Browsing articles by " boyce"
May 24, 2022


Second thoughts about globalization … from the IMF (!):

Does globalization enhance resilience? Or does it have no effect? Or the opposite effect?

For the two major economic disruptions so far this century—the global financial crisis starting in 2008 and the COVID-19 pandemic starting in 2020—economists’ answers to those questions were largely wrong. As for the financial crisis, most of them underestimated the risks of financial globalization, and when it came to the pandemic, most overestimated the risks of sprawling, intricate production networks and trade globalization….

True confessions here.

May 22, 2022

Haiti: reparations in reverse – big time

A remarkable investigative series in the New York Times lays bare the roots of Haitian misery:

The first people in the modern world to free themselves from slavery and create their own nation were forced to pay for their freedom yet again — in cash.

Twenty-one years after Haiti’s revolutionary heroes declared their country’s independence, swearing to die before being put back in chains or living under French domination again, a squadron of French warships — equipped with some 500 cannons — loomed off Haiti’s coastline….

Haiti’s president, eager for the trade and security of international recognition, bowed to France’s demands. With that, Haiti set another precedent: It became the world’s first and only country where the descendants of enslaved people paid reparations to the descendants of their masters — for generations.

It is often called the “independence debt.” But that is a misnomer. It was a ransom.

The amount was far beyond Haiti’s meager means. Even the first installment was about six times the government’s income that year, based on official receipts documented by the 19th-century Haitian historian Beaubrun Ardouin.

But that was the point, and part of the plan. The French king had given the baron a second mission: to ensure the former colony took out a loan from young French banks to make the payments.

This became known as Haiti’s “double debt” — the ransom and the loan to pay it — a stunning load that boosted the fledgling Parisian international banking system and helped cement Haiti’s path into poverty and underdevelopment.

Read more here.

Mar 28, 2022

Chasing dirty money – 2

Econ4’s James Boyce and co-author Léonce Ndikumana write:

If the roof on your house is leaking so badly that you get mold on your walls, you don’t just try to clean up the mold. You also fix the roof. By the same token, it’s not enough to go after the wealth that corrupt oligarchs have stashed away.

Read more here.

Mar 15, 2022

Chasing dirty money

Casey Michel, author of American Kleptocracy, writes that the sanctions imposed in the wake of Russia’s invasion of Ukraine are not enough:

Absent significant domestic reforms in the West—reforms that should have been enacted long ago—sanctions targeted at the oligarchic and official figures close to Russian President Vladmir Putin risk inflicting little more than a flesh wound on Russia’s imperial kleptocracy.

Rampant financial anonymity in places like the U.S. makes it relatively easy for powerful rich people to evade sanctions. A Russian oligarch may have multimillion-dollar mansions in Washington, D.C.; or multiple steel plants across the Rust Belt; or a controlling stake in a hedge fund in Greenwich, Connecticut; or an entire fleet of private jets in California; or an array of lawyers setting up purchases at art houses around the country. And all of that wealth can be hidden—perfectly legally—behind anonymous shell companies and trusts that are enormously difficult to penetrate.

If Western policy makers hope to hold Putin’s cronies truly accountable, sanctions will have to be paired with pro-transparency reforms that can disassemble this web of secrecy. Western governments should start by ending anonymity in shell companies and trusts; demanding basic anti-money-laundering checks for lawyers, art gallerists, and auction-house managers; and closing loopholes that allow anonymity in the real-estate, private-equity, and hedge-fund industries. That is, if the sanctions are to retain their bite, the entire counter-kleptocracy playbook needs to be implemented—immediately.

Global transparency reform is essential because the people and entities who are bankrolling Moscow’s bloodshed don’t exist in some kind of geopolitical vacuum, limiting their grand larceny to Russia alone. They rely not simply on access to the Kremlin and its largesse, but also on Western financial-secrecy tools to hide and launder their illicit wealth, destabilize markets, and upend Western polities.

Read more here.

Feb 5, 2022

Dissecting the BoJo phenomenon


How can someone with demonstrably questionable morals and a more than casual relationship with the truth reach such a powerful position? One word springs to mind: entitlement. Boris comes from a long succession of posh, upper-class, bumbling idiots who were destined for greatness only because no one has ever or will ever tell them they’re not. Boris went to Eton, a sort of Hogwarts for wankers, where you get taught Latin and tax avoidance whilst wearing full evening dress. These people have never spoken to a real person in their life, apart from perhaps their chauffeur. Then on to Oxford, where Boris Johnson was part of the infamous Bullingdon Club, a fun elite social club for the boys. Activities included smashing up restaurants and burning 50-pound notes in front of homeless people, allegedly. “But you know, it was great fun at the time.” And the British government is full of them, entitled arseholes — sorry, sorry — entitled assholes with a Bentley and a nanny making decisions for us all about things that they will never understand. Aristocrats running the fifth-largest economy in the world whilst allowing 30 percent of British children to live in relative poverty. Where the rich get richer and the poor literally get hungrier. Millionaires who spend their time in government giving tax breaks and P.P.E. contracts to their rich mates. Cannibals, self-serving parasites, tapeworms in tiaras, swimming through the intestines of the state, sucking all the goodness out of it for their own repugnant gratification.

