Category Archives: Corpocracy

French central bank warns of a global slowdown


Thee global economic is engaged in a slow-moving crash.

When you consider the reasons, it’s inevitable.

While the rich are getting richer , everyone else is stuck or heading down [see our earlier posts].

And the rich are getting richer because their wealth is invested heavily in the  parasitical FIRE sector, the finance, insurance, and real estate markets,

Real economic growth, based on the consumption of goods and services, can’t happen without growth in the wages of the working and middle classes, the driving factors leading to consumption of those tangible goods and broadly used services.

But corporate mergers are producing cuts in pay and benefits, with cash assets stripped away and pocketed by plutocratic plunderers, rather than being shared with those folks whose labors produced all that wealth and could use their enlarged share of the pie to actually grow the economy [and, yes, we’re well aware that endless economic growth is itself problematic in the longer run].

And to buy what goods they can, people are increasingly forced to turn to debt, either through bank loans or credit cards, paying ever-higher rates of interest to the FIREy plutocrats.

And with education being privatized or subjected to reduced state subsidies, ever larger numbers of young people are being forced to take loans to attain educations once taken for granted.

And the FIRE folks get richer again.

And now for the warning, via Agence France Presse:

France’s central bank trimmed its growth forecasts for 2016 and 2017 on Friday, citing a deterioration in the global economy and Britain’s decision to leave the European Union.

The Bank of France revised its 2016 and 2017 growth forecast down to 1.3 percent, having previously expected growth of 1.4 percent this year and 1.5 percent next year.

It also predicted growth of 1.4 percent in 2018, down from its previous figure of 1.6 percent.

“In 2017 and 2018, the downward revision of our GDP growth projection… is mainly due to the deterioration in the international environment,” it said in a statement.

“The projection is thus particularly affected by less favourable foreign demand prospects.., notably as a result of the impact of Brexit on the UK economy and of its dissemination to the euro area economies.”

Understanding the predatory FIRE sector

For more on the current slowdown and its causes and the predatory nature of the FIRE section, watch this very informative German television interview with University of Missouri-Kansas City economist Michael Hudson, perhaps the most incisive commentator of the modern economic conditions:

Michael Hudson: How Private Debt Makes the Rich Richer

Program notes:

Michael Hudson talks about the causes of inequality in the 21st century

Our author Michael Hudson summarizes some important theses from his book “The Sector – Why Global Finance Is Destroying Us”.
The interview took place on the occasion of the 16th International Literary Festival in Berlin for a symposium titled “Inequality in the 21st Century. Progress, capitalism and global poverty. “ The authors, Angus Deaton, David Graeber and Michael Hudson, presented the most important theses of their current books.

Michael Hudson Bio: Michael Hudson is one of very few economists – globally – who perfectly predicted the 2008 financial crisis.

Michael is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Killing the Host (2015), The Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971), amongst many others.

ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East.

Michael acts as an economic advisor to governments worldwide including Iceland, Latvia and China on finance and tax law.

Massive anti-corruption protests erupt in Brazil


After a neoliberal legislative coup brought down the center-left Brazilian government of Brazilian President Dilma Rousseff, replacing her with a stalwart of the privatize-and-plunder agenda that seems to be all the rage these days, the self-installed replacement regime has been rocked by scandals of its own.

And the Brazilian people want those scandals investigated and prosecuted.

They took to the streets in drove Sunday to demand just that.

From El País:

Once again, Brazilians are taking to the streets to protest against their politicians. Sunday saw huge marches in cities throughout the country that are being seen as a warning to politicians not to tamper with the judiciary as it attempts to unravel a vast corruption network centered on state oil company Petrobras.

The protests were not directed specifically at President Michel Temer, who took over after Dilma Rousseff was impeached earlier this year, and whose popularity rating is just 14%, but were instead largely aimed at members of his PMDB party, several of whom are under investigation for corruption. Temer has promised to kickstart Brazil’s ailing economy with a series of reform measures he hopes to push through Congress.

The march in Rio de Janeiro attracted a wide range of protesters, from anti-abortion rights activists to those calling for a military government, along with many chanting the name of Sergio Moro, the judge overseeing the so-called Lava Jato investigation into corruption at Petrobras. Among those alleged to have been involved in a complex web of graft are members of the Workers’ Party, including former President Ignacio Lula da Silva, as well as Temer’s PMDB, and the conservative PP, which has supported both parties in Congress.

>snip<

In large part, Sunday’s protests were sparked by a vote in Congress in the early hours of Wednesday – while the country was in mourning for the victims of the Chapecoense plane crash in Colombia – that watered down a series of anti-corruption proposals put forward by the Attorney General’s office.

Uncle Sam remains globe’s biggest arms peddler


Share of arms sales of the world’s 100 companies for 2015, by country The Top 100 classifies companies according to the country in which they are headquartered, so sales by an overseas subsidiary will be counted towards the total for the parent company’s country. The Top 100 does not include the entire arms industry in each country covered, only the largest companies. The category ‘Other’ consists of countries whose companies’ arms sales comprise less than 1% of the total: Australia, Brazil, Finland, Norway, Poland, Singapore, Sweden, Switzerland, Turkey and Ukraine. From the Stockholm International Peace Research Institute.

Share of arms sales of the world’s 100 companies for 2015, by country
The Top 100 classifies companies according to the country in which they are headquartered, so sales by an overseas subsidiary will be counted towards the total for the parent company’s country. The Top 100 does not include the entire arms industry in each country covered, only the largest companies. The category ‘Other’ consists of countries whose companies’ arms sales comprise less than 1% of the total: Australia, Brazil, Finland, Norway, Poland, Singapore, Sweden, Switzerland, Turkey and Ukraine. From the Stockholm International Peace Research Institute.

From the Stockholm International Peace Research Institute:

Sales of arms and military services by the largest arms-producing and military services companies—the SIPRI Top 100—totalled $370.7 billion in 2015 according to new data on the international arms industry released today by SIPRI.

The sales of arms and military services companies in the SIPRI Top 100 have fallen for the fifth consecutive year. However, at only a 0.6 per cent decline, the slight decrease may signal a possible reversal of the downward sales trend observed since 2011.

US companies still way ahead despite falling revenues

Companies based in the United States continue to dominate the Top 100 with total arms sales amounting to $209.7 billion for 2015. Arms sales by US companies in the Top 100 decreased by 2.9 per cent compared with 2014—the fifth consecutive year of decline.

‘Lockheed Martin remains the largest arms producer in the world,’ says Aude Fleurant, Director of SIPRI’s Arms and Military Expenditure Programme. ‘However, US companies’ arms sales are constrained by caps on US military spending, delays in deliveries of major weapon systems and the strength of the US dollar, which has negatively affected export sales.’

Many of the larger US arms-producing companies divested their military services activities after 2010 due to falling demand. A number of the new, smaller companies created by this process have consolidated and have built up sufficient revenue to rank in the Top 100 for 2015; three such companies are CSRA, Engility and Pacific Architects and Engineers.

 West European arms sales up in 2015 after falls in 2014

Arms sales by companies in Western Europe listed in the SIPRI Top 100 for 2015 rose by 6.6 per cent in real terms compared with 2014, with total combined revenues from arms sales amounting to $95.7 billion. This increase contrasts with the notable drop in West European companies’ revenues from arms sales recorded between 2013 and 2014.

The combined arms sales of the six French companies listed in the Top 100 totalled $21.4 billion in 2015, a rise of 13.1 per cent compared with 2014, when most of those companies recorded a fall in arms sales. The increase in French companies’ arms sales has acted as an important driver for the recent growth in arms sales in Western Europe.

‘Major arms export deals in 2015, such as those to Egypt and Qatar, have increased French arms companies’ sales,’ says Fleurant. ‘A 67.5 per cent surge in arms sales by Dassault Aviation Group seems to be mainly the result of such exports.’

