Bill Mitchell — Poverty among the unemployment now close to 50 per cent in the EU

Last week, Eurostat released it updated data covering people who are at risk of monetary poverty. In the press release/news page (February 26, 2018) – Almost half the unemployed at risk of monetary poverty in the EU – we learn that 48.7 per cent of unemployed persons in the EU “were at risk of poverty” in 2016, even “after social transfers” were taken into account. The situation has deteriorated significantly since 2005 as a result of the impacts of the GFC and the policy response taken by the European Commission and the Member States (under the EC’s thumb). While the usual suspects perform badly on these indicators (Spain, Greece, Italy), a stark result is that 70.8 per cent of German unemployed persons are at risk of poverty. This proportion has jumped from 40.9 per cent in 2005 (a 29.9 percentage point shift). So, even in the strongest Eurozone economy, the policy frameworks are delivering terrible outcomes. Increasing divergence and inequality and rising social exclusion are the most striking characteristics of the 13 years of European Union history since 2005. It doesn’t look like a policy bloc that any sensible nation should aspire to be part off (or remain within).

A vast swath of the developed world is slipping toward Third World status as a result of policy decisions.

Bill Mitchell – billy blog
Poverty among the unemployment now close to 50 per cent in the EU
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Matthew Karnitschnig — Who killed European social democracy?

Collapse of center left risks destabilizing Continent’s politics.

Neoliberalism takes over. Center left folds. Populism rises. Outcome unclear.

Politico.eu
Who killed European social democracy?
Matthew Karnitschnig

The world just changed. "Putin did it."

Sunday reading.

LobeLog
Unipolar Strategy in a Multipolar World
Paul Pillar

Une parole franche
Missile-gate
Gilbert Doctorow | European Coordinator of The American Committee for East West Accord Ltd.

Russian and Eurasian Politics
Putin’s ‘Missile Speech’: Butter, Guns, and Security Discourse
Gordon M. Hahn, Expert Analyst at Corr Analytics, http://www.canalyt.com and a Senior Researcher at the Center for Terrorism and Intelligence Studies (CETIS), Akribis Group, www.cetisresearch.org.

The Vineyard of the Saker

Putin’s stunning revelations about new Russian weapons systems

The Saker

Moon of Alabama
Russia Shows Off New Weapons - Tells U.S. To "Come Down To Earth"

b

RussiaFeed
Worth a thousand words: Diagrams and charts of new developments in Russia’s defense systems
Seraphim Hanisch

RT
Russia ‘threatens our ability to dominate’ – US general to Congress

Asia Times
The US must harden its response to Putin’s new Cold War

Richard N. Haass | President of the Council on Foreign Relations

The National Interest
Russia's Big Military Buildup: Why Is America So Shocked?

Dave Majumdar | defense editor for The National Interest

 Irrussianality
Artificial conflict
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

The Vineyard of the Saker
How far can the Americans be pushed?

Ghassan Kadi

Antonio Graceffo — Chinese vs Western wrestling: same impulse, different execution

Different wrestling styles way a lot about different cultures.

Asia Times
Chinese vs Western wrestling: same impulse, different execution

Dr. Antonio Graceffo, economics researcher and university professor in China

Diane Coyle — Economies in space and time

This is a book review, but it is also a short summary of economic geography. For example, David Harvey is geographer that applies Marxian economics to geography, even though many likely think of him as being an economist.

Geography is important, but most macroeconomists don't know much about it because it has not been integrated into the curriculum, so economists don't study it. Same with history. But economics is very much influenced by location (space) and period (time).

There’s a section of Economic Geography: A Critical Introduction by Trevor Barnes and Brett Christophers about the richness of border zones – not physical ones as these tend to be quite the opposite when it comes to economic activity, but intellectual.

Interdisciplinarity has been a buzzword for a long time, and immensely hard to achieve within conventional academic structures. But perhaps its moment has come. At any rate, the number of in-principle interdisciplinary research centres is increasing (including the new Institute for Public Policy at Cambridge, which I join tomorrow). Perhaps more important, more and more people appreciate that solving pressing challenges – ageing, the consequences of climate change, trade wars, technological change – requires multiple social science, humanities and scientific perspectives.

