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Blackstone, BlackRock or a public bank?
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
Fox in the hen house: Why interest rates are rising
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
The Bayer-Monsanto merger is bad news for the planet
Two new studies from Europe have found that the number of farm birds in France has crashed by a third in just 15 years, with some species being almost eradicated. The collapse in the bird population mirrors the discovery last October that over three quarters of all flying insects in Germany have vanished in just three decades. Insects are the staple food source of birds, the pollinators of fruits, and the aerators of the soil. Continue reading
The war on the post office
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
Funding infrastructure: Why China Is running circles around America
“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
Student debt slavery II: Time to level the playing field
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
Student debt slavery: Bankrolling financiers on the backs of the young
Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors. Continue reading
The public bank option—safer, local and half the cost
A UK study published on October 27, 2017 reported that the majority of politicians do not know where money comes from. Continue reading
Regulation is killing community banks–public banks can revive them
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
How to wipe out Puerto Rico’s debt without hurting bondholders
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
How to fund a universal basic income without increasing taxes or inflation
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
Saving Illinois: Getting more bang for the state’s bucks
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
Sovereign debt jubilee, Japanese-style
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
Dear Mr. President, be careful what you wish for: higher interest rates will kill the recovery
Responding to earlier presidential pressure, the Federal Reserve is expected to raise interest rates this week for the third time since November, from a fed funds target of 1% to 1.25%. But as noted in The Guardian in a March 2017 article, titled “Trump Is Set to Win the Battle on Interest Rates, but US Economy Will Pay the Price”: “An increase in the base rate, however small, will tighten the screw on younger voters and some of the poorest communities who voted for him and rely on credit to get by. Continue reading
Trump’s infrastructure privatization scheme
Straightaway in office, Trump proved he’s an imperial/predatory corporatist tool—his rhetorical populism pretense, not real, his agenda hugely harming ordinary people at home and abroad. Continue reading
If China can fund infrastructure with its own credit, so can we
May 15–19 has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion. Continue reading
Obscured American: Katy the bartender and nursing student
Jonathan Revusky was in Philly for a few days, and I had a great time showing Jon around. We went to Kensington, Fishtown, Camden, Point Breeze, Little Cambodia and Rittenhouse Square, all but the last at the sinking end of the economic scale, places I’m well familiar with. At Jack’s Famous Bar, we ordered a cheesesteak and a roast beef sandwich for just $4 each, my kind of price, and I thought our lunch excellent. In Camden, I steered Jon to a bodega where a cheesesteak was just $3.50. Jon said, “I would never have walked into a place like that, if I wasn’t with you.” Most Americans wouldn’t go to Camden, period, even if you paid them. Continue reading
War and the State: Business as usual
Part 6 of 6 parts: Deconstructing the State: Getting small
Suppose we chose to join hands with our anti-Federalist ancestors and decided we want to live in a Nation where, “peace, union, and industry, under a mild, free, and steady government” prevail (Storing, 67). Is such an outcome possible? How could we bring it about? Continue reading
War and the State: Business as usual
Part 5 of 6 parts: Critical Thinking: A bridge to the future
You can put away the razor blade. There is a way out. Continue reading
War and the State: Business as usual
Part 4 of 6 parts: End Game: War goes on
All the protests, handwringing, indignation and outrage will change nothing. War will go on. As the CHAplain said in “Mother Courage . . . ,” “the war has really nothing to worry about, it can look forward to a prosperous future.” As Randolph Bourne said, “War is the health of the State.” Continue reading
War and the State: Business as usual
Part 3 of 6 parts: Origin of the State: Barbarians at the gate
The State is a modern invention. It was conceived in violence and has been true to its origins ever since. Rome was in its decline. The barbarians were at the gates. Beginning in the 5th century, Germanic tribes descended from the North, via Scandinavia. Germanic tribes with names like Franks, Angles, Saxons, Lombards, Burgundians, Visigoths, Ostrogoths, Vandals plundered their way across Europe, destroying and killing at will, lending their names to the plots where they settled. “From these raw, belligerent kingdoms rose the first modern nation-states . . .”(Simons, 13). Their society was a simple one, “explicitly organized for one activity, the making of war.” (Simons, 16) Continue reading
