Taking notes 22: The need for a debt strike

by Richard H. Robbins The disclosure of critical flaws in a study used by economists to justify austerity budgets in Europe and the United States once again puts a focus on the role of debt in our economy. The study, Growth in the Time of Debt, by Carmen M. Reinhart and Kenneth S. Rogoff, purported to show that when national debt approaches ninety percent of GDP, economic growth will slow. A new paper, by Thomas Herndon, Michael Ash, and Robert Pollin claims that the process that Reinhart and Rogoff used to select their growth data was skewed to support their conclusion and … Continue reading Taking notes 22: The need for a debt strike

The Politics of debt in America: From debtor’s prison to debtor nation

by Steve Fraser Shakespeare’s Polonius offered this classic advice to his son: “neither a borrower nor a lender be.”  Many of our nation’s Founding Fathers emphatically saw it otherwise.  They often lived by the maxim: always a borrower, never a lender be.  As tobacco and rice planters, slave traders, and merchants, as well as land and currency speculators, they depended upon long lines of credit to finance their livelihoods and splendid ways of life.  So, too, in those days, did shopkeepers, tradesmen, artisans, and farmers, as well as casual laborers and sailors.  Without debt, the seedlings of a commercial economy … Continue reading The Politics of debt in America: From debtor’s prison to debtor nation

Getting serious about politics

by Zoltan Zigedy Economic relations clarify politics just as politics can return the favor. In truth, it is impossible to fully understand one without an understanding of the other, and especially without a grasp of their inter-relationship. No doubt that explains the wisdom of the classical economists (and Marx and Engels) in describing their studies as “political economy.” Similarly, the failure to systematically integrate the two social domains explains the frustration of the modern-day academic economists, even Nobel laureates, who fume about the politicians standing in the way of their ready solutions to the current global economic crisis. A case … Continue reading Getting serious about politics

Taking notes 4

There is an interesting casino scene in Thunderball where Connery’s Bond stares down the bad guy Largo and tells him that he sees the spectre of defeat behind the shoulder of his opponent. While egging his enemy on, the reference is also to the man’s organization: It is a cabal which stands for “Special Executive for Counter-intelligence, Terrorism, Revenge and Extortion”. These words could even apply as an apt description of what that conglomerate — that includes most governments, banks, mega corporations and economists — has been in relation to the rest of humanity. However, with the unsolvable Eurozone crisis, … Continue reading Taking notes 4

Taking notes 2

With the recent downgrading of almost ten Eurozone states by Standard & Poor’s from their so-called triple-A ratings thanks to their debts, sage Euro policymakers have railed against them and the other two agencies, Moody’s and Fitch. The claim by these staunch Europeans is that these credit rating agencies were too quick in downgrading their debt ridden countries from their much coveted ‘AAA’ status despite these chronic economies succumbing to ‘bailouts and austerity programmes’. Coincidentally, as if by the magic of the ‘free market’ some new characters have appeared on the scene called Berger and Krall to launch a European … Continue reading Taking notes 2

Taking notes 1

The US dollar’s (USD) continued decline in international standing took the next inevitable step reflecting the systemic failure of capitalism. The predictable effects of unbridled capital accumulation in America manifests itself yet again in recent media reports that China and Japan are promoting direct currency exchanges to facilitate commerce and profits for their enterprises and boost bilateral trade. The move essentially is to replace the USD as a reserve currency and allows both East Asian economic giants to convert yuan and yen directly, and so by-passing currency conversion via USD. This also saves on currency conversion costs. The move effectively … Continue reading Taking notes 1