David Stockman Interview: The Global Economy Has Entered The Crack-Up Phase | David Stockman’s Contra Corner

Transcript of David Stockman’s Interview By Chris Martenson at Peak Prosperity

Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson. It’s a central banker world and that world is increasingly volatile, deformed, and full of risks. Today, we’re speaking with a guest I am especially keen to interview, Mr. David Stockman, economic policymaker, politician, and financier. Mr. Stockman represented Southern Michigan in the US House of Representatives from 1976 to 1981 and later served as the Director of the Office of Management and Budget in the Reagan administration and was the youngest cabinet member of the twentieth century.

Since then, he has held executive positions in many of the most influential banking, buy-out, and private equity firms including the Blackstone Group and Salomon Brothers. He is author of The Great Deformation: The Corruption of Capitalism in America, which is a blunt and sometimes delightfully and deservedly scathing examination of the various fiscal and policy blunders that have degraded our current and future hopes for prosperity. Be sure to have your blood pressure medication handy as you read it because not only does it detail a litany of regulatory and policy blunders of the recent past, it reads like it was lifted from today’s headlines.

He also runs the popular and excellent website, David Stockman’s Contra Corner, where he both blogs and assembles other excellent economic content for you to read, so be sure to visit it regularly.

Welcome, David. It’s an honor to have you as our guest.

David Stockman: Very happy to be with you again, Chris.

via David Stockman Interview: The Global Economy Has Entered The Crack-Up Phase | David Stockman's Contra Corner.

Robert Reich: The Wealthy Have Pulled America Back to the 19th Century | Alternet

My recent column about the growth of on-demand jobs like Uber making life less predictable and secure for workers unleashed a small barrage of criticism from some who contend that workers get what they’re worth in the market.

A Forbes Magazine contributor, for example, writes that jobs exist only  “when both employer and employee are happy with the deal being made.” So if the new jobs are low-paying and irregular, too bad.

via Robert Reich: The Wealthy Have Pulled America Back to the 19th Century | Alternet.

Global Debt Has Risen by $57 Trillion Since the Financial Crisis, Which Is Scary – NYTimes.com

Here are two things we know about how debt affects the economy.

First, in the abstract it doesn’t matter. For every debtor there is a creditor, and in theory an economy should be able to hum along just fine whether a country’s citizens have a great deal of debt or none. A company’s ability to produce things depends on the workers and machines it employs, not the composition of its balance sheet, and the same can be said of nations.

Second, in practice this is completely wrong, and debt plays an outsize role in creating boom-bust cycles across the world and through history. High debt increases the amplitude of economic swings. To think of it in terms of the corporate metaphor, high reliance on borrowed money may not affect a company’s level of output in theory, but makes it a great deal more vulnerable to bankruptcy.

via Global Debt Has Risen by $57 Trillion Since the Financial Crisis, Which Is Scary – NYTimes.com.

Wall Street Pays Bankers to Work in Government And Wants It Secret | The New Republic

Citigroup is one of three Wall Street banks attempting to keep hidden their practice of paying executives multimillion-dollar awards for entering government service. In letters delivered to the Securities and Exchange Commission (SEC) over the last month, Citi, Goldman Sachs and Morgan Stanley seek exemption from a shareholder proposal, filed by the AFL-CIO labor coalition, which would force them to identify all executives eligible for these financial rewards, and the specific dollar amounts at stake. Critics argue these “golden parachutes” ensure more financial insiders in policy positions and favorable treatment toward Wall Street.

“As shareholders of these banks, we want to know how much money we have promised to give away to senior executives if they take government jobs,” said AFL-CIO President Richard Trumka in a statement. “It’s a simple question, but the banks don’t want to answer it. What are they trying to hide?”

The handouts recently received attention when Antonio Weiss, the former investment banker at Lazard now serving as counselor to Treasury Secretary Jack Lew, acknowledged in financial disclosures that he would be paid $21 million in unvested income and deferred compensation upon exiting the company for a job in government. Weiss withdrew from consideration to become the undersecretary for domestic finance under pressure from financial reformers, but the counselor position—which does not require congressional confirmation—probably still entitles him to the $21 million. The terms of the award are part of a Lazard employee agreement that nobody has seen.

via Wall Street Pays Bankers to Work in Government And Wants It Secret | The New Republic.

The Super-Rich Can’t Hide From the Rest of Us | Michael Winship

My friend Craig Zobel just premiered his new movie at the Sundance Film Festival. Z for Zachariah is based on a young adult novel from the ’70s about a post-apocalyptic world and a woman who lives on a farm in a remote valley. A geographic anomaly, the valley has been isolated and protected from the nuclear radiation that devastated the rest of humanity. But then a man arrives and, a while later, another. You’ll have to see it.

Craig’s movie is the latest in a long line of such stories about faraway, idyllic places trying to fend off human wrongdoing — from Aristophanes’ Cloud Cuckoo Land and the pre-serpent-and-apple Garden of Eden to the Shangri-La of James Hilton’s novel, Lost Horizon. In the classic, 1937 movie version, Shangri-La’s High Lama says to the hero, a British diplomat, “Look at the world today. Is there anything more pitiful? What madness there is! What blindness! What unintelligent leadership! A scurrying mass of bewildered humanity, crashing headlong against each other, propelled by an orgy of greed and brutality.” Sounds like a typical night at Fox News.

Z for Zachariah was filmed on New Zealand’s South Island, about as close to a distant Paradise on Earth as I’ve ever been. Which apparently is part of the reason why, according to former hedge fund director Robert Johnson, “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.”

And not just a getaway for a couple of weeks of vacation fun. No, the British newspaper The Guardian reports, “With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences.”

via The Super-Rich Can't Hide From the Rest of Us | Michael Winship.

Americans are enslaved by the most dependent of us all: the wealthy

Americans are used to being told how to think and what to think. Freedom of choice is cherished yet never really demanded. Americans have allowed the real dependent class—the wealthy—a license to enslave.

Those opposed to a true egalitarian society where government, “we the people,” play a prominent role in deciding what is best for us all claim that government should not pick winners and losers. They claim the free market is the best arbiter of the most efficient distribution of capital.

What does that even mean? Potholes, medical needs, alimentary needs, shelter needs, and clothing needs exist, irrespective of economic system. If these needs cannot be satisfied within the confines of the economic system, it means the economic system is flawed.

via Americans are enslaved by the most dependent of us all: the wealthy.

Global democracy at risk, warns watchdog | World news | The Guardian

Global democracy is at greater risk than at any time in the past 25 years, according to a landmark report by the independent watchdog Freedom House.

In the annual report, Discarding Democracy: Return to the Iron Fist, the Washington-based group said 61 countries were going backwards as far as democracy was concerned, compared with only 33 moving forwards. Moreover, some of the transgressors, including Russia, Egypt, Thailand, Nigeria and Turkey, are global or regional powers setting a bad example to others, it said.

Its findings come despite the fact that 2014 was a record year for democracy, with more people casting votes in national ballots than ever before. But holding elections does not always translate into healthy democracy. As the authoritarian Hungarian leader, Viktor Orban, put it: “A democracy does not necessarily have to be liberal.”

via Global democracy at risk, warns watchdog | World news | The Guardian.