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John Perkins: The Shadow World Of The Economic Hitman
John Perkins: The Shadow World Of The Economic Hitman
If you’re hoping to have a ‘feel good’ day today, we’re about to owe you an apology.
John Perkins, author of The New Confessions of an Economic Hit Man, is someone we’ve been trying to get on the program for some time. He tells a dark story of an elite cabal working in the shadows to subjugate governments as it pursues ever-greater control of the planet’s resources.
What’s most frightening about this story is how credible it is. Anybody paying attention to world developments will have a hard time dismissing Perkins’ claims out-of-hand; and a harder time not being sickened at how on the mark his claims may likely prove to be:
Economic hitmen – I’m a former one, actually – created the world’s first truly global empire. It’s really a corporate empire, not an American empire although the U.S. government certainly supports it.
We work many different ways, but perhaps the most common is that we will identify a country that has resources that corporations want, like oil. We arrange huge loans of that country from the World Bank or one of its sisters. Yet, the money never actually goes to the country. It is primarily there to make the our companies — that build the infrastructure projects like the power plants, and the industrial parks, highways, and ports — very rich.
In addition, a few wealthy families make a lot of money off of these programs. They own the industries and commercial centers.
But the majority of the people do not benefit at all. They do not have enough money to buy much electricity. They cannot get jobs in industrial parks because the industrial parks do not hire many people.
…click on the above link to read the rest of the article…
Canada’s new deficit plan is trouble
Canada’s new deficit plan is trouble
Yesterday Federal Finance Minister Bill Morneau announced the projected deficit for 2016-17 is now $18.4 billion. This amount does not include $10.5 billion in new spending promised by the Liberals during the election campaign. When the budget is delivered in one month’s time it is foreseeable the total deficit could be in excess of $30 billion. During question period Prime Minister Trudeau defended the proposed financial course of action as something the Canadians want and voted for, while the Leader of the Opposition, Rona Ambrose, alleged that increased federal spending will amount to waste. (Ms. Ambrose is likely well aware of the wastefulness of government programs after having served for three years as Minister of Public Works and Government Services. In that role and other portfolios she has held she is not innocent herself of producing and perpetuating waste.)
In their book Free to Choose, Milton and Rose Friedman exposed, among other things, the fallacy of the welfare state and the disappointing nature of all government programs. This is an unavoidable consequence of the spender spending someone else’s money on yet someone else. It is like paying for someone else’s lunch out of an expense account. The spender has little incentive either to economize or to try to get his guest the lunch that he will value most highly. Moreover, as Hayek (1945) explained in the “Use of Knowledge in Society”, spenders do not have and cannot obtain the information necessary to spend money on other peoples’ money on yet other people as effectively as when you spend your own money on yourself. This is the crux of why government spending is so wasteful. Legislators vote to spend someone else’s money. Bureaucrats who administer the spending programs do the spending someone else’s money on yet someone else.
…click on the above link to read the rest of the article…
Europe’s Circular-Economy Opportunity
EUROPE’S CIRCULAR-ECONOMY OPPORTUNITY
A new study “Growth within: A circular economy vision for a competitive Europe” has provided fresh evidence that a circular economy, made possible by the technology revolution, would make Europe to grow resource productivity by up to 3% annually translating into primary-resource benefit of as much as €0.6 trillion per year by 2030 in these economies.
Additionally, it would generate €1.2 trillion in non-resource and externality benefits, bringing the annual total benefits to around €1.8 trillion compared with today.
CIRCULAR ECONOMY IS FOUNDED ON THE BELOW PRINCIPLES:
Waste is food
Waste does not exist… the biological and technical components (nutrients) of a product are designed by intention to fit within a materials cycle, designed for disassembly and re-purposing. The biological nutrients are non-toxic and can be simply composted. Technical nutrients – polymers, alloys and other man-made materials are designed to be used again with minimal energy.
Diversity is strength
Modularity, versatility and adaptiveness are to be prioritised in an uncertain and fast evolving world. In working toward the circular economy, we should focus on longer-lasting products, developed for upgrade, ageing and repair by considering strategies like emotionally durable design. Diverse products, materials and systems, with many connections and scales are more resilient in the face of external shocks than systems built simply for efficiency.
