Sunday, January 22, 2017

Sunday Afternoon Links

This and that for your Sunday reading.

- Bessma Momani writes that Donald Trump's plan to leave the U.S. at the mercy of unregulated financial markets figures to cause another crisis comparable to - or worse than - that of 2008:
Nearly 10 years ago, the U.S. financial industry was exposed as a glorified Ponzi scheme that bundled toxic assets and failing mortgages into seemingly respectable pension plans and investment schemes that were sold across the world. The Obama administration spent its first term, with global support of the G20 and other countries focused on tighter international standards, to introduce regulations that the financial industry bitterly fought but lost. These regulations, loosely known as the Dodd-Frank act in the U.S. Congress, are about to be dismantled, bit by bit.
But it can get worse. In an era of what economists call secular stagnation, where we have a global savings glut, fewer global investment opportunities and low interest rates, global money is also pouring into the United States on expectations of a surge in infrastructure spending, a clampdown on offshore corporate tax havens and the lowering of Dodd-Frank financial regulations.

This is coinciding with global money leaving many emerging market economies that look geopolitically unsettled, such as Turkey, and those rattled by Mr. Trump himself, such as Mexico. With a euro zone that looks shaky in a post-Brexit era and experiencing a rise of nationalists competing in a slew of upcoming elections, ironically, the U.S. still manages to look like the safest investment for the capital industry. Meanwhile Chinese plutocrats are charging Communist Party members with corruption as President Xi Jinping conveniently also consolidates his hunger for centralized power, causing another slow exodus of Chinese wealth.

Here we have the perfect storm brewing of hot money going into the United States in search of higher interest rates and the likely dismantling of financial regulations meant to place a check on speculative bankers and investors. The end result might just be that we return to the same conditions of the mid-2000s, the eve of the international financial crisis. The sky is not yet falling, but the cracks are getting wider and wider and we ought to start listening to Chicken Little on the global economy.
- Meanwhile, Mike Palecek reminds us how Canadians could enjoy both improved accessibility and lower costs in banking services with a postal bank - so long as the possibility isn't squelched to preserve profits for private banksters.

- Dani Rodrik examines the sometimes-conflicting pressures in trying to reduce inequality at the level of both countries and individuals within them. And the Sunday Times reports on one practice sure to exacerbate both, as Italy is planning to require immigrants to perform unpaid labour in order to seek asylum.

- Finally, Sean McElwee examines why on abortion (and other issues) widely-shared progressive positions are losing out in the U.S. due to the lack of stronger connections between partisan politics and popular movements.

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