happen and what will it mean for the U.S. and global economies? Continue reading
Rather than sink Main Street by raising interest rates, the Fed could save it
Inflation is plaguing consumer markets, putting pressure on the Federal Reserve to raise interest rates to tighten the money supply. But as Rex Nutting writes in a MarketWatch column titled “Why Interest Rates Aren’t Really the Right Tool to Control Inflation” . . . Continue reading
The real antidote to inflation: How to stoke the fire without burning down the barn
The Fed has options for countering the record inflation the U.S. is facing that are more productive and less risky than raising interest rates.
The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result. According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%. Continue reading
Monetizing nature is Wall Street’s latest scheme
Just in time for the UN’s policy push for “30 x 30”—30% of the earth to be “conserved” by 2030—a new Wall Street asset class puts up for sale the processes underpinning all life.
A month before the 2021 United Nations Climate Change Conference (known as COP26) kicked off in Scotland, a new asset class was launched by the New York Stock Exchange that will “open up a new feeding ground for predatory Wall Street banks and financial institutions that will allow them to dominate not just the human economy, but the entire natural world.” So writes Whitney Webb in an article titled “Wall Street’s Takeover of Nature Advances with Launch of New Asset Class.” Continue reading
A new water source that could make drought a thing of the past
Lack of fresh water is now a global crisis. Water shortages mean food shortages, with hunger creating death tolls substantially exceeding those of the current Covid-19 crisis. According to the United Nations, some 800 million people are without clean water, and 40% of the world’s population is impacted by drought. By one measure, almost 100 percent of the Western United States is currently in drought, setting an all-time 122-year record. Meanwhile, local “water wars” rage, with states, cities and whole countries battling each other for scarce water resources. Continue reading
Nature’s own fuel could save us from the greenhouse effect and electric grid failure
Hemp fuel and other biofuels could reduce carbon emissions while saving the electric grid, but they’re often overlooked for more expensive, high-tech climate solutions.
On July 14, the European Union unveiled sweeping climate change and emissions targets that would, according to Gulf News, mean “the end of the internal combustion engine.” Continue reading
Republicans believe lying will make it so—and they may be right
But a party morally corrupted by Donald Trump and its own rotten behavior must not stand.
I had a friend who was a pathological liar. I do not use that term lightly; he really was. We met in college and then through an odd set of circumstances wound up working for the same television station in New York—in fact, our offices were right next door to each other. Continue reading
How America went from mom-and-pop capitalism to techno-feudalism
The crisis of 2020 has created the greatest wealth gap in history. The middle class, capitalism and democracy are all under threat. What went wrong and what can be done? Continue reading
Left says Senate Democrats face existential choice: Kill filibuster or watch democracy die
"This is about to move from an abstract conversation about Senate rules to a very clear choice for Senate Democrats: Protect the 'Jim Crow' filibuster or protect American democracy—they won't be able to do both."
As the Senate Rules Committee convened Tuesday to mark up a sweeping legislative proposal aimed at protecting and expanding voting rights, progressive activists ramped up pressure on the chamber’s Democrats to eliminate an archaic procedural rule that poses a critical threat to the bill’s chances of becoming law. Continue reading
Will 2021 be public banking’s watershed moment?
Faced with the dire Covid-19 crisis, some lawmakers are starting to see publicly-owned banks as the key to ensuring an equitable economic recovery. Continue reading
The gamers’ uprising against Wall Street has deep populist roots
Wall Street may own the country, as Kansas populist leader Mary Elizabeth Lease once declared, but a new generation of “retail” stock market traders is fighting back.
A short squeeze frenzy driven by a new generation of gamers captured financial headlines in recent weeks, centered on a struggling strip mall video game store called GameStop. The Internet and a year off in this shut down to study up have given a younger generation of investors the tools to compete in the market. Gerald Celente calls it the “Youth Revolution.” A group of New York Young Republicans who protested in the snow on January 31 called it “Re-occupy Wall Street.” Others have called it Occupy Wall Street 2.0. Continue reading
Tackling the infrastructure and unemployment crises: The “American System” solution
A self-funding national infrastructure bank modeled on the “American System” of Alexander Hamilton, Abraham Lincoln, and Franklin D. Roosevelt would help solve not one but two of the country’s biggest problems.
