What is an attractor state?
It is a state around which a dynamic system organizes itself.Effective Demand
Attractor State of Productive Capacity is Shifting
Edward Lambert
Edward Lambert
Saturday, May 28, 2016
Edward Lambert — Attractor State of Productive Capacity is Shifting
Eric Tymoigne — Money and Banking Part 16: FAQs about Monetary Systems
The following answers a few question in order to illustrate the previous post and to develop certain points.New Economic Perspectives
Money and Banking Part 16: FAQs about Monetary Systems
Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College
Don Quijones — Emails Show TPP ‘Collusion’ Between Mega-Banks & Obama Administration
The stench is getting worse.
Egmont Kakarot-Handtke — Petitio principii — economists’ biggest methodological mistake
Petitio principii (appeal to principle) is also called circular reasoning, begging the question, and assuming the conclusion.
AXEC: New Foundations of EconomicsYou summarize how ergodicity came to economics: “Samuelson said that we should accept the ergodic hypothesis because if a system is not ergodic you cannot treat it scientifically.” (See intro)
This is pretty much the same way how most other core concepts and foundational propositions came to economics as Mirowski has shown (1995).…The rationale of conventional economics is taken from classical physics, where atoms act predictably in accordance with the laws of force fields in which they interact. The program of conventional economics is to construct an analog to atoms and law of force fields. Methodological individualism and rational optimization are assumed and used to construct the concept of homo economicus as an analog to the atom. Markets are "fields," where the forces are the "market forces" of supply and demand that maintain an economic system in a state of equilibrium through mutual adjustment of atoms to shifting economic conditions analogous to the ergodic operation of a physical system in classic physics that is predictable based on laws. Neat, but baseless. Mirowski lays this out in detail in his works.
Petitio principii — economists’ biggest methodological mistake
Egmont Kakarot-Handtke
Friday, May 27, 2016
Zack Beauchamp — The Donald Trump dove myth: why he’s actually a bigger hawk than Hillary Clinton
In fact, Trump is an ardent militarist, who has been proposing actual colonial wars of conquest for years.…
In the past five years, Trump has consistently pushed one big foreign policy idea: America should steal other countries' oil.…
To be clear: Trump's plan is to use American ground troops to forcibly seize the most valuable resource in two different sovereign countries [Iraq and Libya]. The word for that is colonialism.Yeah, he actually said this — repeatedly. Although I would not say that this makes him a bigger hawk than HRC. The Donald is not a neocon — as far as we can tell now anyway. He has suggested he would back off confronting Russia.
But he has also said things involving torture that go way beyond HRC, so while Trump is not a neocon bent on US global hegemony, at least from what he has said publicly, he is no dove either.
This post provides a lot of background. Beauchamp sees Trump as a Jacksonian* rather than a neocon (Wilsonian).
Vox
The Donald Trump dove myth: why he’s actually a bigger hawk than Hillary Clinton
Zack Beauchamp
* The four traditional schools of US foreign policy by Walter Russell Mead
Longtime readers will know that I divide American foreign policy into four schools of thought. Hamiltonians (well represented among the old Republican foreign policy establishment) want the United States to follow the trail blazed by Great Britain in its day: to build a global commercial and security system based on sea power and technological leadership, maintaining a balance of power in key geopolitical theaters and seeking to attract rivals or potential rivals like China into our system as, in Robert Zoellick’s phrase, “responsible stakeholders.” Wilsonians also want the United States to build a world order, but to anchor it in liberal human rights practices and international law rather than in the economic and security frameworks that Hamiltonians prefer. Those two globalist schools dominate the foreign policy establishment’s thought about the world we live in, and have done so since the 1940s.
