Have You Heard About The “Rolling Jubilee”?

Barry Herman, Guest Blogger

As of 2:00 pm on Friday, November 16, 2012, individual Americans have contributed over $290,000 to an Occupy project called “Strike Debt” that will cancel $5.8 million of defaulted debt owed by US residents to hospitals and doctors in this country, and the amount donated is still growing.

This sentence must make little sense to readers outside the United States, so let me explain.

First, medical debt: in this country, many people have medical insurance through their employers or buy it individually. If they are over 65, they have it through a federal government program called Medicare, or if they are poor through a joint federal and state program called Medicaid. Some insurance, however, covers only part of the cost of medical care or it excludes some illnesses (for example, if you have a “pre-existing” condition when you start the insurance, it may not be covered), and some 44 million Americans have no insurance at all. The situation will be improved—if only partly— after the start of “Obamacare,” the medical insurance reform that the Obama Administration managed to get through the US Congress in 2010 (formally, the Patient Protection and Affordable Care Act). In the meantime, millions of Americans owe large amounts of money to hospitals and doctors. Anyone coming to a hospital in the United States has to be treated, whether they have insurance or not, but hospitals have a rather mixed record when it comes to getting paid by those who are not insured. Medical bills are a main reason for personal bankruptcy in this country.

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What About NYC That Doesn’t Make it To Postcards?

Anna Lekas-Miller, Guest Blogger

A woman walks up and down the dark hallway, holding a cheap transistor radio up to her ear, pressing it closer as it keeps cutting in and out.

“They’re saying that it could be anywhere between two and seven weeks before we get power,” she says, shaking her head. “So who even knows?”

I’m a volunteer with Occupy Sandy—a community relief effort that used the Occupy Wall Street network to coordinate hurricane relief in New York City’s hardest hit areas. I’mon the fifteenth floor of 711 Seagirt Boulevard, a twenty-five story housing complex in Far Rockaway—a neighborhood on the Rockaway Peninsula in Queens, New York that was one of the most devastated by Hurricane “Superstorm” Sandy. Though the building itself is secure, and suffered only a few inches of water during the storm itself, it has been without power and running water for almost two weeks. In a twenty-five story housing complex where many of the residents are elderly and disabled and the elevators no longer work, many of the residents have been trapped in their apartments since the storm.

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From the Suppression of Voters to the Suppression of Economic Analysis: Republicans are at War With Democracy in Defense of Oligarchy

James Crotty, Guest Blogger

That the Republican Party undertook a vigorous campaign in the recent election to suppress voting in those states and localities in which it had effective control of government is widely understood. Pictures of long lines at polling places and reports of long hours waiting to vote in neighborhoods largely populated by African American and Hispanic voters provide clear evidence of this. But to be fully effective, the democratic process must not only make it easy to vote, it must also make it easy for voters to be well-informed about the effects of the policy positions taken by contestants for office and by the Parties they represent.

The Republican Party has been waging a war against both foundations of the democratic process. Along with voter suppression, it has been constructing the infrastructure required to support oligarchy – control of the political process by large corporations and wealthy individuals. The movement toward oligarchy is evidenced by the recent Citizen’s United ruling by our ultra-conservative Supreme Court that allows corporations and the rich to spend without limit to influence elections.

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Growth in the South: Resilience, Decoupling, Recoupling

Yilmaz Akyuz

Rapid acceleration of growth in developing countries (DCs) and the widening of their growth gap with advanced economies (AEs) before the outbreak of the global financial crisis were widely interpreted as decoupling of the South from the North.  In the early days of the crisis, there were also widespread expectations that growth in the South would be little affected by the difficulties facing AEs.  In fact, DCs slowed considerably in 2009 as a result of contraction of exports to AEs and financial contagion.  However, they recovered rapidly, with growth rates in 2010-11 matching or exceeding the levels seen before the crisis, while recovery in the US has remained weak and erratic, and Europe has gone into a second dip.  This has again revived the decoupling thesis, notwithstanding the sharp slowdown in many major DCs over the course of the current year.

