Neal Lawson — A Bridge To A Good Society

This site, along with the FES and Compass, has long championed the notion of a good society. It is a desirable world that is much more equal, democratic and sustainable. But the problem was the desirable never felt feasible. We might have wanted to get there – but no one really knew how.

That is all starting to change. Over the last 30 years the world has been transformed by a technology revolution that is now hard wired, or more accurately free wired, into our culture. We can know everything/everywhere and can act, share and collaborate in ways unimaginable to social democrats even at the tail end of the last century. Through a smart phone the world is literally in our hands.
Technology is flattening old vertical corporations in the market and in politics. Today command and control are rendered nigh on impossible by a world that resembles Facebook and not the factory. People don’t take orders and instead are well versed in finding their own voice.

The golden age of social democracy was however built in a very different way, on hierarchical institutions because the 20th century was the era of centralism, bureaucracy and Fordism. But while the ends of that Cold War were meant to be egalitarian and democratic the means were essentially paternalistic and elitists. The neo-liberal counter-revolution became inevitable. Now technology is favouring social democracy but only if it can transform itself. On flattened planes you have to listen to everyone’s voice, anyone can get organised in a future that will be co-produced. So means and ends can be unified – democracy and equality is what we fight with and for.

This is the world Uffe Elbaek, a member of the Danish Parliament, and I describe in a new Compass publication entitled: Bridge: how the politics of the future will link the vertical and the horizontal.

I concur. The playing field is leveling quickly in the digital age through increased communication and availability of knowledge. Hierarchy is giving way to flatocracy, but only if it actually results flat organization and not just flatus.

Social Europe Journal
A Bridge To A Good Society
Neal Lawson

Still time to sign up for my Forex course that starts tomorrow!

There is still time to sign up to my Forex course.

The course starts tomorrow and runs through Friday (3/14). Course hours are 8am - 4pm NY time. It's taught on Cisco's Webex platform. You don't need any special software.

I will be teaching all the usual stuff:

• Market composition--how to determine the positions and orders of market participants and anticipate their behavior with precision.
• Applied MMT--how to use MMT to capitalize on market opportunities while others are doing the wrong thing each and every time.
• Mental Game--how to have the proper trader psychology at all times. Tricks, exercises and rules to ensure that your "mind game" is that of a winner.

Plus...

Why everything you ever heard or learned about trading successfully is WRONG!

And...

How to navigate the most sophisticated online Forex platform there is: Oanda.

In the past 10 months of teaching this course  there have been NO LOSING TRADES! And the account has increased by 100%.

Former students are achieving success. YOU CAN TOO!

Financial freedom, independence, market savvy can be yours!

Sign up here: Pitbull Economics.

Daniel Little — Why emergence?

Little argues that emergence is unnecessary to evoke in order to avoid reductionism, methodological individualism, and microfoundations. There is reason to hold that causal explanation stems from the macro (system) level as well as the meso (institutions, sub-systems) level, in addition to the micro (individual) level.

Understanding Society
Why emergence?
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Lord Keynes — No Constants in Human Behaviour?

Comparison of Mises and Keynes on explanation and prediction in natural science versus social science, including economics. Being ergodic, natural science can produce causal explanations that yield precise predictions, whereas being non-ergodic, social science — including economics — tells stories. These narratives are not (necessarily) trivial, however, depending on the craft of the storytellers.

Social Democracy For The 21St Century: A Post Keynesian Perspective
No Constants in Human Behaviour?
Lord Keynes

(h/t Auburn Parks in the comments)

Al Jazeera — China draws 'red line' on North Korea

China has declared a "red line" on North Korea, saying it will not permit chaos or war on the Korean peninsula, and that denuclearisation is the only way to achieve peace....

"The Korean peninsula is right on China's doorstep. We have a red line, that is, we will not allow war or instability on the Korean peninsula," Chinese Foreign Minister Wang Yi told reporters on Saturday, on the sidelines of China's annual largely toothless parliament.

Al Jazeera
China draws 'red line' on North Korea
via Reuters

Zachary Keck — India Backs Russia’s ‘Legitimate Interests’ in Ukraine

On Thursday a senior Indian official appeared to endorse Russia’s position in Ukraine in recent days, even as Delhi urged all parties involved to seek a peaceful resolution to the diplomatic crisis.

