RIP, Paul Adolph Volcker

Paul Adolph Volcker is dead at the age of 92. (Most accounts of the man suppress the middle name, though it was often pointed out with bitter glee by builders and others who were undone by his high interest rate policies in the early 1980s.) As I wrote in LBO when he left office in 1987, if capitalism gave out a Hero of Accumulation award, he would have been first on the honors list. Let’s recall what he did, because all the worshipful obits will almost certainly sanitize the history. Volcker was… Read More

About that stock panic

Stock markets have stabilized, at least for now, after a few days of what the press likes to call “turmoil.” What does it all mean? There’s no doubt that stocks have been due for a comeuppance for some time: they’re very expensive. Since stocks represent claims on corporate profits, present and future, the conventional way to value them is by measuring their price against those underlying profits (or “earnings” in Wall Street lingo, since to the owning class, profits from capital are just like wages for labor: as they like to say,… Read More

Bosses getting raises, working stiffs not

Stock markets have been swooning, in no small part because last Friday’s U.S. employment report showed that average hourly earnings (AHE)—the average wage, excluding benefits, received by private sector workers—rose smartly in January. This prompted fears that inflationary pressures are mounting, wages will eat into profits, and the Federal Reserve might raise interest rates more aggressively than had been thought as recently as last Thursday. Or, as the New York Times put it in a headline, with its patented mix of dullness and alarm: What these scaremongers aren’t telling you is that it’s only bosses… Read More

Fresh audio product

I’ve been very delinquent at updating my radio archive. It’s now all up to date. Freshly added: June 11, 2015 Adolph Reed on the state of the left • Sungur Savran, editor of Red Med, on the Turkish election and challenges to the AKP’s rule June 4, 2015 Lee Drutman, author of The Business of America Is Lobbying, on the growth and power of lobbying in DC • Josh Bivens on the Fed’s vast asset-purchasing program  May 28, 2015 Katha Pollitt, author of Pro, on the importance of legal abortion that’s actually available • Raquel Varela about the dimensions of Portugal’s economic crisis [back after fundraising… Read More

Credit union switch fizzles

Last fall, there was a lot of buzz about moving money out of banks and into credit unions. Grand claims were made about results. I had my doubts—politically (see here) and financially (see here). One can disagree with me on the politics, but it turns out that not much money was moved. The Federal Reserve is out with its flow of funds accounts for the fourth quarter. These are a detailed accounting of assets, liabilities, and money flows throughout the U.S. financial system. And before anyone says that the Fed is lying to defend its… Read More

The Fed and the class struggle

Mike Konczal assembles some striking quotes from Federal Reserve transcripts showing how obsessed the monetary overlords are with keeping wages down. I won’t recycle any of the quotes—check out his post for the full flavor. Reading these, Mike wonders what the contribution of the Fed has been to wage stagnation over the last few decades. My sense is, not much since Volcker left in 1987. There’s no doubt that the Volcker crackdown of 1979–82, with a second-wave attack in 1984–85, did cause a major shift in the relative power of capital and labor. What… Read More

Fed sees a gloomier future

The Federal Reserve is just out with its latest economic projections. Since the last edition in June, they’ve turned gloomier for the short, medium, and long term. They see growth as slower, and unemployment as higher, for 2011, 2012, 2013, and for the “longer run” than they did just three months ago. For this year, they’re looking for GDP growth to average 1.6–1.7%, compared with a projection of 2.7–2.9% in June. They see unemployment as staying in its current 9.0–9.1% range, instead of falling into the high 8s. For next year, they… Read More

On the Fed (from my book Wall Street

This is the section on the Federal Reserve from my book Wall Street: How It Works and for Whom (Verso, 1997). The complete text can be downloaded here. It’s a little out of date—the Fed is more open now than it was 15 years ago, at least superficially—but it’s still fundamentally right. Two quick updates: 1) The Fed now releases summaries of its policy decisions right after the FOMC meeting. They’re somewhat sanitized, but still informative. 2) The annual profit it turns over to the Treasury has more recently been around $25 billion. Last… Read More

On OWS and the Fed

[I haven’t been posting my radio commentaries here in a while. Here’s some of October 8’s.] Rethinking OWS Turning to larger issues, not only does Occupy Wall Street continue, it’s grown in numbers and prominence—several major unions marched in solidarity earlier this week in Lower Manhattan—and it’s spreading around the country. It’s focusing attention on issues of inequality and exploitation in a way we haven’t seen in ages. And Democratic politicians are looking pressured to say sympathetic things—though I suspect they’re just looking to take advantage of the thing for their own… Read More

Bernanke the steamroller

Comment on today’s Federal Reserve policy decision today, which among other things, included the extremely unusual statement that they’re likely to leave interest rates close to 0 through mid-2013, from Ricardo Perli of ISI, a very mainstream Wall Street research operation: For the first time in a long time, there were three dissents – Fisher (Dallas), Kocherlakota (Minneapolis), and Plosser (Philadelphia).  Up to now, FOMC chairmen strived to avoid more than two dissents.  The fact that this long-standing practice was disregarded means that Bernanke is becoming more determined to push through what in… Read More

New radio product

Freshly posted to my radio archives: April 23, 2011 James Galbraithon deficit hysteria • Matt Taibbi, author of this article (and this one too), on where all that Fed bailout money went, and how no one went to jail for the financial meltdown

Radio commentary, November 13, 2010

Pacifica • deficit commission • QE2 • education “reform” Before that, and before some comments on the news, a few words on the Pacifica situation. I did this show on WBAI in New York for 15 years. I was given the show by our late program director, Samori Marksman, who was a very intelligent and charismatic man with contacts all over the world. After his early death at the age of 52 in 1999—a death I’m certain was hastened by the pressures of Pacifica infighting—he was succeeded by an endless procession of… Read More

Radio commentary, December 17, 2009

Happy Beethoven’s baptism day. Fed begins to withdraw some indulgence On Wednesday, the Federal Reserve held one of its regular policy-setting meetings, which happen every six weeks or so, and decided to do nothing, for now. That is, it left the interest rate under its direct control, the so-called federal funds rate, the interest rate that bank charge each other for overnight loans, unchanged at 0. Ok, it’s averaged 0.12% for the last few weeks, which is pretty close to 0. It also said in the statement accompanying the decision that it… Read More

Radio commentary, August 15, 2009

On Wednesday, the Federal Reserve completed its regular policy-setting meeting, an event that happens every six weeks or so. The communiqué they issued after this one contained few surprises. They see the economy as leveling out, and the financial markets in an improving trend, but prosperity as anything but around the corner. More precisely, they expect economic activity “to remain weak for a time,” and anticipate that they will continue to engineer a regime of “exceptionally low,” in their phrase, interest rates. They see the risks of inflation as very low too—unlike a… Read More

Radio commentary, December 20, 2008

Fed cuts to 0%, tries kitchen sink. The Obama stimulus plan.