video on economy

October 12, 2008 § Leave a comment


worth watching.


the situation facing Obama (and us)

October 9, 2008 § Leave a comment

The core as I see it,of what is happening,is that we have debt, and the question is, who will pay it? the bankers want to shift debt (theirs) to taxes (ours). What looks like minor issues, but are profound, are details in play like getting communities to lower real estate taxes so people have money to pay mortgages, and home prices can rise, making those mortgages inflate (again) in value. But then sales taxes will replace property taxes and these market place taxes are regressive.

This struggle is likely to be the key struggle of the Obama presidency,which means progresives pushing against big money in a perhaps losing battle, with Obama trying to mediate. A collapse of course would be terrible, but a debt prison would also be terrible. Is it possible to get beyond this struggle to deal with the other large systemic issues?

I am inclined to be pessimistic. After all, the rich can hire half the poor to protect themselves from the other half of the poor. Where would you and I be in such a struggle? As has been pointed out, the tactical situation will be different by inauguration. Imagine a bankers revolt saying to Obama, protect the financial system (and its 28 % of all business activity in the US economy in 2007), or we will form a coup against you in the name of the public necessity and good of the people. Will he rich pay the debt, or the rest of us?

FDR could play off the bankers against the rest of the economy, mostly agriculture and manufacturing. Now the bankers have much more power and there is little force that can stand up with a confrontation. We can hope, but what would it be? And,is not Obama’s course of action, centrist and “to protect the financial system because we need it” going to be the course?

Economics Oct 7, 2008

October 7, 2008 § Leave a comment

From Rubini


Despite the so-called bailout plan passing the House of Representatives on Friday, there are obviously still some major strains to global financial markets, and it now appears as if commercial paper markets could be seizing up as well. How much of a help was the bailout plan, and where do you think things stand now?

The bill, first of all, in many dimensions is flawed. But leaving aside the flaws of the bill, there is a much more urgent problem that we’re facing right now. It is one of a generalized run on the short-term liabilities both of the banks, of the non-bank shadow system, and now of the corporate sector. In the case of the banks, there is the beginning of a silent run on the uninsured debts of the banking systems, which are still over $2 trillion despite the increased deposit insurance. Many institutions in the non-bank shadow financial system are also finding that they cannot roll over their debts. There is a situation of generalized panic and lack of trust in counterparties. And worst of all, at this point, the commercial paper [short-term debt issued by large banks and corporations] to the corporate sector, and other types of funding to the corporate sector, is frozen right now. That can tip a corporation into a situation of defaults. They might not be able to pay interest on maturing debts, they might not be able to roll over maturing debts, and they might not be able to finance their working capital. So we’re seeing a generalized liquidity run, and it’s something that this bill cannot directly address. It’s something that needs to be addressed with different sorts of tools.

What sorts of tools do you recommend? I see you’ve called for major coordinated interest-rate cuts, on the order of one hundred points across the board, in all major world economies.

That’s only part of the solution. It has to do with coordinated rate cuts, but it’s not obvious [even after the cuts] that liquidity is going to flow to those who need it. We need to do something slightly more radical than just an interest rate cut. Most likely the Fed will have either to guarantee all deposits on a temporary basis, since that’s the only way you can essentially stop a run. But since that requires legislation and it’s not obvious that Congress will pass a temporary blanket guarantee, the Fed has to stand ready to provide the liquidity to any bank that needs liquidity. So if there is a run on any bank, the Fed has to increase the money supply by as much as is needed to essentially prevent that particular institution from collapsing. That’s the first thing.

Pasted from <>

Sept 8

September 9, 2008 § Leave a comment


Fannie & Freddie: Buying friends in DC – 53 minutes ago
The two mortgage finance companies doled out $174-million over the past 10 years to Washington lobbyists, report says. By Allan Chernoff, CNN senior correspondent NEW YORK (CNN) — When it came to buying influence in Washington, Freddie Mac and Fannie


Paulson placates China, Russia for now
US Treasury Secretary Henry Paulson had little choice but to bail out Fannie Mae and Freddie Mac, with China and Russia holding large amounts of their debt. Doing nothing would have left no further reason for other countries to invest in US government-guaranteed obligations. That day of reckoning has now merely been delayed. –Julian Delasantellis

notes spet 3 2008

September 3, 2008 § Leave a comment



the socialism/ marxist approach now is more important because capitalism thorough the corporations and financial sector is developing part of the planet but not the whole, and the cost to the parts not developed, or exploited (“externalized”) is huge. We need to understand this and the Marxist approach is a good sketch to start with.


