“Even if there were countless perfectly informed sellers and buyers in every market, even if the appearance of the slightest differences in average profit rates in different industries induced instantaneous self-correcting entries and exits of firms, even if every market participant were equally powerful and therefore equally powerless—in other words, even if we embrace the full fantasy of market enthusiasts—as long as there are numerous external parties with small but unequal interests in market transactions, those external parties will face greater transaction costs and free-rider obstacles to a full and effective representation of their collective interest than that faced by the buyer and seller in the exchange, It is this unavoidable disadvantage that makes external parties easy prey to cost-shifting behavior on the part of buyers and sellers.”

Robin Hahnel

Green Economics, p. 57

“We can’t win without inspiring. We can’t win without marshaling energies effectively. When we make mistakes, especially big ones, we need to own up so as to do better. It is precisely that approach, carefully finding flaws and correcting them – and not making believe our past was flawless or, for that matter, that it was nothing but flaws – that can make our earlier efforts part of a long trajectory toward winning.”
“If it pays out, then great, and if it doesn’t – tax write off! You know who else thought like that? The people who set the mortgage market on fire just a few years ago. They made a fortune by structuring finance in such a way that investments produced income irrespective of their true value. They could not have cared less about whether the end result was old people thrown out of their homes or eight million unemployed – that was someone else’s risk. Their risk got hedged by the taxpayer who would bail out the industry so long as the collapse was big enough, so building a decent, functional economy was besides the point.”

Author of The Best Way to Rob a Bank is to Own One, Bill Black, gives a speech at TEDx UMKC on the big banking fraud and the financial crisis.

“It is hard to think of a more powerful way of telling people at the bottom that they are almost worthless than to pay them one-third of one percent of what the CEO in the same company gets.”
“…you don’t need smoked filled rooms and finely plotted conspiracies to get the result we see (which by the way is not to deny there can be a few smoked filled rooms here and there). The basic point is that while members of the rich and elites may jockey for position and sometimes work against each others’ interests (giving the appearance of lack of uniformity and coordination) they work against our interests virtually all the time.”
— Hugh, a commenter on Naked Capitalism
“It’s never been clear to me why we regard people who accumulate great quantities of money as heroes, and people who accumulate great quantities of Kleenex boxes or old newspapers are considered lunatics. It’s a funny old world, as Maggie Thatcher said.”
“Andrew Haldane, the executive director of stability at the Bank of England, did a simple analysis that demonstrated that banks couldn’t even begin to pay for the damage they did to society as a whole via periodic financial crises that result in the loss of jobs and the destruction of savings. That means the financial services industry as now constituted is negative value added from a societal perspective. It is purely extractive. Any reforms that reduce its ability to do damage would be hugely productive. But those are precisely the sort of reforms that badly captured governments and cowardly or corrupt regulators have refused to implement.”
“Most of us pay a sales tax when we buy clothes or a car, but for some reason we are supposed to believe the world will come to an end if the Wall Street guys have to pay a tax when they are flipping credit default swaps.”

A new study from Oxfam published just ahead of this year’s World Economic Forum meeting in Davos, reported that just one percent of the world’s population controls nearly half of the planet’s wealth and 70 percent of the world’s people live in countries where income inequality has been growing in the last 30 years. In the US, the gap between rich and poor has grown faster than in any other developed country. The top one percent has captured 95 percent of all growth since the putative “recovery” of 2009. This is the “new normal.” Is it sustainable?

Barbara Garson is the author of a series of books describing American working lives at historically important turning points. If this is one of those turning points, it’s one in which the one percent have won:

"That the so-called recovery that everyone is bragging about is this," Garson told GRITtv in a recent interview. "We’ve recovered, we’ve taken your full-time job away and given you a part-time job, and we’ve given the difference to our stockholders."

The trouble is, this cockeyed situation is not stable, and even the capitalists, maybe especially the capitalists, should be worried.

"There are capitalist solutions, like redistribution, but they’re not doing it. That may be why we have a socialist solution this time," she concludes. "If seventeen percent of the houses are vacant, we’ll just move into them."

Garson’s new book is Down the Up Escalator: How the 99% Live. You can watch our conversation at GRITtv.org.

Text via Truthout

“All we’ve done, as the continued whining of our top elites proves, is that like spoiled children, they’d become insatiable ids of more demands and more and more reckless conduct. And until someone finds a way to cut their grandiosity and their privileges down to size to discipline them or the bank CEOs manage to break the global economy beyond repair, they will have the bad taste to not only continue looting, but to add insult to injury, keep insisting that we serfs really should think and talk more respectfully about them.”
“Malaise is better than a recession, and a recession is better than a depression. But the difficulties that we are facing now are not the result of the inexorable laws of economics, to which we simply must adjust, as we would to a natural disaster, like an earthquake or tsunami. They are not even a kind of penance that we have to pay for past sins – though, to be sure, the neoliberal policies that have prevailed for the past three decades have much to do with our current predicament. Instead, our current difficulties are the result of flawed policies. There are alternatives. But we will not find them in the self-satisfied complacency of the elites, whose incomes and stock portfolios are once again soaring. Only some people, it seems, must adjust to a permanently lower standard of living. Unfortunately, those people happen to be most people.”
“It’s great to be an economist in a top policymaking position in the United States. Unlike dishwashers, cab drivers, and most other workers, you are not held accountable for the quality of your work. We already knew that, since almost none of the people responsible for allowing the housing bubble to grow large enough to collapse the economy have paid any career price. (Ben Bernanke is praised for avoiding a second Great Depression. Talk about setting the bar low.)”
“I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.”
“We’re now in the seventh year of a slump brought on by Wall Street excess; the wizardly job of “allocating the economy’s investment resources” consisted, we now know, largely of funneling money into a real estate bubble, using fancy financial engineering to create the illusion of sound, safe investment. We also know that there is a real question whether hedge funds, in particular, actually destroy value for their investors.”