mfioretti: debt*

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  1. The last 40 years has seen a steady rise of deficit-hawking, in which the world's postwar social safety nets are shredded because the state "can't afford" them -- think of all the times you've heard of national debt being money that "the taxpayers" will have to pay back, and misleading comparisons between sovereign governments (who print their own money) to households and businesses (who don't), as though sovereign state finance was just a scaled-up version of balancing the family check-book.

    But a pushback has been quietly building against this trend, based in economic theories that treat money "not as a finite abstraction, but a limitless public utility that can be used to meet human needs." These ideas started to move outside of wonkish economic circles with David Graeber's Debt: The First 5000 Years, which became required reading during the Occupy Wall Street years. Graeber sets out the theoretical underpinnings of Chartalism, which holds that "money does not emerge from barter-based economic activities, but rather from the sovereign's desire to organize economic activity. The state issues currency and then imposes taxes. Because citizens are forced to use the state's currency to pay their taxes, they can trust that the currency will carry value in day-to-day economic activities."

    Chartalism became "Neo Chartalism," AKA "Modern Monetary Theory," whose core premise is that "The state can spend unlimited amounts of money. It is only constrained by biophysical resources, and if the state spends beyond the availability of resources, the result is inflation, which can be mitigated by taxation."

    MMT is the key to understanding how governments can pay for pensions, public education and universal healthcare, creating universal prosperity instead of brutal, wildly unequal, unstable states. It's gained so much currency that even archconservative economists are pushing its policies, even when they dare not speak its name.

    These ideas have been around since the early 1900s, growing up as a dissenting counterpoint to Keynesianism, pointing out that Keynes and the neoclassical economists assume that markets will be dominated by "active owners" -- companies run by the people who owned them. But the reality of corporatism is that the majority of companies are owned "passively," by investors whose interests are generally short-term and narrow, and who are willing to destroy the companies they invest in, provided they get a payday in the process.
    http://www.truth-out.org/opinion/item...d-democratic-socialism#15153656154571
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  2. La Bce va molto fiera della sua indipendenza, bene. Ma questa è una relazione bilaterale: tu non puoi essere indipendente da me, se io sono dipendente da te. Quando Mario Draghi si esprime in questo modo, oppure nel modo in cui si era espresso prima delle elezioni politiche italiane, quando aveva affermato che “non importa chi vincerà, perché tanto avete il pilota automatico deciso da noi”, dimostra una cosa molto semplice, che Stiglitz ed Axel Leijonhufvud hanno ampiamente messo in luce: l'indipendenza della Bce dal potere politico è una colossale inganno il cui scopo è sottrarre allo scrutinio democratico una serie di decisioni politiche fondamentali che riguardano la redistribuzione del reddito.

    A partire dagli anni '80 si assiste alla stagnazione dei salari reali, in Italia come nel resto del mondo, che è la radice più profonda della crisi debitoria: se un capitalismo molto maturo e molto produttivo decide di ridurre i salari, per permettere agli operai di continuare a comprare i beni, ed evitare la paralisi del sistema, deve riempire questo “cuneo” con debito: pubblico fino agli anni '90 e poi privato.
    http://www.lantidiplomatico.it/dettnews.php?idx=6&pg=6838
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  3. The 'death of peak oil' has been much exaggerated, writes Paul Mobbs. Take out high-cost 'unconventional' oil and production peaked ten years ago, and even North America's fracking and tar sands boom has failed to open up new resources both big enough to make good the shortfall, and cheap enough to reward investors. We really do need to be thinking 'beyond petroleum'.

    It wasn't simply the economic failure of fracking (covered in The Ecologist last December) and the subsequent collapse in drilling (covered in January). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact:

    "EIA's most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions... The DPR estimates include the first projected declines in crude oil production in these regions since publication of the DPR began in October 2013."

    In the shale oil producing areas of Eagle Ford, Niobrara, and the Bakken, production had reached a peak and was beginning to decline. What the USEIA is not clear about is whether this is the result of recent economics, or some longer-term trend.

