An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Christopher Columbus was worst than Pol Pot by a long shot. He even sold under aged girls into the international child slave sex trade. Rape, pillage, and torture, yet Christopher Columbus considered himself to be a Christian.
In this video below, George Monbiot describes the crimes of Christopher Columbus and also of the the European empires.
The true legacy of Christopher Columbus: 'Western Civilisation' | George Monbiot
Mankind learned the art of going into battle much later than previously thought, a new academic study
I read somewhere once, and I think I even posted it here, that years ago human groups for no bigger than about a hundred people and so everyone knew who the psychopath was. Only a few people needed to be conned by the lying, cheating, toe rag for everyone to know who he was, and after that, he had to behave himself or he would get thrown out of the group.
But in modern society, though, psychopaths can move from group to group and start all over again wrecking people's lives.. They can also rise up in companies as modern capitalism seem to reward psychopathic behavior, like extreme greed and selfishness. And the clever, intelligent ones can use their ruthlessness to rise up in society sometimes becoming leaders of countries. These people are often pro war because they don't expect they will ever fight in one, but they think they can gain from it. There seems to be a lot of them in the Ukraine right now, sponsored by the psychopaths in the US. They are all after the money.
Is it natural for humans to make war? Is organised violence between rival political groups an inevitable outcome of the human condition? Some scholars believe the answer is yes, but new research suggests not.
A study of tribal societies that live by hunting and foraging has found that war is an alien concept and not, as some academics have suggested, an innate feature of so-called “primitive people”.
he findings have re-opened a bitter academic dispute over whether war is a relatively recent phenomenon invented by “civilised” societies over the past few thousand years, or a much older part of human nature. In other words, is war an ancient and chronic condition that helped to shape humanity over many hundreds of thousands of years?
The idea is that war is the result of an evolutionary ancient predisposition that humans may have inherited in their genetic makeup as long ago as about 7 million years, when we last shared a common ancestor with chimpanzees – who also wage a kind of war between themselves.
However, two anthropologists believe this is a myth and have now produced evidence to show it. Douglas Fry and Patrik Soderberg [umlaut over o] of Abo Akademi University in Vasa, Finland, studied 148 violently lethal incidents documented by anthropologists working among 21 mobile bands of hunter-gatherer societies, which some scholars have suggested as a template for studying how humans lived for more than 99.9 per cent of human history, before the invention of agriculture about 10,000 years ago.
They found that only a tiny minority of violent deaths come close to being defined as acts of war. Most the violence was perpetrated by one individual against another and usually involved personal grudges involving women or stealing.
About 85 per cent of the deaths involved killers and victims who belonged to the same social group, and about two thirds of all the violent deaths could be attributed to family feuds, disputes over wives, accidents or “legal” executions, the researchers found.
The role of prices and inflation in neo-classical ("mainstream") economic theory is awkward for us non-mainstream inclined. The price level is simultaneously of critical important for explaining activity as well as being an outcome of other parts of the economy. This makes the subject of inflation extremely awkward for my planned book on business cycles -- as I am pushing the subject of inflation to a later book. Instead, I only aim to have a short chapter explaining the absence of inflation analysis. This article are some preliminary comments that I hope to work into that chapter....
Most theories of the firm within economics pick up the narrative with the existence of the corporation as a given. They then bend over backwards to retro-fit this highly centralized pseudo economy into the larger free market narrative preferred in all major textbooks. In so doing they blithely ignore Alfred Chandler’s famous explanation for the rise of modern business organization, which he argued became possible “only when the hand of management proved be more efficient than the invisible hand of market forces”. Chandler, being a historian rather than an economist, was more interested in reality than in hypotheticals. He understood and tried to explain the actual landscape of large-scale business. I have always wondered what would have happened to economics had it absorbed the true gist of the challenge issued by Coase in 1937. The impudence of that challenge has never been fully understood. Coase asked simply: “why do firms exist?”. After all if market forces are as supreme as the textbooks tell us, there is no room for business organization at all. We ought be able to accomplish all our transacting through a web of contracts in the open marketplace.
