Thursday, November 23, 2017

Daily Mail -'American mercenaries are torturing' Saudi elite rounded up by new crown prince - and billionaire Prince Alwaleed was hung upside down 'just to send a message'

Saudi princes and billionaire businessmen arrested in a power grab earlier this month are being strung up by their feet and beaten by American private security contractors, a source in the country tells

The group of the country's most powerful figures were arrested in a crackdown ordered by Crown Prince Mohammed Bin Salman three weeks ago as he ordered the detention of at least 11 fellow princes and hundreds of businessmen and government officials over claims of corruption.

Just last month, the Crown Prince vowed to restore 'moderate, open Islam' in the kingdom and relaxed a number of its ultra-conservative rules, including lifting a ban on women driving. can disclose that the arrests have been followed by 'interrogations' which a source said were being carried out by 'American mercenaries' brought in to work for the 32-year-old crown prince, who is now the kingdom's most powerful figure.

'They are beating them, torturing them, slapping them, insulting them. They want to break them down,' the source told 

'Blackwater' has been named by's source as the firm involved, and the claim of its presence in Saudi Arabia has also been made on Arabic social media, and by Lebanon's president. 

The firm's successor, Academi, strongly denies even being in Saudi Arabia and says it does not engage in torture, which it is illegal for any U.S. citizen to commit anywhere in the world. 

The Saudi crown prince, according to the source, has also confiscated more than $194 billion from the bank accounts and seized assets of those arrested.

Luis Alberto Moreno — A Belt and Road for the Americas?

In a time of global uncertainty, a vision of “made in the Americas” prosperity provides a unifying agenda for the continent. If implemented, the US could reassert its historical leadership among a group of countries that share its fundamental values, as well as an interest in inclusive economic growth and rising living standards.
If the US doesn't do it, then China will.

Project Syndicate.
A Belt and Road for the Americas?
Luis Alberto Moreno | President of the Inter-American Development Bank, and a member of the World Economic Forum’s Foundation Board

Andrew Sheng and Xiao Geng — The Next Battle in China’s War on Corruption

Good post. Cites David Graeber. This indicates that some Chinese are reading Western alternative viewpoints, learning from them, and integrating them with specifically Chinese conditions. But it is also about corruption in general and is not limited to China.

Project Syndicate
The Next Battle in China’s War on Corruption
Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong, member of the UNEP Advisory Council on Sustainable Finance,  former chairman of the Hong Kong Securities and Futures Commission, and currently an adjunct professor at Tsinghua University; and Xiao Geng, President of the Hong Kong Institution for International Finance and professor at the University of Hong Kong.

Myles Udland — A major psychological shift is occurring across markets and the economy

Markets and the economy are increasingly being characterized by one word: certainty.
This is likely to worry some investors and market watchers who see over-confidence in the future as a sign that things are about to change.
On Wednesday, the latest consumer sentiment survey from the University of Michigan indicated that while overall confidence in the economy is sitting right near a 13-year high, “what has changed recently is the degree of certainty with which consumers hold their economic expectations.”...

Erik Reinert — Towards a better understanding of convergence and divergence: or, how the present EU strategy – at the expense of the economic periphery – neglects the theories that once made Europe successful

This new working paper attempts to address some of the main problems of the European Union today. The main thesis is that the Weltanschauung and the economic narrative on which the European project has been based have changed radically since the inception of the European Project, from one conducive to convergence and cohesion to another which is conducive to divergence and, in the last instance – I shall argue – to a form of internal colonialism towards the economic periphery.
The field of Science and Technology employs the term sociotechnical imaginary [1] about the collective narratives and visions of social futures and of the common good. I shall argue that the European Union has moved away from the sociotechnical imaginary, or narrative, that dominated after World War II. I shall argue that this post WW II Marshall Plan Narrative (MPN) gave way to an equilibrium-based Neo-Classical Economics Narrative with an added innovation rhetoric, which I shall argue is based on a fairly shallow understanding of innovation (which I shall call NC+I)....
Worthwhile post. The working paper looks good, too, but I haven't yet read it.

