“A time has come when we must take a stand and the stand is
clear…Kenya is making a statement that for us ivory is worthless unless
it is on our elephants,” Uhuru Kenyatta, Kenya’s current president
said.
Thursday, May 12, 2016
Wednesday, May 11, 2016
Why Bernie Will, Should and Must Stay in the Race
By Jim Hightower
Nation of Change
Surprisingly, this week’s prize for “Stupidest Political Comment in the Presidential Race” doesn’t go to Donnie Trump or Ted Cruz.
Rather, the honor goes to the clueless cognoscenti of conventional political wisdom. These pundits and professional campaign operatives have made a unilateral decision that Bernie Sanders must now quit the race for the Democratic nomination. Why? Because, they say: “He Can’t Win.”
Actually, he already has. Sanders’ vivid populist vision, unabashed idealism, and big ideas for restoring America to its own people have jerked the presidential debate out of the hands of status quo corporatists, revitalized the class consciousness and relevance of the Democratic Party, energized millions of young people to get involved, and proven to the Democratic establishment that they don’t have to sell out to big corporate donors to raise the money they need to run for office.
Bernie has substantively — even profoundly — changed American politics for the better, which is why he’s gaining more and more support and keeps winning delegates. From the start, he said: “This campaign is not about me” — it’s a chance for voters who have been disregarded and discarded to forge a new political revolution that will continue to grow beyond this election and create a true people’s government.
From coast to coast, millions of voters have been “Feeling the Bern.” That’s the campaign slogan that grassroots supporters created to express their passion for the unconventional presidential run being made by Bernie Sanders.
Yes, passion — an outpouring of genuine excitement that is (as we say in Texas) “hotter than high school love.” All this for a 74-year-old Democratic Socialist who is openly taking on the corporate plutocracy that’s been knocking down the middle class and holding down the poor. Sanders is the oldest candidate in the race — yet, politically, he’s the youngest candidate, exuberantly putting forth an FDR-sized vision and agenda to lift up America’s workaday majority. And, guess what? It turns out that workaday Americans really value democracy over plutocracy, so that’s where his passionate support comes from.
Need I mention that the moneyed powers — and the politicians hooked on their money — hate this affront to their cozy politics-as-usual/ business-as-usual system? Especially shocking to them is that Sanders’ supporters have found their way around the usual Wall of Big Money that the establishment always throws us to thwart populist campaigns. This time, though, a counter-force of common folks has created a widely-successful campaign fund of their own to support their Bernie Rebellion. How successful? A whopping $182-million has been raised in millions of small donations. How small? They average $27 each.
That’s a revolution, right there! Every revolution needs a slogan, so here’s one that used to be on the marquee of a vintage, locally-owned motel just down the street from where I live in Austin: “No additives, No preservatives, Corporate free since 1938.” That perfectly sums up the unique people’s campaign that Bernie-people have forged for themselves.
The keepers of the Established Order fear this grassroots uprising by no-name “outsiders,” and they know that this year’s Democratic nomination is still very much up for grabs, so they’re stupidly trying to shove Sanders out before other states can vote. But Bernie and the mass movement he’s fostering aren’t about to quit — they’ll organize in every primary still to come, be a major force at the Democratic convention, and keep pushing their ideals and policies in the general election… and beyond.
As Sanders puts it: “I run not to oppose any man or woman, but to propose new and far-reaching policies to deal with the crisis of our times… It may be too late to stop the billionaire class from trying to buy the presidency and congress… But we owe it to our children and grandchildren to try…We need to face up to the reality of where we are as a nation, and we need a mass movement of people to fight for change.”
That’s what real politics should be — not merely a vacuous campaign to elect a personality, but a momentous democratic movement fighting for the common good.
Tuesday, May 10, 2016
The Utter Truthlessness of Donald Trump
The cover of 'TrumpNation: The Art of Being the Donald' by Timothy O'Brien. (photo: Warner Books)
By Charles Pierce, Esquire
10 May 16
And more lessons from this week's Sunday showz.
