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Old 2020-05-17, 00:00   #155
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Taibbi: The COVID-19 Bailout Gave Wall Street a No-Lose Casino | Matt Taibbi, Rolling Stone

The closing section:
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Decades ago, America started down the road of creating two economic worlds. Our once-mighty brick-and-mortar economy went into decline and began to be exported overseas, to cheap labor zones and countries with less-stringent environmental laws — places that, as economist Larry Summers infamously put it, were “vastly underpolluted.” That American factory workers would be left behind by this process was just their bad luck, another thing requiring a “suck it in and cope” attitude.

Not so for their bosses, though, who were rescued from the decline by transitioning to even-more-profitable work in a new, “financialized” economy. This world emphasized making money by moving it around in the capital markets — prioritizing fees, interest, capital gains, etc. A generation of minds that were trained in the logic of “financialization,” and its underlying principles — which include the idea that workers are fungible, parasitic drains on the more crucial “wealth creators” above — accelerated the aggressive tilt to the political right by America’s wealthy in recent decades.

Even the experts at the Federal Reserve, whose official mandate includes attaining “maximum sustainable employment,” became more and more removed from their real-world purpose over the years, devoted instead to tending to the needs of this second, sandcastle economy over the problems of disenfranchised working people, whose fates mostly couldn’t be helped. And why not? What Fed official ever interacts with anyone not employed in the financial sector? How could the real world ever seep in?

The coronavirus bailout could end up being the last chapter in this hideous story. Although we’re seeing a graphic demonstration of how “unskilled” workers like home health aides and delivery people and grocery clerks are actually the vitally important people in our society, they’re not getting the radical rescue. There’s no sudden universal health care, no guaranteed sick leave, no massive jobs plan, just Band-Aids. They will die in massive numbers and emerge from this crisis, if and when it ends, poorer and more vulnerable than before.

But the financial markets are getting the World War II-style “whatever it takes” financial commitment, based upon the continuing fallacy that “wealth creators” must be the first in line for rescue in any crisis. This was a wrong assumption on the decks of the Titanic, a wrong assumption after 2008, and a criminally wrong assumption now.

Continuing belief in the trickle-down myth that has been destroying and dividing this country for decades will kill us faster than any pandemic. If we’re going to spend in “unlimited” amounts, let’s for once do it in the real world and for the people who need it most.

Last fiddled with by ewmayer on 2020-05-17 at 00:01
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Old 2020-05-23, 19:39   #156
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o Why the Neoliberals Won’t Let This Crisis Go to Waste | Jacobin Magazine: Many observers expected that the 2008 financial crisis would mark the end of neoliberalism. Instead, we saw a wave of privatization and sharp cuts in public services. Today, the forces best placed to exploit the coronavirus pandemic are still those who already have power: the neoliberals who’ve been shaping the economic policy agenda for decades.
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In November 2008, just weeks after the Lehman Brothers collapse, Barack Obama’s chief of staff Rahm Emanuel insisted that the banking crisis wasn’t just bad news for the neoliberals. As the former Freddie Mac board member put it, the dramatic tumult was also the chance to clear away some deadwood — and even push the neoliberal project along further. In his immortal words, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.”

The quote inspired the title of Philip Mirowski’s 2013 book Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. It provided a rebuke to those who assumed the crisis would simply weaken the dominant economic policy assumptions of recent decades — or that the neoliberals wouldn’t themselves react. Far from the state bailouts of the banks showing that neoliberalism was over, in fact, they were followed by a further wave of marketization of public services — and years of austerity.
o Four functions of markets | Interfuildity -- This weekend's must-read (IMO) for those interested in the crucial "whither markets, whither democracy?" question facing the world.
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Perhaps, perhaps, this crisis marks an end of the “neoliberal era”.

The word “neoliberal” immediately provokes contention, but let’s not get fancy or upset here. For our purposes, neoliberalism is just a set of social heuristics: 1) that markets are in general the most capable institution for organizing human affairs; 2) that therefore, absent strong reasons to the contrary, use of market or market-like institutions should be maximized, “completed”, expanded even into domains heretofore intentionally insulated from them; and 3) that other institutions, including the state, should take a supportive, even subservient role: filling in gaps (“safety net”), addressing “market failures” that are presumed to be rare rather than pervasive, and only when a high burden of proof has been met. Any other intervention is a “distortion” to be avoided at all costs.

