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On Wednesday, the government's partial ban on so-called naked short-selling took effect, as part of Berlin's effort to protect its biggest financial institutions and the euro currency from investors who have been betting against them.

A network of national funds should be introduced so the cost of bank failures are not met by the taxpayer, the EU internal market commissioner has said.

Not long ago I was sitting at home writing something for publication - I won't say what, except that it was a passage about a certain politician on the Hill. Out of habit I launched into a description that was full of nasty and personal language, and I was about to press on to the next part of the piece when suddenly I hit a mental speed bump. A voice in my head whispered - this really happened - "If you write that shit and Bernie Sanders sees it, he's going to be disappointed in you." So I went back and removed the gratuitous body blows from the article.

Right now, according to a number of studies, we are losing about $100 billion every year because corporate America and the very wealthy are stashing their money in tax havens like the Cayman Islands and Bermuda. We should be aware that in 2009, ExxonMobil made $19 billion in profits and not only did the company not pay anything in taxes, it got a $106 million refund from the IRS. We should also be aware that since 1997, we have almost tripled funding for the military. So if we are serious about reducing the deficit, those are things we need to look at-not at Social Security, not programs everyday Americans need.

America is not broke. Contrary to what those in power would like you to believe so that you'll give up your pension, cut your wages, and settle for the life your great-grandparents had, America is not broke. Not by a long shot. The country is awash in wealth and cash. It's just that it's not in your hands. It has been transferred, in the greatest heist in history, from the workers and consumers to the banks and the portfolios of the uber-rich. Today just 400 Americans have more wealth than half of all Americans combined. Let me say that again. 400 obscenely rich people, most of whom benefited in some way from the multi-trillion dollar taxpayer "bailout" of 2008, now have more loot, stock and property than the assets of 155 million Americans combined. If you can't bring yourself to call that a financial coup d'état, then you are simply not being honest about what you know in your heart to be true.

The Big Money economy is booming. According to a new Commerce Department report, third-quarter profits of American businesses rose at an annual record-breaking $1.659 trillion - besting even the boom year of 2006 (in nominal dollars). Profits have soared for seven consecutive quarters now, matching or beating their fastest pace in history. Executive pay is linked to profits, so top pay is soaring as well. Higher profits are also translating into the nice gains in the stock market, which is a boon to everyone with lots of financial assets. And Wall Street is back. Bonuses on the Street are expected to rise about 5 percent this year, according to a survey by compensation consultants Johnson Associates Inc. But nothing is trickling down to the Average Worker economy. Job growth is still anemic. At October's rate of only 50,000 new private-sector jobs, unemployment won't get down to pre-recession levels for twenty years. And almost half of October's new jobs were in temporary help.

http://www.mint.com | It's official, trillion is the new billion. No longer is government spending talked about in terms of a mere ten digits. With the recent flurry of government spending, we are going to need another three zeros to make sense of it all. One trillion dollars is a number that few people can comprehend, let alone your standard nine digit calculator. So what does one trillion dollars look like?

All across the United States, large and small cities are closing public libraries or curtailing their hours of operations. Detroit, I read a few days ago, may close all of its branches and Denver half of its own: decisions that will undoubtedly put hundreds of its employees out of work. When you count the families all over this country who don't have computers or can't afford Internet connections and rely on the ones in libraries to look for jobs, the consequences will be even more dire. People everywhere are unhappy about these closings, and so are mayors making the hard decisions. But with roads and streets left in disrepair, teachers, policemen and firemen being laid off, and politicians in both parties pledging never to raise taxes, no matter what happens to our quality of life, the outlook is bleak. "The greatest nation on earth," as we still call ourselves, no longer has the political will to arrest its visible and precipitous decline and save the institutions on which the workings of our democracy depend.

This is a new blog.

Earlier this week, the Federal Reserve Bank of New York published a blog post about the "mistake of 1937," the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post's author (with whom I have done research) points out, economic conditions today - with output growing, some prices rising, but unemployment still very high - bear a strong resemblance to those in 1936-37. So are modern policy makers going to make the same mistake?

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe's single currency is coming apart at the seams. How did it all go so wrong?

Mathew Yglesias: CBPP Analysis of John Boehner's Plan: The Center on Budget and Policy Priorities concludes that if enacted, John Boehner's debt ceiling plan "could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history." That sounds to me like something that would create strong incentives to not be poor and, indeed, to fully incentive richness. Consequently, we'll have massive economic growth. Right? Think of all the old people who will be willing to do odd jobs, whatever, in order to pay for health care. No more free-riding from grandma and grandpa to slow the economy down. The CBPP adds: This may sound hyperbolic, but it is not. The mathematics are inexorable. ... In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations. As for the way the debt ceiling talks are going, what a disaster.

The fundamental problem that much of the world faces today is that investors are overreacting to debt-to-GDP ratios, fearful of some magic threshold, and demanding fiscal-austerity programs too soon. They are asking governments to cut expenditure while their economies are still vulnerable. Households are running scared, so they cut expenditures as well, and businesses are being dissuaded from borrowing to finance capital expenditures. The lesson is simple: We should worry less about debt ratios and thresholds, and more about our inability to see these indicators for the artificial - and often irrelevant - constructs that they are.