We don't ordinarily touch on the Sunday Showz from the cable networks, but we have to say that Exasperated Jake Tapper
on CNN has become one of our favorite new television programs. On
Sunday, for reasons wholly related to Donald Trump, he hosted Princess Dumbass of the Northwoods. And the word salad bar was wide open!
"I want to help and not hurt, and I am such a realist that I realize there are a whole lot of people out there who say, 'Anybody but Palin.' I wouldn't want to be a burden on the ticket and I recognize that in many, many eyes, I would be that burden. So, you know, I just want the guy to win. I want America to win."
She'll settle for Secretary of State, I guess. And, sadly, the other half of the 2008 Republican ticket
seems to have come loose from his moorings. Also on CNN, John McCain
has surrendered to surreality because that's all he has left.
"You have to draw the conclusion that there is some distance, if not a disconnect, between party leaders and members of Congress and the many voters who have selected Donald Trump to be the nominee of the party," McCain said when asked about the comments by House Speaker Paul Ryan and his close friend Sen. Lindsey Graham, both of whom have so far refused to back Trump. "You have to listen to people that have chosen the nominee of our Republican Party," McCain said. "I think it would be foolish to ignore them."
So he says about a vulgar talking yam who began his
campaign by ridiculing the torments of the damned that McCain endured in
North Vietnam. (This is right up there with his sucking up eight years
later to the forces who slandered his daughter in 2000. Why does it
always seem that the way to gain John McCain's favor is to treat him as
badly as possible?) He then went on to defend his choice of running mate
and to propose one for He, Trump.
"I don't often make a comment like this. But she was treated terribly by what we know as the mainstream media and that's the only thing I will ever resent about my presidential campaign is her treatment by the media. It was disgraceful."
And McCain's suggested running mate this time around?
None other than my new friend, Senator Joni Ernst of Iowa, who is Sarah
Palin, if you substitute pig testicles for moose jerky. From The Washington Examiner:
Asked about Iowa Sen. Joni Ernst, whose name has been floated as someone the Trump campaign may be vetting, the Arizona senator heaped praise on her. "Joni Ernst would be tremendous. She is really remarkable," said McCain. "I think there's a number of members in the Senate."
Genius! I can't wait to see what the folks in the writer's room of Exasperated Jake Tapper have for a season finale.
On the networks, however, this week's House Cup goes
to my man Chuck Todd, who always has been the caretaker of the Overlook
Hotel. Todd had He, Trump over for a chat and, after a few minutes of
stunning incoherence on the subject of election law, we were treated to
this amazing moment of television.
TODD: Wait a minute. Let me stop you there. You just said, "Businesses might pay a little bit more." You just said, "Business might pay a little bit more, but we're going to get 'em a massive tax cut." You just said it within ten words.
TRUMP: No, no. I didn't say it. Excuse me. I said they might have to pay a little bit more than my proposal, Chuck. I said they might have—
TODD: Oh, your proposal. Okay. I just wanted to get that clear.
TRUMP: —yeah, than my proposal.
TODD: Fair enough.
TRUMP: I'm not talking about more than they're paying now.
TODD: Got you.
TRUMP: We're the highest taxed nation in the world. Our businesses pay more taxes than any businesses in the world. That's why companies are leaving. So they may have to pay a little bit more than my proposal, is what I mean. I assume you knew that. I assume you know that.
TODD: Got you. Okay. No, no, no, no. I just wanted to clear that up.
TRUMP: Okay, good. Good, I'm glad you cleared it up—
Forget that little pat on the head there at the end.
My man Chuck Todd had He, Trump pinned. The way you know that is that
He, Trump had to resort to a barefaced non-fact about how we are "the
highest-taxed nation in the world." (This is not within an area code of the truth. Criminy, even PolitiFact noticed.) And what do we get for pushback? "Fair enough" and two "gotchas."