Besides, I’ve always found the borders of economics interesting, including economic geography. The gap between economists who do geography and geographers who think about the economy has perhaps been narrowing in recent times.

Diane Coyle also make an interesting observation about economics and evolution, although she doesn't explicitly identify it as such. It is worth noting.

We economists do have a habit of presenting as marvellous new insights things other disciplines have known for ages, albeit wrapped in some nice econometrics. However – and inevitably there are some frictions in this process of inter-disciplinary engagement – it’s bemusing-to-painful to see how economics is perceived. The book describes (mainstream) economics as being only about constrained optimisation, which is the kind of reductionist statement an economist might make (and anyway, constrained optimisation under conditions of asymmetric information is everywhere in nature). It also defines the economy and economics as being essentially about ‘materiality’, material resources. Surely this can’t be literally intended? But in that case I’m not sure what this means.

This observation can be greatly expanded.

There is a difference between restricting assumptions for modeling simplification and ontological reductionism that takes absence as indicative of non-existence. For example, quality is often eliminated from scientific modeling for methodological convenience, but it does not follow from this that quality either doesn't exist, is trivial, or is unimportant in a larger context.

The Enlightened Economist
Economies in space and time
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Jeff Desjardins — China’s Staggering Demand for Commodities

>50% of all steel, cement, nickel, and copper goes there

Visual Capitalist

China’s Staggering Demand for Commodities
Jeff Desjardins

See also

18 Cognitive Bias Examples Show Why Mental Mistakes Get Made

David Sloan Wilson — How to Construct a New Invisible Hand: A Conversation with Peter Barnes

In a previous essay, I announced a new concept of the invisible hand to replace the old and erroneous idea that the pursuit of self-interest robustly benefits the common good. The new version is based on examples of the invisible hand that exist in nature, such as cells that benefit multi-cellular organisms and social insects that benefit their colonies. These lower-level units don’t have the welfare of the higher-level units in mind. They don’t even have minds in the human sense of the word. Instead, they exhibit behaviors that have been winnowed by higher-level selection to benefit the common good. Higher-level selection is the invisible hand.

Absorbing this fact leads to a robust conclusion about the design of our own societies. We must learn to function in two capacities: 1) As designers of social and economic systems; and 2) as participants in the systems that we design. As participants, we need not have the welfare of the whole system in mind, in classic invisible hand fashion. But as design­ers, we must. The invisible hand must be constructed, which would be a contra­diction of terms according to the old concept.

Yet, this does not mean that the invisible hand must be constructed by centralized plan­ning, the main alternative to laissez faire economic policies that is typically imagined. Instead, the design process needs to be evolutionary, iterative, and collaborative, resulting in mechanisms that work like the invisible hand, even though they never could have arisen on their own. This constitutes a middle path between laissez faire and centralized planning that could be a breakthrough in solving the problems of our age....

Evonomics
How to Construct a New Invisible Hand: A Conversation with Peter Barnes
David Sloan Wilson | SUNY Distinguished Professor of Biology and Anthropology at Binghamton University and Arne Næss Chair in Global Justice and the Environment at the University of Oslo

Max Greenwood — Trump hits Bush: Invading Iraq 'the single worst decision ever made'

He got that right. Monumental strategic blunder, although I would argue that escalating in Vietnam was probably a worse blunder.

The Hill
Trump hits Bush: Invading Iraq 'the single worst decision ever made'
Max Greenwood

Julie Nelson — The void in neoclassical orthodoxy

Femonomics. Important to critique of mainstream neoclassically based economics along with other forms of pluralism in contrast to mainstream orthodoxy.

