Tuesday, September 2, 2014

Vasily Kashin — A New, Senseless Cold War Is Now Inevitable

Turning points in history are rarely recognized as such by contemporaries. Even while following the news and sensing that something has gone wrong, people go about their lives in the usual way. 
But everything can change drastically in a matter of months, and then these days will be only a memory of a past way of life in a big, open world. A new, second Cold War is likely to become an incontrovertible reality by the end of this year.…
The World Post via The Moscow Times
A New, Senseless Cold War Is Now Inevitable
Vasily Kashin | Analyst, Centre for Analysis of Strategies and Technologies, Moscow

Peter Cooper — Value of Fiat Money on the Basis of Marx in Light of MMT

In Marx’s theory, formulated in terms of the gold standard of his day, the value of commodity money is taken to be the amount of simple, socially necessary labor time required to produce gold. This treatment of the value of commodity money is consistent with Marx’s treatment of commodity value in general, which always represents amounts of socially necessary labor time. Since the value of the currency under a gold standard depends not only on the labor time required to produce gold but the rate at which gold is exchanged for currency, the question arises as to whether it is gold that is actually “real money” in such a system, or, rather, state currency, issued and exchanged at a fixed rate for gold, that is real money.…
heteconomist
Value of Fiat Money on the Basis of Marx in Light of MMT
Peter Cooper

Jason Smith — Which way does the information flow?


Hayek's The Uses of Knowledge in Society (1945) established information as the basis of modern economics. This accords, for example, with the view that the primary function of money is as a unit of account, and that accounting records are primary information sources for the study of both economies and economic principles.

Then the questions become questions about information and its use. This is much clearer in business and finance than economics, however. What emerges is recognition that information is not only a matter of records but also a factor that enters into choices that affect outcomes especially through feedback.

When information becomes the basis for theory in addition to record-keeping, then direction of information flow becomes relevant to causality. Jason Smith present arguments for why the direction of flow of economic information is chiefly from demand to supply rather than vice versa.

Information Transfer Economics 

Robert Parry — Who’s Telling the ‘Big Lie’ on Ukraine?

Official Washington draws the Ukraine crisis in black-and-white colors with Russian President Putin the bad guy and the U.S.-backed leaders in Kiev the good guys. But the reality is much more nuanced, with the American people consistently misled on key facts, writes Robert Parry. 
Fact: Beliefs trump facts.Whoever controls the narrative ("spin") controls belief.
If you wonder how the world could stumble into World War III – much as it did into World War I a century ago – all you need to do is look at the madness that has enveloped virtually the entire US political/media structure over Ukraine where a false narrative of white hats vs. black hats took hold early and has proved impervious to facts or reason.
The original lie behind Official Washington’s latest “group think” was that Russian President Vladimir Putin instigated the crisis in Ukraine as part of some diabolical scheme to reclaim the territory of the defunct Soviet Union, including Estonia and other Baltic states. Though not a shred of U.S. intelligence supported this scenario, all the “smart people” of Washington just “knew” it to be true.
Yet, the once-acknowledged – though soon forgotten – reality was that the crisis was provoked last year by the European Union proposing an association agreement with Ukraine while U.S. neocons and other hawkish politicos and pundits envisioned using the Ukraine gambit as a way to undermine Putin inside Russia.
The plan was even announced by U.S. neocons such as National Endowment for Democracy President Carl Gershman who took to the op-ed page of the Washington Post nearly a year ago to call Ukraine “the biggest prize” and an important interim step toward eventually toppling Putin in Russia.…
Consortium News
Who’s Telling the ‘Big Lie’ on Ukraine?
Robert Parry