This is going to be a real crisis for elite political
journalism from now until November, perhaps the deepest crisis elite
political journalism has faced since the run-up to the invasion of Iraq,
and that one didn't turn out well at all.
The Republican Party is about to nominate an utterly truthless fellow
who doesn't know how much he doesn't know and is prepared to lie his way
past everything he doesn't know anyway. I'm afraid that elite political
journalism is so wedded to "balance" that it is in no way prepared to
cope with a post-reality candidate. (Professor Krugman shares this concern.)
"Fair enough" and "gotcha" are not appropriate answers to the assertion
by a candidate that he plans to heal the national economy by setting up
a roulette wheel and two blackjack tables in the Department of the
Treasury.
If hope is not a plan, then bluster and bombast are
even less of one. Elite political journalism has a greater
responsibility to the Republic than "balance" or "objectivity." This is
going to be a long six months.
Monday, May 9, 2016
Raise the Minimum Wage, Reduce Crime?
'Fight for Fifteen'. (photo: David Ryder/Reuters)
By Jukeyka Lantigua-Williams, The Atlantic
04 May 16
A new White House report links higher hourly incomes to lower rates of law-breaking.
The Council of Economic Advisers, which advises the president on national economic policy, recently unveiled key findings that cast doubt on the criminal-justice system’s ability to reduce and prevent crime. “Research has established that rising incarceration is not principally responsible for the reduction in crime, and that higher levels of imprisonment have occurred despite—not because of—changes in underlying criminal activity,” states the report. This is a significant finding: For decades, incarceration advocates promoted the opposite idea. So, if putting people in jails and prisons does not reduce crime, what does?
More education, more job opportunities, school enrichment activities, and a basic living wage are among the factors listed in the study. “Higher wages for low-skilled workers reduce both property and violent crime, as well as crime among adolescents,” the authors write. “The impact of wages on crime is substantial … a 10 percent increase in wages for non-college educated men results in approximately a 10 to 20 percent reduction in crime rates.” More concretely, the Council calculates that raising the minimum wage to $12 by 2020 “would result in a 3 to 5 percent crime decrease (250,000 to 510,000 crimes) and a societal benefit of $8 to $17 billion dollars.”
“The research on this is really clear and really consistent; it cuts across party lines,” said Jason Furman, the Council’s chairman and President Obama’s chief economist, at a White House forum. For example, the Council estimates that “a 10 percent increase in wages for non-college educated men leads to a 10 to 20 percent reduction in crime rates.”
The Council outlined several specific policy recommendations for state governments and private businesses in dealing with the formerly incarcerated. The Obama administration has already instructed the Office of Personnel Management—the government’s HR department, effectively—to delay criminal-background checks beyond initial job applications, for example. And the Departments of Justice and Labor will establish a National Clean Slate Clearinghouse to help legal-aid programs, public-defenders offices, and reentry-services providers with “record-cleaning and expungement.”
But there are some practical obstacles involved with these seemingly straightforward recommendations. Over 46,000 state and federal laws restrict “employment, occupational licenses, and business licenses for people with criminal records,” according to the report. Around 70 percent of employers conduct criminal background checks. Additionally, there are more than 1,000 mandatory license exclusions for people with records of misdemeanors and nearly 3,000 exclusions for felony records, per the American Bar Association. The Council also determined that “applicants with criminal records were 50 percent less likely to receive an interview request or job offer.” The combined results of these practices are multiple, leaving people to struggle with chronic underemployment, a purgatory of low-wage jobs, stagnant skill sets, and a lack of professional mobility. Most drastically, it means that formerly incarcerated people earn considerably less than other workers—between 10 and 40 percent less, according to Council’s report.
The irony is that many among the currently incarcerated might not have ever committed crimes if more employment and higher wages were available. Even summer jobs for disadvantaged young people have a meaningful impact on the crime rate; in one case, the probability of incarceration dropped by 10 percent for those who participated in such programs in New York City, according to the Council. In some instances, the Council writes, “states with more flexible labor-market conditions for individuals with criminal records may have lower recidivism rates.”