This change of sentiment about decoupling reflects lack of sound knowledge and understanding of the evolution of growth fundamentals in DCs and their global linkages.  In an earlier IMF Working Paper Kose, Otrok and Prasad (2008) analysed global business cycles and found decoupling between DCs and AEs, but increased coupling within each group.  Wälti (2009) challenged this and argued that assessment of decoupling should not be based on actual growth rates but deviations from trend (or potential output). On that basis there is no decrease in the synchronicity between DCs and AEs.  Rose (2009) came to broadly the same conclusion, while Yeyati (2009) showed that in fact the 2000s witnessed an increase in the correlations of DCs and G7 cycles.

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Putin Expands State's Role In Energy Policy

Michael Klare, Guest Blogger

Ever since he first assumed the presidency in 2000, Vladimir Putin has sought to bring Russian energy production under state control, reversing the effort made by his predecessor, Boris Yeltsin, to transfer state assets into private hands.  Putin made considerable progress in implementing this goal during his first two terms, when the Kremlin employed questionable tax litigation to seize the assets of privately-owned Yukos (then the largest oil company in Russia) and transferred them to state-controlled Rosneft, and has continued with renewed vigor after he regained the presidency in May.  Already, Putin’s quest has been rewarded by Rosneft’s acquisition of BP-TNK, Russia’s third-largest oil firm, bringing more than half of the country’s oil production under state control for the first time since the 1990s.  But while applauded by some in Moscow, this effort has caused increasing concern in Europe, which relies to a considerable degree on Russian oil and gas and so fears the implications of Putin’s growing sway over Russian energy policy.  The Kremlin’s growing control over energy policy also raises questions about the depth of Russia’s commitment, made at the November 2011 G-20 Summit in Cannes, to increase transparency in international energy markets – questions made all the more salient as Russia assumes the G-20 presidency in 2013.

Even before he assumed the presidency, Putin indicated that state control over oil and other natural resources was essential to the restoration of Russia’s status as a great power.  In the years immediately following the disintegration of the Soviet Union, when Russia’s power was at its lowest ebb, Putin – then a functionary in the St. Petersburg municipal government – began arguing against the selloff of state-owned oil and natural gas fields to private firms and wealthy individuals (the so-called oligarchs).  Such sales, he claimed, were depriving Russia of the resources it needed to fuel its comeback as a major world contender; only by renationalizing these assets could Russia acquire the wherewithal to command respect on the international stage.

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Putin Expands State’s Role In Energy Policy

Michael Klare, Guest Blogger

Ever since he first assumed the presidency in 2000, Vladimir Putin has sought to bring Russian energy production under state control, reversing the effort made by his predecessor, Boris Yeltsin, to transfer state assets into private hands.  Putin made considerable progress in implementing this goal during his first two terms, when the Kremlin employed questionable tax litigation to seize the assets of privately-owned Yukos (then the largest oil company in Russia) and transferred them to state-controlled Rosneft, and has continued with renewed vigor after he regained the presidency in May.  Already, Putin’s quest has been rewarded by Rosneft’s acquisition of BP-TNK, Russia’s third-largest oil firm, bringing more than half of the country’s oil production under state control for the first time since the 1990s.  But while applauded by some in Moscow, this effort has caused increasing concern in Europe, which relies to a considerable degree on Russian oil and gas and so fears the implications of Putin’s growing sway over Russian energy policy.  The Kremlin’s growing control over energy policy also raises questions about the depth of Russia’s commitment, made at the November 2011 G-20 Summit in Cannes, to increase transparency in international energy markets – questions made all the more salient as Russia assumes the G-20 presidency in 2013.

Even before he assumed the presidency, Putin indicated that state control over oil and other natural resources was essential to the restoration of Russia’s status as a great power.  In the years immediately following the disintegration of the Soviet Union, when Russia’s power was at its lowest ebb, Putin – then a functionary in the St. Petersburg municipal government – began arguing against the selloff of state-owned oil and natural gas fields to private firms and wealthy individuals (the so-called oligarchs).  Such sales, he claimed, were depriving Russia of the resources it needed to fuel its comeback as a major world contender; only by renationalizing these assets could Russia acquire the wherewithal to command respect on the international stage.

