Tag Archives: Austerity

Greek general strike: Petrol bombs and teargas during anti-austerity protest – as it happened

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Youths throw Molotov cocktails in Athens, as thousands protest against the ‘vicious cycle’ of austerity in Greece during the first general strike since Alexis Tsipras became PM

Read more » the guardian
See more » http://www.theguardian.com/business/live/2015/nov/12/greek-general-strike-against-austerity-measures-business-live

Million Mask March against Capitalism in London

Million Mask March: Three officers and six police horses hurt on night of violence in London

Fifty people arrested after three police officers hospitalised during anti-capitalist march in central London that also saw photographer hit by supercar

Excerpt:

The Million Mask March, organised by Anonymous to hit back at austerity measures and perceived inequality brought about by the Government, started peacefully enough, with songs and chants at Trafalgar Square.

Read more » The Telegraph
See more » http://www.telegraph.co.uk/news/uknews/crime/11975183/Million-Mask-March-Anonymous-protesters-hurl-fireworks-at-police-in-London-live.html

More » http://www.telegraph.co.uk/news/uknews/crime/11975183/Million-Mask-March-Anonymous-protesters-hurl-fireworks-at-police-in-London-live.html#update-20151106-2107

Syriza split as elections loom

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Alexis Tsipras has become another austerity politician. Once the expression of the hopes of workers across Europe- Syriza have now joined the austerity consensus. Therefore the announcement that the left of Syriza are splitting to form a new party, Popular Unity, is to be welcomed.

Syriza were elected on a platform of reforms- promising to end the humanitarian crisis in Greece. But the leading members of Syriza believed that it was possible to both end austerity and save Greek capitalism- and this miracle was to be performed while remaining in the Eurozone.

The bullying of the EU exposed this political weakness and laid the basis for a complete capitulation by Tsipras. Syriza labour minister, George Katrougalos, said the government needed to “reconfirm its mandate” to implement austerity in the form of the third Greek bailout and that the party is “crippled by a number of dissident MPs”.

25 left MPs have quit to form the new party. The anti-capitalist coalition, Antarsya, of which the Greek SWP is part, has called for a united movement to oppose the bailout deal and the cuts. It’s vital that the new party links up with the anti-capitalists and helps to focus the battles ahead.

Continue reading Syriza split as elections loom

Is Greece close to Grexit?

The Greek government is running out of time and money.

If it fails to come to a deal with eurozone partners to secure the final tranche of its bailout, there is a real chance it could default on its loans.

That could push the Greek government towards leaving the single currency, otherwise known as Grexit.

How bare are Greece’s coffers?

Without an urgent cash-for-fiscal reforms deal, the leftist Syriza government will run out of cash. And that deal needs to be agreed by the end of June, when Greece’s bailout deal with its eurozone creditors runs out.
Somehow, the money was scraped together to survive €1bn (£730m; $1.1bn) in debt payments to the International Monetary Fund in May, but Greece has already postponed June payments to the IMF and further hefty bills are due, to the IMF, European Central Bank and holders of short-term treasury bills.

The government in Athens has called on public sector bodies including hospitals to surrender any cash reserves they have.
The mayor of Greece’s second city, Thessaloniki, has already handed over millions.
Without at least part of the final €7.2bn slice of its giant EU-IMF bailout, Greece would almost certainly default on its debts.
Greeks see cash run out in undeclared default.

Can it stay afloat?

The message from Greece’s government is a resounding no. Quite simply it has too many debts to pay in too short a period.
At the start of June, Mr Tsipras’s government announced it would roll its four June payments to the IMF into one, giving it until the end of the month to find the necessary €1.5bn.
But it also needs to find another €2.2bn in June for public sector salaries, pensions and social security payments.

For a populist, left-wing party like Syriza, it would be unthinkable to pay its debts to creditors ahead of funding pensions for 2.6 million Greeks and some 600,000 civil servant salaries. It has already moved to re-employ 4,000 civil servants whom the previous government got rid of.
Greece’s last cash injection from its international creditors was in August, so the final €7.2bn instalment from its two EU-IMF bailouts, worth €240bn in total, is now seen as vital.
Even then Greece is likely to need a third bailout worth tens of billions. But if Greece’s reform package fails to satisfy its creditors, there will be no new cash.

