Our Neo-Feudal System Is on the Verge of Collapse — Michael Hudson

Transcript of Michael Hudson in conversation with Ellen Brown and Walt McRee.

Neo-feudalism masquerading as "capitalism and democracy."

The Unz Review
Our Neo-Feudal System Is on the Verge of Collapse

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

See also

Reminiscence of the Future
Any Silver Linings?
Andrei Martyanov

The new left economics: how a network of thinkers is transforming capitalism — Andy Beckett

After decades of rightwing dominance, a transatlantic movement of leftwing economists is building a practical alternative to neoliberalism....

The new leftwing economics wants to see the redistribution of economic power, so that it is held by everyone – just as political power is held by everyone in a healthy democracy…

The new economists’ enormously ambitious project means transforming the relationship between capitalism and the state; between workers and employers; between the local and global economy; and between those with economic assets and those without. “Economic power and control must rest more equally,” declared a report last year by the New Economics Foundation (NEF), a radical London thinktank that has acted as an incubator for many of the new movement’s members and ideas....

Addressing asymmetric economic power.

Defend Democracy Press
The new left economics: how a network of thinkers is transforming capitalism

Andy Beckett

Why There Is No “Crisis of Capitalism” — Branko Milanovic

Western dissatisfaction with globalization is wrongly diagnosed as dissatisfaction with capitalism, when in fact it is the product of the uneven distribution of the gains from globalization....

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business

Why There Is No “Crisis of Capitalism”

Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, 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

Emmanuel Saez — Saying Inequality Has Not Increased in the US “the Equivalent of Being a Climate Change Denier”

In an interview with ProMarket ahead of his upcoming Stigler Center visit this week, UC Berkeley economist Emmanuel Saez discussed the impact of the 2017 Trump tax cuts, the disproportionate political power of the super-rich, and whether he agrees with Bernie Sanders that billionaires shouldn’t exist....

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Emmanuel Saez: Saying Inequality Has Not Increased in the US “the Equivalent of Being a Climate Change Denier”

Asher Schechter interviews Emmanuel Saez

IMF boss says raise taxes on the rich to tackle inequality— Larry Elliott

Kristalina Georgieva, the IMF’s managing director, said higher marginal tax rates for the better off were needed as part of a policy rethink to tackle inequality.

In a sign of how the IMF has moved away from the tax-cutting approach that once formed a central part of its policy advice, Georgieva said there needed to be a different approach to tackling what had become “one of the most complex and vexing challenges in the global economy”.

The IMF chief, writing in a blog, said: “Inequality of opportunity. Inequality across generations. Inequality between women and men. And, of course, inequality of income and wealth. They are all present in our societies and – unfortunately – in many countries they are growing.”

The Guardian (UK)
IMF boss says raise taxes on the rich to tackle inequality

Larry Elliott, economics editor

Kristalina Ivanova Georgieva-Kinova is a Bulgarian economist, who is the managing director of the International Monetary Fund. She worked as chief executive of the World Bank from January 2017 to 1 October 2019. She served as Acting President of the World Bank Group from 1 February 2019 to 8 April 2019. Wikipedia

Bill Mitchell— Free flows of capital do not increase output but do increase inequality

There was an IMF paper released in April 2018 – The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data – that had a long title but a fairly succinct message. It indicates that the IMF is still in a sort of schizoid process where the evidential base has built up so against the political voice and practice that the IMF has indulged itself as a front-line neoliberal attack dog that elements in its research division are breaking ranks and revealing interesting information. In part, the Brexit debate in Britain has been characterised by economists supporting the Remain argument claiming that free capital flows within Europe (and Britain) are the vehicle for strong output growth and better living standards. They claim that when Britain leaves the EU global capital flows will be more restricted in and out of Britain and that will be damaging. It is really just a rehearsal of the standard mainstream economic claims found in monetary, trade and macroeconomics textbooks. What the IMF paper does is provide what they call a “fresh look at the at the aggregate and distributional effects of policies to liberalize international capital flows” and the researchers find that, “financial globalization … have led on average to limited output gains while contributing to significant increases in inequality”. That is, the pie hasn’t really grown much as a result of all these free trade moves but a growing share is being taken by an increasingly wealthier few. And workers are the losers....

