Saturday, April 4, 2020

Dirk Ehnts – The Eurozone is Fully Committed to Modern Monetary Theory (MMT)

In my book “Geld und Kredit: Eine €-päische Perspektive” (3rd edition, 2020) I gave the following recommendation on p. 243 (English version available here):
“This [stabilizing employment in the eurozone with fiscal measures] can be done by the ECB declaring that, in case of doubt, it will buy up all the government bonds of eurozone countries. This would make national government bonds risk-free. It must then be clarified which deficit limits are reasonable in times of upswing and recession. This would leave (or re-establish) the responsibility of national governments for full employment.”
This is exactly what has happened now: deficit limits are lifted, government bonds are risk-free. This was already implied. The previous ECB President Mario Draghi said in September 2019 that the ECB should explore new ideas such as MMT (here). His successor, Christine Lagarde, remarked half a year earlier that MMT is not a miracle cure, but could help to combat deflation (here). A key insight of the MMT is that government debt and deficits are not a problem (here), as the central bank ensures that government bonds are risk-free. The ECB is now doing the same. So all lights are on green: national governments can increase their spending at will. A financing question does not arise. Failures cannot occur, so questions of liability are also irrelevant....
Brave New Europe

FT editorial: “Radical reforms are required to forge a society that will work for all” Prakash Loungani

An editorial in the Financial Times headlined “Virus lays bare the frailty of the social contract” says that recent developments “shine a glaring light on existing inequalities” and that “to demand collective sacrifice you must offer a social contract that benefits everyone.” The FT states: “Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”...
Link to editorial: https://www.ft.com/content/7eff769a-74dd-11ea-95fe-fcd274e920ca
FT throws in  the towel on neoliberal globalization. Elites running scared?

On the same day the British Labour party announced the election of a center-rightt new party leader to replace the much denigrated socialist Jeremy Corbyn, the Financial Times(!) calls for the socialist policies Corbyn had planned to implement....
Labour blows it again. US Democratic Party not far behind.

Moon of Alabama
The Financial Times Asks For Socialist Policies

What MMT Is, and Why We Should Not Wait for the Next Crisis to Live Up to Our Means — Yeva Nersisyan and L. Randall Wray

As MMT has been thrust into the spotlight, misrepresentations and misunderstanding have followed. MMT supposedly calls for cranking up the printing press, engaging in helicopter drops of cash or having the Fed finance government spending by engaging in Quantitative Easing.
None of this is MMT.
Instead, MMT provides an analysis of fiscal and monetary policy applicable to national governments with sovereign, non-convertible currencies. It concludes that the sovereign currency issuer: i) does not face a “budget constraint” (as conventionally defined); ii) cannot “run out of money”; iii) meets its obligations by paying in its own currency; iv) can set the interest rate on any obligations it issues.
Current procedures adopted by the Treasury, the central bank, and private banks allow government to spend up to the budget approved by Congress and signed by the President. No change of procedures, no money printing, no helicopter drops are required....
Multiplier Effect
What MMT Is, and Why We Should Not Wait for the Next Crisis to Live Up to Our Means
Yeva Nersisyan and L. Randall Wray

Macro Models Aren't Useful Now, And That Is Perfectly Fine Brian Romanchuk

There has been a small flurry of publications by neoclassical economists attempting to fit a pandemic into standard frameworks. This is what to be expected, as neoclassical models are frameworks designed to maximise the amount of publications over time. However, aggregated models are not particularly useful right now. This is true both for neoclassical as well as traditional heterodox macro models. The reason is that they do not offer much insight into either forecasting, nor are they useful for policymakers. That will change, but we are not there yet.
I will quickly discuss the two main justifications for looking at macro models....
Bond Economics
Brian Romanchuk

Why is Coronavirus so successful? How to defeat COVID-19 & SARS-CoV-2

A really interesting video about the virus, and why it's so effective.





I went shopping yesterday and felt my medical mask was a bit flimsy so I put my bike mask over the top as well. I also put my DIY eye protection glasses on, so I felt pretty safe, like I was in a deep a sea diving suit, except my glasses kept misting up because as I breathed out my breath came right out of the top of the mask straight up into them.


Also, the double mask idea wasn't such a great idea either because they kept falling down, so I had to keep adjusting them. Then, when you add that I had to keep lifting my glasses up to see properly, it turned out that I was touching my face quite a lot, which I only realised when I got outside the store and took everything off.


I had gloves on, but everything I touched in the store could potentially have had the virus on. Crikey! So, just the one simple mask when I go shopping next time.

Sand under a microscope

Savages in the box!


Starting to miss baseball a bit...