Edmund S. Phelps — Teaching Economic Dynamism

In other words, economies today lack the spirit of innovation. Labor markets do not need only more technical expertise; they require an increasing number of soft skills, like the ability to think imaginatively, develop creative solutions to complex challenges, and adapt to changing circumstances and new constraints.
That is what young people need from education. Specifically, students must be exposed to – and learn to appreciate – the modern values associated with individualism, which emerged toward the end of the Renaissance and continued to gain traction through the early twentieth century. Just as these values fueled dynamism in the past, they can reinvigorate economies today. 
A necessary first step is to restore the humanities in high school and university curricula. Exposure to literature, philosophy, and history will inspire young people to seek a life of richness – one that includes making creative, innovative contributions to society. Indeed, studying the “canon” will do more than provide young people with a set of narrow skills; it will shape their perceptions, ambitions, and capabilities in new and invigorating ways. In my book Mass Flourishing, I cite some key figures who articulate and inspire modern values. 
The humanities describe the ascent of the modern world. Countries worldwide can use the humanities to develop or revive the economies that drove this ascent, while helping individuals to lead more productive and fulfilling lives.
Professor Phelps gets it. Economies are about people not equations. Tools are means and not ends. The need is for increased creativity rather than specialized learning or technical expertise. Don't teach to the text or the exam, teach to the desired result — living a good life in a good society. The message should be, pick something great to do and do it. It's short, read the whole thing.

Project Syndicate
Teaching Economic Dynamism
Edmund S. Phelps, Nobel laureate in economics and Director of Columbia University’s Center on Capitalism and Society and Dean of the Newhuadu Business School

Claudio Borio — The international monetary and financial system: its Achilles heel and what to do about it


Free download
This essay argues that the Achilles heel of the international monetary and financial system is that it amplifies the "excess financial elasticity" of domestic policy regimes, ie it exacerbates their inability to prevent the build-up of financial imbalances, or outsize financial cycles, that lead to serious financial crises and macroeconomic dislocations. This excess financial elasticity view contrasts sharply with two more popular ones, which stress the failure of the system to prevent disruptive current account imbalances and its tendency to generate a structural shortage of safe assets - the "excess saving" and "excess demand for safe assets" views, respectively. In particular, the excess financial elasticity view highlights financial rather than current account imbalances and a persistent expansionary rather than contractionary bias in the system. The failure to adjust domestic policy regimes and their international interaction raises a number of risks: entrenching instability in the global system; returning to the modern-day equivalent of the divisive competitive devaluations of the interwar years; and, ultimately, triggering an epoch-defining seismic rupture in policy regimes, back to an era of trade and financial protectionism and, possibly, stagnation combined with inflation.
BIS
The international monetary and financial system: its Achilles heel and what to do about it
by Claudio Borio
Working Papers No 456
September 2014

Yi Wen and Maria A. Arias — What Does Money Velocity Tell Us about Low Inflation in the U.S.?

Holy moly. Still thinking in terms of Friedman's quantity theory. So they confuse the causality.
So why did the monetary base increase not cause a proportionate increase in either the general price level or GDP? The answer lies in the private sector’s dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money, as the figure below shows.
And why then would people suddenly decide to hoard money instead of spend it? A possible answer lies in the combination of two issues: 
A glooming economy after the financial crisis
The dramatic decrease in interest rates that has forced investors to readjust their portfolios toward liquid money and away from interest-bearing assets such as government bonds.
 
In this regard, the unconventional monetary policy has reinforced the recession by stimulating the private sector’s money demand through pursuing an excessively low interest rate policy (i.e., the zero-interest rate policy). 
The increase in the monetary base did not cause people to hoard money and thereby reduce velocity, nor did historically low interest rates. Increased liquidity preference in the case of uncertainty and the need to deleverage, together with tighter lending standards (locking the barn door after the horses have escaped), resulted in higher than usual saving desire relative to spending desire for consumption, and also investment to some degree. Decreased domestic demand also sent a signal to firms not to invest in expanding production domestically. 

A question remains why firms did not invest in capital expansion? Actually, many did, but in FDI where prospects appear brighter than in the US. A significant of increasing corporate earnings also went to either corporate savings or stock buybacks to drive up the share price rather than to increasing dividends, whence it might be spent domestically.