Energy must come from renewable sources
…click on the above link to read the rest of the article…
‘Credo’: economics is a belief system – and we are ruled by fundamentalists
‘Credo’: economics is a belief system – and we are ruled by fundamentalists
Economics is much more than the study of money, writes Paul Mobbs. It is a belief system, and in its ‘mainstream’ incarnation, one that serves a very useful purpose – for those that reap the benefits. But as Brian Davey shows in his insightful new book, it’s letting the rest of us down: failing to deliver human wellbeing, while driving ecological calamity.
It is the gap between physical reality and ‘supernatural’ belief, such as orthodox economists’ rejection of ecological limits, which is both driving today’s ecological crisis and preventing politicians from implementing effective solutions.
Brian Davey’s new book, Credo: Economic Beliefs in a World in Crisis, is an analysis of economic theory as if it were a system of religious belief.
It’s a timely book. The simplistic, perhaps ‘supernatural’ assumptions which underpin key parts of economic theory demand far more attention. It’s a debate we’ve failed to have as a society.
However, while simple to state, this analysis also throws up a major problem for the ‘ecological view’ of the world. If economics is a belief system, how can we persuade the devotees of economics – in particular politicians – with rational arguments when their outlook is based upon a self-justifying ‘faith’ in materialism?
In and of itself money is not ‘evil’. Money simply allows us to exchange goods more easily. As outlined in the more formally religious terms of The Bible, it is the “love of money”which is the “root of all evil”.
The pursuit of material wealth inevitably brings sorrow as we neglect the innate, non-material value of the people and living things around us – a point upon which many of the world’s other great religions tend to agree.
What’s wrong with economics? The way people actually behave
…click on the above link to read the rest of the article…
Teaching economics for the 21st century
Teaching economics for the 21st century
In the economics classroom here at Schumacher College https://www.schumachercollege.org.uk/courses/postgraduate-courses/economics-for-transition, we are drawing on the thinking of Otto Scharmer https://www.presencing.com/ego-to-eco/3-divides(link is external), exploring the three great divides that characterise the times in which we live: separation of self from self (spiritual/cultural alienation); self from others (social divide); and self from the more-than-human world (ecological divide).
Today, the enquiry is on the self-from-others divide, with a strong focus on trends in, and the impact of inequality. Graphs and statistics aplenty as we unpick the complexity of the various trends: Kuznets curve, Gini co-efficients, Palma curves. We explore contradictory trends in the gap between rich and poor across regions and historical periods, seeking out patterns and empirically valid conclusions that may be drawn from them. Picketty rubs shoulders with Friedman.
Trying to disentangle the various assumptions and theoretical frameworks that account for such wildly differing interpretations of the achievements of the just-ended Millennium Development Goals (MDGs) http://www.un.org/millenniumgoals/(link is external). Examining different theories by which we can evaluate the appropriateness and likely success of the newly-launched Sustainable Development Goals http://www.sustainabledevelopment2015.org/(link is external).
So far, so good. This looks and feels like an exemplary exercise in the study of heterodox economics of just the sort that economics students around the world have been demanding in ever more strident terms in recent years http://www.theguardian.com/education/2014/may/04/economics-students-overhaul-subject-teaching(link is external). Multiple perspectives are opened for exploration and the pretence that there is one single, value-free, objectively correct position is abandoned. We are deep into the realm of values.
And then, we observe that we have spent the entire day talking about inequality and its impacts. There is a general consensus that while we are intellectually stimulated by the material, in some sense perhaps cleverer, we have not been moved by it.
…click on the above link to read the rest of the article…
Economists vs. Economics
Economists vs. Economics
Ever since the late nineteenth century, when economics, increasingly embracing mathematics and statistics, developed scientific pretensions, its practitioners have been accused of a variety of sins. The charges – including hubris, neglect of social goals beyond incomes, excessive attention to formal techniques, and failure to predict major economic developments such as financial crises – have usually come from outsiders, or from a heterodox fringe. But lately it seems that even the field’s leaders are unhappy.
Paul Krugman, a Nobel laureate who also writes a newspaper column, has made a habit of slamming the latest generation of models in macroeconomics for neglecting old-fashioned Keynesian truths. Paul Romer, one of the originators of new growth theory, has accused some leading names, including the Nobel laureate Robert Lucas, of what he calls “mathiness” – using math to obfuscate rather than clarify.