Great highlight from last season where Aaron Boone speaks truth to incompetent power...

We need a lot more of this type of thing out there in general... A LOT more...

Epic rant from Boone... Great video...




The thinking error at the root of science denial, by Jeremy P. Shapiro

How the denier mind works.

I've been debating with deniers for weeks on Twitter and it can be soul destroying, but I'm sure some are sockpuppets, that is, they are professional, paid deniers.

It got interesting the other day when we got onto politics where I agreed with deniers about Hillary Clinton, but after that the liberals went mad at me. It was strange because now the conservatives were on my side about Putin, Hillary, and Russia, although it didn't last long.

The liberals also started to attack China and as I don't like the demonisation of China I defended them, but after that, both the conservatives and the liberals were at my throat. It's a strange world because one conservative supported me about China. He was very anti-war and quite thoughtful.

The liberals were hot-blooded and aggressive. It seems they hate Trump so much that they are prepared to believe everything they have been told about Russiagate.


There is no ‘proof’ in science

In my view, science deniers misapply the concept of “proof.”

Proof exists in mathematics and logic but not in science. Research builds knowledge in progressive increments. As empirical evidence accumulates, there are more and more accurate approximations of ultimate truth but no final end point to the process. Deniers exploit the distinction between proof and compelling evidence by categorizing empirically well-supported ideas as “unproven.” Such statements are technically correct but extremely misleading, because there are no proven ideas in science, and evidence-based ideas are the best guides for action we have.

The Conversation 

The thinking error at the root of science denial, by Jeremy P. Shapiro



Every Day 10,000 People Die Due To Air Pollution From Fossil Fuels, Roger Pielke



Roger Pielke has been the darling of the deniers as he thinks climate change won't be that bad. The deniers often post his articles, but when I tweet this one they moan saying what has this to do with climate change?


'Air pollution policies have in the past largely focused on making fossil fuel burning cleaner, but it may be time to include a focus on more rapidly phasing-out of fossil fuels.

Every Day 10,000 People Die Due To Air Pollution From Fossil Fuels, Roger Pielke


The scientists at Watts Up With That


What if I can't pay my mortgage? Steve Keen on the Coronavirus & Economic Crisis with Aaron Wissner

There's a whole load of people on twitter, including some economists, who think we are going over the top about Covid-19. They even post articles by some top virologists who say it's no worst than common flu.

They are concerned about the effect the Lockdown will have on the economy, but I think Steve Keen is right: total isolation and the National Guard or the Post Office delivering food to people's houses, and with testing kits, it should all be over in 8 weeks causing minimum harm to the economy.



What if I can't pay my mortgage? How can I pay my rent?  Will I get fired?  Can I file for unemployment?  What bills should I pay?  What bills should I delay?  

The world's top economist, Dr Steve Keen, sits down with Aaron Wissner of Local Future to discuss what people should do, and how people should think about money, during the coronavirus crisis.

Dr Keen is one of about a dozen people in the world who accurately predicted the 2008 debt bubble collapse and the resulting collapse of the housing markets, the stock markets, and the unemployment to follow; and the only one to be able to describe the reasoning mathematically.

This was possible due to his understanding of money, debt, credit and mathematics as it plays a role in the economy.

This "school" of economic thought is referred to as "post-Keynesian" school, as distinct and separate from "mainstream" economics, which currently the globally dominant (and structurally flawed) school of economic thought.

Post-Keynesian is much more similar to a "hydraulic macroeconomic" model.  Dr Keen generally references the work of John Maynard Keynes, Irving Fisher, Joseph Schumpeter, and Hyman Minsky as influences in helping him to understand money and economics in these terms.  (Perhaps along with writings from John Kenneth Galbraith and Michael Hudson.)

During the conversation, the two discuss what to pay first; the reasons to support a global payment strike on mortgage, rent, taxes and corporate bills; how to prioritize food over all else; methods of food distribution to minimize/eliminate the possibility of contamination; the role of the government in the creation of money; whether gold is or is not money; whether hyperinflation might be at hand (no); and more.

Friday, April 3, 2020

Air Pollution Harms Every Part of Your Body, Research Shows

Nearly 8.8 million people die prematurely each year due to air pollution.


I was out cycling last week and it was sunny and I noticed how fresh the air was. I put it down to Spring but when I got home they said on the news the air was fresh because of the Lockdown.

I worked on diesel vehicles for years and one day a colleague said he had seen a secret government report saying that diesal fumes were one of the most cancerous substances around. It turned out to be true. 

