Tag Archives | Economy

The Middle Class is Poorer Today Than it Was in 1989

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Photo by Brendel (CC)

No surprises for guessing who hogged the gains in the economy over the last 25 years. Yes, you guessed it, the wealthy 1%, per the Washington Post:

The fundamentals of the economy are, well, okay.

It’s been slow and steady, but the recovery has chugged along enough to get us back to something close to normal. The economy has surpassed its pre-crisis peak, unemployment is at a six-year low, and stocks have more than tripled from their 2009 low. It’s not the best of times, but it’s certainly not the worst — which was a very real possibility after Lehman Brothers’ bankruptcy threatened to send us into a second Great Depression.

President Obama and his fellow Democrats, naturally, would like to claim some of the credit for that. If voters credited them with this economic turnaround, Obama and his party might have a better chance of holding the Senate this fall, an outcome that looks precarious.

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4 Ways Amazon’s Ruthless Practices Are Crushing Local Economies

By Akira Ohgaki via Flickr (CC by 2.0).

By Akira Ohgaki via Flickr (CC by 2.0).

via AlterNet:

Even by the anything-goes ethical code of the corporate jungle, Amazon.com’s alpha male, Jeff Bezos, is considered a ruthless predator by businesses that deal with him. As overlord of Amazon, by far the largest online marketer in the world (with more sales than the next nine US online retailers combined), Bezos has the monopoly power to stalk, weaken, and even kill off retail competitors—going after such giants as Barnes & Noble and Walmart and draining the lifeblood from hundreds of smaller Main Street shops. He also goes for the throats of both large and small businesses that supply the millions of products his online behemoth sells. They’re lured into Amazon by its unparalleled database of some 200 million customers, but once in, they face unrelenting pressure to lower what they charge Amazon for their products, compelled by the company to give it much better deals than other retailers can extract.

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Sack the Economists

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By Geoff Davies via Real-World Economics Review Blog:

Non-mainstream economists are all-too aware of the failure of mainstream economists to anticipate, let alone avoid, the Global Financial Crisis and the ensuing Great Recession.  The mainstream profession is also failing to fix the problem, and is actually making it worse.

It is hard to get alternative views heard, and the mainstream carries on almost totally unperturbed, despite being centrally responsible for a global disaster.  This is of course extremely frustrating.

After reading yet another cri de coeur from yet another frustrated economist, I thought perhaps we need to spell out the message in all bluntness: we need to sack the economists (the mainstreamers).  We also need to derail their baleful ideology.  That means we need to disband the departments of neoclassical economics, so the poison is not passed on to any more hapless generations.

When I say “we”, I really mean “we, the people”.  The job can’t be done by a small band of isolated reformers.  That means people need to be informed and persuaded.  They need to be spoken to in terms they understand;  not everyone, but opinion leaders and interested laypeople, of whom there are many.

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Scotland, Sovereignty and Corporations

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David Morris writes at Common Dreams:

Since 1945 the number of nations has soared from about 60 to more than 180. The first wave of new sovereign states came with the decolonization movement of the 1960s and 1970s; the second in the early 1990s with the break-up of the Soviet Union. If Scotland votes for independence it may ignite a third wave. Dozens of would-be nations are waiting in the wings: Wales, Catalonia, Flanders, Breton, the list is long.

In 1957 in his classic book The Breakdown of Nations economist and political scientist Leopold Kohr persuasively and rigorously argued that small nations are the natural order having been throughout history the engines for enlightenment, innovation, mutual aid and the arts. The large nation state, he argued is not a reflection of improved efficiency but of superior force:

It is the great powers which lack the real basis of existence and are without autochthonous, self-sustaining sources of strength.

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Woman with 4 Jobs Dies While Napping in Car

By SpaceShoe via Flickr.

By SpaceShoe via Flickr.

This tragic death raises questions about the economy. It’s time to raise minimum wage – working four jobs and being forced to nap in one’s car between shifts to make ends meet is unacceptable. Minimum wage =/= livable wage and it should.

via AlterNet:

Maria Fernandes, 32, of Newark, NJ, worked four jobs, including two at different Dunkin Donuts stores. In between working, she would often park in public lots and catch up on sleep. She kept a can of gasoline in her car because she had occasionally run out of gas in the past during her job commutes.