    This message was echoed a few weeks later in the Post Carbon Institutes's new analysis of Marcellus shale production, along with a warning about the future prospects:

    "Industry invariably drills its best prospects first, hence the cheapest gas is being exploited now. Infinite faith in technology cannot make up for the realities of geology. These realities are showing up now in the most productive counties."

    .

    'Peak oil' - or the peaks of other resources such as copper or rare metals - is not equivalent to 'running out'. The 'peak' is the point in time when half the available non-renewable reserve has been extracted - somewhere between a half and two-fifths through the lifetime of the resource.

    From that point on it gets progressively harder to maintain production. Supply begins to fall, and both the energy and resources expended to produce a given quantity of the resource begins to increase exponentially over time.

    This effect is the result of the interaction of geology and economics:

    Geology gives a natural distribution of resources - with a few large high-quality deposits, a slightly larger number of middling-quality deposits, and a lot of very small low-quality deposits.
    Economics dictates we use the easiest to exploit and cheapest first, which means we use the biggest, easiest to access ones. Over time what's left gets progressively harder and more expensive to produce as we work through the 'stock' of the resource.


    The difficulty is that when we're talking about essential industrial minerals and energy resources, tight supply and rising prices - like the trends operating across the decade of the 2000s - can destabilise the economy.

    That's very bad for business and our resource-consuming lifestyles.

    In 2008 the crash came. What was worse, the warning signs related to the problems of finite energy supplies, ecological limits and debt were ignored; their message smothered beneath billions of pounds and trillions of dollars of quantitative easing.

    As billions poured into the banks, all the bankers could do in the midst of a recession was to lend to the few large industrial investment projects which were under-way - such as 'fracking' in the USA, or the housing market in Britain.

    The quiet reality of North American oil

    Canada produces a lot of conventional and unconventional oil - a large proportion of which gets sent to the USA. This fact is used as a positive message by the tar sands lobby to promote their industry.

    What that message misses is that the whole of the continent of North American acts as a single market - in part due to NAFTA.

    Mexico used to supply a lot of oil to the USA too, but production in the Cantarell field peaked in 2003 and is now in decline. For the last few years all that those increases in Canadian production have done is to roughly keep pace with the decline of Mexico's production.

    In the USA, yes they've produced a lot of new oil and gas from shale. What's equally significant is that, as a result of the economic downturn, they're also consuming 10% less oil than they were before the crash.

    Within the North American energy system, the impacts of the US economic recession on consumption is every bit as important as all those fracking rigs. In the global context too, the recent Chinese economic slowdown is a major factor in OPEC having the ability to floor the price of oil, thereby curtailing unconventional sources of oil.

    The figures are clear - we've peaked!

    If we take the data from the BP Annual Statistical Review for 2014, global oil supply was higher than in any other previous year. Peak oil averted? - arguably not.

    BP's figures include fracked shale oil, Canadian tar sands, and natural gas liquids from unconventional gas production. As outlined recently by the USEIA and Post Carbon Institute, shale oil is beginning to hit the limits of production. In Canada too, production is being constrained by a lack of new investment due to currently low prices.

    The other major factor is that, even amongst conventional producers, all is not rosy. Six nations produce half the worlds oil, three of which have peaked conventional production; 14 produce 75%, six of which are arguably past their conventional oil peak.

    For the last decade fracking and tar sands have produced enough oil to influence the global figure - but only by a few percent. Strip out that few percent of unconventional oil (let's ignore the gas liquids for now) and that small buffer evaporates.

    Once shale production falls significantly, or Mexico or another key producer begins to hit the steeper part of their depletion curve, or just a few more oil producers reach their peak, production will fall more steeply - portending yet another global energy, then economic crisis.

    The data on this and other ecological issues indicates that the core of neoliberal theory - of continual growth, technological progress and monetary wealth creation - is fatally flawed.
    http://www.theecologist.org/News/news..._heralds_the_arrival_of_peak_oil.html
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  4. Professor Hudson stressed that if the International Monetary Fund (IMF) were to state that the Kremlin's $3 billion loan is not official, "this would rewrite international law and mean that loans from Sovereign Wealth funds of any nation (OPEC, Norway, China, etc.) have no international protection."