Offering a higher minimum wage and improved standard of living to those who most need it isn’t just about reducing poverty—it would have a quantifiable impact on the country’s overall crime rate.
Sunday, May 8, 2016
Public meeting in Payson for Rim Country Environmental Impact Statement Proposed Action
The Forest Service will be presenting information
and gathering preliminary public feedback for the Rim Country
Environmental Impact Statement (EIS) draft Proposed Action at an
informational meeting Tuesday, May 10 from 6:00 to 8:00 p.m.
at the Messinger Funeral Home in Payson, AZ.
The Rim Country EIS is the second landscape-scale,
multi-forest EIS in the Four Forest Restoration Initiative (4FRI). It
will analyze restoration treatments on approximately 1.25 million acres
of National Forest System Land across the Mogollon
Rim near Blue Ridge, Payson, Show Low, and Springerville.
The meeting, hosted by the 4FRI Stakeholder Group,
is open to all members of the public interested in 4FRI the crucial
treatments proposed in the Rim Country EIS. The meeting will begin with a
45-minute presentation by the Forest Service
on 4FRI projects, other projects around Payson, and the draft Proposed
Action for the Rim Country EIS. The remainder of the meeting will be an
open house where the public will have an opportunity to visit with
resource specialists and provide feedback on the
draft Proposed Action.
“This is an informal, informational meeting that we
are offering ahead of the formal public scoping meetings and comment
periods identified by the National Environmental Policy Act,” says
Annette Fredette, 4FRI Planning Coordinator. Those
meetings and opportunities to provide comments for the public record
will occur this summer with the release of the Notice of Intent and
Proposed Action.
“Our intent for the meeting on May 10
is to involve the public in the collaborative process before the formal
planning process even begins. It’s important to us that members of the
local communities be part of this every step of the way.”
Saturday, May 7, 2016
Socialize the Banks
Goldman Sachs. (photo: Reuters)
By Nuno Teles, Jacobin
7 May 16
Breaking up the banks won’t do. They should be publicly owned and democratically controlled.
These days observers worry about banks — European institutions like Germany’s Deutsche Bank, France’s Societé Generale, and Italy’s Monte di Pascoale, not to mention the zombie banks that populate the austerity-ridden eurozone periphery in Greece, Portugal, and Spain. These big banks are widely seen as global capitalism’s next weak link, capable of causing massive financial instability if they go bust.
Such concern isn’t particularly surprising — banks were at the center of the latest crisis from the beginning. Indeed, it wasn’t subprime market defaults that unleashed the destructive financial turmoil of 2007–8, but their ruinous impact on a major investment bank, Lehman Brothers. Lehman’s failure — and the state’s subsequent refusal to bail out the bank — created a credit crunch that sent the entire financial sector, as well as the world economy, into a tailspin.
As the US crisis morphed into the eurozone crisis, banks were again at the epicenter. The debt burden of peripheral states and the prospect of their default threatened the solvency of the entire European banking sector, which had lent to agents public and private.
Europe’s major banks, already troubled by their souring US investments (among other things) faced collapse. Only the quick substitution of bank-held debt for official debt — taken on from the troika of European lenders and the IMF in return for punitive fiscal austerity — saved them.
Yet here we are today, facing another potential wave of failing banks. The lingering instability highlights the hollowness of the G-20 countries’ pledges to reform the financial sector in 2008-09. Promises to “extend regulatory oversight and registration to Credit Rating Agencies,” “take action against non-cooperative jurisdictions, including tax havens,” and “prevent excessive leverage and require buffers of resources to be built up in good times” have yielded little substantive change.
Granted, bank reform legislation has been passed in both the US and Europe. The Dodd-Frank Act in the US, the Eric Liikanen working group recommendations in the European Union, and, ultimately, the Bank of International Settlements’ Basel III regulation all raised capital and liquidity requirements and produced new resolution mechanisms for banks.
