World financial crisis Part 5

kropotkin1951 wrote:

First off socialism and capitalism are economic systems. Democracy is a political theory as is syndicalism, which is the basis for many eco-socialist dreams.

The real question is does democracy only mean casting a vote for recurring dictators like we do in Canada.

Exactly. I found out during the Duffy affair that senators had to own property in the province that they represent.  I assume that was to make sure things didn't get too democratic.

The development of mass communications and data handling coupled with an increasingy educated population suggests we are capable of having far more democratic systems than what we have now even just at the city level. 

To say that socialism is more incompatible with individual freedoms than capitalism, it seems to me, is a valid objective judgement, perhaps arguable in detail but nevertheless free of political ideology.

How various business tycoons would 'like to hear it' has no bearing on the level of its validity.

 

kropotkin1951 wrote:

Edzell wrote:

To say that socialism is more incompatible with individual freedoms than capitalism, it seems to me, is a valid objective judgement, perhaps arguable in detail but nevertheless free of political ideology.

How various business tycoons would 'like to hear it' has no bearing on the level of its validity.

Sorry you missed my subtlety.

Subtlety? That's hilarious.

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No one without money has any say in a corporate decision because they are not shareholders.

Others might quibble on various 'picky' (subtle) grounds but otherwise it's too obvious to merit  bandwidth.

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To say that having them run things is more democratic than a socialist government that is elected is frankly absurd.

Did I say that? I don't see it anywhere. It's another thing I must have missed, along with the subtlety.

 

Despite our many disagreements, I hope we can all share Pondering's joy at the victory of India Walton in the Buffalo mayoral Democratic primary. This is good news for everyone on the left. Of course, as krop pointed out, the current ruling class and their hired help are not going to go quietly, so we should expect bullshit like write in campaigns  intended to siphon off enough Dem votes to swing the general election to the normally moribund Buffalo Republicans.

The great recoil of neoliberal globalization

The current political era is best understood as a “great recoil” of economic globalization. It is a moment when the coordinates of historical development seem to be inverting, upsetting many of the assumptions that dominated politics and economics over the last decades. This moment corresponds to the “second movement” socialist economic historian Karl Polanyi described in his book The Great Transformation, when phases of capitalist expansion recede and are met by “societal responses.”

According to Polanyi, in phases of profound crisis like that opened by the 1929 Wall Street Crash, society tends to act defensively, erecting forms of social protection against a capitalist logic that has manifestly failed to deliver prosperity, yet becomes even more aggressive in its attempts to extract profit. During this moment, societies are involved in a process of “re-internalization” that aims to “re-embed” the economy in society.

On certain occasions, this second movement produces a reactionary drive, pacifying the conflict between capital and labor under the aegis of an authoritarian corporatist state, typified by the fascist movements of the 1920s and 1930s. But this is not the only possible conclusion. Roosevelt’s New Deal in the United States and the French and Spanish popular-front governments represented the left’s attempts to resolve the same quandaries in a progressive direction. To capture contemporary political developments, it is essential to understand how this moment of recoil has come to be, and why globalization has proven so fragile.

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Globalization in Shreds

Amid the dark atmosphere of the present, with societies caught in multiple systemic crises and globalization on the retreat, the wisdom of hindsight allows us to assess these shining promises with a cooler eye. It is true that globalization has had positive results in emerging economies. The inclusion of China and other developing countries in the world market has taken hundreds of millions of people out of rural poverty and created a sizeable middle class. However, the global growth record under neoliberalism (1979-2008) was considerably lower than that achieved under the Keynesianism that defined the Bretton Woods era (1946-71), with its fixed exchange rates and limited capital mobility.

Globalization has contributed to a spectacular increase in social inequality, magnified by the enormous scale on which the economy now operates. In 2020, it was documented that 2,153 billionaires had more wealth than the 4.6 billion people making up 60 percent of the world’s population. Between them, they controlled US$10 trillion, and Jeff Bezos, one of the world’s richest people, was projected to become the world’s first trillionaire in the 2030s. In fact, in America and Europe wages have long stagnated; the labor share in national income has been steadily decreasing since 1990, while the capital share has been growing and growing. In this context, globalization is no longer perceived as a force for prosperity, but as the prime source of many threats that have put society’s well-being in peril.