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Hurricane Sandy and the Global Coastal Crisis

Edward Barbier

In the deadly and destructive aftermath of Hurricane Sandy, the Northeastern United States is rethinking its strategy to reduce coastal vulnerability to future storms and natural disasters.  This should become a global discussion, given the recent, large-scale disasters that have occurred worldwide: the December 2004 Indian Ocean Tsunami, the 2005 Hurricanes Katrina and Rita in the US Gulf Coast, the 2011 earthquake, tsunami and Fukushima nuclear disaster in Japan, and of course, last month’s Hurricane Sandy.

When major coastal storms strike, often the first question asked is whether global climate change is increasing the severity and frequency of such storms.  With respect to Hurricane Sandy, that issue was raised just days after the event.

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Derivatives and Inequality in Agriculture

Sasha Breger Bush, Guest Blogger

Over the past several years it has become increasingly clear that derivatives markets and instruments have played a large role in the global food crisis.  Masters and White, Ghosh, Wise and, most recently, a paper co-authored by the World Bank, IMF, UNCTAD, and FAO (among other agencies), have all pointed to the role of speculative commodity index trading in aggravating the food price crisis in 2007-8 – perhaps by as much as 20% – as well as the run-up in global food prices in 2011.

Derivatives markets and instruments are thus implicated as levers of inequality, as food price volatility does not affect all people in the same way. Indeed, in the presence of food price risk, the poor tend to suffer disproportionately.  Food purchases are generally a greater proportion of one’s income the lower that income is, meaning that food price increases have a disproportionately negative effect on low income people and households. Food price shocks often lead poorer individuals and families to coping strategies that ensure adequate food in the short-term but have longer-term costs, such as pulling kids out of school or liquidating hard assets.  Those with higher incomes, more assets or access to credit do not face the same vulnerabilities. This generates inequalities on a global scale, especially as food price volatility becomes a more permanent feature of the global economic landscape.

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From Argentina to Greece: A Global Roller-coaster

Diana Tussie

In October 2012, a Cayman Islands-based fund, NML Capital Limited, controlled by Elliot Management (EM) won a court order in Ghana to seize the Argentine teaching ship Libertad . The fund claimed that Argentina owed it $350 million, and offered to let the ship leave if Argentina’s government put up a $20 million bond to be forfeited. EM´s CEO is Paul Elliot Singer, who specializes in piling up insolvent country debt. Singer is a major donor to the Republican Party.

If the court order goes into effect, Argentina would be prevented from discriminating between restructured bondholders and holdouts, thus potentially preventing the next payment due in December and leading to a technical default. Everyone who had accepted restructuring would be entitled to better terms if the funds’ demands are met. If the EM demands are accepted, the ruling will be a tipping point in the financial order.

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U.S. Export Strategy: The Saudi Arabia of Coal?

Frank Ackerman

The United States has been called “the Saudi Arabia of coal” since the energy crises of the 1970s; politicians of both parties have embraced this metaphor. It’s certainly true that both countries have more fossil fuel reserves than they can use for decades to come, located in their remote, empty regions; we call ours Wyoming.

Fossil fuel exports are also becoming a potential growth sector of the American economy. As in Saudi Arabia, energy export earnings can be used to pay for high-technology imports from more advanced economies. (And the parallels don’t stop there: does energy production somehow go along with politics based on fundamentalist religion, committed to restricting the lives of women? Let’s leave that for another day; today’s topic is economics.)

Coal use in the United States – almost exclusively for electricity production – is declining, thanks to competition from natural gas and wind power, along with stricter environmental regulation. This might seem like good news for the environment, but to the coal industry, it’s a looming disaster that can only be prevented by increased exports. Five new coal export terminals have been proposed in Oregon and Washington, leading to intense battles over the local and global impacts of increased coal shipments.

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