Real-World Economics Review Blog
The void in neoclassical orthodoxy

Julie Nelson

Peter Koenig - The Children of Syria. The West in Highly Complicit in War Crimes

Syria thought the evil was over but the diabolical evil returns.  KV

Now that the Winter Olympics in PyeongChang, South Korea, are over, warmongering, threats and bombings are retaking world stage. Syria is again in the crosshairs of the blood-drenched empire’s handlers, NATO and its western puppets. The US are setting up a series of permanent illegal, uninvited bases in northern Syria, deploying some 30,000 mostly mercenary type soldiers, commanding the US trained and armed 50,000 strong Kurdish so-called People’s Protection Unit, or YPG, as well as newly trained, funded and armed ISIS fighters – all aiming at taking over one third of the Syrian territory – the beginning of a balkanization of Syria, and with the ultimate goal of ‘regime change’ – the goal that has never changed – removing Bashar al Assad, the legitimate democratically elected President of Syria.

Then there is East-Ghouta – a suburban area of Damascus, already largely under control – again – by US mandated IS or associated terrorists, shelling Damascus with an average of 70 rockets per day. In addition of having hit the Russian Embassy, they are causing innumerable casualties, including children, more suffering, homes, hospitals and schools destroyed, more orphans, to whom they apply the UN-sanitized term “refugees” – children without names without faces, without parents, without education, children as slaves and objects of sexual and labor exploitation – children without a future.

Global Research

Peter Koenig - The Children of Syria. The West in Highly Complicit in War Crimes

Ross on the new steel and aluminum tariffs and domestic policy

Wilbur Ross on with Lou Dobbs.  Schooling the libertarians...

Secretary Wilbur Ross Talks Trade and Tariffs With Lou Dobbs… https://t.co/xZgWKezZRc https://t.co/dqMQ5ABWoD

— TheLastRefuge (@TheLastRefuge2) March 3, 2018

Rebecca Burns — How Lenders Are Turning Low-Level Courts Into Dickensian “Debt Collection Mills

Federal law outlawed debt prisons in 1833, but lenders, landlords and even gyms and other businesses have found a way to resurrect the Dickensian practice. With the aid of private collection agencies, they file millions of lawsuits in state and local courts each year, winning 95 percent of the time. If a defendant fails to appear at post-judgement hearings known as “debtors’ examinations,” collectors can seek a warrant for contempt of court — even if the debtor didn’t realize they were being sued....

What was that about "sh*t-holes"again?

The Intercept
How Lenders Are Turning Low-Level Courts Into Dickensian “Debt Collection Mills

Rebecca Burns

Dave Majumdar — Why is Russia Building Nuclear Powered Cruise Missiles? The Answer: “Capacity”

I would estimate that there is a certain amount of truth to this, but the author is looking at Russia through American eyes and seeing Russia replicate the US defense industry and military Keynesianism as integral to the US economy. At the same time, as the author points out, militaries and defense industries in all countries are looking to enhance their interests, which are served by larger appropriations.

On the other hand, as the author also admits, the Russian military is need of modernization. What he doesn't mention is that NATO ha been moving toward Russia since the Clinton Administration and is now encroaching on Russia's red lines. And, as Putin mentioned in his recent address, G. W. Bush's unilateral abrogation of the missile treaty was a signal. Moreover, everything changed when Clinton bombed Russian ally Serbia at the time of Kosovo.

The reality is that the US, NATO, Russia, and China are in a new arms race, and on the periphery of it are Iran, India, and others. Weaponry is being taken to a new level by all parties and there are no international accords related to this yet. Space and cyberspace are being weaponized, for example, and drones and robots are proliferating. 

This is new and largely unexplored territory. Of course, industry is salivating over the prospects of vastly increased spending on R&D and innovation, as well as building out.

The positive externality is military-initiated R&D and innovation will spin off into non-military development, too. For example, China is developing supercomputers and quantum computers that have been announced as being intentionally designed for dual-use.

The National Interest
Why is Russia Building Nuclear Powered Cruise Missiles? The Answer: “Capacity”

Dave Majumdar | defense editor for The National Interest

See also

American effort said to lag Russia, China

All this is top secret, so no one really knows, or will know unless the stuff get used. Let's hope that never happens.