Read more » BBC
See more » http://www.bbc.com/news/world-europe-32332221

Iceland Jailed Bankers and Rejected Austerity – and It’s Been a Success

Instead of imposing devastating austerity measures and bailing out its banks, Iceland let its banks go bust and focused on social welfare policies. It has now repaid 85 percent of U.K. claims, and the Icelandic finance minister announced recently that all will be settled by the end of the year.

By Roisin Davis / truthdig.com

When the global economic crisis hit in 2008, Iceland suffered terribly—perhaps more than any other country. The savings of 50,000 people were wiped out, plunging Icelanders into debt and placing 25 percent of its homeowners in mortgage default.

Now, less than a decade later, the nation’s economy is booming. And this year it will become the first culturally European country that faced collapse to beat its pre-crisis peak of economic output.

That’s because it took a different approach. Instead of imposing devastating austerity measures and bailing out its banks, Iceland let its banks go bust and focused on social welfare policies. In March, the International Monetary Fund announced that the country had achieved economic recovery “without compromising its welfare model” of universal health care and education.

Iceland allowed those responsible for the crisis—its bankers—to be prosecuted as criminals. Again, a sharp contrast to the United States and elsewhere in Europe, where CEOs escaped punishment.

“Why should we have a part of our society that is not being policed or without responsibility?” asked special prosecutor Olafur Hauksson in the wake of the collapse. “It is dangerous that someone is too big to investigate—it gives a sense there is a safe haven.”

Read more » Flim For Action
See more » http://www.filmsforaction.org/articles/iceland-jailed-bankers-and-rejected-austerity-and-its-been-a-success/

Poloz reiterates bright outlook as Bank of Canada holds key rate

BY BARRIE MCKENNAThe Globe and Mail

OTTAWA — Bank of Canada Governor Stephen Poloz says there’s a brighter future ahead if people can look beyond an economy that’s teetering on the brink of outright contraction.

The central bank kept its key overnight lending rate unchanged Wednesday at 0.75 per cent, even as it released a new forecast showing Canada’s oil-dependent economy stalled and likely didn’t grow at all in the first three months of the year.

The no-growth forecast is a sharp downgrade from the 1.5-per-cent annual growth rate the bank predicted just three months ago, when Mr. Poloz rattled financial markets with a surprise quarter-percentage-point rate cut.

But Mr. Poloz insisted the economy would snap back in the second half of the year as the shock of the oil price collapse fades – optimism that suggests more interest rate relief likely won’t be needed.

“By the middle of the year we should be seeing only the good stuff,” Mr. Poloz told reporters in Ottawa.

The Canadian dollar rebounded, gaining 1.2 cents to 81.30 cents (U.S.), as investors bet that Mr. Poloz’s upbeat tone makes another rate cut this year less likely.

Some analysts aren’t convinced Mr. Poloz is right. He got the first quarter wrong and now he’s overoptimistic about what the rest of the year will bring, said Ben Homsy, a fixed-income analyst at Leith Wheeler Investment Counsel in Vancouver.

“The impact from low oil prices on the Canadian economy is not a one-quarter event,” Mr. Homsy said. “We’ll see that reverberate through the second and third quarters.”

He pointed out that dismal factory sales, which fell for a second consecutive month in February, suggest the lower Canadian dollar isn’t yet helping non-energy exporters.

Read more » The Globe and Mail
See more » http://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-cuts-outlook/article23965431/

Marches for ‘Bread, Work, Homes and Dignity’ Converge on Madrid – End w/Police Repression

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Madrid, March 21, 2015. Coinciding with the first anniversary of the massive March for Dignity last March 22, 10’s of thousands of people have returned this Saturday the streets of Madrid to demand ‘bread, work, shelter and dignity‘.

The protest was organized by over 300 social groups and 9 Dignity Marches converged on Plaza Colon in Madrid from virtually every corner of Spain shortly after noon today.

The main reason for the protest was once again unemployment, affordable housing, social rights and democratic freedoms, rejection of austerity cuts, corruption and privatization of once public services. Also banners against the free trade agreement between the European Union and the United States (TTIP, for its acronym in English) were seen.

Read more » http://revolution-news.com/marches-for-bread-work-homes-and-dignity-converge-on-madrid-end-wpolice-repression/

Protest turns violent in Germany at European Central Bank opening

By Holly Yan, CNN

(CNN) A massive anti-austerity rally in Germany turned violent Wednesday when protesters clashed with police at the opening of the new European Central Bank headquarters.

Frankfurt police said they used water cannons to disperse protesters after attacks on officers, firefighters, a police station and the Old Opera House.

