Tuesday, November 20, 2018

Michael Hudson — Mutual Aid vs Moral Hazard

Creditors argue, for instance, that if you forgive debts for a class of debtors – say, student loans – that there will be some “free riders.” Students freed from debt will benefit, while students who were able to carry and pay off their debts had to “meet their obligations.” It is further argued that if student debts are forgiven (or “junk mortgage” loans written down to fair real estate valuations), people will expect to have bad loans written off. This is called a “moral hazard,” as if debt writedowns are a hazard to the economy, and hence, immoral.
This is a typical example of Orwellian doublespeak engineered by public relations factotums for bondholders and banks. The real hazard to every economy is the tendency for debts to grow beyond the ability of debtors to pay. If large numbers of students remain liable to pay student loans without having obtained well enough jobs to pay, this will prevent them from being able to qualify for mortgage to buy a home and start a family. Many students today are obliged to keep living with their parents, and are unable to marry. The result is deepening economic austerity as a result of the debt overhead.
Meanwhile, defaults on student loans to for-profit colleges are projected as rising toward 40%. Is it worth it to say that to prevent giving these impecunious students a “free lunch,” it is worth keeping a large swath of the population poor and unmarried?....
The basic moral financial principal should be that creditors should bear the hazard for making bad loans that the debtor couldn’t pay — like the IMF loans to Argentina and Greece. The moral hazard is their putting creditor demands over the economy’s survival.
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Mutual Aid vs Moral Hazard
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

Patrick Wood — Should every Australian be offered a government-funded job?

US economist Stephanie Kelton, who served as Bernie Sanders' economic adviser during the 2016 presidential campaign, is currently touring Australia to promote the concept she says isn't too good to be true.
"There is nothing to prevent the Australian government, if it chose to do so, from funding a large-scale government job program that would offer employment to anybody who wanted work and couldn't find it anywhere else in the Australian economy," she said. 
"Let the private sector create as many good jobs as it is willing to create, but the problem is there is always a segment of the population that doesn't get invited to the table. 
"And so this program is there as a backstop to just soak up the people who are left behind."
ABC (Australia)
Should every Australian be offered a government-funded job?
Patrick Wood

Matthew Davis — Who believes fake news? Study identifies 3 groups of people

The results showed that people prone to delusional thinking, religious fundamentalists, and dogmatists tended to believe all news, regardless of plausibility.
Big Think
Who believes fake news? Study identifies 3 groups of people
Matthew Davis

Jason Hickle - Why Growth Can’t Be Green

New data proves you can support capitalism or the environment—but it’s hard to do both.

This started out alarming but got better at the end.

These problems throw the entire concept of green growth into doubt and necessitate some radical rethinking. Remember that each of the three studies used highly optimistic assumptions. We are nowhere near imposing a global carbon tax today, much less one of nearly $600 per metric ton, and resource efficiency is currently getting worse, not better. Yet the studies suggest that even if we do everything right, decoupling economic growth with resource use will remain elusive and our environmental problems will continue to worsen.

Preventing that outcome will require a whole new paradigm. High taxes and technological innovation will help, but they’re not going to be enough. The only realistic shot humanity has at averting ecological collapse is to impose hard caps on resource use, as the economist Daniel O’Neill recently proposed. Such caps, enforced by national governments or by international treaties, could ensure that we do not extract more from the land and the seas than the Earth can safely regenerate. We could also ditch GDP as an indicator of economic success and adopt a more balanced measure like the genuine progress indicator (GPI), which accounts for pollution and natural asset depletion. Using GPI would help us maximize socially good outcomes while minimizing ecologically bad ones.

Western B Mosler retweeted - Number of people who go bankrupt every year because of medical bills:

Number of people who go bankrupt every year because of medical bills: UK - 0 France - 0 Spain - 0 Portugal- 0 Denmark - 0 Australia - 0 Iceland - 0 Italy - 0 Finland - 0 Ireland - 0 Germany - 0 Netherlands - 0 Sweden - 0 Japan - 0 Chile - 0 Canada - 0 United States - 643,000

Robert Booth and Patrick Butler - UK austerity has inflicted 'great misery' on citizens, UN says

Just think of all the North Sea oil profits Britain squandered on tax cuts and dole queues and so today we are fiat broke agsin  after bailing out the banks. And banks like RBS deliberately made thousands of small and medium sized businesses bankrupt to boost their profits which further increased poverty. The One Percent are laughing all the way to the bank while it's austerity for the rest of us. The whipping boy has to pay!

