No, that’s not what I’m saying. But recently, Obama lost an intellectual heavy hitter, our friend Mr. Newberry. SN’s got his detractors, but one thing no one ever says about him is that he doesn’t understand economics. A sample:

The blame lies, of course, with two groups: the monetary authority for its decision to accept all of the risk from the bad debt of the last decade, and hand out fresh money in return, without taking any direction over the resulting financial entities. These entities, of course, flooded the money into the pockets of those in possession of the company.
The write downs obscure how buy outs, golden parachutes, and assorted swap deals have prevented any major reorganization on Wall Street or globally. The same bankers who got us into this mess, by and larger, are still in charge.

The second group, of course, is the fiscal authority of the US. Namely the Rahmite Congress, unconvinced of the existence of a recession but willing to engage in their favorite pass time of handing out subsidies to the middle class to consume. The checks sent out were, as I said at the time, partial rebates on the inflation tax for some, who proceeded to do exactly what should have been expected: namely, they spent it on goods that were inflating. What Rahm should have done was just written a check to the oil companies of the world for 150 billion dollars, because that is exactly where all of that money ended up.

The problem here is that the progressive and Democratic spheres have embraced - the supply side economics of Reaganism - so long as their right to fuck is not going to be gutted.  Read more 

Cross-posted from The Global Sociology Blog.

What happens when a small island African country discovers oil in its territorial waters? (Via Der Spiegel) In a perfect world, it should be the way out of poverty and to development and higher living standards for all. But this is not a perfect world. And this is not a hypothetical situation. It is the story of what happened to Sao Tome and Principe (See the BBC country profile for Sao Tome and Principe for general background information on this country.).

And it is a textbook example of how power differentials and resource curse combine to create a situation where a few will benefit tremendously and the many will be left in the same abject poverty as they were before and where transnational corporations and richer and more powerful countries can throw their weight around with the help of corrupt officials.  Read more 

Cross-posted from The Global Sociology Blog.

Christian Chavagneux and Ronen Palan’s Les Paradis Fiscaux is a great (and mercifully short) introduction to tax heavens, banking secrecy and the offshore financial world. And it’s in French. For my non-French readers, not to worry, hopefully, my review will give enough substantial information… or, y’all could learn French! However, I have preserved what I think are the best quotes in the original language so as to preserve their value.

The book’s central thesis is that the development of offshore financial centers since the 1960s is an integral part of the dynamics of contemporary globalization, both in the financial and productive sectors. Tax heavens are now a pillar without which contemporary economic globalization could not function.

And surprisingly, they have not been studied to the extent that they should have been. For orthodox economic literature, tax heavens are a product of overtaxation in industrialized countries or a simple manifestation of informal economies. Both views are faulty according to Chavagneux and Palan.  Read more 

Cross-posted from The Global Sociology Blog.

Via Context Crawler, thanks to a new article in the American Sociological Review, we should revisit the zombie meme of Opt-Out, the already-debunked idea that women are leaving the workforce to return to homemaking responsibilities. It is a meme that won’t die (hence, the zombie part) because it seems to validate the social conservative and "family values" crowd that women REALLY belong at home with their children and if everyone understood and abide by that, the entire society would be better off.

The correlated belief is that the family is the base institutional structure of society, which has not been true in several centuries, as Stephanie Coontz has aptly demonstrated. But then, social conservatives and "family values experts" are never really bothered by facts and truth. After all, they still maintain that abstinence-only program and virginity pledges work, despite the evidence.

But back to the Opt-Out myth.  Read more 

Cross-posted from The Global Sociology Blog.

Via Le Monde, everybody hates tax havens but they do not exist at the margins of the global financial system. If anything, they are an integral part of it and every year, billions of dollars land there. They are an integral part of the infrastructure of international finances.

What circulates through tax havens? Clean and dirty money (proceeds from illegal activities that end up there for purposes of money-laundering), tax-evasion money. Tax havens were allowed to prosper by all the economic powers, but now, they are worried because they have realized that these havens make funding terrorism easier and more discreet. In the past months, we also discovered that these place facilitate tax fraud on a grand scale, as the case of Liechtenstein where more than a thousand Western people deposited their funds. So, it is not really a surprise that this topic has come up at the G8 meeting.  Read more 

Cross-posted from The Global Sociology Blog.

