Economics


'The Gig Economy' Is the New Term for Serfdom By Chris Hedges March 26, 2018

Corporate capitalism is establishing a neofeudal serfdom in numerous occupations, a condition in which there are no labor laws, no minimum wage, no benefits, no job security and no regulations. Desperate and impoverished workers, forced to endure 16-hour days, are viciously pitted against each other. Uber drivers make about $13.25 an hour. In cities like Detroit this falls to $8.77. Travis Kalanick, the former CEO of Uber and one of the founders, has a net worth of $4.8 billion. Logan Green, the CEO of Lyft, has a net worth of $300 million.

The corporate elites, which have seized control of ruling institutions including the government and destroyed labor unions, are re-establishing the inhumane labor conditions that characterized the 19th and early 20th centuries.

When workers at General Motors carried out a 44-day sit-down strike in 1936, many were living in shacks that lacked heating and indoor plumbing; they could be laid off for weeks without compensation, had no medical or retirement benefits and often were fired without explanation. When they turned 40 their employment could be terminated. The average wage was about $900 a year at a time when the government determined that a family of four needed a minimum of $1,600 to live above the poverty line.

The reign of the all-powerful capitalist class has returned with a vengeance. The job conditions of working men and women, thrust backward, will not improve until they regain the militancy and rebuild the popular organizations that seized power from the capitalists.

The ruling capitalists will be as vicious as they were in the past. Nothing enrages the rich more than having to part with a fraction of their obscene wealth. Consumed by greed, rendered numb to human suffering by a life of hedonism and extravagance, devoid of empathy, incapable of self-criticism or self-sacrifice, surrounded by sycophants and leeches who cater to their wishes, appetites and demands, able to use their wealth to ignore the law and destroy critics and opponents, they are among the most repugnant of the human species.

Don’t be fooled by the elites’ skillful public relations campaigns—we are watching Mark Zuckerberg, whose net worth is $64.1 billion, mount a massive propaganda effort against charges that he and Facebook are focused on exploiting and selling our personal information—or by the fawning news celebrities on corporate media who act as courtiers and apologists for the oligarchs. These people are the enemy.

The corporate architects of the new economy have no intention of halting the assault. They intend to turn everyone into temp workers trapped in demeaning, low-paying, part-time, service-sector jobs without job security or benefits, a reality they plaster over by inventing hip terms like “the gig economy.”

Thom Hartmann: How the GOP Used a Two Santa Clauses Tactic to Con America for Nearly 40 Years This scam has been killing wages and enriching billionaires for decades.

The Republican Party has been running a long con on America since Reagan’s inauguration, and somehow our nation’s media has missed it – even though it was announced in The Wall Street Journal in the 1970s and the GOP has clung tenaciously to it ever since.

In fact, Republican strategist Jude Wanniski’s 1974 “Two Santa Clauses Theory” has been the main reason why the GOP has succeeded in producing our last two Republican presidents, Bush and Trump (despite losing the popular vote both times). It’s also why Reagan’s economy seemed to be “good.”

Here’s how it works, laid it out in simple summary:

First, when Republicans control the federal government, and particularly the White House, spend money like a drunken sailor and run up the US debt as far and as fast as possible. This produces three results – it stimulates the economy thus making people think that the GOP can produce a good economy, it raises the debt dramatically, and it makes people think that Republicans are the “tax-cut Santa Claus.”

Second, when a Democrat is in the White House, scream about the national debt as loudly and frantically as possible, freaking out about how “our children will have to pay for it!” and “we have to cut spending to solve the crisis!” This will force the Democrats in power to cut their own social safety net programs, thus shooting their welfare-of-the-American-people Santa Claus.

Think back to Ronald Reagan, who more than tripled the US debt from a mere $800 billion to $2.6 trillion in his 8 years. That spending produced a massive stimulus to the economy, and the biggest non-wartime increase in the debt in history. Nary a peep from Republicans about that 218% increase in our debt; they were just fine with it.

And then along came Bill Clinton. The screams and squeals from the GOP about the “unsustainable debt” of nearly $3 trillion were loud, constant, and echoed incessantly by media from CBS to NPR. Newt Gingrich rode the wave of “unsustainable debt” hysteria into power, as the GOP took control of the House for the first time lasting more than a term since 1930, even though the increase in our national debt under Clinton was only about 37%.

The GOP “debt freakout” was so widely and effectively amplified by the media that Clinton himself bought into it and began to cut spending, taking the axe to numerous welfare programs (“It’s the end of welfare as we know it” he famously said, and “The era of big government is over”). Clinton also did something no Republican has 'e in our lifetimes: he supported several balanced budgets and handed a budget surplus to George W. Bush.

When George W. Bush was given the White House by the Supreme Court (Gore won the popular vote by over a half-million votes) he reverted to Reagan’s strategy and again nearly doubled the national debt, adding a trillion in borrowed money to pay for his tax cut for GOP-funding billionaires, and tossing in two unfunded wars for good measure, which also added at least (long term) another $5 to $7 trillion.

There was not a peep about the debt from any high-profile in-the-know Republicans then; in fact, Dick Cheney famously said, essentially ratifying Wanniski’s strategy, “Reagan proved deficits ''t matter. We won the midterms [because of those tax cuts]. This is our due.” Bush and Cheney raised the debt by 86% to over $10 trillion (although the war debt wasn’t put on the books until Obama entered office).

Then comes Democratic President Barack Obama, and suddenly the GOP is hysterical about the debt again. So much so that they convinced a sitting Democratic president to propose a cut to Social Security (the “chained CPI”). Obama nearly shot the Democrats biggest Santa Claus program. And, Republican squeals notwithstanding, Obama only raised the debt by 34%.

