From Common Dreams: http://www.commondreams.org/view/2011/09/22-9
At the end of the Cold War, historian Francis Fukuyama stirred a few months of lively controversy — and eventually embarrassed himself — by declaring the “end of history.” Despite Fukuyama’s example, however, I suspect the first person to declare 2011 the beginning of the “end of economics” will be seen as a prophet.
The gradual death of economics as a serious element of public policy dates to 1981, when new president Ronald Reagan embraced the supply-side ideas of George Gilder. “Reputable economists” mocked Gilder’s theory as “trickle-down economics.” But it scored a big hit among free-market fundamentalists who saw too much money churning through the U.S. economy without first passing through their sticky fingers.
In spite of reality, supply-side theory is still with us. Skeptics, of course, were right. In 30 years, nothing has trickled down. I haven’t gotten a penny. Neither have you. Money directed to the rich, as it turns out, clings to the rich.
Meanwhile, the average U.S. family’s net wealth — adjusted for inflation —has not changed. At all. The top one percent of earners are 176 percent better off than they were pre-Gipper, but income for the middle of America’s middle class grew just 21 percent, or about 0.8 percent a year. Better than nothing? Maybe, except that most of this growth came from one-income families becoming, by necessity, two-income families.
The current evolution of trickle-down incorporates a kind of bleak magical thinking. Right-wing economics today conjures intimations of Alice growing small by drinking a potion and then growing freakishly large by eating a cupcake.
This conservative solution includes six elements: a) tax-free corporate power, b) unregulated financial speculation, c) offshore manufacturing (and engineering, and design, and R&D, and customer service, and banking), d) unchecked development and e) union-busting, with f) no government role whatsoever. You could say (if you were cynical) that the 21st-century Lobbyist State has swallowed the Security State whole, after which it got the Welfare State drunk, sodomized it and drowned it in the bathtub.
Continue reading at: http://www.commondreams.org/view/2011/09/22-9
Thursday, September 22nd, 2011
FRANKFURT/OTTAWA (Reuters) – The euro currency project is in danger due to member states’ runaway spending and the resulting sovereign debt crisis, a European Central Bank study warned on Thursday amid mounting global calls on Europe to take more decisive action.
The study, perhaps the most strongly-worded warning about the future of the euro by a central banker, was a parting shot from ECB chief economist Juergen Stark, who resigned this month after opposing the bank’s policy of buying troubled countries’ bonds.
“Greatly increased fiscal imbalances in the euro area as a whole and the dire situation in individual member countries risk undermining stability, growth and employment, as well as the sustainability of EMU (Economic and Monetary Union) itself,” the research paper said.
The report, published by the ECB but not officially endorsed by it, called for compulsory fines on states that run deficits above 3 percent of GDP and “financial receivership where adjustment programs do not remain on track.”
The European Union’s new super-watchdog, the European Systemic Risk Board, warned that the knock-on effects of the debt crisis that began in Greece in 2009 had led to considerably higher risks of financial instability in Europe.
Continue reading at: http://www.rawstory.com/rs/2011/09/22/warnings-mount-on-euro-crisis-credit-crunch/
From The Guardian UK: http://www.guardian.co.uk/business/2011/sep/22/us-stock-market-collapse
Billions are wiped off stock markets around the world as US bond-buying effort fails to calm investors’ nerves
The US stock market collapsed on Thursday as fears of a second recession worried investors and Europe’s woes wiped billions off stock markets around the world.
Wednesday saw the start of the massive sell-off after the US Federal Reserve warned of “significant downside risks” to the American economy. A $400bn bond-buying programme aimed at stimulating the moribund US economy failed to impress investors who continued to sell companies in every sector.
The fall continued as the release of figures showing a contraction in China’s manufacturing sector for a third straight month helped drive down oil prices.
Gold, copper and other commodities also fell on fears that the global economy is heading in to another slowdown. The dollar soared against the pound, euro and other currencies, as investors bet the US currency was the safest place for their money.
In Washington, World Bank president Robert Zoellick said the global economy was in a “danger zone”. Speaking at the beginning of the World Bank and International Monetary Fund annual meetings, Zoellick said: “In 2008 many people said they did not see the turbulence coming. Leaders have no such excuse now. Dangerous times call for courageous people.”
Continue reading at: http://www.guardian.co.uk/business/2011/sep/22/us-stock-market-collapse
A majority of U.S. Supreme Court justices and some politicians like to refer to corporations as “persons.” Few actual people, though, could get away with years of lawless behavior resulting in injuries and deaths, and the destruction of entire communities and ways of life. To do that takes the protection of a corporate charter and a legal and regulatory system that has succumbed to concentrated money and power.
On Friday, two public interest groups asked the attorney general of Delaware to revoke the charter of Massey Energy, a company they call a criminal enterprise.
“Massey Energy operates outside the law,” says Lorelei Scarbro, who lives a few miles from the West Virginia’s Upper Big Branch mine, which is owned and operated by Massey Energy. Scarbro traveled to Delaware to speak in support of revoking the Massey charter. “The people of Appalachia are collateral damage; they believe it’s okay to wipe out a whole culture.”
An April 2010 disaster at the Upper Big Branch mine claimed the lives of 29 coal miners. The accident investigation, commissioned by West Virginia Governor Earl Ray Tomblin, pins the blame for the disaster squarely on Massey’s “total and catastrophic systemic failures … in the context of a culture in which wrongdoing became acceptable, where deviation became the norm.”
According to the report, Massey is also responsible for “incalculable damage to mountains, streams and air in the coalfields; creating health risks for coalfield residents by polluting streams, injecting slurry into the ground and failing to control coal waste dams and dust emissions from processing plants; using vast amounts of money to influence the political system; and battling government regulation regarding safety in the coal mines and environmental safeguards for communities.”