Week-end Wrap - Political Economy - June 22, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus
I apologize for the absence from last week. My computer crashed last Saturday night, and blew away a chunk of the operating system, so could not be rebooted until placed in the hands of a skilled PC doctor. I have begun searching for a feasible alternative PC at a low budget, and welcome any contributions to PayPal using my email address 2nbbooks@gmail.com. Thank you for your patience and understanding.
Strategic Political Economy
Facebook's plan to create a global currency are insane and must be resisted. Ten good reasons: (
[Twitter by Nicholas Shaxson, author of
Treasure Islands: Tax Havens and the Men Who Stole the World, via Naked Capitalism 6-21-19]
The way we structure money and payments is a question for democratic institutions, not technology companies.
By Matt Stoller [New York Times, via Twitter 6-20-19]
There are four core problems with Facebook’s new currency. The first, and perhaps the simplest, is that organizing a payments system is a complicated and difficult task, one that requires enormous investment in compliance systems....
The second problem is that, since the Civil War, the United States has had a general prohibition on the intersection between banking and commerce. Such a barrier has been reinforced many times, such as in 1956 with the Bank Holding Company Act and in 1970 with an amendment to that law during the conglomerate craze. Both times, Congress blocked banks from going into nonbanking businesses through holding companies, because Americans historically didn’t want banks competing with their own customers. Banking and payments is a special business, where a bank gets access to intimate business secrets of its customers. As one travel agent told Congress in 1970 when opposing the right of banks to enter his business, “Any time I deposited checks from my customers,” he said, “I was providing the banks with the names of my best clients.”
Imagine Facebook’s subsidiary Calibra knowing your account balance and your spending, and offering to sell a retailer an algorithm that will maximize the price for what you can afford to pay for a product. Imagine this cartel having this kind of financial visibility into not only many consumers, but into businesses across the economy. Such conflicts of interest are why payments and banking are separated from the rest of the economy in the United States....
The third problem is that the Libra system — or really any private currency system — introduces systemic risk into our economy...
We should not be setting up a private international payments network that would need to be backed by taxpayers because it’s too big to fail.
And the fourth problem is that of national security and sovereignty....
Years ago, Mark Zuckerberg made it clear that he doesn’t think Facebook is a business. “In a lot of ways, Facebook is more like a government than a traditional company,” said Mr. Zuckerberg. “We’re really setting policies.” ...The way we structure money and payments is a question for democratic institutions. Any company big enough to start its own currency is just too big.
Restoring balance to the economy
“Poor People’s Moral Budget: Everybody Has the Right to Live” (PDF)
[Rev. Dr. William J. Barber II and Rev. Dr. Liz Theoharis, Poor People’s Campaign, via Naked Capitalism 6-19-19]
From the “Findings”:
The United States has abundant resources for an economic revival that will move towards establishing a moral economy. This report identifies:
- $350 billion in annual military spending cuts that would make the nation and the world more secure;
- $886 billion in estimated annual revenue from fair taxes on the wealthy, corporations, and Wall Street;
- and Billions more in savings from ending mass incarceration, addressing climate change, and meeting other key campaign demands.
The below comparisons demonstrate that policymakers have always found resources for their true priorities. It is critical that policymakers redirect these resources to establish justice and to prioritize the general welfare instead. The abundant wealth of this nation is produced by millions of people, workers, and families in this country and around the world. The fruits of their labor should be devoted to securing their basic needs and creating the conditions for them to thrive. At the same time, policymakers should not tie their hands with “pay-as-you-go” restrictions that require every dime of new spending to be offset with expenditure cuts or new revenue, especially given the enormous long-term benefits of most of our proposals. The cost of inaction is simply too great.
Lambert Strether notes: "This is, if not MMT, at least MMT-adjacent. It focuses on resources, not money, and it wants to drive a stake into PayGo’s heart-equivalent-if-any. The report is also a useful baseline for Democrat presidential candidates."
Ellen Brown: The American Dream is alive and well — in China
[Public Banking Institute 6-22-19]
