Category - Economics

Why Is The U.S. Desperate To OK Slavery In Malaysia?

Huffington Post, By Akbar Shahid Ahmed, Ryan Grim & Laura Barron-Lopez, May 26

Washington – On Friday night, in an impressive display of dysfunction, the U.S. Senate approved a controversial trade bill with a provision that the White House, Senate leadership and the author of the language himself wanted taken out.

The provision, which bars countries that engage in slavery from being part of major trade deals with the U.S., was written by Sen. Bob Menendez (D-N.J.). At the insistence of the White House, Menendez agreed to modify his language to say that as long as a country is taking “concrete” steps toward reducing human trafficking and forced labor, it can be part of a trade deal. Under the original language, the country that would be excluded from the pending Trans-Pacific Partnership pact is Malaysia.

But because the Senate is the Senate, it was unable to swap out the original language for the modification. (The chamber needed unanimous consent to make the legislative move, and an unknown senator or senators objected.) So the trade promotion authority bill that passed Friday includes the strong anti-slavery language, which the House will now work to take out to ensure that Malaysia (and, potentially, other countries in the future) can be part of the deal.

Observers are left with a deeper question: Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?

[…]

But Malaysia also borders what is effectively China’s jugular vein: the Strait of Malacca.

Via Naked Capitalism: America’s First Black President Throwing Slaves Under the Bus on TPP

Fossil fuel subsidies to hit $5.3 trillion in 2015, says IMF study

Governments could cut 20% of carbon emissions at a stroke if they stopped subsidising oil, gas and coal

RTCC, By Ed King, May 19

Subsidies for fossil fuels that cause climate change have soared since 2013, a new study from the International Monetary Fund has revealed.

Oil, gas and coal costs will be subsidised to the tune of US$5.3 trillion a year in 2015. The last time the IMF ran the data it calculated they were worth $1.9 trillion.

Economists say the latest figures are more accurate as they represent the “true” cost of energy, which includes the environmental, health and climate impacts of burning fossil fuels.

“Over half of the increase is explained by more refined country-level evidence on the damaging effects of energy consumption on air quality and health,” IMF officials Benedict Clements and Vitor Gaspar wrote in [sic] a blog [sic].

The figure is larger than the health spending of all the world’s governments combined, a reckoning the pair called “shocking”.

Coal is the biggest recipient of polluting subsidies, the IMF found, given its combined impact on air quality and high carbon emissions.

“The most dramatic difference, compared with the pre-tax figures, is for coal which is the biggest source of post-tax subsidies, amounting to 3.0% of global GDP in 2011 and rising to 3.9% in 2015,” says the study.

Why Syriza failed; Why Europe may fail with it

Hullabaloo / Down With Tyranny, By Gaius Publius, May 15

I haven’t written much about Greece lately, but there’s quite a story going on. It’s not that difficult to follow, but you have to be careful whom you read. Conventional wisdom (backed by corporate, pro-austerity media outlets here and abroad) says it’s a morality tale — bad Greeks who went into too much debt and now they can’t pay up. Good German bankers want their money and are reluctant to forgive bad deeds because it might encourage other debt-owing entities to seek debt relief as well. They’re calling that “moral hazard,” fear that a bailout might encourage more bad behavior. There must be consequences, or so they think.

The bottom line of those who tell this tale — Greece provides a place for lovers of austerity (like cuts to social programs) to point and sneer. Their refrain, which I’m sure you’ve heard, is “We don’t want to end up like Greece, do we?”

The reality of the Greek situation is different — not hard to understand, just different.
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Senate Cuts Deal To Pass Obama’s Secretive Trade Bills

Huffington Post, By Jessica Schulberg & Michael McAuliff, May 13

Washington – Senate leaders reached a deal Wednesday to push ahead with votes on President Barack Obama’s trade deals.

The agreement came after Democrats blew up an earlier agreement Tuesday over fears that key measures they have sponsored would fail, or never get votes.

But Senate Majority Leader Mitch McConnell (R-Ky.) announced Wednesday afternoon that leaders had found a way around the impasse by agreeing to let Democrats have votes on key trade enforcement measures before holding votes on the fast-track authority that Obama needs to finish new massive trade deals with Pacific Rim countries and Europe.