Now we’re back to a Republican president, and once again deficits be damned. Between their tax cut and the nearly-trillion dollar spending increase passed on February 8th, in the first year-and-a-month of Trump’s administration they’ve spent more stimulating the economy (and driving up debt by more than $2 trillion, when you include interest) than the entire Obama presidency.

Consider the amazing story of where this strategy came from, and how the GOP has successfully kept their strategy from getting into the news; even generally well-informed writers for media like the Times and the Post – and producers, pundits and reporters for TV news – '’t know the history of what’s been happening right in front of us all for 37 years.

Wanniski was tired of the GOP failing to win elections. And, he reasoned, it was happening because the Democrats had been viewed since the New Deal as the Santa Claus party (taking care of people’s needs and the General Welfare), while the GOP, opposing everything from Social Security to Medicare to unemployment insurance, was widely seen as the party of Scrooge.

The Democrats, he noted, got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built, giving a healthy union paycheck to construction workers and making our country shine.

Democrats kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that added to the perception that the Democrats were a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class.

Americans loved the Democrats back then. And every time Republicans railed against these programs, they lost elections.

Wanniski decided that the GOP had to become a Santa Claus party, too. But because the Republicans hated the idea of helping working people, they had to figure out a way to convince people that they, too, could have the Santa spirit. But what?

“Tax cuts!” said Wanniski.

To make this work, the Republicans would first have to turn the classical world of economics – which had operated on a simple demand-driven equation for seven thousand years – on its head. (Everybody understood that demand – aka “wages” – drove economies because working people spent most of their money in the marketplace, producing demand for factory output and services.)

In 1974 Wanniski invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money.

The more things there were, he said, the faster the economy would grow. And the more money we gave rich people and their corporations (via tax cuts) the more stuff they’d generously produce for us to think about buying.

At a glance, this move by the Republicans seems irrational, cynical and counterproductive. It certainly defies classic understandings of economics. But if you consider Jude Wanniski’s playbook, it makes complete sense.

To help, Arthur Laffer took that equation a step further with his famous napkin scribble. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up! Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to fully embrace the Two Santa Clauses strategy. He said straight out that if he could cut taxes on rich people and businesses, those tax cuts would cause them to take their surplus money and build factories, and that the more stuff there was supplying the economy the faster it would grow.

There was no way, Wanniski said, that the Democrats could ever win again. They'd be forced into the role of Santa-killers by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath.

But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security.

And this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy.

Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by doubling the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.

Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined.

Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks. And that's just how it turned out.

Bill Clinton, who had run on an FDR-like platform of a "New Covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box.

A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government."

Clinton was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases. State after state turned red, and the Republican Party rose to take over, ultimately, every single lever of power in the federal government, from the Supreme Court to the White House.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."

In reality, his tax cuts did what they have always 'e over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people. Just like today.

The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, and cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 6 of the non-governmental workforce today.

Over time, and without raising the cap, Social Security will face an easily-solved crisis, and the GOP’s plan is for force Democrats to become the anti-Santa, yet again. If the GOP-controlled Congress continues to refuse to require rich people to pay into Social Security (any income over $128,000 is SS-tax-free), either benefits will be cut or the retirement age will have to be raised to over 70.

The GOP plan is to use this unnecessary, manufactured crisis as an opening to “reform” Social Security - translated: cut and privatize. Thus, forcing Democrats to become the Social Security anti-Santa a different way.

When this happens, Democrats must remember Jude Wanniski, and accept neither the cut to disability payments nor the entree to Social Security “reform.” They must demand the “cap” be raised, as Bernie Sanders proposed and the Democratic Party adopted in its 2016 platform.

And, hopefully, some of our media will begin to call the GOP out on the Two Santa Clauses program. It’s about time that Americans realized the details of the scam that’s been killing wages and enriching billionaires for nearly four decades.

This Is Your Brain on Money: Why America’s Rich Think Differently Than the Rest of Us Economist Chris Dillow cites research by Cameron Anderson and Sebastien Brion, showing that overconfident individuals are seen by others as more competent. He argues that, “overconfident people are more likely to be promoted. And this could have positive feedback effects. Higher status will itself breed even more overconfidence. (E.g. “I got the job so I must be good.”) And if bosses employ like-minded subordinates, the result could be entire layers of management which are both over-confident and engaged in groupthink.” Many other studies cited.

Do Financial Markets Still Exist? By Paul Craig Roberts, Dave Kranzler, Michael Hudson February 14, 2018

Central banks have learned that they can rig financial asset prices to the delight of everyone in the market.

For many decades the Federal Reserve has rigged the bond market by its purchases. And for about a century, central banks have set interest rates (mainly to stabilize their currency’s exchange rate) with collateral effects on securities prices. It appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines driven by fundamentals, and to push prices back up in keeping with a decade of money creation.

No one should find this a surprising suggestion. The Bank of Japan has a long tradition of propping up the Japanese equity market with large purchases of equities. The European Central Bank purchases corporate as well as government bonds. In 1989 Fed governor Robert Heller said that as the Fed already rigs the bond market with purchases, the Fed can also rig the stock market to stop price declines. That is the reason the Plunge Protection Team (PPT) was created in 1987.

Trump Privatizes America By Michael Hudson and Real News, Posted February 14, 2018

What Trump basically said is that states and cities have to let themselves be robbed blind by the hedge funds and Wall Street.

