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Policy news & blueprints for the transition to a new Sustainable and Social Economy
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Only a broad-based financial transaction tax will be effective

"Financial regulation must serve the overall economy and society. Yet, despite the financial crisis, Europe still prioritises financial sector special interests. The game plays out as follows: governments announce a regulation such as a financial transaction tax. Financial sector representatives complain, often spreading misleading messages. The proposed tax then easily becomes ineffective. Whilst governments claim to act on behalf of society they are in fact kowtowing to financial sector special interests. This is the opposite of good governance. It is regulatory capture."

Willy De Backer's insight:

Very good article in Open Democracy about the financial transaction (or 'Tobin') tax and financial reform.

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Financial regulation – biased against clean energy and green infrastructure?

Financial regulation – biased against clean energy and green infrastructure? | The Great Transition | Scoop.it

"Regulation of banks, insurance companies and pension funds – even the ownership structures available for different types of assets and the way that public finances are accounted for – can conspire against sustainable investment in three distinct ways."

Willy De Backer's insight:

Interesting report from Bloomberg's New Energy Finance

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Why peak oil threatens the International Monetary System

"The current incarnation of the International Monetary System, in which the USA enjoys the exorbitant privilege of borrowing practically for free, and is therefore able to pursue reckless fiscal policy with immunity from the adverse consequences that non-reserve currency issuing nations would experience by doing so, cannot continue indefinitely."

Willy De Backer's insight:

Must-read article on the impacts of peak oil on the global financial system.

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Finance failure and the weakness in the system: the inside view

Finance failure and the weakness in the system: the inside view | The Great Transition | Scoop.it
Changing any supply chain takes a lot of leadership effort – so why aren't the leading financial bodies stepping up, asks Raj Thamotheram...
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Obama 2.0: Presidential Declaration of Independence from Wall Street

Obama 2.0: Presidential Declaration of Independence from Wall Street | The Great Transition | Scoop.it
What might a truly new economic vision for America look like? This is my answer framed as the presidential address we must prepare the way for a future president to deliver.

 

Re-elected President Obama would do well to read this insightful piece written by David Korten in 2011.

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Michael Hudson's new must-read book: The Bubble and Beyond

Michael Hudson's new must-read book: The Bubble and Beyond | The Great Transition | Scoop.it

"The finance, insurance and real estate (FIRE) sector has emerged to create “balance sheet wealth” not by new tangible investment and employment, but financially in the form of debt leveraging and rent-extraction. This rentier overhead is overpowering the economy’s ability to produce a large enough surplus to carry its debts. As in a radioactive decay process, we are passing through a short-lived and unstable phase of “casino capitalism,” which now threatens to settle into leaden austerity and debt deflation."

 

The new book by economist Michael Hudson should be mandatory reading for anyone seriously dealing with the global and European crisis.

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Trade Off: Financial system supply-chain cross contagion – a study in global systemic collapse

Trade Off: Financial system supply-chain cross contagion – a study in global systemic collapse | The Great Transition | Scoop.it

"This new study explores the implications of a major financial crisis for the supply-chains that feed us, keep production running and maintain our critical infrastructure. I use a scenario involving the collapse of the Eurozone to show that increasing socio-economic complexity could rapidly spread irretrievable supply-chain failure across the world."

 

Excellent new report from Irish think tank Feasta on the interconnectness between global energy insecurity, economic supply chains and the financial system. Worth reading full report.

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Europe proposes banking union to ease debt crisis

As Europe's debt crisis intensifies, top officials say the continent urgently needs a central authority with the financial muscle to fix its broken banks.

 

The flight forward for EU leaders: a "banking union". Finally full recognition that THIS European "Union" has always been a Europe for capital, never for labour and citizens. As long as things went well, we got the crumbs from the tables of the rich, now they send us back to the poor houses and debtors' prisons.

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Can disruptive policy create a sustainable finance system?

Can disruptive policy create a sustainable finance system? | The Great Transition | Scoop.it

"The ideas for creating a new and sustainable finance system are out there. If this thinking doesn't get greater exposure to policy makers and the media, the world of finance will remain a barrier to social and environmental progress."

 

Good analysis by Chris Hewett on the Open Democracy site.

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Is Greece the Lehman of 2012?

Is Greece the Lehman of 2012? | The Great Transition | Scoop.it
The jury is still out on whether Greece will leave the euro and what that would mean. But even if it's not 2008 again, investors may be underestimating the potential pain ahead.

 

Will "Grexit" be "the second coming of 2008"?

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How Wall Street Killed Financial Reform

How Wall Street Killed Financial Reform | The Great Transition | Scoop.it
It's bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it - with a big assist from Congress and the White House.

 

Brilliant article in Rolling Stone on the financial terrorism of Big Business. Compared to these fundamentalists, Bin Laden was peanuts.

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A Blueprint for "INCRA" - An International Non-Profit Credit Rating Agency

"In light of the intense criticism leveled against credit rating agencies for their perceived failure to analyze adequately sovereign creditworthiness, the Bertelsmann Foundation has developed a blueprint for an international non-profit credit rating agency (INCRA), whose rating criteria are designed to increase credibility and international acceptance."

 

Great initiative by the Bertelsman Foundation to create an alternative to the casino-capitalist rating agencies and integrate sustainability criteria into  sovereign risk assessments.

