Early Headlines: End of Capitalism, Oil Prices to Remain Low, Senate Bill Would Roll Back Train and Auto Safety, Euro is a Disaster and More
Early Bird Headlines 18 July 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
- Crude spreads remain firm in the face of 'massive oversupply': Kemp (Reuters) Oil analyst John Kemp says massive mismatches between supply and demand will weigh on oil prices through 2016.
- The end of capitalism has begun (The Guardian) Paul Mason says that over the past 25 years the left's project of market destruction has collapsed. The market destroyed that plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a "proletariat", but no longer thinks or behaves as it once did. But in the process technology has created a new route out, which the remnants of the old left - and all other forces influenced by it - must embrace or die. Capitalism will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviors. He calls this "postcapitalism". Mason says information technology is the lever of change and that capital is losing control:
First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed - not just to subsist but to provide a decent life for all.
Second, information is corroding the market's ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system's defence mechanism is to form monopolies - the giant tech companies - on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.
Third, we're seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world - Wikipedia - is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
- GOP Bill Would Undermine Auto, Rail Safety Regulations (Associated Press) At a time of record auto recalls and high-profile train wrecks, Republicans are working on legislation to roll back safety regulation of the auto and railroad industries. The provisions will be part of a "must-pass transportation bill" that is required by the end of the month to avoid delays in providing highway and transit aid to the states.
- Greece and Europe: Is Europe holding up its end of the bargain? (Ben Bernanke, Brookings Institution) Specifically, is the euro zone's leadership delivering the broad-based economic recovery that is needed to give stressed countries like Greece a reasonable chance to meet their growth, employment, and fiscal objectives? Over the longer term, these questions are evidently of far greater consequence for Europe, and for the world, than are questions about whether tiny Greece can meet its fiscal obligations. The former Fed chair suggests the answer is no and Eurozone trade imbalances need to be addressed through fiscal actions.
- The euro is a disaster even for the countries that do everything right (The Washington Post) Can you tell which country in the graph below is not a Eurogroup member, had its banks default in 2008, needed a government bailout and had its currency collapse by 60%?
- German lawmakers approve plan for Greek bailout (Al Jazeera) Lawmakers overwhelmingly vote in favor of opening discussion for three-year Greek bailout plan worth $93 billion.
- Greece debt crisis: Reforms 'going to fail' - Varoufakis (BBC News) In a damning assessment of the new round of bailout actions, Mr Varoufakis said: "This programme is going to fail whoever undertakes its implementation." Asked how long that would take, he replied: "It has failed already."
- Greece news: Varoufakis booed in Greek parliament as he votes no to sweeping austerity reforms (The Independent) Econintersect: Is Varoufakis the only man in Greece who understands simple accounting arithmetic.
- ISIL claims suicide car bomb that kills more than 100 in Iraq (Al Jazeera) Death toll in in Khan Bani Saad 20 miles northeast Baghdad just keeps rising. Responsibility has been claimed by Islamic State in Iraq and the Levant (ISIL).
- The Contradictions of China’s Communist Capitalism (Pranab Bardhan, Project Syndicate) Unlike traditional capitalist economies, money is not the only tool at the authorities' disposal in China when it comes to dealing with stock prices. If your brokers in China advise you to sell shares, they must be careful not to appear to be rumor mongers, subject to official punishment. And there are reports that sales of large holdings may trigger investigations by the authorities. Causing public disorder or financial instability can be a serious offense in China, where conspiracy theories about foreigners' efforts to undermine the economy abound. What Chinese officials desire is a capitalist stock market without the possibility of large losses that can shake confidence in the CCP's credibility and control. Econintersect: And they talk about the American Dream.
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