Richard Thaler, a distinguished behavioral economist at the University of Chicago, has taken the profession to task for ignoring real-world behavior in favor of models that assume people are rational optimizers. And finance professor Luigi Zingales, also at the University of Chicago, has charged that his fellow finance specialists have led society astray by overstating the benefits produced by the financial industry.
This kind of critical examination by the discipline’s big names is healthy and welcome – especially in a field that has often lacked much self-reflection. I, too, have taken aim at the discipline’s sacred cows – free markets and free trade – often enough.
But there is a disconcerting undertone to this new round of criticism that needs to be made explicit – and rejected. Economics is not the kind of science in which there could ever be one true model that works best in all contexts. The point is not “to reach a consensus about which model is right,” as Romer puts it, but to figure out which model applies best in a given setting.
Read more at https://www.project-syndicate.org/commentary/economists-versus-economics-by-dani-rodrik-2015-09#xgLwXaG0L2E8thiJ.99
Beware of American econ professors!
Beware of American econ professors!
How Krugman, Sachs and Stiglitz led the Greeks astray.
In countless public utterances and interviews since his resignation, former finance minister Yanis Varoufakis has spoken of how he urged the prime minister to authorize the issue of a parallel currency, to declare that Athens would default on €3.5 billion in Greek government bonds owed to the ECB on July 20 and to seize control of the Bank of Greece. Such an aggressive move would have led inevitably to the introduction of a new currency.
The idea was to use the personal data of Greek taxpayers to secretly create parallel accounts that would facilitate payments in case of a major liquidity squeeze. These accounts would be denominated in euros, but if the need presented itself, they could be turned into the new drachma “at the drop of a hat.”
Varoufakis is not the only one to have harbored revolutionary plans.
“They have served Greece’s cause very poorly indeed.”
On July 14, a few days before he was dismissed from the cabinet for voting against measures mandated by the agreement reached between Tsipras and Greece’s creditors, Panayotis Lafazanis, the head of the Left Platform, the influential far-left faction within Syriza, suggested seizing the national mint and expropriating up to €22 billion in reserves (his figure).
We are all Greece
We are all Greece
The cast of heroes and villains in Greece’s ongoing battle to save its economy varies depending on who’s telling the story. One simplified narrative depicts the German people as rich and callous overlords inflicting hardship on the downtrodden Greeks. The austerity measures they insist upon are essentially meant to punish the Greeks for spending too much on social programs for the sick and elderly.
In an opposing storyline, the Greeks have only themselves to blame: they lived beyond their means, evaded taxation, were generally corrupt, and irresponsibly piled up debts they simply could not repay. In this scenario the Germans are like parental figures administering discipline on the immature Greeks.
Neither of these narratives is accurate or helpful; rather than providing real insight, they merely serve to heighten nationalistic and xenophobic impulses in both countries. In order to make sense of what’s going on, we need to go behind the scenes to look more broadly at the underpinnings of the crisis.
It is widely assumed that the European Union was formed in order to prevent conflict. This notion can be traced to the aftermath of the Second World War, when well-intentioned statesmen promoted the notion that economic integration was a path to peace and harmony. And until this day many idealists support the EU for this reason. However, for many in my network – particularly in Scandinavia – it was clear from the beginning that the EU was primarily about big business.
Before countries were linked together into an economic union, Europe’s many regions were home to a great variety of cultures, languages and customs. But the Union erodes this rich diversity, which was born of human adaptation to different climates and ecological realities. The many borders, currencies, and differing regulations made trade difficult for big business, while the diversity of languages and cultural traditions put limits on mass marketing.
…click on the above link to read the rest of the article…
Harper Is Right: This Election Is about Security Versus Risk
Harper Is Right: This Election Is about Security Versus Risk
It’s our nation’s ruthless economic insecurity that Canadians must weigh.
Stephen Harper chose the Calgary Stampede (now Rachel Notley country) to launch the theme of the now full-blown election campaign. Harper proclaimed he was confident that “this October Canadians will choose security over risk.” Let’s hope so. The question is, of course, what kind of security and risk are we talking about? Political language is never simple or straightforward. It is subject to sophisticated manipulation by professional word-smiths and public relations experts. The choice of what language to use is subject to hundreds of hours of deliberation and enormous resources, because if you get it right, you usually win. If you get it wrong, well, it’s a lot harder. Getting it right means no one even suspects you of manipulating them.
