Defend Democracy Press — Nestle CEO: Water Is Not A Human Right, Should Be Privatized

More neoliberal psychopathy and sociopathy.

Defend Democracy Press
Nestle CEO: Water Is Not A Human Right, Should Be Privatized

Michael Hudson — Rewriting Economic Thought

Transcript of Eric Draitser interviews Michael Hudson.

Longish but good. About rent extraction and economic parasitism, and some of the key social and political and economic factors involved in neoliberalism that make it an illiberal theoretical construct, as revealed in its application in contemporary capitalism.

Rewriting Economic Thought
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, and Distinguished Research Professor of Economics at the University of Missouri, Kansas City

Izabella Kaminska — Attack of the killer rentiers

Paul Krugman recounts the point that rentiers are turning into that old horror movie cliche of the killer/zombie/psychopath who just won’t die quietly — even when you think you’ve killed him multiple times. In classic formulaic style, just when you least expect it, they rise again to try to take you down one last time.

The point refers to John Maynard Keynes’s famous observation that one day the global economy would rid itself of the plague of economic value-sucking rentiers by arriving at a post-scarcity moment. At such a time an abundance of capital would make economic rent an impossibility. Rates would naturally fall to zero to reflect the excess of capital, and rentiers would have to die.

Today we’re calling that idea “secular stagnation”. Which of course sounds more impressive than plain old “abundance” and new enough to be able to distance itself from Marxist economics.

Though, as economist Steve Keen has pointed out, there’s really not that much new or different about it all. Lefties, he notes, have been warning about the symptoms of secular stagnation — which include growing inequality — for over 30 years. And even Summers himself observed that the path towards stagnation probably began as far back as the 1980s; we just never diagnosed the problem properly at the time....

The Fiinancial Times — FT Alphaville
Attack of the killer rentiers
Izabella Kaminska

Washington's Blog — It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness

Randy Wray and Michael Hudson of UMKC cited.

Washington's Blog
It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness
WashingtonsBlog

Riverdaughter — Ok, here’s my theory about why the Masters of the Universe want to kill the social insurance programs

BUT, if you raise the retirement age and keep a lot of older people working, they will be forced to put their money back into the market. Well, they won’t be able to retire until they’re much older than their parents were at retirement. If they have any hope of ever taking time out to go travel or garden, they’re going to have to risk their money in the market, hope that it will pay off so they can get out of the job market before they’re dead and forget about social security.

My theory is that raising the retirement age forces more savings to stay in the market longer and that with a pool of people who can’t retire yet still working, the amount of money going into 401Ks and IRAs is going to go up. Stripville!

The Confluence
Ok, here’s my theory about why the Masters of the Universe want to kill the social insurance programs
Kim

(h/t Naked Capitalism)

Michael Hudson and Dirk Bezemer — Incorporating the Rentier Sectors into a Financial Model

Michael Hudson has put up his and Dirk Bezemer's recent paper on rentierism at his place, if you haven't read it yet. It's short.

ABSTRACT

Current macroeconomics ignores the roles that rent, debt and the financial sector play in shaping our economy. We discuss the Classical view on rents and policy responses to the rentier sector in the 19th century. The finance, insurance & real estate sector is today’s incarnation of the rentier sector. This paper shows how financial flows can be conceptually and statistically studied separately from (but interacting with) the real sector. We discuss finance’s interaction with government and with the international economy.

Michael Hudson
Incorporating the Rentier Sectors into a Financial Model
Michael Hudson, Visting Professor, UMKC, and Dirk Bezemer, Associate Professor, University of Groningen

Glad to see MMT allies bringing economic rent to attention. It is not only central to the problems we face, in many ways it is the problem as the fat underbelly of modern capitalism, filled with parasites, that is resulting in many diseased conditions, just as happens in human physiology.

Joseph Stiglitz — The Price of Inequality

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom....

Rent-seeking distorts the economy. Market forces, of course, play a role, too, but markets are shaped by politics; and, in America, with its quasi-corrupt system of campaign finance and its revolving doors between government and industry, politics is shaped by money.

Read it at Project Syndicate
The Price of Inequality
by Joseph Stiglitz

This gives new meaning to "The rent is too damn high."

Both Joe Stiglitz and Jamie Galbraith are pounding on inequality. This meme is gaining steam.

What's emerging is that what used to be the American dream is now the American Empire. The Great Experiment is failing.

Daron Acemoglu and James Robinson — Who Are the Extractive Elites?

Key to our argument in Why Nations Fail is the idea that elites, when sufficiently political powerful, will often support economic institutions and policies inimical to sustained economic growth. Sometimes they will block new technologies; sometimes they will create a non-level playing field preventing the rest of society from realizing their economic potential; sometimes they will simply violate others’ rights destroying investment and innovation incentives.

An interesting article in The Economist’s Buttonwood column asks: Who are these rapacious elites in today’s Western economies?

Read it at Why Nations Fail

Who Are the Extractive Elites?

by Daron Acemoglu, Killian Professor of Economics at MIT, and James Robinson, David Florence Professor of Government at Harvard University

(h/t Mark Thoma)