“If you look at some of our peer competitors, China being one, the number of facilities that they’ve built to do hypersonics… surpasses the number we have in this country. It’s quickly surpassing it by 2 or 3 times. It is very clear that China has made this one of their national priorities. We need to do the same,” Walker told a press briefing.

This is emerging as a serious problem for the US owing to the sheer size of China. The US is a big country by world standards but it is still dwarfed by China and India.

Asia Times
US developing its own ‘invincible’ hypersonic weapons

Brian Romanchuk — The Easy Way To Deal With Factionalism In Economics

Must-read. This should suffice as the last word on Simon Wren-Lewis's recent post. But it probably won't be.

Bond Economics
The Easy Way To Deal With Factionalism In Economics

Brian Romanchuk

Also

My comment was finally approved and posted along with many others in the moderation queue:

Tom Hickey2 March 2018 at 07:38

Who is being intransigent? As a non-economist MMT advocate (my PhD is in philosophy), it looks to me like the mainstream is the intransigent party. "The methodological debate is over."

JKH, not an MMT advocate, also makes a key point above that the mainstream largely fails to take accounting into consideration when accounting is the language of business and finance and is dismissive of its importance in comparison to mathematics.

MMT is hardly original emphasizing accounting, finance, institutional arrangements, the difference between risk and uncertainty, etc. These were pointed out by Keynes, Lerner, Tobin, Godley, Minsky, etc., before the MMT economists came on the scene.

I would argue that what seems to be needed from an outsider's point of view is a renewed debate on methodology that questions key assumptions like methodological individualism, maximization, equilibrium, etc. that the mainstream considers settled issues.

I agree that the present form of "debate" such as it is tends to get overheated. But this appear to result from the perception on the MMT side that the mainstream is being intransigent about what is settled, on one hand, and the dire results in terms of policy and its effects on real people, on the other.

It would be nice to have a calmly reasoned debate in an open forum but the parties have to be willing to join it. I don't see many mainstream economists willing to debate openly with so-called heterodox economists, not limited to MMT. Where are the Post Keynesians, the Paleo Keynesians, the Institutionalists, the Marxians, etc.

The issue usually boils down to "Where is your model?," meaning a model in the form that the mainstream stipulates, or "The methodological debate is already settled."

I get that the mainstream considers that its "orthodox" (that word should scare you) approach is the paradigm for doing normal science in economics in the Kuhnian sense, and that if the normal paradigm is to be challenged it must be approached in terms of failures and the resort to ad hoc fixes that basically negate falsifiability. I would say that this has been done adequately and most of the mainstream refuses to recognize it.

These issues are going to be settled one way or the other because they affect policy and policy is, well, political. The present system in not working for a lot people and they are not going to be convinced by the mainstream arguments much longer. The mainstream has to deliver or they will be replaced and there are various options available along a range from extreme right to extreme left. This is not just an academic debate, as the macroeconomists offering policy advice are well aware. Lives are at stake as well as political regimes.

People, Dogs Eating Out of Trash in Venezuela

Blowback.... that OPEC is bad...

New Video Shows People, Dogs Eating Out of Trash in Venezuela - https://t.co/fEqm9vc5qX pic.twitter.com/5cFw0u6kyW

— Paul Joseph Watson (@PrisonPlanet) March 1, 2018

If you’re so smart, why aren’t you rich? Turns out it’s just chance.

The most successful people are not the most talented, just the luckiest, a new computer model of wealth creation confirms. Taking that into account can maximize return on many kinds of investment.


Neil Wilson put this out on Twitter. I also came to believe that many rich people were probably just lucky. A person might sell his home to start a business but only one in three businesses are successful. We get to read about very successful people all the time but those that tried and failed disappeared into anonymity and this can give the impression that all we have to do is to try hard enough, and risk things enough, like sell the house, and we can become successful too, but it's not true.  KV

The distribution of wealth follows a well-known pattern sometimes called an 80:20 rule: 80 percent of the wealth is owned by 20 percent of the people. Indeed, a report last year concluded that just eight men had a total wealth equivalent to that of the world’s poorest 3.8 billion people.