But once the initial shock of the crisis passed, banks lobbied intensely to water down the rules, and regulators set an extremely low bar for compliance. The banking business, in short, resumed its old practices — but now in a financial landscape marked by even larger banks that posed far greater systemic risks to the world economy.
The Left and Credit
So as the banks have a field day, where is the Left?
Seemingly nowhere to be found. In the core capitalist countries, the Left has repeatedly failed to crawl out from its defensive trenches and seize the opportunity that the crisis opened. Proposals concerning the financial sector have been weak at best, limited to regulation and taxation measures, such as the popular “Tobin Tax.”
Meanwhile, questions about how banks should be organized and governed aren’t even raised. The Left has either latched onto market-based arguments of “let them fail” or turned to more benign liberal solutions like breaking up big banks. As a result, it has failed to contribute to crucial debates about modern capitalism’s pivotal institutions.
Part of the reason why is the Left’s profound weakness: it has little capacity to propose and implement new policies that benefit the working class. But the Left’s tendency to shy away from debates about banks and finance is rooted in other factors as well.
For one, the Left tends to emphasize production over circulation, the sphere where finance is located. As a result the role of finance is under-examined, dismissed as a big Ponzi scheme that capital escapes to when it’s faced with a “structural blockage” in the sphere of production.
At the same time (particularly since the 2008–2010 crisis), the Left has viewed credit with extreme suspicion, often seeing it as an inherent evil to be restrained.
But while the effects of financialization have been dire for many ordinary people, credit is central to any economy, capitalist or otherwise.
As pointed by the political economist, Costas Lapavitsas, originating in the pre-capitalist exchange of commodities (like cloth and foodstuffs), credit is predicated on the lender-borrower interaction: the lender knows something about the borrower’s material circumstances, then chooses whether to enter into a relationship defined by the “promise to pay.”
In capitalism — where loanable capital is common and often doled out by banks — the social relations behind credit are quite depersonalized. Borrowers are much more homogenized, and their ability to repay is gauged by purportedly objective criteria like present-day credit scores.
Banks integrate and mobilize these criteria — information that is unavailable to other economic agents — through their privileged access to the financial dealings of firms and households.
The ability to assess the soundness of a borrower’s “promises to pay” puts banks in a powerful position. And this position is reinforced by banks’ other information-gathering activities — account management, asset management, foreign exchange — which fall outside lending activities but are at the core of investment banking.
The terrain on which banks operate (and compete) has been in flux since the 1970s. Liberalization, deregulation (and capital-friendly re-regulation) of financial markets, and the rollback of public services have conspired with new technologies to create entirely new financial markets, products, and agents.
Financial income, in turn, has migrated to more and more sectors, including housing (in the form of mortgage payments), pensions (commissions and fees charged on private pension funds), and even utilities (bonds and similar mechanisms for financing infrastructure).
The rise of capital markets and the emergence of new financial agents have not caused the traditional banking sector to wither. New markets opened by public policy, new credit assessment instruments, and faster access to data have simply given banks new agents and markets to loan money to — like households, who have become the main recipients of loanable capital in most developed countries, particularly in the form of mortgages.
Banks have also entered the lucrative market of managing savings and financial assets. As a result, banks have grown bigger, with expanding balance sheets and increasing profits relative to the overall economy.
Contemporary states have helped spur this financialization of the global economy, expanding their purview far beyond constructing new financial markets or transforming the provision of different goods and services for capital’s benefit. Governments today play a paramount role in backing banks’ power.
The reason is fairly straightforward: banks hold, through deposits, “promises to pay” that have a shorter maturity than their assets (others’ promises to pay). Or, more simply, they owe more than they hold at any given time. This imbalance is a source of potential fragility, as was clear during the 2008 liquidity shortage.
In order to prevent boom-and-bust cycles, the state stepped in, providing a financial backstop through its control of the money supply. Banks are given exclusive access to central bank reserves, which banks use to settle their liabilities. By conferring on banks the ability to create credit (and money) — a right that other economic agents don’t have — states give banks an incomparable power over the rest of the economy.
