Friday, 30 August 2019

The Guardian View on Trump v the US Fed: The Bully Pulpit

THE GUARDIAN: The US central bank spent $29tn to stop the last financial crash. Donald Trump now wants it to bail out his presidency

Earlier this month Donald Trump accused the man he had appointed to run the United States Federal Reserve, Jerome Powell, of being an “enemy”. His public dressing down of the central bank chair, who is supposed to be independent, was accompanied by further escalations of the US–China trade war. Mr Trump wants Mr Powell to lower rates to spur growth in the sputtering US economy and give him the upper hand with Beijing. This incompetence and bluster is hardly inspiring global confidence. It was a coincidence, however, that on the same day the Bank of England’s governor, Mark Carney, warned the annual gathering of the world’s central bankers that the global economy was becoming over-reliant on the dollar. That may have been fine when the US was viewed as a responsible leader of the world economy. Mr Carney plainly thinks that is not the case today. » | Editorial | Friday, August 30, 2019

Thursday, 29 August 2019

The Koch Brothers Tried to Build a Plutocracy in the Name of Freedom

THE GUARDIAN: The Kochs have always believed that rich people had the right to rule over everyone else, democracy be damned

It is the hope of every rich megalomaniac that they will “leave a legacy”. David Koch, who died last week aged 79, left a significant legacy indeed. In fact, along with his brother Charles, he can probably claim to have changed the world. Unfortunately, he changed it by setting it on fire.

It’s hard to describe just what a negative force the Koch brothers have been in United States politics over the past several decades. They have used every means at their disposal to subvert democracy. They funded academic posts, thinktanks, lobbying groups, fake grassroots operations, and political campaigns. They used their tremendous wealth to push a radically far-right economic vision in which government protections and welfare programs would essentially cease to exist. They may even have been directly responsible for the election of Donald Trump, the Koch-backed Americans For Prosperity having hired 650 staffers to make millions of phone calls and knock on tens of thousands of doors in Wisconsin and Michigan during the 2016 election. » | Nathan Robinson | Wednesday, August 28, 2019

Monday, 26 August 2019

Brexit: EU 'Would Block Trade Deal If Britain Reneged on Bill'

THE GUARDIAN: UK must honour its debts before starting to negotiate trade deal, say Brussels sources

The European Union would refuse to negotiate a trade deal with the UK if the government reneged on the Brexit bill, EU sources have said.

At the G7 summit in Biarritz, Boris Johnson said it was a “simple statement of reality” that the UK would withhold much of the £39bn financial settlement agreed by Theresa May, in the event of a no-deal.

Brussels sources have warned that future trade talks would be blocked until the UK agreed to a settlement.

The financial settlement was a “totemic” issue for EU member states, one official said. “The message will be ‘honour your debts, or we are not even going to start talking about a trade deal,” the source said, reflecting a widespread view among diplomats.

Responding to the prime minister’s comments, Jean-Claude Piris, a former head of the EU council legal service, tweeted: “If the UK refuses to pay its debts to the EU, then the EU will not accept to negotiate a trade agreement with the UK.” » | Jennifer Rankin in Brussels | Monday, August 26, 2019

Saturday, 24 August 2019

Trump Asserts He Can Force U.S. Companies to Leave China

THE NEW YORK TIMES: BIARRITZ, France — President Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and pariah states like Iran, Syria and North Korea.

As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally meant to enable a president to isolate criminal regimes not sever economic ties with a major trading partner over a tariff dispute.

“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Mr. Trump wrote. “Case closed!”

The president’s threat to all but cut off one of America’s most important trading relationships could disrupt a global economy already on the edge of recession amid his trade war while further unsettling giant companies in the United States that rely on China in their production and sale of everything from clothing to smart telephones. » | Peter Baker and Keith Bradsher | Saturday, August 24, 2019

Aides “Alarmed” by Erratic President Donald Trump Behavior | The Last Word | MSNBC

Trump’s Days-Long Public Meltdown Has Moved from Words to Actions | Deadline | MSNBC

NBC News’ Heidi Przybyla, WBUR’s Kimberly Atkins, NYT’s Nick Confessore, former economic advisor for President Obama Austan Goolsbee, and MSNBC’s Ali Velshi on the president escalating his trade war with China and comparing his hand-picked Federal Reserve chair to the authoritarian president of China

Friday, 23 August 2019

Economist Reacts to Trump's Tweet: Nothing Like This Has Ever Happened Before

Austan Goolsbee, the former chairman of the Council of Economic Advisers under President Obama, reacts to President Trump's tweet asking if Federal Reserve Chairman Jerome Powell or Chinese President Xi Jinping is the bigger enemy to America.

