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That’s an exciting headline, isn’t it?  But it’s important.  One of the key bits of financial deregulation over the past three decades has been the dismantling of capital controls, allowing vast tidal waves of money to flow between borders without hindrance.  In general, this has been a plus: nobody in Britain wants to go back to the days of sleeping on continental friends’ couches because they weren’t allowed to take more than 50 pounds out of the country. On the other hand, the Asian currency crises of the late 90s were largely due to unsustainable amounts of unregulated foreign capital suddenly flowing into the region (and then just as suddenly stopping), and the current banking crisis in the U.S. is at least partly due to an overreaction to the Asian crisis.  For the past decade all that Asian money has been flowing into the U.S. instead, and a tsunami of cheap money was one of the factors that caused the credit and housing bubble of the past few years.  Megan McArdle examines her free trade beliefs on this score:

[This suggests] that global capital flows may be way more problematic than I have historically been willing to credit.  I don’t want to blame all bubbles on foreign money.  But foreign money has two unpleasant characteristics:  there is so much of it that it can relatively easily swamp a nation’s productive capacity, and it is relatively uninformed about the local market.

I’m not sure where that leaves me.  The capital controls of the mid-twentieth century were even worse, especially for emerging markets, where they became both focal points for, and sources of, massive corruption.  And one of the reasons America today is such a massively successful economy is that foreign money funded our industrialization.  Bubbles may simply be an inescapable side effect.  But perhaps it’s time to rethink a commitment to global capital liberalization.

I’m not sure where it leaves me, either, especially since this has been an active subject of conversation for a decade already and hasn’t produced anything even close to a consensus.  But this does seem like the kind of topic that lends itself to my “sand in the gears” theory: we don’t need to reinstate capital controls, we just need to slow down the flow of global capital ever so slightly.  Even a tiny tax on foreign capital flows could have a significant impact.  Ideas welcome on this score.

WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

payment methods

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