Hedge Funds, the Unacceptable Face of Capitalism: Their Role in Precipitating the Collapse of Financial Markets By Hans Stehling Global Research, February 09, 2018

In 1992, acting virtually alone, an individual hedge fund operator used the international monetary system to bet against the Pound Sterling thereby forcing the United Kingdom government to withdraw from the European Exchange Rate Mechanism. That operator reputedly profited personally by more than £1 billion, without the necessity of getting out of bed. That same financier as well as certain other hedge fund operators, stand accused of meddling in the internal affairs of foreign states i.e. countries external to their own domicile. By their very nature they are, in essence, counter democratic in that they clearly operate to the disadvantage of the majority in order that a handful of gamblers can gain a vast monetary advantage.

So, what are hedge funds? They are essentially highly sophisticated, computerised gambling syndicates that predominantly use borrowed money to bet on the movement of quoted stocks…

Money Laundering: Is It Really True that Switzerland Is the #1 Most Corrupt Nation, and the U.S. #2? Counter Information By Eric Zuesse, Global Research, February 01, 2018

The Tax Justice Network produces a Financial Secrecy Index, ranking countries for the assistance their legal systems provide, to money-launderers, and to all people who seek to protect corruptly-obtained wealth. The higher the score, the more corrupt the government is. The last time this Index was published, in 2015, Switzerland was rated the world’s most-corrupt country, and Hong Kong was then #2.

But now, in its newly released global rankings, “Financial Secrecy Index — 2018 Results”, though Switzerland still holds its #1 (most-corrupt) spot, the U.S. has become #2, and Hong Kong has now fallen to #4, which is immediately below Cayman Islands (which is #3, and which had been #5 in 2015).

No Fast Track Why wouldn't we want to make sure future trade deals will have a positive impact on the U.S. trade balance, create good, family-wage jobs, and protect the environment and our natural resources?

Fast Track legislation shrouds trade deals in secrecy. It makes it nearly impossible for Congress to fix trade deals that harm our economy and environment. It prevents citizens from providing input to proposals while the deal is being negotiated. It makes you wonder what they're trying to hide.


What happens when you tax the rich and raise the minimum wage? Meet one of USA's best economies By Walter Einenkel Wednesday Feb 25, 2015

When Minnesota Governor Mark Dayton took office in 2011, Minnesota had more than a $6 billion dollar deficit and an unemployment rate of 7%. Today, Minnesota's unemployment rate is now below 4% and they have a budget surplus of over $1.2 billion dollars. How did Mark Dayton do this?

During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly -- a tax increase of $2.1 billion. He's also agreed to raise Minnesota's minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women.

Mark Dayton's approach of making people who can afford to pay, pay, helped eliminate the deficit. Raising the minimum wage gave more people money to spend. Businesses like money and they like people who have money to spend.

Between 2011 and 2015, Gov. Dayton added 172,000 new jobs to Minnesota's economy -- that's 165,800 more jobs in Dayton's first term than Pawlenty added in both of his terms combined. Even though Minnesota's top income tax rate is the 4th-highest in the country, it has the 5th-lowest unemployment rate in the country at 3.6 percent. According to 2012-2013 U.S. census figures, Minnesotans had a median income that was $10,000 larger than the U.S. average, and their median income is still $8,000 more than the U.S. average today.

Gov. Dayton didn't accomplish all of these reforms by shrewdly manipulating people -- this article describes Dayton's astonishing lack of charisma and articulateness. He isn't a class warrior driven by a desire to get back at the 1 percent -- Dayton is a billionaire heir to the Target fortune. It wasn't just a majority in the legislature that forced him to do it -- Dayton had to work with a Republican-controlled legislature for his first two years in office. And unlike his Republican neighbor to the east, Gov. Dayton didn't assert his will over an unwilling populace by creating obstacles between the people and the vote -- Dayton actually created an online voter registration system, making it easier than ever for people to register to vote.

Income Growth and Inequality 1978-2015

Global Inequality Dynamics: New Findings from WID.world*

'J is for Junk Economics': Michael Hudson on TRNN (4/5)

