Robert Reich - How to Avoid the Austerity Trap But Still Deal With the Budget Deficit

We now know austerity economics is bad for weak economies facing large budget deficits. Much of Europe is in recession because of budget cuts demanded by Germany. And as Europe’s economies shrink, their debts become proportionally larger, making a bad situation worse.

The way to avoid this austerity trap is to get growth and jobs back first, and only then tackle budget deficits. 

The U.S. hasn’t yet fallen into the trap, but it could soon. Last week the non-partisan Congressional Budget Office warned we’ll be in recession early next year if the Bush tax cuts end as scheduled on January 1, and if more than $100 billion is automatically cut from federal spending, as required by Congress’s failure last August to reach a budget deal. 

Predictably, Capitol Hill is deadlocked. Democrats refuse to extend the Bush tax cuts for high earners and Republicans refuse to delay the budget cuts. 

If recent history is any guide, a deal will be struck at the last moment – during a lame-duck Congress, some time in late December. And it will only be to remove the January 1 trigger. Keep everything as it is, the Bush tax cuts as well as current spending, and kick the can down the road into 2013 and beyond. 

Which means no plan for reducing the budget deficit. 

Read More:

http://robertreich.org/post/23939473049

Simon Johnson - The End Of The Euro: A Survivor’s Guide

In every economic crisis there comes a moment of clarity.  In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone.  Economic chaos awaits them.

To understand why, first strip away your illusions.  Europe’s crisis to date is a series of supposedly “decisive” turning points that each turned out to be just another step down a steep hill.  Greece’s upcoming election on June 17 is another such moment.  While the so-called “pro-bailout” forces may prevail in terms of parliamentary seats, some form of new currency will soon flood the streets of Athens.  It is already nearly impossible to save Greek membership in the euro area: depositors flee banks, taxpayers delay tax payments, and companies postpone paying their suppliers – either because they can’t pay or because they expect soon to be able to pay in cheap drachma.

The troika of the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) has proved unable to restore the prospect of recovery in Greece, and any new lending program would run into the same difficulties.  In apparent frustration, the head of the IMF, Christine Lagarde, remarked last week, “As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time.”

Read More:

http://baselinescenario.com/2012/05/28/the-end-of-the-euro-a-survivors-guide/#more-10166

Giuliano Battiston - ‘Green Economy’ - New Disguise for Old Tricks?

Though the current global economic and financial crises are undoubtedly devastating much of the world, they present the perfect opportunity for remodeling our economic system, according to participants at the ninth annual Terra Futura (Future Earth) exhibition of ‘good practices’ in social, economic and environmental sustainability held here from May 25-27.

“What, how, how much and for whom to produce? Those are the questions we urgently need to answer,” said Guido Viale, environmental economist and author of several books on ecological issues. 

“The crisis offers us a chance to ecologically reconvert the ways we produce and use goods and services, paving the way to reduce our dependency on fossil fuels, to respect biodiversity and to create a safe, low-carbon economic system.”

The first step towards a healthier economy and a cleaner environment is "to find cost-effective ways to improve our energy infrastructure and to ‘decarbonize’ our energy supply," said Monica Frassoni, president of the European Alliance to Save Energy (EU-ASE), which was established at the United Nations Climate Change Conference (COP16) in December 2010 and includes some of Europe’s leading multinational companies, along with a prominent cross-party group of European politicians. 

Read More:

http://www.nationofchange.org/green-economy-new-disguise-old-tricks-1338299239

Alex Newman - U.S. & U.K. Taxpayers Funding Forced Sterilization in India

U.S. and British taxpayers are funding brutal forced sterilizations and a growing network of appalling “camps” in India through foreign-aid programs and even the World Bank, according to human rights activists and news reports. But as the scandal surrounding the controversial population-control campaign grows with an Indian Supreme Court investigation into the matter, governments are publicly distancing themselves from the program.  

Citing dubious United Nations theories about “climate change,” population-reduction fanatics — especially in the West — have been working fiendishly around the world for decades to scale back the number of humans. Their methods include everything from promoting abortion and contraception to developing sterilization programs targeting poor women in particular. And the barbarity is largely being bankrolled by taxpayers and elite donors in the U.S. and the United Kingdom.  