Indeed the most common response of economists to the challenge represented by business organization is to argue that a business organization is simply such a web of contracts. In this view we can continue to ignore any oddities of business organization since it is indistinguishable from the market. In this view the firm exists at a “nexus of contracts” and has no special attributes that cannot be negotiated and contracted for in the marketplace.
Except this is not true....
The key to understanding corporations is to separate the economics from everything else. We need to do this because the economics, as expressed in various theories of the firm, are usually entirely idealized and bear no resemblance to reality. Economists, as usual, love to theorize about things that don’t exist but which they wished did exist.... Corporations, far from being products of the free market, are actually franchises of the state. They are sub-contracted jurisdictions.
To be a corporation is to possess a charter from the state. That charter brings privileges not available to non-corporations. The most notable privilege is that the corporation is recognized as a distinct legal entity separate from any “natural” person who may be associated with it. And because the corporation is brought into existence prior to it being populated or animated by any natural person, it is not owned by any of them. It is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns, It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing...
Peter Radford explain why this is important and what problems misunderstanding engenders.
As’ad AbuKhalil | Lebanese-American professor of political science at California State University, Stanislaus
Pepe Escobar at FB:
EXCLUSIVE: BUTCHER/KILLER/REFORMER MBS AND HIS PAL JARED One of my top House of Saud-related sources confirmed it - once again: Khashoggi was CIA - and no wonder the CIA WaPo is up in arms.
Quite a few CIA senior ops are also after MBS prime WhatsApp pal Jared. The narrative is that Jared alerted MBS that Khashoggi was a danger.
Other CIA ops were already in uproar when MBS pulled his Ritz-Carlton jail stunt - accusing Jared of TREASON: giving away CIA files on dissidents in the royal family which were CIA agents. That led to their deaths or arrests or at least forking out billions.
This is the real game: civil war at the top. The Trump clan vs. the CIA. Everything else is smoke and mirrors.
Also in the news.
“The king firmly denied any knowledge of it,” Trump told reporters. “He didn’t really know, maybe - I don’t want to get into his mind but it sounded to me - maybe these could have been rogue killers. Who knows?”
“The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations,” the official Saudi Press Agency (SPA) quoted an unnamed official as saying.
“The Kingdom also affirms that if it receives any action, it will respond with greater action, and that the Kingdom’s economy has an influential and vital role in the global economy,” the official added, without elaborating.
He's a religious faith that no one is allowed to question without forfeiting membership in Western civilization.
Churchill didn't care about British lives, or anyone's lives for that matter, all be cared about was the British Empire which had produced the magnificent wealth of the British aristocracy.
Unfortunately there was a lot in Churchill’s life that was not particularly heroic—it’s striking that our current conservative establishment is willing to “contextualize” away “bigoted” statements made by Churchill, while ranting against Churchill contemporary H.L. Mencken, when he made his own. But then Mencken supposedly took the wrong side in World War One, in which he was effusively pro-German, while Churchill did everything in his power to poison Anglo-German relations before that cataclysm, which he regarded as inevitable. This came after Churchill helped foment the Boer War in South Africa, which enabled the British Empire to swallow up the Transvaal and other parts of South Africa. Later as First Lord of the Admiralty, he imposed on Imperial Germany a starvation blockade that resulted in hundreds of thousands of deaths. This blockade wasn’t lifted until several months after the hostilities had ended. In the Second World War Churchill supported the terror bombing of German cities, at a time when these population centers could no longer defend themselves and when the war was all but lost.
Not only does the U.S. fix other countries elections but they rig their own. Hilary Clinton said something about the US being a great democracy. Today, The Palast Investigative Fund, is releasing the names of the 90,000 residents of Las Vegas and Reno (Clark and Washoe counties) purged from the voter rolls based on flawed evidence that indicates they have moved. Rather than face me in federal court, Nevada’s Republican Secretary of State, Barbara K. Cegavske, on Thursday turned over the list of every Nevada voter whose registration Cegavske cancelled in 2016 and 2017.
