Executives of Sears stand to gain up to $1 million in bonuses, should Sears be liquidated, and $500,000 if it’s restructured. Meanwhile, ordinary workers at Sears are being laid off without severance payments. NEP’s Bill Black appears on the Real News Network and talks about how US bankruptcy law is rigged to favor executives. You can view with transcript here.
It’s telling that in the media coverage about the damage inflicted by Hurricane Michael, there are a lot of stories about how the citizens of Mexico Beach would like to rebuild their town, but no stories at all about how they might be enabled to do that. Only the opposite: why it’s going to be virtually impossible for Mexico Beach to ever be Mexico Beach again. Why is that?
One reason: These were modest structures in a modest town, paid for with modest, working-class incomes. They cannot be rebuilt as modest structures. If they are to be rebuilt at all, they will have to be elevated, heavier, stronger, laterally-braced and deeply rooted. Replacement costs will likely be on the order of $2 for every $1 of value they might have been insured for. That’s an expenditure few of the Mexico Beach citizenry can afford.
The contest for Amazon’s HQ2 prompted hundreds of cities to put in tax break and subsidy bids. NEP’s Bill Black appears on the Real News Network and says these deals never pay off for the communities involved. You can view with a transcript here.
Invited Presentation by L. Randall Wray at the UBS European Conference, London, Tuesday 13 November 2018
Q: These questions about deficits are usually cast as problems to be solved. You come from a different way of framing the issue, often referred to as MMT, which—at the risk of oversimplifying—says that we worry far too much about debt issuance. Can you help us understand where fears may be misplaced?
Wray: First let me say that I think the twin deficits argument is based on flawed logic.
It runs something like this: the government decides to spend too much, causing a budget deficit that competes with private borrowers, driving interest rates up. That appreciates the currency and causes a trade deficit.
In recent essays I’ve made reference to a new framing of what is actually happening when the U.S. treasury issues a bond. It seems to me, this new framing goes to the heart of MMT and might well hold the key to a practical implementation of MMT principles in real world applications. The framing is this:
A U.S. treasury bond is a certificate of issuance of future dollars.
I will expand on this in a moment, but first it is important to say what this framing says a treasury bond is NOT: