Out of Control: The Destructive Power of the Financial Markets - SPIEGEL ONLINE - News - International The enemy looks friendly and unpretentious. With his scuffed shoes and thinning gray hair, John Taylor resembles an elderly sociology professor. Books line the dark, floor-to-ceiling wooden shelves in his office in Manhattan, alongside a bust of Theodore Roosevelt and an antique telescope. Taylor is the chairman and CEO of FX Concepts, a hedge fund that specializes in currency speculation. People like Taylor are "like a pack of wolves" that seeks to tear entire countries to pieces, said Swedish Finance Minister Anders Borg. The German tabloid newspaper Bild sharply criticized Taylor on its website, writing: "This man is betting against the euro." A well-read man, Taylor likes to philosophize about the Congress of Vienna and the Treaties of Rome. Taylor grimaces and sighs. Markets Control Politicians Taylor's arguments echo those of everyone in the financial industry -- the executives, the bankers and the big fund managers. In doing so, they aggravate the crisis. Incalculable Risk
Michael Hudson: The State and Local Budget Crisis 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 The cost of the 2011 cutbacks in federal spending will fall most directly on consumers and retirees by scaling back Social Security, Medicare, Medicaid and social spending programs. The population also will suffer indirectly, by lower federal revenue sharing with U.S. states and cities. State and local revenue, 1930-2007 Untaxing real estate has served mortgage bankers by freeing more rental income (the land’s site value) to be paid as interest. While homeowners saw their carrying charges rise, they nonetheless felt more affluent as real estate prices rose – inflated on easier and easier credit terms. From the local fiscal vantage point, these debt-leveraged price gains represented uncollected user fees for the site value provided by public infrastructure and rising prosperity.
David Graeber’s Debt: My First 5,000 Words In the final lines of his introduction to Debt: The First 5,000 Years, David Graeber writes that “[f]or a very long time, the intellectual consensus has been that we can no longer ask Great Questions.” And as he put it in a guest post over at Savage Minds: The aim of the book was to write the sort of book people don’t write any more: a big book, asking big questions, meant to be read widely and spark public debate…[T]he credit crisis —and near collapse of the global economy in 2008—afforded the perfect opportunity. Debt is a “big book,” in other words, because he wants to re-open a set of questions that had come to seem closed “for a very long time,” the questions of “what human beings and human society are or could be like—what we actually do owe each other, what it even means to ask that question.” It’s a hard book to review, though, because it’s doing several irreducibly different things at once (which I’ll try to lay out in as logical a fashion as I can manage).
John Lanchester · The Non-Scenic Route to the Place We’re Going Anyway: The Belgian Solution · LRB 8 September 2011 Quarterly GDP data don’t, on the whole, tend to make the person studying them laugh out loud. The most recent set, however, are an exception, despite the fact that the general picture is of unrelieved and spreading economic gloom. Instead of the surge of rebounding growth which historically accompanies successful exit from a recession, we have the UK’s disappointing 0.2 per cent growth, the US’s anaemic 0.3 per cent and the glum eurozone average figure of 0.2 per cent. That number includes the surprising and alarming German 0.1 per cent, the desperately poor French 0 per cent and then, wait for it, the agreeably frisky Belgian 0.7 per cent. I’m told that the cliché du jour in financial markets involves reference to ‘uncharted territory’. A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. In other respects, though, the idea that the current crisis represents a new development is mistaken. Would that matter?
John Michael Greer on Resilience vs Efficiency “The rise of this term to its present popularity in green circles has a history worth noting. A year or two ago, the word “sustainability” began to lose its privileged place in the jargon of the time, as it began to sink in that no matter how much manhandling was applied to that much-abused term, it couldn’t be combined with the phrase “modern middle-class lifestyle” without resulting in total absurdity. Enter “resilience”, as another way to talk about what too many people nowadays want to talk about, generally to the exclusion of more useful conversations: the pretense that a set of lifestyles, social habits, and technologies that were born in an age of unparalleled extravagance can be maintained as the material basis for that extravagance trickles away. The word “sustainability”, it bears remembering, has a perfectly clear meaning. The problem with “resilience”, though, is that it also has a perfectly clear meaning. Okay, now that you’ve stopped spluttering, let me explain.