Low interest rates and QE deprived the domestic economic of demand resulting from the interest that would have been paid without QE and reduced the amount than was paid at the low rates relative to more normal rates. But it's a stretch to say that low rates were the cause of money hoarding. In fact, the low rates drove prices of riskier assets higher than they would have been otherwise, as the Fed itself admits and said was a policy objective to increase the wealth effect in addition to stabilizing the housing market by keeping mortgage rates low than they would otherwise be.

The authors conclude:
This happened because the nominal interest rate on short-term bonds has declined essentially to zero, and, in this case, the best form of risk-free liquid asset is no longer the short-term government bonds, but money.
The authors are obviously neither wealthy nor in business or they would know that when large sums are involved even a very small return is significant. When there is a choice between the two alternative of essentially the same risk and one pays some interest at a similar degree of liquidity, however small, and the other does not, then the former is the rational choice and will be chosen by rational agents.

The fact is that the Fed chose to pay interest on excess reserves when it initiated QE in order to maintain control of the interest rate and set it slightly above zero.

FRBSL — On the Economy
What Does Money Velocity Tell Us about Low Inflation in the U.S.? [short]
Yi Wen, Assistant Vice President and Economist, and Maria A. Arias, Research Associate

Marshall Steinbaum — Piketty’s Theory of Inequality and its Critics: A White Paper

In "Capital in the 21st Century," Thomas Piketty of the Paris School of Economics proposes an economic theory of rising inequality over time thanks to the growing prevalence of capital over labor. That theory's analysis of recent trends and its prediction about future inequality—and the capital-centered channel that he specifies for it to play out—have been subjected to criticism from economists, most pointedly from some who conduct research in macroeconomic theory. There are substantial differences between the theory Piketty uses and some of the economics profession's received wisdom. This short paper examines how his theory relates to key ideas in macroeconomics, and, where they are not consistent with Piketty's empirically-based analysis and conclusions, why Piketty's assumptions, reasoning, and predictions are more likely to be correct than those of his critics.
WCEG
Piketty’s Theory of Inequality and its Critics: A White Paper
Marshall Steinbaum | Research Economist at the Washington Center for Equitable Growth
(ht Brad DeLong)

Randy Wray — How to Eliminate the Scourge of Unemployment: Jobs Now at a Living Wage

As Hyman Minsky put it a half-century ago, providing welfare rather than jobs is “a conservative rebuttal to an ancient challenge of the radicals, that capitalism necessarily generates ‘poverty in the midst of plenty’”. 
Rather than paying people not to work, Minsky proclaimed we must pursue an alternative: ““We have to reverse the thrust of policy of the past 40 years and move towards a system in which labor force attachment is encouraged. But to do that we must make jobs available; any policy strategy which does not take job creation as its first and primary objective is but a continuation of the impoverishing strategy of the past decade.” 
Here’s an idea: why not create jobs with decent pay? Now, why didn’t anyone ever think of that before? 
Put people to work doing socially useful things. Take workers as they are, design jobs that they are able to do. Offer a high enough wage with good, supportive working conditions so that no one would take the demeaning and low paying jobs that the private sector creates. If the private sector wants to compete, it will have to pay more and provide more interesting and fulfilling work. 
Here are three links to recent posts.…
Economonitor — Great Leap Forward
How to Eliminate the Scourge of Unemployment: Jobs Now at a Living Wage
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City

WaPo Watch: Dana Milbank hits a trifecta of arrogance, stupidity, and cheese

The occasionally-good Wapo writer Dana Milbank cemented his legacy as a clueless hack today, with a predictable,  awful piece on the federal "debt."  The man somehow managed to stitch together his recent European vacation (wow, glad your job writing useless columns pays you enough for that Dana!), turmoil in the Middle East, the Ice Bucket Challenge, Justin Bieber, and the recent CBO report on debt/deficits.

This guy is clearly a modern day Shakespeare, with all the talent it takes to copy-and-paste tired talking points from any of the half-dozen Pete Peterson websites. If I had tried to submit something so blatantly plagiarized back in my high school days, I'm sure I would have gotten it back with lots of red ink and a 'D-', for lack of creativity and original thought.  The fact that this guy gets paid to be so lazy is an incredible insult to people who actually have to work for a living-- many of whom, tragically, will probably believe much of what he 'wrote' in todays ragsheet column.

If the column does have one redeeming quality is that it should make obvious the outsized influence that the Congressional Budget Bullshit Office has on policymakers in Washington. Despite CBO's appalling record at predicting.....well, anything, it is taken extremely seriously by most people here. CBO also has the added advantage of being perceived as 'nonpartisan', when it is really nothing of the sort. Since its very founding, it has been run by right wing neo-liberals, regardless of what party was in control of the Congress. Both parties are constantly competing to see how low they can bow down to this unelected and unaccountable institution, and in most cases getting a "favorable" score is the overriding imperative of legislative drafting. Case in point is the ACA, which instead of being written to clearly meet a public purpose, was written with all sorts of contortions and machinations to get a "deficit-neutral" score from the Budget Gods.

And of course, I don't mean to suggest that this sort of garbage out of the Washington Compost is anything new. Just that maybe Dana's next European vacation should be permanent. Take our journalists, please!

Bill Mitchell — Same old story – poor getting poorer and more indebted and the rich …

I have started to research the idea of the disappearing or shrinking middle class as part of a book project (for 2015) I am amassing materials for. The idea is simple but the conceptualisation and demarcation of the idea is rather complex. The hypothesis is that Capitalism is now striking at the income and wealth segment that has helped give it stability (which in this sense relates to not having a revolution rather than eliminating major economic cycles and mass unemployment). Marx said that religion was the opiate of the masses that kept them in line whereas in modern times it is mass consumption and credit that seems to keep the middle class in line. The rise in income and wealth inequality over the last 3 decades under the watch of neo-liberalism is obvious and initially showed up as a widening 90/10 gap (the numbers being deciles in the relevant distribution). But as the lowest income groups were marginalised, the dynamic moved on and started hollowing out the middle deciles. Real wages have lagged well behind productivity growth and mass unemployment is infiltrating the middle-income cohorts who typically have superior education, which has insulated them from job loss. The US Census Bureau provides excellent data on – Wealth and Asset Ownership, which allows us to trace the trends in household net worth and debt in the US in some detail. This blog just documents some of the characteristics of those distributions – it is preliminary work for me but of interest nonetheless.
Bill Mitchell – billy blog
Same old story – poor getting poorer and more indebted and the rich …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Hillary Clinton Says Deficit [In Fiat] Sends Message Of Weakness

   (Commentary posted by Roger Erickson)





Hillary Clinton says deficit [in fiat] sends message of weakness

That was a year ago, and she is still confused. What weakness was she actually referring to?

Semantic weakness, perhaps? Plus a weakness in her mind, & her will to use it?

That's pretty embarrassing.

Ben Franklin must be turning over in his grave, and weeping in shame for his country. Almost 300 years, and we are STILL largely ignorant about something as simple as a currency system.

And seemingly getting even more ignorant.



Monday, September 1, 2014

AFP — Ukraine warns of ‘great war’ with Russia ‘the likes of which Europe has not seen since WWII’


The crazies are out in force.

The Raw Story
Ukraine warns of ‘great war’ with Russia ‘the likes of which Europe has not seen since WWII’
Agence France-Presse

Xinhua News English — Ukrainian conflict escalates into "war": DM

Ukrainian Defense Minister Valeriy Geletey said Monday that the conflict in eastern Ukraine between government troops and pro-independence insurgents has escalated into a "war" . 
"A great war came at our doorstep, the war, which Europe has not seen since World War II," Geletey wrote on his official Facebook page. 
Accusing Russia of beginning a "full-scale invasion" of Ukraine, Geletey announced the end of government's military operation in the east. 
"The operation to liberate eastern Ukraine from 'terrorists' is over. We must urgently undertake the defense against Russia," Geletey said.
He blamed Moscow for the escalation of the conflict in Lugansk and Donetsk regions, claiming that Russia "via unofficial channels" has threatened to use "tactical nuclear weapons" against Ukraine.
 
Geletey estimated that the casualties in the "war" to be numbered in "thousands and even tens of thousands of people" and called for the "consolidation" of the Ukrainian society. 
Earlier in the day, Russian Foreign Minister Sergei Lavrov said that Moscow will not militarily interfere in the ongoing Ukraine crisis, urging the United States and the European Union (EU) to help stop Kiev from using heavy weapons. 
Lavrov expressed the hope that the Contact Group for Ukraine, which are meeting in the Belarussian capital of Minsk on Monday, primarily dedicate to "an imminent and unconditional ceasefire."…
Xinhua News English (China)
Ukrainian conflict escalates into "war": DM

RT — NATO summit: Obama, Cameron urge allies to ramp up military spending

Barack Obama and David Cameron will urge NATO members to increase military spending at the alliance’s summit in Wales, amid growing geopolitical tensions, Europe-wide austerity, and criticism that some countries are getting a “free ride”.
The NATO summit, which kicks off later this week, will see Obama and Cameron urge European state leaders to protect their continent from amplifying threats by honoring commitments to allocate a minimum of 2 percent of GDP on defense spending. NATO members attending the two-day summit in Newport will also debate how best to deal with the ongoing crises in Iraq and Ukraine.
While the White House has insisted increased military spending is a “top priority”, many diplomats believe the US administration’s plea will be rejected by EU states that are still suffering from the ravages of a deep recession. At present, only two NATO members have reached the 2 percent target other than the US and Britain.
A group of former military commanders said on Saturday that NATO states must take responsibility for their share of the military cost of sustaining the alliance. A former head of the UK Royal Navy, Lord West, argued people in certain states are simply not spending enough, emphasizing that France and Britain were the only EU states that are meeting the two percent NATO target.
Lord West went on to suggest that NATO, in its current guise, was effectively “broken” at a time when Russia and other states posed a considerable threat on the international stage….
Meanwhile, in the biggest policing operation of its nature in British history, roughly £50 million has been channeled into providing stalwart security at the NATO summit in Wales. At least 9,000 police officers will take part in the operation.
RT
NATO summit: Obama, Cameron urge allies to ramp up military spending

Bloomberg View — Stopping Europe's Descent Into Deflation

Europe also needs to rethink its fiscal policy. That's beyond the remit of the ECB, though it wouldn't hurt for Draghi to demand changes. Again, he took a step in that direction in his recent speech, saying that fiscal policy should "play a greater role" in boosting demand. Then he took a step back by saying that Europe's Stability and Growth Pact allowed sufficient room to maneuver, and that it would be "self-defeating" to abandon it. No. It isn't a matter of finding room for maneuver. This pact, which tells governments to cut government borrowing regardless of impending deflation, needs to be scrapped.…
Monetary policy can and should do more. That's the responsibility of Draghi and his ECB colleagues. If they want to, Europe's governments can repair their fiscal policies, as well -- by scrapping the fiscal pact rather than fiddling with it. If Europe's long recession gets worse, it will be because its leaders saw what was happening yet chose not to act.
Bloomberg View
Stopping Europe's Descent Into Deflation
By The Editors

Bryan Williams — The right’s jobs debacle: Here’s how to bring unemployment down to zero

Forget Paul Ryan's delinquent fathers theory. Want to crush poverty? Here's how the government can end joblessness
According to April figures from the Bureau of Labor Statistics, 9.8 million people actively looking were unable to find employment. Creating jobs for them might be the easiest possible way to help the millions of impoverished job seekers out of poverty.
So, what if we just hired everybody who needs a job? Could a federal job guarantee work?
Salon
The right’s jobs debacle: Here’s how to bring unemployment down to zero
Bryan Williams

The Vineyard of the Saker — Novorussia: independent, associated or (con)federated?


