Grexit time?
It’s time for Greece to exit the euro, if not the EU, writes Simon Jenkins in the Guardian:
Sometimes the small voice of economics should rise above the shrieking hysterics of politics. The laws of bankruptcy were invented by the Victorians not to stick plaster over capitalism’s wounds. Insolvency and limited liability lay at the core of commercial enterprise. Borrower and lender alike had to accept risk for capitalism to thrive. Greece within the eurozone was allowed to borrow riskily and was lent to riskily. Any fool (except a eurofool) knew it would end in disaster.
The IMF last week admitted Greece’s debts were “unsustainable”. But such is the political arthritis now afflicting Europe’s “technocratic” rulers that they ignored the fact. They concentrate on their one concern: somehow extending Greece’s repayments so German, French and British banks could have even larger loans underpinned. It is bankers, not Greeks, who are being “bailed out”. They want Greek taxpayers to go on paying interest even if the principal is as beyond reach as a tsarist bond.
Read his piece here.
Also Eduardo Porter’s recent New York Times piece on Germany’s own debt write-down after World War II.
What’s in a trade agreement?
These days trade agreements are not just about imports and exports. They’re also about undermining the power of governments to protect public health and the environment by regulating corporate behavior – via provisions slipped into trade agreements in the guise of “Investor-State Dispute Settlement” (I.S.D.S.), as James Surowiecki explains in the New Yorker:
In the old days, aggrieved American investors would call on the Navy to protect their interests—thus the phrase “gunboat diplomacy.” How much better that now they just call their lawyers.
But these days signing such agreements is risky for countries. I.S.D.S. lawsuits used to be rare, but they’re becoming a growth industry. Nearly a hundred have been filed in the past two years, as against some five hundred in the quarter century before that. Investor protection, previously a sideshow in corporate law, is now a regular part of law-school curricula. “We’ve also seen an expansion in the types of claims that have been brought,” Lise Johnson, the head of investment law and policy at the Columbia Center on Sustainable Investment, told me. I.S.D.S. was originally meant to protect investors against seizure of their assets by foreign governments. Now I.S.D.S. lawsuits go after things like cancelled licenses, unapproved permits, and unwelcome regulations.
To learn more about what’s in a trade agreement, read his story here. For more, see blog entries on TripleCrisis here.
Neil Young: Who’s Gonna Stand Up?
Neil Young asks, “Who’s Gonna Stand Up and Save the Earth?”
An international student call for pluralism in economics
From an open letter signed by student associations from across the world:
It is not only the world economy that is in crisis. The teaching of economics is in crisis too, and this crisis has consequences far beyond the university walls. What is taught shapes the minds of the next generation of policymakers, and therefore shapes the societies we live in. We, over 65 associations of economics students from over 30 different countries, believe it is time to reconsider the way economics is taught.
Read more here.
True cost of fossil fuels
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.
A user’s guide to economics
The author of Economics: A User’s Guide breaks down the scientific aspirations – or pretensions – of neoclassical economics:
Source: http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=13830
Real-world microeconomics
Here’s an introductory textbook – written by Econ4’s Jerry Friedman – that not only covers the usual micro topics but goes beyond, putting the economic behavior of consumers and firms into its social context:
This unique textbook covers all the standard topics of an introductory microeconomics course, including the profit-maximizing firm, the utility-maximizing consumer, supply and demand, price and income elasticities, factors of production and their marginal products, and so on. But this book does much more: it offers both an alternative vision of microeconomics—placing individual decision-making in the context of social norms and institutions—and cogent criticism of neoclassical theory. Students using this book will get more than just an introduction to mainstream microeconomics—they will gain a deeper and more critical understanding of it.
Read more about Microeconomics: Individual Choice in Communities here.
Read more about other economics textbooks from Dollars and Sense here.
Innovation for the future economy: solar roadways
A century ago, cities were “drowning in horse manure.” Today we are drowning in fossil fuel emissions. It’s time for the transportation revolution of the 21st century. Maybe this will be part of it:
Source: http://paksc.org/video/documentaries/246-solar-roadways-the-prototype
Divestment pressure mounts
This week’s student protests put the heat on Harvard:
“Throughout Harvard heat week, Harvard’s top decision-makers have been hiding from both their students and from the issue of climate justice,” protesters wrote in a statement on Wednesday. “They must face the broad, diverse, and growing coalition behind divestment from fossil fuels.”
Read more coverage here and here. And check out the Divest Harvard facebook page here.
The Next System Project
A new project from Econ4’s Gar Alperovitz and many more:
Learn more about the Next System Project here.