He sums up the problem in economics as it is practiced in relation to policy formulation. Conventional economics is a simplification that tends toward oversimplification. Policy based on conventional economists' modeling assumptions and methodological choices risks being unrealistic. This has consequences that manifest not only economically but also socially and politically.
In other words, we must attempt to perceive the complex realities behind simple numbers.
Developing Economics
Towards a better understanding of convergence and divergence: or, how the present EU strategy – at the expense of the economic periphery – neglects the theories that once made Europe successful
Erik Reinert | Professor of Technology Governance and Development Strategies at Tallinn University of Technology, Estonia, Senior Research Fellow at NORISS, Norwegian Institute of Strategic Studies, in Oslo., and Founder and Chairman of the Other Canon Foundation

Brian Romanchuk — The Theoretical Incoherence Of Full Employment Arguments

One quite often runs into arguments that rely on assuming full employment, and then relating that policy decisions. In my view, such arguments are fundamentally weak; we need to refer to actual model results to discuss policy. In this article, I explain why an attempt to apply a NAIRU argument to a Job Guarantee is misguided. The analysis is unusual: instead of discussing a single model, the behaviour of an entire class of reasonable economic models is analysed. This reflects the attitude towards model uncertainty that animates robust control theory.
Since my thesis is that full employment arguments are mathematically incoherent, I had little choice but to lapse into a stilted mathematical writing style. My apologies....

Bond Economics
The Theoretical Incoherence Of Full Employment Arguments
Brian Romanchuk

Oliver Carroll — Vladimir Putin says all big Russian businesses should be ready for war production

Taking no chances in a dangerous world, with NATO policy being to encircle Russia and to destabilize it internally. 

Of course, the West will see this a gearing up for an invasion of Europe and the corporate media will picture it as the resurgence of the Red Menace, calling for an military buildup and renewed arms race.
Last Monday, British Prime Minister Theresa May said the UK would lead a response to counter “Russian hostility.” “We know what you are doing,” she said.
Meanwhile, China is also beefing up militarily as the US "pivots to Asia" and further encircles China. As a consequence, India is also beefing up its military.

The Independent
Vladimir Putin says all big Russian businesses should be ready for war production
Oliver Carroll

Chris Dillow — Notes on productivity

Productivity is a problem and conventional British economists don't have a theory that explains it. So what to do? Oh, right, more blood letting (austerity).

Stumbling and Mumbling
Notes on productivity
Chris Dillow | Investors Chronicle

Raúl Ilargi Meijer — Austerity, Bloodletting and Incompetence

Punxsutawney Phil Hammond, the UK chancellor, presented his Budget yesterday and declared five more years of austerity for Britain. As was to be expected. One doesn’t even have to go into the details of the Budget to understand that it is a dead end street for both the country and for Theresa May’s Tory party.

So why the persistent focus on austerity while it becomes clearer every day that it is suffocating the British economy? There are many answers to that. Sheer incompetence is a major one, a lack of empathy with the poorer another. Conservative Britain is a class society full of people who dream of empire, and deem their class a higher form of life than those who work low-paid jobs.
When you see that the British Parliament has even voted that animals don’t feel pain or emotions, you’d be tempted to think it’s a throwback all the way back to the Middle Ages, not just the British Empire. They’re as lost in time as Bill Murray is in Groundhog Day. Only worse.
But perhaps incompetence is the big one here. The inability to understand that if your economy is not doing well, you need to stimulate it, not drain even more of what’s left out of it. The people in government don’t understand economics, and therefore rely on economic theory for guidance. And the prevailing theories of the day prescribe bloodletting as the cure, so they bloodlet (let blood?). Let it bleed.
This is not a British problem, it’s pan-European if not global. Neither is the UK Tory party the only one being killed by it, all Conservative parties share that faith. They’re just lucky that their left wing opponents have all committed hara kiri, and joined their ranks when it comes to economics. All of Europe’s poorer have lost the voices that were supposed to speak for them, to economic incompetence.

Obviously, the US democrats did their own hara kiri years ago. One might label -some of- Bernie Sanders’ views left-wing, but he’s trapped in a system that won’t let him breathe.
All of this leads me to question the following:
The Automatic Earth
Austerity, Bloodletting and Incompetence
Raúl Ilargi Meijer

Will Denayer — The doomsday glacier problem

Sea level rising faster than anticipated by older models. A new model (2002) explains the acceleration. 

Coastal land value?