This seems to occur in all societies at all scales. It is a well-studied pattern called a power law that crops up in a wide range of social phenomena. But the distribution of wealth is among the most controversial because of the issues it raises about fairness and merit. Why should so few people have so much wealth?

The conventional answer is that we live in a meritocracy in which people are rewarded for their talent, intelligence, effort, and so on. Over time, many people think, this translates into the wealth distribution that we observe, although a healthy dose of luck can play a role.

But there is a problem with this idea: while wealth distribution follows a power law, the distribution of human skills generally follows a normal distribution that is symmetric about an average value. For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.

The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.

And yet when it comes to the rewards for this work, some people do have billions of times more wealth than other people. What’s more, numerous studies have shown that the wealthiest people are generally not the most talented by other measures.

That may not be surprising or unfair if the wealthiest 20 percent turn out to be the most talented. But that isn’t what happens. The wealthiest individuals are typically not the most talented or anywhere near it. “The maximum success never coincides with the maximum talent, and vice-versa,” say the researchers.

So if not talent, what other factor causes this skewed wealth distribution? “Our simulation clearly shows that such a factor is just pure luck,” say Pluchino and co.

Emerging Technology

If you’re so smart, why aren’t you rich? Turns out it’s just chance.

Zero Hedge - US Sells 210 Javelin Anti-Tank Missiles And Launchers To Ukraine

I can't understand the Ukrainian people, what do they want a war with Russia for? Are they mad because most will die a horrible death, and their children too, and their country and standard of living will be ruined. And all for what, so the oligarchs can make a ton of money? They must be fed pure propaganda all the time. Putin offered the Ukraine a good deal, much better than the EU one which wanted to impose severe austerity and ruin their countries pensions, but the US installed oligarchs rejected that.

I saw a documentary once about the working class soccer hooligans living in the run down areas. They were all practising man to man combat getting ready for the war with Russia. They were skinheads and punks and had menacing looking tattoos and piercings all over their bodies. But this is how people at the bottom of the ladder get their self esteem. If they are no good at anything, like in sports or in academia, and if they feel they can't start a business up or do something like that, and if they feel they can't make a success of life, then they can at least be the worst, the most notorious, the hardest, and the scariest. This makes them feel like 'real men'.  When the women were interviewed they said that the men were heroes and looked sexy. Don't they realise that they will all end being roasted alive and covered in napalm? 

See how the Russiagate scare is forcing Trump into this? The 'liberals' and the hawks are not going to drop Russiagate easily. KV

Well, it's finally official - after years of preparation by the Obama administration to provide lethal offensive weapons to Ukraine over the vocal objections of the Kremlin, today the Trump administration announced it would sell Ukraine 210 Javelin anti-aircraft missiles and 37 launchers for $47 million. The sale, which was first reported last December, marks a significant increase in U.S. military support for Ukraine and another major deterioration US-Russian relations, and is the first lethal weapons sale of its kind since the breakout of a Russian-backed proxy civil war against the central government in Ukraine's eastern provinces.

As discussed previously, President Trump approved the plan in the days just before Christmas 2017, and began informal notifications with Congress about it. With Thursday's formal notification, Congress now has 30 days to sink the deal or it will go through, which is expected.

Trump has said the sale represents evidence of his "tougher" stance on Russia than President Barack Obama's, although according to ABC, the Special Representative for Ukraine Negotiations sought to downplay the significance on Monday.

Zero Hedge - US Sells 210 Javelin Anti-Tank Missiles And Launchers To Ukraine

PCR - Is Washington Sufficiently Intelligent to Be Trusted with an Independent Foreign Policy?

As I figured would be the case, Putin’s message to the West that Russia cannot be intimidated and that the nations must work together to deal with world problems was far over the heads of the dumbshit “exceptional” Americans. CNN rushed out an idiot named Samantha Vinograd who served as a staffer on Obama’s National Security Council to declare that Putin’s speech was only aimed at one person in the world—President Trump. https://www.cnn.com/2018/03/01/opinions/russia-missile-trump-opinion-vinograd/index.html

Putin, the idiot Samantha Vinograd says, is “poking at Trump’s insecurities” with the threat that “my missiles are bigger than yours.”