Trump 'Hereby Orders' US Companies to Leave China after Attacking Fed Chair

THE GUARDIAN: President calls for US boycott after Jerome Powell warned central bank faces ‘new challenge’ ‘with Trump’s seesaw trade policies

Donald Trump ordered US companies to leave China on Friday after launching another blistering attack on Federal Reserve chairman Jerome Powell, asking “who is our bigger enemy, Jay Powell or [China’s] Chairman Xi?”

Moments after Federal Reserve chairman, Jerome Powell, warned the US central bank was facing a “new challenge” as it deals with the Trump administration’s seesaw trade policies and ongoing dispute with China, Trump went on a Twitter rampage calling for a US boycott. » | Dominic Rushe in New York | Friday, August 23, 2019

Economist Richard Wolff on Why a Recession Is Imminent

Thursday, 22 August 2019

500K Fewer Jobs Added Since 2018 Than Previously Reported | Velshi & Ruhle | MSNBC

The Bureau of Labor Statistics made a correction, showing the economy got less of a boost from tax cuts than we first thought. And speaking of the tax cuts, a new CBO estimate says we will hit a trillion dollar deficit next year. The President of the Committee for a Responsible Federal Budget, Maya Macguineas and TIME Magazine Executive Editor Ben Goldenberger join Chris Jansing to discuss who exactly is doing well in this economy.

Sunday, 18 August 2019

Forget a 2008 Lehman Bros-style Crash – This Is How a ‘Normal’ Recession Could Start

THE GUARDIAN: Current political uncertainty or trade restrictions could shock business confidence, but policymakers are fixated on finance

There’s a hoary old proverb in the financial markets that a crisis happens precisely when the institutional memory of the last crisis has faded: when all the key chairs are occupied by people who aren’t scared any more, the same mistakes get repeated.

On that basis, in the face of grim economic news around the world, we ought to be reasonably safe from another Lehman Brothers-type meltdown, or even a repeat of the eurozone crisis. But what might be a little bit more worrying is that there are surprisingly few people left who remember how the normal kind of recession happens. » | Dan Davies | Friday, August 16, 2019

Thursday, 15 August 2019

Brexit, Iran, Huawei: What John Bolton’s ‘Interim Deals’ Could Cost

THE GUARDIAN: How far from European policy will the US national security adviser try to pull the UK?

John Bolton, the national security adviser to Donald Trump and one of the pre-eminent advocates of “America first”, could not have been more solicitous to the Boris Johnson government – but his overtures may come with a sting in the tail for the UK.

The messages of solidarity poured out. We are with you, he vowed, saying Brexit was in the US national security interest, with or without a deal with the EU by 31 October. Laced with a few barbs at the expense of Brussels, he presented his credentials as a pioneer Brexiter, arguing he was a leaver before there were leavers.

But Bolton did not just vow friendship or repeat the oft-made promise that the UK will be at the front of the queue for any trade deal: he came with a specific proposal. Britain and the US could strike interim deals lowering trade barriers in specific areas, such as manufacturing, before a comprehensive trade deal could be signed some years down the line, he said. He was sure such deals could be greeted with unanimous bipartisan support by Congress, the body that sanctions US trade agreements. Some doubt the possibility of striking deals before everything is agreed, however.

The aim is to provide the UK with a safety net as it loses access to European markets in a no-deal scenario. It is not quite a bailout, but it underlines how much the Trump administration sees Britain’s exit from the EU as being in the US’s national security interest. » | Patrick Wintour, Diplomatic editor | Tuesday, August 13, 2019

Welfare for Walmart (2014)

Donald Trump Grapples with Self-Inflicted Economic Wounds as Markets Plunge | The Last Word | MSNBC

Lawrence O'Donnell explains how the day after President Trump admitted that he has been lying about his tariffs and that his tariffs have, in fact, cost American consumers billions upon billions of dollars, the stock market crashed.

Thursday, 8 August 2019

The Dramatic Drop in Sterling Is Only a Taste of What Is to Come

THE GUARDIAN: The threat of a no-deal Brexit has sent the pound plummeting. The British people must be given a chance to halt it

As our currency plummeted last week, politicians were remarkably quiet. In normal times, a catastrophic slide in the pound would send a shockwave through Westminster. An emergency cabinet meeting might have been called. The chancellor might have made an announcement, calming markets and reassuring the public.