There are two other schools that are home-focused rather than globalist. They are less interested in changing the world around the United States than in keeping the United States safe from the world. Jeffersonians have historically sought to avoid war and foreign entanglements at all costs; Jacksonians have been suspicious of foreign adventures, but strongly believe in national defense and support a strong military and want decisive action against any threat to the United States, its honor, or its treaty allies.Jeffersonians are generally opposed to almost any war other than a war of self defense following a direct enemy attack; Jacksonians aren’t interested in global transformation but will generally back robust American responses to anything they see as a security threat or a threat to America’s honor and reputation abroad.
Arturo Garcia — Trump backs out of debate against Sanders after tech company offers to pay for it
“Based on the fact that the Democratic nominating process is totally rigged and Crooked Hillary Clinton and Deborah Wasserman Schultz will not allow Bernie Sanders to win, and now that I am the presumptive Republican nominee, it seems inappropriate that I would debate the second place finisher,” the statement read.
The statement came to light shortly after Traction and Scale CEO Richie Hecker volunteered to offer the $10 million the GOP nominee had wanted to be donated to charity as a condition of debating Sanders.…
Lame. What about the money to charity?
Bernie wins big without having to do anything. Trump looks like an a$$hole.
Raw Story
Trump backs out of debate against Sanders after tech company offers to pay for it
Arturo Garcia
Asia Unhedged — Xi visit to China rust belt hints squeakier view of economy than Li
Speculation about China's top leadership is just that. That said, this presents a view that many analysts agree with.
Asia Times
Xi visit to China rust belt hints squeakier view of economy than Li
Asia Unhedged
Also
Overall risks associated with public debt are "controllable", and there is room on the government's balance sheet to borrow more, the Ministry of Finance said.
However, it warned the local governments' ability to repay debt has weakened.
Michael Kinship — All Donald Trump’s Men
Donald Trump claims to fight for the little guy against a rigged system, but the presumptive Republican presidential nominee has turned to political operatives who have scammed money for the rich and powerful, says Michael Winship.
With friends like these…
Consortium News
All Donald Trump’s Men
Michael Kinship
See also
Trump's campaign is a mess
All Donald Trump’s Men
Michael Kinship
See also
But then the job of Vice President is going to be very, very important in a Trump administration according to Manafort, so they aren't going to take any chances:HullabalooHe needs an experienced person to do the part of the job he doesn’t want to do. He seems himself more as the chairman of the board, than even the CEO, let alone the COO.”
Trump's campaign is a mess
digby
Michael Brenner — America’s Worst Laid Plans
The U.S. government seeks to impose neo-liberal economics on the world even though those “free-market” policies funnel global wealth to a tiny fraction at the top, cause widespread despair and spark political turmoil, Michael Brenner explains.
Neoliberalism: Unregulated markets and privatization of public assets are the solution to all social, political and economic problems now and forever.
What is left unsaid is that markets are naturally asymmetric because societies are hierarchical socially, politically and economically. What is also left unsaid is that this result in institutional capture that tilts the playing field so that wealth flows to the top.
The rationale of exceptionalism to justify imposing this globally as the world order:
America's leadership is puny and not up to the task. And there is no one of that caliber in the wings and no vision to replace the insanity.
Consortium NewsThe rationale of exceptionalism to justify imposing this globally as the world order:
The United States has been pursuing an audacious project to fashion a global system according to its specifications and under its tutelage since the Cold War’s end.
For a quarter of a century, the paramount goal of all its foreign relations has been the fostering of a system whose architectural design features the following:
- a neo-liberal economic order wherein markets dictate economic outcomes and the influence of public authorities to regulate them is weakened;
- this entails a progressive financializing of the world economy which concentrates the levers of greatest power in a few Western institutions – private, national and supranational;
- if inequality of wealth and power is the outcome, so be it;
- security provided by an American-led concert that will have predominant influence in every region;
- a readiness to use coercion to remove any regime that directly challenges this envisaged order;
- the maintenance of a large, multi-functional American military force to ensure that the means to deal with any contingency as could arise;
- all cemented by the unquestioned conviction that this enterprise conforms to a teleology whose truth and direction were confirmed by the West’s total victory in the Cold War.