At least 88 officers have been wounded, police said. Eight suffered head injuries after stones were thrown at them, and 80 were hurt when an unknown substance was poured over them.

The damage included at least seven police cars that were set on fire.

Officers arrested five people for violent acts against police and detained another 500 people for questioning, Frankfurt police spokeswoman Tessa Koschig said.

The protest movement, dubbed “Blockupy,” comes amid criticism of austerity measures from the Greek finance minister, who said his country is suffering under the ECB’s policies.

“We want the European Central Bank to stop the austerity (policies) in Europe that is responsible for mass joblessness … people don’t have enough to eat,” Blockupy spokeswoman Songa Winter said. The European Central Bank is tasked with ensuring price stability in the eurozone, and it targets inflation levels just below 2%. The region has been suffering from depressed economic activity, and unemployment remains near record highs.

“What we’re seeing, I think, in Frankfurt is a reaction you see across the eurozone for many people who have said it’s just been too painful, too much, and it’s been going for too long,” CNN’s Jim Boulden said.

Read more » CNN
See more » http://www.cnn.com/2015/03/18/europe/germany-european-central-bank-protest/

The rich are 64% richer than before the recession, while the poor are 57% poorer

Britain’s divided decade: the rich are 64% richer than before the recession, while the poor are 57% poorer

By NIGEL MORRIS

The gap between richest and poorest has dramatically widened in the past decade as wealthy households paid off their debts and piled up savings following the financial crisis, a report warns today.

By contrast, the worst-off families are far less financially secure than before the recession triggered by the near- collapse of several major banks. They have an average of less than a week’s pay set aside and are more often in the red.

Younger workers have fallen behind older people while homeowners – particularly those who have paid off their mortgages – have become increasingly affluent compared with their neighbours who are paying rent.

Evidence of Britain’s rapidly growing wealth gap was revealed by the Social Market Foundation (SMF), which analysed the changing incomes and savings of thousands of people. Its findings will be seized on by Labour as evidence that any recovery from the downturn is uneven and not shared across all income groups. However, the trends uncovered by the SMF began before the Coalition came to power, underlining the huge impact of the credit crunch on levels of affluence.

It found that the average wealth of the best-off one-fifth of families rose by 64 per cent between 2005 and 2012-13 as they put more money aside as a buffer against future shocks. They have average savings and investments of around £10,000 compared with £6,000 seven years earlier.

The proportion of people in this group with debts (apart from mortgages) dropped from 43 per cent to less than one-third. However, the SMF found the poorest 20 per cent are less financially secure than they were in 2005, with their net wealth falling by 57 per cent and levels of debt and use of overdrafts increasing.

Read more » The Independent
See more » http://www.independent.co.uk/news/uk/home-news/britains-divided-decade-the-rich-are-64-richer-than-before-the-recessionwhile-the-poor-are-57-poorer-10097038.html

Corporations are destroying human society, global culture and the environment. – Howard Zinn

Read more » Twitter »» Howard Zinn

Global banks: A world of pain – The giants of global finance are in trouble

New York: ONLY pop music and pornography embraced globalisation more keenly than banks did. Since the 1990s three kinds of international firm have emerged. Investment banks such as Goldman Sachs deal in securities and cater to the rich from a handful of financial hubs such as Hong Kong and Singapore. A few banks, such as Spain’s Santander, have “gone native”, establishing a deep retail-banking presence in multiple countries. But the most popular approach is the “global network bank”: a jack of all trades, lending to and shifting money for multinationals in scores of countries, and in some places acting like a universal bank doing everything from bond-trading to car loans. The names of the biggest half-dozen such firms adorn skyscrapers all over the world.

This model of the global bank had a reasonable crisis in 2008-09: only Citigroup required a full-scale bail out. Yet it is now in deep trouble. In recent weeks Jamie Dimon, the boss of JPMorgan Chase, has been forced to field questions about breaking up his bank. Stuart Gulliver, the head of HSBC, has abandoned the financial targets that he set upon taking the job in 2011. Citigroup is awaiting the results of its annual exam from the Federal Reserve. If it fails, calls for a mercy killing will be deafening (see next story). Deutsche Bank is likely to shrink further. Standard Chartered, which operates in Asia, Africa and the Middle East, is parting company with its longstanding boss, Peter Sands.

