Daily Archives: July 23, 2019

Chinese Money in the U.S. Dries Up as Trade War Drags On

Something I read made me look into the article Chinese Money in the U.S. Dries Up as Trade War Drags On in The Dreaded New York Times.

Growing distrust between the United States and China has slowed the once steady flow of Chinese cash into America, with Chinese investment plummeting by nearly 90 percent since President Trump took office.

This is a very complicated economic and political balance to be weighed about China’s investing in the USA. I don’t have the expertise to conclude what is the best policy. It looks like we will see as this mindless experiment plays out. Perhaps some experts with a broader point of view than the Trump administration will study this issue and come up with some suggestions. After all Trump won’t be in office forever.

Maybe the proper approach to take is for the governments of China and the USA to work together to come up with the proper balance of policies that will be best for the workers in both countries. Instead of a trade war, or a trade agreement that only considers the interests of the oligarchs, we could have trade agreements that are mutually beneificial for all citizens of both countries. What a wonderful world it could be.

One of the things that makes our workers not competitive with workers in other countries is the high cost of living overhead we impose on our workers. The overhead I am thinking about is the cost of debt service in the private sector from the financialization of our economy for the benefit of entities that make money from lending money. We think rising real-estate prices are good because home owners can enhance their stagnant wages with capital gains on their real-estate. Actually it is the mortgage lenders that make money by granting larger and larger mortgages to cover the risi8ng cost of real-estate.

If we removed the high cost of financing our lives (including student debt, credit card debt, mortgage debt, and automobile loan debt) and removed the high cost of health care, our own workers could compete on a more even playing field with the rest of the world.

Economic Update: Socialism & Worker Co-Ops

The Real News Network published the Richard Wolff video Economic Update: Socialism & Worker Co-Ops.

20th century socialism is now behind us. Socialists continued to evaluate both its achievements and failures via extensive self-criticism. A changed socialism has emerged, focused on a transition of workplaces from top-down hierarchical capitalist structures into democratic worker cooperatives. The powerful appeal of worker co-ops as grounding a new 21st century socialism is presented.

Richard Wolff has his own sense of humor sometimes, but he doesn’t use it much during these talks. He is not pretending to be the cowboy economist. Still, you can’t learn everything from a comedian. The more from him that I hear, the more I understand (also true of the cowboy economist).

The talk of how a new political party could grow is a new subject for me to hear from Richard Wolff. It is very intriguing. I hope I will hear more and more of this in the future.

How the private sector finances its deficits

YouTube has the video #02: How the private sector finances its deficits.

Many people worry about government deficit spending and the debt. They shouldn’t, or at least not for the reasons they think. Rather than jumping straight to that, I thought I’d first point out that this is not the exclusive domain of the public sector. The private sector, too, creates its own money

This gives away the surprise of the video
If you are watching these videos, you are learning Modern Money Theory the easy way.

How to tell if someone is a socialist!

YouTube has the video How to tell if someone is a socialist!

The word “socialist” is being used a lot lately with very little concept of the definition. I’m here to clear that up.

This is the definition I have been trying to promote on this blog. Maybe it is easier to stomach from a good old cowboy from Texas. I just don’t have the accent to prove I lived in Texas for four years, and married a woman from Texas. We both escaped. I knew some people like this guy when I was in Texas, but not a lot of them. Some of those people I knew were not as open and brazen about it as I was.

How the American People (could not possibly have) Financed World War Two!

YouTube has the video #06: How the American People (could not possibly have) Financed World War Two!.

We hear about the glorious job the American people did in financing World War Two. Only thing is, that story isn’t quite right. They did something that was glorious, all right, but it was not financing the war–it was holding inflation in check.

Maybe hearing this from a good old cowboy will make it more palatable.

The Stock-Buyback Swindle

The Atlantic has the article The Stock-Buyback Swindle.

To ward off hostile takeovers, boards started firing CEOs who didn’t deliver near-term stock-price gains. The rolling of a few big heads—including General Motors’ Robert Stempel in 1992 and IBM’s John Akers in 1993—drove home the point to CEOs: They had better start thinking about shareholder value.

If their conversion to the enemy faith was at first grudging, CEOs soon found a reason to love it. One of the main tenets of shareholder value is that managers’ interests should be aligned with shareholders’ interests. To accomplish this goal, boards began granting CEOs large blocks of company stock and stock options.

The shift in compensation was intended to encourage CEOs to maximize returns for shareholders. In practice, something else happened. The rise of stock incentives coincided with a loosening of SEC rules governing stock buybacks. Three times before (in 1967, ’70, and ’73), the agency had considered such a rule change, and each time it had deemed the dangers of insider “market manipulation” too great. It relented just before CEOs began acquiring ever greater portfolios of their own corporate stock, making such manipulation that much more tantalizing.

Excellent article that explains how rules changes are just reinforcing this pernicious trend. These changes to rules make it impossible for a CEO not to use stock buy backs if she or he wants to keep her or his job.

If you are interested to learn how your money and wealth are being stolen, reading this article will go a long way in furthering your educationi.