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Category Archives: Economy

Why the US trade war with China is a genuine conflict

The trade war between the US and China can only fill us with dread. How will it affect our daily lives? Will it result in a new global recession or even geopolitical chaos?

To orient ourselves in this mess, we should bear in mind some basic facts. The trade conflict with China is just the culmination of a war which began years ago when Donald Trump fired the opening shot aimed at the biggest trading partners of the US by deciding to levy tariffs on the imports of steel and aluminium from the EU, Canada and Mexico.

Trump was playing his own populist version of class warfare: his professed goal was to protect the American working class (are metal workers not one of the emblematic figures of the traditional working class?) from “unfair” European competition, thereby saving American jobs. And now he is doing the same with China.

https://www.independent.co.uk/voices/us-china-trade-war-trump-us-economy-mexico-steel-a9046501.html

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The Exploitation Time Bomb

Worsening economic inequality in recent years is largely the result of policy choices that reflect the political influence and lobbying power of the rich. There is now a self-reinforcing pattern of high profits, low investment, and rising inequality – posing a threat not only to economic growth, but also to democracy.

NEW DELHI – Since reducing inequality became an official goal of the international community, income disparities have widened. This trend, typically blamed on trade liberalization and technological advances that have weakened the bargaining power of labor vis-à-vis capital, has generated a political backlash in many countries, with voters blaming their economic plight on “others” rather than on national policies. And such sentiments of course merely aggravate social tensions without addressing the root causes of worsening inequality.

https://www.project-syndicate.org/commentary/increasing-inequality-economic-political-risks-by-jayati-ghosh-2019-07

 
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Posted by on August 8, 2019 in Economy

 

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The imperial rivalry between the US and China means the left must choose the EU it wants

The US has declared China a “currency manipulator” — which, on the face of it, is like a bear declaring that another bear defecated in the woods. But the formal act of designation is a big deal.

Under a law passed in 1988, when the US first discovered that its global dominance might be under threat from trade competitors, the president is empowered to “initiate negotiations … on an expedited basis” to force China to raise the value of the renminbi against the dollar.

The act includes sanctions such as banning Chinese firms from US contracts, and was described at the time by critics as “the economic equivalent of civilian bombing”. But in truth the economic war between China and the US is already under way, and is wholly framed by Trump’s skewed vision of American geopolitics.

https://www.newstatesman.com/world/north-america/2019/08/imperial-rivalry-between-us-and-china-means-left-must-choose-eu-it-wants

 
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Posted by on August 7, 2019 in Asia, Economy, European Union, North America

 

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Mauritius Leaks

Key findings
New leak reveals how multinational companies used Mauritius to avoid taxes in countries in Africa, Asia, the Middle East and the Americas
Law firm Conyers Dill & Pearman and major audit firms, including KPMG, enabled corporations operating in some of the world’s poorest nations to exploit tax loopholes
A private equity push into Africa backed by anti-poverty crusader and rock star Bob Geldof benefited from Mauritius’ treaties that divert tax revenue away from Uganda and elsewhere
Multi-billion dollar U.S. companies Aircastle and Pegasus Capital Advisers cut taxes through confidential contracts, leases and loans involving Mauritius and other tax havens
Officials from countries in Africa and Southeast Asia told ICIJ that tax treaties signed with Mauritius had cost them greatly and that renegotiating them was a priority

https://www.icij.org/investigations/mauritius-leaks/

 
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Posted by on August 7, 2019 in Africa, Economy

 

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Yanis Varoufakis: “Never before have we had so much money, yet so little investment in what humanity needs”

Laura Siegler: With the economic rift seemingly still expanding between Southern Europe, on the one hand, and the ‘core’ European countries (Germany, Benelux, France, Scandinavia) on the other, what is the scope for a common environmental agenda of the European left?

Yanis Varoufakis: This question is not just global but also within Europe, because the fragmentation of oligarchy — of capitalism and financialised capitalism — is detrimental to any attack against the climate extinction we are facing. We have a remarkable disconnect, an imbalance, between the amount of liquidity, of money which is available, and the amount of investments — the things the humanity needs. Never before have we had so little investment in what humanity needs, in relation, as a percentage, to the available money. We have the highest amount of savings in the history of capitalism, and the lowest levels of investments, in comparison, especially in the technology of the future that will prevent the climate catastrophe.

https://ceasefiremagazine.co.uk/yanis-varoufakis-never-money-investment-humanity-needs/

 
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Posted by on August 7, 2019 in Economy, European Union

 

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‘Socialism for the rich’: the evils of bad economics

In most rich countries, inequality is rising, and has been rising for some
time. Many people believe this is a problem, but, equally, many think
there’s not much we can do about it. After all, the argument goes,
globalisation and new technology have created an economy in which those
with highly valued skills or talents can earn huge rewards. Inequality
inevitably rises. Attempting to reduce inequality via redistributive
taxation is likely to fail because the global elite can easily hide
their money in tax havens. Insofar as increased taxation does hit the
rich, it will deter wealth creation, so we all end up poorer.