Read more » The Economist
See more » http://www.economist.com/news/finance-and-economics/21645807-giants-global-finance-are-trouble-world-pain

Germany Rejects Loan Request Saying Greece Must Meet Conditions

(Bloomberg) — Germany rejected Greece’s request for an extension of its aid program, saying its offer doesn’t meet the euro region’s conditions for continuing aid.

The Greek government is trying to agree bridge-financing without meeting the conditions of its existing rescue program, German Finance Ministry Spokesman Martin Jaeger said in an e-mailed statement. European Commission Spokesman Margaritis Schinas moments earlier had said the Greek letter could be the basis for a “reasonable compromise.”

The euro dropped 0.3 percent to $1.1358.

Read more » Bloomberg
See more » http://www.bloomberg.com/news/articles/2015-02-19/eu-says-greek-letter-may-pave-way-for-reasonable-compromise-i6c3go5j

‘Contingency plan’ needed for Greek eurozone exit – British govt

The UK is preparing for a possible Greek exit from the eurozone by taking measures to ensure British banks and companies are not exposed to risk.

Prime Minister David Cameron discussed plans to prepare the UK for a Greek exit from the eurozone with senior Treasury and Bank of England officials at a meeting on Monday.

They debated the possible impact an exit would have on markets and considered potential contingencies for the British businesses thought to be exposed to financial risk.

The meeting follows comments by the former chairman of the US Federal Reserve, Alan Greenspan, who told the BBC: “I believe [Greece] will eventually leave.”

Read more » http://rt.com/uk/230603-uk-begins-preparations-grexit/

Richest 1% to own more than rest of world, Oxfam says

The wealthiest 1% will soon own more than the rest of the world’s population, according to a study by anti-poverty charity Oxfam.

The charity’s research shows that the share of the world’s wealth owned by the richest 1% increased from 44% in 2009 to 48% last year.

On current trends, Oxfam says it expects the wealthiest 1% to own more than 50% of the world’s wealth by 2016.

The research coincides with the start of the World Economic Forum in Davos.

The annual gathering attracts top political and business leaders from around the world.

Read more » BBC
Learn more » http://www.bbc.com/news/business-30875633

Italy’s finance ministry gets egged by #socialstrike protesters

 

By Magan Specia

Protesters hurled eggs at the country’s finance ministry and scaled the sides of the Colosseum on Thursday as nationwide labor demonstrations heated up.

Students and union members were the driving force behind the demonstrations, rallying on Twitter under the hashtag #socialstrike.

Several were injured in in Padua where protesters clashed with police. The violence erupted when members of the march headed toward the local offices of Premier Matteo Renzi’s centre-left Democratic Party (PD).

Read more » Mashable
Learn more » http://mashable.com/2014/11/14/national-labor-protest-italy/

Clashes at Greek protests to mark police shooting

Clashes have erupted in the capital of Greece during protests marking six years since police shot dead an unarmed teenager.

At least 5,000 demonstrators marched in Athens on Saturday. Some attacked shops and hurled petrol bombs at riot police.

Police officers used tear gas and a water cannon to disperse protesters.

The demonstrators had been marking the anniversary of 15-year-old Alexis Grigoropoulos’ death. He was shot by an officer who has since been jailed.

Mr Grigoropoulos’ killing on 6 December 2008 sparked violent riots across Greece, with cars being set alight and shops looted in a number of cities.

Clashes have also broken out on previous anniversaries of his death.

On Saturday, anti-establishment protesters attacked banks and damaged shops and bus stops.

Read more » BBC
Learn more » http://www.bbc.com/news/world-europe-30363054

The Marxist Nightmare Of The 1 Percent

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“… between technology, globalization, trade, the winner-take-all superstar effect, inequality is rising. This is not just a ‘moral’ issue but also an issue of too little consumption too little savings that is bad for global growth. So it becomes vicious cycle. It’s a bit like the old Marxist idea that if profits grow too much compared to wages, there’s not going to be enough consumption, and capitalism is going to self destruct. So I think that insight of Karl Marx is as useful today as it was 100 years ago.”

If profits grow too much compared to wages, there’s not going to be enough consumption, and capitalism is going to self destruct.

That quote is from Nouriel Roubini, and it perfectly summarizes what a lot of the world’s elites were thinking about at the World Economic Forum.

Roubini’s words echoed the warning from MIT professor Erik Brynjolfsson, who told us:

…there are a lot of forces affecting inequality. There’s globalization, there are institutional changes, cultural changes, but I think most economists would agree that the biggest chunk of it is due to technology. And that’s because of what economists call skill-biased technical change — favoring skilled workers versus less-skilled workers.

