Saturday, May 25, 2019

FT - Modern monetary theory offers insights into the eurozone

The article is behind a paywall, but I have found that the FT let's you read an article once before the paywall comes up. Whether this is intentional or a quirk in the system, I don't know?

The article was saying that MMT had got the ECB chiefs thinking about how they could print money to help failing states without giving a free ride to the bond markets. They said that printing money would not cause inflation in an economy that is in deflation.

So, MMT is now being taken seriously by the ECB chiefs, well, at least some of it's theories.

The FT article said that MMT is associated with the left.

Anyway, try the link and see if you are able to get in the first time like I did this morning, unless I was just lucky again.

FT - Modern monetary theory offers insights into the eurozone

https://www.ft.com/content/97cdd71c-7d3e-11e9-81d2-f785092ab560






A Dialectical Analysis of Myth


Those trained via dialectical method always retreat and flee into mythology when they eventually hit the wall technically; eventually you see them dispense something associated with myth.  Article here written by a dialectic person from that perspective; I'd assume not qualified technically.

Article at Mesocosm.

The abject failure to understand mythological thinking is one of the most serious problems of our age, politically, culturally, philosophically, and spiritually. Irrational forces drive individual behavior and collective action, and the failure to understand and live in productive dialog with the energies of the psyche leaves reason vulnerable on several fronts, and cedes a deep matrix of human motivation to noxious and self-serving ideologies. 
The essay that follows, I must emphasize at the onset, is not a critique of science or an endorsement of myth; rather, it is a dialectical analysis of the interplay between both.


Friday, May 24, 2019

Andrei Martyanov — Douglas Macgregor Hits It Out Of The Ball Park


Douglas Macgregor is a military policy realist. He analyzes the US military and its operational strategy (in contrast with grand strategy as implementation of policy).

Reminiscence of the Future
Douglas Macgregor Hits It Out Of The Ball Park
Andrei Martyanov

Alexander Losev — Finance as an Operational Theater in US-China Trade War


How a global economic crisis could break out if the Sino-American trade war gets out of hand.

While the analysis is not in paradigm with MMT, it is the way many if not most approach the issues and this cognitive bias gives a spin to behavior based on it.

Valdai Analytics
Finance as an Operational Theater in US-China Trade War
Alexander Losev

Tyler Cowen — *Range: Why Generalists Triumph in a Specialized World*

I sometimes say that generalists are the most specialized people of them all, so specialized they can’t in fact do anything. Except make observations of that nature. Excerpt:
In an impressively insightful image, Tetlock described the very best forecasters as foxes with dragonfly eyes. Dragonfly eyes are composed of tens of thousands of lenses, each with a different perspective, which are then synthesized in the dragonfly’s brain.
I am not sure Epstein figures out what a generalist really is (and how does a generalist differ from a polymath, by the way?), but this book is the best place to start for thinking about the relevant issues.
Generalists are a subset of polymaths, since one must be a polymath to be a decent generalist. One definition of philosophy is the study of the whole. Plato and Aristotle were such generalists that they were able to establish the foundational structure of the Western intellectual tradition.

Keynes was a generalist whose training was in mathematics. Adam Smith and Karl Marx were also generalists trained in philosophy. Marx was responding to Hegel who was an über-generalist. Economist Kenneth Boulding was also a generalist and a co-founder of general systems theory. He also contributed to the study of conflict and conflict resolution.

Marginal Revolution
*Range: Why Generalists Triumph in a Specialized World*
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

Branko Milanovic — “We had everything before us, we had nothing before us”.


Some philosophy in the broad sense that is neither MMT nor economics-related but important owing to its contemporary relevance in determining the social, political and economic dialectic that the world is experiencing at this point in time and which is shaping the future for some time to come.

Are we in another Gramsci interregnum?
The crisis consists precisely in the fact that the old is dying but the new cannot be born; in this interregnum a great variety of morbid symptoms appear. — A. Gramsci, Prison Notebooks, 3
Global Inequality
“We had everything before us, we had nothing before us”.
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace
A quick search on the Internet shows that, in the past few years, a spike occurred in the frequency of references to Gramsci’s famous quote about “morbid symptoms”: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”
I myself have contributed to this spike by borrowing the phrase “morbid symptoms” for the title of my 2016 book on the counterrevolutionary phase that followed the Arab Spring, and by quoting the whole sentence as epigraph to the book.
The obvious reason for this spike in uses of the quote is that it provides a clue to the emergence on the global scale, in recent years, of various phenomena that are unmistakably “morbid” from a progressive perspective: from the sad fate of the Arab Spring to the so-called Islamic State, to the reinvigoration of the European far right, to Donald Trump, and so on and so forth. However, before dwelling on the relevance of the above sentence to our present condition, it is appropriate to start by making sure that we correctly understand what Gramsci meant when he wrote it. For this, we need to reinsert the quotation in the text from which it was lifted and replace this text in its own historical context in order to grasp Gramsci’s intention, which may be different from what we instinctively attribute to him in retrospect....
ISR — International Socialist Review
Morbid Symptoms?
Gilbert Achcar


Thursday, May 23, 2019

Fed Minutes


Interesting reveal in latest Fed minutes where we can now see the FOMC exhibiting some understanding of the Accounting relationship between the Treasury General Account fluctuation and Reserve composition here; excerpt:

The deputy manager reviewed developments in domestic money markets. Reserve balances declined by $150 billion over the intermeeting period and reached a low point of just below $1.5 trillion on April 23. The decline in reserves stemmed from a reduction in the SOMA’s agency MBS and Treasury holdings of $46 billion, reducing the SOMA portfolio to $3.92 trillion, and from a shift in the composition of liabilities, predominantly related to the increase in the Treasury General Account (TGA).
The TGA was volatile during the intermeeting period. In early April, the Treasury reduced bill issuance and allowed the TGA balance to fall in anticipation of individual tax receipts. As tax receipts arrived after the tax date, the TGA rose to more than $400 billion, resulting in a sharp decline in reserves over the last two weeks of April. Against this backdrop, the distribution of rates on traded volumes in overnight unsecured markets shifted higher. The effective federal funds rate (EFFR) moved up to 2.45 percent by the end of the intermeeting period, 5 basis points above the interest on excess reserves (IOER) rate.


And btw last year same issues with TGA and Reserve composition and seasonality effects on these balances around Tax Day BUT..... no mention of TGA in last year's minutes here ... hmmmm why include this now but not then????  Evolved from the apes by random chance mutation????  I don't think so...

Well I'll tell you why and its because someone over there is getting a hold of Mike's scientific work over the last year where he has been including these effects of wild TGA fluctuations in his financial analysis that is why...  either in his subscription service or his V-logs... GUARANTEED.... lock... it.....  noooooooobody else talking about this before... noooooooobody... and then all of a sudden voila here it is in the Fed minutes... coincidence? I think NOT...

Based on these minutes, you can see Fed using Mike's analysis to try to assess the effect of these account fluctuations on their managment of their FFR but still not making the connection between these balances and the various bank regulatory ratios so still making the same error of omission as the MMT people.

Fed making (at least) TWO errors; one (BIG) error of reification where they continue to think "banks lend out the reserves!" and one error of omission where they don't exhibit understanding of the subject variation in Reserve composition effects on bank regulatory ratios and stress testing.

MMT just making the ONE error of omission, MMT of course not making the error of reification; asserting (correctly) the abstract property of Reserve Balances via analogy ("it like points on a scoreboard!") always being a big part of the MMT dialectic thesis.

But Mike gets credit for this at least small step forward for the Fed imo...


