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Jared Bernstein — Is Economics a Science? (Spoiler alert: Nope…)

There’s irony to all this. The most useful economists today are the ones who can most clearly see through pseudo-scientific evidence purporting to show that unfettered markets will self-regulate and that interventions will do more harm than good. In this regard, our best economists are the ones who look upon today’s economic science with a very jaundiced eye.

On the Economy
Is Economics a Science? (Spoiler alert: Nope…)
Jared Bernstein | Senior Fellow, Center on Budget and Policy Priorities

Eric W. Dolan — Study finds wealth gives rise to a sense of entitlement and narcissistic behaviors

Climbing the economic ladder can influence basic psychological processes within an individual.

According to a new study published in Personality and Social Psychology Bulletin this month, wealth tends to increase a person’s sense of entitlement, which in turn can lead to narcissistic behaviors.

Paul Piff of the University of California at Berkeley told PsyPost “there is something about wealth that gives rise to a sense of entitlement, a sense that one deserves more good things in life than others, which in turn gives rise to an increased or inflated sense of self-importance, vanity, grandiosity, and omnipotence (narcissism).”

“Narcissism is a multi-faceted and complex construct, but that wealth is specifically associated with it suggests that as a person’s level of privilege rises, that person becomes increasingly self-focused – in a sense, becoming the center of their own world and worldview,” he explained.

“The studies in the paper measure narcissism in a whole host of ways, including measuring how likely someone is to stare at their reflection in a mirror (wealthier people do that more often). Even students who come from wealth, but have done little to create their own wealth (yet), report more entitlement. This suggests that wealth shapes an ideology of self-interest and entitlement that’s transferred culturally from one generation to the next.”

The Raw Story
Study finds wealth gives rise to a sense of entitlement and narcissistic behaviors
Eric W. Dolan

What was that about it being more difficult for a rich person......?

Stephanie Kelton — The Good Society: Lessons Not (Yet) Learned

John Kenneth Galbriath’s book, The Good Society: The Humane Agenda, creates a blueprint for a more just, prosperous and stable world. I’m re-reading it for the nth time because I continue to believe we might just get there one day. Indeed, I’m convinced we must.

Here are some excerpts....

New Economic Perspectives
The Good Society: Lessons Not (Yet) Learned
Stephanie Kelton | Associate Professor of Economics and Chair of the Economics Department, UMKC

A fundamental question of the global intellectual tradition and perennial wisdom is, What is the good life for individuals in a good society, and how to achieve it. The history of thought is about the different answers based on different ontological, epistemological, ethics, aesthetic assumptions about reality, experience, and the place of humanity in it. These assumptions underlie social and political thought.

Economics generally presupposes foundational assumptions and makes theoretical and methodological assumptions based on such implicit prior assumptions that frame the enquiry.

Since the Enlightenment, the design problem has been reconciling social, political and economic liberalism, along with developing institutions and policy based on different design solutions. These solutions differ based on both normative assumptions for example, that serve as criteria, as well as differences in worldview that frame reality differently.

In The Good Society (1996), John Kenneth Galbraith presents his summation of a 20th century liberal position eloquently, and, if one shares his values and worldview, convincingly.

Contrasting positions are developed by: 

• Ludwig Mises in Liberalism 
• Friedrich Hayek in The Constitution of Liberty (1960), Law, Legislation and Liberty (1973)
• Murray Rothbard in Man, Economy, and State (1962), For a New Liberty: The Libertarian Manifesto (1973), and The Ethics of Liberty, Humanities Press (1982)
• Ayn Rand in The Virtue of Selfishness (1964), Introduction to Objectivist Epistemology (1979), and Philosophy: Who Needs It? (1982)
• Milton Friedman, Capitalism and Freedom (1962) and Free to Choose (1980), which was a response to John Kenneth Galbraith's book and television series, The Age of Uncertainty. 

These positions are now the dominant subject of discussion in American political economy today rather than Galbraith's The Good Society.

