Eureka! Warren Mosler FINALLY Beginning To Be Plagiarized By The Orthodox. Only Took 20 Years.

   (Commentary posted by Roger Erickson.)

http://moslereconomics.com/mandatory-readings/

http://www.slate.com/blogs/moneybox/2013/10/23/how_to_fix_everything.html

So Rand Paul's not the only one.

At this point ... WHO CARES!

Can EVERYONE start plagiarizing Mosler? Please?

And Randy Wray? And Bill Mitchell? And Robert Eisner, Michael Kalecki, Abba Lerner ... on to Beardsley Ruml, Marriner Eccles, Thorstein Weblen, CH Douglas, JJ McGeer and ... and all the way back to John Law?

Then add some Bill Black ....

And even some enlightened policy operations, capable of at least TRYING to fuse at least credit, currency and criminology into one, adaptive, policy channel? Maybe in realtime?

Wow. Wouldn't that be minimal ... as a start?

Lars Syll on the topics of the day

Lars has several posts up relevant to present discussion. The good news is that we are now in the process of drilling down, and some of the mainstreamers are starting to feel the heat thanks to the bloodhounds like Lars that are on the scent and now nipping at their ankles.

The confidence fairy

This post is short and consists mostly of a dynamite Kalecki quote from "Political aspects of full employment" (1943) showing how the neoliberal argument is political rather than economic. It's short and a must-read.

Dumb and dumber in modern macroeconomics

This post answers Simon Wren-Lewis's latest with a couple of devastating quotes from Robert Solow aimed at the mainstream assumption of a representative agent maximizing utility rationally.

Krugman responding to my critique

Paul Krugman responds today to the gadget critique of Lars posted here yesterday in his blog post, Gadgets Versus Scratchpads (More Wonkery), where he argues unconvincingly that IS-LM is not a gadget. Lars promises a response tomorrow. Stay tuned.

Meanwhile, Brad DeLong jumps in with "Microfounded" And Useful Models

To have fake micro foundations for your model is not a feature, but a bug.

Matias Vernengo — Central Bank Independence not so well intentioned failure

The problem actually lies in the fact that a CBI is by definition not coordinating with the Treasury on fiscal policy, and in some cases might be forbidden to do basic things like buying government debt. The justification is the fear of inflationary pressures, while the truth might be closer to Kalecki's view that fiscal and monetary policy are used to maintain a significant level of unemployment to keep workers in line.

Read it at New Keynesianism
Central Bank Independence not so well intentioned failure

by Matias Vernengo | Associate Professor of Economics, University of Utah

Chris Dillow does Kalecki

The bottom line here is simple. Both capitalists and workers have cause for complaint. Capitalists have lost pricing power - the degree of monopoly has fallen - which has tended to depress the profit share. But this has not benefited workers because instead the "wedges" of other incomes and higher imports have depressed their share.

******* 

You might object that imports are not a cost for capitalists to the extent that they comprise consumer goods. You'd be wrong. If workers buy domestic consumer goods, their wages are not a cost to capitalists in aggregate. This is because what they lose through the back door in higher wage costs is recouped through the front in higher spending. If, however, workers spend their incomes overseas, then wages are a net cost. In this sense, all imports are a cost to UK capitalists, either directly (imported materials) or indirectly.

Read it at Stumbling and Mumbling
The wage & profit squeeze
by chris dillow

The cost of a persistent CAD.

Neel Kashari — Newtonian Profits

Some investors have used the Kalecki profits equation to break corporate profits into its fundamental macroeconomic elements, specifically:

Profits = Investment – Household Savings – Government Savings – Foreign Savings + Dividends

From this equation, investors can see that corporate profits have expanded to such a large share of GDP due to large government deficits. Therefore, if the government implemented a deficit reduction plan, corporate profits could suffer.

Read it at PIMCO | Equity Focus
Newtonian Profits
by Neel Kashari

(h/t Scott Fullwiler via Twitter)

Scott tweets: "PIMCO does the Kalecki profits equation, precursor to Godley sector balances."

Peter Cooper responds to the recent post on Kalecki

Read it at heteconomist.com
Kalecki, the Job Guarantee and Future Society

by Peter Cooper

Kalecki, full employment, and the ELR

May as well rock the boat a bit.

Dedicated to frequent commenter Laura.

In an extremely important and prescient paper, published in 1943 titled "Political aspects of full employment" Kalecki displayed skepticism about the political possibility of maintaining full employment. He argued that full employment was incompatible with the institutions of capitalism, and that, unless there were some fundamental institutional changes, then, although the system could reach full employment through the appropriate economic policies, it could not maintain adequate levels of employment for long periods.

This paper evaluates the buffer stock employment model in the light of Kalecki's observations. According to this model, the government acts as an employer of the last resort absorbing cyclical variations in unemployment. This has been suggested as a long term solution to the problem of unemployment. However, we argue that the proposed solution does not lead to the sorts of institutional changes which will allow the maintenance of full employment. It does nothing to change the underlying class relations which are at the heart of the incompatibility of full employment with capitalism. Rather, it acts as a bandage, attempting to treat the symptoms, namely unemployment. However, because the proposal in no way effects the underlying antagonisms, it is unlikely to provide an acceptable solution to the problem of unemployment by itself.

Political Aspects of Buffer Stock Employment
Peter Kriesler and Joseph Halevi