I think it fair to describe the period from about 1980 until the 2008 financial crisis as a neoliberal era, a period of time during which these social heuristics were widely accepted by governing elites and policy, in the United States and the broad West, was informed and shaped by them. The period from 2008 until now has been a kind of undead neoliberal era. Post Great Financial Crisis, neoliberal ideas have been discredited among much of the public and are actively contested even within governing elites. But, absent consensus on some new set of social heuristics, not much has actually changed. Material interests in the continuity of institutions shaped by neoliberalism remain strong.

Continuity now is broken. When this pandemic is “over” (whatever that means), the undead bones of neoliberal governance may well yet again gather themselves from the chaos and reconstitute the suave, smooth-talking vampire to whose predations we have grown unhappily accustomed. But they may not. We may find ourselves in a period of social experimentation and change. If so, as we diminish (not eliminate!) the role of markets, it is useful I think to understand the variety of functions that markets serve, so that framers of new institutions understand what will be excised, what may sometimes need to be replaced. So. Here are four functions of markets:
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Old 2020-06-07, 12:35   #157
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Default Civil unrest: Wall Street celebrates...

Fox News: Black deaths, stock market graphic was insensitive
Quote:
LOS ANGELES (AP) — Fox News apologized Saturday for how it displayed a chart correlating the stock market's performance with the aftermath of the deaths of George Floyd, Martin Luther King Jr. and Michael Brown.

The graphic that aired Friday to illustrate market reactions to historic periods of civil unrest "should have never aired on television without full context. We apologize for the insensitivity of the image and take this issue seriously," the cable channel said in a statement.

The chart included on "Special Report with Bret Baier" illustrated gains made by the S&P 500 index after King's assassination in 1968; the Ferguson, Missouri, police shooting of 18-year-old Michael Brown in 2014, and the May 25 death of Floyd while in Minneapolis police custody. It also measured the financial yardstick against the 1991 acquittal of Los Angeles police officers in the beating of Rodney King.
<snip>
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Old 2020-06-16, 21:56   #158
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https://sirota.substack.com/p/they-h...-for-all-money
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Since 2008, we spent somewhere between $20-35 trillion on corporate bailouts -- that’s the allegedly “unaffordable” amount that could pay for Medicare for All in the same time period.

In recent weeks, we’ve seen health care industry CEOs report paying themselves $2.4 billion as 27 million people were thrown off their health care coverage. We’ve also seen Americans being charged anywhere from $400,000 to $1.1 million for COVID treatment, and facing $2,000 bills for coronavirus tests.

In response, polls show Americans remain deeply concerned about the current health care system, and support for Medicare for All has surged. And yet, despite data showing that a single-payer system would save big money, surveys still indicate some popular trepidation about the price tag of government-sponsored health care.

That reflects, in part, a Democratic primary season that saw most candidates, the press corps and the Washington political class try to pretend that the planet’s wealthiest nation cannot possibly afford the kind of Medicare for All system that other less-wealthy nations have had for decades.

“No matter how you cut the numbers, there is absolutely no way to pay for Medicare for all without tax increases -- or spending cuts -- on the middle class,” one pro-austerity group told Politico in a story breathlessly touted by the health care industry’s dark money group.

But here’s what few seem to have noticed: As of the last few months, we just definitively proved we actually did have the money all along -- and we had it even if we never hiked taxes to raise new revenues.
No new taxes or other revenue. Just print some more (symbolic.) Of course, it is all numbers changed or shifted to pay for the bonanza.
That is, creating dollars out of bits and bites.
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Old 2020-06-17, 06:46   #159
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Quote:
Originally Posted by kladner View Post
...
Just print some more (symbolic.) Of course, it is all numbers changed or shifted to pay for the bonanza.
That is, creating dollars out of bits and bites.
This means having the rest of the world pay for it : it used to be that a country creating a lot of money out of nothing would see its currency diminish in value against the other currencies. Nowadays the third parties, having a huge part of their assets and revenues in dollars, have to accept its inflated value in order for their assets not to diminish. It could be argued that the USA is basing a lot of its wealth on a Ponzi scheme.