The Case for Public Banks
Seemingly nowhere to be found. In the core capitalist countries, the Left has repeatedly failed to crawl out from its defensive trenches and seize the opportunity that the crisis opened. Proposals concerning the financial sector have been weak at best, limited to regulation and taxation measures, such as the popular “Tobin Tax.”
Meanwhile, questions about how banks should be organized and governed aren’t even raised. The Left has either latched onto market-based arguments of “let them fail” or turned to more benign liberal solutions like breaking up big banks. As a result, it has failed to contribute to crucial debates about modern capitalism’s pivotal institutions.
Part of the reason why is the Left’s profound weakness: it has little capacity to propose and implement new policies that benefit the working class. But the Left’s tendency to shy away from debates about banks and finance is rooted in other factors as well.
For one, the Left tends to emphasize production over circulation, the sphere where finance is located. As a result the role of finance is under-examined, dismissed as a big Ponzi scheme that capital escapes to when it’s faced with a “structural blockage” in the sphere of production.
At the same time (particularly since the 2008–2010 crisis), the Left has viewed credit with extreme suspicion, often seeing it as an inherent evil to be restrained.
But while the effects of financialization have been dire for many ordinary people, credit is central to any economy, capitalist or otherwise.
As pointed by the political economist, Costas Lapavitsas, originating in the pre-capitalist exchange of commodities (like cloth and foodstuffs), credit is predicated on the lender-borrower interaction: the lender knows something about the borrower’s material circumstances, then chooses whether to enter into a relationship defined by the “promise to pay.”
In capitalism — where loanable capital is common and often doled out by banks — the social relations behind credit are quite depersonalized. Borrowers are much more homogenized, and their ability to repay is gauged by purportedly objective criteria like present-day credit scores.
Banks integrate and mobilize these criteria — information that is unavailable to other economic agents — through their privileged access to the financial dealings of firms and households.
The ability to assess the soundness of a borrower’s “promises to pay” puts banks in a powerful position. And this position is reinforced by banks’ other information-gathering activities — account management, asset management, foreign exchange — which fall outside lending activities but are at the core of investment banking.
The terrain on which banks operate (and compete) has been in flux since the 1970s. Liberalization, deregulation (and capital-friendly re-regulation) of financial markets, and the rollback of public services have conspired with new technologies to create entirely new financial markets, products, and agents.
Financial income, in turn, has migrated to more and more sectors, including housing (in the form of mortgage payments), pensions (commissions and fees charged on private pension funds), and even utilities (bonds and similar mechanisms for financing infrastructure).
The rise of capital markets and the emergence of new financial agents have not caused the traditional banking sector to wither. New markets opened by public policy, new credit assessment instruments, and faster access to data have simply given banks new agents and markets to loan money to — like households, who have become the main recipients of loanable capital in most developed countries, particularly in the form of mortgages.
Banks have also entered the lucrative market of managing savings and financial assets. As a result, banks have grown bigger, with expanding balance sheets and increasing profits relative to the overall economy.
Contemporary states have helped spur this financialization of the global economy, expanding their purview far beyond constructing new financial markets or transforming the provision of different goods and services for capital’s benefit. Governments today play a paramount role in backing banks’ power.
The reason is fairly straightforward: banks hold, through deposits, “promises to pay” that have a shorter maturity than their assets (others’ promises to pay). Or, more simply, they owe more than they hold at any given time. This imbalance is a source of potential fragility, as was clear during the 2008 liquidity shortage.
In order to prevent boom-and-bust cycles, the state stepped in, providing a financial backstop through its control of the money supply. Banks are given exclusive access to central bank reserves, which banks use to settle their liabilities. By conferring on banks the ability to create credit (and money) — a right that other economic agents don’t have — states give banks an incomparable power over the rest of the economy.
The Case for Public Banks
The special relationship between banks and the state
became clear in the recent financial meltdown. As trust in the money
markets evaporated, banks became dependent on state institutions to
survive, let alone thrive.