» Table of Contents

Ecology Against Capitalism

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May 2002
$17.95 paper
$48.00 cloth
160 pp.


by John Bellamy Foster

Ecology Against Capitalism is a fine and well timed book. The boom is over, the earth is warming, the fundamental questions are coming again to the fore. Foster fortunately answers, as only he can, in a voice both balanced and clear headed.”
— TOM ATHANASIOU,co-founder of EcoEquity and author of Divided Planet: The Ecology of Rich and Poor

“Foster has written another extremely valuable book. Anyone who wants to understand our current environmental problems and what we need to do to solve them should read [Ecology Against Capitalism].”

In recent years John Bellamy Foster has emerged as a leading theorist of the Marxist perspective on ecology. His seminal book Marx’s Ecology (Monthly Review Press, 2000) discusses the place of ecological issues within the intellectual history of Marxism and on the philosophical foundations of a Marxist ecology, and has become a major point of reference in ecological debates. This historical and philosophical focus is now supplemented by more direct political engagement in his new book, Ecology Against Capitalism. In a broad-ranging treatment of contemporary ecological politics, Foster deals with such issues as pollution, sustainable development, technological responses to environmental crisis, population growth, soil fertility, the preservation of ancient forests, and the “new economy” of the Internet age.

Within these debates on the politics of ecology, Foster’s work develops an important and distinctive perspective. Where many of these debates assume a basic divergence of “red” and “green” issues, and are concerned with the exact terms of a trade-off between them, Foster argues that Marxism—properly understood—already provides the framework within which ecological questions are best approached. This perspective is advanced here in accessible and concrete form, taking account of the major positions in contemporary ecological debate.

Foster’s introduction sets out the unifying themes of these essays to present a consolidated approach to a rapidly-expanding field of debate which is of critical importance in our time.

Table of Contents


Chapter One: The Ecological Tyranny of the Bottom Line
Chapter Two: Global Ecology and the Common Ground
Chapter Three: Ecology and Human Freedom
Chapter Four: Let Them Eat Pollution
Chapter Five: The Scale of Our Ecological Crisis
Chapter Six: Sustainable Development for What?
Chapter Seven: The Heresy of Ecological Economics
Chapter Eight: Globalization and the Ecological Morality of Place
Chapter Nine: Capitalism’s Environmental Crisis—Is Technology the Answer?
Chapter Ten: Environmental Problems in the “New Economy”
Chapter Eleven: The Limits of Environmentalism Without Class
Chapter Twelve: Malthus’ Essay on Population After 200 Years
Chapter Thirteen: Liebig, Marx, and the Depletion of Soil Fertility: Relevance for Contemporary Agriculture


About the Author
JOHN BELLAMY FOSTERis professor of sociology at the University of Oregon and co-editor of Monthly Review. He is the author of The Vulnerable Planet and co-editor of Hungry for Profit (2000), Capitalism and the Information Age (1998), and In Defense of History (1996).

Notes May 31, 2008

May 31, 2008 § Leave a comment

on LA real estate. Gives me the opportunity to point out that the standard view is to blame the poorer for trying to invest and gain. The reality is that people who had to buy houses, or wanted to, had to pay more than they would have if there had not been a bubble.


The lenders made more moony because the loans were bigger. The brokers made larger fees because the fees were based on a percentage of the sale, and the lender holds the note, which value remains constant, while the borrow holds the house, which is worth less. The difference can be seen as money lost to the borrower. This is deeply unfair.


The following from the excellent Calculated Risk


Los Angeles Real Prices Click on graph for larger image in new window.



This graph show the real Case-Shiller prices for homes in Los Angeles.
The low price range is less than $417,721 (current dollars). Prices in this range have fallen 34.9% from the peak in real terms.
The mid-range is $417,721 to $627,381. Prices have fallen 30.7% in real terms.
The high price range is above $627,381. Prices have fallen 22.8% in real terms.
In the recent bubble, the areas that saw the most appreciation are seeing the fastest price declines.
This seems to fit with some new research from David Stiff, Chief Economist, Fiserv Lending Solutions: Housing Bubbles Collapse Inward

« Read the rest of this entry »

Conversation with Elizabeth Warren….cont.

May 19, 2007 § Leave a comment


Because mother was home, and they are paying more for taxes because of progressive taxation: when you’ve got two incomes that second one is being taxed at a higher rate than if they were being taxed separately. So, a generation ago — let me see if I can do this as a picture. The median American family in the United States spent about half of its income on those basic fixed expenses: the mortgage, health insurance, transportation, taxes, nothing on child care. Today the median two-income family is spending 75% of their income on those five basic expenses, and with two people in the work force they actually have fewer dollars left over than their one-income parents had a generation ago to cover everything, to cover all the flexible things, food and clothing and savings and vacations, and all the other kinds of expenses that come up. So, what we have today is two people working full-time, flat-out, hard-bore, and they actually have less money to spend than one person working full-time just one generation ago.

Source: Conversation with Elizabeth Warren, p. 3 of 4

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