If you’re in Nevada, or know anyone in Nevada, please, please check the purge hit-list. If you’re a victim, you still have until Thursday, October 18 to re-register online. Then, please send us a message: we need your story so we can take action to end this purge scourge.
Cegavske used the same notorious “purge by postcard” and “Crosscheck” methods of cleansing voter rolls as GOP Secretaries of State Brian Kemp of Georgia and Kris Kobach of Kansas.
Our experts, reviewing these lists, have found that the overwhelming majority of voters who have supposedly moved out of state or out of their home counties have, in fact, not moved an inch — most remain at their original registration address.
The NAACP and League of Women Voters have cited the “Crosscheck” program used in Nevada and other GOP states as wildly inaccurate and racially biased.
Lawyers for the Palast Investigative Fund filed a 90-day notice that Cegavske would face a lawsuit on grounds of Nevada’s violation of the National Voter Registration Act of 1993 for failing to make public the names of voters whose registration the state cancelled and full reason for the cancellation.
The state continues to stonewall this reporter, withholding critical information about Nevada’s participation in the Interstate Crosscheck program. Specifically, thousands of Nevadans apparently lost their right to vote because the Crosscheck list, given to Cegavske by Kris Kobach of Kansas, contained erroneous information that these Nevadans were registered in other states.
Therefore, we are preparing a federal law suit against the state—which will follow our lawsuit against Cegavske’s fellow Secretary of State, Brian Kemp of Georgia — on similar grounds of withholding data on their massive purge operations.
We are preparing to give the purge lists to non-partisan, non-profit groups, including those affiliated with Black Lives Matter and the New Georgia Project who will help locate victims of the purge to help them re-register.
The Palast Fund’s legal actions are supported with the help and advice of the Southern Christian Leadership Conference, the Atlanta NAACP, and other civil rights organizations including the Rainbow/PUSH Coalition whose founder, Rev. Jesse L. Jackson, is my co-plaintiff in anti-purge litigation in Illinois.
And get your friends in ANY state to sign up for our continuing Election Crimes bulletins.
On the whole the native Americans were a peaceful people. Steve Pinker got it wrong when he said that pre states societies were more far more violent than our own.
This is a sad quote, and I'm sure you've all read it before. In two momentous early encounters, Native Americans greeted Europeans with kindness and generosity. Here is how Christopher Columbus described the Arawak, tribal people living in the Bahamas when he landed there in 1492: "They...brought us parrots and balls of cotton and spears and many other things, which they exchanged for the glass beads and hawks' bells. They willingly traded everything they owned.... They do not bear arms, and do not know them, for I showed them a sword, they took it by the edge and cut themselves out of ignorance…. With 50 men we could subjugate them all and make them do whatever we want." ***** A similar pattern unfolded in New England in the early 17th century. After the Pilgrims arrived in Plymouth in 1620 on the Mayflower, they almost starved to death. Members of a local tribe, the Wampanoag, helped the newcomers, showing them how to plant corn and other local foods. In the fall of 1621 the Pilgrims celebrated their first successful harvest with a three-day feast with the Wampanoag. The event my classmates and I reenacted in grade school really happened! But soon after the white settlers wiped out the Wampanoag. The Scientists American John Morgan - Thanksgiving guilt trip: How warlike were Native Americans before Europeans showed up?
The gents have been caught with their pants down again.
Five years after we first reported on the "Goldman whistleblower" at the NY Fed, Carmen Segarra, the former bank examiner is out with a new book based on more than 46 hours of secret recordings.
Segarra was a former bank examiner who looked into Goldman Sachs for the Federal Reserve Bank of New York, and claims she got fired in 2012 after making too much noise about Goldman’s alleged conflicts.