Banks relied on emergency loans from central banks to sustain their liquidity mismatch, which would have otherwise thrown them quickly into bankruptcy.
Governments also restored their solvency through emergency programs. States bought billions of dollars of worthless assets (through the Troubled Asset Relief Program in the US, for instance) or added regulatory capital through contingent bonds and tax credits or public money transfers (as with the UK’s “temporary” nationalizations).
States provided implicit and explicit subsidies to banks by boosting guarantees on deposits, carrying out unprecedented quantitative easing programs that granted banks safe returns through asset buying, and lowering interest rates to historic lows, thereby reducing banks’ funding costs.
The transfer of public resources to private banks was extraordinary. Yet the rescue measures were wrapped in financial jargon and a sense of political inevitability, and so, despite some halfhearted grumbling by lawmakers, they largely escaped public scrutiny.
That may be changing. The state’s heavy footprint in the financial sector is making it increasingly difficult to argue banks should remain privately owned. Why should profits accrue to shareholders, after all, when the risks and losses are socialized?
Public banks are not a novelty of course. Many countries, such as Germany and France, have long had such institutions, either in the form of commercial banks or development banks that provide loans to specific economic sectors.
And public ownership alone is no silver bullet for challenging global capitalism and its attendant crises. More often than not, these banks behave no differently than their private counterparts, or are controlled by public bureaucracies that end up serving particular private interests.
Simply put, public ownership of banks is necessary but not sufficient.
For public control to be liberatory, it must be part of an expansive vision that reshapes the practices and uses of credit along egalitarian lines. Private finance has promoted the commodification of (and shaped the organization of) key sectors like health and education. Taking control of credit must mean democratizing access to these essential services.
On the question of bank governance, it is not enough to have public officials in charge. Unions, social movement actors (like consumer organizations), and elected officials from both local and central government must have a role in their management. A progressive finance policy can only be enacted when a variety of societal actors, who all possess specific knowledge and interests, have a say in the organization and provision of credit.
Considering the global nature of contemporary finance, any plan to socialize the credit system — and reform the relation between money, credit, and state — must also take into account the highly unequal power relations that characterize the global economy.
US, as issuer of the dollar, controls a quasi-world currency that’s commonly used to settle international liabilities even between non-American agents. This gives the US immense power over the world economy, unmatched by any other country.
Through its own banks, the US controls the quantity and price (interest rates) of dollars used across the globe. (The euro — which is primarily controlled by Germany, the eurozone’s biggest economy — also enjoys global reach.)
In this context, any attempt to socialize the credit system must take into account the specificities of each country: how it is integrated into the world economy and how it can be disconnected from the chains of international finance and gain the space it needs to pursue its own economic and social policies.
Its balance of payments position, external indebtedness, and foreign currency reserve position are constraints that have to be dealt with on a case-by-case basis. For instance, it is difficult to imagine how any peripheral country in the eurozone could nationalize its banks without breaking with the euro, regaining sovereignty over its own currency, ending central bank independence, and introducing strict capital controls.
After years of financial crisis, rising inequality, and “secular stagnation,” the time is ripe for the Left to advance an egalitarian project that places finance at the center.
This doesn’t mean a “one size fits all” program. Each country will have to devise its own socialized system of credit. But the goal will be clear, across borders and states: a more equitable, democratic international economic order.
Banks relied on emergency loans from central banks to sustain their liquidity mismatch, which would have otherwise thrown them quickly into bankruptcy.
Governments also restored their solvency through emergency programs. States bought billions of dollars of worthless assets (through the Troubled Asset Relief Program in the US, for instance) or added regulatory capital through contingent bonds and tax credits or public money transfers (as with the UK’s “temporary” nationalizations).
States provided implicit and explicit subsidies to banks by boosting guarantees on deposits, carrying out unprecedented quantitative easing programs that granted banks safe returns through asset buying, and lowering interest rates to historic lows, thereby reducing banks’ funding costs.