"a comprehensive index of useful links for anyone interested in economics, business, and finance" - has economics study aids for students
EconLinks easy access to basic economic and financial information for students in economics and business courses
Economic Reporting Review
Economic Statistics Briefing Room --U.S. Economic Indicators from the White House Web site
Economics Working Paper Archive (Washington University)
EDGAR Online --Corporation filings (10-K, 10-Q etc.)
EDGAR (U.S. Securities and Exchange Commission) --Corporation filings
Educational Resources: Economics
Fed 101 an outstanding basic introduction to the federal reserve banking system and its history
FINANCE page of links
Financial Accounting Standards Board
FinFacts: Worldwide 2001 Cost of Living Survey: City Rankings compares the prices of more than 200 items in 144 cities around the world
FTAA - Free Trade Area of the Americas
Game Theory Explained
Geo Newsletter bimonthly; reports on worker cooperatives and community-based economies in the U.S. and worldwide
Global Capitalism and Its Discontents updates and articles focusing on anticapitalism
Global Macroeconomic and Financial Policy Site, Nouriel Roubini's latest news and analysis
GLOBALIZATION page of links
Glossary of Political Economy Terms
GREENSPAN, ALAN notes and quotes
Grounds for Change "a Pacific Northwest organic coffee roaster specializing in socially responsible and environmentally sustainable coffee. We roast exclusively 100% Fair Trade Organic Coffee, that is grown in shaded conditions "
Human Rights Report U.N. report on the quality of life indicators in 162 countries [pdf]
"The Income Gap: A Problem America Can't Ignore" "A contributing factor to the income gap is the growing divide between executive and worker pay. In 1970, the average CEO made 41 times what the average manufacturing worker made. In 1997, according to Business Week magazine, this ratio was 326 to one."
Inequality.org info on the divide in income, "the great unmentionable"
INSURANCE page of links
International Economics Network a portal for international economics; links to economics sites, organized by topic area
INVESTMENT page of links
Just Coffee organic coffee from fair trade collectives in Central America -- "Through Fair Trade, consumers, activists, and coffee roasters are partnering with small coffee growers to ensure that growers, their families, and their communities receive a fair price for their produce. By cutting the coffee supply chain down to a minimum number of participants, and by each paticipant committing to deal with the others as equal partners, Fair Trade is positively changing the way that coffee business is 'e" [a photo-editorial about this group ran in the November 2004 issue of The Progressive
Kicking Away the Ladder: Developement Strategy in Historical Perspective economics book by Ha-Joon Chang which argues that historically the free trade countries used tariffs and other forms of protectionism to develop their economies before turning to free trade; they are now trying to force free trade on developing nations which really need protectionism at this stage of their development
Kicking the IMF and World Bank Where It Hurts book review of Kicking Away the Ladder, by Ha-Joon Chang - "the history that the IMF and World Bank hope you will never learn"
Labour Economics Gateway Internet-sites that are of interest to labour economists
Library of Economics and Liberty compilation of seminal works and ideas from important commentators on economics
Macroeconomics--Argus index of links
MARKETING page of links
Mountain Voices interviews with over 300 people who live in mountain and highland regions around the world -- Mexico, Peru, Lesotho, Kenya, Ethiopia, Poland, Pakistan, India, Nepal, China -- its aim is to give a voice to people most affected by development and change at the local level
My Favorite Books Dave Iverson's list is about halfway down the document
Nash Equilibrium short definition
Nash Equilibrium and the History of Economic Theory 32 page paper on Nash's impact on economics and the social sciences
New Work News life in the new economy
OMB Watch "promoting government accountability" - focuses on budgetary matters and government secrecy
PATENTS page of links
Poverty Net--World Bank
The Short Run economics news and information site
Social Crisis in East Asia --World Bank
STATISTICS page of links
STOCKS & BONDS page of links
Survey of Current Business (U.S. Bureau of Economic Analysis)
Taco Bell Boycott "Taco Bell is owned by Yum Brands, the world's largest restaurant company (bigger than Mc'ald's), which pools the buying power of its five major chain brands (Pizza Hut, KFC, Taco Bell, Long John Silver, and A&W Restaurants) to demand the lowest possible prices from their suppliers, exerting a powerful downward pressure on wages and working conditions in their suppliers' operations"
TAXES page of links
Treasury Bulletin
UN Economic Commission for Latin America and the Caribbean (ECLAC) includes press releases, interviews, speeches, op-ed pieces, statements of the Secretary-General, and nearly all its publications, in both English and Spanish
United States Foreign Trade Highlights

World Bank Group
WTO/GATT Research compiled by Jeanne Rehberg, NYU Law Librarian; an authoritative guide to an intimidating subject, without a trace of jargon


"..most economists are intellectual practitioners who adopt basic assumptions they knw are incorrect, and then extrapolate conclusions they declare to be true" (Gabriela Bocagrande, quoted in Editorial. The Nation, 1/16/04, 3).


"The American economy.. is in much deeper trouble than most people realize...

"For several decades, in fact, the federal government has toleratd and even encouraged the dispersal of American production overseas... No other major economy in the world accepts perennial trade deficits.. But American leaders and policy-makers are uniquely dedicated to a faith in "free market" globalization, and they have regularly promised Americans that despite the disruptions, this policy guarantees their long-term prosperity. Present facts make these long-held convictions look like gross illusion... the trade deficit.. Last year it set another new record: $489 billion...

"The U.S. economy, in essence, is being kept afloat by enormous foreign lending... This lopsided arrangement will end when those foreign creditors... Japan, China, and Europe -- decide to stop lending...

"That reckoning could arrive as a sudden thuderclap of financial crisis -- spiking interest rates, swooning stock market and crashing home prices... As foreign capital moves elsewhere and easy credit disappears for consumers, many Americans will experience a major decline in their living standards...

"Now the rest of the world is propping up American consumers... The net inflow of foreign capital to the United States represents a staggering 75 percent of the net outflows from the rest of the world...

"The failure of conventional explanations for trade deficits leads, logically, to an unorthodox conclusion: The source of the deficits (and growing indebtedness) must be embedded in the trading system itself...

"The national ambitions and competitive energies of globalization, at least as currently practiced, persist in developing new productive capacity -- more factories -- faster than they generate rising incomes and adequate demand to absorb the surplus goods. This leads inevitably to falling prices and stiffer pressures for cost reductions. The convenient remedy -- somebody, somewhere has to shut down factories -- has typically begun by closing America's and moving it's high-wage production offshore for cheaper labor.

American production usually goes first because the U.S. government does not resist...

"Through industrial policy and numberous informal barriers, America's European rivals have managed to avoid both trade deficits and the thirty-year stagnation of wages that U.S. industrial workers have suffered. Only in America do the experts believe these consequences have no meaning for overall prosperity. Only in America has the government put the interests of multinationals ahead of citizens.

"A decisive President, one who grasped the gravity of the situation, would start by bringing up a taboo subject -- tariffs -- and inform the world that the United States is prepared to impose a temporary general tariff of 10 or 15 percent on all U.S. imports. Every multinational would have to rethink its industrial strategy, because some of its production might be stranded in the wrong country. Import-dependent retailers like Wal-Mart would be seriously disrupted, too.

"With a general tariff, the practice of wage arbitrage -- shifting high-wage jobs to low-wage nations, then selling the goods to the U.S. market -- would no longer be a free ride" (William Greider. "The Serpent That Ate America's Lunch." The Nation, May 10, 2004: 11-18).