Notable is that there is nothing on the right that mentions society.This is unsurprising since the underlying assumption of these works is methodological individualism grounded in the implicit assumption of ontological individualism.

The exception to this is journalist Walter Lippmann's The Good Society (1937). Lippmann is remembered, however, more for A Preface to Morals (1929) and The Public Philosophy (1955). While very influential in presenting the conservative viewpoint in the last century, he is hardly cited today, like his then famous opponent on the left, American educator and philosopher John Dewey. "... [Dewey] wrote in The Public and its Problems: "Till the Great Society is converted in to a Great Community, the Public will remain in eclipse. Communication can alone create a great community" (p. 142).

Time to again shine the light on the living a good life in a good society and the great community of humanity as we enter the age of globalization and a rising collective awareness of humanity, as well as ecological interdependence in the community of being.

A "Profit" in Fiat* ... They're Reaching New "Highs" ?

Commentary by Roger Erickson

(Maybe on stimulants? What is wrong with the people making this statement?)

Student loan rates will feed federal profits

What would Beardsley say? (probably unprintable! not fit for p. 35; #WWBS ? )

* What the heck does a "profit in fiat" mean? More public initiative than we can use? Does that apply to any contexts other than those involving deranged addicts?

ps: "(The government) is absolutely making more money because of these changes." BMHOTK! Do these idiots even know the difference between semantics, tic douloureax and mental diarrhea?

Bill McBride — The Future is still Bright!

Early this year I wrote The Future's so Bright .... In that post I outlined why I was becoming more optimistic, even though there might be too much deficit reduction in 2013. As I noted, "ex-austerity, we'd probably be looking at a decent year" in 2013. And of course - looking forward -Congress remains the key downside risk to the U.S. economy.

It still appears economic growth will pickup over the next few years. With a combination of growth in the key housing sector, a significant amount of household deleveraging behind us, the end of the drag from state and local government layoffs (four years of austerity mostly over), some loosening of household credit, and the Fed staying accommodative (even if the Fed starts to taper, the Fed will remain accommodative).....

Calculated Risk
The Future is still Bright!
Bill McBride

Lars P. Syll — Krugman once again on math-in-economics

Keynes on the inappropriateness of atomism in the case of organic systems, hence the fallacy of using atomistic models in representing phenomena embedded in complex systems.

Biology arises out of physics in the sense that matter is constituted of atoms. But different combinations of atoms, e.g., at the protein level, result in complexity and emergence that cannot be either induced or deduced from the properties of the atoms. Analysis of microfoundations only go so far in explanation involving complex systems in which the whole is greater than the sum of the parts.

Krugman once again on math-in-economics

Lars P. Syll | Professor of Social Studies and Associate Professor of Economics, Malmo University

Stijn Claessens and Lev Ratnovski — What is shadow banking?

There is much confusion about what shadow banking is and why it might create systemic risks. This column presents shadow banking as ‘all financial activities, except traditional banking, which require a private or public backstop to operate’. The idea that shadow banking is something that needs a backstop changes how we think about regulation. Although it won’t be easy, regulation is possible.

Vox.eu
What is shadow banking?
Stijn Claessens, Assistant Director in the Research Department of the International Monetary Fund, Professor of International Finance Policy at the University of Amsterdam and CEPR Research Fellow, and Lev Ratnovski, Economist, Research Department, IMF

Matt Oppenheimer — Bitcoin’s complex and changing regulatory environment

Operating without the proper licenses carries significant risk for all those involved in the bitcoin company but the bitcoin community also has an enormous opportunity to work with regulators to set up the proper systems.

This will take longer and be much more complicated than the bitcoin community anticipates, but it is also the only way for bitcoin to become legitimate. Because the alternative is no alternative at all.

Jumping through the (significant) hoops. Not easy, and expensive.