“I think that we’ve come up with something that is fair,” Senate Minority Leader Harry Reid (D-Nev.) said.

Obama Administration Says Yes To Drilling In The Arctic

Climate Progress, by Emily Atkin, May 11

The Obama administration has given conditional approval to a controversial proposal by Royal Dutch Shell to drill for oil in the Arctic Ocean this summer.

On Monday, the Department of Interior’s Bureau of Ocean Energy Management (BOEM) approved Shell’s exploration plan for the Chukchi Sea, which entails drilling up to six wells approximately 70 miles northwest of Wainwright, Alaska. The plan is for exploratory drilling, a sort of first step that companies take to determine whether a region is feasible for large-scale production.

In announcing the conditional approval, BOEM cited its recently-issued safety regulations for drilling in the U.S. portion of the Arctic Ocean, including the Chukchi Sea, where big oil companies have long been hoping to lay their claim. Those regulations require companies to have contingency plans for mishaps — companies must be able to “promptly deploy” emergency containment equipment to deal with a spill, and must build a second rig close to their initial operations so a relief well could be drilled in the event of a blowout, among other things.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” BOEM Director Abigail Ross Hopper said in a statement. “As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards.”

Today’s Victory Day celebrations in Moscow mark a turning point in Russian history

Vineyard of the Saker, May 9

Today is truly a historical day. For the first time ever, the West has boycotted the Victory Day Parade in Moscow and, also for the first time ever, Chinese forces have marched on the Beautiful Square, (“Red” square is a mistranslation – the “Red Square” ought be called the “Beautiful Square”) with the Russians. I believe that this is a profoundly symbolic shift and one which makes perfectly good sense.

[…]

Both Russians and Americans are quite aware of what is at stake and neither side can back down. On one hand, if the US/NATO/EU prevail, they will have succeeded in breaking the Russian “back” and Russia will rapidly be submitted. Should that happen, all the BRICS countries will soon follow, including China. On the other hand, if Russia prevails in the Ukraine, then the US grip on the EU will soon be weakened and, possibly, lost altogether and the entire world will see that the Empire is crumbling. Should that happen, the entire international financial system will escape from the AngloZionst control and liquidate the petrodollar. The consequences of such a collapse will be felt worldwide.

The presence of Xi Jinpin next to Putin on this historic day, the participation of the Chinese military in the parade and the presence of PLA Navy ships alongside the Russian Black Sea Fleet, is a direct and powerful message to the world: in this titanic struggle, China is fully throwing her weight behind Russia.

[Sidebar: Notice on the photo of Xi and Putin that there is one more absolutely crucial figure sitting next to the war veteran: Nursultan Nazarbaev, the President of Kazakhstan. The crucial role this man has played to shape today’s world has not been recognized, but with time I am sure it will. Long before Putin, it was Nazarbaev who did everything in his power to prevent the breakup of the Soviet Union, the creation and strengthening of the Commonwealth of Independent States and the creation of the Eurasian Economic Union. I would note that Putin has, on several occasions, expressed his deep admiration for, and gratitude to, Nazarbaev whom he has explicitly described as the “father” of the new Eurasian union.]

This is the “new Russia” – one literally flanked by her two allies, China and Kazakhstan. It is hard to over-estimate the importance of this event: for the first time in 400 years Russia has finally fully turned her face to her natural ecosphere – the East.

Sanders Raises $3 Million in Four Days; Will He Split the Party?

Naked Capitalism, By Gaius Publius, May 10

My headline has two parts (you can see it above) but the second is, for me, the most important and the most interesting. I’ve been writing about the split — the chasm, really — between progressives and “progressives” in the Democratic Party for at least a year, and Howie has been documenting the sins of money-bought “Democrats” like the DCCC since forever.

Some want that split to heal, and some want it to widen. Democrats who want it to heal are motivated by two main interests, it seems. One is the desire, understandable enough, to keep government out of the hands of Republicans, who really are the greater evil, if only by a little.

