China Politics: Reflections from a One Party State

Perhaps because they call themselves Communists, many observers, think the party is homogeneous, but it is not. There are forces of movement and forces of order. A FT columnist recently wrote about the possible threat to the post-Mao consensus. That consensus was not so much on substance as process

Propaganda: Brainwashing in Communism and in Democracy

by Frank Li and Derryl Hermanutz, Guest Authors from Global Economic Intersection This is the fifth article of the series: “Towards An Ideal Form of Government”. In my 1/20/2012 post (Democracy and Communism: Are They Really the Same?), I stated: “Democracy,   as we know it today, is akin to communism in one critical aspect: 

A Quiet Putsch in Hungary?

A putsch, as any dictionary will tell you, refers to the violent overthrow of a government. Hungary has not been subject to that kind of action per se, but rather a more insidious grab for power. Its new constitution goes into effect today, and while perfectly legal, marks the end of Hungary’s flirtation with liberalism (meant in the classical sense of “liberty” and not the modern partisan sense)

Michael Hudson on the erosion of democracy

Michael Hudson was on RT’s Capital Account with Lauren Lyster, speaking about the loss of democracy that has accompanied the global financial crisis. The video is below, but recently Michael also wrote two articles for the Frankfurter Allgemeine Zeitung in which he gives one a more in depth view of his perspective

Europe’s Transition From Social Democracy to Oligarchy

This appropriation of the economic surplus to pay bankers is turning the traditional values of most Europeans upside down. Imposition of economic austerity, dismantling social spending, sell-offs of public assets, de-unionization of labor, falling wage levels, scaled-back pension plans and health care in countries subject to democratic rules requires convincing voters that there is no alternative. It is claimed that without a profitable banking sector (no matter how predatory) the economy will break down as bank losses on bad loans and gambles pull down the payments system. No regulatory agencies can help, no better tax policy, nothing except to turn over control to lobbyists to save banks from losing the financial claims they have built up.

What banks want is for the economic surplus to be paid out as interest, not used for rising living standards, public social spending or even for new capital investment. Research and development takes too long. Finance lives in the short run. This short-termism is self-defeating, yet it is presented as science. The alternative, voters are told, is the road to serfdom: interfering with the “free market” by financial regulation and even progressive taxation.

There is an alternative, of course

Debt and Democracy: Has the Link been Broken?

Debt and Democracy: Has the Link been Broken

Adjustment Needed Now

By Claus Vistesen (see source of image at end of post) I have recently spent a few days in New York talking to clients as well as sneaking in a bit of marathon watching and a visit to the Guggenheim museum. Flying across the big pond also means that there is plenty of time to

More on the political economy of the European sovereign debt crisis

European economies are really breaking down and panic has set in. You see pointless proposals to lord over supposed fiscal free riders from Finland and unelected governments lacking in political legitimacy and taking unfavourable economic policies in both Greece and Italy. Europe is clearly on the edge

Joseph Stiglitz on Iceland’s Crisis and Recovery

I would say that Stiglitz is right that Iceland did well in large measure because Iceland was not subjected to the kind of austerity that you traditionally see in these kinds of programs and which is an anti-growth policy. We are seeing the negative repercussions of this in Greece. He is also right that capital controls were necessary (at least temporarily). Most importantly, sovereigns should not step in and assume all of the banking sector’s liabilities. Ireland has learned this the hard way

EU: Democracy Incompatible with Debt Collection

“Yesterday, the headline in the Frankfurter Zeitung was “Democracy is Junk.” The meaning was the financial sector was saying that democracy is incompatible with collecting debts and, when debtors can’t pay, with foreclosing on the public domain and privatizing a country. You can’t have democracy when debts grow beyond the ability to pay and the IMF imposes austerity, like it used to do in third world countries.”

An outline of critical events affecting Greek Referendum

Now that we have had a chance to digest the information from last night, there are a number of developments to report on the Greek situation which are relevant to unravelling likely scenarios going forward. Here is my synopsis of what has happened followed by some comments on the implications

Consent Needed for Debt Repayments

What people don’t realize is that what happened in Iceland has been used as a test case for what’s happening in Greece and what’s happening in Europe, and maybe what happens in the United States