The three German companies listed in the Top 100 continued to increase their combined sales (by 7.4 per cent) in 2015. Companies in the Top 100 based in the United Kingdom reversed the downward trend recorded in 2014 with a 2.8 per cent rise in their combined arms sales in 2015.

Continue reading

Steve Benson: Pipe dreams of another sort


From the editorial cartoonist of the Arizona Republic:

blog-t-benson

Headline of the day: Pipeline victory a pipe dream?


You could see this one coming from a mile away.

From the London Daily Mail:

Trump WANTS the Dakota Access pipeline and will review Obama administration’s decision to sideline crude oil project after months of protests

  • Spokesman for president-elect said ‘we support construction of’ the pipeline and we’ll review the full situation once we’re in the White House’
  • Army Corps of Engineers said Sunday that it would not grant an easement for the Dakota Access pipeline to cross Lake Oahe, seeking an alternative route instead
  • House Speaker Paul Ryan called the move ‘big-government decision-making at its worst’
  • Republican Rep. Kevin Cramer called it ‘chilling signal’ to infrastructure builders, and said ‘I can’t wait for the adults to be in charge on Jan. 20’
  • Company behind DAPL accused government of ‘currying favor with extremists’ by caving to protesters

Aussie students hoist the Pharma Bro’s petard


Remember Pharma Bro?

That’s the nickname of Martin Shkreli, the greedy investor who plunged into the depths of infamy when he upped the price of a vital malaria drug by 30 times when it bought the only company that makes it.

Well, it seems some Australian students found a way to make the pils, which Shkreli priced at $750 a pop for a mere two bucks.

In other words, you could buy 375 of their pills from what one of Pharma Bro’s would cost you, before an internal furor forced him to cut the price to a mere $375.

Besides malaria, the drug is used to treat toxoplasmosis [previously], a disease caused by exposure to cats, and parasitical infections sometimes found in AIDS patients.

Well, it looks like the price will be coming down, and very soon.

From euronews:

The man who became a global figure of greed after hiking the price of a life-saving drug by 5000 percent in the US, may have just met his match.

Last year, US entrepreneur Martin Shkreli bought Turing Pharmaceuticals and almost immediately increased the price of the medicine Daraprim in the US from $13.50 to $750.

Now a group of school students in Australia has replicated a key-ingredient in the medicine for just $2.

Daraprim is an anti-parasitic drug used to treat malaria and HIV patients.

One of the students taking part in the experiments, Brandon Lee said: “It was a lot of trial and error, the process. We had to repeat a lot of the reactions and try different reaction conditions in order to see which materials in which things would react to make the Daraprim. But, yeah, it was a rollercoaster of emotions sometimes. I think because we are high school students we are able to relate to a larger audience, able to relate to the general public and show that even ordinary high school students like us, are able to make this drug for a pretty low price.”

Chart of the Day: The elephant in the room


blog-econ

From the Yomiuri Shimbun, offering a sharp critique of neoliberalism which notes:

U.S. leaders seemingly assumed that economic inequality among citizens would not significantly increase as a result of their policies. This is because they believed in the “trickle down” theory, whereby an increase in the number of wealthy people and large corporations would stimulate the economy and gradually benefit poor people and smaller businesses.

But this trickle down never happened.

Manufacturers moved their production facilities to emerging economies with cheap labor, such as China. Laborers in developed economies were forced to take lower-paid work. Investors started demanding more dividends from successful companies, leading them to prioritize payments to investors over increasing the salaries and benefits of their employees. Large corporations transferred their profits to tax havens to evade taxation.

>snip<

[W]hite laborers — the driving force of Trump’s victory — have fallen to a position of vulnerability over the past 30 years of neoliberalist policy. Perhaps it was a matter of course that their distrust of established politics could not be overturned.

Real estate tycoon Donald Trump is undoubtedly a “winner” in the stratified society. The policies he proposes, such as improving infrastructure, have the potential to boost the economy for the time being. But they also include generous tax reductions for the rich and lower corporate taxes, which could go in the opposite direction of the attempts to rectify disparity.

The many contradictions contained in Trump’s policies are the result of an attempt to attract a wide range of voters.