Therefore, it is inherently a virtuous project whose realization will benefit all mankind. Virtue is understood in both tangible and ethical terms.…The rest explains the insanity of it all and where it is leading.
America's leadership is puny and not up to the task. And there is no one of that caliber in the wings and no vision to replace the insanity.
America’s Worst Laid Plans
Michael Brenner | Professor of International Affairs at the University of Pittsburgh
Alexander Mercouris — The Strange Story of Russia’s Eurobond or How the West is Forcing Russia to Improve its Financial System
The story of the floating of Russia’s eurobond is a revealing tale of Western arrogance and Western blindness, not just about Russia but about the operation of the financial markets. In the process Western actions have achieved the opposite of what Western leaders intended.The Duran
The Strange Story of Russia’s Eurobond or How the West is Forcing Russia to Improve its Financial System
Alexander Mercouris
Enrico Braun — OWNED: Victoria Nuland Totally Shut Down by Matt Lee with One Question (Video)
An oldie but a goodieTwo minute clip says everything about US information policy.
This is the woman who is likely to be US secretary of state under Killiary.
Russia Insider
OWNED: Victoria Nuland Totally Shut Down by Matt Lee with One Question (Video)
Enrico Braun
Russia Insider
OWNED: Victoria Nuland Totally Shut Down by Matt Lee with One Question (Video)
Enrico Braun
Alexei Lossan — The Plans on Putin's Desk - 3 Ways Out of the Economic Crisis
Russia Beyond the Headlines
The Plans on Putin's Desk - 3 Ways Out of the Economic Crisis
Alexei Lossan
Yves Smith — New IMF Paper Challenges Neoliberal Orthodoxy
While the IMF’s research team has for many years chipped away at mainstream economic thinking, a short, accessible paper makes an even more frontal challenge. It’s caused such a stir that the Financial Times featured it on its front page. We’ve embedded it at the end of this post and encourage you to read it and circulate it.
The article cheekily flags the infamous case of the Chicago Boys, Milton Friedman’s followers in Pinochet’s Chile, as having been falsely touted as a success. If anything, the authors are too polite in describing what a train wreck resulted. A plutocratic land grab and speculation-fueled bubble led quickly to a depression, forcing Pinochet to implement Keynesian policies, as well as rolling back labor “reforms,” to get the economy back on its feet.
The papers describes three ways in which neoliberal reforms do more harm than good.…Now that the wheels are coming off, the knives are coming out.
Naked Capitalism
New IMF Paper Challenges Neoliberal Orthodoxy
Yves Smith
Eric Beinhocker — The Great Transformation: Economics, Policy, Politics
Economic ideas matter. The writings of Adam Smith over two centuries ago still influence how people in positions of power – in government, business, and the media – think about markets, regulation, the role of the state, and other economic issues today. The words written by Karl Marx in the middle of the 19th century inspired revolutions around the world and provided the ideological foundations for the cold war. The Chicago economists, led by Milton Friedman, set the stage for the Reagan/Thatcher era and now fill Tea Partiers with zeal. The debates of Keynes and Hayek in the 1930s are repeated daily in the op-ed pages and blogosphere today.
Economic thinking is changing. If that thesis is correct – and there are many reasons to believe it is – then historical experience suggests policy and politics will change as well. How significant that change will be remains to be seen. It is still early days and the impact thus far has been limited. Few politicians or policymakers are even dimly aware of the changes underway in economics; but these changes are deep and profound, and the implications for policy and politics are potentially transformative.