This is not at all unusual. Any company entering a highly regulated industry faces similar obstacles in getting federal approval and approval in all 50 states to go national. Then there are the cross-border issues. Not impossible but expensive and time-consuming, and requires submitting to ongoing oversight. All of the this is rather antithetical to the concept of alternative currency. But failing to do so invites civil and criminal penalties designed to be onerous.

The Raw Story
Bitcoin’s complex and changing regulatory environment
Matt Oppenheimer | Pando Daily

David Edwards — Ted Cruz [lies?]: Republicans repealing Obamacare to help African-Americans and Hispanics

Ted Cruz: Republicans repealing Obamacare to help African-Americans and Hispanics (via Raw Story )

Sen. Ted Cruz (R-TX) says that Republicans are working to defund and repeal President Barack Obama’s health care reform law in order to help African-Americans and Hispanics. In an interview with CNN that aired on Sunday, Cruz told host Candy Crowley…

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David Edwards — Did you forget Medicare? Jim DeMint claims [lies?] ‘federal health care’ can’t work

Did you forget Medicare? Jim DeMint claims ‘federal health care’ can’t work (via Raw Story )

CNN host Dana Bash offered no fact check on Sunday as Heritage Foundation President Jim DeMint (R) falsely claimed that fewer doctors accepted Medicare than private insurance. During a Sunday interview, DeMint explained that Heritage Action had launched…

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New Surprises at the Heliospheric Boundary

Video below from Thunderbolts.info

Data making it back from the Voyager spacecraft which are now reaching the outer reaches of our solar system is conflicting with some established theories of astrophysics... pretty interesting stuff:

The NASA spacecraft Voyager 1 has provided scientists on earth with a series of theory-shattering surprises. The probes Voyager 1 and Voyager 2 are now exploring the outer boundary of the Sun’s domain, called the heliosphere. What the probes have encountered are not what the astronomers expected. Through a series of surprises, the astronomers have openly expressed their complete bafflement over the Voyager data.

Here we see a different part of the academe where members will actually alter their thinking and question their previously held beliefs when faced with new conflicting measured objective data.

Of course this is not the case within the monetarist department of the academe of economics which seems to be currently led by human morons, and is unfortunately very influential in current economic policymaking.

In any case, MNE readers can here enjoy the video and see some true scientists in action from another part of the academe for a change...

Randy Wray — What Do You Want in a New Fed Chair? Hint: Larry Summers Doesn’t Have It

Blockbuster.

Economonitor — Great Leap Forward
What Do You Want in a New Fed Chair? Hint: Larry Summers Doesn’t Have It
L. Randall Wray | Professor of Economics, UMKC

Daniel Little — Friedman on racial discrimination

Daniel Little buries Milton Friedman's argument in Capitalism and Freedom on the free market as the antidote to racism.

Understanding Society
Friedman on racial discrimination
Daniel Little | Chancellor, University of Michigan at Dearborn

What's wrong with Friedman's argument is that it doesn't fit the evidence. 

Why it is wrong is more significant. It is wrong because the choice of methodological individualism rests on an implicit assumption of ontological individualism, which is an erroneous assumption as shown by life and social science. It is also rejected by long-standing tradition. Aristotle defined human being as social in Polítics, 1253 a 2.

Ramanan — Jackson Hole Symposium Starts With The Money Multiplier

Robert Hallfrom Stanford University in the first talk titled The Natural Rate of Interest, Financial Crises and the Zero Lower Bound:

… Every economic principles book describes how, when banks collectively hold excess reserves, the banks expand the economy by lending them out. The process stops only when the demand for deposits rises to the point that the excess reserves become required reserves and banks are in equilibrium. That process remains at the heart of our explanation of the primary channel of expansionary monetary policy …

The Case for Concerted Action
Jackson Hole Symposium Starts With The Money Multiplier
Ramanan

Really.

Bill Mitchell — IS-LM Framework – Part 5

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text during 2013 (to be ready in draft form for second semester teaching). Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it. 