Links — 23 May 2019

Bloomberg View
The New Assange Indictment Endangers Journalism
Eli Lake

RT
'Modern fascism is breaking cover': Journalists react to Assange Espionage Act charges

Buzzfeed
Legal experts say the new indictment against Assange is the first time the Justice Department has used the Espionage Act to charge a third party — not the government leaker — with publishing classified information.
Press Freedom Groups Say The New Charges Against Julian Assange Are A Threat To Journalists
Zoe Tillman

The Hill
Democratic senator warns of threat to press freedom in new Assange charges
Zack Budryk

Boston Review
The Anti-Defamation League Is Not What It SeemsUnder the guise of fighting hate speech, the ADL has a long history of wielding its moral authority to attack Arabs, blacks, and queers.
EMMAIA GELMAN

McKinsey — A new look at the declining labor share of income in the United States

Labor’s share of national income—that is, the amount of GDP paid out in wages, salaries, and benefits—has been declining in developed and, to a lesser extent, emerging economies since the 1980s. This has raised concerns about slowing income growth, inequality, and loss of the consumer purchasing power that is needed to fuel demand in the economy. The decline has been much discussed and the rising power of companies vis-à-vis workers—whether from new technology, globalization, the hollowing out of labor unions, or market consolidation—has shaped much of that discussion.
The labor share of income in 35 advanced economies fell from around 54 percent in 1980 to 50.5 percent in 2014.
In A new look at the declining labor share of income in the United States (PDF–849KB) we examine the relative importance of different factors in the United States through a focus on the complement of the labor share decline—that is, the rise in capital share of income. We decompose this into the role of depreciation, capital-to-output ratios, and returns on invested capital. Linking this decomposition with a microanalysis of 12 key sectors allows us to identify the relative importance of the factors that have contributed to the labor share decline. While our findings confirm the relevance of the most commonly cited factors, including globalization and technology adoption, they also suggest that additional trends often absent from the current debate—including boom and bust effects from commodity and real estate cycles and rising depreciation, including from a shift to more intangible capital such as intellectual property—played an even more central role.
McKinsey
A new look at the declining labor share of income in the United States

See also

Jason Hickel
HOW NOT TO MEASURE INEQUALITY

Tyler Durden — iPhones Are Now "Embarrassing" In China As Trade War Deepens


Tim Cook's worst nightmare. But not just Apple. American products used to cool. Now, the coolness factor is disappearing.

China had already completed its export-dependent phase of the economic plan, and was already embarking on increasing consumption-share of GDP. This just hastens the transition as the government is forced to increase domestic demand through stimulus to maintain employment.

Zero Hedge
iPhones Are Now "Embarrassing" In China As Trade War Deepens
Tyler Durden

Matthew Ehret — Trump Attacks Military Industrial Complex and Calls for Infrastructure Investments in the Middle East

While Trump has too often accommodated this hive of neocons, his recent statements and repeated calls for cooperation with Russia and China demonstrate a sound push back which should be taken very seriously. In that Fox interview Trump said:

“With all of everything that’s going on, and I’m not one that believes—you know, I’m not somebody that wants to go in to war, because war hurts economies, war kills people, most importantly—by far most importantly.”You know, in Syria, with the caliphate, so I wipe out 100 percent of the caliphate. That doesn’t mean you’re not going to have these crazy people who run around blowing up stores and blowing up things—these are seriously ill people. I don’t want to say, ‘Oh, they’re wiped,’ you know, ISIS. But, I wiped out 100 percent of the caliphate. I say, ‘I want to bring our troops back home.’ The place went crazy. You have people here in Washington, they never want to leave.”‘You know what I’ll do, I’ll leave a couple hundred soldiers behind,’ but if it was up to them, they’d bring thousands of soldiers in. Someday people will explain it, but you do have a group, and they call it the military-industrial complex. They never want to leave. They always want to fight.”
Trump continued to explain his preference for economic over military solutions which is certainly in alignment with the Russia and Chinese approach in the Middle East....
Strategic Culture Foundation
Trump Attacks Military Industrial Complex and Calls for Infrastructure Investments in the Middle East
Matthew Ehret

See also
President Donald Trump said on Thursday he did not think additional U.S. troops are needed in the Middle East to counter Iran, casting doubt on a Pentagon plan to bolster forces in the region.
Reuters
Trump doubts U.S. needs to send more troops to Middle East
Phil Stewart, Jeff Mason




Manlio Dinucci — Rand Corp: how to destroy Russia

The conclusions of the latest confidential report by the Rand Corporation were recently made public in a « Brief ». They explain how to wage a new Cold War against Russia. Certain recommendations have already been implemented, but this systemic exposure enables us to understand their true objective.…
What America's best and brightest are up to these days.

Strategic Culture Foundation
Rand Corp: how to destroy Russia
Manlio Dinucci

Okwonkwo — Before the US started harassing Huawei, there was Toshiba of Japan and Alstom of France in the same boat


Brook no competitors. Huawei is nothing new. But taking a country the size of China is. The US did not need the Japanese or French markets. The Chinese market is quite a different matter.

KenyaTalk
Before the US started harassing Huawei, there was Toshiba of Japan and Alstom of France in the same boat
Okwonkwo

See also
The consequence of the the 737 MAX accidents give China a tool to exert pressure of its own. The credibility of the U.S. regulator FAA is damaged as it was the last one to ground the planes. It is China that will decide when those planes are allowed back into its air. What if it does not do that. What if it buys less planes:
No other country has greater demand for aircraft: In the 20 years through 2037, Boeing estimates Chinese purchases at 7,690 new planes worth $1.2 trillion.
Airbus will be happy to sell all those planes. Unless of course Trump makes a deal and lets Huawei off the hook.
Forget Airbus. After having enormous success in military export, Russia is gearing up for the civilian market, which it will soon begin to take a piece of in any case.

Moon of Alabama
Why Trump's Huawei Ban Is Unlikely To Persist

Andrei Martyanov — Hm, Something Is Missing....


How the West rewrites history. Andrei Martyanov sets the record straight.

Reminiscence of the Future
Hm, Something Is Missing....
Andrei Martyanov

Vasily Kashin — The West and Russian-Chinese Relations: Stages of Denial


A look at the view of Sino-Russian relations in contrast to the reality of their mutually supportive alignment that is not hierarchical and doesn't involve dependence. In other words, a solid relationship that is mutually beneficial.

Analytics Valdai
The West and Russian-Chinese Relations: Stages of Denial
Vasily Kashin

Bill Mitchell — Being anti-European Union and pro-Brexit does not make one a nationalist

The European Parliament elections start today and finish at the weekend (May 23-26). The Europe Elects site provides updated information about the opinion polls and seat projections, although given the disastrous showing of the polls in last Saturday’s Australian federal election, one should not take the polling results too seriously. But it is clear that there is an upsurge in the so-called populist parties of the Right at the expense of the traditional core political movements (centre-right and centre-left). It is also easy to dismiss this as a revival of ‘nationalism’ based around concepts of ethnicity and exclusivity and dismiss the legitimacy of these movements along those lines. However, that strategy is failing because the ‘populist’ parties have become more sophisticated and extended their remit to appeal more broadly and make it difficult to relate them to fascist ideologies. The fact that the progressive (particularly Europhile variety) continue to invoke the pejorative ‘nationalist’ whenever anyone begs to differ on Europe and question why they would support a cabal which has embedded neoliberalism and corporatism in its very legal existence (the Treaties) is testament to why the traditional Left parties are showing up so badly in the polls these days. The British Labour Party, for example, should be light years ahead of the Tories, given how appalling the latter have become. But they are not a certainty if a general election was called and the reason is they have not understood the anxieties of the British people and too many of their politicians are happy to dismiss dissent as being motivated by racism. The Brexit outcome so far is a good case study in that folly....
Since MMT focuses on monetary systems, in particular the existing floating rate regime, and currencies are national units of account, nationalism versus internationalism becomes relevant, especially in democracies. 