For almost 200 years the politics of the west, and more recently of much of the world, have been conducted in a framework of right versus left – of markets versus states, and of individual rights versus collective responsibilities. New economic thinking scrambles, breaks up and re-forms these old dividing lines and debates. It is not just a matter of pragmatic centrism, of compromise, or even a ‘third way’. Rather, new economic thinking provides something altogether different: a new way of seeing and understanding the economic world. When viewed through the eyeglasses of new economics, the old right–left debates don’t just look wrong, they look irrelevant. New economic thinking will not end economic or political debates; there will always be issues to argue over. But it has the promise to reframe those debates in new and hopefully more productive directions.…
So how might new economics move us beyond the mechanistic view of policy and regulation, and towards a view that takes into account the complexity, unpredictability, and reflexivity of the economy?
My view is that we must take a more deliberately evolutionary view of policy development. Rather than thinking of policy as a fixed set of rules or institutions engineered to address a particular set of issues, we should think of policy as an adapting portfolio of experiments that helps shape the evolution of the economy and society over time. There are three principles to this approach…Theoretical physicist John Hagelin ran for president on a similar platform some time ago as the Natural Law Party candidate. (I voted for him because of the platform rather than because he happens to be a friend.) While he had no chance of winning, it got him in a lot of doors with both parties and also leaders in important fields. He said he found a surprising level of agreement with his position that through science we already know promising solutions to virtually all our major problems, but that we are not trying them. The reason he got from those who agreed was that no one wanted to buck the trend by proposing something new and unknown to the public. It was just too risky for a politician career-wise.
Evonomics
The Great Transformation: Economics, Policy, Politics
Eric Beinhocker | Executive Director of the Institute for New Economic Thinking at the Oxford Martin School, University of Oxford
Lane Kentworthy — Social-democratic vs market-friendly progressivism
Iber and Konczal aim to highlight a tension within the American left between a “social democratic” vision of how to address social problems and a “progressive but market-friendly” vision. They say Bernie Sanders, a social democrat, believes access to education and healthcare should be a right, available to all persons regardless of income or wealth, whereas Hillary Clinton, a market-friendly progressive, thinks education and healthcare should remain market commodities, with access hinging at least partly on a person’s ability to pay.Hillary Clinton is a progressive? What? Clintonism is Third Way New Democrat!
But the observation on Sanders is illuminating, too. There is a difference between social democracy and democratic socialism. Sanders is a social democrat that is offering some tweaks to neoliberalism.
Though Sanders favors free college for everyone, that isn’t what he would provide. He proposes zero tuition (for in-state students at four-year public universities). But that wouldn’t cover room and board, which costs $10,000 a year or more for a typical student. Offering “free” college that doesn’t include room and board is a bit like offering “free” healthcare that covers the cost of surgery but requires patients to pay out of pocket for the hospital room. In the Sanders plan, low-income students, but not middle-income ones, “would be able to use federal, state, and college financial aid to cover room and board, books, and living expenses.” So for Sanders, like for Clinton, college education wouldn’t be genuinely decommodified.
That’s the case in Sweden too, which is why a large portion of young Swedes leave college with fairly large student loan debt despite paying zero tuition.
Lane Kentworthy
Social-democratic vs market-friendly progressivismWhen the College Cost Reduction and Access Act took effect in 2009, neither lawmakers nor school administrators had any idea how many college students would check the box on the Free Application for Federal Student Aid (FAFSA) -- the document that determines eligibility for Pell grants, subsidized loans and work-study awards that help students pay for college or vocational training -- to indicate that they were homeless.Truthout
At last tabulation, the number was 58,000, a small percentage of the 20.2 million students presently enrolled in both undergraduate and graduate study. Nonetheless, school counselors and advocates believe the number is starkly inaccurate and represents a mere fraction of university students who actually lack a permanent home.…
Students With Nowhere to Stay: Homelessness on College Campuses
Ellen J. Bader
Liu Haiyang — Whose “International Law” Are We Talking About?
A Chinese view of what happens when the US makes the rules.
