With 1,597,000 unemployed, 2,191,000 inactive but want a job, and 1,118,000 part timers wanting full time why do we need any more?Modern Money Matters
Why does the UK Import Labour?
With 1,597,000 unemployed, 2,191,000 inactive but want a job, and 1,118,000 part timers wanting full time why do we need any more?Modern Money Matters
How the Fed Will Hit the Budget With a $50 Billion Charge https://t.co/UBN6a8sTca— The Fiscal Times (@TheFiscalTimes) February 24, 2017
The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.— Donald J. Trump (@realDonaldTrump) February 25, 2017
The Nuclear Question is becoming increasingly obfuscated by spin and lobbying as the West sleepwalks into Cold War II — a walk made all the more dangerous when the loose lips of the U.S. tweeter-in-chief announced that another nuclear arms race is a great idea (see link, link, link). Two Cold War II issues are central and almost never addressed: What will be the Russians' understanding of all the propaganda surrounding the Nuclear Question and the looming American defense spendup? And how might they act on this understanding?The Blaster
Germany's foreign intelligence agency, the BND, apparently spied on large numbers of foreign journalists overseas over the course of several years, including employees of the BBC, Reuters and the New York Times. Critics see a massive violation of press freedoms.Spiegel Online
The Netflix movie “The White Helmets” may win an Oscar in the “short documentary” category at the Academy Awards on Sunday. It would not be a surprise despite the fact that the group is a fraud and the movie is a contrived infomercial
Awarding “The White Helmets” an Oscar would fit with the desire of Hollywood to appear supportive of “human rights,” even if that means supporting a propaganda operation to justify another bloody “regime change” war in the Middle East.
Much of what people think they know about the White Helmets is untrue. The group is not primarily Syrian; it was initiated by British military contractor James LeMesurier and has been heavily funded (about $100 million) by the U.S., U.K. and other governments. The White Helmets are not volunteers; they are paid, which is confirmed in a Al Jazeera video that shows some White Helmet “volunteers” talking about going on strike if they don’t get paid soon.
Still, most of the group’s heavy funding goes to marketing, which is run by “The Syria Campaign” based in New York. The manager is an Irish-American, Anna Nolan, who has never been to Syria. As an example of its deception, “The Syria Campaign” website features video showing children dancing and playing soccer implying they are part of the opposition demand for a “free and peaceful” Syria. But the video images are taken from a 2010 BBC documentary about education in Syria under the Baath government.The White Helmets as anti-Assad volunteer heroes helping those repressed and attacked by Assad has been debunked as a propaganda hoax. The echo chamber still shamelessly promotes it.
SWL: Accepting the concept of the NAIRU does not mean you have to agree with their judgements. But if you want to argue that they could be doing something better, you need to use the language of macroeconomics.As an applied mathematician, Brian showed how macroeconomists don't know what they are talking about with respect to NAIRU when using the language of macroeconomics because the concept is empty.
Philosophy is a battle against the bewitchment of our intelligence by means of our language. — Ludwig Wittgenstein, Philosophical Investigations, § 109There are many parallels between economics and philosophy, one of the most evident is unfounded assumptions presumed to be self-evident. Scientific method was developed to circumvent this.
BR: The whole point of the standard NAIRU definition is that it is easy to observe: you just need to back out the acceleration of inflation (keeping in mind there may be other variables whose influence needs to be isolated). However, in the real world, the observed unemployment rate is affected by institutional factors -- which do not exist in a NAIRU model. Since the end result is that NAIRU estimates are inherently unreliable, the concept is wrong by definition.
This is why most mainstream macro has retreated to discussing output gaps of various types. Output gaps have to be inferred via various statistical techniques, and they are inherently fuzzier. It may be that Professor Wren-Lewis has some of these more recent models in mind when he is referring to NAIRU; but that makes as much sense as referring to post-1990 Fed Policy as monetary base targeting.
If you want to use standard academic terms, NAIRU is falsifiable, and was in fact falsified. The generalised output gaps that popped up to replace NAIRU are pretty much unfalsifiable.To a philosopher standing outside economics looking in, it appears that many economists are so intellectually committed to finding a solutions that they convince themselves and each other that they have found one when they have not.
