Monday, December 8, 2014

Capitalism is crazy

Capitalism is crazy.
NY Times documents how a company is destroyed sending jobs overseas.  California Teachers Retirement System is part of the destroyer team.
Timken Steel of Canton Ohio.
…If he can’t, or if another company comes along with an offer too rich to refuse, Mr. Timken acknowledges what many in Canton would rather not say out loud. “If the number is big enough, the board is going to have to look at it and say, ‘Ugh, O.K., unless you can show me a plan that’s better than that, we’re going to take it,’ ” he said. “We’re a publicly traded company.”
As in all publicly traded companies, TimkenSteel’s board and top executives have a fiduciary duty to shareholders to maximize both profits and investor returns. For many companies in the region, that has meant cutting costs and moving production to places where labor is cheaper. Goodyear Tire & Rubber, for example, was founded in nearby Akron in 1898, but Goodyear hasn’t made regular tires in the onetime rubber capital of the world in more than three decades….
“The professor said we’d all be bankers and consultants and lawyers and health care professionals,” Mr. Timken recalled. “There’s a role for those people, but the ripple effect of manufacturing is dramatically higher than the ripple effect of banking. It creates wealth. And countries that have let it slip away have suffered.”

Tuesday, December 2, 2014

Full Show: The Long, Dark Shadows of Plutocracy | Moyers & Company |

Full Show: The Long, Dark Shadows of Plutocracy | Moyers & Company |

Capital in the Twenty-First Century- A Review

 Capital, Kapital, and the Continuing Struggle  By Bill Barclay
Capital in the Twenty-First Century
By Thomas Piketty
What can you say about a book that has been reviewed dozens of times, was a New York Times best seller for three weeks, led to numerous book discussion groups, and has been a cultural phenomenon? You can say that Thomas Piketty’s Capital in the Twenty-First Century (here­after Capital) is worth the fuss. It has brought what socialists have known for a long time to the wider public.
Pushing Paradigm Change
In the last 40 years, the dominant paradigm in economics has been that of Friedrich Hayek’s “catal­laxy,” defi ned as “the
order brought about by the mutual adjust­ment of many indi­vidual economies in a market.” Translation: unregulated markets will eventually work out to the benefit of all. In support of that para­digm, Nobel Prize win­ner Robert Lucas has argued that “of the ten­dencies that are harm­ful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on
questions of distribu­tion...” And focusing on distribution is exactly what Piketty does. He analyzes the distribution of income and wealth and their determinants for the past 250 years to show that unregulated capitalism is making the rich richer and the rest of us poorer. This will not come as a surprise to those who have been paying attention. What’s new is that our economic and po­litical elites have taken notice, some favorably (Paul Krugman), others less so (the Wall Street Journal editorial board). Some whose praise we might not expect argue that the book raises important ques­tions (the World Bank’s Branko Milanovic). But none are ignoring it.
A major reason for the recognition, grudging or otherwise, of Capital, is its popular reception. Every­where, individuals, discussion groups, and meetups have been reading and talking about the book—or at least part of it. One analysis maintains that most people reading electronic versions of Capital do not get past page 26, but you can learn a lot from those pages.
A significant part of the cultural phenomenon is a matter of timing, but here luck and hard work rein­force each other. Although Occupy is given the credit for popularizing the 1% versus 99% meme fi rst artic­ulated by economist Joseph Stiglitz, it is Piketty and his colleague Emmanuel Saez who have been doing most of the heavy lifting, with more than a decade of work on income concentration. The combination resulted in what an economist might call a virtuous circle: Piketty and Saez labor in (relative) obscurity
to increase focus on the
top 1%, Occupy’s archi­tects use their work in a mass mobilization, and Piketty publishes a book that further opens the door for new politi­cal thinking and orga­nizing around the prob­lem of inequality.

Monday, December 1, 2014

Wall Street is Taking Over our Pensions

Wall Street is Taking Over America's Pension Plans
Portside Date: 
December 1, 2014
Murtaza Hussain 
Date of Source: 
Thursday, November 20, 2014
The Intercept
Coverage of the midterm elections has, understandably, focused on the shift in political power from Democrats toward Republicans. But behind the scenes, another major story has been playing out. Wall Street spent upwards of $300M [1] to influence the election results. And a key part of its agenda has been a plan to move more and more of the $3 trillion dollars in unguarded government pension funds into privately managed, high-fee investments — a shift that may well constitute the biggest financial story of our generation that you’ve never heard of.
Illinois, Massachusetts, and Rhode Island all recently elected governors [2] who were previously executives and directors at firms which managed investments on behalf of state pension funds. These firms are now, consequently, in position to obtain even more of these public funds. This alone represents a huge payoff on that $300M investment made by the financial industry, and is likely to result in more pension money going into investments which offer great benefits for Wall Street but do little for the broader economy.

Sunday, November 30, 2014

European Union and Austerity

Roberto Savio
November 26, 2014
Inter Press Service
Since the signing of the Single European Act in 1986, the European Union has been unable to agree on legislation which would provide working people with minimum social guarantees and common rights as workers in the face of the onslaught of the unified market forces. The result has been the continued erosion in the social well being of European workers.