On its face, the US FON [freedom of navigation] program is an effort to assert US desires upon the world oceans for the sole purpose of affording its naval and air forces the maximum degree of mobility and flexibility. In essence, through enforcing American perspective of international law in defiance of shared international perspectives of international law, the apparent provocative nature of such assertions exposes the FON operations as exercises of hegemonic power projection so as to establish a US-dominated maritime legal order beyond a world ocean legal order guaranteed under the convention. As for the FON operations conducted in the South China Sea, they are no more than a tool to carry out the US “Pivot to Asia” strategy.CHINA US Focus
Whose “International Law” Are We Talking About?
Liu Haiyang is a research fellow at the Collaborative Innovation Center of South China Sea Studies, Nanjing University
Dara Lind — Trump campaign chair [Paul Manafort]: We’ll pick a white man for VP. Anything else would be “pandering.”
Vox
Trump campaign chair [Paul Manafort]: We’ll pick a white man for VP. Anything else would be “pandering.”
Dara Lind
Thursday, May 26, 2016
Sputnik — 'Risks of a US-China Conflagration in the Pacific Quite High'
Commenting on growing US-Chinese tensions in the South China Sea region, and Beijing's announcement that it would deploy nuclear-armed subs to the Pacific in response to US missile defenses in South Korea, University of Maryland professor John Short warned that the risks of a military confrontation between the two powers are 'quite high'.
Sputnik
'Risks of a US-China Conflagration in the Pacific Quite High'
Richard Sakwa — West could sleepwalk into a Doomsday war with Russia – it’s time to wake up
It is pointless to speculate what a war between Russia and the Atlantic community would look like, or even how it would start. This really would be a war to end all wars, since there would be no one left to fight another war. The emphasis now must be on averting such a doomsday scenario, and for that there must be honest recognition of earlier mistakes by all sides, and the beginning a new and more substantive process of engagement.
The endless prolongation of sanctions and a rhetoric of violence and scapegoating creates an atmosphere where a small incident could easily spiral out of control. It is the responsibility of our generation to ensure that it never happens.…nsnbc
West could sleepwalk into a Doomsday war with Russia – it’s time to wake up
Richard Sakwa | Professor of Russian and European Politics, University of Kent
José L. Flores — Wall Street’s New Man in Brazil: The Forces Behind Dilma Rousseff’s Impeachment
This fight is not about Dilma Rousseff or corruption; the government would not impeach a corrupt president only to install a more corrupt president. This drama isn’t even about the political parties, all of them are corrupt. The problem is for the last thirteen years the Workers’ Party, with all its faults, has been implementing social welfare and safety net programs for the poor and was paying for it on the dime of Petrobras.
Brazil is the richest and most influential country in South America and for that reason is a primary target for U.S. economic control. If neoliberalism is not implemented in Latin America, what Washington considers its backyard, countries like Brazil will seek independent paths, regardless of U.S. capital and investments. This is always unacceptable to the United States’ imperialist policies and to the proxy leaders it uses for self-aggrandizement and profit.A worse sin was BRICS, RC in particular.
Counterpunch
Wall Street’s New Man in Brazil: The Forces Behind Dilma Rousseff’s Impeachment
José L. Flores
The Saker — How Russia Is Preparing for WWIII
I have recently posted a piece in which I tried to debunk a few popular myths about modern warfare. Judging by many comments which I received in response to this post, I have to say that the myths in question are still alive and well and that I clearly failed to convince many readers. What I propose to do today, is to look at what Russia is really doing in response to the growing threat from the West. But first, I have to set the context or, more accurately, re-set the context in which Russia is operating….The Unz Review
How Russia Is Preparing for WWIII
The Saker
Katehon — Russian Orthodox Church against liberal globalization, usury, dollar hegemony, and neocolonialism
The Russian Orthodox Church of the Moscow Patriarchate has published a draft of the document "Economy in the context of globalization. Orthodox ethical view. " This document demonstrates the key positions of the Russian Church on a number of issues relating to the economy and international relations.…Not to be outdone by the pope.