We have got on to slippery ice where there is no friction and so in a certain sense the conditions are ideal, but also, just because of that, we are unable to walk. We want to walk: so we need friction. Back to the rough ground! — Ludwig Wittgenstein, Philosophical Investigations, § 107
One executive said in discussions with White House officials that his company has 50 participants in a factory apprenticeship program, but could take 500 if enough were qualified. But he said that in his experience, most students coming out of high school lack the math and English skills to absorb technical manuals.
US factory CEOs to Trump: Jobs exist; skills don’t https://t.co/OTk6NsBMNS pic.twitter.com/Jeyd31L1xF— Washington Informer (@DC_Informer) February 23, 2017
So that’s where Europe is headed. First, budgetary discipline will continue to be an anchor principle. Second, getting the budget deficit down or into surplus is a lot easier if you have a trade and current surplus. German Finance Minister Wolfgang Schäuble wants Germany to lead the way on both these scores as a matter of ‘leading by example’. Third, the eurozone is indeed following this example. We can see the numbers; the euro currency area now has a surplus with the rest of the world, where just 6 or seven years ago it had a deficit.
I don’t know how long the EU wants this policy framework to continue. It ism’t clear if this is a ‘ride out the storm’ approach or a permanent policy framework. I believe they want the surpluses to continue indefinitely. But if these surpluses do continue indefinitely, Donald Trump will put Europe in his crosshairs. And we’ll have to see whether he’s all bluster or whether he intends to take action.
Or to put the point more simply: we are divided politically because we are divided structurally by inequalities of access, property, opportunity, and outcome; and the mechanisms of electoral politics are mobilized to challenge and defend the systems that maintain these inequalities.Short summary: social, political and economic asymmetry.
Earlier today, I was listening to an interview with IMF head Christine Lagarde dance around the issue of the unsustainability of Greece’s debt load. And she said something very telling. She said that debt haircuts were not on the table but that maturity extensions and interest rate reductions were, but only AFTER Greece implemented reforms demanded by the Troika."Liberalized free markets and fiscal discipline" is neoliberalism in a nutshell.
What’s important to realize when Lagarde says this is that although she’s talking about Greece, the negotiations with Greece are not really about Greece itself per se. They are about the maintaining or imposing an economic paradigm for every country in the EU that Greece was not meeting – and this is a paradigm that the IMF supports as much as the ECB and the EU. Greece is just being used as an abject lessons for other larger EU economies.
Think of it this way: 25 years ago, the EU signed on to the idea of a single currency in Maastricht. The question marks at the time were Belgium and Italy – Italy because of its constant currency devaluations and Belgium because of high government debt loads. The EU figured out how to deal with Belgium and Italy by creating the stability and growth pact which said that all member states had to keep their deficits under 3% and get their debt under 60%, or at least moving in that direction. Underneath these simple rules lies a whole economic ideology though. And that orthodoxy says long-term growth and a stable currency are best maintained by liberalized free markets and fiscal discipline.…
Russia’s role in Trump’s election has led to a boom in Putinology. But do all these theories say more about us than Putin?The Guardian
As I noted in my last post the Bank of England have released an official policy document that concedes that much of Post-Keynesian endoegnous money theory is indeed correct. Interestingly, they have also released some Youtube clips with the authors where they expound on their work in more details. You can watch these videos at the BoE website here.
The videos are fascinating. The language the authors use — which contains references to ‘fiat money creation’ and money as IOUs — is straight out of either David Graeber’s book Debt: The First 5000 Years or MMT. If I were to guess I would say that it is some combination of both.
This is an enormous step forward. But I found it particularly interesting how young the authors in the videos were. One of them must be in his early 30s or so. It seems that the younger folks in the BoE are finally starting to ‘get it’.
Now, the question is where this might take the BoE if it begins to spread. There are two paths that can be taken now that they’ve gotten the basic mechanics of money creation correct.Econintersect
… on Googling Bastiat + pollution, I came across a remarkable package in which Bastiat anticipates the climate change debate and takes the denialist side in advance.…
What’s striking, though, is [Bastiat's] a priori faith that everything will be OK because of Divine Providence [compare with "spontaneous natural order"], which ensures that human activity tends towards harmony. If that fails, and a laissez-faire economy does in fact produce unsustainable pollution, his whole case collapses.
