Category Archives: Economics

Bolivan President Evo Morales taking bold steps to end economic colonialism

A recent article, Evo Morales: A Bolivian idol, posted on the Aljazeera website, quotes the Bolivian president as saying,

“I have no regrets – in fact, I am pleased to have expelled the US ambassador, the Drug Enforcement Administration (DEA) and to have closed the US military base in Bolivia. Now, without a US ambassador, there is less conspiracy, and more political stability and social stability. Without the International Monetary Fund, we are better off economically.”

Bold action, indeed. Read the full article here.

Thomas H. Greco to address Tucson business communty

I will be giving a free presentation in Tucson on August 18 to show local small businesses how to create liquidity based on their own capacity to produce desired goods and services.

Details can be found at:  https://beyondmoney.files.wordpress.com/2014/08/2014-tucson-flyer-local.pdf
Even if you don’t live anywhere near Tucson, I’m sure this will be of interest to many in your network so please help to get the word out. Our communities cannot afford to be complacent. We need new creative approaches to economic development, and locally controlled exchange alternatives are a key requirement to future prosperity, resilience, and a sustainable world.

This presentation will be recorded and made available on this website following the event.

Thomas H. Greco

Income (and wealth) inequality becoming a political issue

At long last, income inequality is becoming a mainstream political issue, thanks in large part to New York Times columnist Paul Krugman and Thomas Piketty, an obscure professor at the Paris School of Economics.

The English translation of Picketty’s new book Capital in the Twenty-First Centuryhas become a political bombshell especially since Krugman’s review of it appeared in New York Review of Books. Titled, Why We’re in a New Gilded Age, the review highlights Picketty’s research findings and political agenda.

As Krugman describes it, “The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to ‘patrimonial capitalism,’ in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.” And in assessing the book, he calls it “a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics.”

Krugman concludes his review with this statement: “Piketty ends Capital in the Twenty-First Century with a call to arms—a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.”

Now, Krugman has upped the ante with his April 24 editorial The Pikkety Panic, arguing that “..what’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.” Krugman presents evidence to suggest that “conservatives are terrified” and in a panic to try to refute Pikkety’s inevitable conclusions, but failing to find substantive arguments, they have fallen back on name calling. If you can’t refute the facts, then try to discredit the source.

Summing up, Krugman says,

“Now, the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean that they are on the run politically. Money still talks — indeed, thanks in part to the Roberts court, it talks louder than ever. Still, ideas matter too, shaping both how we talk about society and, eventually, what we do. And the Piketty panic shows that the right has run out of ideas.”

If that isn’t enough to make the political pot boil over, another newly published academic study, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens finds that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.”

Of course, most activists and even ordinary people have known all that, but now that academia has taken notice and begun to present solid scientific evidence, the pressure on politicians to acknowledge these conditions and act on them will build more quickly.

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Growth, more growth, then the end of growth…

If you don’t understand geometric or exponential growth then you don’t understand anything about the magnitude of the predicament that humanity now faces or the fundamental changes that are about to occur, one way or another.

I’ve never seen the facts of exponential growth so clearly and elegantly presented as in this video lecture by the late Professor Albert Bartlett. In Arithmetic, Population and Energy, Professor Bartlett shows that even seemingly small rates of growth must ultimately result in a situation that cannot be sustained. He relates the simple arithmetic of exponential growth specifically to human population, peak energy, and resource depletion and blows away the foolish arguments of politicians and pundits who argue that growth can continue as it has in the past.

Bartlett does not mention debt growth, but  I must add that it is an even more immanent problem and the most acute symptom of the “disease” that has infected civilization, that is the global interest-based debt-money system. I urge everyone to view Prof. Bartlett’s presentation, then, if you haven’t already, read my recent article,  Money, debt and the end of the growth imperative.

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The Pace University Left Forum Panel Reconvenes and Henry George is Rebranded

Scott Baker has provided a comprehensive summary of a very important recent event that featured some visionary thinkers in economics, money and finance. His description begins…

The team of panelists from last year’s Pace University Left Forum panel – reviewed in the March/April, 2012 issue of GroundSwell – reconvened this year on June 8, 2013, minus Kucinich adviser Dave Kelley who was sidelined due to a back injury.   The remaining panelists were Dr. Michael Hudson, Dr. Cay Hehner, and Chair Andy Mazzone.   The title of this year’s panel was “Wall Street’s War to Impose Austerity.”