Limitation of sovereignty, including currency sovereignty limit the scope of democracy by transferring control of previously national matters to international bodies and entities that are not accountable to national electorates and cannot be addressed through the political process.

In this, there is nothing intrinsically xenophobic or ethnic involved. It is simply preserving the power of the people to require accountability from elected representatives.

This was the original idea of Populism, Prarie Populism, and the Populist movement in the US and Canada, as well as Progressivism historically. The basic idea is the people taking sovereignty back from the elite that had hijacked popular sovereignty as the basis of liberalism and liberal democracy, and turned the country into a plutonomous oligarchy.

Very often, international arrangements benefit national elites but not the people at large. Therefore, international institutional arrangements can be viewed as anti-democratic by design. Actual outcomes seem to support this view.

Historically, such issues were discussed in detail at the time of the formulation of the US founding documents, which involved states ceding a great deal of the sovereignty to the federal government, specifically in The Federalist Papers

The discussion there is informed by the founding fathers knowledge of the Western intellectual tradition that was formed in ancient Greece, where Athens was the incubator of Western democracy and the Western liberal tradition. Although centrists led by Alexander Hamilton prevailed at the time, the controversy over federal prerogatives and states' rights remains lively today. America fought the Civil War over it.

My background is in philosophy and while not my primary focus, social and political theory is a sub-specialty. Like Karl Marx, I came to realize that social and political thought and practice cannot be approached comprehensively independently of economic and financial thought and practice. While Marx is often viewed as an economist, his training was in philosophy and whose work is chiefly about social and political theory, not economics per se. Adam Smith also. I regard Smith, Marx and Keynes as the big three in economic thought, and none of them were trained in economics. Keynes was a mathematician, as Michael Emmett Brady has attempted to show, which he contends, is why economists fail to understand what Keynes actually wrote.

The following quotation sums up why currency sovereignty and who controls it are crucial. 
"Give me control of a nation's money and I care not who makes its laws" — attributed to Mayer Amschel Bauer Rothschild (likely a false attribution)
Even though this quote appears to be spurious, the idea behind it is sound. Thus, the importance of currency sovereignty to democratic governance, and the relevance of MMT to social theory and practice.

Of course, the same can be said of the press, the commanding heights of the economy, and the political process. However, in a plutocracy, which is what representative democracies (republics) are, wealth is determinative. In a plutonomy everything comes back to money, who has it and who doesn't have it.

Neoliberalism can be viewed as a political theory that serves plutonomy. And the neo-imperialism and neocolonialism that follow from it can be viewed as the attempt to extend Western dominance and achieve global hegemony with the assistance of comprador governments run by local elites as minions of the Western elite.

Bill Mitchell – billy blog
Being anti-European Union and pro-Brexit does not make one a nationalist
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, May 22, 2019

Michael Muharrey — Signed as Law: Kansas Removes Barrier to the Use of Gold and Silver as Money


Money crankery.

So everyone using bullion as money carries scales and assay equipment and keeps up on market fluctuations of bullion on smart phones? Really?

Activist Post
Signed as Law: Kansas Removes Barrier to the Use of Gold and Silver as Money
Michael Muharrey | Communications Director for the Tenth Amendment Center



Marko Marjanovic — Big Blow for Huawei as Japanese, Korean, British Firms Reconsider or Suspend Cooperation as Well

Huawei’s suppliers in Japan, South Korea, Taiwan (ROC), and Britain are examining if they can continue to make business with Huawei, while some have already declared a suspension in cooperation.
The issue is that these non-American companies nonetheless use some American components of technology, and if they proceed they will be sanctioned by the US themselves.
It is the same reason why Russia’s Sukhoi did not in the end sell its SSJ-100 airliners to Iran….
Apparently some have forgotten that Nazi Germany was way ahead of the West in development of rocketry, jet aircraft, and atomic weapons. The US instituted the Manhattan Project to catch up.  And remember how MIG-15's ended US control of the skies in Korea? The US had to scramble to bring its own jets into service as quickly as possible. Certainly, China and Russia will try to do the same to become self-sufficient in technology, and they have the resources to do so if they choose. Now they have no choice.

Skeptics point out that this will take time. Well, both China and Russia are in this for the long haul. The tech world is splitting, whatever that will entail subsequently.

In the end, these countries that the US views as adversaries will emerge stronger and more self-sufficient, and they will also be stiffer competitors in the global economy. Russia and China will also be forced to cooperate out of necessity, deepening the fissure between West and Global North, and East and Global South.

Checkpoint Asia
Big Blow for Huawei as Japanese, Korean, British Firms Reconsider or Suspend Cooperation as Well
Marko Marjanovic

See also
Donald Trump’s former chief strategist Steve Bannon gave an impassioned account of what is driving the US war on Chinese tech firm Huawei… and trade has little to do with it. The US wants to destroy its competitor, for good.
Capitalism is about monopoly power. Free market competition as modeled by neoclassical economics reduces profit to costs, eliminating rents.

RT
‘Shutting down’ Huawei ‘10 times more important’ than trade deal with China – Bannon

Also

Zero Hedge
Expect A Long-Trade War: China Offers Tech Companies Five-Year Tax Break To Offset Tariffs
Tyler Durden

T. J. Cole — Vicious Cycle: The Pentagon Creates Tech Giants and Then Buys their Services


"Private enterprise" and "the free market" at work. Ain't capitalism grand.

Counterpunch
Vicious Cycle: The Pentagon Creates Tech Giants and Then Buys their Services
T. J. Cole

Katsuji Nakazawa — Xi Was Ready for a Deal With Trump, But the Party and the Politburo Overruled Him


Worse than the headline. "Unequal treaties" is a hot button for all Chinese as being reminiscent of China's humiliation by Western "gunboat diplomacy." No way Xi can accede to US demands even if he wanted to without jeopardizing his position as leader.

Trump was correct in claiming that China backtracked on previously negotiated points. Xi was told to forget it.

Checkpoint Asia
Xi Was Ready for a Deal With Trump, But the Party and the Politburo Overruled Him
Katsuji Nakazawa

See also

Zero Hedge
Tyler Durden


Marko Marjanovic — Russia’s $30 Million Missile Corvettes Have Four Times the Weapons Range of US $2 Billion Destroyers and Cruisers

Russia is adding warships to its navy faster than the US. The reason for that is simple, while the US is pouring $14 billion into the USS Gerald Ford carrier the Russians are building corvettes. A class of warships between 500 and 1,000 tons.
Not only are they small, they are cheap. The newest class, Karakurt, sets back the Russian budget 2 billion rubles or just over $30 million at the exchange rates.
These sound like puny vessels, except here is the thing: they can hit an enemy surface ship from four times the distance a US destroyer (Arleigh-Burke) or cruiser (Ticonderoga) can.
Four different classes of corvettes are being built. Buyan-M-class of which 15 are planned and 10 are already serving. Steregushchiy-class of which 24 are planned and 6 are serving. Karakurt-class of which 18 are planned and one is already serving. And Gremyashchiy-class of which 4 are planned and 1 is already serving.
Except the Steregushchiy-class all these vessels may fire the Kalibr and the P-800 Onyx anti-ship missiles with the respective range of 660 and 600 kilometers. Steregushchiy carries a lighter Kh-35 missile with the range of “only” 300 kilometers.
Arleigh-Burkes and Ticonderogas fire the Harpoon anti-ship missile with the range of just 130 kilometers. Even if the US had heavier anti-ship missiles ready its primary “surface combatants” could not fire them because their multi-functional weapons cells would be too small to accommodate them. An Arleigh-Burke costs $2 billion, the older Ticonderogas cost $1 billion at the time they were built. Both classes displace around 10,000 tons....
On the cheap. And the corvettes are chiefly relatively short range (brown/green water) and defensive in perimeter rather than long range (blue water), offensive vessels like destroyers and cruisers, a chief mission of which is to serve in carrier groups to protect carriers.