Check out the full video rant here.

Feb 1, 2022

Plundering Africa

Léonce Ndikumana and Econ4’s James Boyce describe something you won’t find in economics textbooks:

In the imaginary world of a perfect market economy, natural resources would be a blessing and capital would flow to the countries where it is most scarce. Africa would be a net recipient. The Angolan people would prosper from the proceeds of oil extraction; Ivorians would thrive as the world’s top cocoa exporter (45 per cent of global production); and South Africans would enjoy the fruits of mineral abundance.

Yet, this is not happening. Natural resources are instead a hunting ground for quick wealth extraction and offshore accumulation. Cross-border capital flows are driven, not by relative scarcity in Africa, but by the relative secrecy available in foreign havens.

Read more here.

Jan 19, 2022

Political thumbs on the energy scales

The northern plains states in the US could be the “Saudi Arabia of wind energy.” But in North Dakota, the political leverage of the coal lobby tips the scales:

David Saggau, the chief executive of an energy cooperative, tried to explain the losing economics of running a coal-fired power plant to a North Dakota industry group more than a year ago.

Coal Creek Station had lost $170 million in 2019 as abundant natural gas and proliferating wind projects had cut revenue far below what it cost to run the plant…. “We made folks aware that the plant was for sale for a dollar,” Saggau, of Great River Energy, told the Lignite Energy Council during an October 2020 virtual meeting. “We’re basically giving it away.”

A renewable future was at hand. Winds come howling over the Missouri River in the heart of North Dakota — at the site where Lewis and Clark spent their first frigid winter — and Great River Energy planned to supply wind power over Coal Creek’s valuable transmission line. NextEra Energy, EDF Renewables and other powerhouse firms were racing to lock landowners into leases to harvest some of the most powerful and sustained winds in the country.

But that new clean-energy future never materialized in this part of coal country, with a landscape that has been mined for more than a century and has the scars and sinkholes to prove it. And the sale of Coal Creek Station, which received its last major permit approval earlier this month, illuminates the United States’ halting transition to renewables. Even in places such as North Dakota, where supply and demand align with clean energy, culture and politics pose major obstacles.

In these rural North Dakota counties, local officials passed ordinances that blocked wind and solar projects. State officials rallied to save Coal Creek, and a politically connected North Dakota energy firm stepped in to prolong its life, promising someday to capture its carbon emissions and store them underground.

Read the gory details here.

Dec 27, 2021

The fallout of dirty money

The American banking system’s welcome mat for kleptocrats and their stolen loot has come at a big price at home as well as abroad. Reviewing two new books on the subject – The Wealth Hoarders by Chuck Collins and American Kleptocracy by Casey Michel – Jake Bernstein highlights the impact on real estate markets:

The Patriot Act allowed the treasury secretary to exempt industries from customer due diligence. Six months after its enactment, the Bush-Cheney Treasury Department issued exemptions for the real estate industry, lawyers holding escrow accounts for clients, private equity, and hedge funds. All were subsequently abused by kleptocrats and other malefactors, but US real estate in particular has been a staggeringly attractive destination for dirty money. Global Financial Integrity, a Washington-based think tank, recently tallied more than one hundred publicly reported real estate money laundering cases in the US over the past five years and arrived at the figure of $2.3 billion worth of transactions.

Ironically, what makes real estate in America alluring to the international criminal set is our rule of law. Property rights are generally protected in the United States. Disputes are adjudicated by an independent judiciary. Under this safety blanket, real estate assets appreciate….

In cities like New York and Miami—or London and Vancouver—high-end residential real estate buyers, often cloaked in anonymity, have crowded out locals and compounded inequality, turning metropolises into playgrounds of the global elite.

Read more here and here and here.

Dec 15, 2021

The blank check department

There’s one US government department that doesn’t have big money worries:

Where are you going to get the money?  That question haunts congressional proposals to help the poor, the unhoused, and those struggling to pay the mortgage or rent or medical bills, among so many other critical domestic matters.  And yet — big surprise! — there’s always plenty of money for the Pentagon. In fiscal year 2022, in fact, Congress is being especially generous with $778 billion in funding, roughly $25 billion more than the Biden administration initially asked for.  Even that staggering sum seriously undercounts government funding for America’s vast national security state, which, since it gobbles up more than half of federal discretionary spending, is truly this country’s primary, if unofficial, fourth branch of government.

Read more here and here.

Dec 7, 2021

Vaccine hesitancy: connect the dots

Inequality + erosion of public services -> mistrust -> vaccine hesitancy -> worse public health outcomes for all:

When people feel supported through social programs, they’re more likely to trust institutions and believe they have a stake in society’s health. Only then do the ideas of social solidarity and mutual obligation begin to make sense.

The types of social programs that best promote this way of thinking are universal ones, like Social Security and universal health care. Universal programs inculcate a sense of a common good because everyone is eligible simply by virtue of belonging to a political community….

If the world is going to beat the pandemic, countries need policies that promote a basic, but increasingly forgotten, idea: that our individual flourishing is bound up in collective well-being.

Read more here.