The stupid Samantha Vinograd repeats the lie that Russiagate was Putin’s plot “to destabilize the United States.” So, how is the US a superpower when Russia controls US elections? Doesn’t this mean that Americans are of no relevance whatsoever in the world?

I mean, really. With intelligence levels this low on Obama’s National Security Council, no wonder the neoonservatives were able to run over the Obama regime and resurrect the Cold War, thus returning the world to a high chance of nuclear Armageddon.

The idiot Samantha Vinograd says the solution is more sanctions on Russia. She is the epitomy of Einstein’s rule that “insanity is to continue doing the same thing over and over again and expecting different results.”

All the illegal sanctions did was to produce Russian military superiority over the utter fools in Washington.

I really do not think that there is enough intelligence in Washington for the world to allow Washington to have an independent foreign policy.

The world won’t be safe until the government of the United States is committed to an insane asylum.

PCR - Is Washington Sufficiently Intelligent to Be Trusted with an Independent Foreign Policy?

The Saker - Putin’s stunning revelations about new Russian weapons systems

PCR - There No Longer Is A Military Option Against Russia

Putin has just announced the new weapons systems Russia that has which greatly outsmarts Western technology. 

If you have no read it yet, please check out Putin’s full address to the Federal Assembly.  What stunned me, and many other, are the new weapon systems Putin has announced.

First, he confirmed that the Sarmat ICBM would replace the old but already formiable SS-18 “Satan”.  Then he turned to new weapon systems:

1. A nuclear powered cruise missile with basically unlimited range
2. A nuclear powered unmanned submersible with intercontinental range, very high speed, silent propulsion and capable of moving a great depths
3. A Mach 10 hypersonic missile with a 2’000 kilometer range (named: Kinzhal)
4. A new strategic missile capable of Mach 20 velocities (named: Avangard)

All of these systems can be armed with conventional or nuclear warheads.  Just think of the implications!  Not only does that mean that the entire ABM effort of the USA is now void and useless, but also that from now US aircraft carrier battle groups can only be used against small, defenseless, nations !

Right now I simply don’t have the time to write a full analysis of the stunning, truly tectonic, implications of this announcement, so I will turn to my naval warfare expert friend Andrei Martyanov and repost his initial reaction to just one of these systems:

The Saker - Putin’s stunning revelations about new Russian weapons systems

Darius Shahtahmasebi — The Real Reason Israel and Lebanon Are on the Verge of War

You guessed it. Oil and gas.

AntiMedia | OpEd
The Real Reason Israel and Lebanon Are on the Verge of War

Darius Shahtahmasebi

Navarro Pushes Back Against False Narrative from GOPe and Wall Street Financial Class

More from Navarro on the new US steel and aluminum policy as Trump is taking some flack from all the libertarian morons:

Peter Navarro Pushes Back Against False Narrative from GOPe and Wall Street Financial Class – America First Economic Policy… https://t.co/42aiI7hMrw pic.twitter.com/4eVRET81JC

— TheLastRefuge (@TheLastRefuge2) March 2, 2018

Simon Wren-Lewis — The dangers of pluralism in economics: the case of MMT

I commented there but all comments are moderated so it may take some time to show up. Others have commented and their comments have been posted.

Mainly Macro
The dangers of pluralism in economics: the case of MMT
Simon Wren-Lewis | Emeritus Professor of Economics, Oxford University

Lucas Chance — 40 Years of Data Suggests Ways to Fix the Problems Caused by Globalization

Globalization has led to a rise in global income inequality, not a reduction.

Income doesn’t trickle down.

Policy – not trade or technology – is most responsible for inequality.

Demand lagging capability to supply due to hoarding at the top end. Contrary to the assumptions of neoclassical economics, distribution counts. This should be obvious since in a capitalistic system distribution is through markets where goods are rationed by price and ability to pay. But the "laws of economics" seem to have missed this.