Anti-austerity protest in Brussels, Belgium, home to the Parliament of the European Union, Surat Lozowick
After the Italian sea search-and-rescue operation Mare Nostrum at a cost of nine million euros a month, through which the Italian Navy has rescued nearly 100,000 migrants – although perhaps up to 3,000 have died – from the Mediterranean since October 2013, Europe is now presenting its new face in the Mediterranean.
The European Union is launching Joint Operation Triton with a monthly budget of 2.9 million euros and funds secured until the end of the year. Its function is to enforce border controls – not to save “boat people” – and it will patrol just thirty nautical miles from the coast, which pales in comparison with Italy’s Mare Nostrum operation which saw patrols being sent close to the Libyan coast.

Monday, November 24, 2014

Bottom Economics _ Krugman

Rock Bottom Economics
Paul Krugman
Six years ago the Federal Reserve hit rock bottom. It had been cutting the federal funds rate, the interest rate it uses to steer the economy, more or less frantically in an unsuccessful attempt to get ahead of the recession and financial crisis. But it eventually reached the point where it could cut no more, because interest rates can’t go below zero. On Dec. 16, 2008, the Fed set its interest target between 0 and 0.25 percent, where it remains to this day.
The fact that we’ve spent six years at the so-called zero lower bound is amazing and depressing. What’s even more amazing and depressing, if you ask me, is how slow our economic discourse has been to catch up with the new reality. Everything changes when the economy is at rock bottom — or, to use the term of art, in a liquidity trap (don’t ask). But for the longest time, nobody with the power to shape policy would believe it.

Saturday, November 8, 2014

The $ 9 Billion Fraud of J. P. Morgan Chase

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This Changes Everything

A review of the book that I discussed in class.

Naomi Klein CreditSuzanne DeChillo/The New York Times 
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“Every inhabitant of this planet must contemplate the day when this planet may no longer be habitable.” Thus spoke President Kennedy in a 1961 address to the United Nations. The threat he warned of was not climate chaos — barely a blip on anybody’s radar at the time — but the hydrogen bomb. The nuclear threat had a volatile urgency and visual clarity that the sprawling, hydra-headed menace of today’s climate calamity cannot match. How can we rouse citizens and governments to act for concerted change? Will it take, as Naomi Klein insists, nothing less than a Marshall Plan for Earth?
“This Changes Everything: Capitalism vs. the Climate” is a book of such ambition and consequence that it is almost unreviewable. Klein’s fans will recognize her method from her prior books, “No Logo: Taking Aim at the Brand Bullies” (1999) and “The Shock Doctrine: The Rise of Disaster Capitalism” (2007), which, with her latest, form an antiglobalization trilogy. Her strategy is to take a scourge — brand-­driven hyperconsumption, corporate exploitation of disaster-struck communities, or “the fiction of perpetual growth on a finite planet” — trace its origins, then chart a course of liberation. In each book she arrives at some semihopeful place, where activists are reaffirming embattled civic values.
To call “This Changes Everything” environmental is to limit Klein’s considerable agenda. “There is still time to avoid catastrophic warming,” she contends, “but not within the rules of capitalism as they are currently constructed. Which is surely the best argument there has ever been for changing those rules.” On the green left, many share Klein’s sentiments. George Monbiot, a columnist for The Guardian, recently lamented that even though “the claims of market fundamentalism have been disproven as dramatically as those of state communism, somehow this zombie ideology staggers on.” Klein, Monbiot and Bill McKibben all insist that we cannot avert the ecological disaster that confronts us without loosening the grip of that superannuated zombie ideology.

Oligarchs determine our politics.

Monday, November 3, 2014

Government spending per country.

Data summary

Government spending by country - projected. GDP. 
Country200820122017%-point change, 2012- 2017
Australia 34.48 36.4 34.56 -1.84 
Austria 49.34 51.51 49.25 -2.26 
Belgium 49.8 52.81 50.68 -2.13 
Canada 39.83 42.02 40.54 -1.48 
Cyprus 42.13 47.15 47.92 0.77 
Czech Republic 41.15 43.52 43.77 0.25 
Denmark 51.6 58.22 52.16 -6.06 
Estonia 41.04 45.26 39.49 -5.77 
Finland 49.32 54.37 53.84 -0.53 
France 53.28 56.17 52.71 -3.46 
Germany 44.05 44.93 44.11 -0.82 
Greece 50.6 51 42.78 -8.22 
Hong Kong 18.9 20.88 17.76 -3.12 
Iceland 44.64 44.56 40.47 -4.09 
Ireland 42.57 42.83 35.97 -6.86 
Israel 45.43 44.28 43.94 -0.34 
Italy 48.6 51.01 49.73 -1.28 
Japan 35.73 41.12 40.32 -0.8 
Korea 22.39 21.51 20.7 -0.81 
Luxembourg 37.12 43.81 45.11 1.3 
Malta 43.93 43.97 41.21 -2.76 
Netherlands 45.98 50.08 49.86 -0.22 
New Zealand 32.67 34.24 29.88 -4.36 
Norway 39.64 44.31 46.79 2.48 
Portugal 44.8 46.7 44 -2.7 
Singapore 17.85 17.68 19.87 2.19 
Slovak Republic 35.05 36.93 36.67 -0.26 
Slovenia 41.46 46.16 43.09 -3.07 
Spain 41.3 42.7 39.53 -3.17 
Sweden 49.15 49.16 46.6 -2.56 
Switzerland 31.3 33.44 33.3 -0.14 
Taiwan 22.3 21.15 19.41 -1.74 
United Kingdom 42.92 45.46 39.17 -6.29 
United States 39.2 40.65 39.39 -1.26 
SOURCE: International Monetary Fund, World Economic Outlook Database, October 2012

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