Citi is a particularly blatant example of a way of operating that has become endemic in American business: when things get tough, throw as many employees as possible under the bus, and use that to maintain or even increase the pay of the top echelon.
Read more...American readers may tell themselves that the failures and stresses of European banks are Europe’s problem. That’s a simplistic view. Major European banks are significant lenders in the US, particularly to corporations. And European banks also fed heavily at the trough of US rescue facilities, as did the bank in case study, Dexia.
Dexia is a classic example of a not very sophisticated bank deciding to get into the big leagues and coming to ruin.
Read more...Yves here. Any post that starts out by making fun of Matt Yglesias already has something going for it. But one bit I quibble with. Kervick suggests that Social Security might be excluded from a Grand Bargain. Don’t get too optimistic.
Read more...By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet
A gang of brazen CEOs has joined forces to promote economically disastrous and socially irresponsible austerity policies. Many of those same CEOs were bailed out by the American taxpayer after a Wall Street-driven financial crash. Instead of a thank-you, they are showing their appreciation in the form of a coordinated effort to rob Americans of hard-earned retirements, decent medical care and relief for the poorest.
Read more...Like it or not, you in the not too distant future are going to have to submit to personal surveillance to get many types of insurance and certain financial products. And that future is closer than you probably realize.
Read more...By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College,. His latest book is “The Bubble and Beyond.”
The Democrats could not have won so handily without the Citizens United ruling. That is what enabled the Koch Brothers to spend their billions to support right-wing candidates that barked and growled like sheep dogs to give voters little civilized option but to vote for “the lesser evil.”
Read more...A tangible sign that the issue of income inequality is taking hold in the American psyche: Tyler Cowen has made a patently ridiculous effort to try to change the topic, and Megan McArdle is dutifully amplifying it.
Read more...Even though the news media are generally focusing on the “progress is being made” aspects of the Hurricane Sandy aftermath (in large measure because that’s what officials are pushing), there is still a great deal of distress, as well as probable long-lingering problems that are not being acknowledged.
Read more...Econ4 has released the first video in its series, The Bottom Line. This offering debunks the propaganda that tax cuts for the wealthy create jobs.
Read more...Philip Pilkington is an Irish writer and journalist living in London. You can follow him on Twitter @pilkingtonphil
Perhaps the most effective myth that mainstream economists have propagated over the course of the last century is the idea that the majority of prices in an advanced capitalist economy are set by the interaction of supply and demand in a market for scarce resources. Perhaps the second most effective myth they have spread is that this interaction tends toward equilibrium and stability.
Read more...It’s frustrating to know that there’s a simple solution to a serious problem but no one seems willing to do the obvious.
Read more...Mark Ames (via Joe Costello) recommended a 1977 documentary series written and hosted by John Kenneth Galbraith. This segment, “The Manners and Morals of High Capitalism,” discusses how the rising bourgeoisie and the new rich justified their lofty status. Kings could rely on God and the Great Chain of Being for their authority, but what about mere capitalists? Galbraith reviews the views of some of the leading defenders of this new order, and shows how their ideas have influenced our views.
Galbraith makes quite a few deadpan observations.
Read more...Earlier today, El-Erian in the Financial Times released a short and apt note on the limits of the central bank put.
Read more...Yves here. Readers in Spain have dismissed the possibility of a Spanish breakup. But long-simmering regional frustrations combined with a rapidly deteriorating economy have the potential to produce paralyzing levels of civil disobedience.
Read more...This edited transcript is expanded from a live phone interview with Michael Hudson by Dimitris Yannopoulos for Athens News. It summarizes some of the major themes from Hudson’s new book, The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis, which is available on Amazon.
Q: How has the financial system evolved into the form of economic servitude that you call “debt peonage” in your book, implying a negation of democracy as well as free-market capitalism as classically understood?
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