    Furthermore, such a move would have shattered the world's debt markets "along New Cold War lines," "with financial warfare replacing military warfare," the economist underscored, adding that the world is not ready for this.

    Ukrainian servicemen deploy a weapon at the beach of the Azov Sea in Shyrokyne, eastern Ukraine
    © AP Photo/ Evgeniy Maloletka
    Donbass on Brink of Major War, Conflict May Escalate Any Time - DPR
    On the other hand, Professor Hudson denounced the decision of Ukraine's Verkhovna Rada to seize Russia's assets in Ukraine as a "radical step" that it is "beyond civil law."

    "If Ukraine did this while still receiving IMF, US and Canadian lending, its creditors could be held as responsible," he remarked.

    Meanwhile, it seems that the Western financial aid to Ukraine still goes into a "black hole," due to the country's high corruption and lack of transparency. It is highly doubtful though that Washington or Brussels will simply print money and lend it to President Petro Poroshenko endlessly.

    "The 'West' is not in the charity business. Its firms do not want to lose money, and the EU Constitution bans the European Central Bank and European taxpayers from financing foreign governments," the economist emphasized.

    In his interview to The Saker, Professor Hudson underscored that the US interventionism and deep involvement in domestic affairs of other countries will eventually do a disservice to Washington.

    "US foreign policy is simply "Do what we say, privatize and sell to US buyers, and permit them to avoid paying taxes by transfer pricing and financialization gimmicks, or we will destroy you like we did Libya, Iraq, Syria et al," the professor pointed out, stressing that such an approach will prompt foreign countries to unify into a resistance and to create a viable alternative to American financial hegemony.
    http://sputniknews.com/business/20150...ntent=t8G&utm_campaign=URL_shortening
    Tags: , , , , , , by M. Fioretti (2015-06-15)
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  5. Loveland Technologies, the firm that mapped the city of Detroit's foreclosure crisis in stunning detail as thousands of land parcels were auctioned off by Wayne County, introduced a sophisticated update to the Why Don't We Own This? website on Friday.

    WDWOT 2.0 is the result of four months of development, design time, "soul-searching and talking," said Loveland's founder, Jerry Paffendorf.

    The updated site features even more detailed property information, including land parcels owned by the city of Detroit, homes that are at risk for foreclosure and the tax status of properties.

    Detroiters can check the tax status of their property online, and those in trouble are automatically presented with options that can help them prevent foreclosure. The site has also been made more accessible from a mobile browser.

    One of the biggest changes to WDWOT is a new premium section, which for a $25 annual fee offers select features like the ability to save maps and searches. Premium members can also make private comments only available to other premium members and access an alert system that notifies members when a property's status changes.
    http://www.huffingtonpost.com/2013/01...nt-we-own-this-detroit_n_2550299.html
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  6. -
    http://www.michaelmoore.com/words/mike-friends-blog/30-years-ago-today
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  7. Today in the United States, two-thirds of graduating seniors at four-year colleges have student-loan debt, including over 62 percent of public university graduates. While average undergraduate debt is close to $25,000, I increasingly talk to college graduates with closer to $100,000 in student-loan debt. During the time in one’s life when it should be easiest to resist authority because one does not yet have family responsibilities, many young people worry about the cost of bucking authority, losing their job, and being unable to pay an ever-increasing debt. In a vicious cycle, student debt has a subduing effect on activism, and political passivity makes it more likely that students will accept such debt as a natural part of life.

    2. Psychopathologizing and Medicating Noncompliance. In 1955, Erich Fromm, the then widely respected anti-authoritarian leftist psychoanalyst, wrote, “Today the function of psychiatry, psychology and psychoanalysis threatens to become the tool in the manipulation of man.” Fromm died in 1980, the same year that an increasingly authoritarian America elected Ronald Reagan president, and an increasingly authoritarian American Psychiatric Association added to their diagnostic bible (then the DSM-III) disruptive mental disorders for children and teenagers such as the increasingly popular “oppositional defiant disorder” (ODD). The official symptoms of ODD include “often actively defies or refuses to comply with adult requests or rules,” “often argues with adults,” and “often deliberately does things to annoy other people.”

    the mere act of watching TV—regardless of the programming—is the primary pacifying agent (private-enterprise prisons have recognized that providing inmates with cable television can be a more economical method to keep them quiet and subdued than it would be to hire more guards).