"...another successful Republican frame, the false idea that the "market" is a force of nature... In reality, the market is a social institution with rules and regulating mechanisms that have been put in place by human beings. This reality is hidden by the force-of-nature framing" ("Got Frame?" Texas Observer, 7/30/04: 3).


"It is unclear to me why anyone would believe anything the president says about our fiscal situation. Keep in mind, this is a man who took three Texas oil companies into bankruptcy... Under Bill Clinton, the economy gained an average of 236,000 jobs every month. Under George W. Bush, the economy has lost an average of 66,000 jobs a month" (Molly Ivins. "The Un-Tax and Spend President." Texas Observer, 2/13/04: 14).


"...Franklin Roosevelt argued that the real enemies of enlightened capitalism were "the malefactors of great wealth" -- the "economic royalists" -- from whom capitalism would have to be saved by reform and regulation" (Bill Moyers. "This is Your Story. Pass It On." Texas Observer, 8/13/04: 4-9, 38).


"...the Inter-American Development Bank (IDB)... Latin America's largest lender and creditor... surplus of grandiosity, delusion, and bullshit...

"...in 1994... was "tasked" by the U.S. Congress with reducing poverty and social inequality while promoting democracy and the rule of law, the Bank has taken great pains to portray itself as an intrument of social peace and justice... did business for 17 years with Augusto Pinochet in Chile and other mass-murdering heads of state throughout the continent...

"...Peru's best-known and most demented economist, Hernando De Soto, long a favorite of the international development set... added a fresh approach to the trouublesome problem of youth unemployment: volunteerism!... If you can't find a job or successfully exploit yourself, you can fill your time by working for free..." (Gabriela Bocagrande. "Scenes From the VIP Room." Texas Observer, 5/7/04: 12-13, 26).


"According to this year's World Economic Forum survey of 101 countries, three of the five most "competitive" are Sweden, Denmark, and Norway. Social Democracies raise living standards. And often they tend to be more competitive. It's a shame that in America even some on the left can't seem to grasp this" (Letters. The Nation, Jan. 10/17, 2005: 2).


"The American economy.. is in much deeper trouble than most people realize...

"For several decades, in fact, the federal government has toleratd and even encouraged the dispersal of American production overseas... No other major economy in the world accepts perennial trade deficits.. But American leaders and policy-makers are uniquely dedicated to a faith in "free market" globalization, and they have regularly promised Americans that despite the disruptions, this policy guarantees their long-term prosperity. Present facts make these long-held convictions look like gross illusion... the trade deficit.. Last year it set another new record: $489 billion...

"The U.S. economy, in essence, is being kept afloat by enormous foreign lending... This lopsided arrangement will end when those foreign creditors... Japan, China, and Europe -- decide to stop lending...

"That reckoning could arrive as a sudden thuderclap of financial crisis -- spiking interest rates, swooning stock market and crashing home prices... As foreign capital moves elsewhere and easy credit disappears for consumers, many Americans will experience a major decline in their living standards...

"Now the rest of the world is propping up American consumers... The net inflow of foreign capital to the United States represents a staggering 75 percent of the net outflows from the rest of the world...

"The failure of conventional explanations for trade deficits leads, logically, to an unorthodox conclusion: The source of the deficits (and growing indebtedness) must be embedded in the trading system itself...

"The national ambitions and competitive energies of globalization, at least as currently practiced, persist in developing new productive capacity -- more factories -- faster than they generate rising incomes and adequate demand to absorb the surplus goods. This leads inevitably to falling prices and stiffer pressures for cost reductions. The convenient remedy -- somebody, somewhere has to shut down factories -- has typically begun by closing America's and moving it's high-wage production offshore for cheaper labor.

American production usually goes first because the U.S. government does not resist...

"Through industrial policy and numberous informal barriers, America's European rivals have managed to avoid both trade deficits and the thirty-year stagnation of wages that U.S. industrial workers have suffered. Only in America do the experts believe these consequences have no meaning for overall prosperity. Only in America has the government put the interests of multinationals ahead of citizens.

"A decisive President, one who grasped the gravity of the situation, would start by bringing up a taboo subject -- tariffs -- and inform the world that the United States is prepared to impose a temporary general tariff of 10 or 15 percent on all U.S. imports. Every multinational would have to rethink its industrial strategy, because some of its production might be stranded in the wrong country. Import-dependent retailers like Wal-Mart would be seriously disrupted, too.

"With a general tariff, the practice of wage arbitrage -- shifting high-wage jobs to low-wage nations, then selling the goods to the U.S. market -- would no longer be a free ride" (William Greider. "The Serpent That Ate America's Lunch." The Nation, May 10, 2004: 11-18).


"Last summer, in the lull of the August media doze, the Bush Administration's doctrine of preventive war took a major leap forward. On August 5, 2004, the White House created the Office of the Coordinator for Reconstruction and Stabilization, headed by former US Ambassador to Ukraine Carlos Pascual. Its mandate is to draw up elaborate "post-conflict" plans for up to twenty-five countries that are not, as of yet, in conflict. According to Pascual, it will also be able to coordinate three full-scale reconstruction operations in different countries "at the same time," each lasting "five to seven years."

"Fittingly, a government devoted to perpetual pre-emptive deconstruction now has a standing office of perpetual pre-emptive reconstruction...

"But if the reconstruction industry is stunningly inept at re-building, that may be because rebuilding is not its primary purpose. According to Guttal, "It's not reconstruction at all--it's about reshaping everything." If anything, the stories of corruption and incompetence serve to mask this deeper scandal: the rise of a predatory form of disaster capitalism that uses the desparation and fear created by catastrophe to engage in radical social and economic engineering. And on this front, the reconstruction industry works so quickly and efficiently that the privatizations and land grabs are usually locked in before the local population knows what hit them...