Nuanced.

The Vineyard of the Saker
Novorussia: independent, associated or (con)federated?
Vineyardsaker

Liberty Website Reports USPS Worker Discards Mail...what's the point?


How does the libertarian brain work?

OK, below is a snip from one of these libertarian people's websites where we can see them report an incident during which someone working for the US Postal Service in (I'm sure) violation of postal regulations, apparently discarded some mail I assume rather than deliver it during the remainder of the shift...

So these libertarians report:

A USPS worker was recorded throwing mail into a dumpster in Bond Hill, Ohio last week. The female worker is show tossing the letters, paychecks and notices into the trash and could face federal charges for the crime. 
“This is clearly unacceptable behavior that does not reflect the efforts of the thousands of professional, dedicated carriers in our workforce,” USPS spokesman David Van Allen said.
That's all the post reports, so what is the point here from these libertarians?

Libertarians are by definition anti-authority, here it is right from wiki:
While libertarians share a skepticism of authority...
So what prevents this postal worker from throwing out the mail other than authority?

If a supervisor was along for the ride that day, do we think that this worker would have pulled over to throw out the mail?

Of course not (unless the supervisor was also a libertarian I suppose...), so this postal worker simply acted in libertarian fashion, i.e. could give a shit about anyone else, IGNORED AUTHORITY, and simply pulled over and threw out the mail.

So what is the libertarian point here?  Seems like something right out of the libertarian playbook...  I just don't get how the libertarian brain works... I suppose they could have been applauding the postal worker?

Hard to get these people...


Paul Ingram — NATO-Russia: time for a change in direction

NATO’s summit this week offers the opportunity to turn the tide against the re-emergence of the cold war in the context of the Ukraine crisis. It is an opportunity, however, unlikely to be taken.
Open Democracy — Open Security
NATO-Russia: time for a change in directionPaul Ingram, executive director of the British American Security Information Council (BASIC) since 2007. BASIC works in the US, the UK, Europe and the middle east to promote global nuclear disarmament and a transformation in strategic relationships using a dialogue approach.

DS Wright — Senator John McCain Claims Ukraine President Yanukovich ‘Overthrown Peacefully’

Perhaps one of the reasons Senator John McCain has been so consistently wrong about world events is that he is living in an alternate reality. Over the weekend Senator McCain told Face The Nation that former Ukraine President Viktor Yanukovich was “overthrown peacefully by the people of Ukraine.”Regardless of how you feel about Viktor Yanukovich it is flat out wrong to claim he peacefully removed from office – obviously and comprehensively wrong. It is so amazingly inaccurate that in order to to say it you either have to be a shameless liar or mentally defective.
Senile?

Firedoglike
Senator John McCain Claims Ukraine President Yanukovich ‘Overthrown Peacefully’
DS Wright

Veteran Intelligence Professionals for Sanity (VIPS) Warning To Merkel on Russian ‘Invasion’ Intel

Alarmed at the anti-Russian hysteria sweeping Official Washington – and the specter of a new Cold War – U.S. intelligence veterans took the unusual step of sending this Aug. 30 memo to German Chancellor Merkel challenging the reliability of Ukrainian and U.S. media claims about a Russian “invasion.”
Take Away: "You need to know, for example, that accusations of a major Russian “invasion” of Ukraine appear not to be supported by reliable intelligence. Rather, the “intelligence” seems to be of the same dubious, politically “fixed” kind used 12 years ago to “justify” the U.S.-led attack on Iraq."