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Wall Street elites are no longer accountable

Wall Street elites are no longer accountable | The Great Transition | Scoop.it
The idea that forging signatures, that notarizing very important legal documents really improperly in thousands of cases -- maybe millions -- the idea that that is somehow is going to be allowed to go on with just sort of a penalty of some kind or a fine and not prosecuted in the criminal courts, I think it is amazing. It is really counter to what we have all been led to believe was the course of action in such a case.

 

Great podcast with Pulitzer prize winner Gretchen Morgenson on how the financial elites keep wrecking the economy without any punishment.

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European Union's Banking Union Can Work

European Union's Banking Union Can Work | The Great Transition | Scoop.it
It won't be easy, but the half-baked idea of a banking union can be turned into something useful if the European Central Bank follows certain steps.
Willy De Backer's insight:

Question is not if it would work. Question is if Europe's citizens really need it. Why not a citizens' union or a social union? Banking union shows where EU elites have their priorities

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The power to 'create money out of thin air'

The power to 'create money out of thin air' | The Great Transition | Scoop.it

"If we can move on from Adam Smith’s 300 year-old flawed analytical system to a proper understanding of the powers and public goods we have, due to ignorance, outsourced to the private banking sector – then perhaps as both economists and citizens we might finally be able to understand the creation of money – by both central and private banks - ‘out of thin air’. Only with this understanding will it be possible to devise policies, regulation and strategies to tackle and once again subordinate global finance to the interests of society and the ecosystem."

Willy De Backer's insight:

Brilliant but sometimes a bit technical review by Ann Pettifor of the role of money and credit in the current economic crisis. Must-read article for anyone interested in how to tame the financial sector.

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State Capture and the Democratic Movement

State Capture and the Democratic Movement | The Great Transition | Scoop.it

"What is urgently needed are initiatives to expose the capture of states by the financial sector, but also—much more difficult—analysis of how societies in crisis allow stereotypes of the ‘other’ to be popularised, opening the way to violence and ultimately, war."

Willy De Backer's insight:

Excellent article on how the capture of the state by the financial elites is leading to nationalist-populist policies to undermine the social welfare state and organised labour.

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It’s the interest, stupid! Why bankers rule the world

It’s the interest, stupid! Why bankers rule the world | The Great Transition | Scoop.it
In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest.

 

The case for a public banking systems which re-invest its profits in prosperity instead of high bonuses.

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Difficult Labour: the birth of the financial transaction tax

"Video "Difficult Labour" for the financial transaction tax of Oxfam Germany with Heike Makatsch, Mark Waschke, Stephan Grossman & Rike Eckermann."

 

Brilliant and funny video on the Tobin Tax

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MIT Economist: Big Banks Have 'Hijacked' The Political Process

MIT Economist: Big Banks Have 'Hijacked' The Political Process | The Great Transition | Scoop.it
A prominent economist says big banks have "hijacked" the political process and now have "a leading driver's seat" in determining financial regulation.

 

Daron Acemoglu (author of "Why nations fail") explains in this short article in the Huffington Post how the financial elites have eroded democracy.

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Realizing Private Capital’s Public Benefits

Realizing Private Capital’s Public Benefits | The Great Transition | Scoop.it

"Financial-market reform has fallen far short of securing the sector’s resilience, let alone driving investment in the technology, energy systems, infrastructure, and business models needed to develop a sustainable world economy."

 

Good article in Project Syndicate by sustainability expert Simon Zadek on the need to tackle the financial sector.

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Time is ripe for a global commitment on mandatory reporting at Rio+20

Time is ripe for a global commitment on mandatory reporting at Rio+20 | The Great Transition | Scoop.it
Voluntary initiatives are not enough: a global agreement on reporting is needed to make ambitions on sustainability a reality...

 

I have started to become quite sceptical on this issue. As long as the power of the financial sector over government is not broken, even better and mandatory sustainability reporting alone will not help.

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Credit is What Credit Does: Finance and Economic Growth Uncoupled

Credit is What Credit Does: Finance and Economic Growth Uncoupled | The Great Transition | Scoop.it

“Most of our credit system does not support economic growth in the sense of supporting transactions in goods and services,” he explains. “Most of our finance system, most bank loans, support increased asset prices, which have a number of detrimental effects on the economy.”

 

"The threat to growth today is not a shrinking of the financial sector, but it enormous size.”

 

Must-read article on the web site of the Institute for New Economic Thinking.

 

 

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UN experts call for global financial tax to offset costs of economic crisis

UN experts call for global financial tax to offset costs of economic crisis | The Great Transition | Scoop.it
A group of United Nations independent experts today called on the European Union (EU) to take the lead in promoting the adoption of a global financial transaction tax that would offset the costs of the current economic crisis and protect basic human rights.
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Hollande, la finance et l’angoisse finale du banquier

Global plutocracy and the financial Fourth Reich are preparing their battle plans against Hollande win in French presidential elections.

 

Read also this week's Economist to understand how the 1% is preparing for new class war.

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The Rich Get Even Richer

The Rich Get Even Richer | The Great Transition | Scoop.it
The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent had an 11.6 percent increase in income.

 

This NY Times article again confirms the perversity of current financial capitalism. Does anyone really believe this can go on for over?

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