On Monday, Fernandes pulled into a WaWa convenience store parking lot in Elizabeth, NJ, to nap. Concerned employees called 911. When emergency workers arrived and opened her car door, they were met with a toxic odor. Workers determined that Fernandes was dead and called Hazmat workers to the scene.

Fernandes died from inhaling a fatal mixture of carbon monoxide from her car, which was running, and the can of gasoline that spilled open in the back of her car.

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Citigroup: The Original Gangsta

500px-Citi.svgRobert Scheer writes at Truthdig:

Barack Obama’s Justice Department on Monday announced that Citigroup would pay $7 billion in fines, a move that will avoid a humiliating trial dealing with the seamy financial products the bank had marketed to an unsuspecting public, causing vast damage to the economy.

Citigroup is the too-big-to-fail bank that was allowed to form only when Bill Clinton signed legislation reversing the sensible restraints on Wall Street instituted by President Franklin Roosevelt to avoid another Great Depression.

Those filled with Clinton nostalgia these days might want to reflect back on how truly destructive was his legacy for hardworking people throughout the world who lost so much due to the financial shenanigans that he made legal.

“Today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority,” a beaming Clinton boasted after signing the Financial Services Modernization Act into law in 1999.

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According to the World Bank, Preventing Climate Change Would Help the Economy

Credit: Collection of Dr. Pablo Clemente-Colon, Chief Scientist National Ice Center.

Credit: Collection of Dr. Pablo Clemente-Colon, Chief Scientist National Ice Center.

Yes, you read that right. Implementing preventative measures and tackling the climate change before it gets worse would actually save us money and boost the economy. Well, according to the World Bank, who seem to be pro-climate change when dollar signs are in the mix.

Fighting climate change would help grow the world economy, according to the World Bank, adding up to $2.6tn (£1.5tn) a year to global GDP in the coming decades.

The findings, made available in a report on Tuesday, offer a sharp contrast with claims by the Australian government that fighting climate change would “clobber” the economy.

The report also advances on the work of economists who have argued that it will be far more costly in the long run to delay action on climate change.

Instead, Tuesday’s report found a number of key policies – none of which included putting an economy-wide price on carbon – would lead to global GDP gains of between $1.8tn and $2.6tn a year by 2030, in terms of new jobs, increased crop productivity and public health benefits.

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The Mantra on Wall Street Is ‘Don’t Fight the Fed’, but Do You Know What the Fed Is Doing? And Where Did Belgium Get $141 Billion to Purchase U.S. Treasury Bonds?

via chycho

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The main mantra on Wall Street is ‘Don’t Fight the Fed’, implying that if monetary policy is geared towards easing – lowering of interest rates – then riskier markets are the game in town, and if monetary policy is geared towards tightening – rising interest rates – then volatile markets are to be avoided. But do we know what the Fed is up to?

I. DOW, S&P 500, QE, and Tapering

Both the DOW and S&P 500 are sitting at all-time highs. Since bottoming out in early March 2009 (DOW, S&P 500), the DOW is up approximately 150% and the S&P 500 approximately 180%. Astronomical returns no matter what period you compare this to.

It’s no secret that the only reason the markets have been soaring is because of unlimited quantitative easing [QE], i.e., stimulus, stimulus, and indefinite-stimulus – “fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy.”

By December 2012, funds were being pumped into the markets to the tune of $85 billion a month – a last resort, desperate measure that the FOMC began so that their ‘growth’ targets could be met.

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Why Riot?

PIC: Bryan Tong Minh (CC)

PIC: Bryan Tong Minh (CC)

A thought provoking must read on a largely misunderstood topic:

Via Ultra

So I’m writing here for simple reasons: to defend the riot as a general tactic and to explain why one might engage in a riot. By this I mean to defend and explain not just the window breaking, not just “non-injurious violence,” and certainly not just the media spectacle it generates, but the riot itself—that dangerous, ugly word that sounds so basically criminal and which often takes (as in London in 2011) a form so fundamentally unpalatable for civil society that it can only be understood as purely irrational, without any logic, and without possible defense.

I aim, nonetheless, to defend and explain the riot, because we live in a new era of riots. Riots have been increasing in absolute number globally for the past thirty years. They are our immediate future, and this future will spare Seattle no less than Athens or London, Guangzhou or Cairo.

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