Millions of Americans have joined the ranks of the unemployed, and government relief checks and savings are running out; meanwhile, the country still needs trillions of dollars in infrastructure. Putting the unemployed to work on those infrastructure projects seems an obvious solution, especially given that the $600 or $700 stimulus checks Congress is planning on issuing will do little to address the growing crisis. Various plans for solving the infrastructure crisis involving public-private partnerships have been proposed, but they’ll invariably result in private investors reaping the profits while the public bears the costs and liabilities. We have relied for too long on private, often global, capital, while the Chinese run circles around us building infrastructure with credit simply created on the books of their government-owned banks. Continue reading
Why the Fed needs public banks
The Fed’s policy tools—interest rate manipulation, quantitative easing, and “Special Purpose Vehicles”—have all failed to revive local economies suffering from government-mandated shutdowns. The Fed must rely on private banks to inject credit into Main Street, and private banks are currently unable or unwilling to do it. The tools the Fed actually needs are public banks, which could and would do the job.
On November 20, US Treasury Secretary Steven Mnuchin informed Federal Reserve Chairman Jerome Powell that he would not extend five of the Special Purpose Vehicles (SPVs) set up last spring to bail out bondholders, and that he wanted the $455 billion in taxpayer money back that the Treasury had sent to the Fed to capitalize these SPVs. The next day, Powell replied that he thought it was too soon—the SPVs still served a purpose—but he agreed to return the funds. Both had good grounds for their moves, but as Wolf Richter wrote on WolfStreet.com, “You’d think something earth-shattering happened based on the media hullabaloo that ensued.” Continue reading
Oregon senator vows amendment to bar Trump from sending ‘paramilitary squads onto America’s streets’
‘We won't let these authoritarian tactics stand.’
Oregon Sen. Jeff Merkley on Saturday announced plans to introduce an amendment barring the Trump administration from deploying federal law enforcement to U.S. streets as backlash continues over the White House’s use of unidentified agents to violently crack down on protests in Portland and detain demonstrators without cause. Continue reading
Meet BlackRock, the new great vampire squid
To most people, if they are familiar with it at all, BlackRock is an asset manager that helps pension funds and retirees manage their savings through “passive” investments that track the stock market. But working behind the scenes, it is much more than that. BlackRock has been called “the most powerful institution in the financial system,” “the most powerful company in the world” and the “secret power.” It is the world’s largest asset manager and “shadow bank,” larger than the world’s largest bank (which is in China), with over $7 trillion in assets under direct management and another $20 trillion managed through its Aladdin risk-monitoring software. BlackRock has also been called “the fourth branch of government” and “almost a shadow government”, but no part of it actually belongs to the government. Despite its size and global power, BlackRock is not even regulated as a “Systemically Important Financial Institution” under the Dodd-Frank Act, thanks to pressure from its CEO, Larry Fink, who has long had “cozy” relationships with government officials. Continue reading
When profits and politics drive science: Rushing a vaccine to market for a vanishing virus
More than 100 companies are competing to be first in the race to get a COVID-19 vaccine to market. It’s a race against time, not because the death rate is climbing but because it is falling—to the point where there will soon be too few subjects to prove the effectiveness of the drug. Continue reading
Another bank bailout under cover of a virus
Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.
When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the act actually said was that the next time the banks failed, they would be subject to “bail ins”—the funds of their creditors, including their large depositors, would be tapped to cover their bad loans. Continue reading
Crushing the states, saving the banks: The fed’s generous new rules
Congress seems to be at war with the states. Only $150 billion of its nearly $3 trillion coronavirus relief package—a mere 5%—has been allocated to the 50 states; and they are not allowed to use it where they need it most, to plug the holes in their budgets caused by the mandatory shutdown. On April 22, Senate Majority Leader Mitch McConnell said he was opposed to additional federal aid to the states, and that his preference was to allow states to go bankrupt. Continue reading
She’s back: Nikki Haley’s anti-China rage
Neocon hardliner Nikki Haley is an ideologically extremist hawk on the far-right fringe of US politics. Continue reading
A universal basic income is essential and will work
A central bank-financed UBI can fill the debt gap, providing a vital safety net while preventing cyclical recessions.