Also we talk in the book about capital-biased technical change — you bring capital over labor like when you replace humans with robots. And the third category that maybe is the most important one, we call it superstar-biased technical change, maybe we should come up with a better name. But it’s the fact that technologies can leverage and amplify the special talents, skill, or luck of the 1% or maybe even the 100th of 1% and replicate them across millions or billions of people. In those kinds of markets, you tend to have winner-take-all outcomes and a few people reap enormous benefits and all of us as consumers reap benefits as well, but there’s a lot less need for people of just average or above-average skills.

Brynjolffson came to The World Economic Forum in Davos to warn policymakers that without changes, technology would exacerbate inequality, rather than benefit society as a whole.

The folks at the World Economic Forum in Davos are almost all doing extremely well. They’re the world’s 1% (actually probably more like the world’s 0.001%), and it’s well known that the recovery has been good to them. But there was also a sense — that Roubini gets at in his comment — that the good times won’t last if things keep becoming more unequal.

Figuring out a way to promote mass welfare and to ensure that more people have jobs and strong incomes becomes crucial to preserving what the elites have. Better to have some sort of rebalancing than a dramatic capitalist-destroying rebalancing.

Read more: http://www.businessinsider.com/rich-tech-fears-2014-1#ixzz3KDVYHufQ

30,000 Canadians are homeless every night

200,000 Canadians are homeless in any given year, national report says

By CBC News

Despite sporadic success in addressing homelessness in Canada, little progress has been made toward a permanent cross-country solution, says a national report into the extent of the problem.  The report’s initial numbers tell a grim story. Among the report’s findings:

At least 200,000 Canadians experience homelessness in any given year.
At least 150,000 Canadians a year use a homeless shelter at some point.
At least 30,000 Canadians are homeless on any given night.
At least 50,000 Canadians are part of the “hidden homeless” on any given night — staying with friends or relatives on a temporary basis as they have nowhere else to go.

Read more » CBC
See more » http://www.cbc.ca/news/canada/30-000-canadians-are-homeless-every-night-1.1413016

 

Misrule of the Few – How the Oligarchs Ruined Greece


emonstrators shout slogans during a protest in Thessaloniki on Saturday, protesting against a planned gold mine operation by Canadian company Eldorado Gold Corp. (Nikolas Giakoumidis/Associated Press)
Photo credits: (Nikolas Giakoumidis/Associated Press)

By Pavlos Eleftheriadis

Just a few years ago, Greece came perilously close to defaulting on its debts and exiting the eurozone. Today, thanks to the largest sovereign bailout in history, the country’s economy is showing new signs of life. In exchange for promises that Athens would enact aggressive austerity measures, the so-called troika — the European Central Bank, the European Commission, and the International Monetary Fund — provided tens of billions of dollars in emergency loans. From the perspective of many global investors and European officials, those policies have paid off. Excluding a one-off expenditure to recapitalize its banks, Greece’s budget shortfall totaled roughly two percent last year, down from nearly 16 percent in 2009. Last year, the country ran a current account surplus for the first time in over three decades. And this past April, Greece returned to the international debt markets it had been locked out of for four years, issuing $4 billion in five-year government bonds at a relatively low yield — only 4.95 percent. (Demand exceeded $26 billion.) In August, Moody’s Investors Service upgraded the country’s credit rating by two notches.

Yet the recent comeback masks deep structural problems. To tidy its books, Athens levied crippling taxes on the middle class and made sharp cuts to government salaries, pensions, and health-care coverage. While ordinary citizens suffered under the weight of austerity, the government stalled on meaningful reforms: the Greek economy remains one of the least open in Europe and consequently one of the least competitive. It is also one of the most unequal.

Read more » Foreign Affairs
Learn more » http://www.foreignaffairs.com/articles/142196/pavlos-eleftheriadis/misrule-of-the-few

‘Revolution is inevitable’: Russell Brand

 

‘Revolution is inevitable’: Russell Brand hits Wall Street, kisses RT interviewer (VIDEO)

Russell Brand and some 200 Occupy Wall Street protesters descended onto New York City’s financial district on Monday, where the celebrity called for a “revolution” within the US. Brand explained his viewpoint to RT – and even kissed the correspondent.

The gathering began as part of a promotional event for his newly released book, titled ‘Revolution.’ However, after a reading at Zuccotti Park – where Occupy Wall Street protesters made global headlines for rallying against social and economic inequality – Brand and other attendees marched to Wall Street.

