The July/August Issue Is Out!


The July/August issue of Dollars & Sense is out! We fell a bit behind because of our recent office move. But the issue has now been sent out to e-subscribers and the print edition is at the printers.

We have posted three articles from the issue online already:  Josean Laguarta Ramírez’s Enforcement of Puerto Rico’s Colonial Debt Pushes Out Young Workers, John Miller’s A Clintonomics Sequel, and Alejandro Reuss’s An Historical Perspective on  Brexit.

(Alejandro’s take on Brexit, along with the two-part article the first part of which is our current cover story, have some similarity in perspective to a piece by Dani Rodrik that is making a splash recently, The Abdication of the Left, from Project Syndicate.)

Here is the editorial note from the July/August issue, with a review of the contents:

Out of the Frying Pan …

Life in capitalist society, in “ordinary” times, is no picnic. It’s more like a fish fry—and we’re the ones in the pan.

Rob Larson, in the second part of his study of the economics of information, shows the relentlessness of capitalist corporations in controlling the information we see about them, in a range of arenas: from advertising, to corporate public relations, to influence over the organizations—mass media and credit rating agencies—that are supposed to render independent judgment of them.

Suzanne Schroeder continues along those lines, arguing that the problems of private credit rating run deeper than the conflicts of interest laid bare by the recent financial crisis (for example, the outrageous granting of top “AAA” ratings to mortgage-backed securities and the like). Rather, the problem is that the standard methods of credit rating rely on the assumptions of an inherently stable and self-correcting capitalist economy. A solution, Schroeder argues, requires not only an alternative approach to credit rating, but also a reorientation of government policy to “stabilize an unstable economy.”

Of course, these are not ordinary times, and all of the contradictions and outrages of capitalist society are amplified.

José A. Laguarta Ramírez’s article about Puerto Rico’s debt crisis points to its roots in colonialism. Subordinate to the U.S. government politically and to U.S. corporations economically, Puerto Rico is now mired in “odious debt”—neither incurred freely by its people nor used for their benefit. Meanwhile, legislation just passed by the U.S. government will impose harsh austerity and an undemocratic “oversight” board. Laguarta Ramírez suggests that the solution to the crisis lies in the direction of repudiating the debt, which in turn points in the direction of political independence.

D&S co-editor Alejandro Reuss looks at the eurozone crisis. The structure of the monetary union deprived member countries of the means to respond individually, and did not institutionalize ways to respond collectively (like automatic fiscal transfers to the hardest-hit areas). This faulty structure, Reuss argues, was not just an accident, but a result of the long-range neoliberal turn of economic policymaking in Europe—in which the mainstream social democratic parties are seriously implicated. The most recent twist, the UK’s “Brexit” referendum, is a nationalist and nativist reaction to the crisis of internationalized capitalism—to which the left must answer with a new socialist internationalism.

Arthur MacEwan addresses the question of whether we’re staring into an abyss of long-term economic stagnation. There are good reasons, he notes, to think of economic stagnation as an inherent problem in capitalist economies, rooted in “over-accumulation”: Profit-making in one period gives capitalist enterprises the means invest in expanded plant and equipment, and the expanded capacity means more goods and services can be produced—sometimes more than people are able and willing to buy. MacEwan, however, also points to more particular causes of the current stagnation, and argues that a solution requires government policies to reduce inequality, maintain demand and employment, and invest in new infrastructure.

With each new piece of news—the Puerto Rico debt crisis, the Brexit vote, the victories of the right in Latin America and Europe—it seems like we’re going from the frying pan into the fire. But consider each of the problems described above—the chronic and the acute. For each, there are solutions, and it comes to us to organize and fight for them.

Yes, we’re going into the fire. But what will emerge from the flames?

New Issue! Plus–Fed Rate Hike Explained


Our new issue is at the printers!  Print subscribers should get their copies in the first week of January (the holidays will delay things a bit), and I expect to email the issue to e-subscribers early next week.

We have posted one feature from the issue, Marty Wolfson’s The Fed Raises Rates–by Paying the Banks.  (For more on the Fed’s rate hike, see Gerald Epstein’s The Fed’s New “Operation Twist”:  Twisted Logic over at our sister blog, Triple Crisis.)  You can see the table of contents of the Jan/Feb issue here.  And here is our p. 2 editors’ note, which gives an overview of the issue:


In this issue, we paired the article “How Private Equity Works—And Why It Matters,” by Eileen Appelbaum and Rosemary Batt, with Dutch Renaissance painter Pieter Bruegel’s Avaritia, from his Seven Deadly Sins. Breugel depicts not only Greed (as a mythological figure), but a host of surrounding figures whose machinations illustrate the sin. And Bruegel lived in the 16th century, so he didn’t know the half of it.
Greed would appear to come up in this issue over and over again:
Appelbaum and Batt describe how private equity firms buy out target companies with borrowed money, load them up with debt, strip them of valuable assets, and pay themselves extraordinary dividends and fees. And it’s (mostly) legal.
In his article on the Federal Reserve’s recently announced interest-rate hike, Marty Wolfson explains that the Fed is planning on paying banks billions of dollars in interest (even though it need not). It’s a windfall for the banks, and just another example of how the public authority acts in the service of private “greed.” The Fed’s conduct of monetary policy is channeled through private banks and beholden to their interests. More, its decision-makers see it as their sacred mission to act as protectors and benefactors to high finance.
Matías Vernengo gives us yet another example, this one from Argentina. The country’s newly elected right-wing president has promised currency and spending policies that would be misguided—though could be rationalized—as responses to a serious international payments crisis. Yet there is no such crisis in Argentina! The only way to make sense of these policies is as a deliberate offensive, on behalf of the wealthy elite, against the laboring masses.
The neoliberalism that Vernengo recognizes as “resurgent” in Argentina, after an interlude of relatively pro-worker and pro-poor policies, meanwhile, has been the dominant tendency of capitalism worldwide for decades. As David Kotz argues in his cover story on “Neoliberalism, Its Crisis, and What Comes Next,” this epoch has seen the most predatory and destructive forces of capitalism unleashed from the restraints of labor organization and state regulation.
A critique of greed, a condemnation of it as a sin (as Breughel’s engraving frames it), however, simply does not suffice. In the medieval morality play, the social order torn asunder by sin is restored by purgation and repentance. In the police procedural of modern capitalist society, the social order upset by crime is restored by the administration of justice.
If sin is an offense against the social order, though, greed is no sin today. As Noam Chomsky put it back in the mid-1990s, amidst a surge in media criticism of “corporate greed”: “Talk about corporate greed is nonsense. Corporations are greedy by their nature. They’re nothing else. … You can’t make them more or less greedy.”
Far from being an offense against the order of contemporary capitalist society, greed is at its foundation. Greed is neither a sin whose perpetrators must fear for their souls, nor a crime whose perpetrators must fear earthly justice. And the battle against institutionalized greed seeks not to restore the social order, but to overturn it.