Via Context Crawler, comes this article from the Washington Post, by Shankar Vedantam on happiness surveys. We take it for granted, and it is supported by surveys, that people tend to be happier when their economic situation is more secure and overall better. That is fairly uncontroversial. And right now, the economy stinks, gas prices are through the roof, so, the mood is on the gloomy side. Straightforward as well. If the economy were better, people would be happier. What is the paradox then?  Read more 

Cross-posted from The Global Sociology Blog.

Parts one, two and three.

The highlight of the session “Women Confront Globalization” was the screening of a rough cut of the film Poto Mitan - Haitian Women, Pillars of the World Economy, directed by Renee Bergan (she is also the founder of Renegade Pictures) and she co-presented it with anthropologist Mark Schuller of UC Santa Barbara, co-director of the film.

 Read more 

Cross-posted from The Global Sociology Blog

This third part of my report from the GSA conference (part 1 and part 2 ) was truly the best, from my point of view, because it featured a speech by one of my favorite sociologists (if not THE favorite), William Robinson, of UC Santa Barbara. He is the author of what I consider the authoritative social theory book on globalization: A Theory of Global Capitalism: Production, Class, and State in a Transnational World.

In his presentation, Robinson contrasted his approach to globalization as qualitatively different phenomenon (transnationalism) as opposed to the school of thought he labeled "new imperialism." Robinson’s view of globalization involves specific features:

• the rise of truly transnational capital with integration of all countries into that system;
• the rise of the transnational state (TNS) where class power is exercised through networks and by the transnational capitalist class (TCC - especially its political / executive component);
• the development of new relations of power and inequalities on a global scale
• the increased power of the transnational corporation (TNC)

So, for the maths-oriented among us: Globalization = TNS + TNC + TCC = true transnationalism.  Read more 

Cross-posted from The Global Sociology Blog

I watched The Devil’s Miner (website) last night for the first time (it was originally from 2005) and what a film this is. The central question of the film is

How do we live in dignity?

Especially when you are 14 years old, living in Potosi, Bolivia, and you work at a mine inCerro Rico, "the mountain that eats men"? The mines there have been exploited for 450 years and are responsible for 8 million dead. Initially, exploited by the Spaniards, the mines were taken over by the Indios (indigenous peoples) and run as cooperatives but it is still as dangerous and it is still drudgery.

The film’s central character is Basilio He is 14 and has been working in the mines since he was ten. He lost his father when he was two, so, now, he is the father in the family, so much so that his little sister, Vanessa, calls him "papa". He works with his little brother Bernardino, who is twelve (also in the mines). The boys go to school for half a day and spend the rest of the time working in the mines.  Read more 

Cross-posted from The Global Sociology Blog

The highlight of the second panel I attended on the World Social Forum was the presentation of Mike Menser on the internationalization of solidarity economics.

First, let me provide a primer on solidarity economics with the examples of Via Campesina . the Brazilian Landless Workers Movement (MST) and Mondragon Cooperative Corporation (Wikipedia). Solidarity economics starts from the World Social Forum that "another world is possible" and applies to it to economics. The idea is that it is possible to organize economies around principles different than that of global capitalism. According to Ethan Miller, these alternatives already exist:

"Can thousands of diverse, locally-rooted, grassroots economic projects form the basis for a viable democratic alternative to capitalism? It might seem unlikely that a motley array of initiatives such as worker, consumer, and housing cooperatives, community currencies, urban gardens, fair trade organizations, intentional communities, and neighborhood self-help associations could hold a candle to the pervasive and seemingly all-powerful capitalist economy. These "islands of alternatives in a capitalist sea" are often small in scale, low in resources, and sparsely networked. They are rarely able to connect with each other, much less to link their work with larger, coherent structural visions of an alternative economy."  Read more 

Cross-posted from The Global Sociology Blog

The Global Studies Association conference is actually interesting because it still human-sized (unlike the ASA), so, there aren’t too many sessions, you can attend most of them, the attendance is not monstrous, so you get to talk to the speakers, and quite a few prestigious ones too.

This year’s conference, at Pace University in New York City, was titled The Nation in the Global Era. So, of course, the big question, which has been hotly debated ever since the academic recognition of globalization as a significant phenomenon (itself a hotly debated topic), was that of the relevance of the modern nation-state in the global era. In a more nuanced fashion, the sessions centered around the transformation, role and relevance of the nation-state in the global context.  Read more 

We’ve been chatting it up about barter and trade and revolutionary economics lately, so this caught my eye:

The Economics of Free Beer  Read more 

I’m not an economist. Some of these people are paid big money to be. So, this struck me:

The disconnect between the US economy and Latin America has never been greater than in the first months of 2008. While our US economists are focused on the continued fallout from the credit crunch, the housing recession and a weakening labor market, throughout Latin America new growth records keep being set.