Signed by
William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.) 
David MacMichael, National Intelligence Council (ret.) 
Ray McGovern, former US Army infantry/intelligence officer & CIA analyst (ret.) 
Elizabeth Murray, Deputy National Intelligence Officer for Middle East (ret.) 
Todd E. Pierce, MAJ, US Army Judge Advocate (Ret.) 
Coleen Rowley, Division Counsel & Special Agent, FBI (ret.) 
Ann Wright, Col., US Army (ret.); Foreign Service Officer (resigned)
Consortium News
Warning Merkel on Russian ‘Invasion’ Intel

Laurence Cox and Alf Gunvald Nilsen — The twilight of neoliberalism: can popular struggles create new worlds from below?

If the ideologists of neoliberalism want to present it as the natural order of humanity, a more sober historical assessment points out that it has lasted about as long as Keynesianism did before it – a few decades.
In our new book We Make Our Own History: Marxism and Social Movements in the Twilight of Neoliberalism we condense four decades of research and activism into an argument about how ordinary people can understand the nature of the world we live in and find ways to push beyond the neoliberal orthodoxy of the last few decades.
We start by asking how we can get beyond the theologies of university economists – impervious to the failures of their ideas and their costs in human lives – and the opinion politics of angry right-wingers on the Internet. We look at how people in struggle learn about the world through attempting to change things (and in the process overthrow apartheid, dictatorships or empires) and develop movement-based theories such as Marxism, feminism or ecological thinking. Often these forms of thought become taken up into the university, and popular movements have to “reclaim, reuse and recycle” them for their own purposes, in attempting to break out of the limits which the powerful and wealthy want to set on them.
 
We Make Our Own History rethinks humanist Marxism as a theory of collective action, including the ways in which social movements from below can develop from localised struggles over individual issues to far-reaching projects for social change (a welfare state, an end to patriarchy, an ecologically sustainable society). It also looks at the history of movements from above – those which can draw on the resources of capital, the state or cultural power to impose themselves. Rather than see these as unstoppable, we show how complex the process of constructing power has been, how at every stage of the way popular resistance has shifted the terrain, and how short-lived all historical forms of capitalism have been. If the ideologists of neoliberalism want to present it as the natural order of humanity, a more sober historical assessment points out that it has lasted about as long as Keynesianism did before it – a few decades – and is just as vulnerable to the collapse of the alliances which sustain it.…
Yet any attempt to shortcircuit the slow development of popular agency, whether through opinion politics or intellectual critique which discuss structures in isolation from the kinds of agency which sustain them – and the kinds of agency needed to overcome them – is doomed to failure. The most effective orientation for change is one which starts from dialogue with practically situated struggles – those that people have to engage in to sustain their lives – and supports their extension in alliances across space but also across the social world, into far-reaching projects for change which are grounded in a wide range of differentsituations. These processes of external struggle, internal learning and alliance-building are what matter most, and there is no short-cut (in universities, parties or shouting at the computer screen) that can usefully avoid them. 
Human beings make our own history, but not just as we please: neoliberalism, like all other forms of capitalism before it (and in the bigger picture like every form of class society), had a beginning and will have an end. The key question in this crisis is whether movements from below are able to develop together in a way that enables them to set the direction for what comes next.
Open Democracy

Ellen Brown — Even the Council on Foreign Relations Is Saying It: Time to Rain Money on Main Street


Ellen comments on the Mark Blyth and Eric Lonergan article on actual helicopter drops published in Foreign Affairs (posted here at MNE last week). 

If you haven't read it in its entirety, it's worthwhile. Even if you have, since its appearance a long comments section has been generated in which Eric Lonergan addresses multiple objections.

It's a serious proposal for central banks adopting fiscal policy to complement monetary policy, since the latter has shown itself to be ineffective.

While I am reticent to see a small cohort of unelected and unaccountable bureaucrats invested with even more political and economic power, this may be the only practical alternative to permanent gridlock in legislatures.

However, even this has similar limitations, since if it were tried, TPTB would soon capture the appointment process to ensure that only cronies were appointed and helicopter drops were directed at them.

So I don't see this as a viable alternative to democratic process in the long run, even though it might provide a short term fix.