The development of these vessel and missile types was one meaning of what Russia meant by "asymmetric response to threats."

China is using a similar strategy and so is Iran.

Check point Asia
Russia’s $30 Million Missile Corvettes Have Four Times the Weapons Range of US $2 Billion Destroyers and Cruisers
Marko Marjanovic

Warren Mosler — "Entweder wir glauben an die Demokratie oder nicht"


Die Zeit is somewhat similar to the NYT in the US in that it is centrist to left of center and intellectual. But it differs from the Time in not being considered the paper of record. It is published weekly rather than daily.

Die Zeit is a major venue and their publishing this article by Warren Mosler is a big step forward for MMT in Germany.

Die Zeit
"Entweder wir glauben an die Demokratie oder nicht"
Warren Mosler

Andrei Martyanov — Daniel L. Davis Hits It Out Of The Ball Park


Smackdown of US foreign and military policy and policymakers.

Reminiscence of the Future
Daniel L. Davis Hits It Out Of The Ball Park.
Andrei Martyanov

Timothy Taylor — Origins of "Microeconomics" and "Macroeconomics"


Some history of economics.

Conversable Economist
Origins of "Microeconomics" and "Macroeconomics"
Timothy Taylor | Managing editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota

Stephanie Kelton — The Deficit Myth (Book)


Stephanie's new book is available for preorder. It should be a game-changer.

The blurb reads, "Deficits can be used for good or evil." "Evil?" Probably few people know that German economic development post Weimar and rearmament in preparation for WWII was engineered under Adolph Hitler by Hjalmar Schacht, head of the Reichsbank (German central bank). Hitler is often associated with the Weimar Republic that destroyed the Deutsche mark (DM). Nothing could be further from the truth. 

Under Hitler Germany rose from the ashes of WWI and the draconian settlement involving reparations that were designed to prevent the rise of another strong Germany in the center of Europe, ostensibly because Germany had caused the conflict (which history shows to be false). The retaliatory Treaty of Versailles led to German post-war collapse and the rise of Hitler and the Nazi Party. Hjalmar Schacht was instrumental in making this possible using his position and financial knowledge.

Schacht left the Reichsbank 1939, but remained a minister without portfolio until 1943. Nevertheless, he was tried and convicted at Nuremberg, and he served time for his contributions to German resurgence under Hitler and the Nazis along with his Nazi sympathies. The link provides a detailed summary of Schacht's operations while heading the Reichsbank.

The financial-economic plan that Schacht devised did not rely on deficits, since this would include bond issuance and be transparent to the world. Instead, he used a variety of financial techniques including overt money financing (OMF) without fiscal offsets, that is, direct payments by the central bank for government purchases to conceal what was really taking place.

While Schacht's plan was used to fund what the world considers as "evil," it demonstrated that as long as real resources are available, financing is no problem for a government whose central bank issues the currency. Such a government is self-funding. What this shows is that the "money power" can be used for good or for ill, wisely or foolishly.

As a result, some argue that the government must be prevented from self-funding because it may result in ill. That is to say, policy space must be restricted voluntarily in the case of a floating rate system or operationally by imposing a fixed rate system. It is an objection that needs to be addressed.

The Deficit Myth
The Deficit Myth
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Bill Mitchell – Announcing – Foundation for Monetary Studies Inc.

It is Wednesday today and a blog-lite day. An announcement and a few videos only. But plenty to occupy your time if so inclined. I have an important announcement to make, a video of our Birmingham event (May 11, 2019) and some music from one of the best guitar players. Thomas Fazi and I also have an article coming out in The Tribune magazine soon in response to a rather unsavoury and silly attack on Modern Monetary Theory (MMT) by an ex-advisor to the British Labour Party. There will also be a longer version published here in the coming days – which contains more detail. But I have to finish the edits today! So with that said …
Announcing – Foundation for Monetary Studies Inc.
Today, I am formally announcing the – Foundation for Monetary Studies Inc. – aka The MMT Foundation.
Regular readers will know that this has been in the wind for some time. We have now completed all the legal steps to bring the MMT Foundation into operation.
We hope this will take our MMT-related projects forward and help more people understand our work and use that understanding to improve their nations down to their local communities....
Bill Mitchell – billy blog
Announcing – Foundation for Monetary Studies Inc.
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, May 21, 2019

Pepe Escobar — Why capturing Huawei is no victory in tech war

Chinese firm is a queen on tech chessboard, but Beijing will just tell its whiz-kids to reach the next level….
Asia Times

RT — Huawei CEO says company’s own OS will run Android apps - reports


My, my. turns out that Huawei was not only making its own chips in anticipation of exclusion, but also preparing its own operating system. Obviously, native developers will create their own apps hosted in a Huawei store. This market is lost to US firms (think Google and Apple).

The decoupling of the US from China and end of Chimerica is leading to a new division of the global economy into blocs, on one hand, and on the other, to a push for national self-sufficiency and control the commanding heights of the economy and finance.

In other words, neoliberal globalization has reached its limit and is now beginning to unwind.

RT
Huawei CEO says company’s own OS will run Android apps - reports

Banikinkar Pattanayak — Indian Households Hold More Gold Than the World’s Top 10 Central Bank Holders Combined

This is nothing new. India households have always been holders of gold. Chinese households also have a preference for gold.

As India and China become more prosperous, this demand will likely increase.

Checkpoint Asia
Indian Households Hold More Gold Than the World’s Top 10 Central Bank Holders Combined
Banikinkar Pattanayak

Michelle Starr — Tomorrow The Definition of The Kilogram Will Change Forever. Here's What That Really Means

This is a big deal even though it won't be noticed by most people. However, precise measurement essential to science and measurement involves application of metrics defined by criteria. The units and their criteria are arbitrary. There was no such thing as a kilogram prior to the development and introduction of the metric system. Same with other measurement systems. The "trick" is to establish a constant criterion in a relative universe. That is as close to an absolute as human can construct. This post explains how the issue has been approached in physics.

Of course, a great deal more precision can be arrived at through physics than other science, which strive to use the measurements developed by physics in so far as possible, but physical measurement is applicable only to quantity. Measuring quality presents greater challenges. So do psychological "dimensions."

Science Alert
Tomorrow The Definition of The Kilogram Will Change Forever. Here's What That Really Means
Michelle Starr

Richard Murphy — Growth, MMT and the Green New Deal


Richard Murphy has been working on the New Green Deal over the last decade. In the second half of this post he provides an outline that is very useful in thinking about it.

Tax Research
Growth, MMT and the Green New Deal

Richard Murphy

Yasmin Tayag — How Do You Pay for the Green New Deal? Ask Andrés Bernal

The House of Representatives didn’t know what hit it.