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Regression or internalization?

The present crisis of globalization has many echoes in Polanyi’s analysis and his discussion of the sense of “exposure” produced by capitalist rapacity. The push for externalization of neoliberal capitalism, with its geo-economic dislocations and the flattening of barriers and regulative institutions, has exposed workers and citizens to a number of economic flows against which they feel they have little control, which breeds a perception that might be described as “agoraphobia” — a fear of open spaces.

We live in an agoraphobic world because globalization is no longer perceived as a sea of opportunities that any sane citizen should tap into with enthusiasm, where the best will be prized for their efforts. Rather, it is increasingly regarded as something akin to a lawless and tempestuous ocean inhabited by monsters and ravaged by corsair ships that launch frequent attacks on workers and local communities. Global flows of finance, trade, services, information and people, celebrated by neoliberal economists as sources of economic prosperity, are now often seen as scourges to be defended against.

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Rather than merely a movement back, we are also witnessing a movement inward at the moment, as befits a moment of implosion. It is a phase of internalization, to use Polanyi’s words; a moment which revolves around the attempt of re-embedding economic processes in social and political institutions. After the push of neoliberal globalization towards externalization as a means to increase profits and lower political control, now contemporary reality seems to be heading in the opposite direction.

State interventionism, long decried by neoliberals, is coming back with a vengeance amid massive spending and investment programs, and countries like the US look with a mixture of disdain and envy at the example of Chinese capitalism and the way it has outperformed Western neoliberal capitalism in many respects. Furthermore, experts are pointing to a partial re-nationalization and regionalization of the economic system. Faced with the supply chain crisis fueled by the COVID-19 emergency, countries have been trying to partly reshore their supply system so as to make it less prone to failure and risk.....

..from dec 15

Taming inflation can be worse than inflation

One of the biggest threats to the moneyed class is inflation because it hurts those who have a lot of money, but can help those who owe a lot of money.

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Now, with a recovering economy in the wake of the pandemic, the bank has allowed our inflation rate to creep up to 4.7 per cent — a far cry from “runaway” or “galloping” inflation. Even so, it’s prompting howls of outrage from Bay Street.

Finance Minister Chrystia Freeland moved to reassure Bay Street earlier this week, announcing that inflation-fighting will remain unequivocally the top priority of the Bank of Canada for the next five years. In renewing the bank’s mandate like this, she has kept Canada on the very-low inflation path Crow established years ago.

There had been speculation she might buck the financial establishment and create a “dual mandate,” requiring the bank to prioritize not just fighting inflation but also battling the real scourge faced by workers — high unemployment.

In the end, she appeased Bay Street, settling for vague instructions that the Bank also keep an eye on labour markets.

Although few Canadians were lying awake at night wondering what Freeland would decide, in fact, her decision will be one of the most consequential in shaping post-pandemic Canada.

Many Canadians may soon actually suffer from insomnia, terrified of losing their homes due to crippling interest rates — as so many did in the early ’90s.

Bay Street isn’t shy about advocating higher interest rates. Earlier this week, prominent inflation hawk William Robson published an op-ed calling for higher rates — possibly much higher....

Report: Snow-washing, Inc - How Canada is marketed abroad as a secrecy jurisdiction

1. INTRODUCTION

Canada enjoys a positive global reputation as a stable, affluent democracy with strong rule of law. Yet it is also among the most opaque jurisdictions when it comes to the ownership of companies and partnerships. Ownership information is not public and entities can be set up and controlled from abroad. Some entities have no reporting requirements or domestic tax obligations, yet they can hold bank accounts and enter contracts. These structures are particularly attractive to bad actors in need of fronts for their misdeeds. As a result, Canada has become a sought-after place to incorporate shell companies.1

A cottage industry of consultants - many with no apparent links to Canada - has emerged promoting Canadian entities as fronts for opaque offshore company structures. Framed through the lens of ‘tax optimization,’ these structures appear intended to conceal ultimate ownership and leverage Canada’s strong reputation to access the global financial system.