According to recent reports, the foreign-aid “family planning” money is being used by Indian authorities to forcibly sterilize Indians using outright deception or even coercion. In some cases, authorities coerce families into consent by threatening to withhold food or other essentials. Sometimes the victims are bribed using Western tax money without being told what the procedures really accomplish — let alone the risks.  

Read More:

http://www.thenewamerican.com/world-news/asia/item/11372-us-uk-taxpayers-funding-forced-sterilization-in-india

Pratap Chatterjee - Bailing out Germany: The Story Behind the European Financial Crisis

Bankia, Spain’s fourth largest bank, asked the government for a €19 billion ($24 billion) bail out on Friday night.  Four Greek banks - Alpha Bank, Bank of Piraeus, Eurobank and National Bank of Greece – were together given €18 billion ($23 billion) from their government last week also.

The sudden economic crash in several southern European countries: Greece, Italy, Portugal and Spain as well as Ireland (sometime called the PIIGS, a rather dubious and perjorative name); is commonly blamed on lazy workers, a bloated social security system and unwise borrowings by greedy governments. This is why lenders like the European Central Bank (ECB) and the International Monetary Fund (IMF) are now asking these governments to cut social spending (austerity measures) and pay ever higher interest rates, despite the fact that only serves to make the situation worse.

"As far as Athens is concerned, I … think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax," Christian Lagarde, the French head of the IMF told the Guardian.

In reality, a large chunk of the bailouts are for debts created by private banks in Greece, Ireland, Italy, Portugal and Spain borrowing abroad – for speculative real estate schemes and such like - not by shopkeepers, small entrepreneurs and ordinary citizens. And a surprisingly big chunk of the rash loans were handed out by private (and some public) banks in just four countries: France, Germany, the UK and Belgium (in that order).

Read More:

http://www.commondreams.org/view/2012/05/28-7

Aaron Dykes - Mark of the Beast: Bilderberg Pushes Mandatory Internet ID for Europe

While the international ACTA ^[1] treaty and United States’ CISPA ^[2] legislation are setting the stage to clamp down on the world wide web, technocrats are working overtime to try to pin down your identity and make sure all your activities are thoroughly monitored and under control.

The European Union is now moving to create a mandatory electronic ID system ^[3] for all EU citizens that would be implemented across Europe to standardize business both online and in person, authenticating users via a common ‘electronic signature.’ A single authenticating ID would guard access to the Internet, online data and most commerce. It is nothing short of an attempt to phase in a Mark of the Beast system, and a prominent Bilderberg attendee is behind the scheme.

Neelie Kroes is the EU’s Digital Agenda Commissioner ^[4], and is introducing legislation she hopes will force “the adoption of harmonised e-signatures, e-identities and electronic authentication services (eIAS) across EU member states.”

The extent of such a system would, of course, expand over time, particularly as many EU nations have resisted the big government encroachment of ID requirements on civil rights grounds, which even now smack of the Nazi regime’s draconian “papers please” policies that empowered their other avenues of tyranny. According to EurActiv.com ^[3], Neelie Kroes would later “widen the scope of the current Directive by including also ancillary authentication services that complement e-signatures, like electronic seals, time/date stamps, etc,” as the supra-national body attempts to corral more nations into participation.

Read More:

http://www.prisonplanet.com/mark-of-the-beast-bilderberg-pushes-mandatory-internet-id-for-europe.html

Andre Damon - Mounting Signs Of Deepening Global Slump

New economic figures point to a renewed downturn of the world economy amid a growing debt crisis in Europe and the threatened breakup of the euro zone.

The economy of the 17-member euro zone contracted sharply in May, according to the currency bloc’s purchasing managers’ index, which fell at its fastest rate since June 2009. Market, the issuer of the survey, said the figures indicate the euro zone economy will likely shrink by about 0.5 per cent in the current quarter.

The euro zone purchasing manager’s index fell to 45.9 in May, down from 46.7 in April. Germany’s index dropped to 49.6, down from 50.5, and that of France fell from 45.9 to 44.7. Figures below 50 indicate a contraction.