The New York Fed has often been blasted for its lackadaisical approach to overseeing banks leading up to the 2008 financial crisis. Its last president, William Dudley, was named in 2009 after spending 21 years at Goldman. But Segarra’s book claims that the problem persisted for years after the crisis, with regulators happy to act on the banks’ behalf.
“We want [Goldman] to feel pain, but not too much,” her boss — who goes by the pseudonym Connor O’Sullivan in the book — told her, Segarra claims. -NY Post
The recordings were made over a seven month period while Segarra worked at the New York Fed. Neither Goldman nor the NY Fed have disputed the authenticity of the tapes.
One of the loudest voices screaming "Russia is meddling in our democracy!" has been Rep. Marcy Kaptur (D-OH). Last year she signed a letter to the Speaker of the House demanding that Homeland Security and the FBI brief Congress on "the Russian attack on 21 states' voting systems" (a charge since disproven). The letter complained that "when a sovereign nation attempts to meddle in our elections, it is an attack on our country."
This week Rep. Kaptur (and 22 Democrat colleagues) sent a letter to President Trump's Assistant Secretary of State for Europe, Wess Mitchell, demanding the reinstatement of a cancelled State Department program to send $700,000 to finance anti-government stories in Hungary's media in advance of the upcoming 2019 local elections in that country.
"Supporting an independent media in Hungary should be a priority" for the United States, the Congressional letter says.
Do Kaptur and her Capitol Hill colleagues not understand the basic fact that when a foreign government funds a sector of another country's media, that media can no longer be considered "independent"?
At the demise of empire, City of London financial interests created a web of offshore secrecy jurisdictions that captured wealth from across the globe and hid it behind obscure financial structures in a web of offshore islands. Today, up to half of global offshore wealth may be hidden in British offshore jurisdictions and Britain and its offshore jurisdictions are the largest global players in the world of international finance. How did this come about, and what impact does it have on the world today? This is what the Spider’s Web sets out to investigate.
The Spider’s Web was written, directed and produced by Michael Oswald, you can sponsor his future films on Patreon. The film’s official website is here, and you can read about Queue Politely’s other works on their website here.
The bank capital can be thought of as the book value of shareholders' equity on a bank's balance sheet. Because many banks revalue their financial assets more often than companies in other industries that hold fixed assets at a historical cost, shareholders' equity can serve as a reasonable proxy for the bank capital. Typical items featured in the book value of shareholders' equity include preferred equity, common stock and paid-in capital, retained earnings,...
So negative income at the bank reduces bank capital... and will decrease any regulatory ratio of capital:assets...
I don't know much about John Hankey except that he is a liberal. He seems to be a conspiracy theorist but I'm keeping an open mind on him. He comes across as fairly reasonable to me.
In this short video clip John Hankey says Trump was really a front man for a section of the ruling elite and everything he said was written for him. LIke millions of Americans, he says, that he too fell for the con. I fell for it too, although I'm English and so couldn't vote. Jill Stein was my preferred candidate.
Cambridge Analytica was a military contractor specializing is Psychological Warfare. Steve Bannon, Trump's primary strategist, hired them to develop psychological weapons to persuade angry voters. THEY came up with "drain the swamp", "build a "wall", "deep state", and "fake news", 2 YEARS BEFORE TRUMP WAS A CANDIDATE! Bannon says he got the idea from the people who created Hitler as a candidate
I believe that these corrosive moral claims derive from a fundamentally flawed understanding of how market capitalism works, grounded in the dubious assumption that human beings are “homo economicus”: perfectly selfish, perfectly rational, and relentlessly self-maximizing. It is this behavioral model upon which all the other models of orthodox economics are built. And it is nonsense.