"The World Bank and the International Monetary Fund have been imposing shock therapy on countries in various states of shock for at least three decades, most notably after Latin America's military coups and the collapse of the Soviet Union. Yet many observers say that today's disaster capitalism really hit its stride with Hurricane Mitch. For a week in October 1998, Mitch parked itself over Central America, swallowing villages whole and killing more than 9,000. Already impoverished countries were desparate for reconstruction aid--and it came, but with strings attached. In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress initiated what the Financial Times called "speed sell-offs after the storm." It passed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned land-reform laws and made it easier for foreigners to buy and sell property. It was much the same in neighboring countries...

"Now the bank is using the December 26 tsunami to push through its cookie-cutter policies. The most devastated countries have seen almost no debt relief... Rather than emphasizing the need to help the small fishing communities--more than 80 percent of the wave's victims--the bank is pushing for expansion of the tourism sector and industrial fish farms. As for the damaged public infrastructure, like roads and schools, bank documents recognize that rebuilding them "may strain public finances" and suggest that governments consider privatization (yes, they have only one idea)...

"As in other reconstruction sites, from Haiti to Iraq, tsunami relief has little to do with recovering what was lost...

"In January Condoleezza Rice sparked a small controversy by describing the tsunami as "a wonderful opportunity" that "has paid great dividends for us"... If anything, Rice was understating the case" (Naomi Klein. "The Rise of Disaster Capitalism." The Nation, May 2, 2005: 9-11).


"...many of America's leading economists and political pundits, were convinced that the introduction of a single common currency across the EU would fail. The euro succeeded beyond even the most enthusiastic projection of its supporters and is now stronger than the dollar... and is becoming a rival in world financial circles' (Jeremy Rifkin. The European Dream p. 64)...


"GDP gives a false sense of real economic well-being... The fault with the GDP is that it doesn't discriminate between economic activity that really improves the standard of living of people and economic activity that does not...

"GDP counts every economic activity as good. So if crime rises because of unemployment and poverty, requiring an increase in police protection and enforcement, court costs, prisons costs, and a beefing up of private surveillance and protection, the economic activity it engenders finds its way into the GDP. If a toxic-waste dump needs to be cleaned up, an oil spill contained, or contaminated groundwater purified, again the economic activity adds to the total GDP. If the use of fossil fuels increases, it is added to the GDP, even though it means a depletion of existing stocks of nonrenewable energy. And if the health of millions of Americans deteriorates because of an increase in obesity, cigarette smoking, alcohol consumption, and drug use, the increased costs of health care are, likewise, added to the GDP... The purchase of more missiles, airplanes, tanks, and bombs are all added to the GDP... Here lies the rub. So much of our GDP--and an increasing percentage of it each year--is made up of economic activity that clearly does not improve our well-being...

"The late senator Robert Kennedy... "it does not allow for the health of our families, the quality of their education, or the joy of their play... it measure everything, in short, except that which makes life worthwhile"...

"Even the man who invented the GDP, Simon Kuznets... warned... that "the welfare of a nation" can "scarcely be inferred from a measure of national income"" (Jeremy Rifkin. The European Dream. p. 72-73)...


"Richard Layard is an economist and Labour peer who made his considerable name in employment economics. Now he has written a remarkable book [Happiness: Lessons From a New Science] about happiness that effectively trashes the claim of economics to guide policy for a good society.

"Happiness, not gross domestic product, still less competitiveness, should be the overriding principle of economic policy, Layard maintains, backing up his proposition with some fascinating statistics...

"...another key psychological element that is left out of economists' accounts: the self-fulfilling nature of many assumptions about human behavior...

"Hence the phenomenon of the "supervisor's dilemma", a vicious circle in which tight supervision generates behavior that seems to justify still tighter control. This reflects much of today's management, at least in the US and Britain, where people's levels of trust in one another have halved within the past 40 years--although not in Europe, where levels have stayed much the same.

"What does this mean? The implication is that companies and managers driven by the economic model of human nature are not only engines of individual unhappiness (as is largely borne out by people's worsening experience of work); but through these self-fulfilling assumptions they are reshaping people in their own impoverished image in a way that makes happiness impossible to achieve in the future. This is a frightening prospect, and clearly illustrates why the attitude-shaping role of management is so pivotal...

"... much of today's practice is counterproductive...

"Thus for Layard a happy society is based on old-fashioned virtues such as trust, fairness, and (yes) equality. Although political leaders and managers are wedded to "change" and to "flexibility", "there are huge advantages to inflexibility and predictability, as continental Europeans appreciate"...

"A fulfilling job allowing pride in the work, challenge and autonomy, is its own reward, and the best motivator. Since people care more about losses than gains, repeated reorganizations may produce more harm than good" (Simon Caulkin. "Money can't buy happiness." Guardian Weekly, April 29, 2005: 26).


This is a review of Lawless World: America and the Making and Breaking of Global Rules, by Philippe Sands.

"By far the most important body of international law concersn trade and overseas investment... It is these laws--secretive, hidden from view and above all binding--that have underpinned the neoliberal globalization project. The chapters on trade and investment reveal how biased these rules are in favour of the West, and how they are made and exercised in institutional recesses that are unaccountable, even to cabinets, let alone parliaments, and utterly invisible to the public eye. This is the nexus of corporate, bureaucratic and judicial power...