Excerpts from offshore consultant websites

• ‘Canada is a new player in the world of offshore companies ... it has no negative offshore reputation and no association with tax avoidance or evasion. It is by far one of the best neutral jurisdictions, providing offshore benefits without any of the traditional offshore drawbacks.’2
• ‘A Canadian company can be used to act on the behalf of offshore companies or can be used to receive and remit money to offshore companies to avoid with- holding taxes...’3
• ‘Canada LLP - A Tax-Free and Highly Reputable Offshore Company’4
• ‘If you have previously used UK partnership structures in business, which were distinguished by a high level of confidentiality, then given today’s realities, many factors have changed and a Canadian LP would be the best choice.’5

These offshore consultants promote Canadian entities as ‘flow-throughs’ whose value lies in their Canadian identity, which serves as a cover for offshore structures. These shells are unlikely to generate much if any tax revenue or local employment, and may not have any economic benefit to Canada beyond the nominal fees charged by the government to incorporate them and renew their registration.

In the absence of open company data, it is impossible to know just how widespread the use of Canadian shells has become. Canada’s corporate registries are antiquated and have limited search functionality, and the companies they administer disclose little about themselves. In order to demonstrate how a transparent registry can be used to investigate wrongdoing, we used the UK’s open data on companies and beneficial owners to flag instances where Canadian entities were used in suspicious corporate structures. Among the Canadian entities in the UK’s beneficial ownership registry are: a group of Albertan Limited Partnerships that media and experts claim form part of a complex web of shell companies used to launder billions of dollars from Eastern Europe; a BC Limited Liability Partnership fronted by a prolific nominee whose companies have been identified in media reports as having been used to commit fraud and channel bribes; and two Quebec companies linked to dubious oil deals in post-Soviet states.6 These cases, identified through another country’s beneficial ownership database, are likely just the tip of the iceberg.

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2. WHAT IS SNOW-WASHING?

The term “snow-washing” refers to the misuse of Canadian legal entities to commit financial crime, by concealing suspect transactions under the cover of Canada’s reputation for financial integrity.11

While snow-washing has only been reported on since the Panama Papers scandal broke in 2016, it is not a new phenomenon. In an investigation by The Toronto Star and CBC-Radio Canada published in January 2017 under the title, “Snow Washing: Canada is the world’s newest tax haven,” reporters found more than two dozen corporate service providers outside Canada that promoted Canadian companies “as vehicles to avoid tax in a reputable ‘offshore destination’”.12 Among those service providers was the disgraced Panama-based firm, Mossack Fonseca, which began to promote Canada as a tax haven in 2010.13 As this report shows, little has changed since then, and there are still many dubious service providers that pitch Canadian entities as fronts for offshore company structures.....

Tech meltdown: China's $1.9-trillion stock rout has no end in sight

The downward spiral of Chinese tech stocks shows no signs of abating, with alarms now ringing in the options market. Even after a drop in market value of almost $2 trillion, investors are seeking hedges against further losses in the Hang Seng Tech Index. Bearish options on the benchmark are trading near a record premium above bullish calls as the gauge plunged this week, data compiled by Bloomberg shows.

The tech index has plunged 61 per cent from its peak last year. The Nasdaq Golden Dragon China Index of US-traded stocks has fared even worse, down 68 per cent, and with another bad day or two, the peak-to-trough decline could surpass its 72 per cent crash in the 2008 global financial crisis. But for many investors, overwhelmed by renewed regulatory and earnings shocks and Russia’s invasion of Ukraine, the shares aren’t cheap enough yet.

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Chinese tech shares are particularly vulnerable in an environment where investors are shunning risk. On Thursday, Chinese stocks in the US suffered their biggest selloff since 2008 after US regulators identified five companies that could be subject to delisting for failing to comply with auditing requirements.

Moreover, fear of a fresh regulatory crackdown by Beijing has escalated lately as policy makers proposed more curbs on online games. Earnings results, so far, have been unable to ease any worry about the growth outlook.

Canada's inflation skyrockets to levels not seen since 1991

The national inflation rate for March blew past expectations, jumping to 6.7 per cent, according to Statistics Canada, to its highest level since 1991. The Consumer Price Index for February was already at a sky-high 5.7 per cent, so this month’s figure all but guarantees the Bank of Canada will continue to raise its key interest rate to try to tame inflation to a much more moderate 2 per cent.

The jump is being blamed on price pressure in the housing market, ongoing supply chain issues, and the Ukraine crisis which has driven up energy, commodity, and the agriculture markets.