The researchers argue that the ultrafine particles that make up air pollution are absorbed by the bloodstream and travel throughout the body, potentially harming every cell in the body. Additionally, the presence of these particles in different organs could cause dangerous levels of inflammation as the body’s immune system tries to fight what it perceives to be infection.

Global Citizen

Air Pollution Harms Every Part of Your Body, Research Shows

US snatches masks from Germany in act of ‘modern piracy’ – Berlin senator

A delivery of 200,000 masks left a 3M factory in China this week and arrived in Bangkok, Thailand, from where they were supposed to be sent to the German capital. The masks never got to Berlin, and police in the city told Der Tagesspiegel that the shipment was instead bound for the US. Berlin's Senator for the Interior Andreas Geisel confirmed on Friday that the masks had been “confiscated.”

“We consider this an act of modern piracy. This is not how you deal with transatlantic partners,” Geisel said.

Tom Mills Tweet

In light of all the deniers on twitter who are having a field day making light of COVID-19, I thought this was spot on.

Seeing reports from the BBC that everyone dies eventually. Huge if true.

Walk the World - The Merits of MMT + MMT Is Now Official Policy!

I discuss MMT (Modern Monetary Theory) with Steven Hail from the University of Adelaide, who makes the case for a different way to think about public debt, and the potential benefits of running a (controlled) deficit. 





A point by point critique of MMT which I found interesting.





Links — 3 April 2020

Reminiscence of the Future
Trump's World.
Andrei Martyanov

Foreign Affairs
Mark Blyth: The U.S. Economy Is Uniquely Vulnerable to the Coronavirus

Intel Today
CIA Order of Succession 2019 — When Haspel Ripped a Page from Hoover Book
Ludwig De Braeckeleer

Moon of Alabama
The Science Says #MaskUp - A Look At Two New Virus Studies

People's Dispatch
One year after launch, EU countries and Iran close first deal under INSTEX payment mechanism

The Grayzone

Zero Hedge
Putin Responds To Trump Oil Gambit: 10MM Production Cut "Possible" But US Needs To Join
Tyler Durden

Marketplace
How a debt jubilee could help the U.S. avert economic depression
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University


Moonetary Policy gone berserk!


Righteous rant from Mike here:





Here are the hockey stick graphs Mike produced from his data:





I'll add the one from September 2008 that shows the SAME THING when they caused the GFC back then:





Checkmate... AGAIN.... for like the 1005th time.... except for morons.... just take the L....







Thursday, April 2, 2020

Links — 2 April 2020

Valdai
Coming Political and Social Troubles from Coronavirus
Clifford Kupchan

Reminiscence of the Future
OO From OODA In Relation To GIGO.
Andrei Martyanov

FAIR (information war)

Fort Russ News
UN Warns of Global Food Shortage Caused by Coronavirus Measures
Drago Bosnic

Russia Observer
RUSSIAN FEDERATION SITREP 2 APRIL 2020
Patrick Armstrong

Caitlin Johnstone — Rogue Journalist
Someone’s Screwing You, And It Ain’t China: Notes From The Edge Of The Narrative Matr
Caitlin Johnstone

The Vineyard of the Saker
China rolls out the Health Silk Road
Pepe Escobar


We Need Class, Race, and Gender Sensitive Policies to Fight the COVID-19 Crisis— Disproving the belief that the pandemic affects us all equally, data collected by New York City Department of Health and Mental Hygiene and a piece published today in the New York Times shows that the novel coronavirus is “hitting low-income neighborhoods the hardest.”[1] In a forthcoming policy brief, we share evidence that this pattern would be the case and provide a solid explanation as to why (Nassif-Pires et al., forthcoming). Moreover, as we argue, the death tolls are also likely to be higher among poor neighborhoods and majority-minority communities. This inequality in health costs is in addition to an unequal distribution of economic costs. In short, poor and minority individuals are disproportionately feeling the impacts of this crisis. A concise version of our evidence is presented here.Luiza Nassif-Pires, Laura de Lima Xavier, Thomas Masterson, Michalis Nikiforos, and Fernando Rios-Avila

Disproving the belief that the pandemic affects us all equally, data collected by New York City Department of Health and Mental Hygiene and a piece published today in the New York Times shows that the novel coronavirus is “hitting low-income neighborhoods the hardest.”[1] In a forthcoming policy brief, we share evidence that this pattern would be the case and provide a solid explanation as to why (Nassif-Pires et al., forthcoming). Moreover, as we argue, the death tolls are also likely to be higher among poor neighborhoods and majority-minority communities. This inequality in health costs is in addition to an unequal distribution of economic costs. In short, poor and minority individuals are disproportionately feeling the impacts of this crisis. A concise version of our evidence is presented here....
Multiplier Effect
We Need Class, Race, and Gender Sensitive Policies to Fight the COVID-19 Crisis
Luiza Nassif-Pires, Laura de Lima Xavier, Thomas Masterson, Michalis Nikiforos, and Fernando Rios-Avila