Previous Parts to this Chapter:
▪ The IS-LM Framework – Part 1
▪ The IS-LM Framework – Part 2
▪ The IS-LM Framework – Part 3
▪ The IS-LM Framework – Part 4 

Chapter 16 – The IS-LM Framework

16.6 Introducing the price level

Bill Mitchell – billy blog
IS-LM Framework – Part 5
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

David Ruccio — It’s the math again

On the normative use of mathematics in economics as a rhetorical device for persuasion based on the logical fallacy of appeal to authority not supported by context.

Mathematics never says anything about the state of the world because it is about abstract relationships, but it can be used to appear to do so when accompanied with handwaving. But only testing can determine whether abstract relationships are actually the case.

Consistency does not implies correspondence. That's why we do science. But the math must be consistent. And in economics, this implies stock-flow consistency, which econometric models do not always observe.

Real-World Economics Review Blog
It’s the math again

David Ruccio | Professor of Economics, University of Notre Dame

When Crooks Act Smarter Than Prosecutors

Commentary by Roger Erickson

And electorates too.

We're selecting the wrong prosecutors, for the wrong reasons?

"It doesn’t make any sense TO ME that they would [cause their own firm to lose money], Wagner said."

Well, you might wanna, you know, THINK on it a little bit, genius? And, you know, maybe ask who gets the money the firm "loses" as a result of the cause? Embezzling - i.e., stealing from your own company - is NOT, I repeat NOT a new concept. Nor a rare one.

So why this NEW phenomenon of crooks being smarter than prosecutors?

Crooks haven't gotten any smarter? Hmmm. That leaves very few other options. Let's see if the electorate is smart enough to figure this out on their own.

While y'er giving it a t'ink, lets run through some of the accomplices.

Who's selecting these prosecutors? And how many of them? [Don't tell me we can no longer afford enough fiat to police our own crime rates, with either enough prosecutors OR by filling those positions with people who actually exhibit the required confluence of intelligence, experience, drive, morals and lack of fixated ideology?]

And who's selecting the people delegated with selecting such prosecutors? Are we getting a little warm yet?

And who's selecting the people who set the standards for selecting prosecutors? Hmmm?

Getting a bit uncomfortable? GOOD!

It also never made sense to me, that citizens would actively vote to degrade their own policy apparatus. Yet when public purpose is draining away faster than a 1% solution through a hole in daddy's arm ... you might want to wonder who's getting all the public fiat, AND trying to reduce it's flow. If not enough public fiat is getting to the Middle Class .. the solution is to reduce net public initiative? Brilliant! [psst, Genius. I got a virtual bridge in Arizona to sell ya.]

At the same time, maybe ask what the 1% recipients are DOING with all the hoarded fiat? Just sayin'.

Unfortunately, declining group intelligence is also not, I repeat NOT a new phenomenon. So let y'er mind roam, and consider whether crooks are getting smarter than citizens ... or just putting in more effort. It's terrible, after all, to see a group intelligence wasted, only because we're not making the effort to select what's important to us. It's not just fools & money that are soon parted. It's also the inactive and their group fiat.

Is there a hole in fiat's name, where all the public initiative goes?

There he goes again, President Obama: "At some point, the government’s going to run out of money..."

Borrowing a phrase from 'The Gipper'  in the headline lead here, President Obama yesterday in his speech on the topic of government student loans, urged our institutions of higher learning to start to hold the line on the rising costs of education, excerpt from the Washington Times here:

Mr. Obama said the federal government and colleges have been in a type of financial arms race in recent years, with the government boosting its contributions and schools raising their prices.

“At some point, the government’s going to run out of money,” the president said.

Beginning in 2015, Mr. Obama said, he would have the Education Department compile and release a scorecard of colleges that provide the best values. The formula would look at affordability, measured by tuition costs versus how many students are taking loans or are on scholarship; productivity, measured by graduation rates and the earnings of graduates; and “access,” measured by the percentage of students who receive federal aid.