Bill Mitchell – billy blog

Free flows of capital do not increase output but do increase inequality
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

How to Tax the Super Rich — Emmanuel Saez

Does the solution to widening economic inequality lie in a wealth tax? We speak to Emmanuel Saez, an adviser to Elizabeth Warren who helped design the “Ultra-Millionaire Tax” plan.

Half-hour podcast.

Project Syndicate
How to Tax the Super Rich
Emmanuel Saez and Elmira Bayrasli

Hedge fund titan Ray Dalio: Trickle-down economy 'not working' — Brittany De Lea

“This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe that the world is approaching a big paradigm shift,” Dalio wrote.

Governments are also battling large deficits, while pension and health care liabilities are increasing. The latter circumstance, he says, will result in an escalation of the wealth gap battle as the government decides whether to cut benefits, raise taxes or print money to address it.

This is far from the first time Dalio has sounded the alarm bells about either the U.S. or the global economies. In May, for example, he said a shift toward an economic theory backed by New York Rep. Alexandria Ocasio-Cortez – modern monetary theory (MMT) – was “inevitable” as the Federal Reserve eventually looks to ease monetary policy when interest rates are zero percent. MMT refers to the idea that if a government controls its own currency, there is no need to worry about balancing the budget. Therefore the government, not the central bank, can control the economy through fiscal policies, like spending and taxing.

Fox Business

Hedge fund titan Ray Dalio: Trickle-down economy 'not working'

Brittany De Lea | FOXBusiness

Here is Ray Dalio's post at his blog at LinkedIn. You may need to sign up to read.

The World Has Gone Mad and the System Is Broken — 5 Nov 2019

Chile: The poster boy of neoliberalism who fell from grace — Branko Milanovic

It is not common for an OECD county to shoot and kill 16 people in two days of socially motivated riots. (Perhaps only Turkey, in its unending wars against the Kurdish guerilla, comes close to that level of violence.) This is however what Chilean government, the poster child of neoliberalism and transition to democracy, did last week in the beginning of protests that do not show the signs of subsiding despite cosmetic reforms proposed by President Sebastian Piñera.

The fall from grace of Chile is symptomatic of worldwide trends that reveal the damages causes by neoliberal policies over the past thirty years, from privatizations in Eastern Europe and Russia to the global financial crisis to the Euro-related austerity....

Global Inequality
Chile: The poster boy of neoliberalism who fell from grace

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

See also

FAIR
The Revolution Isn’t Being Televised - Media uninterested in protest movements around the world

Alan MacLeod

One Country, Two Nations— Rod Dreher

The bottom line is that we have become a nation of haves and have-nots. Of people who are falling behind economically, and people who are moving ahead. The Democratic Party represents the economic winners; the Republican Party, the economic losers. This graphic shows how much things have changed in a decade. The Democratic districts got richer, and the Republican districts got poorer….

The final slide says:

Why does this matter?

“When folks have less in common with one another, it’s hard to expect that they’re going to see the problem the same way,” said Roger Johnson, president of the National Farmers Union, “let alone recognize that a problem exists.”

Different narratives as stories we tell ourselves in different contexts (subcultures), which are also influenced by the media to which we are exposed — think Fox versus MSNBC, for example.

Anyway, the WSJ piece makes it clear that economically, the Democrats are the party of the rich and the rising middle classes, and the Republicans are the party of the working class and the downwardly mobile middle classes. Of course race plays into this too, though that isn’t measured by the WSJ piece. We can say, then, that the Democrats represent the economic winners and racial minorities, while the Republicans represent the economic losers and whites.

Prediction:

Anyway, the WSJ charts show why the Republican Party is going to become more populist — there will be no restoration of the pre-Trump GOP; watch Sen. Josh Hawley rise — and the Democratic Party is going to become more bourgeois. Of course both parties will have their own outliers, but that’s going to be the mainstream of the parties.