The Green New Deal, introduced by Representative Alexandria Ocasio-Cortez in February, energized politicians on both sides of the political spectrum with its twin goals of carbon neutrality by 2030 and the promise of jobs for every American. It also polarized them. Critics have one main question: How the hell are we going to pay for it?
As the guy responsible for the plan’s “jobs guarantee,” Andrés Bernal, 32, has a lot to answer for. And he’s more than happy to. The Colombia-born, Texas-raised advisor to Ocasio-Cortez spends most of his time thinking about the people who need that kind of job security and how to pay their salaries. In fact, he’s one of them.

When he’s not advising the most galvanizing congresswoman on the planet on progressive economics, he’s a Ph.D. candidate and lecturer of urban studies at Queens College in New York City, making him part of one of America’s most notoriously underprotected workers’ groups....

The next generation is rising up and they are energized.

TeleSUR - Huawei Blacklisted By The US

Google say they won't be upgrading Android on Huawei phones anymore. And I've just bought a new Honor 10 phone as well. All this will do is force Huawei to develop its own operating system, which will probably outsmart everything else..

We've been constantly told about competition, and that you can't buck the market. But I always knew that the elite only love the market because they were the winners in it, and that as soon as they weren't winning so well they would buck the market.

It's market discipline for for us and monopolies and cartels for them - a rigged market.




TRNN - Trump Says the Military Industrial Complex is Pressuring him Into a War With Iran

Trump says he does not want a fight with Iran, but the military industrial complex is trying to force him into one. I have read that many conservatives are now very anti-war, mainly due to influence of the libertarians and Ron Paul, so Trump has a lot of support on this.

Col. Larry Wilkerson says bombs won't work and so the US would be forced into a ground war if they go ahead. He says that the Pentagon is run by baboons and monkeys.

With a thirty year Boeing veteran at the Pentagon, Patrick Shanahan as Acting Secretary of Defense, and with John Bolton and Mike Pompeo at the helm, war with Iran is likely says the former chief of staff to Secretary of State, Col. Larry Wilkerson.




Transcript here.
TRNN - Trump Says the Military Industrial Complex is Pressuring him Into a War With Iran

Bill Mitchell – Japan Finance Minister getting paranoid about MMT

The debates about MMT are expanding. There are weird offerings springing up each day. I read something yesterday about how MMT is really just Marxism in disguise and therefore a plot to overthrow entrepreneurship. Well in a socialist society there will still be a monetary system! Most of the critiques just get to their point quickly – MMT is about wild printing presses undermining the value of the currency! That should summarise 25 years of our work nicely. But there are also other developments on a global scale. A few weeks ago there was a lengthy debate in the Japanese parliament during a House of Representatives Committee hearing considering whether the October sales tax hikes should continue. The Finance Minister, Taro Aso was confronted by Committee members who indicated that it was useless denying that Modern Monetary Theory (MMT) was some abstract theory that was wrong because the Japanese are already “doing it”. The Minister told the hearing that MMT was dangerous and would undermine financial markets if anyone said otherwise. An interesting discussion took place. It highlighted some key features of MMT. It also indicates that progress is being made in the process of education aimed at giving people a better understanding of how the monetary system that we live within operates....
Bill Mitchell – billy blog
Japan Finance Minister getting paranoid about MMT
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Monday, May 20, 2019

Paul Robinson — Book Review – John Helmer


If you are aware of John Helmer's blog Dancing with Bears, frequently linked to here, you may be interest in this. Otherwise, not so much.

Irrussianality
Book Review – John Helmer
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

Paul Antonopoulos — China’s U.S Strategy: “Be Courteous, Because Russia And China Rises As The West Falls”

According to [economist and director of the China Institute of Fudan University, Zhang] Weiwei, it is enough just to take a look at the volume of the Chinese economy to understand the cause of his lack of concern. It turns out that Trump is trying to impose tariffs on imports of the goods on the Asian country which is the largest manufacturer in the world.
“No matter what Trump says about his victory, we know that this is nonsense,” the expert said in an interview with Russia’s Rossiya 24.
As a result of this war, the burden of tariff rates will ultimately fall on US citizens in the form of taxes.
Although there are usually no winners in commercial wars, in the current battle with China, the US loses more than its Asian rival, says Weiwei.
“If China throws the US out of its market, the US will no longer be a superpower,” he warned.…
The present US administration, not just the president, doesn't seem to understand that China exacted a price for entry to its market. They see this as China "cheating" us.

Fort Russ News
China’s U.S Strategy: “Be Courteous, Because Russia And China Rises As The West Falls”
Paul Antonopoulos

Brian Romanchuk — Comments On Turning Points And Recessions

As the Canadian experience shows, deciding which episodes qualify as "recessions" can be debated. The safest course of action is to make it clear what definition you are using, and apply it consistently across regions.
This is logic and critic thinking 101, and also fundamental to math application. While it is basic for thinking critically, it is key for doing science.

This is a big problem for economics since economics is not regarded as a pure science but an applied science. Macroeconomics is considered a policy science. Ambiguity then becomes a hazard.

Terms like "inflation" and "recession," which are defined arbitrarily in terms of data selection, are especially slippery since measurement differs by locale and definitions are often revised, making historical comparison tricky.

Bond Economics
Comments On Turning Points And Recessions
Brian Romanchuk

Sunday, May 19, 2019

At the front line in the Sino-American trade war — Links

Zero Hedge
Beijing Backs Iran, "Firmly Opposes" Unilateral US Sanctions
Tyler Durden

Sputnik International
Google Suspends Huawei Access to Android Updates After Trump’s Ban – Reports

Reuters
Schumer asks government to probe rail tech from China

Sputnik International
Chinese Users Call for Boycott of Apple Phones Due to US Trade War


Bill Mitchell — Australia and Scotland and the need to escape neoliberalism

Today’s blog post considers the Australian election and some issues that arose from my recent trip to Scotland – all of which bear on the progress of our work in the public debate. In Australia, we have just held a federal election and it was expected (and certainly the polls and bookies expected) that the Labor Party would win easily after 6 shocking years of conservative rule. Those 6 years have been marked by scandal, three leaders (Prime Ministers), massive internal divisions within the government, on-going climate change denial and a slowing economy. But Labor was thrashed in the election and I offer a few reasons why I think that happened. For Scotland, as they debate independence in the lead up to another referendum (as yet unscheduled) they have been struggling with the choice of currency issue and whether the new independent nation should join the EU. After initially thinking they would stick with the British currency for some time, the debate has swung heavily in favour of introducing their own currency as soon as is possible after the independence is achieved. Clearly, I have favoured that option for several years. But the overwhelming thinking is that the new nation should join the EU. That is a choice that I think would bring grief. And given the fact that the rUK will retain “continuing nation” status, a newly independent Scotland would be under significant pressure to use the euro. In other words, the currency choice and EU membership trends at present are incompatible. During my visit there I urged the activists to ditch their pretensions for EU membership and become truly independent.…
Bill Mitchell – billy blog
Australia and Scotland and the need to escape neoliberalism
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Matthew Ehret — The Polar Silk Road Comes to Life as a New Epoch in History Begins

Speaking at China’s second Belt and Road conference in Beijing featuring 37 heads of state, Russia President Vladimir Putin unveiled the intention to unite Russia’s Northern Sea Route with China’s Maritime Silk Road. This announcement should come as no surprise to anyone who has been paying attention to the close strategic friendship between both countries since the 2015 announcement of an alliance between the Russian-led Eurasian Economic Union and Belt and Road Initiative. This extension of the Maritime Silk Road represents a powerful force to transform the last unexplored frontier on the Earth, converting the Arctic from a geopolitical zone of conflict towards a new paradigm of mutual cooperation and development....
Strategic Culture Foundation
The Polar Silk Road Comes to Life as a New Epoch in History Begins
Matthew Ehret