Speaking of the pope:
Katehon (not the document): The unconditional support of state sovereignty against the transnational elite is a distinctive feature of the position of the Orthodox Church. This differs the Orthodox from Catholics, who are members of the globalist transnational centralized structure, in contrast to the Orthodox Churches, which are united in faith, but not administratively.…
This document is very important because it shows that the Russian Orthodox Church not only occupies a critical position in relation to the liberal globalization, but also offers a Christian alternative to globalization processes. While Catholics and most Protestant denominations have passionate humanist ideas, and in the best case, criticize globalization from the left or left-liberal positions, the Russian Orthodox Church advocate sovereignty and national identity. The most important aspect of the Orthodox critique of globalization is the idea of multipolarity and the destructiveness of modern Western civilization’s path.Where the two Churches agree is on distributism.
Peter Hobson — Was Russia's First Bond Sale in 3 Years a Success?
The plan was to sell up to $3 billion in 10-year, dollar-denominated eurobonds. The yield, at around 4.75 percent, was generous compared to Western bond markets. Within a few hours, banking sources were saying that orders had been placed worth $5.5 billion…The Moscow Times is a liberal paper not friendly to the government, so this is unlikely to be a puff piece.
The Moscow Times
Was Russia's First Bond Sale in 3 Years a Success?
Peter Hobson
The Moscow Times is a liberal paper not friendly to the government, so this is unlikely to be a puff piece.
Matias Vernengo — A brief note on Venezuela and the turn to the right in Latin America
Naked Keynesianism
A brief note on Venezuela and the turn to the right in Latin America
Matias Vernengo | Associate Professor of Economics, Bucknell University
Samuel Bowles — When economic incentives crowd in social preferences
Explicit economic incentives – for example, a subsidy to contribute to a public good – can sometimes ‘crowd out’ generous and ethical motives. But when properly designed, can incentives ‘crowd in’ these civic virtues? This column uses an example from ancient Athens to show how this might be done, providing a lesson for modern mechanism design and public policy.Is there a close connection between morality and economics. Bowles suggests so, based Aristotle and ancient Athens.
Voxeu
When economic incentives crowd in social preferences
Samuel Bowles | Research Professor and Director of the Behavioral Sciences Program, Santa Fe Institute
Branko Milanovic — Economic reflections on the Fall of Constantinople
For the economic history buffs.
Global Inequality
Economic reflections on the Fall of Constantinople
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
Dylan Minor — CEOs with Lots of Stock Options Are More Likely to Break Laws
Harvard Business Review
CEOs with Lots of Stock Options Are More Likely to Break Laws
Kimball Corson — A Note on Liquidity Preference
Short summary of the liquidity trap.
Wandering the Oceans: SailBlogs
A Note on Liquidity Preference
Kimball Corson
Michael Burke — US productivity declines
US productivity is set to decline for the first time in three decades, according to forecasts from the influential business research organisation the Conference Board. The level of productivity, which is the amount produced per hour of labour, is decisive for living standards. It is extremely difficult to increase the living standards of the mass of the population without increasing productivity, and impossible to do so on a sustained basis. The Conference Board is forecasting US productivity will decline in 2016.
The Financial Times quotes Bart van Ark, the Conference Board’s chief economist saying, “Last year it looked like we were entering into a productivity crisis: now we are right in it”.
Social and political implications of economic stagnation coming. American dream fading. This will be a challenge for the next administration and the next congress.
US productivity declines
Michael Burke. economist, Social Economic Bulletin
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On Memorial Day, politicians will speak at ceremonies all over the country and repeat their favorite mantra: "Support the troops."
This pledge is hammered into the American psyche at every turn. But there is a hidden, dark history that shows that the politicians are in fact no friend to service members--but their greatest enemy.
Abby Martin documents experimentation on US troops, from race-based chemical agent tests to nuclear weapons.