According to an April 6 article on CNBC.com, Spain is slated to become the first country in Europe to introduce a universal basic income (UBI) on a long-term basis. Spain’s minister for economic affairs has announced plans to roll out a UBI “as soon as possible,” with the goal of providing a nationwide basic wage that supports citizens “forever.” Guy Standing, a research professor at the University of London, told CNBC that there was no prospect of a global economic revival without a universal basic income. “It’s almost a no-brainer,” he said. “We are going to have some sort of basic income system sooner or later ….” Continue reading
Was the Fed just nationalized?
Did Congress just nationalize the Fed? No. But the door has been cracked open for that possibility.
Mainstream politicians have long insisted that Medicare for All, a universal basic income, student debt relief and a slew of other much-needed public programs are off the table because the federal government cannot afford them. But that was before Wall Street and the stock market were driven onto life-support by a virus. Congress has now suddenly discovered the magic money tree. It took only a few days for Congress to unanimously pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be doling out $2.2 trillion in crisis relief, most of it going to Corporate America with few strings attached. Beyond that, the Federal Reserve is making over $4 trillion available to banks, hedge funds and other financial entities of all stripes; it has dropped the fed funds rate (the rate at which banks borrow from each other) effectively to zero; and it has made $1.5 trillion available to the repo market. Continue reading
Socialism to the rescue after Fed’s bazooka fails
In what is being called the worst financial crisis since 1929, the US stock market has lost a third of its value in the space of a month, wiping out all of its gains of the last three years. When the Federal Reserve tried to ride to the rescue, it only succeeded in making matters worse. The government then pulled out all the stops. To our staunchly capitalist leaders, socialism is suddenly looking good. Continue reading
The Fed’s baffling response to the coronavirus explained
When the World Health Organization announced on February 24 that it was time to prepare for a global pandemic, the stock market plummeted. Over the following week, the Dow Jones Industrial Average dropped by more than 3,500 points or over 10%. In an attempt to contain the damage, on March 3 the Federal Reserve slashed the fed funds rate from 1.5% to 1.0%, in their first emergency rate move and biggest one-time cut since the 2008 financial crisis. But rather than reassuring investors, the move fueled another panic sell-off. Continue reading
Mexico’s President AMLO shows how it’s done
While U.S. advocates and local politicians struggle to get their first public banks chartered, Mexico’s new president has begun construction on 2,700 branches of a government-owned bank to be completed in 2021, when it will be the largest bank in the country. At a press conference on Jan. 6, he said the neoliberal model had failed; private banks were not serving the poor and people outside the cities, so the government had to step in. Continue reading
The Fed protects gamblers at the expense of the economy
Although the repo market is little known to most people, it is a $1-trillion-a-day credit machine, in which not just banks but hedge funds and other “shadow banks” borrow to finance their trades. Under the Federal Reserve Act, the central bank’s lending window is open only to licensed depository banks; but the Fed is now pouring billions of dollars into the repo (repurchase agreements) market, in effect making risk-free loans to speculators at less than 2%. Continue reading
No corporate law and power questions for Judge Ketanji Brown Jackson
Posted on March 28, 2022 by Ralph Nader
In over twenty hours of grueling confirmation hearings for Judge Ketanji Jackson’s nomination to the U.S. Supreme Court, Republican Senators (Cruz, Cotton, Hawley, Blackburn, and Graham) found much time to disgrace themselves, using the judge as a prop for their despicable political ambitions. Meanwhile the Democratic (and Republican) Senators found no time to tap into Judge Jackson’s knowledge and analysis of the grave issues regarding the nexus of the power of giant corporations and the Constitution. Continue reading →