Reversal of the "good old days" when the GOP was the party of business and the Democratic Party was the party of labor, with the "people of color" being Lincoln Republicans. How the worm turns.

The American Conservative
One Country, Two Nations
Rod Dreher

Lars P. Syll — Paul Krugman — finally — admits he was wrong!

Globalization not as represented by the free traders, who now have egg on their faces and have to eat crow. To boot, trade was supposedly Paul Krugman's specialty, even though he is best known for witing a popular macro textbook. So he was one of "the experts."

Will the inapplicability of the ISLM "gadget " be next? So far, Paul Krugman is hanging onto it as it crashes and burns.

Lars P. Syll’s Blog
Paul Krugman — finally — admits he was wrong!
Lars P. Syll | Professor, Malmo University

Unbound: How Inequality Constricts Our Economy — Heather Boushey

Inequality constricts growth by:

• Obstructing the supply of people and ideas into our economy and limiting opportunity for those not already at the top, which slows productivity growth over time
• Subverting the institutions that manage the market, making our political system ineffective and our labor markets dysfunctional
• Distorting demand through its effects on consumption and investment, which both drags down and destabilizes short- and long-term growth in economic output

Capitalism produces inequality, and inequality undermines the foundation of capitalism. "Internal contradiction" that leads to social, political and economic transformation through the operation of the historical dialectic, to go all Marx on it. 

WCEG — The Equitablog
Unbound: How Inequality Constricts Our Economy

Heather Boushey, California Future of Work Commission

Thomas Piketty’s New Book Brings Political Economy Back to Its Sources — Branko Milanovic

In the same way that Capital in the Twenty-First Century transformed the way economists look at inequality, Piketty’s new book Capital and Ideology will transform the way political scientists look at their own field.

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Thomas Piketty’s New Book Brings Political Economy Back to Its Sources

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

Production and then distribution, or distribution and production together — Branko Milanovic

Must-read! Branko Milanovic sums up the fundamental issue affecting political economy as economics in relation to society.

Neoclassical economic is like doing engineering with a total focus on efficiency and ignoring resilience. This approach views redundancy as inefficient. This is like eliminating the emergency brake on vehicles.

An economy is the material life-support system for a society and its culture. It is the welfare and progress of the society that set the priorities.

Neoliberalism is based on the view that society does not exist. Go figure.

As Branko Milanovic points out, following the classical economists and Marx, it's the endowments, stupid. This results in market asymmetries that determine who wins and who loses, not the assumed spontaneous natural order that arises spontaneously as a result of the operation of a free market that leads to equilibrium characterized by optimality

Global Inequality
Production and then distribution, or distribution and production together
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

Economic Policy Institute — Labor Day Series

Economic Policy Institute

Black workers endure persistent racial disparities in employment outcomes

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: Black workers are twice as likely to be unemployed as white workers overall (6.4% vs. 3.1%). Even black workers with a college degree are more likely to be unemployed than similarly educated white workers (3.5% vs. 2.2%). When they are employed, black workers with a college or advanced degree 3h

Working people have been thwarted in their efforts to bargain for better wages by attacks on unions

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: The share of workers represented by unions has dropped by more than half since 1979—from 27.0% to 11.7% in 2018. Not coincidentally, the share of income going to the top 10% has escalated in this period—these high earners now capture nearly half of all income. The decline of unions is not beca3h

Low-wage workers are suffering from a decline in the real value of the federal minimum wage

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: The real value of the federal minimum wage has dropped 17% since 2009 and 31% since 1968. Workers earning the federal minimum wage today have $6,800 less per year to spend on food, rent, and other essentials than did their counterparts 50 years ago. Some states have raised their minimum wages 3h

Wage growth is being held back by political decisions and the Trump administration is on the wrong side of key debates

