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Finance and the Economy

There’s No Good Reason To Spend Nearly $1 Trillion On Our Military

If you looked at the U.S. military budget without knowing otherwise, you’d probably guess we were in the midst of World War III. Our military spending is now the highest it’s been at any point since World War II — and Congress keeps adding more. The GOP-led House of Representatives just passed legislation that will increase military spending to $895 billion, while the Senate Armed Services Committee passed a bill that would total $923 billion. Those totals don’t even include the military aid to Ukraine and Israel that was included in the $95 billion war package Congress passed this spring. We’re teetering closer and closer to a $1 trillion military budget.

The World’s Richest Just Got Extraordinarily More Wealthy

In every measurement of economic inequality, personal wealth is found to be more unequal than income. Naturally, this state of affairs invites attention and criticism, along with demands for a reduction of that inequality by various means, including to reduce the stubborn racial wealth gap. The latest World Wealth Report for 2024, published last month by The Capgemini Research Institute, brings this level of inequality into stark relief. We learn from the report that very high net-worth individuals (“HNWI,” defined as those with at least $1 million of investable assets) have been doing quite well, which is probably not a surprise.

Oil And Gas Leases On Federal Lands In Question

A dozen Democratic lawmakers on the House Natural Resources Committee want to know if shale drillers could see their oil and gas leases and operations on federal lands suspended amid allegations that the companies may have colluded to drive oil prices up. “Such market manipulation would have enormous impacts on the price of gas paid by working families across the country,” the lawmakers wrote in a July 9 letter to the Department of the Interior. The lawmakers, who include Democratic representatives like Arizona’s Raul Grijalva and California’s Katie Porter, cited evidence that the Federal Trade Commission uncovered during its roughly six-month review of an ultimately successful merger between ExxonMobil and Permian shale giant Pioneer Natural Resources, and class action litigation alleging at least eight major shale producers engaged in antitrust violations.

The Presidential Debate That Wasn’t

In the days immediately following the first US presidential debate between Joe Biden and Donald Trump, countless analyses have appeared. Nearly all have focused on the candidates’ delivery, less on what they said, and almost nothing about what should have been but was not said. Trump was obviously coached by his team to tone down the personal insults, which he mostly did, and scored some policy points while making dozens of false or unverified statements in the process. Meanwhile, as the general media analysis has also gone, Biden’s delivery was a disaster. As one well known TV commentator called it: “a slow motion car accident”.

A Practical Prescription For Taxing Our World’s Richest

Ever wonder why the divide between the world’s richest and everybody else keeps getting wider? Gabriel Zucman, one of the world’s finest young economists, has just produced a report that riffs on one key reason: Our super rich pay next to nothing in taxes. Just how close to nothing? This close: Over the past four decades, the world’s “ultra-high-net-worth individuals” have seen their fortunes increase, after taking inflation into account, an average 7.5 percent per year. How much annually have these rich paid in taxes? They’ve been paying, Zucman calculates, an effective tax rate “equivalent to 0.3% of their wealth.”

The Fed’s ‘Chicken Run’: Sticking With High Rates Will Crash The Economy

On June 13th, financial markets discovered they had overestimated the likelihood that the Federal Reserve would soon be cutting interest rates. Federal Reserve Chair Jerome Powell’s remarks at his press conference and the Federal Open Market Committee’s freshly updated quarterly “Summary of Economic Projections” pointed forcibly to the conclusion that the Fed would likely cut rates only once before the end of 2024. In the midst of their own historic surge, US financial markets could mostly afford just to sigh. Reactions elsewhere were less sanguine: Some international commentators worried that higher for longer US rates would make repaying foreign dollar loans harder and accelerate a movement of capital out of the developing world.

The Impending Collapse Of US Empire

The public perception of the American empire, at least to those within the United States who have never seen the empire dominate and exploit the “wretched of the earth,” is radically different from reality. These manufactured illusions, ones Joseph Conrad wrote so presciently about, posit that the empire is a force for good. The empire, we are told, fosters democracy and liberty. It spreads the benefits of “Western civilization.” These are deceptions repeated ad nauseam by a compliant media and mouthed by politicians, academics and the powerful. But they are lies, as all of us who have spent years reporting overseas understand.

Why Does The Government Borrow When It Can Print?