For context, the last time prices jumped this much, Super Nintendo had just hit the shelves, and “(Everything I Do) I Do It for You” by Bryan Adams was number 1 in the Billboard charts.

Most expensive macaroni and cheese in decades

Prices at the grocery store continue to rise, with many items breaking records for price jumps. Among them: eggs, butter, pasta, cheese, and breakfast cereals.

“Prices for dairy products and eggs rose 8.5% year over year in March, following a 6.9% increase in February. This is the largest yearly increase since February 1983. Price growth for butter (+16.0%), cheese (+10.4%) and fresh milk (+7.7%) contributed to the gain,” the report reads.

The price for pasta products spiked, with the largest increase Canadians have seen since the 2009 recession, as well as the cost for cereal products. The rise is due to the 14-year high in the price for wheat futures, due to the conflict between two of the world’s largest wheat exporters, Russia and Ukraine. The war is also wreaking havoc on global fertilizer production, which in turn is linked to rising prices......

Comment:

john clarke: 

There are two interesting things about this article. First and foremost, the downturn in China is a strong indication of the mounting problems of global capitalism and the gathering conditions of slump.

The second striking theme is the absurd parroting of the contention that the ebbing of the Chinese economy is attributable to the political leadership's reluctance to go along with the global consensus and pretend the pandemic is over.

China manufacturing output drops to lowest level in 2 years

..global banks declared covid supports as inflationary. that is why countries are responding by denial. when economists talk about hurting the economy they are talking about hurting the ruling class first. and after that the pecking order of trickle down effect of that. always always always it's the working and underclasses that pay. whether it's in terms of non support for covid or economic recovery the cost is brutal. in terms of dealing with covid china runs against that grain.  

Some of us saw what happened in the early '80's. The working class people lost their homes and the speculators bought them up. We need to fix the problem of allowing our housing market to be used for speculation.

NDPP wrote:

A pity pro-American arse-lickers on babble will continue to live in denial…

What about Putin's asslicker on Babble?

NDPP wrote:

A pity pro-American arse-lickers on babble will continue to live in denial…

JKR wrote:

What about Putin's asslicker on Babble?

NorthReport wrote:

JKR
I'm sure you are better than this.

I was responding to NDPP’s calling babble posters “pro-American arse-lickers.”

What People Don’t Get about This Inflation Spike

Part one of two.

If you are sitting around the kitchen table contemplating the escalating cost of your grocery bills (and just about everything else), then welcome to what U.S. writer James Kunstler calls “the long emergency.”

In 2005 Kunstler, famous for his critique of suburbia, noted that civilization’s energy appetites were unsustainable given the declining quality of fossil fuels left in the world.

“We can be certain that the price and supplies of fossil fuels will suffer disruptions in the period ahead that I am calling the Long Emergency,” advised Kunstler. “No combination of alternative energies will permit us to continue living the way we do, or even close to it.”

The inflation we are facing today is a manifestation of that long emergency intensifying. The elephant in the room is the rising cost of all fossil fuels.

That’s not of course what we are hearing from those either trying to calm our nerves or inflame populist emotions.

The experts mostly blame the pandemic, unsettled supply chains and great surges in demand. Don’t worry, the authorities tell us, all of this is temporary and transient.

At the same time political insurrectionists, who now proliferate like rodents in our whack-a-mole culture, have blamed everything from government deficits to carbon taxes for inflation. They do so even though inflation has appeared in jurisdictions with no deficits and no carbon taxes.

Pierre Poilievre, for instance, has famously accused the Bank of Canada for Canada’s 30-year high inflation rate. On Twitter the demagogue and wannabe prime minister claims that “money printing deficits” have “bid up the price of goods.”

These political explanations steadfastly ignore that our inflationary hell is due to the rising cost of oil, gas and coal all at once.

These fossil fuels still perform the majority of work in an ailing civilization struggling with the weight of its unsustainable numbers and unpredictable complexity. Houston geologist Art Berman, a reliable guide to the vagaries of our fossil fuel culture, recently put it this way: “What is going on is a system collapse.”......

..we have all the tools and knowledge we need to transition to a better world. we've had these tools and knowledge for a very long time. well before there was a climate crisis. so that we could all have better equatable lives across the board. a more just society.

..so when do we start?