Part of the series Labor Day 2019:The fact that the unemployment rate has averaged 3.8% over the past year (its lowest 12-month average since 1970) might make one think that times are flush for American workers and that there is widespread agreement that the U.S. economy is being well managed by elected officials. But while times are better for workers today than they were 10, five, or even three years ago, a crucial ingredient for workers’ well-being—faster-growing wage growth—still hasn’t appeared. This wage failure might be why the public seems unwilling to give President Trump (and his Republican supporters in Congress) credit as good economic managers despite today’s low unemployment rate. In fact, the president and his supporters in Congress are responsible for a number of policy decisions that will reliably harm workers’ future prospects for wage growth.1

Lars P. Syll — a primary reason for the rise of inequality

Economic liberalism expressed as "free market capitalism" aka neoliberalism is incompatible with political liberalism as liberal democracy owing to the social effects of the inequality that favoring economic liberalism in the above sense leads.

Lars P. Syll’s Blog
Economics — a primary reason for the rise of inequality
Lars P. Syll | Professor, Malmo University

Top 1% Up $21 Trillion. Bottom 50% Down $900 Billion. — Matt Bruenig

The insights of this new data series are many, but for this post here I want to highlight a single eye-popping statistic. Between 1989 and 2018, the top 1 percent increased its total net worth by $21 trillion. The bottom 50 percent actually saw its net worth decrease by $900 billion over the same period.…

People's Policy Project
Top 1% Up $21 Trillion. Bottom 50% Down $900 Billion.
Matt Bruenig

The Federal Reserve’s new Distributional Financial Accounts provide telling data on growing U.S. wealth and income inequality — Raksha Kopparam

Wealth disparities between the rich and the poor in the United States have broadened over the past 30 years, according to a new dataset released earlier this month by researchers at the Federal Reserve Board. Their Distributional Financial Accounts is the new dataset that provides quarterly estimates of wealth distribution in the country from 1989 to 2019. 2 The new dataset was created by integrating the Federal Reserve Board’s Financial Accounts with the Survey of Consumer Finances. Together, they contain reliable measures of the distribution of household-sector assets and liabilities from 1989, which gives policymakers and economists alike new insight into how the distribution of wealth has changed since the 1990s.

The new Federal Reserve Board dataset confirms that wealth concentration has been growing, consistent with other data series such as the World Inequality Database assembled by academics worldwide. Indeed, the Fed’s new Distributional Financial Accounts open up new opportunities to study close to real-time changes in the U.S. wealth distribution. It provides the necessary data to study fluctuations in the wealth distribution over short time periods, while accounting for changes that occur between times of survey measurement for less frequently collected datasets....

WCEG — The Equitablog
The Federal Reserve’s new Distributional Financial Accounts provide telling data on growing U.S. wealth and income inequality
Raksha Kopparam, Research Assistant at the Washington Center for Equitable Growth

Bill Mitchell — The rich are getting richer in Australia while the rest of us mark time

Only a short blog post today – in terms of actual researched content. Plenty of announcements and news though, a cartoon, and some great music. I have been meaning to write about the household income and wealth data that the ABS released in July, which showed that real income and wealth growth over a significant period for low income families has been close to zero, while the top 20 per cent have enjoyed rather massive gains. These trends are unsustainable. A nation cannot continually be distributing income to the top earners who spend less overall while starving the lower income cohorts of income growth. A nation cannot also continually create wealth accumulation opportunities for the richest while the rest go backwards. These trends generate spending crises, asset bubbles and social instability. That is what is emerging in Australia at present.

While Bill's analysis in this post is Aussie-centric, the rationale is applicable to the whole neoliberal world. It's basically what neoliberalism is about. The contemporary difference is that now the domestic populations of the neoliberal nations are being colonized as well. Even some of the top tier that are receiving most of the benefits are getting squeamish, realizing that an unsustainable process cannot go on forever and that eventually the bill will come due.

Bill Mitchell – billy blog
The rich are getting richer in Australia while the rest of us mark time
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Nobel Economist Says Inequality is Destroying Democratic Capitalism — Angus Deaton

Should be neoliberalism is destroying the illusion of liberal democracy.

Evonomics
Nobel Economist Says Inequality is Destroying Democratic Capitalism

Angus Deaton | Senior Scholar and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University