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Trump has promised to Make America Great Again. As a self-proclaimed expert on everything of import, he knows exactly how to increase domestic investment and consumption, boost exports, reduce the country's trade deficit, expand employment and bolster wages. And as America's leader-and-policymaker-in-chief, he has taken the necessary steps to achieve every one of these goals. He has lowered taxes on corporations and the rich to induce greater investment, relaxed environmental standards and de-socialized medical care to cut red tape and eliminate waste, curtailed civilian government spending and raised military expenditures to make government lean and mean, warned corporations and individuals to remain economically patriotic and undermined the Fed's "independence" to prevent interest rates from rising and the stock market from tanking. And if that wasn't enough, he has also launched a so-called trade war to prevent America from being ripped off by other countries, especially China. Capitalists and pundits follow him like imprinted ducks. His tweets rattle markets, his announcements are dissected by academics and his utterances are analysed to exhaustion by various media. A visiting alien might infer that he actually runs the world. And the alien wouldn't be alone. The earthly population too, conditioned by ivory-tower academics and popular opinion makers, tends to think of political figureheads as "leaders" and "policymakers". Situated at the "commanding heights" of their respective nation states and international organizations, these "leaders" supposedly set the rules, make policies, steer their societies and determine the course of history. Or at least that's the common belief. The reality, though, is quite different.

Trump has promised to 'make America great again'. As a self-proclaimed expert on everything of import, he knows exactly how to increase domestic investment and consumption, boost exports, reduce the country's trade deficit, expand employment and bolster wages. And as America's leader-and-policymaker-in-chief, he has taken the necessary steps to achieve every one of these goals, or so he says. Capitalists and pundits follow him like imprinted ducks. His tweets rattle markets, his announcements are dissected by academics and his utterances are analysed to exhaustion by various media. A visiting alien might infer that he actually runs the world. And the alien wouldn't be alone. The earthly population too, conditioned by ivory-tower academics and popular opinion makers, tends to think of political figureheads as 'leaders' and 'policymakers'. Situated at the 'commanding heights' of their respective nation states and international organizations, these 'leaders' supposedly set the rules, make policies, steer their societies and determine the course of history. Or at least that's the belief. The reality, though, is quite different.

FROM THE NOTE: This week, with the Federal Reserve Banks of New York and Atlanta anticipating sharply lower GDP growth for 2019:Q1, President Trump presented a 'Budget for A Better America', calling for a smaller government and a bigger military. Forty years ago, the very same call was hailed as the best recipe for renewed growth. The U.S. ruling class was getting ready to install Ronald Reagan as President, abandon the Cold War and embark on neoliberalism, and it argued that, for that shift to succeed, the country needed a leaner government in order to unleash its entrepreneurial spirit and crowd-in private investment, and that it required a strong military in order to boost its global muscle and open world markets for its products and capital. Ideology aside, one key reason for the growth optimism of the time was rising military spending. . . .

FROM THE NOTE: This week, with the Federal Reserve Banks of New York and Atlanta anticipating sharply lower GDP growth for 2019:Q1, President Trump presented a 'Budget for A Better America', calling for a smaller government and a bigger military. Forty years ago, the very same call was hailed as the best recipe for renewed growth. The U.S. ruling class was getting ready to install Ronald Reagan as President, abandon the Cold War and embark on neoliberalism, and it argued that, for that shift to succeed, the country needed a leaner government in order to unleash its entrepreneurial spirit and crowd-in private investment, and that it required a strong military in order to boost its global muscle and open world markets for its products and capital. Ideology aside, one key reason for the growth optimism of the time was rising military spending. . . .

In this article, the structure of Hollywood film distribution will be analyzed through the lens of risk. In both its technical and conceptual senses, risk is relevant to the study of Hollywood's dominant firms. In the interest of lowering risk, the business interests of Hollywood look to predetermine how new films will function in an already instituted order of cinema, which includes the creativity of filmmakers and the habits of moviegoers. This presentation of risk will explain why, for the political economy of Hollywood, the social world of cinema is an instrumental order. While risk is specifically about the size and pattern of future earnings, it is also an indirect prediction about the stability of the social conditions that would help translate potential earnings into an actual stream. The social world of cinema has a bearing on the Hollywood film business's degree of confidence, which refers to the ability of capitalists to make predictions about future earnings.

I recently had a lively Twitter debate with Jonathan Nitzan, Shimshon Bichler and Cory Doctorow about the future of big corporations in the United States. The debate was prompted by Doctorow's piece 'End of the line for Reaganomics', which I reposted on capitalaspower.com. Doctorow argues that we may be witnessing a sea change in the way governments treat big corporations. Since the Reagan era, the US government has taken most of the teeth out of antitrust enforcement [.] Jonathan Nitzan and Shimshon Bichler then entered the Twitter debate backed by their own research on corporate power. For their part, Nitzan and Bichler are less optimistic that the US government will seriously challenge the power of big corporations [.] Here's where I enter the debate. I am more optimistic than Bichler and Nitzan that the US government will challenge corporate power. The reason is that the COVID crisis has forced a drastic change in government policy. Let's have a look.