Karl Marx was right, it seems, in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. So what can be done to prevent that outcome?

When Perry accuses Ben Bernanke of treachery and treason, his violent rhetoric ("we would treat him pretty ugly down in Texas") is scary in itself. But we shouldn't let that obscure Perry's substantive message - that neither Bernanke nor the Fed really deserve to exist, to control the US money supply, and to work towards a dual mandate of price stability and full employment. For the first time in living memory, someone with a non-negligible chance of winning the US presidency is arguing not over who should head the Fed, but whether the Fed should even exist in the first place. Looked at against this backdrop, the recent volatility in the stock market, not to mention the downgrade of the US from triple-A status, makes perfect sense. Global corporations are actually weirdly absent from the list of institutions in which the public has lost its trust, but the way in which they've quietly grown their earnings back above pre-crisis levels has definitely not been ratified by broad-based economic recovery, and therefore feels rather unsustainable. Meanwhile, the USA itself has undoubtedly been weakened by a shrinking tax base, a soaring national debt, a stretched military, and a legislature which has consistently demonstrated an inability to tackle the great tasks asked of it. It looks increasingly as though we're entering Phase 2 of the global crisis, with 2008-9 merely acting as the appetizer. In Phase 1, national and super-national treasuries and central banks managed to come to the rescue and stave off catastrophe. But in doing so, they weakened themselves to the point at which they're unable to rise to the occasion this time round. Our hearts want government to come through and save the economy. But our heads know that it's not going to happen. And that failure, in turn, is only going to further weaken institutional legitimacy across the US and the world. It's a vicious cycle, and I can't see how we're going to break out of it.

The Dow Jones average suffered its latest calamitous decline on Thursday, plunging 419 points and erasing much of the progress that had been made after the last series of wild swings two weeks ago. There were many factors at work in Thursday's carnage, which came after markets in Asia and Europe experienced similar turmoil, but the overriding one seems to be this: Just about everyone now believes the U.S. economy is getting worse -- and no one thinks our leaders in Washington are about to do anything meaningful about it. So we thought it might be a good time to take a step back and consider the fundamental absurdity of the paralysis in Washington, where spending cuts and deficit reduction -- and not job creation -- have come to define and dominate the discussion. And who better to illustrate this than ... Robert Reich, playing the roles of both Professor Donald Right and Dr. Hugo Wrong in a one-man show that everyone on Capitol Hill really ought to check out:

Businesses have had at least 25 to 30 years near complete certainty -- certainty that they will pay lower and lower taxes, that they' will face less and less regulation, that they can outsource to their hearts' content (which when it does produce savings, comes at a loss of control, increased business system rigidity, and loss of critical know how). They have also been certain that unions will be weak to powerless, that states and municipalities will give them huge subsidies to relocate, that boards of directors will put top executives on the up escalator for more and more compensation because director pay benefits from this cozy collusion, that the financial markets will always look to short term earnings no matter how dodgy the accounting, that the accounting firms will provide plenty of cover, that the SEC will never investigate anything more serious than insider trading (Enron being the exception that proved the rule). So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their 'certainty' amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.

Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What's under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area's G.D.P., so the common European currency itself is under existential threat.

When we study Marx in my graduate social theory course, it never fails that at least one student will say (approximately), "Class struggle didn't escalate in the way Marx expected. In modern capitalist societies class struggle has disappeared. So isn't it clear that Marx was wrong and his ideas are of little value today?" I respond by challenging the premise that class struggle has disappeared. On the contrary, I say that class struggle is going on all the time in every major institution of society. One just has to learn how to recognize it. One needn't embrace the labor theory of value to understand that employers try to increase profits by keeping wages down and getting as much work as possible out of their employees. As the saying goes, every successful capitalist knows what a Marxist knows; they just apply the knowledge differently. Workers' desire for better pay and benefits, safe working conditions, and control over their own time puts them at odds with employers. Class struggle in this sense hasn't gone away. In fact, it's inherent in the relationship between capitalist employer and employee. What varies is how aggressively and overtly each side fights for its interests.

The euro is becoming an ever greater threat to Europe's common future. The currency union chains together economies that are simply incompatible. Politicians approve one bailout package after the other and, in doing so, have set down a dangerous path that could burden Europeans for generations to come and set the EU back by decades.

Now Minnesota joins the list of states being gutted by the Republican Party. The government in the state famous for being nice has shut down, because Democratic Governor Mark Dayton wanted to impose a higher income tax on Minnesotans earning $1 million or more a year-a whopping 7,700 people in a state of 5.3 million. There are additional matters-a GOP insistence on a 15 percent reduction in state workers over the next four years, for example. And so the evidence mounts: In Saint Paul and Columbus and Tallahassee and Madison, as in Washington D.C., we are watching something that is no longer a political party in the normal sense, but a group of cynical highwaymen perpetuating a national crisis and then exploiting that very crisis to try to destroy the public sphere.