Web of Debt
Even the Council on Foreign Relations Is Saying It: Time to Rain Money on Main Street
Ellen Brown

Bob Sutton — The Baboon Troop that Mellowed Out After the Alpha Males Died


The No Assholes Rule.

Work Matters
The Baboon Troop that Mellowed Out After the Alpha Males Died
Bob Sutton | Professor of Management Science and Engineering and a Professor of Organizational Behavior (by courtesy) at Stanford. co-founder of the Center for Work, Technology and Organization, which he co-directed from 1996 to 2006, and also co-founder of the Stanford Technology Ventures Program and the Hasso Plattner Institute of Design (which everyone calls “the d school”).
(ht Lambert Strether at Naked Capitalism)

Bill Mitchell — Large-scale employment guarantee scheme in India improving over time

Successful policy is not about how rich it makes society in general [e.g. as measured in GDP per capita] but how rich it makes the poor! I see richness in broad terms which embrace both economic and social valuations. So it is not just about how much stuff one can command ownership of. Various versions of this rule have been expounded by people over the years. 
It is anti-trickle down and all the neo-liberal hype that justified transferring real income and wealth to the top-end-of-town, via deregulation etc and then claiming it would eventually enrich the lower income groups and poor as a result of the increased endeavour at the top that was claimed to engender. A total lie.
Bill Mitchell – billy blog
Large-scale employment guarantee scheme in India improving over timeBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Diane Coyle — Economies and economics

As part of the preparation for the new course I’m teaching at the University of Manchester this autumn, Economics for Public Policy, I’ve been looking again at Microeconomics: Behavior, Institutions and Evolution by Sam Bowles. It’s a decade old now but still pretty unique in its approach, which is rooted in social interactions and institutions rather than the atomised individuals of the standard micro course. In other words, it’s about economies, and not ‘economics’.
The Enlightened Economist
Economies and economics
Diane Coyle | Acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Ralph Musgrave — MMT for beginners

At least this is my version of MMT. Hopefully other MMTers will agree.
You are invited to give Ralph feedback either at his place or in the comments here, or both.

Ralphonomics
MMT for beginners
Ralph Musgrave

Joseph E. Stiglitz — Democracy in the Twenty-First Century

The economist Thomas Piketty’s forecast of still higher levels of inequality does not reflect the inexorable laws of economics. Indeed, the main question today is not really about capital in the twenty-first century; it is about democracy in the twenty-first century.
Economists are now starting to weigh in strongly on social and political philosophy, social science, and political science. That's a good thing.

Since the ancient Greeks, this debate has been about what it means to life a good life as an individual in a good society. This is the subject matter of ethics, on one hand, and social and political inquiry on the other. Economics is a subset of these as a "moral science" (J. M. Keynes).

Failure to recognize this is to miss the entire point of economics as a discipline of knowledge that does not and cannot exist separately and independent from other disciplines of knowledge anymore than an economy can be separated from the society and its institutions that it serves as a material life-support system.

The issue: Is neoliberal capitalism antithetical to democracy instead of being its sine qua non as claimed by neoliberals (TINA). If neoliberalism and democracy are incompatible, how can this disconnect be reconciled socially, politically, and economical in an integrate fashion that serves both unique individuals and the society as a whole.

This requires inquiry into how to reconcile and harmonize the liberal ideals of the Enlightenment — liberty, egality, and community.

In America, this requires taking into consideration the Preamble: We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

While the Preamble does not grant any rights or powers not included in the text of the US Constitution, it does state explicitly the basis for public purpose in a constitutional democracy.

Project Syndicate
Democracy in the Twenty-First Century
Joseph E. Stiglitz | Nobel laureate in economics, University Professor at Columbia University, formerly Chairman of President Bill Clinton’s Council of Economic Advisers and Senior Vice President and Chief Economist of the World Bank

Jonathan Larson — Sergei Glaziev—Putin's economic brain


If Putin listens to this advice, the US Brzezinski doctrine is going on the rocks.

real economics
Sergei Glaziev—Putin's economic brain
Jonathan Larson