Sergi Basco, Martí Mestieri — The new globalisation and income inequality

Trade in intermediates (or ‘unbundling of production') and trade in capital have become increasingly important in last 25 years. This column shows that trade in intermediates generates a reallocation of capital across countries that exacerbates world inequality in both income and welfare. Unbundling of production hurts middle-income countries but helps those with high productivity. Trade in intermediates also increases within-country inequality, and this increase is U-shaped in the aggregate productivity level of the country....
There exists a general consensus among economists that globalisation is good at the world level. However, the increasing discontent with globalisation in developed countries has forced economists to better understand the mechanisms through which it affects the distribution of income between and within countries. In this column, we have discussed that in the most developed (productive) economies, the new globalisation is good at the country level but it generates a redistribution of income towards capital. Thus, the optimal policy for these countries does not seem to be to put the brakes on the emergence of global supply chains but to better redistribute income within the country. Finally, it is worth mentioning that since the new globalisation amplifies competition among countries, the returns to productivity enhancing policies (like education or infrastructure) have increased. 
VoxEU
The new globalisation and income inequality
Sergi Basco, Martí Mestieri

CTGN — Learning lessons from Huawei's countermeasure


Turns out that Huawei was preparing for such an eventually for some time.

CTGN
Learning lessons from Huawei's countermeasure
Editor's Note: The following article is taken from the Chinese-language "Commentaries on International Affairs" published on China Plus on May 19, 2019.

China's Central Bank Warns on Trade, Pledges Targeted Stimulus


Reification error continues to plague mankind nowhere else as prominent currently as in Asia:

"The bank will make “good use” of targeted monetary tools, such as cuts to the amount of money banks lock up and targeted medium-term lending facility, to channel credit to specific sectors,"
China turning Japanese..  and btw Japan hasn't made a new high in price of equity shares since 1989... as both moron hacker nations appear to be competing in continued zombie action to "add high powered money to lend out!"... 

U.S. needs to 'decouple' financially from China similar to what we've been able to do with Japan and pronto...




But Trump apparently wants the U.S. in on this "pumping money!" moron-fest too:



SCARY!!!!

When you come across two competing in a moron contest, the move should not ideally be to want to jump in with them too...



Chris Hedges - What Greed has Done

Why the West is coming to an end - greed!



The elite don't care about the environment, or its beauty.

They don't care about the suffering of people: poverty and war are profitable.

They don't care about living in pleasant and decent society: why do they care when they live far away from everyone else in their estates, or gated communities, or even abroad, maybe on an island.

They tell us capitalism is dog eat dog, so either win at the game or go under. They tell us we are all utterly competitive and there is no true humanity. We are only mean!

They tell us life has no values except commercial ones. Values are subjective personal experiences that are not essential to existance. So, go to your yoga class if you want, or meditation retreat, or your spiritual community, but you can't buck the market.

To stave off the boredom of a repetitive life of all work, we keep ourselves amused with our phones, TV, gadgets, cars, celebrity gossip, or whatever.



What some viewers say about the Chris Hedges video:

What stupefies me are the middle to lower working class knuckleheads that actually DEFEND these robber barons. Do they expect some form of kickback for their "loyalty"?

I thought this reply was pertinent.








There are those who love their neighbours and those who love an idea of supremacy and superiority that essentially systemises hatred of your neighbour.







Saturday, May 18, 2019

Vijay Prashad — The Plot to Kill Venezuela


The curse of oil and Dutch disease used to force compliance.
[Mark] Weisbrot and [Jeffrey]Sachs say that these sanctions “would fit the definition of collective punishment,” as laid out in the Hague Convention (1899) and in the Fourth Geneva Convention (1949). The United States is a signatory of both of these frameworks. “Collective penalties,” says the Fourth Geneva Convention, “are prohibited.” Tens of thousands of Venezuelans are dead. Tens of thousands more are under threat of death. Yet, no one has stood up against the grave breach of the convention in terms of collective punishment. There is not a whiff of interest in the UN Secretary General’s office to open a tribunal on the accusations of collective punishment against Venezuela. Allegations of this seriousness are brushed under the rug.
Venezuelanalysis
The Plot to Kill Venezuela
Vijay Prashad | Executive Director of Tricontinental: Institute for Social Research and the Chief Editor of LeftWord Books

See also

Once upon a time.…
How Many Damn Fucking Times Do I Have to Explain This?

Also

Strategic Culture Foundation

Friday, May 17, 2019

Eamon Barrett — China Is Running Out of U.S. Goods to Tariff, But It Has Other Trade War Weapons to Unleash


Devaluation would be the most disruptive.

Fortune
China Is Running Out of U.S. Goods to Tariff, But It Has Other Trade War Weapons to Unleash
Eamon Barrett

Patrick Cockburn — Four times the US has made the same mistake in the Middle East. Now Trump is making it yet again over Iran

The US and its allies have fatally underestimated the religious motivation of their adversaries, and lost countless conflicts as a result.
The Sunni-Shia divide is as real and as influential as the Catholic-Protestant conflict in the West and the Catholic-Orthodox conflict that dates to the rivalry between Rome and Constantinople and now encompasses the Western Eastern Christian worlds and their worldviews. The West, under US leadership, taking the side of the Sunnis is a huge strategic blunder.
Craig Murray, formerly British ambassador to Uzbekistan and Rector of the University of Dundee


Moon of Alabama — Propaganda Intensifies Trade War With China


More on China.

I concur with most of the post. However, I disagreed previously with the view that the US has no China strategy and that the Trump administration is shooting from the hip. Instead, US policy is to aim between the eyes with a sniper rifle to disable the rise of China in this century. I continue to hold this view. It is part of the larger view based on the Wolfowitz Doctrine of not permitting a competitor to permanent US global hegemony, which involves neoliberal globalization based on the US dictating the rules.

Moon of Alabama
Propaganda Intensifies Trade War With China

Ian McKay — Are we witnessing the death of liberal democracy?


"Liberal democracy" is an oxymoron. What passes for liberal democracy is dying owing to its internal oppositions. Liberalism and democracy are incompatible. Being based on property, liberalism is naturally biased toward oligarchy

Property ownership and property rights are dominant in liberalism and this leads to plutocracy. Ian McKay cites C. B. Macpherson on this. The problem arises from the basis of liberalism in property to the bias toward capitalism as an economic system. Capitalism is the favoring of capital, both real and financial, over the other factors, labor (people) and land (environment). Interest and profit are based on rent extraction, so capitalism tends toward rent seeking.

C. B. Macpherson needs to be rediscovered along with Hyman Minsky, Karl Polanyi, and Kenneth Boulding.

The Conversation
Are we witnessing the death of liberal democracy?
Ian McKay, Director of the Wilson Institute for Canadian History, McMaster University

Magpie — Getting all Tied Up (2)


Magpie critiques Paul Mason's criticism of MMT from the POV of a Marxist.

Magpie's Asymmetric Warfare
Getting all Tied Up (2)
Magpie

Tim Johnson — Ethics and actuaries: issues and opportunities


This is an excellent presentation on ethics in finance if you have the time and interest.