This is perhaps even worse than just thinking the plain vanilla "We're out of money!"; as what the President is talking about is the ability of the government to even LEND US dollar balances; which nominally have to be "paid back" to the government.

He is asserting that the government can "run out of money" to even lend to our citizens... pretty bad.

The President is getting some reeeeeeeeally bad economic advice from his staff, he should clean house of the Rubinites and bring in some new people with some new economic perspectives... otherwise this is going to be a reeeeeeeeally long 3 1/2 more years.

When Will Robert Rubin and Larry Summers Come Clean, and Admit 1% Use of PEPs?

Commentary by Roger Erickson

Brauny guys have come clean about PED*, and Weilly guys have admitted that PEP** was a mistake. So how long can Rubin and Summers shirk morality and continue operating a virtual LieStrong Self-Charitable Foundation?

Never heard of PEP? Surely you had to wonder how skinny-moral guys suddenly end up flexing so much fiat?

You surely can't argue that an entire nation's fiat was in their gene tree, no matter where they landed, or which tree they fell out of.

And what is it all for? Why do we exalt myosin blobs and megalomania sacs? Does the group intelligence of a nation really circle striated muscle tissue, or even hoarded public initiative? Both could be put to work on a greater variety of desired public outcomes. What happened to our sense of NEW adventure and BIGGER vistas to conquer? Forget "Land Ahoy!" We're on to "Dynamic Group Options Ahoy!!!"

Seriously. How dumb do WE think that WE are? Why even bother deluding ourselves? There are many things that feel briefly enticing, but don't remain so for long. It's clearly more productive to be far more selective about our choices - both physical and social. We're easily smart enough to do that, and only need to put in more time and effort on the democracy training field.

So. Was Ruinomics all dependent upon PEP, even if only used by ~1% of the electorate?

*physical performance-enhancing-drugs

** fiat perp-enhancing-policies; aka, Control Fraud

CNBC — Bitcoin recognized by Germany as "private money"

Virtual currency bitcoin has been recognized by the German Finance Ministry as a "unit of account", meaning it is can be used for tax and trading purposes in the country.

Bitcoin is not classified as e-money or a foreign currency, the Finance Ministry said in a statement, but is rather a financial instrument under German banking rules. It is more akin to "private money" that can be used in "multilateral clearing circles", the Ministry said.

"We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,"said Frank Schaeffler, a member of the German parliament's Finance Committee, who has pushed for legal classification of bitcoins.

CNBC
Bitcoin recognized by Germany as "private money"
Matt Clinch | Assistant Producer
(h/t Rohan Grey on FB)

UPDATE:

Correction: an earlier version of this story incorrectly stated that bitcoin was legal tender. The virtual currency has been confirmed as a financial instrument or "private money".

Larry Summers Memo Bids Adieu To The Last Well Democracy (not confirmed in the wild since 1945?)

Commentary by Roger Erickson

Has anyone else seen this? Please provide any feedback about it's authenticity.

Larry Summers and the Secret "End-Game" Memo

Or here, if the prior link is overwhelmed.

THE CONFIDENTIAL MEMO AT THE HEART OF THE GLOBAL FINANCIAL CRISIS

Who knew that Larry Summers might be living proof of Lily Tomlin's maxim: "No matter how cynical you become, it's never enough to keep up."

If there's any sliver of a democracy left in the USA, might this put the nail in the coffin of both our economy AND Larry's clamor to put another "man's man" imprint on the Federal Reserve? 

Lily bar the door? Santa Fraud's already been skulking 'round town!

In fact, he already knows what you've been doing. He knows every word you wrote. He knows where you sleep. He knows that he's been bad. He interpolates what you've been thinking and have bought. So don't shop for heavens sake.

Encrypt anything you write?

And decrypt anything you read in any corporate-owned media.

We've been had? For bad men's sake?
Someone could make a scary, Rubinesque nursery rhyme out of this. The chorus refrain could be: 

 Control Frauds have seized this town. 

 Control Frauds have seized this town. 