Once they arrived, Brand spoke about the need for a social and economic “revolution,” something he writes about at length in his new book. Brand mentioned the high disapproval ratings that have been reported regarding American institutions like Congress, arguing that the last time vast swathes of the country were taxed by “elites,” a revolution was sparked.

Speaking with RT’s Aleksey Yaroshevsky at the event, Brand said the arrival of his book comes at a time when Americans are bracing for similar revolutionary action.

“I think it’s inevitable,” Brand said. “When universal change is required, people will formulate and organize, and bring about that change. Now we are living under galling inequality, at the point of ecological crisis. People are misinformed, but the means for new communication are merging, and people are awakening.”

Read more » RT
http://rt.com/usa/195992-russell-brand-revolution-wall-street/

Anger grows as wages soar for health-care CEOs while services cut for patients.

Kathleen Wynne must clean up home-care mess: Hepburn

Workers on the front lines of health care are angry that executive salaries are soaring while vital health services are silently slashed.

By:

She sits in her car and cries after telling a war veteran suffering from Parkinson’s disease that she can’t approve visits by a nurse to his home to give him the insulin he needs.

Read more » The Star

1 million workers across the UK walk off their jobs to protest pay and pension cuts in the nation’s largest strike in decades

Public sector strikes hit schools and services around the UK

Hundreds of thousands of people have taken part in rallies and marches across the UK as part of a day of strike action by public service unions. Teachers, firefighters and council workers joined the strike, which follows disputes with the government over pay, pensions and cuts. Thousands of pupils were affected as some 6,000 schools in England closed, the Department for Education said.

Read more » BBC
http://www.bbc.com/news/uk-28240683

 

Tens of thousands march in London against coalition’s austerity measures

An estimated 50,000 people in London addressed by speakers, including Russell Brand, after People’s Assembly march

By  and agencies

Tens of thousands of people marched through central London on Saturday afternoon in protest at austerity measures introduced by the coalition government. The demonstrators gathered before the Houses of Parliament, where they were addressed by speakers, including comedians Russell Brand and Mark Steel.

An estimated 50,000 people marched from the BBC’s New Broadcasting House in central London to Westminster.

“The people of this building [the House of Commons] generally speaking do not represent us, they represent their friends in big business. It’s time for us to take back our power,” said Brand.

Read more » The Guardian
http://www.theguardian.com/politics/2014/jun/21/protest-march-austerity-london-russell-brand-peoples-assembly#start-of-comments

Empty wallets explain new levels of partisan hatred

Tricle downBy  | Daily Ticker

new study by Pew Research verifies much we already know about political extremism in America: It’s getting worse and interfering with social and economic progress. The big question is: Why?

Pew doesn’t address that question, but here’s a plausible answer: Voters are becoming angrier because living standards are falling and the middle class is shriveling. Prosperity breeds comity, but when it gets harder to get ahead, the natural inclination is for the losers to look for somebody to blame and the winners to feel more threatened. That’s been going on for nearly 30 years. Income inequality began to worsen in the United States starting around the early 1980s.

Read more » Yahoo News
https://ca.finance.yahoo.com/blogs/daily-ticker/empty-wallets-explain-why-democrats-and-republicans-hate-each-other-191155158.html

European Central Bank hurls cash at sluggish euro zone economy, seeks to force bank lending

FRANKFURT (Reuters) – The European Central Bank launched a raft of measures on Thursday to fight low inflation and boost the euro zone economy, cutting rates, imposing negative interest rates on its overnight depositors and offering banks new long-term funds.

By John O’Donnell and Eva Taylor

FRANKFURT (Reuters) – The European Central Bank launched a raft of measures on Thursday to fight low inflation and boost the euro zone economy, cutting rates, imposing negative interest rates on its overnight depositors and offering banks new long-term funds.

The ECB cut all its main rates to record lows in a drive to fight off the risk of Japan-like deflation and bring down the euro’s exchange rate. For the first time, it will charge banks 0.10 percent for parking funds at the central bank overnight.

It stopped short of large-scale asset purchases known as quantitative easing for now, but ECB President Mario Draghi said more action would come it necessary.

Draghi outlined a four-year 400 billion euro ($544.86 billion) scheme giving banks that have been holding back credit due to looming stress tests an incentive to increase lending to businesses in the euro zone.

“Now we are in a completely different world,” Draghi told a news conference, citing “low inflation, a weak recovery and weak monetary and credit dynamics”.