The UK government has inflicted “great misery” on its people with “punitive, mean-spirited, and often callous” austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found.
Philip Alston, the UN’s rapporteur on extreme poverty and human rights, ended a two-week fact-finding mission to the UK with a stinging declaration that levels of child poverty were “not just a disgrace, but a social calamity and an economic disaster”, even though the UK is the world’s fifth largest economy,
About 14 million people, a fifth of the population, live in poverty and 1.5 million are destitute, being unable to afford basic essentials, he said, citing figures from the Institute for Fiscal Studies and the Joseph Rowntree Foundation. He highlighted predictions that child poverty could rise by 7 percentage points between 2015 and 2022, possibly up to a rate of 40%.
I have also seen tremendous resilience, strength and generosity, with neighbours supporting one another, councils seeking creative solutions and charities stepping in to fill holes in government services,” he said.

On food banks, he said: “I was struck by how much their mobilisation resembled the sort of activity you might expect for a natural disaster or health epidemic.”

The Guardian 


Politico — Full text: President Donald Trump's statement on Saudi Arabia, Khashoggi killing

How political capital will this cost?

Full text: President Donald Trump's statement on Saudi Arabia, Khashoggi killing

See also

Kathryn Krawczyk

See also

The Hill
Ex-CIA chief calls on Congress to declassify CIA findings on Khashoggi killing
Aris Foley

See also
In a statement on Tuesday, the president said that “the United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country, Israel and all other partners in the region.”

Last week, the CIA reportedly concluded Saudi Crown Prince Mohammed bin Salman ordered the killing of the journalist, who was a US resident, inside the Saudi consulate in Istanbul.

But Trump and members of his administration continue to back Riyadh because they don’t want to jeopardize billions of Saudi dollars flowing into the US economy through weapons purchases and investments.

This isn’t that surprising — for decades, the US has quietly looked away from Saudi Arabia’s human rights abuses for material gain. Trump, however, is making this subtext explicit in a way that no administration has before.
Donald Trump is not at all concerned with political correctness. The US is the hegemon and will do what it pleases. Donald Trump is president, so he gets to choose that. Elections count. End of discussion.

Why the US won’t break up with Saudi Arabia over Jamal Khashoggi’s murder
Julian Borger


Report: Netanyahu Asked Trump to Stick With Saudi Crown Prince After Khashoggi Murder

Links — 20 Nov 2018

Armstrong Economics
Did Browder Have Magnitsky Killed?
Martin Armstrong

Dances with Bears
John Helmer

Uneasy Money
Was There a Blue Wave?
David Glasner | Economist at the Federal Trade Commission

Mind Nature: Red Pill or Blue Pill?
Ken McLeod

Caitlin Johnstone — Rogue Journalist
Life Secrets
Caitlin Johnstone

Intel Today
RussiaGate — Adam Carter : “My Turn to Speak”

Strategic Culture Foundation
The Iranian Albatross the US Has Hung Around Its Own Neck
Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

Moon of Alabama
U.S. Busts APEC Summit With Tariff Demands - New York Times Blames China

Trump administration slaps new sanctions to punish Iran and Syria
Caitlin Oprysko

Sputnik International
US Sanctions Iran, Russian Companies Over Alleged Oil Shipments to Syria

Time to loosen 'constricting belt' over self-centered mentality

Chinese schools to debut AI textbooks in 2019
China Plus

The awakening of an innovative China

40 years on: Photos show China now and then
China Daily

Countdown begins for 5G commercialization
China Daily

China sends 5 satellites into orbit via single rocket

Daniel Hruschka — You Can't Characterize Human Nature If Studies Overlook 85 Percent Of People On Earth

Non-random sampling.
… a nonrandom sample tells us about a population, but we don’t know how precisely: we can’t determine a margin of error or a confidence level.
A lot of mistakes occur from generalizing special cases. This tendency to overgeneralize, along with the tendency to absolutize, often infects formulation of assumptions in "scientific" modeling.

You Can't Characterize Human Nature If Studies Overlook 85 Percent Of People On Earth
Daniel Hruschka | Professor and Associate Director of the School of Human Evolution and Social Change , Arizona State University

Rigged Game — The Spider’s Web: Britain’s Second Empire

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....
Rigged Game
The Spider’s Web: Britain’s Second Empire
Don Quijones

Deutsche Bank at 90% loss of value

Deutsche Bank still circling the toilet bowl [Ed: Figurative Language ALERT for Art Degree people out there... they are not actually all in a big toilet bowl going around and around ofc... haha!  gotta be careful with reification Art Degree people... ]

The "neo-liberal conspiracy!" continues to impress... those crafty "neo-liberals!" really know how to make the munnie don't they!

Let us watch what happens to them going forward into next year if the ECB stops adding reserve assets next month (Ed Note: I'm addressing Science trained people with "us" here... Art Degree people authorized to continue with normal finger painting activities...)

S&P buybacks continue apace

Will set record this quarter of >$200B... stock index still about 5% below its all time high...

RT Calling out Ocasio on US Civics faux pas

Putin neo-Pravda jumping on the Ocasio nit-picking bandwagon... interesting...

Monday, November 19, 2018

Bill Mitchell — The flexibility experiment in Portugal has largely failed

Portugal has been held out by the Europhile Left as a demonstration of how progressive policies can manifest in the European Union, even with the Fiscal Compact and the Stability and Growth Pact (SGP). In 2015, after the new Socialist government took over with supply guarantees from the Left Bloc (Bloco de Esquerda) and the Portuguese Communist Party (PCP) and The Greens (Partido Ecologista “Os Verdes”), it set about challenging the austerity mindset that has blanketed the European continent in stagnation. Things improved in 2016 with increased government spending. But by 2017, the European Commission had reasserted its austerity mindset and the supposed flexibility that the Left were hoping and which Portugal had briefly embraced in 2016 was gone. And we learned that the neoliberal bias of the Eurozone and its fiscal rules dominates any progressive ambitions that a nation state might entertain. Another blow for the Europhile Left. The lesson: start looking at and supporting exit if you are truly serious about restoring a progressive policy agenda in Europe....
Bill Mitchell – billy blog
The flexibility experiment in Portugal has largely failed
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Links — 19 Nov 2018

Rigged Game
Across the West Powerful Firms Are Becoming Even More Powerful
Patrick Foulis and cross-posted from The Economist (Behind Paywall)
The Dangerous Rush to Judgment Against Julian Assange
Bill Blum, author, attorney and former judge

Reminiscence of the Future
Leningrad, 1942--LDNR 2018
Andrei Martyanov

Fort Russ
A billion in US arms aid to Ukraine since 2014 to make war on Donbass
Joaquin Flores

Asia Times
Afghanistan Takes Center Stage in the New Great Game
Daniel Brumberg | director of Democracy and Governance Studies at Georgetown University and a non-resident senior fellow at Arab Center Washington DC

Mark Curtis
Why the West’s World War One carve-up is still unfinished business

Mint Press News
The Tide Is Turning: Israel Is Losing on Two War Fronts
Ramzy Baroud

Moon of Alabama
Syria - Back In The Arab Fold

Moon of Alabama
Syria Sitrep - Army Wins Al-Safa Battle - More Troops Move Towards Idelb

Russia accuses Kremlin critic Browder of ordering lawyer's murder

Magnitsky might have been poisoned with substance created for sabotage, says prosecutor

Russia to put Browder on international wanted list

Why is macroeconomics so hard to teach?

Doesn't seem hard to me you just choose which Theory you fancy and then just teach that Theory.... MMT or otherwise... then let the dialectical process sort it out... Art Degree methodology 101...

What is so hard about that?  I don't see it..