Flassbeck Economics
The doomsday glacier problem
Will Denayer

Lars P. Syll — Randomization — a philosophical device gone astray

When giving courses in the philosophy of science yours truly has often had David Papineau’s book Philosophical Devices (OUP 2012) on the reading list. Overall it is a good introduction to many of the instruments used when performing methodological and science theoretical analyses of economic and other social sciences issues.
Unfortunately, the book has also fallen prey to the randomization hype that scourges sciences nowadays....
Lars P. Syll’s Blog
Randomization — a philosophical device gone astray
Lars P. Syll | Professor, Malmo University

Bill Mitchell – The lame progressive obsession with meaningless aggregates

Maybe the British Labour Party could get Nancy Pelosi to do some stupid tweets for them as well. She is an expert at it – see my blog – When neoliberals masquerade as progressives. She thinks it is smart progressive politics to post tweets criticising her political opponents for a policy that “explodes the deficit … dumping … debt on every man, woman & child in America”. A fallacious argument. But moreover, a very stupid strategic argument because it fails to educate the public on what deficits and public debt are and what the capacities of a currency-issuing government and locks the progressive side of politics into no-win dilemmas. When it is their turn to govern they quickly find that they have no room to move on government spending because their own taunts when in opposition are thrown back at them. Same the world over. The progressive side of politics seems to have a lame obsession with meaningless aggregates – like the size of the fiscal deficit or public debt to GDP ratio. Pathetic is not the word.
I don't believe that Nancy Pelosi would be regarded as a "progressive" in the US. She is a limousine liberal (rich) and a latté liberal (upper class Californian) that has been a Clinton New Democrat as long as I can remember. She dd not switch to supporting Bernie Sanders in the general, which is a pretty good criterion of being progressive in US politics at the moment. I think most American who are paying attention would recognize that Pelosi and the other New Democrats are neoliberals whose political strategy has been representing the Democratic Party as GOP Lite.

Nancy Pelosi et al are increasing being recognized as old school people that should just step out of the way and make room for new blood take over. The real problem in US politics is that the "new blood" is pretty much the same as the old blood on the issue of fiscal deficits and public debt. TINA (there is no alternative) means that no one is presenting any other alternative than a variant of neoliberalism in economic policy.

The real problem is that most actual progressives in US politics that are actively challenging the Clinton New Democrats for party control are under the same neoliberal illusion or at least have very strong neoliberal tendencies they have absorbed from the ongoing propaganda in US corporate media.

This problem is now endemic in the US and there is no voice of reason present in the establishment, including the corporate media. Polls indicate that it is political folly to espouse views that contract the public perception of deficit hysteria and debt phobia that have been created by organizations such as the Peterson Institute. It may take a deep depression to turn this around.

The bright spot is that Stephanie Kelton got a lot of cred and publicity as Bernie's economic adviser and now she is being featured more in the corporate media. Pavlina Tchernova also got some good exposure regarding the job guarantee that made a wave, too. So some good things are happening, but slowly.

Bill Mitchell – billy blog
The lame progressive obsession with meaningless aggregates
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, November 22, 2017

WSW - Google’s Eric Schmidt admits political censorship of search results

Eric Schmidt, the executive chairman of Google’s parent company, Alphabet, confirmed this weekend that the world’s largest Internet company is, in close coordination with the state, manipulating search results to censor sites critical of the US government.
Responding to a question about the “manipulation of information” on the Internet during an appearance at the Halifax International Security Forum, Schmidt announced that Google is working on algorithms that will “de-rank” Russian-based news websites RT and Sputnik from its Google News services, effectively blocking users’ access to either site.
Schmidt’s remarks at the gathering of military and national security officials confirm the World Socialist Web Site’s charges that Google has been deliberately altering its search algorithms and taking other steps to prevent people from accessing certain information through its search engines. The WSWS has itself been a principal target of these efforts.

The statements expose as lies the company’s previous claim that changes to its search engine were aimed at “improving search results” and that these changes were politically unbiased.

Lee Camp - The Real Foreign Agents In The US You Aren't Being Told About

Michael Hudson’s “TED TALK” on Economics

Contains an excellent video of Micheal Hudson talking about his book, J is for Junk Economics, and he emphasis here how Trump was the lesser evil than Hilary. That made me laugh because when I tell my liberal friends this they look horrified. The UK Guardian recently run an article by Zoe Williams titled, Why does nobody mention that Hillary Clinton is perfectly nice? But the Guardian closed CiF after only 90 comments, probably because of the type of comments it was getting, so I didn't get a chance to write, 'We came, he saw, he died, ha ha ha', with a link to the Hilary video. But the Guardian would have no doubt removed my comment.

Ross Ashcroft, who made the film, The Four Horseman, and is part of the team behind the Renegade Economists, is now a presenter at RT which seems to be fast hoovering up all the best journalists I have enjoyed over the years.