The transfer of public resources to private banks was extraordinary. Yet the rescue measures were wrapped in financial jargon and a sense of political inevitability, and so, despite some halfhearted grumbling by lawmakers, they largely escaped public scrutiny.
That may be changing. The state’s heavy footprint in the financial sector is making it increasingly difficult to argue banks should remain privately owned. Why should profits accrue to shareholders, after all, when the risks and losses are socialized?
Public banks are not a novelty of course. Many countries, such as Germany and France, have long had such institutions, either in the form of commercial banks or development banks that provide loans to specific economic sectors.
And public ownership alone is no silver bullet for challenging global capitalism and its attendant crises. More often than not, these banks behave no differently than their private counterparts, or are controlled by public bureaucracies that end up serving particular private interests.
Simply put, public ownership of banks is necessary but not sufficient.
For public control to be liberatory, it must be part of an expansive vision that reshapes the practices and uses of credit along egalitarian lines. Private finance has promoted the commodification of (and shaped the organization of) key sectors like health and education. Taking control of credit must mean democratizing access to these essential services.
On the question of bank governance, it is not enough to have public officials in charge. Unions, social movement actors (like consumer organizations), and elected officials from both local and central government must have a role in their management. A progressive finance policy can only be enacted when a variety of societal actors, who all possess specific knowledge and interests, have a say in the organization and provision of credit.
Considering the global nature of contemporary finance, any plan to socialize the credit system — and reform the relation between money, credit, and state — must also take into account the highly unequal power relations that characterize the global economy.
US, as issuer of the dollar, controls a quasi-world currency that’s commonly used to settle international liabilities even between non-American agents. This gives the US immense power over the world economy, unmatched by any other country.
Through its own banks, the US controls the quantity and price (interest rates) of dollars used across the globe. (The euro — which is primarily controlled by Germany, the eurozone’s biggest economy — also enjoys global reach.)
In this context, any attempt to socialize the credit system must take into account the specificities of each country: how it is integrated into the world economy and how it can be disconnected from the chains of international finance and gain the space it needs to pursue its own economic and social policies.
Its balance of payments position, external indebtedness, and foreign currency reserve position are constraints that have to be dealt with on a case-by-case basis. For instance, it is difficult to imagine how any peripheral country in the eurozone could nationalize its banks without breaking with the euro, regaining sovereignty over its own currency, ending central bank independence, and introducing strict capital controls.
After years of financial crisis, rising inequality, and “secular stagnation,” the time is ripe for the Left to advance an egalitarian project that places finance at the center.
This doesn’t mean a “one size fits all” program. Each country will have to devise its own socialized system of credit. But the goal will be clear, across borders and states: a more equitable, democratic international economic order.
Friday, May 6, 2016
We Must Do Everything Legally Possible to Prevent Trump From Becoming President
By Robert Reich, Robert Reich's Facebook Page
- Nominate a new Supreme Court justice in the mold of Justice Antonin Scalia.
- Rescind the Obama executive orders on immigration.
- Threaten punitive measures against corporate executives who shift jobs out of the United States.
- Design the wall with Mexico, seal the southern border, and assign more security agents along it.
- Put in place a ban on immigration to the United States by Muslims.
- Rescind the Obama executive orders on immigration.
- Repeal the Affordable Care Act.
- Give military leaders more power over foreign affairs.
- Put business executives and generals in charge of cabinet agencies.
- Use twitter and other social media to intimidate and bully adversaries.
- Begin an audit of the Federal Reserve.
And that's just a start. As commander-in-chief, Donald
Trump would have control over the nation's nuclear warheads, and its
spy agencies (including domestic spying). He'd have enormous discretion
over how the nation's laws were executed and administered -- labor laws,
civil rights and voting rights, women's rights, environmental
protection. And he's have the Bully Pulpit to spread his racist and
xenophobic venom.
All of us owe it to ourselves, our children and grand
children, our communities, nation, and the world, to do everything
legally possible to prevent this utter idiot from becoming president of
the United States.
What do you think?
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