Supply Chains Are Being Hit By Consumption Pattern Changes — Brian Romanchuk

Will Oremus has written an interesting article "What Everyone's Getting Wrong About the Toilet Paper Shortage." The key takeaway is that it is not all about hoarding or even inventory building, it is also a consumption shift. His source from inside the industry gave a guesstimate that 40% of toilet paper is for commercial buildings. With the shutdown in activity, that commercial usage is moving to houses. The problem is straightforward: commercial toilet paper is a completely different product than residential, with different inputs*, produced at different plants, and use a completely different supply chain.…
Bond Economics

We Are All MMTers Now — John Furlan

The U.S has potentially entered the Age of Modern Monetary Theory (MMT) with the deficit-busting stimulus bill, which would follow the two previous political/economic paradigm shifts, the Age of FDR/Keynes from 1932 to 1980, and the Age of Reagan/Friedman from 1980 to 2008. It’s just that most Americans haven’t even heard of MMT yet, but that could change very quickly if Sanders starts mentioning it,...
If Sanders does so, he may still have the very belated chance to lead the historic paradigm shift, even if he doesn’t get the nomination, should he choose in the next Democratic debate in April, using the stimulus bill as the consummate opportunity.
To do so, what Sanders must emphasize from this day on should be based on what Kelton wrote in her March 21 New York Times op-ed, which - because of the stimulus bill - is BY FAR the single most important thing you MUST read this week, other than articles on Covid-19 safety. Here are her last three paragraphs: 
economicintersect.com
We Are All MMTers Now
John Furlan

How Can We Cooperate When the Pandemic Is Driving Us Apart? — Jill Suttie interviews Paul Atkins

JS: What are those concepts? What do we need for groups to be more kind, helpful, and cooperative?
PA: There are eight design principles in our book that help groups to act more cooperatively [for the common good].
Greater Good Magazine
How Can We Cooperate When the Pandemic Is Driving Us Apart?
Jill Suttie interviews Paul Atkins, coauthor of the new book Prosocial: Using Evolutionary Science to Build Productive, Equitable, and Collaborative Groups.

We Must Spend Our Way to Recovery, Says Economist — Angelika Albaladejo

The recently passed $2.1 trillion stimulus proves that Congress has always had the power to fund big spending packages, without worrying about how to offset the costs. That is according to Modern Monetary Theory, an economic school of thought that’s been gaining prominence in recent years, including among rising progressive political stars like Congresswoman Alexandria Ocasio-Cortez.




Stephanie Kelton
Stephanie Kelton, Modern Monetary Theory’s most prominent advocate, spoke to Capital & Main about the federal government’s response to COVID-19 and the oncoming economic recession. Kelton is a professor of economics and public policy at New York’s Stony Brook University. She has served as a chief economist for Democrats on the U.S. Senate Budget Committee and as an advisor to Senator Bernie Sanders’ 2016 and 2020 presidential campaigns. Her new book, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, will be published in June.
This interview has been edited for length and clarity.... 
An economist with star power.

Capital and Main
We Must Spend Our Way to Recovery, Says Economist
Angelika Albaladejo

Michael Roberts — blogging from a marxist economist Engels on nature and humanity


Marx tends to get all the credit and garners of the opprobrium, too. But Engles also made significant contributions, both to Marx's thinking and also in his own right. He did a lot more than pay Marx's bills so he had freedom to do research and write.

Michael Roberts points out that Marx and Engels also were ecological economists and environmental economists as well as classical economists analyzing economic rent and rent-extraction as the basis of capitalism in a way similar to feudalism but also different from it owing to the difference in conditions of material production.

Worth a read now that alternatives are under discussion and options under consideration.

Michael Roberts Blog — blogging from a marxist economist
Michael Roberts

Inequality, morals & Marxism — Chris Dillow


Previously Marxian Chris Dillow goes full-on Marxist. Time to change the material conditions of production. This is a moral argument in addition to being an economic one.

Capital had its chance twice. The first time it failed was in the global financial crisis, which lead to obscene levels of "inequality" (read funneling ownership and control of real and financial resources to the top). Now, there is systemic failure that threatens civilizational collapse, with the current pandemic only one of the factors involved. Metaphorically, there are four horsemen of the apocalypse.

We need a new approach to power-sharing. TPTB not only aren't cutting it but are also getting in the way. Time to make room for competence.