"He argues, moreover, that international law-making, even in the economic arena, is slowly being prised open and thereby subject to influence by a growing number of actors, including developing countries and NGOs. He recognizes that international law is opaque and largely undemocratic, but believes, perhaps too optimistically, that the processes and institutions are being opened up, albeit slowly.

"The nub of the book, however, concerns the way in which the United States, since the Bush presidency, has decided to opt out of international treaties" (Allen Lane. "A law unto themselves." Guardian Weekly, April 8, 2005: 27).


"...a sweeping new report from the World Bank... to prove that, in general, fairer economies are more successful. Inequality is not only unfair--it also wastes resources and stifles economic progress...

"Giving the poor a fair share in the economy is therefore the best recipe for success...

""We hope this report will change the perception that people often have that the poor are almost charity cases, and the rest of the country generates the growth," he said. "You shouldn't see those people as an ocean of unskilled labour. You should see them as a pool of potentially skilled individuals" (Heather Stewart. "Equality is the best policy." Guardian Weekly, Sep. 30: 31).


"Is there a real solution to the problem of losing jobs overseas? It does not make sense to focus our anger at the Chinese worker: You can't blame somebody for wanting a better job. We should not blame business leaders, either; outsourcing and offshoring are often the rational and necessary choice to compete under our current system of subsidies and trade laws. These people take advantage of outsourcing for the simplest of reasons: because they can...

"One intelligent response to outsourcing would be to stop passing the same trade agreements over and over...

"By end of 2005, it is projected that more than 830,000 American tech jobs will have moved to low-wage countries like India and China...

"Put simply, if your job uses a phone, a computer or a welding torch, outsourcing trade policies will affect you. If you can telecommute, your job can likely be outsourced...

"CAFTA--NAFTA's big brother... we can expect the same results of more lost jobs. And we should ban the billions in public subsidies that go to government contractors who move jobs overseas" (Andy Gussert. "Shoring up trade laws." Progressive Populist, May 1, 2005: 9).


"...the business costs of this [Bush] approach are already becoming evident. For starters, the new wave of anti-Americanism sweeping the planet goes far beyond KFC bombings in South Asia or widespread hostility in the Middle East. In Asia, the South China Morning Post has noted that a "strong growing hostility" toward the United States has complicated Disney's expansion plans in the area. The Bush imperial foreign policy, moreover, is inspiring consumer backlash even among traditional allies...

"...survey of global elites found that "41 percent of Canadian elites were less likely to purchase American products because of Bush Administration policies, compared to 56 percent in the UK, 61 percent in France, 49 percent in Germany and 42 percent in Brazil...

"...sixty-two percent of executives surveyed by Opinion Dynamics Corp. said the war is hurting America's global competitiveness" (Mark Engler. "Bush's Bad Business Empire." The Progressive Populist, Dec. 15, 2005: 2, 8-9).


"The Germans make the cars, the Italians make the clothes, the French make the wine, the British make the pharmaceuticals--and then they all buy and sell from each other...

"That's the theory. According to the UK Interdependence Report, it doesn't quite work out that way.

"Take chocolate-covered biscuits. Each year the UK export 1,145 tonnes of these delicacies to the Germans. The Germans meanwhile export 1,728 tonnes to the UK...

"The NEF says there is a serious side to the statistic showing that the 465 tonnes of gingerbread coming into the country is matched by the 460 tonnes exported. It argues that the environmental impact of "lorries passing in the night" is not included in the price of the goods in the shops, and that much of the trade that is going on is actually ecologically wasteful.

""Shipping vast quatities of identical goods backwards and forwards around the world matter for three big reasons" said Andrew Simms of NEF. "First, it is a towering monument to inefficiency, as wasteful as a job-creation scheme that pays people to shift a pile of rocks from one end of a worksite to another and back again.

""More profoundly, it matters because we face upheaval from potentially irreversible climate change due, in large part, to the burning of fuel, whilst at the same time there is rising conflict over access to dwindling oil supplies. The third reason is that a global economy built on, and blind to, its own fossil fuel dependence simply cannot survive in its current form"" ("Chocolate biscuit paradox." Guardian Weekly, April 21, 2006: 27).


"The United States is running a current account deficit of more than $700 billion a year to fund consumption we can't afford. This is not financially sustainable. Meanwhile, many workers in developing countries work twelve to sixteen hours a day, in dangerous conditions, without the right to form an independent union, at poverty pay, so that multinational corporations can boost their bottom line. That is not politically sustainable...

"... our corporate tax system is insanely inefficient and unfair. American taxpayers currently subsidize the offshoring of their own jobs (at a rate of at least $7 billion a year) through policies that exempt income earned offshore from corporate taxes. Very vew other countries have similar systems, and most have some form of "border adjustable" tax that exempts exports from sales or value-added taxes. Our current system taxes exports, while subsidixzing the offshoring of jobs. We need a complete overhaul of our corporate tax system to address this self-inflicted wound.

"Second, the overvalued dollar is killing our domestic manufacturing sector and exacerbating the problems in tradable services (a category that now covers everything not nailed to the floor). While the high dollar policy serves the Wal-Marts of the corporate world very well, it creates almost insurmountable competitive problems for domestic products...

"Third, the framework of rules in the global trading system (through the WTO and our own domestic agreements) is severely lopsided in favor of multinational corporate interests--leaving workers, small farmers, the environment and the poor ever more vulnerable and weak" (Thea Lee. "A New Domestic and Global Strategy." The Nation, April 17, 2006: 20-21).


"Postwar prosperity was built on a vast cut in the cost of security and the achievement of peace in Europe and much of Asia. The American role in the cold war system was to provide security; for this the dollar's role as anchor of the world trading system was our reward. But now, with Iraq, we are seen worldwide as the leading predator state, promoting war as a solution rather than as the ultimate economic and human horror. For this, many would like to see our privileges revoked.