Experts in the art of issue framing will tell you that those who frame an issue first have a huge advantage, because they force their opponents to reframe it — in other words get you to take the time to reconsider what the words actually mean. Maybe that is why neither the Liberals nor the NDP have taken the trouble to challenge Harper’s framing of the security issue as exclusively a foreign policy and military issue: security against terrorism.
That’s unfortunate, because not only is Harper vulnerable on his own limited anti-terror grounds, he is extremely vulnerable when it comes to the kind of security that actually affects millions of Canadians. When it comes to economic and social security, the vast majority of Canadians haven’t been this insecure since the Great Depression.
…click on the above link to read the rest of the article…
Stouffville Corner
A new section of my site, Stouffville Corner, aims to provide a variety of write-ups on topics I consider to be of primary importance/ interest. The aim was to have my local paper, Stouffville Tribune, publish them on a weekly/bi-weekly basis to bring the issues to the consciousness of my local community (thus the name). While the paper no longer accepts op-ed pieces due to its limited publication schedule (use to be published twice a week but now only once), I will still be offering the articles on a weekly/bi-weekly basis on my site beginning today with the introductory piece that has been accepted as a letter-to-the-editor.
Cheers…
Steve
In Denial: We Pursue Endless Growth At Our Peril
James Steidl/Shutterstock
In Denial: We Pursue Endless Growth At Our Peril
As we’ve been discussing of late here at PeakProsperity.com, humans desperately need a new story to live by. The old one is increasingly dysfunctional and rather obviously headed for either a quite dismal or possibly disastrous future. One of the chief impediments to recognizing the dysfunction of the old story and adopting a new one is the most powerful of all human emotional states: Denial.
I used to think that Desire was the most powerful human emotion because people are prone to risking everything in their lives – careers, marriages, relationships with their family and close friends – pursuing lust or accumulating 10,000 times more money and possessions than they need in their desire for “more.”
Perhaps it was my own blind spot(s) that prevented me from really appreciating just how powerful human denial really is. But here we are, 40 years after the Club of Rome and 7 years after the Great Financial Accident of 2008, collectively pretending that neither was a sign warning of the dangers we face — as a global society — if we continue our unsustainable policies and practices that assume perpetual growth.
Economic Denial
In the realm of economics, the level of collective denial gripping the earth’s power centers is extraordinary. Perhaps that should be of little surprise, as we’re now at the height of the largest set of nested financial bubbles ever blown in world history.
The bigger the bubble(s) the bigger the levels of denial required to sustain their expansion. These bubbles are doozies, and that explains the massive and ongoing efforts to prevent any sort of reality from creeping into the national and global dialog.
To understand this pattern of avoidance of unpleasant realities, consider the behavior of cities — even entire nations — which cannot bring themselves to talk openly about their state of insolvency, let alone do something about it.
Economic inequality: 10 reasons why we can’t beat it
Even the OECD says inequality is bad. But making it go away is much tougher
It almost feels like an old story. Ever since the economy crashed in 2008 a growing chorus of voices has warned that inequality was wiping out the middle class and damaging society.
This week the Organization for Economic Co-operation and Development, the rich countries` think-tank, made headlines for declaring that growing inequality is not only bad for social cohesion, but is actually cutting points off economic growth.
- Precarious jobs holding back young workers, OECD finds
- Canadian cities unlikely to mimic L.A. on minimum wage
If we all agree, why is it such an intractable problem? The story is complex, but here are just a few reasons why inequality is so hard to fix.
1. Equality where?
While inequality within rich countries has been getting worse, many point out that global inequality has been shrinking.
Countries like the U.S. and Canada used to consume a majority of the world’s wealth. As the rich and middle class in places like China and India get a bigger piece of the action, some argue that morally, increasing global equality outweighs a relative decline in wealth by some people in the rich world.
2. Free trade and globalization
The push to create open trade between countries means that the low- and unskilled workers of rich countries are increasingly competing directly with workers in China, Bangladesh, Vietnam and India. Even within North America, industrial jobs often move to where wages are lowest, meaning middle class industrial jobs disappear.
3. Automation
Even in developing countries, manufacturers are replacing jobs withrobots and automation. Here in North America, computerized processes are already taking jobs done by factory workers, clerical workers and even professionals as clever software learns to search legal titles and write simple news stories.