The other interest, though, is more insidious and far less defensible. If the party pulls together, those whose careers are tied to the success of its money-soaked DLC wing will see those careers advanced — in some cases, spectacularly.

The losers in all this? Unbailed-out mortgagees; students with crushing personal debt; the soon-to-explode bomb of poverty among soon-to-retire 401k-holders — the jobless; the poor; the barely-making-it in a Nike and Apple “made in Asia” economy. The bottom 80% who are going nowhere or going down. The traditional constituents, in other words, of the real Democratic Party as constituted in the pre–Bill Clinton years.

Who wants the split in the Democratic Party to widen? Anyone who wants progressive change in America at a non-incremental pace. And everyone, voter or activist, who no longer wants to reward “professional Democrats” — self-serving, money-serving women and men — for their constant and regular betrayals.

The Case That Blew the Lid Off the World Bank’s Secret Courts

Truthout, By Jim Shultz, April 28

There’s an international awakening afoot about a radical expansion of corporate power – one that sits at the center of two historic global trade deals nearing completion.

One focuses the United States toward Europe – that’s the Transatlantic Trade and Investment Partnership (TTIP) – and the other toward Asia, in the Trans-Pacific Partnership (TPP). Both would establish broad new rights for foreign corporations to sue governments for vast sums whenever nations change their public policies in ways that could potentially impact corporate profits.

These cases would not be handled by domestic courts, with their relative transparency, but in special, secretive international tribunals.

It’s a stupendously powerful tool and a double win for the corporations: It’s a money machine that loots public treasuries and a potent tool to stifle unwelcome regulations, all wrapped in one. As Senator Elizabeth Warren recently wrote in the Washington Post, “Giving foreign corporations special rights to challenge our laws outside of our legal system would be a bad deal.” But it’s a deal US lawmakers are rapidly preparing to make as they debate extending “fast-track” trade promotion authority to President Barack Obama.

The “War on Cash” in 10 Spine-Chilling Quotes

Wolf Street / Naked Capitalism, By Don Quijones, April 27

The war on cash is escalating. As Mises’ Jo Salerno reports, the latest combatant to join the fray is JP Morgan Chase, the largest bank in the U.S., which recently enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes. In other words, the war has moved on from one of words to actions.

Here are ten quotes that should chill the spine of any individual who cherishes his or her freedom and anonymity:

1. Kenneth Rogoff (from the intro to his paper The Costs and Benefits to Phasing Out Paper Currency):

Despite advances in transactions technologies, paper currency still constitutes a notable percentage of the money supply in most countries… Yet, it has important drawbacks. First, it can help facilitate activity in the underground (tax-evading) and illegal economy. Second, its existence creates the artifact of the zero bound on the nominal interest rate.

In other words, cash (not money) is the source of all evil and must be destroyed because governments can’t trace its every movement, and it represents a limiting factor on central banks’ ability to continue their insane negative-interest-rate experiment.

We Can’t Let John Deere Destroy the Very Idea of Ownership

Wired, By Kyle Wiens, April 21

It’s official: John Deere and General Motors want to eviscerate the notion of ownership. Sure, we pay for their vehicles. But we don’t own them. Not according to their corporate lawyers, anyway.

In a particularly spectacular display of corporate delusion, John Deere—the world’s largest agricultural machinery maker —told the Copyright Office that farmers don’t own their tractors. Because computer code snakes through the DNA of modern tractors, farmers receive “an implied license for the life of the vehicle to operate the vehicle.”

It’s John Deere’s tractor, folks. You’re just driving it.

Several manufacturers recently submitted similar comments to the Copyright Office under an inquiry into the Digital Millennium Copyright Act. DMCA is a vast 1998 copyright law that (among other things) governs the blurry line between software and hardware. The Copyright Office, after reading the comments and holding a hearing, will decide in July which high-tech devices we can modify, hack, and repair—and decide whether John Deere’s twisted vision of ownership will become a reality.

[…]

General Motors told the Copyright Office that proponents of copyright reform mistakenly “conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle.” But I’d bet most Americans make the same conflation—and Joe Sixpack might be surprised to learn GM owns a giant chunk of the Chevy sitting in his driveway.