Stumbling and Mumbling
Inequality, morals & Marxism
Chris Dillow | Investors Chronicle

Bill Mitchell — EMU Member States should ignore Brussels and do whatever it takes

Last Thursday (March 26, 2020), the European Council met to discuss the way in which the European Union would deal with the coronavirus crisis. Not much happened. Well that is not exactly true. A lot happened in the sense that even when faced with the worst health crisis in a century that is already devastating the populations in Italy and Spain and creating economic havoc throughout, the leadership split along familiar lines and failed to come up with any solution. There was a lot of talk about solidarity and all the buzz words that the European leadership frequently outputs in their wordy statements. But very little action and lots of acrimony, division and back to form behaviour. My view is that the Member States should now just do whatever they consider it takes to bolster their health systems and protect their economies, which will involve significant fiscal deficits (multiples of the allowable limits under the Stability and Growth Pact), and trust that the ECB’s unlimited bond buying spree will back them. And when the Brussels technocrats start talking about Excessive Deficit Mechanisms and the rest of the blather, they should just show them the door. And if push comes to shove, they just should exit the whole rotten structure. But now is the time for defiance and disobedience. Now is the time that democracy fought back and told the elites to be quiet....
Yanis Varoufakis already blew the whistle on the EZ elite based on his dealings with them as finance minister of Greece. The wisest course would be to exit this toxic environment as soon as possible before they do any more damage. 

Same goes for NATO. It is no longer fulfilling its original purpose, which was questionable anyway and has has become a tool of white power and empire. Radical, you say?  I was a US naval officer serving in the Western Pacific during Vietnam. I was gung ho until I learned what was really going on. When I got out I became an anti-war activist and an opposer of liberal interventionism.

Two of the most significant warnings to American were issued by American presidents. The first was George Washington's warning against party factionalism in his farewell address (1796), written with the assistance of Alexander Hamilton. The second was Ike's warning in his farewell address (1961) about the military-industrial complex that he was instrumental in creating post WWII. 

Also worthy of mention is Truman public regret for having created the postwar CIA as the successor to the wartime OSS as a standing intelligence/operational service that would spearhead the creation of a deep state as a shadow government. In fact, the CIA, which then grew into the combined intelligence services that now includes a "department of homeland security" may have the widest and deepest influence, but we can only glimpse this through the courage of whistleblowers.

Of course, all this is dismissed as "conspiracy theory" by elites, their minions and those brainwashed by propaganda from complicit media, but the facts speak for themselves. From ancient times, elites have shown that when it comes to governance they are it for themselves their cronies and when push comes to shove their class as they put elite factionalism on the back burner to put down a rising "rabble."

Bill Mitchell – billy blog
EMU Member States should ignore Brussels and do whatever it takes
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tom O'Connor - U.S. HAS SPENT SIX TRILLION DOLLARS ON WARS THAT KILLED HALF A MILLION PEOPLE SINCE 9/11, REPORT SAYS

The United States has spent nearly $6 trillion on wars that directly contributed to the deaths of around 500,000 peoplesince the 9/11 attacks of 2001.

"In sum, high costs in war and war-related spending pose a national security concern because they are unsustainable," the report concluded. "The public would be better served by increased transparency and by the development of a comprehensive strategy to end the wars and deal with other urgent national security priorities."


Michael Greger - Benefits of Flax Seeds for Inflammation

I thought this was excellent. Dr Michael Greger is a vegan and has no ties to any companies. Here he talks about the benefits of flax seeds.

Apparently, one tablespoon of flax seed a day is all that is needed, but you should grind it or buy it split as it will just pass through the body otherwise. It seems to have powerful anti-inflammatory effects, and it can lower blood pressure as well as drugs do but without side effects.




Should we be concerned about the cyanide in flax seed?


Wednesday, April 1, 2020

Links — 1 April 2020

Reminiscence of the Future
Noblesse Oblige.
Andrei Martyanov

The Unz Review
Trump Asks Putin for Help in Oil War

Zero Hedge (uncertainty, no data or unreliable data)
UBS: Does Anyone Know What Is Happening?
Tyler Durden

Zero Hedge (real resource non-availability)
Supplies Are Starting To Get Really Tight Nationwide As Food Distribution Systems Break Down
Tyler Durden


In Groundbreaking Move, Fed Excludes Treasurys From Leverage Ratio Rule: Here's What That Means — Tyler Durden


Temporarily, for one year.

Zero Hedge
In Groundbreaking Move, Fed Excludes Treasurys From Leverage Ratio Rule: Here's What That Means
Tyler Durden

War Footing...


US at hair trigger weapons free status.. and the whole country is in a very bad mood...