SUMMARY In recent months, Canadians have seen significant price increases in everyday goods. New analysis shows that along with prices increasing, so too have corporate profit margins, which is not a coincidence. In 2021, when Canada was in the middle of the covid pandemic, large corporations in all major sectors of the economy saw their profit margins substantially exceed 20 year averages, with many hitting record levels. The Finance, Insurance & Real Estate Sector (FIRE), which already had the highest sectoral profit margin over the last two decades, also had the biggest increase in 2021—reaching a profit margin of 22%. As the federal government considers its 2022 budget, it is critically important that both rising profit margins and all-time lows in corporate taxation be addressed. Our previous research shows that in 2021, corporations enjoyed their lowest ever effective income tax rate of 16.6%, which contributed to the sharp rise in corporate profit. However, the key contributor to the jump in corporate profits is increasing prices. This report indicates that in 2021 corporations brought in unprecedented levels of profit largely by increasing what they charge for their goods and services. This allowed corporations to almost double profit margins in 2021 to 16%, compared to the 9% average for 2002 to 2019. When corporations choose to raise their prices in order to boost their profit margins, they drive up inflation. While much emphasis is put on inflation being caused by government spending, the corporate pursuit of higher profits through price increases is a much simpler explanation, though more poorly understood and less discussed. This misunderstanding plays into the hands of individuals, organizations and lobby groups pushing an austerity agenda. Such an agenda would have a range of negative repercussions on the Canadian economy, while benefiting only the very rich. The more Canadians understand what causes prices to rise, the better we can respond in a manner that helps the overall economy, as opposed to enriching only a fortunate few. Beyond driving inflation and reducing the affordability of goods and services, higher corporate profit margins also contribute to rising inequality. The overwhelming majority of corporate owners are part of the 1% and they receive the majority of capital income. Fortunately, a number of reasonable, immediately applicable solutions exist, including bringing corporate income tax rates closer to where they used to be, applying an excess profits tax on top pandemic profits, closing the most egregious tax loopholes, and improving corporate financial transparency.

FROM THE ARTICLE: "Contrary to the usual assumption that government debt is widely held, Mr Hager's data suggests ownership has become far more concentrated recently, echoing a wider concentration of wealth in the US. . . . [E]ven if you disagree with Mr Hager's leftwing political bent, the data certainly casts a new light on the political dynamic in the current fiscal rows. To the wealthy elites in the US who hold government bonds, it seems self-evident that the government needs to preserve the sanctity and value of Treasuries; this group has a strong incentive to ensure this happens via fiscal reform (particularly if this entails budget cuts, rather than higher taxes.) But what is rarely debated is that millions of poor Americans have far less (or no) skin in the Treasuries game. Little wonder, then, that the fiscal debate is so polarised, and unlikely to become any less so any time soon."

Who owns the U.S. public debt? Why is it such an important commodity in global capitalism? Why does public debt provoke such intense political debate? And how can the quantitative data on the ownership structure of public debt provide insights into these topics? Our guest today, Sandy Hager, reveals answers to all of these questions and more. Duration: 41 minutes

This paper demonstrates that the interests of American banking and government have converged after the early 1980s and relates this trend to modern financial deregulation, revealing a symbiosis that would later influence the global financial crisis of 2007-2008. An examination of corporate profit and taxation in the United States reveals an anomaly: from the early 1980s until the financial crisis, banking profits after tax sharply outpaced those of the corporate average despite their effective tax rates having simultaneously increased relative to those of the corporate average. These conditions thereby created a mutually beneficial relationship between American banking and government in which banks earned higher profits and the government earned higher tax revenues. However, this tax arrangement ultimately depended on unsustainably deregulated banking profits, and fell apart during the financial crisis of 2007-2008.

This article offers new theoretical and empirical insights to explain the resilience of US Treasury securities as the world's premier safe or "risk-free" asset. The standard explanation of resilience emphasizes the relative safety of US Treasuries due to a shortage of safe assets in the global political economy. The analysis here goes beyond the standard explanation to highlight the importance of domestic politics in reinforcing the safe status of US Treasury securities. In particular, the research shows how a formidable "bond" of interests unites domestic and foreign owners of the public debt and works to sustain US power in global finance. Foreigners, who now own roughly half of the US public debt, have something to gain from their domestic counterparts. The top 1% of US households, which dominate domestic ownership of US Treasuries, has considerable political clout, thus alleviating foreign concerns about the creditworthiness of the US federal government. Domestic owners, in turn, benefit from the seemingly insatiable foreign appetite for US Treasury securities. In supplying the US federal government and US households with cheap credit, foreign investors in US Treasuries help to deflect challenges to the top 1% within the wealth and income hierarchy.

In various writings Karl Marx made references to an 'aristocracy of finance' in Western Europe and the United States that dominated ownership of the public debt. Drawing on original research, this paper offers the first comprehensive analysis of the pattern of public debt ownership within the US corporate sector. The research shows that over the past three decades, and especially in the context of the current crisis, a new 'aristocracy of finance' has emerged, as corporate holdings of the public debt have become rapidly concentrated in favor of large corporations classified within Finance, Insurance and Real Estate (FIRE). Drawing on Wolfgang Streeck's concept of the 'debt state', the paper goes on to demonstrate how concentration in ownership of the public debt reinforces patterns of social inequality and proceeds in tandem with a shift in government policy, one that prioritizes the interests of government bondholders over the general citizenry.