The new regulations on banks’ capital requirements known as Basel 3, made known to the public in mid-September, are a major institutional boost to the monopolistic position of the largest banks.1 In the new framework the capital that banks must hold against lending activities has been raised from a ratio of 2%, established by Basel […]
Subjects Archives: Political Economy
One in Three Americans Lacked the Income Needed to “Make Ends Meet” in 2009; Young Adults Among the Hardest Hit
Today the Census Bureau released a report on trends in income, including median income, income inequality and income poverty, and health insurance coverage between 2008 and 2009. As expected given the increase in unemployment — which grew from 7.4 percent in December 2008 to 10 percent in December 2009 — the report shows a substantial […]
Pharmaceutical Industry-Funded Study Shows That Unauthorized Drug Copies Save Tens of Millions
This is the clear implication of a new industry funded study, even if USA Today essentially ran an ad for the pharmaceutical industry by headlining its piece: “growing problem of fake drugs endangers consumers’ health.” The article highlighted the fact that unauthorized copies of drugs sometimes do not meet the same standards as the official […]
Savings, Investment and Growth: Theory and Reality
Neoclassical economic models are based on the assumption that investment is financed from household savings. Accordingly, capital accumulation will be maximized by policies aimed at increasing household savings rates and capital imports (“foreign savings”). These models also predict that capital should flow from rich to poor countries, attracted by higher rates of return. However, facts […]
Why Millions March in France, But Not in the US
The basic issue is the same there and here. Capitalism generates another of its regular, periodic crises, only this one is really bad. It begins, as often happens, in the financial sector where credit invites the competition-driven speculation, the excess risk-taking, and the corruption that explodes first. But precisely because the non-financial rest of the […]
FDI as a Means of Financing Development
Discussions on foreign direct investment (FDI) as a means of financing development often suffer from two different shortcomings. The first, a very basic one, confuses real with financial resources. The second does not distinguish between different forms of foreign direct investment. The question of financing development is concerned with finding the real resources for increasing […]
Europe in Crisis
Part 1: The German Space of Accumulation The present state of affairs in the Eurozone and in the EU reflects the partition of the European Union into three groups. The first is a group of neomercantilist countries centred on Germany and formed by Holland, Belgium, Austria and Scandinavia. Their neomercantilism can be defined as a […]
War by Other Means
Phillip J. Cooper. The War against Regulation: From Jimmy Carter to George W. Bush. Studies in Government and Public Policy Series. Lawrence: University Press of Kansas, 2009. 288 pp. $34.95 (cloth), ISBN 978-0-7006-1681-7. Phillip J. Cooper is an accomplished scholar of the executive branch of the U.S. government and its interaction with the courts. […]
Update on the Venezuelan Economy
Executive Summary: After nearly six years of record economic growth, the Venezuelan economy went into recession in the first quarter of 2009, shrinking by 3.3 percent that year. A number of analysts see this as the end of an “oil boom” and the beginning of a long period of recession and stagnation. For example, in […]
Report on UNCTAD Assistance to the Palestinian People: Developments in the Economy of the Occupied Palestinian Territory
Highlights: 2010: Palestinian economy far from recovery The Palestinian economy held back by: The enduring cost of Israeli military operation in Gaza The closure policy in the West Bank The siege of Gaza A weakened tradable goods sector and an eroded productive base are at the heart of the Palestinian development bottleneck. Rehabilitation of […]
Capitalism and the State
DIE LINKE (the Left Party) has initiated a debate on its draft party program, which it wishes to officially adopt in Autumn 2011. Neues Deutschland is joining this debate with a series of articles. In the Neues Deutschland article published on 9 August 2010, Michael Heinrich tackles the issue of the relationship between capital and […]
Who Will Allow Brazil to Reach Its Economic Potential?
The biggest economic question facing Brazil, as for most developing countries, is when it will achieve its potential economic growth. For Brazil, there is a simple, most relevant comparison: its pre-1980 — or pre-neoliberal — past. From 1960-1980, income per person — the most basic measure that economists have of economic progress — in Brazil […]
Whose Recovery? What Double Dip?
Is there an economic recovery underway? Was there one that has now stopped? Will our current recession, partly recovered from, now tumble downward again in a second or “double” dip? Mainstream politicians, journalists, and academics are engaged in hot and heavy debates about recoveries and double dips. Yet the economic reality for most Americans is […]
Quarterly Report on Household Debt and Credit
Excerpt: Household Debt and Credit Developments in 2010Q21 Aggregate consumer debt continued to decline in the second quarter, continuing its trend of the previous six quarters. As of June 30, 2010, total consumer indebtedness was $11.7 trillion, a reduction of $812 billion (6.5%) from its peak level at the close of 2008Q3, and $178 […]
Hormel Strike a Key Event in Nation’s Labor History
From the late summer of 1985 into the early spring of 1986, the small town of Austin, Minnesota, figured prominently in the national news. The dramatic themes and issues, twists and turns, of a labor conflict there captured the national imagination. This interest was not merely passive, as more than thirty support committees formed across […]
Will Chinese Workers Challenge Global Capitalism?
Paul Jay: In China in June, leaders of the Chinese Communist Party said that it’s time for workers’ wages to go up. And there’s been a lot of discussion about whether China’s actually restructuring its economy to try to boost domestic demand. Certainly in what leaders say in other parts of the world they […]
What Oil and Gas Companies Extract — from the American Public: It’s Time to End Unjustified Tax Loopholes for Oil and Gas Companies
In the wake of the disastrous oil spill in the Gulf of Mexico, the public and the media have turned their attention to some of the subsidies provided through the tax code to BP, the corporation that leased the ill-fated Deepwater Horizon drilling platform.1 The truth is that oil and gas companies have for […]
What’s So Great about the Great Recession?
David Leonhardt tells readers that the Great Recession has had some silver linings for many workers. High on his list is continued wage growth. This is misleading. All the real wage growth in this downturn occurred in the months of November and December of 2008. This was due to a plunge in the price of […]
The State under Neo-liberalism
Much has been written on the subject of the capitalist State in the era of neo-liberalism. Two features of the “neo-liberal State” in particular have been highlighted.1 One relates to the change in the nature of the State, from being an entity apparently standing above society and intervening in its economic functioning in the interests […]
Hungary’s Defiance of IMF and European Authorities Scares the Guardians of Austerity in Europe
The government of Hungary has taken on a lot of powerful interests in the last couple of months, and so far appears to be winning — despite provoking outrage from “everybody who’s anybody.” “The IMF should hold the line,” shouted the Financial Times in an editorial the day after Hungary sent the IMF packing in […]