Of course, it’s possible to salvage a version of laissez-faire in the way suggested by Coase, using newly created property rights. But this requires the admission that property rights are a socially constructed set of rules, enforced by coercion, rather than a category inherent in the natural relationship between people and things. It’s precisely this admission that propertarians have been unwilling/unable to make, and why they still rely on magical thinking like that displayed by Bastiat.
Can America recover ideal rates of growth through interest-rate policies? This important analysis suggests that most economists misunderstand the issue. Updating Keynes, the analysis suggests that fiscal stimulus, labor union bargaining power, and more progressive income taxes are needed to support growth. (The article includes some algebra, which some readers may choose to skip.)
The main points of this paper are that loanable-funds macroeconomic models with their “natural” interest rate do not fit with modern institutions and data. Before getting into the numbers, it makes sense to describe the models and how to think about macroeconomics in the first place....Unfortunately, the article cited is behind a paywall. This is a useful short summary however.
In his Prison Notebooks, Antonio Gramsci wrote: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum morbid phenomena of the most varied kind come to pass.”
The world is once again living an interregnum. It is poised between the failed economic model of recovery from the crash of 2007-08 and the birth of a new model, one that would actually work for the majority of Americans....Occasional Links & Commentary
The New Democrats faced a difficult tactical problem, however, in coming up with a workable plan to defeat Ellison. The DNC had proven ineffective and been caught putting its thumb on the scale to try to ensure that Hillary beat Bernie. The New Democrats lacked a strong candidate. They could have supported Ellison, who is widely viewed as likely to be a highly effective DNC leader that will lead the revitalization of the Party. Obama and the Clintons, however, are enraged at the prospect that a Bernie supporter would lead the DNC. Their highest national political priority is defeating Ellison. Do not fall for the “cool Obama” hype. Obama is furious with Bernie and Ellison and has pulled out all the stops to try to prevent progressives’ from challenging his legacy as a New Democrat. The Clintons share his rage....The losers are trying to maintain control after the world has passed them by.
U.S. foreign policy, as I elaborated in the 2003 article, has long been designed not simply to protect U.S.-based firms in their international operations, but to establish the right of the firms to access and security wherever around the world. Oil firms have been especially important in promoting and gaining from this right, but firms from finance to pharmaceuticals and many others have been beneficiaries and promoters of the policy.
Whatever else, as the Iraq and Middle East experience has demonstrated, this right comes at a high cost. The best estimate of the financial cost to the United States of the war in Iraq is $3 trillion. Between the 2003 invasion and early 2017, U.S. military forces suffered 4,505 fatalities in the war, and allied forces another 321. And, of course, most of all Iraqi deaths: estimates of the number of Iraqis killed range between 200,000 and 500,000.Triple Crisis
Two Year german government bonds to New record low https://t.co/3ByDe9ltUj. Crazy stuff!— Maarten van den Berg (@morte1974) February 22, 2017
The paperback edition of Abolish Money (From Economics)! is now available at online booksellers. It will take time for it to appear on some websites.…Bond Economics
The West’s anti-Russian propaganda links Moscow to the blight of “fake news” but the evidence doesn’t connect the two. So, The New York Times makes the case with its own “fake news,” reports Robert Parry.The m.o. on this is usually the same. Reports that are verifiably true but peripheral to the point are introduced first to establish credibility and then reports that are not documented are brought in to persuade uncritical readers (probably most) to accept information that is dubious or bogus to carry home the propaganda point. The key to success is to repeat the narrative.
Earlier this month I spent a fun 3 days at a seminar discussing Market Systems Innovation. No really. I discovered a community of very smart people working on markets, who seem to be on a similar journey to the people working on governance and institutions, who I have spent most of my time with in recent years. Chatham House Rule, so the speakers must remain shrouded in mystery, but I will say it was at the Rockefeller Foundation’s Bellagio Centre, just to make you jealous....From Poverty to Power
Microsoft’s Bill Gates is one of the richest and most influential people on earth. He announced in 2015 that his Bill & Melinda Gates Foundation was aiming at achieving full digitalization of the payment systems of India and other populous developing countries by 2018. This “financial inclusion” program for India dates back to well before Narendra Modi came to power. It was elevated to official US policy by Executive Order in 2012, because the President saw vital US security interests are at stake....Real-World Economics Review Blog