When asked for India’s official assessment of the events in Ukraine, National Security Adviser Shivshankar Menon responded:

“We hope that whatever internal issues there are within Ukraine are settled peacefully, and the broader issues of reconciling various interests involved, and there are legitimate Russian and other interests involved…. We hope those are discussed, negotiated and that there is a satisfactory resolution to them....”

Local Indian media noted that Menon’s statement about Russia’s legitimate interests in Ukraine made it the first major nation to publicly lean toward Russia. As my colleague Shannon has reported throughout the week,many of China’s public statements could be interpreted as backing Russia in Ukraine, despite Beijing’s own concerns about ethnic breakaway states and its principle of non-interference.

However, at other times, including at the UN Security Council, Beijing has appeared to be subtly rebuking Moscow by suggesting that its unilateral path threatened regional and global stability. At the very least, however, Beijing has characteristically not gone as far as the U.S. and the West in publicly scolding Vladimir Putin for the military intervention in Crimea.

The Diplomat
India Backs Russia’s ‘Legitimate Interests’ in Ukraine
Zachary Keck

Frank Li — Ukraine, Russia, China, U.S.: It's Capitalism, Stupid!

Succinct summary of neoliberalism. Only capitalism works. Forget democracy. It's a failure.

EconMatters
Ukraine, Russia, China, U.S.: It's Capitalism, Stupid!
Frank Li

Harold James — The Secret History of the Financial Crisis

The Fed emerges as the world's sole super-bank. IMF is toast.

Project Syndicate
The Secret History of the Financial Crisis
Harold James | senior fellow at the Center for International Governance Innovation, Professor of History and International Affairs at Princeton University and Professor of History at the European University Institute, Florence

Unconventional Economist — GDP is rubbish!

GDP leads to an obsession with nominal GDP as a measure of growth = good. Not necessarily. Growth doesn't necessarily imply either increased capital formation or a higher standard of living.

Thankfully, the ABS is developing new ways of measuring Australia’s progress, which includes a bunch of qualitative factors such as health, safety, equality, etc. Let’s hope that it gains greater prominence amongst commentators and policy makers.

Macrobusiness
GDP is rubbish!
Unconventional Economist

INET — The Exchange Rate as a Monetary Phenomenon

On Perry Mehrling's "money view" as it relates to forex.

INET
The Exchange Rate as a Monetary Phenomenon
Elham Saeidinezhad, Jay Pocklington, Michael Beall, and Yakov Feygin

Philip Pilkington — Keynes and Loanable Fund

Keynes debunks the savings fund investment ex ante argument by showing how saving is an ex post residual of investment. The mistake is erroneously imputing causality in accounting identity.

Keynes: "Saving at the prior date cannot be greater than the investment at that date. Increased investment will always be accompanied by increased saving, but it can never be preceded by it."
Fixing the Economists 

Keynes and Loanable Fund

Philip Pilkington

Paul Craig Roberts — The Looting Of Ukraine Has Begun

Yikes! It gets worse all the time.

Institute for Political Economy
The Looting Of Ukraine Has Begun
Paul Craig Roberts | formerly Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration and a co-founder of Reaganomics. His latest book is The Failure of Laissez Faire Capitalism and Economic Dissolution of the West.

See also Washington’s Arrogance, Hubris, and Evil Have Set the Stage for War — Information Clearinghouse interviews Paul Craig Roberts

This is how nutty neoconservatives that dominate US foreign policy are. Will Europe follows them over the brink? I would say that is the only brake now, without regime change in the US away from the Establishment that controls both parties. Roberts discounts that brake. BTW, this is published by World News Daily, an ultra-conservative "right-wing" organization.

Roberts is redeeming himself although economically he is still out of paradigm.

Marshall Auerback — Bubble Trouble?

There are two parts of the bubble process. First there is a big bull market driven by fundamental and psychological factors. At some point the appreciation goes on for long enough and far enough that all people who try to trade it on fundamentals capitulate. Everyone’s expectations are then driven only by the price pattern. That behavior becomes completely extrapolative. And through several mechanisms that extrapolative behavior becomes non linear.

Macro Bits
Bubble Trouble?
Marshall Auerback

Michael Stephens — Working Paper Roundup 3/7/2014

Links to papers by Randy Wray, Pavlina Tcherneva, and Éric Tymoigne for your weekend reading.