The last 40 years of research across multiple scientific disciplines has proven, with certainty, that homo economicus does not exist. Outside of economic models, this is simply not how real humans behave. Rather, Homo sapiens have evolved to be other-regarding, reciprocal, heuristic, and intuitive moral creatures. We can be selfish, yes—even cruel. But it is our highly evolved prosocial nature—our innate facility for cooperation, not competition—that has enabled our species to dominate the planet, and to build such an extraordinary—and extraordinarily complex—quality of life. Pro-sociality is our economic super power.
Economists are not wrong when they attribute the material advances of modernity to market capitalism’s genius for self-organizing an increasingly complex and intricate division of knowledge, knowhow, and labor. But it’s important to recognize that the division of labor was not invented in the pin factories of Adam Smith’s eighteenth century Scotland; at some level, it has been a defining feature of all human societies since at least the cognitive revolution. Even our least complex societies, small bands of hunter-gatherers, are characterized by a division of labor—hunting and gathering—if largely along gender lines. The division of labor is a trait that is universal to our prosocial species.
Viewed through this prosocial lens, we can see that the highly specialized division of labor that characterizes our modern economy was not made possible by market capitalism. Rather, market capitalism was made possible by our fundamentally prosocial facility for cooperation, which is all the division of labor really is.…
The following observation is critical.
This dispute over behavioral models has profound non-academic consequences. Many economists, while acknowledging its flaws, still defend homo-economicus as a useful fiction—a tool for modeling and understanding the economic world. But it is much more than just an economic model. It is also a story we tell ourselves about ourselves that gives both permission and encouragement to some of the worst excesses of modern capitalism, and of contemporary moral and social life...
While models purport to be descriptive, they function as metaphors. All models are limited in the interest of economy and tractability. It is simply not possible to construct a complete description of a system that is complicated, let alone complex. The purpose of the model is to isolate important relationships and regularities using the model as an analogy, whether its construction is conceptual or mathematical. The question is then how useful is the model in elucidating relations and regularities that are not evident without analysis.
There is nothing inherently wrong with exploring a domain using all models that may be useful in this regard. Those that are actually useful will be used and eventually the others will be discarded or supplanted.
The economic model based on homo economicus as outlived its usefulness for several reasons. The first is a descriptive issue. The second is a normative one.
The first is that the scope of such models is too limited to provide much useful information. The assumes humans in the "state of nature" following evolutionary principles based on survival of the fittest" through competition in a symmetrical environment. Thus, the appeal to "spontaneous natural order" on the conditions that "imperfections," such as prosocial policy, are minimized.
This state of affairs doesn't apply to modern societies and their embedded economics that are highly influenced by culture and institutions. This means that in econometrics, important information will be put aside for modeling convenient, e.g., in the interest of mathematical tractability. The result is that model equilibria may not reflect observed events accurately. This is accounted for using ceteris paribus although conditions are actually changing, positing constants when conditions call for variables, and an indefinite "long run."
The second is more serious because it is normative. Conclusions that purport to be positive are used normatively and prescriptively. This is especially the case when models use technical terms take from ordinary language. Even if the terms are defined operationally, the ordinary language meaning comes along, altering not only the denotation but also the connotation. For example, "debt" as a liability becomes "debt" as something bad, dangerous, and to be avoided.
None of this is in way "scientific" regardless the trappings in the terminology of science.
If we accept that it is true—if we internalize that most people are mostly selfish—and then we look around the world at all of the unambiguous prosperity and goodness in it, then it follows logically, it must be true, by definition, that a billion individual acts of selfishness magically transubstantiate into prosperity and the common good. If it is true that humans really are just selfish maximizers, then selfishness must be the cause of prosperity. And it must be true that the more selfish we are, the more prosperous we all become. Under this logical construct, the only good decision is a business decision—“Greed is good”—and the only purpose of the corporation must be to maximize shareholder value, humanity be damned. Welcome to our neoliberal world.
But if, instead, we accept a prosocial behavioral model that correctly describes human beings as uniquely cooperative and intuitively moral creatures, then logically, the golden rule of economics must be the Golden Rule: Do business with others as you would have them do business with you. This is a story about ourselves that grants us permission and encouragement to be our best selves. It is a virtuous story that also has the virtue of being true....