 Control Frauds already own ... YOUR nation!

Might the last well democracy coincide with the last well person, for related but analogous reasons, ultimately attributable to the combination of unchecked institutional momentum and active Control Fraud?

AP/HuffPo — Median Household Income Dropped 4 Percent Since The End Of The Great Recession: Report

The Huffington Post
Median Household Income Dropped 4 Percent Since The End Of The Great Recession: Report
AP/HuffPost

Joshua Holland — CATO Institute Report Says Poor Americans Have It Too Good

CATO Institute Report Says Poor Americans Have It Too Good (via Moyers & Company)

Conservative think tanks have spawned a cottage industry churning out dubious studies purporting to show that poor families are living high on the hog on public benefits, a claim that anybody who has actually experienced poverty in America would find…

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DogStar Days of August: Maybe ECONOMISTS Are Remnants Of An Ancient Parasite, Still Living Largely Undetected In, On And Among Us?

Parasite in Cheek Commentary by Roger Erickson look alike.

Detectable only by the social health burden they impose on the unwitting host?*

That would, at least, explain the anomalous market responses to seemingly bizarre steps such as QE.** Once the parasite penetrates our cultural policy apparatus, seemingly random system response patterns may eventually be seen as processes which indirectly benefit or at least protect the parasite.***

* Courtesy of the Ancient Load Semantic Trove

** Anyone noticed the curious repetition of the "QE" motif, in both the 1750-era East India Corp. re-conquest of India, and the 2008-era banker-corp re-conquest of the USA? Others have suggested that the interim terms "QV" and "EI" would have instead given way to "EE" if another layer if parasitic indirection had not been adopted over such courtly blandishments.

*** Note that all prior social parasite terminology has yielded to the modern pejorative, "Control Fraud."

Orienting Group Intelligence To Scale-Dependent Inter-Dependencies

Commentary by Roger Erickson

Why does this topic keep coming up? Because it seems to be one of our rate-limiting hurdles to pursuing return on coordination.

As an example, Bill Mitchell writes that "mainstream economics is defunct, and we should decommission teaching programs throughout the world and introduce new progressive approaches."

That's always somewhat true, of all disciplines. The concepts of group adjustment, cultural agility, national evolution and national Adaptive Rate all lead, inevitably, to consideration of the tempo for introducing such changes.

And, a similar concept is being heard from people in many, of not most, disciplines?

The whole world seems to be seeing what Max Planck noted back circa 1905.
[No idea whether he was the 1st to express this.]

Much of the difficulty in reconciling scale-related axioms arises from CONFUSING MICRO-SCALE WITH MACRO-SCALE INTER-RELATIONSHIPS.

Specialists - in all disciplines - keep demonstrating that uniquely different properties are expressed at every scale of every type of organization. Yet the bulk of most electorates don't hear or fully absorb this simple message.

One corollary is that we have zero predictive power. But seemingly unlimited adaptive power!

Perhaps that is a topic we would do well to better DEMONSTRATE to all kids. Say, by age 10, if not before. After all, how are we to accelerate the rate of our own cultural autocatalysis, without recognizing and fully appreciating the impact of scale-dependent inter-dependencies?

Perhaps that simple step would better prepare citizens entering all emerging disciplines, and make them more comfortable facing a lifetime of scaling organizational tasks.

It's one thing to make individuals aware of this obsevation. What group effects might become evident if most or all group members grasped this concept? Could we hope that the average politician wouldn't be so ignorant about emerging group dynamics and our ability to explore emerging group options?

How would YOU demonstrate this concept to 10 year old kids, so that they would own the solution, rather than just accepting it as ideology from adults? How can we teach kids that what they learn to expect in local interactions, does NOT predict what can be expected as larger-scale interactions constantly develop.

ps: If you could get that concept across to a 10-yr old, then maybe there'd be hope for Greenspan, Geithner, Rubin, Orszag and Summers. Maybe even David Walker and Peter Peterson!