Money, Maths and Magic
Ethics and actuaries: issues and opportunities
Tim Johnson | Lecturer (associate professor) in the Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh

Caitlin Johnstone — CONFIRMED: Chemical Weapons Assessment Contradicting Official Syria Narrative Is Authentic


Big. The "official" narrative is unraveling.

Caitlin Johnstone.com
CONFIRMED: Chemical Weapons Assessment Contradicting Official Syria Narrative Is Authentic
Caitlin Johnstone

Also

RT
‘How do they sleep?’ Roger Waters calls out US, UK & France over ‘faked’ Douma chemical attack

Also

Col. Lang publishes the full assessment, which he reports receiving from the authors.

"Taken together, these findings establish beyond reasonable doubt that the alleged chemical attack in Douma on 7 April 2018 was staged." — OPCW Engineering sub-team assessment

Sic Semper Tyrannis
OPCW Engineering sub-team assessment on the Douma gas "attack" in April 2018
Col. W. Patrick Lang, US Army (ret.)
At the Defense Intelligence Agency, Lang was the Defense Intelligence Officer (DIO) for the Middle East, South Asia and counter-terrorism, and later, the first Director of the Defense Humint Service. At the DIA, he was a member of the Defense Senior Executive Service. He participated in the drafting of National Intelligence Estimates. From 1992 to 1994, all the U.S. military attachés worldwide reported to him. During that period, he also briefed President George H. W. Bush at the White House, as he had during Operation Desert Storm.

He was also the head of intelligence analysis for the Middle East for seven or eight years at that institution. He was the head of all the Middle East and South Asia analysis in DIA for counter-terrorism for seven years. For his service in the DIA, Lang received the Presidential Rank Award of Distinguished Executive. — Wikipedia

See also
A new book called Bitten: The Secret History of Lyme Disease and Biological Weapons by Kris Newby adds significantly to our understanding of Lyme disease, while oddly seeming to avoid mention of what we already knew.

Newby claims (in 2019) that if a scientist named Willy Burgdorfer had not made a confession in 2013, the secret that Lyme disease came from a biological weapons program would have died with him. Yet, in 2004 Michael Christopher Carroll published a book called Lab 257: The Disturbing Story of the Government’s Secret Germ Laboratory. He appeared on several television shows to discuss the book, including on NBC’s Today Show, where the book was made a Today Show Book Club selection. Lab 257 hit the New York Times nonfiction bestseller list soon after its publication.
Newby’s book reaches the same conclusion as Carroll’s, namely that the most likely source of diseased ticks is Plum Island....
Counterpunch
Where Lyme Disease Came From and Why It Eludes Treatment
David Swanson
For nearly two decades, one of the most overlooked and little known arrests made in the aftermath of the September 11 attacks was that of the so-called “High Fivers,” or the “Dancing Israelis.” However, new information released by the FBI on May 7 has brought fresh scrutiny to the possibility that the “Dancing Israelis,” at least two of whom were known Mossad operatives, had prior knowledge of the attacks on the World Trade Center.
Shortly after 8:46 a.m. on the day of the attacks, just minutes after the first plane struck the World Trade Center, five men — later revealed to be Israeli nationals — had positioned themselves in the parking lot of the Doric Apartment Complex in Union City, New Jersey, where they were seen taking pictures and filming the attacks while also celebrating the destruction of the towers and “high fiving” each other. At least one eyewitness interviewed by the FBI had seen the Israelis’ van in the parking lot as early as 8:00 a.m. that day, more than 40 minutes prior to the attack. The story received coverage in U.S. mainstream media at the time but has since been largely forgotten.
The men — Sivan Kurzberg, Paul Kurzberg, Oded Ellner, Yaron Shimuel and Omar Marmari — were subsequently apprehended by law enforcement and claimed to be Israeli tourists on a “working holiday” in the United States where they were employed by a moving company, Urban Moving Systems. Upon his arrest, Sivan Kurzberg told the arresting officer, “We are Israeli; we are not your problem. Your problems are our problems, The Palestinians are the problem.”
For years, the official story has been that these individuals, while they had engaged in “immature” behavior by celebrating and being “visibly happy” in their documenting of the attacks, had no prior knowledge of the attack. However, newly released FBI copies of the photos taken by the five Israelis strongly suggest that these individuals had prior knowledge of the attacks on the World Trade Center. The copies of the photos were obtained via a FOIA request made by a private citizen....
Mint Press News
Newly Released FBI Docs Shed Light on Apparent Mossad Foreknowledge of 9/11 Attacks
Whitney Webb

Thursday, May 16, 2019

Zero Hedge — Something Just Broke In The Chinese Yuan


When is China going to follow Russia and float?
We argue that policymakers in China are now going to be more accepting of USD/CNY appreciation through 7: years of regulatory measures should make outflows more manageable, easier monetary policy will add upside pressure and a weakening FX is the natural means of offsetting tariffs....
Zero Hedge
Something Just Broke In The Chinese Yuan
Tyler Durden

Sandra Black, Paul Devereux, Petter Lundborg, Kaveh Majlesi — Nature versus nurture in economic outcomes and behaviours


The wealth of parents and that of their children is highly correlated, but little is known about the different roles genetic and environmental factors play in this. This column compares outcomes for adopted children in Sweden and those of their adoptive and biological parents and finds there is a substantial role for environment in the transmission of wealth and a much smaller role for pre-birth factors. And while human capital linkages between parents and children appear to have stronger biological than environmental roots, earnings and income are, if anything, more environmental....
Well, that settles economic Lamarckism.

VoxEU 
Nature versus nurture in economic outcomes and behaviours

Thomas Piketty — Europe and the class cleavage

In all the referendums for the last 25 years the working classes have systematically expressed their disagreement with the Europe presented to them, whereas the richest and the most privileged classes supported it. During the French referendum on the Treaty of Maastricht in 1992, we observed that 60% of the voters with the lowest incomes, personal wealth or qualifications voted against, whereas the 40% of the electorate with higher incomes voted in favour; the gap was big enough for the yes vote to win with a small majority (51%). The same thing happened with the Constitutional Treaty in 2005, except that this time only the top 20% were in favour of the yes vote, whereas the lower 80% preferred to vote no, whence a clear victory for the latter (55%). Likewise for the referendum on Brexit in the UK in 2016: this time it was the top 30% who voted enthusiastically to remain in the EU. But, as the bottom 70% preferred to leave, the leave vote won with 52% of the votes. 
What is the explanation? Why are votes on the European Union always characterised by such a marked division of social class? This outcome is all the more puzzling as the structure of the vote for the different political parties has long since ceased to be so clearly marked by the class structure, with the three dimensions of social division (qualifications, income, personal wealth) all pulling in the same direction. Since the 1970-1980s; the most highly qualified have swung distinctly towards the left wing parties in both countries, whereas those with the highest incomes and personal wealth continue to tend to support the right-wing parties, which are themselves undergoing change. On the other hand, during the votes concerning Europe in 1992 (French referendum on Maastricht Treaty), 2005 (French referendum on constitutional treaty) and 2016 (UK referendum on Brexit), the intellectual and economic elites in both instances found themselves supporting the EU as it existed, whereas the less privileged categories on the left and on the right rejected it.
The reason for this, according to those who are better off, is that the working classes are nationalist and xenophobic, perhaps even backwards. However the xenophobia of the less well off is no more natural than that of the elites. There is a much simpler explanation: the European Union, as built in recent decades, is based on widespread competition between countries, on fiscal and social dumping in favour of the most mobile economic actors and functions objectively to the benefit of the most privileged. Until the European Union takes strong symbolic measures for the reduction of inequalities, for example a common tax which impacts the richest, enabling the taxes of the poorest to be lowered, this situation will continue....
Le Monde — Le blog de Thomas Piketty
Europe and the class cleavage
Thomas Piketty

Ben Holland — Marco Rubio Puts Out a Paper Citing Obscure Left-Wing Economists


OMG. Who knew?