Unfortunately, Hanauer then concludes, without justification, that capitalism is the solution rather than the problem. The problem is the approach to capitalism.
Capitalism is the greatest problem-solving social technology ever invented. But knowing that capitalism works is different than knowing why it works. And contrary to economic orthodoxy, it is reciprocity, not selfishness that guides it—indeed—as if by an invisible hand. It is social reciprocity that builds the high levels of trust necessary for large networks of people to cooperate at scale. And it is only through these networks of highly-cooperative specialists that the complexity that defines our modern economy can emerge....
I argue that this cannot be true and it is contradicted by what he said previously.
It is generally agreed that there are three major factors of economic productions — capital, land and labor. Rent is income generated without productive work. Feudalism is a system that favors the ownership of land and extraction of rent through agriculture. Capitalism is a system that favors the ownership of industrial and finance capital and extraction of rent through ownership of capital.
What is needed instead of a rejiggering of capitalism is an integrated system that balances capital, land and labor, that is, the means of production with people and the environment. This is different from most definitions of socialism and might be termed holism or ecologism, or some such that denote a condition of harmony, balance, and wellbeing of people and the planet.
What is required is a vision of possibilities and plans to actualize them. This design process may be speeded up by necessity as climate change begins to bite down harder.
Every bomb you make,
Every job you take,
Every heart you break,
Every Irish wake,
I'll be watching you.
Every wall you build,
And everyone you've killed,
Every grave you've filled,
All the blood you've spilled,
I'll be watching you.
Oh can't you see
You belong to me.
They'll be a bill to pay
On that judgement day.
For every empty plate,
Every word of hate,
Those who subjugate,
Those who violate,
I'll be watching you.
Sharon Burke | Senior Advisor at New America, where she directs the Phase Zero project. She served in the Office of the Secretary of Defense 1994-2000, on the staff of Policy Planning at the State Department from 2002-2005, and as the Assistant Secretary of Defense for Operational Energy from 2010-2014
They're scared of us getting the truth out. If the MSM just puts out is propaganda it easy to bunk. Through the internet we can share the truth and enlighten others, but they want to stop this. Billions of people have no idea what's going on.
Alternative voices online are incensed after Facebook and Twitter closed down hundreds of political media pages ahead of November's crucial midterm elections. Facebook says they broke its spam rules, they say it’s censorship.
Some 800 pages spanning the political spectrum, from left-leaning organizations like The Anti Media, to flag-waving opinion sites like Right Wing News and Nation in Distress, were shut down. Other pages banned include those belonging to police brutality watchdog groups Filming Cops and Policing the Police. Even RT America’s Rachel Blevins found her own page banned for posts that were allegedly “misleading users.”
Vanessa Beeley gets an award for good journalism which surprises everyone, she then goes on to describe the horrendous massacre of 270 civilians by ISIS in a Syrian town. The Western media hardly reported the massacre, says Vanessa Beeley, but I did a search and found that the Daily Mail has reported it. She says the ISIS terrorists went through US controlled territory so we need to ask why were they allowed through?
The mystery surrounding the disappearance of a Saudi journalist in Turkey has taken a twist, as reports suggest Riyadh was planning to detain him. Media in the US says Washington had come across intel of a special operation ordered by the Saudi Crown Prince.
If the establishment media were truly balanced, social media’s purge of alternative news outlets would be a front-page splash. The fact it isn’t proves that those who shout loudest about “free speech” may be its greatest enemies. Sadly, RT saw something like this coming. And for that reason, we have developed a new site to promote the free exchange of information and views. The fact it launches on the same weekend that US social media giants Facebook and Twitter clamped down on dissent is merely a coincidence.
New Samizdat is a news aggregator with a difference. The website will attempt to bring you the most important and interesting stories across the English-speaking web, which are either undervalued or ignored by legacy outlets.