Neoliberalism is a political theory based on neoclassical economics that assumes growth per capital regardless of distribution is primary and growth is optimized by favoring capital in order to promote capital accumulation.

Capital is both non-financial and financial. Only a portion of non-financial capital is productive, mostly technology. Financial capital is unproductive unless in invested in production or spent on consumption.

Wealth includes both financial and non-financial capital. Most global wealth is owned by the wealthy. (Surprise.) Wealth constitutes portfolio savings. It is augmented in portfolios by income not spent on consumption and capital gains. But income spent on consumption flows to some portfolios either through distribution of profit or capital gains based on firm investment.

If the profit rate falls owing to lagging demand, then firm investment in new production decreases and various forms of saving increase.

The only way lower income people can maintain lifestyle is through personal borrowing. If income is stagnant or falling, borrowing becomes unsustainable.

The data show the US faring particularly badly owing to policy choices.

Harvard Business Review
40 Years of Data Suggests Ways to Fix the Problems Caused by Globalization

Lucas Chancel | Codirector of the World Inequality Lab at the Paris School of Economics

See also

Project Syndicate
Working Toward the Next Economic Paradigm
Mohamed A. El-Erian

RT Putin on new US nuclear stance: If attacked, Russia will use nukes

So there you have it. The cards are on the table.

“We are greatly concerned by some parts of the new nuclear posture, which reduces the benchmark for the use of nuclear weapons. Whatever soothing words one may try to use behind closed doors, we can read what was written. And it says that these weapons can be used in response to a conventional attack or even a cyber-threat,” [Putin] said.

“Our nuclear doctrine says Russia reserves the right to use nuclear weapons only in response to a nuclear attack or an attack with other weapons of mass destruction against her or her allies, or a conventional attack against us that threatens the very existence of the state.”

“It is my duty to state this: Any use of nuclear weapons against Russia or its allies, be it small-scale, medium-scale or any other scale, will be treated as a nuclear attack on our country. The response will be instant and with all the relevant consequences,” Putin warned.

RT
Putin on new US nuclear stance: If attacked, Russia will use nukes

See also

Earlier today, NBC News released a preview clip of the full interview which will be available this weekend. Watch:

21st Century Wire
Putin to Megyn Kelly: ‘US Started New Arms Race When They Pulled Out of Missile Treaty’

Navarro on the new Steel and Aluminum policy

Navarro on Tucker making the case for the new tariffs:

Trade Guru Peter Navarro Interview With Tucker Carlson… https://t.co/MTstD1YGgH https://t.co/0K5uAnJmjR

— TheLastRefuge (@TheLastRefuge2) March 2, 2018

Even it Up

The Wilson sisters with the pre-quel to Trump's little trade war he has going now:

I don't want to bum it all
But this ax she got to fall
Even it
Even it up

Brad DeLong — Nikola Tesla

It is traditional to talk about Thomas Alva Edison. The most famous inventor in the world, "the wizard of Menlo Park", New Jersey, registered more than 1000 patents and founded 15 companies—including what is now called General Electric. But that story is too well-known. Let’s talk about Nicola Tesla instead....

If you look at a chart of economic growth relative to energy usage, it is understandable why Nikola Tesla is arguably the most important person in the economic history of humankind, having pioneered alternating currency as the basis for the modern power grid and inventing the induction motor to make it useful. Tesla and Westinghouse's AC beat out Edison's DC system in that it was more efficient. The world now runs on AC.

The world from space at night, illuminated by the electric power grid, is Tesla’s world.

See also William Nordhaus on the falling cost of artificial light, Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not.

Grasping Reality
Nikola Tesla
Brad DeLong | Professor of Economics, UCAL Berkeley

NewDealdemocrat — China, not automation, is by far the biggest factor in the decline of prime age labor force participation

Perhaps the biggest mystery in economic analysis in the last few years has been trying to find an explanation for the big decline in labor force participation since 1999. A recent NBER working paper by Abraham and Kearney has posited the most comprehensive answer to date. Since it was summarized in this Washington Post article, I’m just going to quote a few paragraphs and suggest that you read the entire article....

