(1) New Issue! Our November/December 2013 issue is finally done (sent to the printers and to e-subscribers, anyhow). Here is the editorial note from p. 2 describing the issue:
Change Is in the Air
Frequent D&S contributor Bill Black has been a leading voice in saying what is not a promising sign of change on the financial scene: JPMorgan Chase’s $13 billion settlement and the recent grand jury ruling against Bank of America. Even as these legal developments recognize how fraud played a central role in the run-up to the financial crisis, there has still not been a single criminal prosecution of a bank official. As if channeling Bill Black, U.S. District Court Judge Jed S. Rakoff gave a speech before the New York Bar Association excoriating the U.S. Department of Justice and the Securities and Exchange Commission and asking, “Why have no high level executives been prosecuted in connection with the financial crisis?”
But the news is not all bleak. The “change in the air” to which our cover and its (groanworthy?) visual metaphor refer are three promising developments in domestic and international finance:
- · Abby Scher continues her coverage of the “New Economy”, showing how credit unions and other non-profit financial institutions can help cooperatives get the financing they need to start up and grow.
- · Jim Campen reports on two regulatory victories for consumers over the big banks: The CARD Act, which has reined in the abusive “tricks and traps” of credit-card companies; and the Consumer Financial Protection Bureau, which implements and enforces the Act and monitors deceptive practices in consumer-credit markets.
- · Kevin Gallagher shows how China’s development banks are “redefining the global development agenda,” and argues that they could provide an alternative to the neoliberal, austerity-oriented policies of the Western development banks—if they can do a better job of addressing human rights and environmental concerns.
Beyond finance, though, there are other promising signs. It is encouraging that Bill DeBlasio, a candidate running against Wall Street—and his billionaire predecssor’s Wall Street-friendly policies—could win New York’s mayoral election by “the largest margin of victory by a nonincumbent … in city history,” according to the Daily News. Even more exciting were the squeak-by victory of Kshama Sawant, a left economics professor and socialist, in her race for Seattle’s city council, and the successful ballot measure to raise the minimum wage to $15 in the nearby municipality of SeaTac.
Beyond the United States, one measure of the change in zeitgeist was British comedian Russell Brand’s stint as guest editor of a special issue of the New Statesman on revolution, and the fact that his interview with the BBC’s stodgy Jeremy Paxton went viral. Brand gave defended his apathy about electoral politics-as-usual by declaring that “imagining the overthrow of the current political system is the only way I can be enthused about politics.” But there was progress in the electoral realm in Chile, when several leaders of that country’s 2011 student protest movement were elected to that country’s lower legislative house (some as Communists, some as independents). And Socialist Michelle Bachelet handily won the first round of voting and is poised to regain the presidency (after a one-term gap, during which right-wing billionaire Sebastián Piñera held the office).
This seems like an important historical moment to put a finger in the wind. In the aftermath of the global financial crisis, we are in an uncertain and fluid interregnum. The neoliberal structures of the last thirty years have led us into an impasse, and the direction out is not clear. “Doubling down” on neoliberalism is only extending the crisis. Some sort of economic restructuring will have to happen. What is at stake is whether the restructuring will be shaped by the interests of Wall Street, corporations, and billionaires, or instead by the interests of the people who elected DeBlasio, Sawant, and Bachelet.
This is not to say that any of these candidates, their policies, or their parties are “the answer.” It remains to be seen whether DeBlasio will govern from the left. Bachelet, meanwhile, has already had a term as president (and Chile’s Socialists had a full decade before Piñera) without fundamentally altering the country’s neoliberal economic model. It would be wrong, though, to discount the possibilities altogether. To give just one example of what difference the change in zeitgeist can make: as Bill Black pointed out on the D&S blog, Bachelet is likely to stand up against the United States’ corporate agenda in negotiations over the secretive Trans-Pacific Partnership (TPP) agreement.
Don’t worry, though, we haven’t gone all Pollyanna on you. This issue’s “Ask Dr. Dollar” explains the role of securitization in the housing bubble and collapse, economist Matías Vernengo explains the method behind the Tea Party’s debt-ceiling “madness,” John Miller explains how rising inequality is choking the recovery, and Steve Pressman’s review strikes a sober note on the limits of co-ops. Happy holidays.
(2) Some links: Here are some items that have come across my desk that may be of interest:
- The Skunk Party Manifesto, by Yves Smith at Naked Capitalism, from today.
- Judge Jed Rakoff’s speech to the NYC Bar Association.
- Ambrose Evans-Pritchard responds to Russell Brand on revolution–kind of an odd piece, but interesting for mentioning the threat of deflation and the possibility of using fiat currency for public works. The last paragraph stinks, though. (I’d wanted to mention brand in our ed note, but there wasn’t room.)
- Demos has a new report on Detroit’s bankruptcy showing that it was Wall Street’s fault (interest-rate swaps) not pensioners.
- Gillian Tett in the FT on who owns treasuries (public debt), reporting on this York PhD dissertation by Sandy Hager. Important to know if we want to understand the class politics of paying down public debt.
- Piece from the Rosa Luxemburg Stiftung on De Blasio.
- From the Economist: The New Debtors Prisons. Hat-tip TM.
Ok, that’s it for now.