The package, adopted unanimously, was aimed at increasing lending to the “real economy”, he said.

Other steps included extending the duration of unlimited cheap liquidity for euro zone banks, injecting about 170 billion euros by stopping tenders that withdrew funds spent on past government bond purchases, and preparing for possible future purchases of asset-backed securities to support small business.

Read more » MSN
http://money.ca.msn.com/investing/news/breaking-news/ecb-hurls-cash-at-sluggish-euro-zone-economy-seeks-to-force-bank-lending

“Are we finished? The answer is no.” – Mario Draghi, president of the European Central Bank says

Draghi Unveils Historic Measures to Counter Deflation Threat

Mario Draghi, president of the European Central Bank (ECB), reacts whilst speaking at a news conference where he unveiled historic measures to face down inflation in Frankfurt, Germany, on Thursday, June 5, 2014.

Bloomberg News reported:

The ECB today cut its deposit rate to minus 0.1 percent, becoming the first major central bank to take one of its main rates negative. In a bid to get credit flowing to parts of the economy that need it, the ECB also opened a 400-billion-euro ($542 billion) liquidity channel tied to bank lending and officials will start work on an asset-purchase plan. While conceding that rates are at the lower bound “for all practical purposes,” he signaled the the ECB is willing to act again.

“We think it’s a significant package,” Draghi told reporters in Frankfurt. “Are we finished? The answer is no.”

Courtesy: Bloomberg

Thomas Piketty’s Capital: everything you need to know about the surprise bestseller

The radical economist’s book Capital in the Twenty-First Century has angered the right with its powerful argument about wealth, democracy and why capitalism will always create inequality. Not read it yet? Here’s what it means

By The Guardian

That capitalism is unfair has been said before. But it is the way Thomas Piketty says it – subtly but with relentless logic – that has sent rightwing economics into a frenzy, both here and in the US.

His book, Capital in the Twenty-First Century, has shot to the top of the Amazon bestseller list. Carrying it under your arm has, in certain latitudes of Manhattan, become the newest tool for making a social connection among young progressives. Meanwhile, he is beencondemned as neo-Marxist by rightwing commentators. So why the fuss?

Piketty’s argument is that, in an economy where the rate of return on capital outstrips the rate of growth, inherited wealth will always grow faster than earned wealth. So the fact that rich kids can swan aimlessly from gap year to internship to a job at father’s bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident: it is the system working normally.

If you get slow growth alongside better financial returns, then inherited wealth will, on average, “dominate wealth amassed from a lifetime’s labour by a wide margin”, says Piketty. Wealth will concentrate to levels incompatible with democracy, let alone social justice. Capitalism, in short, automatically creates levels of inequality that are unsustainable. The rising wealth of the 1% is neither a blip, nor rhetoric.

To understand why the mainstream finds this proposition so annoying, you have to understand that “distribution” – the polite name for inequality – was thought to be a closed subject. Simon Kuznets, the Belarussian émigré who became a major figure in American economics, used the available data to show that, while societies become more unequal in the first stages of industrialisation, inequality subsides as they achieve maturity. This “Kuznets Curve” had been accepted by most parts of the economics profession until Piketty and his collaborators produced the evidence that it is false.

In fact, the curve goes in exactly the opposite direction: capitalism started out unequal, flattened inequality for much of the 20th century, but is now headed back towards Dickensian levels of inequality worldwide.

Continue reading Thomas Piketty’s Capital: everything you need to know about the surprise bestseller

CANADA – Economy slows to worst quarter since 2012

OTTAWA – Canada’s economy suffered through its worst quarter in more than a year during the first three months of 2014, as activity slowed in many key sectors, particularly business investment.

Due in part to the unusually harsh winter, economic growth fell to a surprisingly weak 1.2 per cent annualized rate, the slowest quarterly pace since the fourth quarter of 2012, when the growth rate was 0.9 per cent.

As well, for the month of March, gross domestic product inched forward by only 0.1 per cent, suggesting a weak hand off to the second quarter.

Statistics Canada also revised downward the fourth quarter growth rate from the previously reported 2.9 to 2.7 per cent, and January’s strong 0.5 per cent GDP reading was trimmed back to 0.4.

Read more » msn NEWS
http://news.ca.msn.com/canada/economy-slows-to-worst-quarter-since-2012-2

The New 1% isn’t just the Rich, it is the Spoiled Oligarch Heirs (Krugman)

Economist Paul Krugman explains how the United States is becoming an oligarchy – the very system our founders revolted against.

