Debt Relief for Whom? Part II

Christopher Leonard explains how Federal Reserve bailouts “went to large corporations that used borrowed money to buy out their competitors; it went to the very richest of Americans who owned the majority of assets; it went to the riskiest of financial speculators on Wall Street, who use borrowed money to build fragile positions in global markets;and it went to the very largest of U.S. banks, whose bigness and inability to fail was now an article of faith.” . . . → Read More: Debt Relief for Whom? Part II

The Big Bean Bubble

In the mini-economy of Beanland, reckless bank lending has caused a crash. Hardly anybody has money to buy beans. The price of beans plummets. To the farmers it looks like there’s a bean surplus. Actually, there’s a deficit in demand for beans. . . . → Read More: The Big Bean Bubble

What’s Crippling the Recovery: Lack of Investment Demand or Too-Big-to-Lend Banks?

Quantitative Easing (QE) was supposed to stimulate the economy by encouraging investment with low interest money. That hasn’t happened, but why? Does no one want to borrow, or do banks not want to lend? My favorite financial columnist, Yves Smith, has laid out both theories. . . . → Read More: What’s Crippling the Recovery: Lack of Investment Demand or Too-Big-to-Lend Banks?

Capturing the Multinational Dragons’ Gold

As medieval dragons do, the dragon in the Beowulf epic sleeps on a pile of gold. With magic sword and shield, Beowulf kills the dragon and, mortally wounded, distributes the gold to his grateful people. Today’s multinational dragons sleep not on gold, but on hoards of cash. Meanwhile little firms—the true “job creators”—perish for want of cash. We don’t need to assault the dragons; we do need to tear away the tax privileges on which they depend. . . . → Read More: Capturing the Multinational Dragons’ Gold

The Great Real Estate Bubble of the Roaring Twenties

Economists conventionally attribute the Great Depression to blunders by the then-new Federal Reserve Bank. According to this story, promoted by Milton Friedman and the Chicago School, after the stock market crash of 1929, the Fed kept interest rates too high, strangling the economy. This story made most economists confident that it couldn’t happen again.

But . . . → Read More: The Great Real Estate Bubble of the Roaring Twenties