Multiplier Effect
Working Paper Roundup 3/7/2014
Michael Stephens

Lars P. Syll — Advice on mathematics for Ph. D. students

Compare with Alfred Marshall:

Alfred Marshall’s advice to A.L. Bowley, a former student and distinguished pioneer of mathematical economics and statistics in the 1920s, to: “(1) Use mathematics as shorthand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3. This I do often”.

Lars P. Syll | Professor, Malmo University
Advice on mathematics for Ph. D. students

Quoting Roger Farmer

Arturo Garcia — Report: Senate Democratic staff took secret CIA documents years before anyone noticed (via Raw Story )

Report: Senate Democratic staff took secret CIA documents years before anyone noticed (via Raw Story )

Democratic party staffers for the Senate Intelligence Committee obtained secret documents related to a damning report against the Central Intelligence Agency (CIA) three years before the agency noticed and demanded their return, McClatchy Newspapers…

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David Ferguson — Ed Snowden claims he raised concerns with NSA officials more than 10 times (via Raw Story )

Ed Snowden claims he raised concerns with NSA officials more than 10 times (via Raw Story )

Former security contractor and National Security Agency whistleblower Edward Snowden said that he tired to bring his concerns to the attention of superiors on at least 10 occasions before deciding to leave the organization with a massive cache of secret…

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Joshua Holland — All of the Arguments Against Raising the Minimum Wage Have Fallen Apart (via Moyers & Company)

All of the Arguments Against Raising the Minimum Wage Have Fallen Apart (via Moyers & Company)

Conservatives should be on the front line of the battle to raise the minimum wage. Work is supposed to make one independent, but with the inflation-adjusted federal minimum down by a third from its peak, low-wage workers depend on billions of dollars…

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David Ferguson — Michele Bachmann: Tea Party is an ‘intellectual movement’ at its core (via Raw Story )

Michele Bachmann: Tea Party is an ‘intellectual movement’ at its core (via Raw Story )

In her remarks to the 2014 Conservative Political Action Conference, Rep. Michele Bachmann (R-MN) told the assembled crowd that the Tea Party and conservative movements will triumph over progressivism because of the right’s unstoppable intellectual…

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Peter Martin — The world owes $57 trillion. Who the F*** to? Mars? Jupiter?

World Debt Clocks — World owes over 57 trillion (expressed in USD)

These morons apparently don't realize that all money is created by crediting and debiting accounts. Money functions as a unit of account, medium of exchange, store of value, and record of debt. Every debt has a corresponding credit denominated the unit of account of that jurisdiction, so that all debt as someone's liability is someone else's asset, which nets to zero. 

Since money is not only someone's debt (a payable) but also someone else's credit (a receivable), it is just as true to say that the world owns over 57 trillion in financial assets expressed in USD, as it is to say that the world owes 57 million in financial liabilities. Doh.

If there were no credit-debt relationships, that is, if all financial liabilities were extinguished, then there would be no money, and exchange of goods and services would be reduced to barter.

Modern Monetary Theory — Real Economics

The world owes $57 trillion. Who the F*** to? Mars? Jupiter?

Peter Martin

Speaking truth to power (video)

Trending — Speaking truth to power.

Senator Ludlam welcomes Tony Abbott to WA

(h/t John Zelnicker)

Paul Vigna — Lakota Indian Promotes New Digital Currency, Mazacoin

“I’ve been studying tribal sovereignty since I was 16,” said Mr. Harris, the Lakota who developed and is promoting mazacoin. “To be a truly independent state you have to have your own issued currency.”

WSJ — MoneyBeat
Lakota Indian Promotes New Digital Currency, Mazacoin

Paul Vigna

(h/t Clonal)

Slide Deck: MMT Knows- the Fed Sets Rates

I've been working on a powerpoint presentation laying out some MMT basics. Ideally, it could be presented to members of Congress and staffers to help them better understand our modern system of public finance. Link here

Ryan Relapse: Free school lunches mean poor parents don’t care about kids

Looks like Paul Ryan has had a relapse back in to out of control rampant Randism running amok within him, nothing like the CPAC conference to bring out the best in people:

Ryan insisted that liberals were only offering people “a full stomach and an empty soul.” 

He then told a story of a “young boy from a very poor family” who received free lunches at school “from a government program.”