In the first seven months of Fiscal Year (FY) 2024, net interest (payments minus income) on the federal debt reached $514 billion, exceeding spending on both national defense ($498 billion) and Medicare ($465 billion). The interest tab also exceeded all the money spent on veterans, education, and transportation combined. Spending on interest is now the second largest line item in the federal budget after Social Security and the fastest growing part of the budget, on track to reach $870 billion by the end of 2024. According to the Congressional Budget Office, the federal budget deficit was $857 billion in the first seven months of fiscal year 2024.

Newsflash: Inequality In Neoliberal America

If anyone is perplexed or surprised  why Americans are so upset about the economy, they should look no further than the Income Distribution and Dynamics in America (IDDA) recent report by the Federal Reserve Board of  Minneapolis and its data site that looks at the stagnation of American income and economic mobility in America.  It unfortunately confirms what we already know—the neoliberal state benefits unevenly and in ways that confound an ability to challenge it.. America is built upon two myths, the myth of equality and the myth of the American dream. The myth of equality is the idea that we all have an equal opportunity to succeed. 

Is India’s Economy Truly Thriving? Or Is It Exaggerating Its Growth?

As many of you will know, general elections are currently underway in India, elections which the ruling BJP and the Prime Minister, Mr. Narendra Modi, are expected to win easily. Victory would give Modi a third term in government, a feat previously accomplished only by the country’s first Prime Minister, Jawaharlal Nehru. Sections of the Western media and most of the Indian media are poised to attribute any such victory to Modi’s economic management, which has allegedly made the Indian economy boom as never before. However, as the elections proceed, this near-certain victory is receding into the distance, and a very different reality is coming into view. With us to discuss this is a most distinguished guest, Professor C.P. Chandrasekhar.

Tackling California’s Budget Crisis: Taxes, Cuts, Or Form A Public Bank?

In 2022, the state of California celebrated a record budget surplus of $97.5 billion. Two years later, according to the Legislative Analyst’s Office, this surplus has plummeted to a record budget deficit of $73 billion. Balancing the budget will be challenging. Unlike the federal government, the state cannot just drive up debt and roll it over year after year. The California Balanced Budget Act, passed in 2004, requires the state legislature to pass a balanced budget every year. The usual solutions are to cut programs or raise taxes, but both approaches are facing an uphill battle. Raising taxes would require a two-thirds vote of the legislature, which would be very challenging, and worthy public programs are in danger of getting axed, including homelessness prevention and funding for low-income housing.

The Land And Sea Blockade Against Israel Is Working

Israel’s aspirations to become the region’s transportation hub have taken a hit. The maritime and land blockade against Israel to stop the genocide in Gaza is working, as one of Israel’s main plans for a prospective “land bridge” connecting the Gulf countries with Israel and Europe has suffered an irrevocable setback.  The Israel-centered India Middle East Europe Economic Corridors project (IMEC), which was first proposed by U.S. President Biden in September of last year during the G20 meetings, is facing an existential threat.

Industrial Policy Is A Good Idea, But So Far We Don’t Have One

In a remarkable and comprehensive book, forthcoming from Cambridge, Marc Fasteau and Ian Fletcher provide a theoretical, historical, and up-to-date review of industrial policies, in the United States and elsewhere, as well as a decent summary of the main Biden initiatives: the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the CHIPS Act, as of late 2023. Their goal is to justify, defend, and extend the case for industrial policies, which they do with admirably fair attention to unsuccessful past cases. Mine in this essay is narrower: mainly to describe the specific goals of President Biden’s programs.

Vacant Storefronts Are Killing Our Downtowns

One of the long-term effects of the Covid-19 pandemic is the way it has transformed office use, threatening the viability of storefront retail in downtown office buildings. Owners of such commercial properties are now often exploring converting vacant retail space into restaurants and other experiential venues. But the range of alternative options needs to be expanded – and small-scale manufacturing offers a proven, yet often overlooked, solution. The need for alternative options is apparent from the scale of the problem. In the last quarter of 2023, the national office vacancy rate hit a record-breaking 19.6%, per Moody’s Analytics.

Last Year, You Spent Over A Month’s Rent On Pentagon Contractors

Ever wonder where your taxes go? Each year, the Institute for Policy Studies releases a tax receipt so you can find out. One item always stands out: the Pentagon — and the contractors who profit off it. In 2023, the average taxpayer spent $2,974 on the Pentagon. Of that, just $705 went to salaries for the troops, who often have to rely on programs like food stamps. A much larger sum — $1,748 — went to corporate Pentagon contractors. That’s more than the average American’s monthly rent, $1,372. From Lockheed Martin to SpaceX, these corporations don’t need your support. And they aren’t operating with your well-being in mind.
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