But these aren’t normal times. Over the past three years, politics has been increasingly blind to the concerns of ordinary people. The Brexit debate is stuck on abstract constitutional issues such as the backstop. While they are important matters, the relentless focus of public discourse on them means that we are in danger of forgetting about the lives of real people. Westminster is gripped by a fanatical race towards a cliff-edge Brexit and nobody is stopping to think about the impact it would have on the everyday lives of the people we serve as politicians.

The falling pound is a perfect example. Consider for a moment the situation we find ourselves in. Three years on from the referendum, and sterling has now fallen by 15% against the euro. On average, the pound is now weaker than it was at the height of the financial crisis. » | Sam Gyimah | Thursday, August 8, 2019

Wednesday, 7 August 2019

Gold Rises to $1,500 an Ounce for First Time in Six Years

THE GUARDIAN: Rise comes amid concerns over US-China trade conflict and European markets

The price of gold has risen to $1,500 an ounce (£1,234.45 at market rates on Wednesday) for the first time in six years as investors seek shelter in low-risk assets amid concerns about the global economy.

The spot gold price rose 1.75% to $1,500.29, its highest level since 2013, taking the metal’s gains this year to 17%.

Gold is considered a safe haven asset and investors traditionally buy into the precious metal at times of economic or political instability. » | Sean Farrell | Wednesday, August 7, 2019

In 33 Years The Rich Will Own All the Wealth in America!

According to new data from the federal reserve, if current trends of the rich getting richer and the middle class getting poorer continues at their current rate, in 33 years the top 10% of Americans will own one hundred percent of all American wealth. Everyone else will be in poverty and in debt. Right wing billionaires like Donald Trump are cheering this on, calling for more tax cuts on rich people and less power for working people through the continuing destruction of unions and fighting the minimum wage. They tell us that the problem is not corporate monopoly and rich people taking everything for themselves.

Robert Reich: The Myth of the Rugged Individual

Former Secretary of Labor Robert Reich debunks the myth of the self-made individual and explains what your life chances really depend on.

Tuesday, 6 August 2019

The Guardian View on the China-US Trade Wars: The Global Economy Is At Risk

THE GUARDIAN: Xi Jinping’s newfound readiness to let the yuan float sends a worrying message that there will be no deal by the end of August deadline

Events have moved disturbingly swiftly since Donald Trump surprised everyone last week by announcing plans for a fresh wave of tariffs on Chinese imports. Beijing retaliated by targeting US agricultural products and allowing its currency to depreciate against the US dollar. Mr Trump duly fired off a tweet accusing the Chinese of currency manipulation, a clear sign that he is preparing to ratchet up the tension still further. Financial markets have responded predictably to this major escalation in the economic cold war. Share prices fell and investors sought out the traditional safe haven assets: gold and the swiss franc.

When the US president announced his first wave of protectionist measures in March 2018 he boasted that trade wars were good and easy to win. That’s not the way that the markets see things. They see the world’s two biggest economies digging in for the long haul and Mr Trump intensifying global trade tensions in order to pressurise America’s central bank, the Federal Reserve, to cut interest rates. » | Editorial | Monday, August 5, 2019

China Accuses US of 'Deliberately Destroying' World Order

THE GUARDIAN: Trade war rhetoric ratchets up as Beijing responds to US claim of being ‘a currency manipulator’

China stepped up the trade war rhetoric on Tuesday, accusing the US of “deliberately destroying international order” with “unilateralism and protectionism”.

A day after Washington branded China a currency manipulator in a rapidly escalating trade dispute, China’s central bank said it “deeply regretted” the move by the US and said such behaviour “seriously undermined international rules” and damaged the global economy.

In a strongly worded editorial in the People’s Daily, the official newspaper of the Chinese Communist party, China accused the US of “deliberately destroying the international order” and holding its own citizens hostage. » | Dominic Rushe , Lily Kuo in Hong Kong and agencies | Tuesday, August 6, 2019

UK Too Desperate to Secure US Trade Deal, Says Clinton's Treasury Secretary

THE GUARDIAN: Britain in weak negotiating position despite Trump’s warm words, says Larry Summers

The former US treasury secretary Larry Summers has said he does not believe that a “desperate” UK would manage to secure a post-Brexit trade deal with Washington, as Dominic Raab, the new foreign secretary, heads to the US to scope out the potential for such an agreement.

Summers, who was a senior official under Bill Clinton and Barack Obama, said the UK was in a weak position when it came to negotiating with trade partners.

He told BBC Radio 4’s Today programme on Tuesday: “Britain has no leverage, Britain is desperate … it needs an agreement very soon. When you have a desperate partner, that’s when you strike the hardest bargain.”

