A few weeks ago, in "Financial Insecurity Ruins Our Lives: Let's Change the Game," I discussed poverty's association with failed relationships, poor health, and mental illness. Poverty exacerbates those. Fiscally "liberal" policies that reduce poverty are good, as are charitable institutions. But they don't strike too deeply at the roots of the problem, they are inevitably fleeting, and they don't challenge or change our assumptions about capitalism or homo economicus. This makes both fiscal liberalism and philanthropy somewhat Sisyphean, condemned to an never-ending uphill struggle with fiscal conservatism against a backdrop of assumptions that this is the way it's supposed to be: a pendulum swinging back and forth between austerity and generosity.Read more
On Friday, May 22, the Senate Banking Committee approved Senator Richard Shelby's regulatory reform bill for financial institutions. Although the process between committee approval and actual floor debate and passage will take some time, proponents of tougher regulations on big banks are already voicing fierce opposition to the bill, which purports to free smaller banks (those with less than $500 billion in assets) of the more stringent requirements of Dodd-Frank. However, all is not what it seems.
Last week I wrote an article on the impact of wildly illegal currency manipulation by the world's major banks, and the impact it had on the City of Baltimore, culminating in scenario after scenario of poverty, brutality, and unrest. Now it looks like some of those banks are pleading guilty to felonies over these ruinous crimes.Read more
There’s no shortage of pundits condemning the riots in Baltimore. There are also plenty of well-meaning people focusing solely on the disenfranchisement of particular pockets of that city as if the human beings suffering there were characters in some morality play. But it’s time to talk economics, because the events in Baltimore didn’t happen in a vacuum. “In fact,” writes Harlan Green of PopularEconomics.com, “the Baltimore riots are the result of an economic system that can only be described as broken, where the bullies win, everyone else loses.”Read more
Do you know a Mayor? If so, you may be able to help PBI's friends at Commonomics USA with their campaign to put public finance on the agenda at the 2015 United States Conference of Mayors. Read the information here, and email them at info@commonomicsusa if you can help--as soon as possible!Read more
Chicago is in trouble. According to Mish's Global Economic Trend Analysis blog, there is a $1.1 billion "budget hole" in the Chicago public school system. A "derivative time bomb" of as much as $263 million, just triggered on the Chicago Board of Education, means that Chicago Public Schools may be out of money in 30 days. "On March 9, Moody's dropped Chicago School bonds two notches to Baa3, that last rank above junk," according to the site's blogger, Mike "Mish" Shedlock, who adds: "On March 20, Fitch downgraded Chicago Board of Education Rating to BBB-, also one step above junk." If the district cannot renegotiate the swap, or pass further bonds for the funds (and both events seem difficult to implement), a "termination event" would trigger, forcing the Board to pay the negative valuation on the swap, which it simply cannot afford to do. The District supposedly has just enough to pay the termination fees, but would be left "virtually broke."Read more
Maine public banking advocate Randall Parr continues his productive output answering critics of public banks. Will local banks with state deposits suffer losses if those deposits are redeposited into a state-owned bank? What would be the impact of a public bank on the state's economic health? On its poverty rate? Would creating a state-owned bank be costly? How would it be funded? Parr offers practical, documented answers to these questions in the piece we are reprinting below.Read more