CNBC resident clown, Joe Kernan, email's me

So I guess my post about Joe Kernan being absolutely clueless touched a nerve. Here's an email I got from him earlier:

He'd rather have Carrot Top on than me, the "bitter party of one."

Even Carrot Top would decline, Joe. Nobody watches your crappy show.

Warren Mosler — macro update

While the Fed believes labor markets have improved sufficiently to start somehow unwinding QE, they have made it clear the data and their forecasts are not going to trigger any actual Fed rate hikes anytime soon. For one thing there is currently no sign of any kind of developing private sector credit expansion that would cause them to immediately hike rates to ‘cool down’. In fact, at this point they are keeping rate policy arguably ‘as accommodative as possible’ to remain supportive of private credit expansion.

On the other hand, the ‘markets’ have become concerned about ‘supply side’ effects of ‘tapering’, fearing fewer Fed purchases will mean higher term rates, and particularly higher mortgage rates, even as the Fed funds rate remains well anchored at current levels.

So what we are seeing is a ‘market determined’ decision to hike longer term rates based mainly on supply fears and not on fears of ‘excess demand’ driving up rates.

And adding to the volatility is the notion that should the Fed someday decide things have ‘normalized’ and the economy no longer ‘needs’ negative real rates,
that would translate into the Fed shifting the Fed funds rate to maybe 3-4% to be at some ‘neutral’ spread to ‘inflation’ etc.

So it’s pretty much binary- we stay near 0 (life support) until it’s time to ‘normalize’ to 3-4%.

All of this makes it rational for market indifference levels to shift a full 1% or more-turning term financing on or off- on nuances of Fed language.

All of which comes back to the fact that the term structure of risk free rates, with floating fx, is necessarily a policy decision, best left to political decision vs market decision, because with floating fx ‘market decision’ is necessarily nothing more than forecasting reaction functions of those setting the rates. That is, the ‘feedback’ from today’s rates determined by market forces is nothing more than what markets think the Fed will vote into policy down the road.

And I see no value in paying the real price of the volatility/uncertainty we are seeing to get that kind of information.

So best to cut the highly disruptive volatility that goes with letting markets determine longer term risk free rates by having the Fed peg the entire term structure of risk free rates with, for example, a bid for the entire tsy curve at their target rate ceiling, along with an open ended securities lending facility.

That is, in my humble opinion best for the FOMC to vote on the entire term structure of risk free rates than today’s policy of voting on just the Fed funds rate and using ‘language’ to influence the curve.

But that’s just me…
(feel free to distribute)

The Center of the Universe
macro update
Warren Mosler | Valance Finance

Ari Berman — North Carolina Republicans Escalate Attack on Student Voting

Huge overreach and really dumb strategy going forward. The plan seems to be alienate the young now and trust that they will become more conservative when they grow up.

The Nation
North Carolina Republicans Escalate Attack on Student Voting
Ari Berman

Read It And Weep - Blindfolded Man Walkering

Commentary by Roger Erickson

What'd the Soviets use to yell, endlessly? "We're winning. We're whining. We're winning."

Winning what? The war against group intelligence?
(The Middle Class is now dying to learn which metrics are used to select the "nation's top accountant.")

Don't miss the highlighted phrases. Aside from the comic relief provided by those screamers, the only good news is that fewer people are actually paying any attention to the walkering man.

Nation's former top accountant eyes US debt warily

"The economy is slowly growing, the government's yearly budget deficit falling. But the nation's former top accountant doesn't buy the idea that everything is OK."

"... I'm a patriot who knows math ..."

"... bring in more [fiat] ..."

"I have answers."

Well, responses at least. So did Alice in Wonderland.  Do you suppose David Walker ever heard of Beardsley Ruml? You know, while David was training to be the nation's top accountant? Knowledge of Marriner Eccles' 1936 & 1938 policy explanations might be asking too much of a top accountant. Maybe after David stoops to walking in the Middle Class's fiat, instead of on them.