Peru announced last week that real GDP grew by 9.1% in 4Q, bringing growth for 2007 to 8.9% ? the best pace in more than a decade. Meanwhile in Brazil, the signs of abundance are widespread: locals are boasting that auto production could set a new record – up to nearly 3.5 million vehicles this year – while foreign direct investment doubled in 2007 to US$35 billion compared with just a year ago. Even in Mexico ? where the link with the US is strongest ? the downturn is not immediately apparent. While Mexico’s 4Q GDP began to show a slowing pace on a quarter-over-quarter basis, the more widely reported year-over-year report showed 4Q GDP up 3.8% ? its best quarterly performance during the year.  Read more 

Fascinating.

Steve Drobny’s “Inside the House of Money” is a brilliant and fascinating book. Drobny is a principal with Drobny Global Advisors, a firm that provides research services to global macro hedge funds. In this book Drobny presents 13 long and detailed interviews with global macro hedge funds managers, each representing a different trading style and approach.  Read more 

I love lists like these

Summary of the World

If we could shrink the Earth’s population to a village of precisely 100 people, with all existing human ratios remaining the same, it would look like this

81 would be from less developed countries with a gross income per capita and year of US$ 3,580, 19 would be from developed countries with a gross income per capita and year of US$ 22,060.

There would be 61 Asians, 12 Europeans, 13 Africans, 9 would be from South America and the Caribbean, and 5 from North America including Canada.

75 would be non-white, while 25 would be white.

60 would mistrust their own government.  Read more 

Via Blondesense, a Tom Paine dicussion about economic policy and China, and more from the idiots who brought you the fallen Saddam statue.

Yes, the Red Menace that we spent so many years fearing as a military threat now represents a far more serious economic threat. Mao must be turning in his grave with the news that no less than six U.S. Cabinet members are on their way to the Middle Kingdom on Wednesday to beseech, beg, lobby and try to persuade the new mandarins not to sell off their vast reservoir of dollars.
snip
Already, as I have reported , the Treasury Department has opened a global crisis management center that sounds very much like an economic war room. It is headed by none other than Jim Wilkinson, the GOP info warrior who ran the Coalition Media Center during the opening days of the Iraq War, when great victories were all we read about in the news  Read more 

You were brilliant, you were evil, you were an inspiration, you were racist, you loved freedom above all things, you were an enabler of neoimperialist corporatism…that’s what I’ve heard and more. But here’s what I remember about you

Decriminalizing drugs is even more urgent now than in 1972, but we must recognize that the harm done in the interim cannot be wiped out, certainly not immediately. Postponing decriminalization will only make matters worse, and make the problem appear even more intractable.  Read more 

A tone you rarely hear here, or at least in most US based economics reporting. The money quote:

The bilateral trade volume amounted to 211 billion dollars last year, accounting for 15 percent of China’s total foreign trade of 1.4 trillion dollars.

Just 15%. The way a lot of econ folks over here speak, you’d think the Chinese economy would wither and die without us buying their plastic junk. (Forgive me SN) Not so much, it seems.

A perspective to keep in mind as we ponder things like war with Iran (who provide 40% of Chinese petroleum needs), our national debt and who lends us money for wars and tax cuts.

Looks like the Corrente Collective is on an economics kick today, so here’s mine. Stirling Newberry has a terrific post over at TPM Cafe today which he calls “If You Hate The Boom You Are Going to Positively Loathe The Recession.” Have you been wondering why “the economy” is allegedly so great on paper when it is steadily getting worse in your personal pocketbook? Listen my children and you shall hear:

Inflation, to the extent that a government benefits from it, is a kind of tax. Americans have been trained to point the shotgun of their vote squarely at their own foot on the tax issue. They have been trained to hate visible taxes like the income tax, and love stealth taxes. Inflation is a stealth tax, in that you can’t tell who is collecting it, how it falls on people, or what its overall effects are. It simply eats away at your living standard and savings, and the benefits flow to those who have the power to spend that taxed standard of living.  Read more