The president has criticized Federal Reserve policy for undermining his attempts to build the economy. To make the central bank serve the needs of the economy, it needs to be transformed into a public utility. Continue reading
For decades now, going back to when Bob Geldoff handed over millions in cash to Meles Zenawi during “We Are the World” circa 1983-4 supposedly for food aid for the victims of what was then the Great Ethiopian Famine, the City of London has been at the heart of Grand Theft Ethiopia, grand theft Africa really. Continue reading
California legislators exploring the public bank option may be breaking not just from Wall Street but from the Federal Reserve. Continue reading
It has happened at slaughterhouses run by Smithfield Foods, Swift and Agriprocessors. Continue reading
American president Donald Trump seems intent to isolate the U.S. economy from neighboring economies, and even from the world economy, and thus to break with three quarters of a century of closer economic cooperation between countries, established after World War II. There is a clear danger that the international economic system could become structurally unsettled for years to come, which does not mean that such a system is not in need of reform. Continue reading
California needs over $700 billion in infrastructure during the next decade. Where will this money come from? The $1.5 trillion infrastructure initiative unveiled by President Trump in February 2018 includes only $200 billion in federal funding, and less than that after factoring in the billions in tax cuts in infrastructure-related projects. The rest is to come from cities, states, private investors and public-private partnerships (PPPs) one. And since city and state coffers are depleted, that chiefly means private investors and PPPs, which have a shady history at best. Continue reading
On March 31, the Federal Reserve raised its benchmark interest rate for the sixth time in 3 years and signaled its intention to raise rates twice more in 2018, aiming for a fed funds target of 3.5% by 2020. LIBOR (the London Interbank Offered Rate) has risen even faster than the fed funds rate, up to 2.3% from just 0.3% 2–1/2 years ago. LIBOR is set in London by private agreement of the biggest banks, and the interest on $3.5 trillion globally is linked to it, including $1.2 trillion in consumer mortgages. Continue reading
I was chatting with my tobacconist the other day—I have no rabbi, no priest, no minister, no imam, no chiropractor, and no lawyer, but I do have a tobacconist—when it struck me that my trade deficit with him is astronomical. Continue reading
The US Postal Service, under attack from a manufactured crisis designed to force its privatization, needs a new source of funding to survive. Postal banking could fill that need. Continue reading
“One Belt, One Road,” China’s $1 trillion infrastructure initiative, is a massive undertaking of 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 advisor 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 January 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.” Continue reading
How to build the economy? Not through trickle-down economics. Tax cuts to the rich and big corporations don’t lead to more investment and jobs. Continue reading
Thirty states and the District of Columbia currently have laws broadly legalizing marijuana in some form. The herb has been shown to have significant therapeutic value for a wide range of medical conditions, including cancer, Alzheimer’s disease, multiple sclerosis, epilepsy, glaucoma, lung disease, anxiety, muscle spasms, hepatitis C, inflammatory bowel disease, and arthritis pain. Continue reading
It’s common knowledge that our political system is awash with money. And that money, despite some flimsy legal barriers, comes with strings attached. Continue reading
So. the US economy is just fine. The post-recession 2010 Dodd-Frank legislation has cured all. Banks have lots of cash. Congress is your friend and that certain-to-pass Tax Cut and Jobs bill will finally allow you, your family and America to . . . MAGA. Continue reading
The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself. Continue reading
Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors. Continue reading
Trump and congressional Republicans are engineering the largest corporate tax cut in history in order “to restore our competitive edge,” as Trump says. Continue reading
Sudden changes in trade and tax policies, the likes of those considered by the Trump administration, could be very disruptive to macroeconomic equilibrium, especially if they result in a sudden burst of inflation and in rapid interest rate hikes. Indeed, raising taxes on imports, repatriating large corporate profits parked overseas and increasing the fiscal deficit, when the economy is running at close to full capacity, can result in both demand-led and supply-led inflation. This could come much faster than most people expect, if all these measures are implemented in the coming years. Continue reading
A UK study published on October 27, 2017 reported that the majority of politicians do not know where money comes from. Continue reading
Crushing regulations are driving small banks to sell out to the megabanks, a consolidation process that appears to be intentional. Publicly-owned banks can help avoid that trend and keep credit flowing in local economies. Continue reading
During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. Continue reading
Trump and conservatives in Congress are planning a big tax cut for millionaires and billionaires. To justify it they’re using the oldest song in their playbook, claiming tax cuts on the rich will trickle down to working families in the form of stronger economic growth. Continue reading
In May 2017, a team of researchers at the University of Oxford published the results of a survey of the world’s best artificial intelligence experts, who predicted that there was a 50 percent chance of AI outperforming humans in all tasks within 45 years. All human jobs were expected to be automated in 120 years, with Asian respondents expecting these dates much sooner than North Americans. In theory, that means we could all retire and enjoy the promised age of universal leisure. But the immediate concern for most people is that they will be losing their jobs to machines. Continue reading
Do the Wall Street Journal’s editorial page editors read their own newspaper? Continue reading
Trump promised a “stronger and better” deal. The only equitable one is fair, not free, trade benefiting everyone, not business and large investors exclusively. Continue reading
Illinois is insolvent, unable to pay its bills. According to Moody’s, the state has $15 billion in unpaid bills and $251 billion in unfunded liabilities. Of these, $119 billion are tied to shortfalls in the state’s pension program. On July 6, 2017, for the first time in two years, the state finally passed a budget, after lawmakers overrode the governor’s veto on raising taxes. But they used massive tax hikes to do it—a 32% increase in state income taxes and 33% increase in state corporate taxes—and still Illinois’ new budget generates only $5 billion, not nearly enough to cover its $15 billion deficit. Continue reading
Betsy DeVos and her husband Dick are lucky: They inherited a big chunk of the multi-billion-dollar fortune that Dick’s dad Richard amassed through his shady Amway corporation. But what they’ve done with their Amway money is certainly not the American Way. Continue reading
Wall Street analysts tell us that Amazon’s $14 billion buyout of Whole Foods isn’t only a win-win for both of them, but also for consumers, for Amazon intends to lower the organic grocer’s prices. Continue reading
A friend of mine from India tells a story about driving an old Volkswagen beetle from California to Virginia during his first year in the United States. In a freak ice storm in Texas he skidded off the road, leaving his car with a cracked windshield and badly dented doors and fenders. When he reached Virginia he took the car to a body shop for a repair estimate. The proprietor took one look at it and said, “it’s totaled.” My Indian friend was bewildered: “How can it be totaled? I just drove it from Texas!” Continue reading
Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year. Continue reading
Several years ago when the Federal Reserve had its Fed funds rate at zero to 25 basis points (one-quarter of one percent—0.25%), there was a great deal of talk, somehow presented as urgent, whether the Federal Reserve would raise interest rates. Continue reading
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When it comes to the economy, Trump keeps two sets of books
Posted on June 8, 2018 by Michael Winship
The May jobs numbers were good last week—so swell, in fact, that our putative president couldn’t resist hinting about them in an early morning tweet last Friday morning, a major breach of confidentiality and protocol that instantly affected Treasury yields—basically, the interest rate at which the government borrows money. Continue reading →