Baker follows with his “Abstract” summary…

Wall Street had a record year in profits last year. Bonuses were up and stock prices zoomed. Meanwhile, the productive classes continued to see their wages stagnate as they have for 40 years, while under-reported inflation figures and regressive tax schemes took more of their paychecks, if they could find work. But now Austerity threatens to siphon whatever is left from the bottom to the banking elites. Faux progressive organizations like Third Way in the U.S. are attempting to privatize Social Security to pour billions into Wall Street for further gambling. From Cyprus’ confiscation of up to 70% of bank deposits to Greek pro-recession budget slashing, the road to neo-feudalism continues. Based on Professor Dr. Michael Hudson’s book “Finance Capitalism and its Discontents” and “The Bubble and Beyond”, panelists Dr. Michael Hudson, Dr. Cay Hehner, Dave Kelley, and Chair Andy Mazzone will discuss specific austerity measures that are designed to confiscate, impoverish, and destroy the middle class, while widening the already historic wage gap even further. Learn how the expansive forces of industrial capitalism have been subverted by today’s predatory finance capitalism aided by junk economics and failure to collect the economic rent. What is the rentier class and how does it collect 1/3 of GDP? Is government regulation always wrong? What is the best tax policy? Why the 1% versus the 99%?

Current president of the Henry George School, Andy Mazzone, gave the opening, and after introducing himself as an ex-CEO of a Fortune 500 company, and a trained economist in Marxism, said he now classifies himself as a neo-Georgist — defined as “someone who believes all forms of monopoly should be taxed” while untaxing all forms of earned income — wages, sales, capital.   (In previous discussions with Mr. Mazzone, I have challenged this tax-all-monopolies philosophy a bit, relying on my experience in the fast-changing world of Information Technology where I was a Manager of Information Systems for over 2 decades, and where monopolies may last no longer than the next business cycle.   I think we get into questionable territory in advocating taxing patentable innovations (though I would agree that patents are too easily granted nowadays).   The land monopoly is different, of course, because land, unlike capital, cannot be created by people, is finite, and generally appreciates, while capital goods depreciate and are replaced by newer “improvements,” just as Henry George said over a hundred years ago when improvements came along at a much slower rate.)

Mazzone went on to say that Michael Hudson’s book, “Super Imperialism” basically forecast the current crisis and the financialization of everything, and the subsequent collapse from de-industrialization.

The full report goes on for six pages and includes a number of arguments relating to social justice and economic fairness as well as some essential historical perspective. You can read the rest of it here.

Showdown looming over shutdown

Once again, the Democrats and Republicans in Washington are facing off in a battle over the budget. The Republicans, who control the House, are demanding huge cuts that would pull the teeth from regulatory agencies, like the EPA, Fish and Wildlife, and the IRS, decimate social programs in health and education, including Medicare. Some of the details are provided in this New York Times article.

The elite agenda has long been apparent– to further concentrate power and wealth in their hands, to reduce the middle-class to serfdom, and to change the nature of our government to something more akin to imperial Rome or the fascist states of the 20th century. That agenda, since the start of the Reagan-Thatcher era of the 1980’s, has been advancing under both Republican and Democratic administrations with only moderate variations in its pace.

Here are the questions that come to my mind as we approach what appears to be a critical juncture:

1. Are the Democrats in Congress really making a sincere attempt to oppose the elite agenda and protect the general interests of all the people, or is their vocal opposition just for show?

2. How far will the American people allow themselves to be pushed before they will stand up for themselves and for the common good?

3. And when they do stand up, what form will their actions take, and will it be in time to avoid an ugly and destructive confrontation?

I have often thought that Franklin Roosevelt saved capitalism in the 1930s by instituting a wide range of programs under the “New Deal” that curbed abuses of power by Wall Street and corporate leaders and provided for a more equitable distribution of the economic pie. There were a few hard liners who disagreed with that and actually tried to engineer a coup d’état to depose him. Fortunately, that attempt failed when Major General Smedley Butler refused to go along with it.

So, here we are again in the midst of an economic depression, but this time the redistribution of wealth is going in the opposite direction, which can only worsen our predicament. And, no, there will not be a new “New Deal.”

Many things have changed drastically over the past 80 years. Some of these like surveillance technologies and advanced weaponry have favored the presently dominant force of centralized control, while others like microcomputers, the internet, and cheap global person to person communications have favored the emergent force of decentralized power and global community. Society is being rebuilt from the bottom upward, community by community. Those efforts will need to be rapidly ramped up in the face of increasingly dysfunctional national governments.

As David Stockman, director of the Office of Management and Budget under President Ronald Reagan, said to state and local political and business leaders a couple years ago, “Washington will become a fountain of harm as you struggle with our own problems.” And so it, not just in Washington, but in Athens, London, Rome, and capitals around the world.

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Developing a framework for an equitable, harmonious and sustainable global society

The current global mega-crisis is forcing us to confront the flaws and inconsistencies inherent in the present dominant structures of economics, money, and finance. As a result, we have before us a great opportunity to open up a conversation that admits to consideration ideas and proposals that may have heretofore be rejected out of hand as radical, impractical, or utopian, ideas like those put forth by Mahatma Gandhi three quarters of a century ago.

My good friend and scholar, Rajni Bakshi, has recently articulated that possibility and those ideas in her article, Civilizational Gandhi. You can download the full article here. I also recommend her article, Replacing Keynes With Gandhi.

Ms. Bakshi is the Gandhi Peace Fellow at Gateway House: Indian Council on Global Relations based in Mumbai, India.

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