The Fed Sinks the Dollar: The Price-Wage Squeeze

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Counterpunch Against the recommendations of most economists and even the Financial Times of London, the Federal Reserve Board yesterday cut its discount rate by yet another quarter-point, to just 2%. Ostensibly, the intention is to try and spur economic “recovery” – as if a cut in the interest rates would do this. At first glance this seems to reflect the Fed’s ideology that manipulating the interest alone can expand or contract the economy – as if it is like a balloon, with its structure is pre-printed on it, to be inflated or deflated at will to control the level of activity. This simplistic philosophy was a hallmark of the Greenspan era. Changing the interest rate alone meant that the Fed didn’t have to “think,” didn’t have to regulate markets, raise reserve requirements ...

Resurrecting Greenspan: Hillary Joins the Vast, Rightwing Financial Conspiracy

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Counterpunch On Monday, March 24, presumably representing Wall Street – as any New York senator must do in view of its dominant financial role in the state’s political campaigns – Hillary Clinton proposed that Congress show its bipartisan spirit by appointing an “emergency working group on foreclosures,” to be led by none other than Alan Greenspan and earlier Federal Reserve Chairman Paul Volcker, and Clinton Treasury Secretary Robert Rubin. Her idea was for them to come up with a plan to alleviate the subprime and financial crisis. This seems like calling in arsonists to help put out the fire that they and their own constituency had set in the first place. Their lifelong interest, after all, had been to promote deregulation and special tax favoritism for their Wall Street constituency, highlighted ...

A Trillion-Dollar Rescue for Wall Street Gamblers, But No Money for Families and Retirees

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Counterpunch If the move to a Unitary Executive of unfettered presidential power frightens you, America’s radical right turn to Unitary Finance should compound your fears – and your debts as well. The financial events of the last two weeks of March 2008 demonstrate that the “economic royalists” and “money changers” whom Franklin Delano Roosevelt (FDR) drove from the temple of finance have returned to mismanage our economy into dire straits of unprecedented risk – debt creation, euphemized as “leveraging” and “wealth creation.” The few checks and balances that remain in the way of the financial sector’s increasingly centralized planning, especially at the state level, are being swept aside under the guise of “saving the system.” Few Wall Street beneficiaries who use this phrase explain just what the system is. For starters, its ...

A Grand Global Bargain? Save the Economy, Dismantle the Empire

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Counterpunch Today’s deepening financial and economic crisis cannot be alleviated without addressing a number of problems that the public does not really want to hear about. Even to cite them raises a wall of cognitive dissonance. For starters, today’s debt problem is not marginal, but has become structural – and structural problems cannot be solved with merely marginal palliatives. What Alan Greenspan called “wealth creation” turned out to be asset-price inflation – bidding up property values and the stock market on credit. The Bubble Economy loaded down households, real estate and entire companies with debt, while the Bush tax cuts for the higher tax brackets forced federal, state and local budgets much more deeply into debt. This policy could continue as long as debt inflated property prices at a faster rate than the ...