Sunday, November 18, 2018

Bill Mitchell — EU Services Notification Directive will undermine democracy within cities

In a blog post last week – Financial services agreements – the EU as a neoliberal, corporatist project (November 13, 2018) – I wrote about the way the EU compromised the capacity of elected Member State governments to advance the well-being of their nations by the way they negotiate trade arrangements in services, particularly with respect to the financial services sector. For all those Europhiles that regularly deny the core agenda of the EU is to compromise democratic outcomes in favour of capital, that analysis, alone, should be sufficient to discourage those thoughts. Of course, that isn’t the only manifestation of this neoliberal, corporatist bias in the way the EU has developed over the last decades. I mostly conduct my analysis at the macroeconomic level but I am also interested (as my publication record demonstrates) in urban and regional analysis. At the level of the European city, the EU is behaving in the exactly the same way – to curb that ability of city authorities to render their cities favourable environments for the residents who live there....
Bill Mitchell – billy blog
EU Services Notification Directive will undermine democracy within cities
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Ramanan — Fine Jeremy Corbyn Speech From 2010

I came across this fine Jeremy Corbyn Speech in which he explicitly talks about the ideology of the working class which is utterly deflationary to output. It’s from 2010, and shows how clear his understanding of the way the world works, is. It is extremely rare and in my opinion, no politician has come even remotely close to it....
The Case for Concerted Action
Fine Jeremy Corbyn Speech From 2010
V. Ramanan

Clarissa — Kardashianization of Politics

Journalists simply follow ratings. The Kardashians have a huge following. When you see a woman who is a parody of a star on the Kardashians, you’ve got to put her on to attract viewers. I tune in for her like I don’t for Elizabeth Warren or Paul Ryan because she’s simply so goshdarn funny. It’s the Kardashian-type funny but it’s still entertaining.
Alexandria the Great Ocasio-Cortez.

The "younger generation" is about being natural and part off that means "not politically correct," let alone "serious." The older generation — the folks on the way out — grew up in an environment in which success meant "being serious," so as to establish gravitas and finally be recognized as a "very serious person" (VSP). That's out now. The mask is off.

This short blog post captures it. 

"The times they are a-changin'." (Dylan's Nobel in Literature is looking a lot more prescient. If you haven't yet read his Nobel lecture, it's good.)

Clarissa's Blog
Kardashianization of Politics

See also

The Establishment answer — wishful thinking.

Face the Nation — CBS
Commentary: Alexandria Ocasio-Cortez becomes the Sarah Palin of the Left

See also

Bonus pic. Alexandria the Great, Stephanie Kelton opposite, Pavlina Tcherneva behind (Twitter).

Three "power ladies" to be reckoned with. Wait, make that "high power ladies," as in, "You ain't seen nuthin' yet."

Jean Hopfensperger — Fastest Growing Religion Is ‘None’

Institutional religion off, spirituality on.

On a practical level, that means a lot less funding for religious institutions — and a lot more funding for "spirituality," some of which is organized and some not. This trend was already perceptible as an aspect of the countercultural revolution of the Sixties and Seventies. An underground or alternative economy also developed then and it has grown into the billions presently and become mainstream. Part of that is the so-called New Age market.

Minneapolis StarTribune
Fastest Growing Religion Is ‘None’
Jean Hopfensperger

Luke Dormehl — China says it has developed a quantum radar that can see stealth aircraft

What’s less clear is whether this is real functioning technology or an example of the Chinese government bragging about some technology which does not yet exist. “Without being able to take the lid off what has been shown here, we can’t be sure if this is an elaborate hoax,” Alan Woodward, a professor of physics at the U.K.’s University of Surrey, told New Scientist.
The demonstration was only available to Chinese media, and foreign press — including a reporter for the publication Aviation Week — were asked to leave. Still, if this does turn out to be legit, it will represent a game changer in the world of stealth aircraft....
Digital Trends
China says it has developed a quantum radar that can see stealth aircraft
Luke Dormehl
In a breakthrough for nuclear fusion research, scientists at China's Experimental Advanced Superconducting Tokamak (EAST) reactor have produced temperatures necessary for nuclear fusion on Earth
Big Think
China’s artificial sun reaches fusion temperature: 100 million degrees
Stephen Johnson

Frank Jacobs — How to split the USA into two countries: Red and Blue

Notice who gets all the most desirable (and expensive) property. There are the areas that pay most of the taxes based on income and wealth distribution.