Micheal Hudson - Michael Hudson’s “TED TALK” on Economics

Pepe Escobar — How Turkey, Iran, Russia and India are playing the New Silk Roads

Big doings underway you won't read about in Western corporate media. 

The only way the Global North can stop this surge of the Global South now is through hybrid warfare.

Asia Times
How Turkey, Iran, Russia and India are playing the New Silk Roads
Pepe Escobar

Moon of Alabama — Google Does Evil

Why you should be using DuckDuckGo.

Moon of Alabama

Thorsten Beck and Hans‐Helmut Kotz — New eBook: Ordoliberalism: A German oddity?

Free is good.
German economics and, as a result, German economic policymaking, appear to be a land apart. Critics have even suggested that German policymakers and academics live in a “parallel intellectual universe”. The conflict, for example, with US economic policy pragmatism is a hardy perennial in international debates – dating back long before the most recent struggles in the G20 context. Similarly, the Eurozone crisis has opened fault lines between German economists and policymakers and those in a number of Eurozone (in particular periphery) countries. This column introduces a new eBook explaining the historical development of the ordoliberal school of economics and its influence on German policymaking, and contrasting it critically with what we like to call the Anglo-Saxon-Latin pragmatism of economic policymaking. The contributors come from a wide spectrum of economic schools of thoughts and include both academics and (former) policymakers that have had to directly deal with the consequences of these fault lines.
New eBook: Ordoliberalism: A German oddity?
Edited by Thorsten Beck, Professor of Banking and Finance, Cass Business School; Research Fellow, CEPR, and Hans‐Helmut Kotz, Resident Fellow, Center for European Studies and Visiting Professor of Economics, Harvard University; Program Director of the SAFE Policy Center, Center for Financial Studies (Goethe University Frankfurt)

RT - Trump, Putin have ‘great call’ that lasts 1.5 hrs

See how friendly Putin and Trump are. It must terrify the US Military-Industrial complex, the Neocons, and the neoliberals.

Michael Roberts — Budget and Brexit

Britain has been a rentier economy extraordinaire, with the highest dependence on the financial sector of all major economies. And the biggest fall in productivity growth has been in this sector since 2007.
Michael Roberts Blog
Budget and Brexit
Michael Roberts

Alexander Mercouris — The Trump – Putin call: summary and analysis

Everything you might want to know about the phone "summit" without actually listening in.

Positive overall. The Trump-Putin relationship seems to be developing along the lines of the Trump-Xi relationship. Basically good relations.

The Duran
The Trump – Putin call: summary and analysis
Alexander Mercouris

Leon Hadar — The Real Winner in America's Russia Crisis Is China

Calling BS on the US political establishment and deep state.

The US political establishment and the US deep state are joined at the hip through the military-intelligence-corporate-governmental complex that is foundational to US corporate statism.

The National Interest
The Real Winner in America's Russia Crisis Is China
Leon Hadar | senior analyst with Wikistrat, a geostrategic consulting firm

Brian Romanchuk — "An Introduction to SFC Models Using Python" Published

Stock-Flow Consistent (SFC) models are a preferred way to present economic models in the post-Keynesian tradition. This book gives an overview of the sfc_models package, which implements SFC models in Python. The approach is novel, in that the user only specifies the high-level parameters of the economic model, and the framework generates and solves the implied equations. The framework is open source, and is aimed at both researchers and those with less experience with economic models. This book explains to researchers how to extend the sfc_models framework to implement advanced models. For those who are new to SFC models, the book explains some of the basic principles behind these models, and it is possible for the reader to run example code (which is packaged with the software online) to examine the model output....
The book is available in ebook and paperback editions.
Bond Economics
"An Introduction to SFC Models Using Python" Published
Brian Romanchuk

The Arthurian — Hey, Tom

Remember when I said
I predict a boom of "golden age" vigor, beginning in 2016 and lasting eight to ten years. It has already begun. In two years everyone will be predicting it. 
Tom, you said
Art goes out on the limb....
Art follows up.

I admit that things are looking up for the US and the global economy, which are still coupled.

But there is also a lot of other coupling (like China), and so predictions have to be contingent on trends holding or improving, with no surprises like adverse shocks.

Lots of things can go wrong both domestically in the US and also internationally. Some contingencies are known, and some may be unknown, hence impossible to anticipate, e.g, accident, acts of God, knock on effects or unintended consequences that are unforeseeable.

Some of these things are financial, some economic, some political and some military. Right now, it's a balancing act, or maybe more like juggling knives.

Is confidence running too high now for conditions? How much hedging is recommended?