Bill Moyers interviews Paul Krugman

” Capital in the Twenty-First Century by Thomas Piketty, a 42-year-old who teaches at the Paris School of Economics, shows that two-thirds of America’s increase in income inequality over the past four decades is the result of steep raises given to the country’s highest earners.

This week, Bill talks with Nobel Prize-winning economist and New York Times columnist Paul Krugman, about Piketty’s “magnificent” new book.

“What Piketty’s really done now is he said, ‘Even those of you who talk about the 1 percent, you don’t really get what’s going on.’ He’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth.”

Krugman adds: “We’re seeing inequalities that will be transferred across generations. We are becoming very much the kind of society we imagined we’re nothing like.” ”

Courtesy: http://www.juancole.com/2014/04/spoiled-oligarch-krugman.html

The New York Times – A Return to a World Marx Would Have Known

Doug Henwood is editor of Left Business Observer, host of a weekly radio show originating on KPFA, Berkeley, and is author of several books, including “Wall Street: How It Works and For Whom” and “After the New Economy.”

I don’t see how you can understand our current unhappy economic state without some sort of Marx-inspired analysis.

Here we are, almost five years into an officially designated recovery from the worst downturn in 80 years, and average household incomes are more than 8 percent below where they were when the Great Recession began, and employment still 650,000 short of its pre-recession high.

Though elites are prospering, for millions of Americans, it’s as if the recession never ended.

How can this all be explained? The best way to start is by going back to the 1970s. Corporate profitability — which, as every Marxist schoolchild knows, is the motor of the system — had fallen sharply off its mid-1960s highs. Stock and bond markets were performing miserably. Inflation seemed to be rising without limit. After three decades of seemingly endless prosperity, workers had developed a terrible attitude problem, slacking off and, quaintly, even going out on strike. It’s no accident that Johnny Paycheck scored a No. 1 country hit with “Take This Job and Shove It” in 1977 — utterly impossible to imagine today.

This is where Marx begins to come in. At the root of these problems was a breakdown in class relations: workers no longer feared the boss. A crackdown was in order.

And it came, hard. In October 1979, the Federal Reserve began driving interest rates toward 20 percent, to kill inflation and restrict borrowing, creating the deepest recession since the 1930s. (It was a record we only broke in 2008/2009). A little over a year later, Ronald Reagan came into office, fired the striking air-traffic controllers, setting the stage for decades of union busting to follow. Five years after Johnny Paycheck’s hit, workers were desperate to hold and/or get jobs. No more attitude problem.

The “cure” worked for about 30 years. Corporate profits skyrocketed and financial markets thrived. The underlying mechanism, as Marx would explain it, is simple: workers produce more in value than they are paid, and the difference is the root of profit. If worker productivity rises while pay remains stagnant or declines, profits increase. This is precisely what has happened over the last 30 years. According to the Bureau of Labor Statistics, productivity rose 93 percent between 1980 and 2013, while pay rose 38 percent (all inflation-adjusted).

The 1 percent got ever-richer and more powerful. But there was a problem: a system dependent on high levels of mass consumption has a hard time coping with the stagnation or decline in mass incomes.The development of a mass consumer market after Marx died, with the eager participation of a growing middle class, caused a lot of people to say his analysis was obsolete. But now, with the hollowing out of the middle class and the erosion of mass purchasing power, the whole 20th century model of mass consumption is starting to look obsolete.

Borrowing sustained the mass consumption model for a few decades. Non-rich households borrowed to buy cars, buy food, pay medical bills, buy ever-more-expensive houses, and so on. Conveniently, rich households had plenty of spare cash to lend them.

That model broke apart in 2008 and has not — and cannot — be revived. Without the juice provided by spirited borrowing, demand remains constricted and growth rates, low. (See also: Europe.)

Raising the incomes of the bottom 90 percent of the population through higher wages and public spending initiatives — stifled since Reagan starting putting the squeeze on them — could change that. But the stockholding class has resisted that, and they have a lot of political power.

And an extraordinarily lopsided economy is the result. We didn’t expect that the 21st century would bring about a return of the 19th century’s vast disparities, but it’s looking like that’s just what’s happened.

Courtesy: The New York Times
http://www.nytimes.com/roomfordebate/2014/03/30/was-marx-right/a-return-to-a-world-marx-would-have-known?smid=fb-share