What a state-owned bank can do for New Jersey
Phil Murphy, the leading Democratic candidate for governor of New Jersey, has made a state-owned bank a centerpiece of his campaign. He says the New Jersey bank would “take money out of Wall Street and put it to work for New Jersey—creating jobs and growing the economy [by] using state deposits to finance local investments . . . and . . . support billions of dollars of critical investments in infrastructure, small businesses, and student loans—saving our residents money and returning all profits to the taxpayers.” Continue reading
War and the State: Business as usual
Part 2 of 6 parts: Federated governments: The Nation vs. the State
At a fundamental level government is a means for structuring the power dynamics of a given society. It is the means by which a society takes control of itself or fails to. Continue reading
War and the State: Business as usual
Part 1 of 6 parts: War and the health of the State
War has indeed become perpetual and peace no longer even a fleeting wish nor a distant memory. We have become habituated to the rumblings of war and the steady drum beat of propaganda about war’s necessity and the noble motives that inspire it. We will close hospitals. We will close schools. We will close libraries and museums. We will sell off our parklands and water supply. People will sleep on the streets and go hungry. The war machine will go on. Continue reading
Trumpcare/Ryancare dead on arrival: Can we please now try single payer?
The new American Health Care Act has been unveiled, and it has been pronounced an even greater disaster than Obamacare. Dubbed “Ryancare” or “Trumpcare” (over the objection of White House staff), the Republican health care bill is under attack from all sides, with even conservative leaders calling it “Obamacare Lite,” “bad policy,” a “warmed-over substitute,” and “dead on arrival.” Continue reading
Leave no dollars behind
I predict wild success for the Trump administration, at least in its ability to enrich itself. Throughout the campaign it was an open question how rich Trump was. He has, after all, used the bankruptcy rules to his advantage and has failed to pay workers amounts that seem like small change for so-called billionaires. But the question will be open no longer, if all goes as it has been going, Trump will share his new riches with members of his family and administration. Continue reading
How to cut infrastructure costs in half
Americans could save $1 trillion over 10 years by financing infrastructure through publicly-owned banks like the one that has long been operating in North Dakota.
President Donald Trump has promised to rebuild America’s airports, bridges, tunnels, roads and other infrastructure, something both Democrats and Republicans agree should be done. The country needs a full $3 trillion in infrastructure over the next decade. Continue reading
The Italian banking crisis: No free lunch—or is there?
On December 4, 2016, Italian voters rejected a referendum to amend their constitution to give the government more power, and the Italian prime minister resigned. The resulting chaos has pushed Italy’s already-troubled banks into bankruptcy. Continue reading
‘We’ll look at everything’: More thoughts on Trump’s $1 trillion infrastructure plan
The Trump agenda, it seems, is not set in stone. The president-elect has a range of advisors with as many ideas. Steven Mnuchin, his nominee for Treasury secretary, said in November that “we’ll take a look at everything,” even the possibility of extending the maturity of the federal debt with 50-year or 100-year bonds to take advantage of unusually low interest rates. Continue reading
Trump’s $1 trillion infrastructure plan
Lincoln had a bolder solution
In Donald Trump’s victory speech after the presidential election, he vowed, “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.” Continue reading
Prop. 51 versus a state-owned bank: How California can save $10 billion on a $9 billion loan
School districts are notoriously short of funding—so short that some California districts have succumbed to Capital Appreciation Bonds that will cost taxpayers as much is 10 to 15 times principal by the time they are paid off. By comparison, California’s Prop. 51, the school bond proposal currently on the ballot, looks like a good deal. It would allow the state to borrow an additional $9 billion for educational purposes by selling general obligation bonds to investors at an assumed interest rate of 5%, with the bonds issued over a five-year period and repaid over 30 years. $9 billion × 5% × 35 equals $15.75 billion in interest—nearly twice principal, but not too bad compared to the Capital Appreciation Bond figures. Continue reading
How Uncle Sam launders marijuana money
Posted on January 29, 2018 by Ellen Brown
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 →