The Trans-Pacific Partnership: Toward Absolutist Capitalism

Naked Capitalism, By Lambert Strether, April 20

There are many excellent arguments against the Trans-Pacific Partnership (TPP), two of which — local zoning over-rides, and loss of national sovereignty — I’ll briefly review as stepping stones to the main topic of the post: Absolutist Capitalism, for which I make two claims:

1) The TPP implies a form of absolute rule, a tyranny as James Madison would have understood the term, and

2) The TPP enshrines capitalization as a principle of jurisprudence.

Zoning over-rides and lost of national sovereignty may seem controversial to the political class, but these two last points may seem controversial even to NC readers. However, I hope to show both points follow easily from the arguments with which we are already familiar. Both flow from the Investor-State Dispute Settlement (ISDS) mechanism, of which I will now give two examples. more

MoJo Explicator: Here’s What You Need to Know About the Trade Deal Dividing the Left

China makes big cut in bank reserve requirement to fight slowdown

Reuters, April 20

Beijing – China’s central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to the world’s second-biggest economy to help spur bank lending and combat slowing growth.

The People’s Bank of China (PBOC) lowered the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5 percent, effective from April 20, the central bank said in a statement on its website www.pbc.gov.cn.

“Though the growth in the first quarter met the official target of around 7 percent for 2015, the slowdown in several areas, including industrial output and retail sales, has caused concern,” said a report published by the official Xinhua news service covering the announcement.

The latest cut, the deepest single reduction since the depth of the global crisis in 2008, shows how the central bank is stepping up efforts to ward off a sharp slowdown in the economy.

“The size of the cut is more than expected,” said Shenwan Hongyuan Securities analyst Chen Kang.

“It’s going to release around a trillion yuan (in liquidity) at least.”

IMF tells regulators to brace for global ‘liquidity shock’

Financial engineering that preceded the last two financial crises is back, International Monetary Fund warns

The Telegraph, By Ambrose Evans-Pritchard, April 15

An illusion of liquidity has beguiled financial markets across the world and spawned some of the worst excesses seen on Wall Street in modern times, the International Monetary Fund has warned.

Investors are borrowing money to buy shares on the US stockmarket at a torrid pace and are resorting to the same sorts of financial engineering that preceded the last two financial crises.

“Margin debt as a percentage of market capitalisation remains higher than it was during the late-1990s stock market bubble. The increasing use of margin debt is occurring in an environment of declining liquidity,” said the IMF in its Global Financial Stability Report.

“Lower market liquidity and higher market leverage in the US system increase the risk of minor shocks being propagated and amplified into sharp price corrections,” it said.
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Three Charts Explain the Student Loan Mess

Bloomberg Business, By Noah Smith, April 17

Here are three charts about student loans that have me worried. First, the total amount of student loans in the U.S. has risen steadily, doubling just since the financial crisis:

This is troubling, although by now it’s a story that most people know. But what fewer people realize is that the federal government has rapidly taken over almost the entire student-loan market since the crisis. Federally owned student loans rose from zero in the mid-1990s, to a bit more than $100 billion on the eve of the crisis, to about $850 billion in late 2014:

…Student debt now comprises 45 percent of federally owned financial assets. Oy!

Thousands in Germany protest against Europe-U.S. trade deal

Reuters, By Noah Barkin, April 18

Berlin – Thousands of people marched in Berlin, Munich and other German cities on Saturday in protest against a planned free trade deal between Europe and the United States that they fear will erode food, labor and environmental standards.

Opposition to the Transatlantic Trade and Investment Partnership (TTIP) is particularly high in Germany, in part due to rising anti-American sentiment linked to revelations of U.S. spying and fears of digital domination by firms like Google.

A recent YouGov poll showed that 43 percent of Germans believe TTIP would be bad for the country, compared to 26 percent who see it as positive.

The level of resistance has taken Chancellor Angela Merkel’s government and German industry by surprise, and they are now scrambling to reverse the tide and save a deal which proponents say could add $100 billion in annual economic output on both sides of the Atlantic.

Sputnik News: Some 22,000 Participated in Anti-TTIP Protests Across Austria – Organizers

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