Despite warm words from Donald Trump about a trade deal, Summers said: “We have economic conflict with China and, even on top of that, the deterioration of the pound is going to further complicate the negotiating picture.

“We will see it as giving Britain an artificial comparative advantage and make us think about the need to retaliate against Britain, not to welcome Britain with new trade agreements.” » | Rowena Mason, Deputy political editor | Tuesday, August 6, 2019

Monday, 5 August 2019

Brexit Britain: Europe's View

The UK has long enjoyed a reputation for its global influence, military power and financial strength. But the Dutch prime minister, Mark Rutte, recently described Britain as a "waning country", too small to stand alone on the world stage. So, is Brexit changing the way the rest of Europe views the UK? Our foreign affairs editor Deborah Haynes has travelled across the continent to find out what impact leaving the European Union is having on Britain's reputation.

China's Yuan Sinks amid Fears Beijing May Give Up on US Trade Talks

THE GUARDIAN: Leadership could be ‘weaponising’ its currency, says one analyst, as Asia stock markets sink to six-month low

The simmering trade tensions between the United States and China have threatened to spark a full-blown currency war after Beijing allowed the yuan to drop below a level it had previously defended with sustained vigour.

China’s central bank allowed the yuan to sink below the sensitive seven-to-one dollar level for the first time since 2008 in what one expert called a “weaponisation” of the currency. In the wake of Monday’s news, Asian shares slumped to a six-month low.

Beijing has consistently advocated the need for a higher yuan despite accusations from Donald Trump that it was deliberately keeping its currency low in order to flood America with cheap products.

But Monday’s move suggests that Beijing does not see any prospect of reaching an agreement in its trade dispute with Washington in the light of the US president’s threat last week to impose more tariffs on Chinese goods. » | Martin Farrer | Monday, August 5, 2019

Political Theory – John Maynard Keynes

John Maynard Keynes was arguably the greatest economist of the 20th century. He discovered the idea that governments should stimulate demand during economic downturns – and was the creator of both the IMF and the World Bank. His ideas continue to underpin a lot of the modern economic system.

Sunday, 4 August 2019

Whatever They Say about Brexit, Sterling’s Nosedive Tells Us the Truth

THE GUARDIAN: The falling pound betrays the lack of confidence in Britain’s future. It can’t be blagged away, even in a post-truth world

If you are reading this and earn your living in UK currency, you are already poorer today than you were before June 2016. And you will be poorer by the end of the year if a no-deal EU exit comes to pass. If you have savings in sterling, then you’re in even more trouble.

In the post-truth world we have been living in for the past three years, there’s one thing that cannot be blagged away, cannot be accused of bias, cannot be propped up by a gust of groundless optimism – the British pound. It is quite literally a sovereign, bowing to no ideology or political pressure. As elegantly and neutrally as a force of nature, it rises and falls as it divines the direction of the country’s economy. That direction, according to the pound’s nosedive over the past few weeks, is downwards.

You might not yet have noticed what economists call “the pass-through effect”, the impact of changes in the exchange rate on domestic prices for traded and non-traded goods. But it is here. We are all experiencing it now, in some way. It’s not just holidaymakers, many of whom are shocked that they are getting fewer euros than pounds at airport exchange bureaux or ATMs (in the past week, even dollars were informally trading at parity, a significant milestone in the pound’s depreciation). » | Nesrine Malik | Sunday, August 4, 2019

Saturday, 3 August 2019

Trump: Things 'Going Along Very Well' with China as Markets Fall over Tariffs

THE GUARDIAN: US imposed new tariff on $300bn of Chinese goods / President falsely claims US consumers not paying tariff costs

Donald Trump has said things are “going along very well” with China, a day after financial markets around the world fell sharply following the president’s threat to impose a new tariff on $300bn (£248bn) of Chinese goods, in a rapid escalation of the trade war between Washington and Beijing.

The FTSE 100 was down more than 2% as markets across Europe tumbled on Friday, continuing a wave of selling pressure around the world in the aftermath of the president’s announcement on Thursday evening, which dashed hopes of a resolution to the US-China trade war.

Tweeting on Saturday, Trump sought to down play the tension, and insisted US consumers were not paying for import taxes he has imposed on goods from that country although economists say Americans are footing the bill. » | Guardian staff and agencies | Saturday, August 3, 2019

Republican: "Trump Is an Economic Ignoramus"

Friday, 2 August 2019

Dollar Is the Strongest Currency... No More? US Government Raises Spending by $320bn to Cover $22trn debt

US lawmakers have passed a two-year budget deal which will allow the government to raise spending by hundreds of billions of dollars to cover its debts.