When Debt Is More Important Than People, The System Is Evil Submitted by Charles Hugh Smith from Of Two Minds When Debt Is More Important Than People, The System Is Evil The Empire of Debt has only one end-point: a death spiral. It is evil and must be dismantled. Ethics has no place in the Empire of Debt. The financialized Status Quo is careful to limit the language used to describe the situation in Greece to the subtexts of "obligations" and "avoiding chaos." The reality being masked is that debt is now more important than people. 1. 2. This begs further investigation. The ethics of debt, at least in the officially sanctioned media, boils down to: nobody made them borrow all those euros, and so their suffering is just desserts. What's lost in this subtext is the responsibility of the lender. Consider an individual who is a visibly poor credit risk. Now a lender comes along who can create credit out of thin air (via fractional reserve banking) and offers this poor credit risk $100,000 in collateral-free debt at low rates of interest.
Where Is Our Oil Price Collapse? From Jim Quinn of The Burning Platform Where Is Our Oil Price Collapse? Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded: But, a funny thing happened on the way to another oil price collapse. A Plunging US Dollar
Sachs: The Great Failure of Globalization Jeff Sachs: The great failure of globalization, by Jeffrey Sachs, Commentary, Financial Times: ...I’ve watched dozens of financial crises up close... Neither the US nor Europe has even properly diagnosed the core problem, namely that both regions are being whipsawed by globalization. Jobs for low-skilled workers in manufacturing, and new investments in large swaths of industry, have been lost to international competition. ... The simple fact is that globalization has not only hit the unskilled hard but has also proved a bonanza for the global super-rich. An improved fiscal policy in the transatlantic economies would therefore be based on three realities. Export-led growth is the other under-explored channel of recovery. Sadly, these global economic currents will continue to claim jobs and drain capital until there is a revival of bold, concerted leadership. ...
Debt The First 5,000 Years David Graeber “Brilliant … and unexpectedly funny.” —The Spectator (selected as a book of the year) Every economics textbook says the same thing: Money was invented to replace onerous and complicated barter systems—to relieve ancient people from having to haul their goods to market. The problem with this version of history? Here anthropologist David Graeber presents a stunning reversal of conventional wisdom. With the passage of time, however, virtual credit money was replaced by gold and silver coins—and the system as a whole began to decline. DAVID GRAEBER teaches anthropology at Goldsmiths College, University of London. “An absolutely indispensable—and enormous—treatise on the history of money and its relationship to inequality in society.” “Mr. “Debt [is] meticulously and deliciously detailed.” “Written in a brash, engaging style, the book is also a philosophical inquiry into the nature of debt — where it came from and how it evolved.” “[A]n engaging book.
The Greater Recession: America Suffers from a Crisis of Productivity - Derek Thompson - Business In fact, real wages for middle class men have declined by 28 percent since 1969, according to a report from the Hamilton Project. For men without a high school degree, they've fallen by a whopping 66 percent. "Stagnation is too weak a word," said Michael Greenstone, author of the report. "The decline in earnings shakes the core of the American Dream." Economists got it wrong, Greenstone said, because they compared wages among all working men rather than among all "working-age" men. "This decline in the earnings opportunities for men has had profound influences on American society," Greenstone said. This finding has deep implications. ALL ABOUT PRODUCTIVITY(or: If We're Working Less, Who's Working More?) Americans have a complicated relationship with productivity. Don't ask David Allen to explain this. We know where the jobs are going -- to machines, software, and foreign workers. What's so bad about 1950s wages, anyway? Poverty is overrated. It doesn't end there. Look at this graph.