Econ4 does not accept advertising dollars. And we don’t promote commercial ventures. But for the first time ever, we’re making this exception (free promotion – still no dollars) for Michael Moore’s latest film. It debuts in theaters on Feb. 12.
Econ4’s Doug Smith writes for Naked Capitalism on the hypocrisy of celebrating Labor Day while screwing workers:
You, my friends, are truly champion asset creators! Your long-suffering self-denial of working for crap wages contributes to massive corporate profits that executives tap to buy-back company stock in order to keep those asset values high. Your low-to-no wages give you as consumers the God-given freedom to borrow and, thereby, fund securitized assets. And, when those asset values get threatened, your taxes come to the rescue through bailouts and mumbo jumbo (“quantitative easing”).
Read his piece here.
Bill Lazonick writes in the Harvard Business Review:
The debate over how to reverse ever-increasing income inequality has moved front and center in the Democratic presidential campaign. In speeches on July 13 and July 24, front-runner Hillary Clinton first outlined and then elaborated upon her policy agenda for combating what she calls “quarterly capitalism.” In emphasizing the need for value-creating business investment in an economy in which value-extracting financial interests are driving corporate resource-allocation decisions, the Clinton economic reform package is novel and refreshing for a Democratic presidential contender….
But perhaps the most elegant solution is one Clinton has not yet advocated: simply banning corporations from making open-market repurchases of their shares.
A new IMF working paper estimates world spending on fossil fuel subsidies:
Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund.
The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.
Read more here.
Unusually blunt words from World Health Organization Director Margaret Chan:
Ebola emerged nearly four decades ago. Why are clinicians still empty-handed, with no vaccines and no cure?
Because Ebola has historically been confined to poor African nations. The R&D incentive is virtually non-existent. A profit-driven industry does not invest in products for markets that cannot pay. WHO has been trying to make this issue visible for ages. Now people can see for themselves.
Quiz for the day: Who said this?
The 85 richest people in the world, who could fit into a single London double-decker, control as much wealth as the poorest half of the global population– that is 3.5 billion people….
A greater concentration of wealth could—if unchecked—even undermine the principles of meritocracy and democracy. It could undermine the principle of equal rights proclaimed in the 1948 Universal Declaration of Human Rights.
Pope Francis recently put this in stark terms when he called increasing inequality “the root of social evil”.
Some of the greatest problems, still outstanding today, lay with the so-called too-big-to-fail firms. In the decade prior to the crisis, the balance sheets of the world’s largest banks increased by two to four-fold. With rising size came rising risk—in the form of lower capital, less stable funding, greater complexity, and more trading.
This kind of capitalism was more extractive than inclusive. The size and complexity of the megabanks meant that, in some ways, they could hold policymakers to ransom. The implicit subsidy they derived from being too-big-too-fail came from their ability to borrow more cheaply than smaller banks—magnifying risk and undercutting competition.
Answer: IMF Managing Director Christine Lagarde, in a speech to a conference on “inclusive capitalism” on May 27. See the transcript of her speech here. For more on changing spirits of the times, see here.
Robert Reich peels away the layers of an ideological onion:
One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the “free market” is natural and inevitable, existing outside and beyond government. So whatever inequality or insecurity it generates is beyond our control. And whatever ways we might seek to reduce inequality or insecurity — to make the economy work for us — are unwarranted constraints on the market’s freedom, and will inevitably go wrong.
By this view, if some people aren’t paid enough to live on, the market has determined they aren’t worth enough. If others rake in billions, they must be worth it.
Read more here.
“Econ 101 is killing America,” write Robert Atkinson and Michael Lind:
Even though most economists know better, they present to the public, the media and politicians a simplified, vulgar version of neoclassical economics — what can be called Econ 101 — that leads policymakers astray. Economists fear that if they really expose policymakers to all the contradictions, uncertainties and complications of “Advanced Econ,” the latter will go off track — embracing protectionism, heavy-handed “industrial policy” or even socialism.
Read their take on the myths of Econ 101 here.
Katrina van den Heuvel writes in The Washington Post:
True conservatives are — or should be — offended by corporate welfare as well. Conservative economists Raghuram Rajan and Luigi Zingales argue that it is time to “save capitalism from the capitalists,” urging conservatives to support strong measures to break up monopolies, cartels and the predatory use of political power to distort competition.
Here is where left and right meet, not in a bipartisan big-money fix, but in an odd bedfellows campaign to clean out Washington.
Read her piece here.
Capitalism Unmasked, a new eBook edited by Lynn Parramore, was produced in a partnership between AlterNet and Econ4 to expose the myths of unbridled capitalism and show the way to a better future. You can download the PDF here.