    Television is a dream come true for an authoritarian society: those with the most money own most of what people see; fear-based television programming makes people more afraid and distrustful of one another, which is good for the ruling elite who depend on a “divide and conquer” strategy; TV isolates people so they are not joining together to create resistance to authorities; and regardless of the programming, TV viewers’ brainwaves slow down, transforming them closer to a hypnotic state that makes it difficult to think critically. While playing a video games is not as zombifying as passively viewing TV, such games have become for many boys and young men their only experience of potency, and this “virtual potency” is certainly no threat to the ruling elite.

    American culture offers young Americans the “choices” of fundamentalist religion and fundamentalist consumerism. All varieties of fundamentalism narrow one’s focus and inhibit critical thinking. While some progressives are fond of calling fundamentalist religion the “opiate of the masses,” they too often neglect the pacifying nature of America’s other major fundamentalism.
    http://www.filmsforaction.org/news/8_...k_how_the_us_crushed_youth_resistance
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  8. Nuova contrazione segnalata dalla Banca d'Italia. Quelli alle famiglie calano dello 0,3% nel raffronto con novembre 2011, per le società non finanziarie crollo del 3,4%. In ripresa la raccolta delle banche, con i depositi in crescita del 6,6%. Stabili i tassi dei mutui al 4,05%
    Lo leggo dopo
    A novembre prestiti ai privati in calo dell'1,5% Crollo per le imprese, stabili i tassi dei mutui

    VEDI ANCHE
    Articolo
    S&P e Cina spingono le Borse europee
    Lo spread tra Btp e Bund scende sotto 270

    MILANO - Il periodo di difficoltà economica continua ad essere accentuato dalla stretta sul fronte creditizio, a testimonianza del fatto che nonostante le graduali distensioni dello scenario finanziario il peggio deve ancora passare
    http://www.repubblica.it/economia/201...estiti_bankitalia_-1_5_annuo-50239112
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  9. -
    http://www.ilfattoquotidiano.it/2011/07/28/banche-in-saldo/148246
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  10. At the moment, probably the most pressing need is simply to slow down the engines of productivity. This might seem a strange thing to say—our knee-jerk reaction to every crisis is to assume the solution is for everyone to work even more, though of course, this kind of reaction is really precisely the problem—but if you consider the overall state of the world, the conclusion becomes obvious. We seem to be facing two insoluble problems. On the one hand, we have witnessed an endless series of global debt crises, which have grown only more and more severe since the seventies, to the point where the overall burden of debt—sovereign, municipal, corporate, personal—is obviously unsustainable. On the other, we have an ecological crisis, a galloping process of climate change that is threatening to throw the entire planet into drought, floods, chaos, starvation, and war. The two might seem unrelated. But ultimately they are the same. What is debt, after all, but the promise of future productivity? Saying that global debt levels keep rising is simply another way of saying that, as a collectivity, human beings are promising each other to produce an even greater volume of goods and services in the future than they are creating now. But even current levels are clearly unsustainable. They are precisely what’s destroying the planet, at an ever-increasing pace.

    Even those running the system are reluctantly beginning to conclude that some kind of mass debt cancellation—some kind of jubilee—is inevitable. The real political struggle is going to be over the form that it takes. Well, isn’t the obvious thing to address both problems simultaneously? Why not a planetary debt cancellation, as broad as practically possible, followed by a mass reduction in working hours: a four-hour day, perhaps, or a guaranteed five-month vacation? This might not only save the planet but also (since it’s not like everyone would just be sitting around in their newfound hours of freedom) begin to change our basic conceptions of what value-creating labor might actually be.
    http://www.thebaffler.com/past/practical_utopians_guide
    Tags: , , , by M. Fioretti (2013-08-15)
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