Angry Bear
China, not automation, is by far the biggest factor in the decline of prime age labor force participation
NewDealdemocrat

See also

As is clear from the chart above, the employment-population ratio (the blue line) has collapsed from a high of 64.4 in 2000 to 59 in 2014 (and had risen to only 60.1 by the end of 2017).* During the same period, the average real incomes of the bottom 90 percent of Americans have stagnated—barely increasing from $37,541 to $37,886.

That should be indicator that the problem is on the demand side, that employers’ demand for workers’ labor power has decreased, and not the supply side, that workers are choosing to drop out of the labor force.

But, as I explained back in 2015, that hasn’t stopped mainstream economists from blaming workers themselves—especially women and young people, for being unwilling to work and turning instead to public assistance programs and raising children and being distracted by social media and digital technologies, as well as Baby-Boomers, who are choosing to retire instead of continuing to work....

Occasional Links & Commentary
Where have all the workers gone?
David F. Ruccio | Professor of Economics, University of Notre Dame

See also

EconoSpeak
Begun the Trade War Has
ProGrowthLiberal

also

Michael Roberts Blog
Robots: what do they mean for jobs and incomes?
Michael Roberts

TAC Staff • Of Course NATO is Obsolete

The American Conservative is not convinced of the Russian threat. Winding back NATO could save us a fortune, but the military-industrial complex might not be happy.

The Soviet Union is long gone, along with those menacing troops and the strategic threat they posed. The rationale for NATO has evaporated.

And yet it remains. Not only that, but it long since has abandoned its defensive posture and embraced an offensive temperament, moving inexorably eastward in a manifest effort to encircle Russia and remove its influence from territories that had been within its sphere of interest for centuries. Instead of an alliance to prevent war, NATO has become an institution generating tensions and hostilities where none need exist.

William S. Smith of the Catholic University of America noted recent meetings pulled together by NATO’s military committee chairman, a Czech army general named Petr Pavel. His sessions with his counterparts from Ukraine and Georgia, crowed Pavel, were “dedicated to Projecting Stability.” Given that those two nations are crucial to Russia’s sense of national security (and have been for centuries), wrote Smith, stability seems the least likely outcome of those meetings.

Those clinging to NATO simply can’t see that the world has changed and now requires new thinking, new geopolitical sensibilities, new alliances. To avoid obsolescence NATO must adjust to these new realities. If it can’t it should be killed off. 

The American Conservative

TAC Staff • Of Course NATO is Obsolete

Jordan Weissmann - Why Don't Young Americans Buy Cars?

Auto makers are worried about the Millennials. They just don't seem to care about owning a car. Is this a generational shift, or just a lousy economy at work? 

Richard Eskow — Picture the United States Without Student Debt made me think of this. The elite own the means of production but every action can have unknown consequences. The elite decided to lower taxes on themselves and so they funded a big campaign through their think tanks to get the public behind it. It worked. But it was difficult for the state to fund itself, especially its war machine, so the elite funded a campaign which said it was unfair that some people can get to go to university for free while other hard working people fund it, and so free university education was abolished. The bankers rubbed their hands together about the thought of all those student loans, but now indebted young people can't afford to buy cars anymore.

To be fair, the young have also lost interest in cars because they would prefer to buy software and electronics instead, but lack of funds is certainly a reason why they don't buy cars anymore. KV

Kids these days. They don't get married. They don't buy homes. And, much to the dismay of the world's auto makers, they apparently don't feel a deep and abiding urge to own a car. 

This week, the New York Times pulled back the curtain on General Motors' recent, slightly bewildered efforts to connect with the Millennials -- that giant generational cohort born in the 1980s and 1990s whose growing consumer power is reshaping the way corporate America markets its wares. Unfortunately for car companies, today's teens and twenty-somethings don't seem all that interested in buying a set of wheels. They're not even particularly keen on driving. 

The Atlantic

Jordan Weissmann - Why Don't Young Americans Buy Cars?