…click on the above link to read the rest of the article…
One Last Look At The Real Economy Before It Implodes – Part 6 – Solutions
One Last Look At The Real Economy Before It Implodes – Part 6 – Solutions
All problems, all crises, have at least one solution, if not many solutions. There is no such thing as an unwinnable scenario. Some may not be smart enough or courageous enough to see it, but the solution is always there, waiting to be discovered. The only fight that cannot be won is the fight in which the enemy makes all the rules and we foolishly abide by those rules. Life is not a game of chess, and a man can choose to be more than a pawn anytime he has the guts to do so.
In the past, I have likened the liberty movement to a rebellion against not just tyrants but the game itself – a group of people willing to walk away from the chess board and make their own rules. I stand by that assertion. However, simply walking away is not enough; we must also be willing to take actions that will destroy the game entirely.
In order to accomplish this task, any rebellion against corruption of power must be self-critical – more self-critical of its own weaknesses than opposing propagandists could ever be. Most of our problems as a society are being caused by a relatively small number of elitists, but we will never be able to undo these problems without understanding our weaknesses as much as the enemy’s weaknesses. In this final installment of my six-part series, I will talk about REALsolutions to the inevitable economic implosion in front of us, but I will also discuss the shortcomings of the liberty movement as an obstacle to the success of those solutions.
…click on the above link to read the rest of the article…
“Facts Do Not Cease To Exist Because They Are Ignored”
“Facts Do Not Cease To Exist Because They Are Ignored”
Courage
“The kid had a 94-mile-per-hour fastball, a clean delivery, and a body that looked as if it had been created to wear a baseball uniform. He was, in short, precisely the kind of pitcher Billy thought he had trained his scouting department to avoid.”
– Michael Lewis, Moneyball
In his book Moneyball, Michael Lewis explores the irrationality and ignorance of human behavior and the opportunities it creates for those willing to resist it. The book represents a value investors guide to how the Oakland A’s, with one of the smallest budgets in Major League Baseball, consistently found and acquired quality players that were shunned under 
the traditional scouting matrix. These overlooked and undervalued players afforded the Oakland A’s and General Manager Billy Beane the fifth best winning percentage with the fourth lowest total payroll over the last 15 years. As the graph below from FiveThirtyEight shows, Beane dramatically outperformed his opponents when it came to maximizing the value of his budget.
Once when asked why he was willing to allow Michael Lewis to write a book about his approach, Beane responded “It won’t matter who reads it, no one would have the courage to put into practice what we do.” This same model of logic and courage should be applied in investing.
…click on the above link to read the rest of the article…
The Economic Wall Dead Ahead Is Hidden Behind False Signs Of “Recovery”
The Economic Wall Dead Ahead Is Hidden Behind False Signs Of “Recovery”
This morning I had left the TV mistakenly tuned to CNBC with the sound on—-and unavoidably caught another bullish strategist jawing about the US economy’s awesome strength. This one was peddling as exhibit #1 the recent surge in C&I loans, arguing that it is a sure sign that business is gearing up for a post-winter boom.
It turns out that the $1.8 trillion of C&I loans outstanding at the end of February, in fact, were up by 14% since January 2014. But then again, when are they going to find a guest which wasn’t born yesterday. That is to say, an analyst who is capable of looking at the historic context in which the latest data points are anchored, the quality of the numbers at issue and the deeper implications of the indicators.
In this case, like most of the blizzard of bullish factoids spewed out each day on bubble vision, the purported business lending boom is not all that. The upward blip during the last 13 months was from a level which had first been reached way back in October 2008. In other words, it had taken 63 months to dig out of the deep crater that had resulted from the liquidation of the mountains of bad debt that existed on the eve of the financial crisis.
Next consider the quality and content of the purported “surge” in business lending. The skunk in the woodpile is patently obvious in the graph below.
The “surge” is almost entirely due to financial engineering and LBOs. In fact, virtually all of the growth in business lending during the past two years is due to a dramatic rise in leveraged loans from the deal business. Thus, overall C&I loans are up a modest $220 billion since October 2008, but 100% of that gain is accounted for by the 37% rise in leveraged loans outstanding since 2008.
…click on the above link to read the rest of the article…