https://www.theguardian.com/inequality/2019/jun/06/socialism-for-the-rich-the-evils-of-bad-economics

 
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Posted by on August 3, 2019 in Economy

 

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The Roots of Our Discontent

Every spring, the convenes some of the world’s leading economists to discuss the issues of the day in open dialogue with one another and the public. In the following interview, the festival’s director, Italian economist Tito Boeri of Bocconi University, and Raghuram G. Rajan, former Governor of the Reserve Bank of India and currently Professor of Finance at the University of Chicago Booth School of Business, discuss a wide range of topics relating to this year’s theme: “Globalization, Nationalism, and Representation.”

Decentralized Despair

Tito Boeri: Countries around the world are experiencing a crisis of political representation and a revival of nationalism. Finding remedies to counter the darker impulses of populism is proving difficult. Though the policies being adopted by some populist governments are clearly mistaken, it is not obvious what can be done to address the underlying issues that populists have seized upon.

In medical terms, we have a rather good diagnosis, a debatable prognosis, and no well-defined treatment. The underlying causes include economic shocks – the information and communications technology (ICT) revolution, globalization, financial and refugee crises – as well as cultural factors, some of them related to the loss of ideological anchors following the fall of the Berlin Wall. Analyses of recent European voter behavior by economists Barbara Petrongolo and Josef Zweimüller suggest that the populists have built up majority support in the small towns, villages, and municipalities where many “permanent losers” of the ICT revolution and globalization are concentrated. In the United States, similarly situated voters have supported President Donald Trump in droves.

https://www.project-syndicate.org/onpoint/the-roots-of-our-discontent-by-raghuram-rajan-2019-06?barrier=accesspaylog

 
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Posted by on July 17, 2019 in Economy

 

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Russia-India-China will be the big G20 hit

It all started with the Vladimir Putin–Xi Jinping summit in Moscow on June 5. Far from a mere bilateral, this meeting upgraded the Eurasian integration process to another level. The Russian and Chinese presidents discussed everything from the progressive interconnection of the New Silk Roads with the Eurasia Economic Union, especially in and around Central Asia, to their concerted strategy for the Korean Peninsula.

A particular theme stood out: They discussed how the connecting role of Persia in the Ancient Silk Road is about to be replicated by Iran in the New Silk Roads, or Belt and Road Initiative (BRI). And that is non-negotiable. Especially after the Russia-China strategic partnership, less than a month before the Moscow summit, offered explicit support for Tehran signaling that regime change simply won’t be accepted, diplomatic sources say.

Putin and Xi solidified the roadmap at the St Petersburg Economic Forum. And the Greater Eurasia interconnection continued to be woven immediately after at the Shanghai Cooperation Organization (SCO) summit in Bishkek, with two essential interlocutors: India, a fellow BRICS (Brazil, Russia, India, China, South Africa) and SCO member, and SCO observer Iran.

https://www.asiatimes.com/2019/06/article/russia-india-china-will-be-the-big-g20-hit/

 
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Posted by on July 17, 2019 in Asia, Economy, Europe, Middle East

 

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Blame US Trade Policy for Sky-High Drug Prices

Sharp price increases for essential and life-saving medicines have generated a political backlash against the pharmaceutical industry in the United States. In February, the US Senate Committee on Finance scolded industry representatives for pursuing policies that are “morally repugnant.” Since then, 44 US state governments have filed a lawsuit against Israel-based Teva Pharmaceuticals and 19 other companies, alleging conspiracy to stifle competition for generic drugs and illegal profiteering from over 100 different medicines.

https://www.project-syndicate.org/commentary/drug-prices-united-states-patent-law-by-jayati-ghosh-2019-06

 
 

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Workers Should Be in Charge

Earlier this month, Univision announced it was selling Gizmodo Media Group (a digital media company comprising former Gawker sites such as Gizmodo, Kotaku, Splinter, Jezebel, and The Root) as well as the Onion (including its eponymous site, The A.V. Club, Clickhole, and The Takeout) to a private equity firm, Great Hill Partners.

No further layoffs have been announced for the 233 unionized employees at the two properties. But workers and contributors are probably right to worry that some or all of the sites will see mass layoffs or closure as Green Hill seeks to strip the companies for their most profitable parts while burning the rest. This is the private equity business model, after all, and it would be naive to expect anything else.

But what if there was an alternative? Wouldn’t it be better if the workers at the Gizmodo Media Group and the Onion had the right to block the Great Hill sale and buy the company themselves, turning it into a worker-owned business, with financial and technical assistance from the government?

https://www.jacobinmag.com/2019/04/worker-ownership-private-equity-cooperatives

 
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Posted by on May 14, 2019 in Economy, Uncategorized

 

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