Economist Jeffrey Sachs is professor of Health Policy and Management and Director of The Earth Institute at Columbia University. He used to be one of your standard establishment types. As recently as 2006, he wrote a book The End of Poverty: Economic Possibilities for Our Time that I read in which he promoted the neoliberal ideology of the policies that developing countries should adopt. He was a major player on the international scene, a widely sought-after and quoted advisor to governments, the World Bank, the IMF, and the like. [Read more…]

The rules against insider trading are meant to ensure that ‘the market’ is democratic and that everyone has access to the same information on which to base investment decisions, and to prevent individuals from taking advantage of knowledge that might give them more accurate knowledge of the true value of something than the public at large. As a result, we are constantly reassured how ‘the market’ has a self-correcting mechanism that results in the publicly stated value of financial products reflecting their true value. [Read more…]

I recently read Bailout: How Washington Abandoned Main Street While Rescuing Wall Street by Neil Barofsky and it was a gripping read. His book is an insider’s account of how the financial crisis of 2008 was handled in Washington DC and it is not a pretty sight. [Read more…]

I wrote before about the faulty analysis by two Harvard economists Carmen Reinhart and Kenneth Rogoff that asserted that when the debt-to-GDP ratio reached a critical point of 90% in a country, the rate of economic growth took a nose-dive and went into negative territory. This analysis was used to spook policymakers, especially in the US and Europe, that bringing deficits under control was the most urgent priority, and that taking measures to stimulate growth and create jobs was the wrong approach. Governments went on an austerity spree, resulting in many people being thrown out of work and social services cut, casuing immense hardship. [Read more…]

Debt cutting frenzy has been rampant across North America and Europe, with ‘everyone’ (i.e., politicians, elite media, and the oligarchs) arguing that if the deficits are not reduced by cutting spending on social services, countries risk ruin. This phony consensus has been driven by pseudo-grassroots campaigns like ‘Fix the Debt’ and the Simpson-Bowles ‘Catfood Commission’, while standing in the shadows and pushing this agenda is billionaire Pete Peterson who has poured half a billion dollars into trying to cut Social Security, Medicare, Medicaid, and other social programs. [Read more…]

In his search for a ‘grand bargain’ on the budget, president Obama has repeatedly signaled his willingness to cut earned benefits such as Social Security, a long-standing goal of the oligarchy. The way it is proposed is to replace the current Consumer Price Index or CPI, the current way of measuring the rate of inflation, with something called the ‘chained CPI‘, which would have the effect of lowering the reported rate of inflation. This is important because Social Security payments (as well as disabled veterans benefits and food stamps) are tied to the rate of inflation so lowering the ‘official’ rate would result in reduced payments to all those groups. [Read more…]

I am sick of hearing people opposing a rise in the minimum wage because it would be an intolerable burden on business that would cause them to lay people off or prevent them hiring workers or that it would cause rampant inflation. Suring a hearing of the Senate Committee on Health, Education, Labor and Pensions, senator Elizabeth Warren takes apart a restaurant owner David Rutigliano who tries to shiftily make this argument. [Read more…]

The Cyprus government has extended the bank closure until next Tuesday, suggesting that the bailout plan proposed by the president is running into really heavy weather. The European Central Bank has apparently given the government a deadline until Monday to accept the deal or go bankrupt, so you can expect the Cypriot parliament to come under great pressure during the next few days. [Read more…]