The euro zone’s gross domestic product remained flat in the first quarter of the year, avoiding a negative figure due only to the relatively stronger performance of the German economy, which expanded by 0.5 percent.

In May, however, even Germany’s economy likely shrank. Business confidence there fell last month to 106.9 from 109.9 in April, according to the Ifo institute, the second-biggest monthly drop since late 2008.

Read More:

http://www.wsws.org/articles/2012/may2012/econ-m26.shtml

Greg Palast - Killings, cancer, corruption and Azerbaijan: Eurovision in the Islamic Republic of BP

Palast's book Vultures' Picnic will be released in Britain June 26. Catch with Special Guest Warren Ellis, info here.

Will “Beyond Petroleum” oil giant BP pick the winner of the Eurovision Song Contest today in Baku, Azerbaijan? If so, I wouldn’t be surprised.

When I was arrested by the military police of Azerbaijan during my investigation of BP for Channel 4′s Dispatches in 2010, one of the cops who surrounded our crew in the desert told us, with great pride:

“BP drives this country.”

Indeed it does.

In 1992, the newly independent former Soviet republic of Azerbaijan elected a kindly Muslim Professor, Abulfaz Elchibey, as President.

But the voters had made an error: Elchibey refused to give BP an exclusive contract to drill the nation’s massive Caspian Sea fields as the company wished. In 1993, with assistance and, reportedly, guns provided by MI6, Elchibey was overthrown by the nation’s former Soviet KGB boss, Heydar Aliyev.

Read More:

http://www.leftfootforward.org/2012/05/eurovision-bp-azerbaijan-killings-cancer-corruption/

Lynn Parramore - The Best and the Greediest? Ivy League Students Are Still Heading to Wall Street

The Ivy League classes of 2012 arrived on campuses in fall of 2008, just as the world economy was plunging into a Wall Street-driven freefall. Many were glad they weren’t out facing a nasty job market. But they worried about the future. They networked earlier. They fretted over internships. 

Their senior year started with the launch of the Occupy movement, which raised a collective fist at the financiers whose casino games wrecked the economy. A few students from elite colleges even joined the protest. Back in November, some Harvard students interrupted a Goldman Sachs recruiting event hosted by the Office of Career Services.

But now the show is over, and it’s time to don the caps and gowns. Will students be any less likely to flock to Wall Street this year?

A look at last year’s numbers: In 2011, finance was still the most popular career for Harvard graduates, luring up 17 percent of those who went from college to a full-time job. Finance accounted for 14 percent of the 2010 graduating class at Yale. Princeton, which wins the Lloyd Blankfein Booby Prize for the most Wall Street-crazed campus, sent 35.9 percent of those who had jobs at graduation into finance. That’s more than a third of the entire student body.  

Read More:

http://www.alternet.org/story/155535/the_best_and_the_greediest_ivy_league_students_are_still_heading_to_wall_street

Chinese Chaos is the Immediate Threat to the Dollar

In twenty or thrity years, I expect future monetary historians looking back on this period of history to frequently misquote Ernest Hemingway:

How did the dollar die? First it died slowly — then all at once.

The slow death began with the dollar’s birth as a global reserve currency. America was creditor and manufacturer to the world, and the capitalist superpower. People around the globe transacted overwhelmingly in dollars. Above all else, people needed dollars to conduct trade, and they were willing to pay richly for them, and for dollar-denominated debt .

By the ’90s America began enjoying a tremendous free lunch — the world provided America with goods, resources and services, and Americans provided the global reserve currency, as well as acting as world military policing global shipping. Why manufacture at home, or produce resources at home when the world wants your currency? To get what you want, all you have to do is run your printing press — which was much easier after 1971, when Nixon ended the gold exchange standard. In a flat free-trade world, supply chains and technology agglomerated wherever the labour was cheapest, which was predominantly Asia. So America let her industrial base and her domestic supply webs degenerate, to enjoy the free lunch that the dollar brought:

Read More:

http://azizonomics.com/2012/05/26/chinese-chaos-is-the-immediate-threat-to-the-dollar/