"Corporate and financial fraud and political corruption form the second great domain of predatory capitalism. DeLay, Frist, and Abramoff are the names in the ews, but the tone is set by the leadership--Cheney of Halliburton and Bush of Harken Energy--a large predator and a small scavenger, specialists in cronyism and expert in nothing else. When predation becomes the dominant business and political form, the foundation of capitalism crumbles. Markets lose legitimacy, investors fly to safety in bonds, and authentic innovation and shared growth both become unnattainable. The solution must be not just a change of parties but a new political class, including a new media not under corrupt control.

"Then there is the predatory attack on unions and labor, in which many economists are complicit. This is far advanced in America and most visible today in Europe, as reflected by the doctrine of flexible labor markets, which claims that the conquest of unemployment requires cutting the pay of the working poor. But there is not history of unemployment ever being conquered this way...

"The way forward is a program for growth and justice built on the needs of the working population and the middle class. To begin with, in the United States, there must be a powerful demolition of the old political order: We need election where all votes are cast and counted. The campaign against voter repression is the essential civil rights struggle of our time, even though most progressives ''t seem to realize it yet. Prevailing will require fundamental reform such as the introduction of nationwide vote-by-mail (the Oregon system)...

"Overseas, crackdowns on tax havens and the arms trade, a stabilizing financial system and an end to the debt peonage of poor countries whould be among the priorities of a new structurre.

"The truths are that egalitarian growth is efficient, that speculation must be regulated, that crime starts at the top and that peace is the primary public good. These truths are poison to predators and are the reason predators have fostered and subsidized an entire cynical intellectual movement devoted to "free" markets made up of a class of professor-courtiers now everywhere in view. Taming predatory capitalism could start with breaking this econo-corporate analytical axis, and reviving the concept of countervailing power, first formulated by JOhn Kenneth Galbraith in 1952" (James K. Galbraith. "Taming Predatory Capitalism." The Nation, April 17, 2006: 23-24).


"President Richard Nixon's decision to end the Bretton Woods agreement in 1971 was a milestone in the erosion of the Western social contract. This decision ushered in a new international monetary system--one in which international payments in dollars would be made by private banks rather than exchanges of gold between the Federal Reserve and other central banks, and the value of the dollar would be determined by supply and demand.

"This new dollar-centric international monetary system has been a powerful force in shaping the global economy and is, to a great extent, responsible for the current pattern of globalization. For the United States, it has meant that US policy-makers have had to hold real US interest rates higher than those of other strong currencies and have had to accept a higher value of the dollar relative to other major currencies. This has not only led to slower US economic growth but has made US goods less competitive vis-a-vis those of other economies. Thus the cost of American dollar hegemony has been the loss of export markets and, along with it, the loss of relatively good jobs in the tradable-goods sector of the economy" (Jane D'Arista. "Reform the Internatinal Financial System." The Nation, April 17, 2006: 27).


"Momentous change is approaching in American politics. Conceivably, the turning point has already arrived, too indistinct to recognize. We are witnessing the demise of the reigning economic ideology. A deep shift of this kind is a very rare event, one that comes along only every thirty or forty years. Economic disorders accumulate that the orthodoxy cannot answer and may even have caused. Eventually, the ideological presumptions are discredited by real-world contradictions.

"The last time this happened was in the 1970s, when economic liberalism foundered and collapsed. Ossified intellectually, unable to adjust to changed circumstances, the liberal order did not know how to deal with economic consequences like inflationaly stagnation. As the long postwar prosperity lost its energy, so did liberal politics.

"Something similar is happening now to the Republicans. Their problem is the under-performing economy, which must borrow to stay afloat and, roughly speaking, lifts only half the boats. The conservative order--inspired two generations ago by Milton Friedman and Friedrich von Hayek and brought to power by Republican ascendancy--pushed government aside so business and capital would be free to generate more lasting prosperity. But their utopian promise was not fulfilled. Instead, the right's principal product... was economic inequality...

"...This very wealthy country has the capacity to insure that all citizens, regardless of status or skills, have the essential needs to pursue secure, self-directed lives. This starts with the right to health, work, livable incomes and open-ended education, and to participate meaningfully in the decisions that govern their lives. The marketplace has no interest in providing these. It is actively destroying them...

"One in six manufacturing jobs has been lost since 2000 (39 percent in communications equipment, 37 percent in semiconductors). These losses are explained as free-market "efficiencies" but mainly represent the global relocation of American production.

"The cumulative effect is an economy that doesn't produce enough to pay for what it wants and needs. The conservative order, notwithstanding its proclaimed values, makes up the difference by borrowing...

"The republicans now find themselves in a corner with no good choices. If Bush withdrew the stimulus of federal deficits, economic growth would collapse. The sensible course would require a massive shift in priorities--moving money and benefits from the wealthy few to the struggling many--but that is ideological heresy and would double-cross the GOP's monied patrons...

"You wouldn't know it from reading the newspapers, but substantial and often overwhelming majorities of Americans have repeatedly endorsed governing concepts that conventional politicians dismiss as radical or unrealistic: Universal healthcare. A job for everyone who wants to work, guaranteed by the government. Secure retirements. Stronger enforcement of environmental laws. Stronger defenses against encroaching corporate power. Union protection for workers against exploitative employers. The list goes on. These widely endorsed goals assume an activist government that nurtures people and society first, ahead of corporations and capital. Imagine a political agenda that set out to give the people what they say they want" (William Greider. "The Future is Now." The Nation, June 26, 2006: 23-26).


Please send comments to: Colby Glass, MLIS