See the post for other "strange maps" and stats.

Big Think
How to split the USA into two countries: Red and Blue
Frank Jacobs

Stephen Johnson — Here's how diverse the 116th Congress is set to become

  • In Total, Almost Half of the Newly Elected Congressional Representatives Are Not White Men.
  • Those Changes Come Almost Entirely From Democrats; Republican Members-Elect Are All White Men Except for One Woman.
  • LGBT breakthroughs include Democrat members-elect Sharice Davids (D.-Kan.), the first LGBT Kansan elected to Congress, and Kyrsten Sinema (D.-Ariz.), the first openly bisexual person ever elected to the U.S. Senate.
  • The first Muslim women were elected to the House: Ilhan Omar (D.-Minn.), a Somali-American, and Rashida Tlaib (D.-Mich.), a Palestinian-American.
  • Two new Native American women were elected to the House: Deb Haaland (D.-N.M.) and Sharice Davids (D.-Kan.).
  • Ayanna Pressley (D.-Mass.) is the first black woman elected to Congress in Massachusetts.
  • Sylvia Garcia (D.-Tex.) is the first Latina to represent Texas in the House.
The Democratic Party is starting to actually like America. The GOP, not so much — in fact, not at all.

Big Think

Brian Romanchuk — How Can A Floating Currency Sovereign Default?

I have been toying with an idea of writing a book with the title "How Can a Floating Currency Sovereign Default?" As a follower of Modern Monetary Theory (MMT), this is a bit of a joke, since the text of the book would just be: "They can't." The book can then be submitted to the World's Shortest Book Competition.
Thinking about this has led to me to the realisation that the usual way of discussing sovereign default is inherently defective. (This criticism extends to my earlier book Understanding Government Finance, unfortunately.) The usual technique is to describe the mechanisms for default, look at some models, and argue why a default is unlikely. This then runs into a hurricane of whataboutery - what about the external constraint, Russia, Iceland, etc.
I think we need to follow a different tack, and I expect to turn that into a somewhat longer book.... 
Bond Economics
How Can A Floating Currency Sovereign Default?
Brian Romanchuk

Elliot Hannon — Democrat Declared Winner in Orange County House Race, Marking a Clean Democratic Sweep of the Onetime Conservative Stronghold

Strongest evidence yet of a Blue Wave. Orange County has traditionally been rock-solid Republican and a conservative stronghold.

On the other hand, it could only be a rejection of the Trump GOP and a vote for the bipartisan Establishment over it.

Democrat Declared Winner in Orange County House Race, Marking a Clean Democratic Sweep of the Onetime Conservative Stronghold
Elliot Hannon

ProMarket — Editors’ Briefing: This Week in Political Economy (November 11-18)

"Is monopolization threatening capitalism?" Facebook, Google, Amazon.

Editors’ Briefing: This Week in Political Economy (November 11-18)

Pence Vs. Xi at APEC — Trump decides to skip

Is accusing China of using debt as a weapon capitalist chutzpah on the part of Pence, when it's SOP under neoliberalism — "free markets, free trade, and free capital flows" — to put less powerful countries in debt to powerful countries to the degree that they need to go to the IMF for funding to meet debt obligations, the strings attached being giving up control of their institutional arrangements, fiscal policy and national sovereignty? 

I doubt Pence will fool anyone on this, but some countries will "go along to get along" with the US.