“He didn’t want a free lunch,” Ryan insisted. “He wanted his own lunch, one in a brown paper bag, just like the other kids.”

“He wanted one, he said, because he knew a kid with a brown paper bag had someone who cared for him. This is what the left does not understand.”

What era is this guy even talking about? "brown bags"?????  Helllo! Ryan! Its 2014!

Schools today have cafeterias and hot lunches this guy doesn't even know what the heck is even going on in the country.

Story at Raw Story.

Travis Gettys — Bernie Sanders wants to unite Tea Party and progressive voters in 2016 White House run (via Raw Story )

Bernie Sanders wants to unite Tea Party and progressive voters in 2016 White House run (via Raw Story )

Sen. Bernie Sanders (I-VT) said he’s prepared to run for president in 2016 because he doesn’t see anyone willing to stand up for progressive values. “This country faces more serious problems than at any time since the Great Depression, and there…

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Dan Froomkin — The Inverse of Oversight: CIA Spies On Congress

Like this is something new? If spies spy on foreign governments, you can bet they spy on their own government. It was at least suspected that J. Edgar Hoover's FBI did and even presidents feared him.

The Intercept
The Inverse of Oversight: CIA Spies On Congress
Dan Froomkin

Joe Weisenthal — A Depressingly Simple Explanation For The Weak Recovery

Why is the economy so weak? It's simple: Inequality. Income gains for the 95% have been meager for a long time, but up until the crisis, households could take on debt to compensate. Now credit has been harder to come by, and so household buying power is limited....

Mediocre income gains for the 95% and no easy access to credit to compensate for that. Depressingly simple.

Business Insider
A Depressingly Simple Explanation For The Weak Recovery
Joe Weisenthal

Chris Mooney — Here Are 5 Infuriating Examples of Facts Making People Dumber

Together, all of these studies support the theory of "motivated reasoning": The idea that our prior beliefs, commitments, and emotions drive our responses to new information, such that when we are faced with facts that deeply challenge these commitments, we fight back against them to defend our identities. So next time you feel the urge to argue back against some idiot on the internet…pause, take a deep breath, and realize not only that arguing might not do any good, but that in fact, it might very well backfire.

So much for rationality. It's cognitive bias all the way down.

Mother Jones
Here Are 5 Infuriating Examples of Facts Making People Dumber
Chris Mooney

Ramanan — Massive Overstatement Of Profits?

So pure rearrangements of terms of sectoral balance identity [without looking at flow of funds] doesn’t prove the overstatement of profits as claimed by Auerback. Of course it still leaves the possibility of dynamics which lead to a contraction of aggregate demand and hence profits but Auerback’s claim is that this is purely due to accounting identities and this claim is erroneous.

The Case For Concerted Action
Massive Overstatement Of Profits?
Ramanan

The pattern is clear. It's a simple model, but the predator finance capitalist model is devastatingly effective.

The pattern is clear. America's predator finance capitalists, who are clearly in control, run roughshod over the global economy with nothing stopping them.

Their model is simple: First, lever nations up with debt by using schemes that involve massive control fraud, then force them to the brink of bankruptcy and then offer to "save" them with "bailouts" via central banks or the IMF or World Bank, in exchange for brutal austerity. This destroys labor bargaining power and income, it also necessitates asset liquidations at fire sale prices.

That's when the predators swoop in to buy up these assets at pennies on the dollar and begin imposing fees for the use of the very same assets that once belonged to the people, which by the way, were paid for many times over as a result of taxes collected. In effect the new owners, the finance capitalists, impose a new tax for an asset that we the people once owned free and clear.

Now for the loans. Of course the loans are such that they can never be paid off because their terms are so onerous. This ensures that the austerity never stops because the threat of bankruptcy is always there. Only when the body of the victims have been sucked dry of every possible remaining asset do the predators discard the wretched carcass, but before they do, they take whatever is left of the pensions of the public workers. Then they look for a new victim and repeat, all the time aided by the law enforcement and military apparatus of the United States, which is unchallengeable.

I may have left some things out, like a corrupted academe (economics profession, certain universities i.e. Harvard, Stanford, U. of Chi.), which enables these frauds and thefts thanks to bogus research (Reinhart & Rogoff stuff), a cowardly and unsrupulous media that will do or say anything for ad dollars and a dumbed down citizenry.

But you get the picture.