Bloomberg
Marco Rubio Puts Out a Paper Citing Obscure Left-Wing Economists 
Ben Holland

Here is Marco Rubio's paper.

American Investment in the 21st Century

Craig Murray — The Pivot Point

Sometimes history appears to be approaching a pivot point, and then the weight swings back and nothing happens. But sometimes it does tip, and times such as these are times of great potential for change. I see hope, for example, in the upsurge of support for Green politics, and the happy convergence of popular political discontent with rising awareness over climate change.
This may be a point in time owing to a crisis or a process during which a realignment is worked out. I would bet on the latter alternative. This is likely to extend at least over the decade of the 20s s an "interregnum" (A. Gramsci). This will be a period in which the American millennial generation supplants the post-WWII "baby boomers" as the most numerous generation and the trendsetters. Globally, there is already a realignment underway in which the West is losing its dominant position that commenced half a millennium ago. This is likely to be a period of conflict.

Craig Murray Blog
The Pivot Point
Craig Murray, formerly British ambassador to Uzbekistan and Rector of the University of Dundee

Andrei Martyanov — As Was Predicted.


Andrei Martyanov leaves a key piece out of this post, one that he and others have mentioned previously. The political jostling for control between the Western-leaning liberals (or so-called fifth column), the Russian oligarchs, and military-intelligence is over in Russia. Putin had been balancing these factors previously.

Now the Stavka (General Staff) won and is control of Russian policy. This happened some time ago. It began after Kosovo and the eastward Nato expansion under Bill Clinton. After having stood by while the USSR collapsed, they are determined not to make a similar mistake again.

Reminiscence of the Future
As Was Predicted.
Andrei Martyanov

See also by AM.

Sen. Tom Cotton as ignoramus of the year.

Ohh, Goody...

See also

Moon of Alabama
The Lunacy Of Waging A War On Iran From Which China And Russia Will Win

The Vineyard of the Saker
The AngloZionist Empire: a hyperpower with microbrains and no cred left
The Saker
Related

The military-industrial complex doesn’t care about actually winning wars, since it gets paid in any case. In fact, if things don't go well, it gets paid more, so the preference is for endless war. Talk about perverse incentives.

Bracing Views
America’s Peculiar Military Dictatorship
W. J. Astore

Bloomberg — Trump’s Huawei Threat Is the Nuclear Option to Halt China’s Rise

This could potentially lead to Huawei’s destruction,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies. “You can’t underestimate the significance. It’s their most important company and threatening it in this way will generate a massive public response as well as from the Chinese government. The bilateral trade talks were on thin ice and this could derail them entirely.”…
Maybe time to consider firms in your portfolio whose earnings are heavily dependent on either investment in China or selling into the Chinese market? Just sayin'.

Bloomberg
Trump’s Huawei Threat Is the Nuclear Option to Halt China’s Rise

Scratch that "maybe"? If I were Tim Cook, I'd be panicking about now.

Zero Hedge
Tyler Durden
In a series of editorials and op-ed articles published Monday and Tuesday, Chinese state media slammed what it labeled the Trump administration's "greed and arrogance", called for a "people's war" targeting the US "with precision" as China begins a "fight for a new world."
"The shit's on," as they say in the military.

Zero Hedge
Tyler Durden
In the two years since US President Donald Trump abandoned the Trans-Pacific Partnership, Japan and the other TPP signatories have forged ahead with new trade deals. As a result, US exporters are increasingly feeling the pinch –
Project Syndicate
Is America Tired of Losing Yet?
Anne O. Krueger
Related
I was at a dinner in Washington last evening. Attending this was someone who teaches at the National Defense University who reported on what I consider a disturbing development there. Apparently this commonplace of having critical thinking being a goal of higher ed was in place officially at the NDU. However, after "Mad Dog" Mattis resigned, the Chair of the Joint Chiefs replaced the Commandant of the NDU. The new Commandant has made a big deal of getting rid of this goal and replacing it with an emphasis on training for "war execution."
Econospeak
J. Barkley Rosser | Professor of Economics and Business Administration James Madison University

Swiss Propaganda Research — The Propaganda Multiplier: How Global News Agencies and Western Media Report on Geopolitics

It is one of the most important aspects of our media system, and yet hardly known to the public: most of the international news coverage in Western media is provided by only three global news agencies based in New York [AP], London [Reuters] and Paris [AFP]....
Why you can't always (ever?) believe what you see and hear on "the news," which is actually an echo chamber.The obvious question is, echoing whose voices? The article attempts to answer this but the subject is purposefully oblique and amorphous.

At the same time, actual news is dismissed as fake and investigative reporting is dismissed as conspiracy theory, while whistleblowers are persecuted and if possible prosecuted, while "anonymous sources" are treated as authoritative.

This would all remain unknown if it were not for the Internet, and the powers that be are now seeking to regain control of the narrative by introduction censorship, either directly or indirectly by "de-platforming."

This is incompatible with a functioning democracy, whether direct or representative.
John Hellevig

Randy Wray — How To Pay For The War

Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics Institute, Bard College, May 3, 2019.
I’m going to talk about war, not peace, in relation to our work on the Green New Deal—which I argue is the big MEOW—moral equivalent of war—and how we are going to pay for it. So I’m going to focus on Keynes’s 1940 book— How To Pay for the War—the war that followed the Economic Consequences of the Peace.

Our analysis (and the MMT approach in general) is in line with JM Keynes’s approach. Keynes rightly believed that war planning is not a financial challenge, but a real resource problem....
Excellent post — with a qualifier.

Economists are not qualified to material systems scientists. The latter alone can determine the real requirements for vast undertakings such as war and now a response to climate change that will involve restructuring energy use and energy resources.

History shows that after wars the situation returns to "normal," at least for some. However, there is no good reason to expect that the current environmental crisis will play out that way. Nothing like this has happened on such a vast scale in human history.

Randy says he is optimistic about this. Other say they are not.

As far as I can tell, the material systems folks are not, at least for the most part. Moreover, climate change is not just a domestic issue but an international one and the solution, to the degree that one is available, must be international. If it is not, it militaries warn that it likely to become a causal factor in rising conflict.

Of course, Randy is correct about affordability being a canard. The actual issue is availability of real resource and the knowledge and skill to deploy them at scale — and the scale is global. A daunting challenge.

Humanity needs to get busy on this and that won't happen until the crisis develops to the critical point. That may occur only after the tipping point was passed, as it turns out in hindsight for those to look back and reflect on history.

Randy's forecast may be a bit rosy.
In another important contribution—Economic Possibilities for our Grandchildren— written in 1930, Keynes speculated about our future– a time when “for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”
By Keynes’s timeline, this should have been reached by 2030. We’ve timed our GND to be completed by 2030. We have 10 years to make Keynes’s vision become reality. The alternative is annihilation.
My view is that the US is facing political turmoil until at least after the 2032 general election as an "interregnum" (A. Gramsci) during which a realignment unfolds. It is as yet very uncertain what the future will look like and what political forces will prevail. It is by no means a foregone conclusion that the the outcome will be positive for either the US or the world. It looks to me like there may be a major culling in store.

New Economic Perspectives
HOW TO PAY FOR THE WAR
L. Randall Wray | Professor of Economics, Bard College