Sources will vary, but inquiring minds who challenge groupthink will be favored. However, you’ll see the MSM often featured too, as one of its greatest tricks is to cover vital and radical news but bury it in the mainstream.
New Samizdat will post the most interesting links, across all spectrums, with the intention of stimulating debate and providing access to information. And we hope it can play a small part in fighting modern censorship by giving you a trusted page where the most interesting news and views can be found.
Our evidence suggests that banks were arbitraging the SLR (and eSLR) rule by shifting from safer assets toward riskier, higher-yielding ones. Evidence from other studies we discuss point to the same behavior by banks or dealers with portfolios heavily weighted toward safe, low-yield assets as part of their business models. Policymakers are aware of this regulatory arbitrage and are addressing it.
The way to fund £20bn of extra healthcare spending is for the government to create the necessary funding for that purpose. And it can do this at any moment. The fact is that tax does not precede spend. It is always, and inevitably, true that spend precedes tax. In that case the hypothesis that extra tax must be raised before the NHS can be funded is incorrect. What actually happens is that if the government spends an extra £20 billion into the economy, and increases GDP directly as a result (because government spending is part of GDP, because it creates wealth) then the government can, if it so wishes, claim back some, all, or even more of that spend in tax if it so wishes, with the possibility that it might claim back more than is even spent being made possible by multiplier effects, which are quite high in the case of NHS expenditure.
What it is important to stress though is that the reason to make that claim back by way of tax would not be to fund the NHS. That would make no sense at all, because the NHS would have already been funded: the expenditure does that. So the reclamation of that spend by taxation has to be for some other purpose. It may be to control inflation. It may be to reduce inequality i.e. taxing those with more than others simply for social purpose. Or it could be as part of the policy to control carbon use. And it may be for the delivery of some other government policy. But the funding of the NHS will not actually come into the equation. That problem is solved the moment the government decides to create the money to make the payment to provide the additional resources the NHS requires, as it may at any time because all money creation is ultimately under its control....
MODERN MONETARY THEORY (MMT) is emerging as one of the main heterodox ways to understand macroeconomics, in contradistinction to the neoliberal orthodoxy.
MMT is not a set of policy prescriptions. Rather, to use co-founder Bill Mitchell’s word, it is a “lens” that allows us to see more clearly what already exists.
So, its proponents claim it is not particularly ideological. The ideology comes afterwards when we craft policies based on an understanding of MMT....
This post is a good summary of Bill Mitchell's position.
A new project will promote the idea that it is the government - not the private sector - that creates money. In doing so, it could demolish the arguments for austerity...
Identifies the process by which bank reserve asset levels are increased in the surplus nation China vs. deficit nation USA.
Germane to the current China led situation where they appear to be adding $100Bs equivalent of non-risk reserve assets to depositories this year and causing the current price reduction of risk assets and probably reduction of new credit for financing risk assets.
No bottom in sight right now for price of risk assets in China as $100Bs (equivalent) reserves are added; and some related negative effects on US risk asset prices here too as China this year hacks a page out of the US monetary policy playbook from 2008 and down we go...
By end 2014, the PBOC’s balance sheet totaled RMB33.8 trillion, or USD5.4 trillion using
the yearend exchange rate of one US dollar for 6.2052 Yuan. It was equal to 53% of China’s
GDP in 2014 (RMB63.6 trillion), and 2.6 time bigger than its size of RMB12.9 trillion at the
end of 2006.
Meanwhile, the Fed’s balance sheet rose to USD4.5 trillion, equal to 26% of the
US GDP in 2014 (USD17.4 trillion), and 5.0 times bigger than its size of USD903.7 billion
at end 2006.
The PBOC’s balance sheet was larger than the Fed’s in both the absolute and
relative terms, but the Fed’s balance sheet registered faster expansion. These two balance
sheets dwarf the world’s other major central banks’.
However, they took different routes to get there.