The New Arthurian Economics
Hey, Tom
The Arthurian

Tuesday, November 21, 2017

Phil McDuff — A budget to increase national debt? That would be a pay rise for Britain

MMT in the Guardian!

The Guardian
A budget to increase national debt? That would be a pay rise for Britain
Phil McDuff

John Heltman — Fed interest payments to banks are here to stay, Yellen says

Federal Reserve Chair Janet Yellen said Tuesday that the central bank should continue to use interest payments on member bank reserve balances as its primary means of affecting short-term interest rates, rebuffing calls to return to more conventional monetary policy tools....
American Banker
Fed interest payments to banks are here to stay, Yellen says
John Heltman

Corporate Statism grows in the US?

Executive Chairman of Google’s parent company Alphabet, Eric Schmidt, says Google will “engineer” specific algorithms for RT and Sputnik to make their articles less prominent on the search engine’s news delivery services.
Alex Christoforou
Amazon launches a cloud service for US intelligence agencies
  • The introduction of the AWS Secret Region for the U.S. intelligence community comes six years after Amazon announced a cloud data center region for public-sector customers.
  • U.S. government agencies with sufficient secret-level access and contracts will also be able to use the new region.

Sputnik — Little Trouble in Big Bundestag: Sputnik's Guide to Merkel's Coalition Fiasco

Backgrounder on what's up in Deutschland.

Sputnik International
Little Trouble in Big Bundestag: Sputnik's Guide to Merkel's Coalition Fiasco


Strategic Culture Foundation
Germany"s Government Impasse: End of Merkel Era Is Within Sight
Alex Gorka

Trump Dual-hats Mulvaney at CFPB

Something else to keep an eye on as part of changes to bank regulation.

Doesn't understand the QE effects causing the GFC and subsequent credit contraction but not too bad otherwise; gets the direction right anyway:

One large downside to Dodd-Frank was that in order to hold the required capital, all banks decreased lending to shore-up their liquid holdings and meet the regulatory minimums. 
Without the ability to borrow funds, small businesses have a hard time raising money to create business. Growth in the larger economy is hampered by the absence of capital. 
Another downstream effect of banks needing to increase their liquid holdings was exponentially worse. Less liquid large banks needed to purchase and absorb the financial assets of more liquid large banks in order to meet the regulatory requirements. 
That’s the underlying problem for a Glass-Steagall type of regulation now. 
The Democrats created Dodd-Frank which: #1 generated constraints on the economy (less lending), #2 made fewer banking options available (banks merged), #3 made top banks even bigger. 
This problem is why President Trump and Secretary Mnuchin are working to create a parallel banking system of community and credit union banks, individually less than $40 billion in assets, that are external to Dodd Frank regulations and can act as the primary commercial banks for small to mid-sized businesses.

So they might be foregoing the current proposed policy change of elimination of risk-free assets in the computation of the Leverage Ratio for the big banks and instead creating a parallel small banking system with that regulatory feature.

Have to keep an eye on this going forward... imo this area of policy adjustment is more important in scale to the economy short-term than the current tax reform proposals which seem to be getting all the attention.

Monday, November 20, 2017

Bill Mitchel — Unemployment is miserable and doesn’t spawn an upsurge in personal creativity

Here is a summary of another interesting study I read last week (published March 30, 2017) – Happiness at Work – from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the relationship between happiness and labour force status, including whether an individual is employed or not and the types of jobs they are doing. The results reinforce a long literature, which emphatically concludes that people are devastated when they lose their jobs and do not adapt to unemployment as its duration increases. The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. Further, they do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support. The overwhelming conclusion is that “work makes up such an important part of our lives” and that result is robust across different countries and cultures. Being employed leads to much higher evaluations of the quality of life relative to being unemployed. And, nothing much has changed in this regard over the last 80 or so years. These results were well-known in the 1930s, for example. They have a strong bearing on the debate between income guarantees versus employment guarantees. The UBI proponents have produced no robust literature to refute these long-held findings.
Bill Mitchell – billy blog
Unemployment is miserable and doesn’t spawn an upsurge in personal creativity
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Samantha Eyler-Driscoll — Who Are the Top 1 Percent in America? The Answer from New Research Might Surprise You

A new paper challenges Thomas Piketty’s portrayal of an income distribution dominated at the top by passive rentiers who do nothing to earn their money, arguing that income inequality in America today is driven by the working rich.
ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Who Are the Top 1 Percent in America? The Answer from New Research Might Surprise You
Samantha Eyler-Driscoll