Jacob
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Old 2020-06-17, 20:11   #160
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Quote:
Originally Posted by S485122 View Post
This means having the rest of the world pay for it : it used to be that a country creating a lot of money out of nothing would see its currency diminish in value against the other currencies. Nowadays the third parties, having a huge part of their assets and revenues in dollars, have to accept its inflated value in order for their assets not to diminish. It could be argued that the USA is basing a lot of its wealth on a Ponzi scheme.

Jacob
You are absolutely correct. Russia, and China are trading in lots of their dollars for gold to get out of the dollar trap.

https://www.thestreet.com/video/cryp...eiser-15154154

https://dissidentvoice.org/2018/08/r...lar-sanctions/

https://www.marketwatch.com/story/wh...old-2019-09-13

https://www.newsmax.com/finance/mark.../29/id/909254/

Last fiddled with by kladner on 2020-06-17 at 20:11
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Old 2020-06-19, 20:19   #161
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Quote:
Originally Posted by kladner View Post
You are absolutely correct. Russia, and China are trading in lots of their dollars for gold to get out of the dollar trap.
This sounds like a typical gold-bug delusion (I like Max Keiser for his rants, but his 'fixes' often leave me guffawing) - you can use gold for small-scale hedging and such, but there's simply nowhere near enough of it in saleable form to conduct any large-scale trade based on it. What China, Russia et al really need, and what they are busily working on, is a non-dollar-based trade-settlement payments system.
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Old 2020-06-20, 21:39   #162
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I, Who Hates Shorting, Just Shorted the Entire Stock Market. Here’s Why | Wolf Street

Good summary of the central-bank-money-printing-induced financial-market craziness - the "Hertz shares rally after bankruptcy announcement, so Hertz and creditors try a money-raising new-share offering knowing said shares will be worthless shortly" episode is especially telling.

Disagree with Wolf's conclusion, though - the Fed may have *paused* its financial-asset purchases, them having succeeded beyond all expectation - equity indices making record highs amidst the worst job losses and GDP hits since, well, ever - but as soon as the cocaine wears off and markets once again tenously reconnect with that obsolescent relic known as "the real goods and services economy", they'll simply throw another selloff tantrum and dear-hearted Uncle Feddie will feel compelled to print a few more $trillions to comfort the bawling infant.
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Old 2020-06-27, 13:18   #163
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That may be old news for those in the know but it's something I've only recently heard about, and it really floors me: you can literally buy yourself a Montenegrin passport https://tranio.com/montenegro/passport/... legally. You just invest in the country's real estate or economy, and become a citizen. From what Google tells me, it exists in other countries, like Malta. That's really something I wouldn't have even thought could exist, but the people with that sort of money really don't live in the same world, do they?

But in terms of rational thinking, it makes sense. These countries bring in more rich people, they pay less taxes than they'd pay in their homeland, and the hosting country gets a new wealthy taxpayer, that's a win-win.
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Old 2020-06-28, 22:36   #164
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@GalebG2: You neglected to note the "who loses" part of your tax-loophole story, though it's pretty obviously the country whose taxes are being evaded by the dodger.

BTW, multinational corporations use corporate versions of these legal-because-we-bribed-legislators-to-make-them-legal schemes to avoid literal $trillions in taxes. How do you think Amazon pulled in over $200 billion in revenue in 2018 and ended up getting a $129 million tax *refund* for that year?
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Old 2020-07-13, 16:27   #165
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Default Iran-China pact turbocharges the New Silk Roads -By Pepe Escobar

http://www.informationclearinghouse.info/55337.htm
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TWO of the US’s top ‘strategic threats’ are getting closer and closer within the scope of the New Silk Roads — the leading 21st century project of economic integration across Eurasia. The Deep State will not be amused.

Iranian foreign ministry spokesman Abbas Mousavi blasted as ‘lies’ a series of rumours about the ‘transparent roadmap’ inbuilt in the evolving Iran-China strategic partnership.

That was complemented by president Rouhani’s chief of staff, Mahmoud Vezi, who said that ‘a destructive line of propaganda has been initiated and directed from outside Iran against the expansion of Iran’s relations with neighbours and especially (with) China and Russia.’
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