The problem with cryptocurrencies

I know almost nothing about cryptocurrencies or the blockchain technology that undergirds it. I was aware that all transactions by currency holders are recorded on a distributed public ledger, which apparently is what is meant by a ‘blockchain’. I had been aware that these currencies, of which there are many in addition to the best known one of bitcoin, are not backed by any government like ‘real’ currencies are. Their value is maintained by having their production limited by having it ‘mined’, which is a metaphor for actions that are done by computers.

Elizabeth Kolbert writes about how this ‘mining’ works.
[Read more…]

Bankruptcy

For many ordinary people, declaring bankruptcy is a way to escape from crushing debt often caused by circumstances beyond their control, like health care bills, and start a new life, though it is never an easy out. In addition, they are made to feel ashamed for doing so. In 2005, the credit card companies lobbied for a new law that made made it much harder for individuals to declare bankruptcy. As a then senator, Joe Biden fought in favor of the new law, no doubt because his home state of Delaware is home to many credit card companies.

In yesterday’s episode of Last Week Tonight, John Oliver describes how the current bankruptcy laws are confusing and hard to maneuver and of a new proposal to simplify it. Of course Republicans will filibuster it.

John Oliver on the Texas freeze fiasco

He roundly criticizes all those responsible for what was a foreseen and avoidable disaster.

Meanwhile, Alexandria Ocasio-Cortez shames Ted Cruz by raising $5 million to help Texans while he was gallivanting off to Cancun.

We should also recall that Cruz was one of those people who objected to aiding people in other states who got hit with natural disasters. I am sure that he is opposing all federal aid to Texas now because he is a person who stands on principle, right?

Going big on stimulus is a no-lose proposition for Biden and the Democrats

Republicans are fighting to reduce the $1.9 trillion stimulus plan put forward by Joe Biden. I hope the Democrats do not agree. As I see it, there is nothing to lose by going big.

If they go big and the pandemic is curbed and the economy bounces back in a year or two, they will be praised for their actions. If the economy does not recover as much as expected, the stimulus cannot be blamed for being too big and instead it could be argued that it was not big enough. On the other hand, if the stimulus is trimmed back by a lot and the economy does not recover, Biden and tee Democrats will be blamed for going too small.

Republicans are saying that the large stimulus will add to the deficit and ‘overheat’ the economy and cause inflation. But we know that Republican concerns over the deficit are bogus and are always, always, just a way to oppose spending that does not benefit the wealthy. Furthermore both Fed chair Jerome Powell and treasury secretary Janet Yellen (who was Powell’s predecessor as Fed chair) have discounted the danger of inflation and said they have the tools to curb it if it does occur.

So Biden and the Democrats should go big and ignore the ‘sky is falling’ bad faith arguments of the Republicans.

The myth of the Chinese debt trap

The US and China are now locked in a competition for global leadership. There is a prevailing narrative that the Chinese government is using its Belt and Road initiative to gain power over developing countries as it seeks to expand its geopolitical influence. Their alleged strategy is to offer countries low-interest loans for big infrastructure projects that it knows that the countries cannot pay back but will likely accept because of those countries’ leaders’ grandiose ambitions. When the countries later find it hard to service those loans and are on the brink of default, China steps in and takes control of the asset it financed, in the process making those countries subservient to them.
[Read more…]

Will Biden avoid the Obama trap?

Ryan Grim recalls how Obama, even though he came into office in 2009 in the wake of the 2008 financial crisis with much bigger Democratic majorities in both houses of congress than Joe Biden just obtained, got slow-walked by the Republicans who dangled the carrot of bipartisanship in front of him and managed to water down all his proposals. His weak response is blamed for the massive losses the party suffered in the 2010 and 2014 mid-term elections which resulted in Republicans winning the majorities in both chambers.
[Read more…]

Why I do not invest in art or the stock market

While the GameStop controversy has faded from the news headlines, the issue is still roiling the markets. I was listening to an analyst who was saying that the people who are driving up the price of the stock may themselves end up losing a bundle. Some analysts are calling it yet another bubble that will burst at some point and then the stock price will revert to a more realistic value. But what is a realistic price of that stock? It seems to me that the price of a company’s stock is not based on anything tangible.
[Read more…]

Rise in minimum wage in 2021

2020 has been terrible for people working in the service sector and other low-wage jobs due to the effects of the pandemic. Thanks to various measures that have been passed in states and cities because of pressure by activists and labor unions, minimum wages are due to rise in some areas of the country providing at least some relief.

2020 was a devastating year for underpaid frontline workers.

But even in the face of public health and economic crises triggered by Covid-19, the Fight for $15 movement persisted, and now 24 states and 50 municipalities throughout the U.S. are set to raise minimum wages in 2021.

On New Year’s Day, 20 states and 32 cities will increase their minimum wage, with the wage floor in 27 of those jurisdictions reaching or exceeding $15 per hour. The January 1 raises will be followed by another round of wage floor hikes later in 2021, when four additional states and 18 localities will increase their minimum wage, 13 of them to at least $15 per hour.

[Read more…]