China says no developing country will fall into debt trap by cooperating with China

For the Chinese idiom, see

Language Log
"China has no intention to touch the cheese of any country"
Victor Mair

See also

APEC leaders divided after US, China spat
Ayee Macaraig, Andrew BEATTY | AFP

See also

The Week
Pence vows more trade war 'until China changes its ways'
Bonnie Kristian

See also

Sputnik International
Asia-Pacific Economic Cooperation Summit Reveals Depth of US-China Division

See also

"We suggest a certain country matches its words with its deeds, rather than wag the finger at others," [Chinese Foreign Ministry Spokesperson Hua Chunying] said in the statement. "The country should treat all countries on an equal footing no matter big or small, respect other countries' right of following a development path that accords with their own national conditions and make real contributions to developing countries."
China urges U.S. to stop wagging finger at others

See also
Tyler Durden


US-Chinese Trade War Is To Escalate Further As Both Sides Are Not Going To Make Concessions


APEC fails to reach consensus as U.S.-China divide deepens


Sputnik International
APEC Participants Adopt Final Declaration Excluding Some Controversial Issues
Eisenhower's worst nightmare has come true, as defense mega-contractors climb into the cockpit to ensure we stay overextended....
The dependence on the private sector in the Pentagon and the intelligence community had reached such a point that it raised a serious question about whether the workforce was now “obligated to shareholders rather than to the public interest,” as Priest and Arkin reported. And both Gates and Panetta acknowledged to them their concerns about that issue.
Powerfully reinforcing that privatization effect was the familiar revolving door between the Pentagon and arms contractors, which had begun turning with greater rapidity. A 2010 Boston Globe investigation showed that the percentage of three- and four-star generals who left the Pentagon to take jobs as consultants or executives with defense contractors, which was already at 45 percent in 1993, had climbed to 80 percent by 2005—an 83 percent increase in 12 years.... 
Longish historical article putting things in perspective.

The American Conservative
America’s Permanent-War Complex
Gareth Porter

See also

Did "we" get our money's worth? It all depends on the meaning of "we."

Military Times
Price tag of the ‘war on terror’ will top $6 trillion soon
Leo Shane III

John Quiggin — Trolls (crosspost from Crooked Timber)

John Quiggin explains his new troll policy.
I’ve decided that life is too short for me to deal with any more trolls.
John Quiggin
Trolls (crosspost from Crooked Timber)
John Quiggin | Profess of Economics at the University of Queensland


I just ran into this interesting study.
In a study published by Taylor Francis Online, and written by Kathleen Searles, Sophie Spencer and Adaobi Duru, it's quite clear that abusive and "uncivil" comments (like "UR a commie lib and you eat babies — go die") negatively affect perception of both a publication and its authors, regardless of gender.…
... what they found is that such abusive comments will negatively affect perceptions of the publication itself, as well as the author of an article, regardless of gender.
We found a significant effect for the abusive comment on author credibility and intention to seek news from the author and outlet in the future, but gender of the author did not moderate these effects.
Big Think
Study: The effects of online trolling on authors, publications
Brandon A. Weber

Is There a Fifth Dimension?: Arlie Petters at TEDxNCSSM

Scientists have the tools and methods to discern whether there is a 5th dimension - four spacial dimensions plus time. A three dimensional object casts a two dimensional shadow on a flat two dimensional plane, but a four dimensional object would cast a three dimensional shadow in our space time.

Arlie Petters studies the shadows created by the stars in the universe and as their light passes the planets the pattern it produces looks remarkably like the human brain with its membranes and cells.

We once thought the World was flat, but then we discovered it was round. Are we ready for another paradigm shift, asks Arlie Petters?

A 2012 video, so it seems they haven't found the 5th dimension yet.

Keiser Report: Capitalism is not working?

This is quite a good episode. U.S. companies are busy buying back their shares while China companies are busy expanding their businesses, but the China housing bubble is about to bust, says Max Keiser. The U.S. elites have given up competing with China and have decided to just cannibalize the US. economy instead.

In this episode of the Keiser Report, Max and Stacy discuss the surge in share buybacks as corporations turn their Trump tax break into more income for shareholders now, meaning less investment in the future of the actual company. In the second half, Max continues his interview with Mish Shedlock of MishTalk.com about the credit cycle turning. They discuss the recent Bloomberg opinion piece arguing that ‘capitalism is not working.’ They also talk about 50 million empty homes in China and what that portends for the global economy.