The Fed’s balance sheet has expanded
mainly through three rounds of asset purchases or quantitative easing. As a result, the Fed
was holding USD2.46 trillion worth of US treasuries, USD1.74 trillion worth of AMBS
at the end of 2014, which make up of 93% of its total assets. The PBOC never resorted to
asset purchases. Instead, its balance sheet expansion came mostly from purchasing foreign
currencies from inflows.
Some believe that MMT’s brand of economics raises important questions that spill over into religion and metaphysics. That’s what Scott Ferguson, a professor in the Department of Humanities and Cultural Studies at the University of South Florida, argues in his book Declarations of Dependence: Money, Aesthetics, and the Politics of Care.
Banking with its tax avoidance schemes, off shore tax havens, and money laundering is very close to organised crime, says Evan Jones.
Corruption in banking
Corruption in the Australian financial sector is not an aberration but an integral dimension of its modus operandi. Three factors lie behind banking’s criminal tendencies.
First, there is the special character of banking. Credit is an indispensible facility, so an essential public service is being delivered by companies with private motives. Moreover, the lender-borrower relationship is asymmetric. On home mortgages, the lender readily engages in predatory lending, capturing unsuitable borrowers, in addition fabricating figures and falsifying documents.
Regarding small business or farmer borrowers, the relationship is profoundly asymmetric. The lender takes customer assets as security over any loan. The lender will perennially induce the business borrowers to include the family home (and possibly that of the parents) as bank security.
The bank can default the business/farmer borrower at will, with a variety of mechanisms at its disposal. The defaulted business borrower is subsequently left without the business and homeless, forced onto public welfare. This practice is not incidental but pre-planned and pervasive.
In short, a banking licence is the perfect vehicle to both install and legitimate a criminal racket.
Second, inbuilt banking corruption has been facilitated by comprehensive deregulation (including privatisation) of the sector, following the 1981 Campbell report. A previous culture that kept malpractice under control was being dismantled in the 1970s and the process sped up with deregulation. Admittedly, internationalisation of finance and externalisation of workforce hire were inevitable, but no thought was given to the reconstruction of a culture of competence and integrity. Corruption set in from day one of deregulation, not least with the flogging of foreign currency loans to unsuspecting small business people and farmers.
Third, the corporation per se is a natural vehicle for corrupt practices, of which more below.
Warren Mosler’s unorthodox take on fiscal policy is catching on with progressive Democrats.
A superb article about Warren Mosler. Did you know that Bill Mitchell developed MMT independently of Warren Mosler? Warren Mosler has a heart!
He ran a hedge fund, lives in a Caribbean tax haven, and loves fast cars and yachts—not obvious qualifications for a left-wing guru. But that’s what Warren Mosler is rapidly becoming.
Its main argument is that governments with their own currencies can’t go broke. They have more room to spend than is usually supposed and don’t need to collect taxes (or even borrow) to pay for it. One thing they can, and should, spend money on is a jobs guarantee—offering work to anyone who wants it.
Conventional economics teaches that a government collects money by taxing and spends part or all of the take. When it spends more than it collects, it has to borrow. Modern Monetary Theory stands this on its head. The government doesn’t need tax dollars to fund spending, because it has a monopoly on creating the money. For almost a half-century, the greenback hasn’t been pegged to gold or anything else. America can’t run out of dollars any more than a department store can run out of its own gift vouchers.
But there's critics -
Critics say Modern Monetary Theory is a recipe for reckless spending and runaway prices. “They’re too optimistic,” says Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics in Washington. If the government borrows on the scale advocated by MMTers, he says, “the outcome, I believe, will be inflation. And they don’t believe that.”
“I don’t know anyone who takes them seriously besides themselves,” Gagnon says. But he’s not wholly unsympathetic, agreeing that MMTers were right to dismiss the risk of a sovereign currency-issuing nation like the U.S. suffering a Greek-style fiscal crisis.
