Wednesday, July 8, 2020

New York AG: Black protesters were disproportionately charged with felonies — Zack Budryk


More systemic racism? Isn't that what the protests were about? 

The irony of it all.

How the Pentagon failed to sell Afghan government’s bunk ‘Bountygate’ story to US intelligence agencies — Gareth Porter


NYT with egg on its face, and many others that ran away with the story, too.

The Grayzone
How the Pentagon failed to sell Afghan government’s bunk ‘Bountygate’ story to US intelligence agencies
Gareth Porter

RT — Christopher Steele to pay damages to Russian bankers for ‘inaccurate and misleading’ claims in his infamous dossier


Ha ha.

RT
Christopher Steele to pay damages to Russian bankers for ‘inaccurate and misleading’ claims in his infamous dossier

Big Oil Should Focus On The World’s Cleanest Energy — Irina Slav


Geothermal.

Oilprice
Big Oil Should Focus On The World’s Cleanest Energy
Irina Slav

The Tremendous but ‘Secret’ Success of Socialist Vietnam — Andre Vltchek


Backgrounder on the development of Vietnam under a Communist government. Are Cuba and Vietnam development models for other small countries.

NEO
The Tremendous but ‘Secret’ Success of Socialist Vietnam
Andre Vltchek

Russia, China keep the ‘dragon in the fog’ — M. K. Bhadrakumar


Backgrounder on Hong Kong, Russian constitutional amendment, and more.

India Punchline
Russia, China keep the ‘dragon in the fog’
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

See also

Gold, Goats 'N Guns
Trump Reaps the Whirlwind With China/Iran Mega Deal
Tom Luongo

Modern monetary theory gets to Westminster — Richard Murphy


More high level exposure for MMT thanks to The Deficit Myth.

Tax Research UK
Modern monetary theory gets to Westminster
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

‘Either you are fighting to eliminate exploitation or not’: A leftist critique of the Green New Deal — James Wilt interviews Max Ajl

But there has been growing criticism from some parts of the left of the proposed Green New Deal, particularly relating to its potential impacts on the Global South and undefined relationship with capitalism. There is no singular Green New Deal that exists–with plenty of debate among supporters of it–but it is possible to speak about the most popular version of it as proposed by the likes of Ocasio-Cortez and Sanders.
It’s a vision that scholar and author Max Ajl is deeply concerned about. Ajl is an associated researcher at the Tunisian Observatory for Food Sovereignty and the Environment and writes on rural development, especially in the Arab region. His book, A People’s Green New Deal, is forthcoming from Pluto Press in 2021.
His critiques of the Green New Deal are careful and productive, grounded in disciplines of agro-ecology and food sovereignty, seeking to leverage existing interest in the proposal into something far more liberatory and internationalist....
Canadian Dimension
‘Either you are fighting to eliminate exploitation or not’: A leftist critique of the Green New Deal
James Wilt interviews Max Ajl

Complex Ideas — Peter Radford


Important post on the philosophy (foundations) of economics as a discipline. Short for the amount of information it contains. Should read even though it is not directly relevant to MMT.

In it indirectly relevant to MMT, however, in that it recognizes that the social world is complex, as is the biological world and to a lesser degree the physical world. MMT economists get this by taking an open-ended approach that assumes reflexivity (learning) and emergence (synergism) in complex adaptive systems.

Conventional economists complain that MMT lack formal expression. Peter Radford explains why that is a distraction from the task at hand of explaining real world economies.

Basic to this is the systems approach, but not through formal systems. Social science is more akin to biology than physics as a category of science, and it is different from biology owing to the difference in intelligence, which gets expressed as information. Human intelligence is a highly developed complex system using the physical and biological as apparatus but not limited to them.

The Radford Free Press
Complex Ideas
Peter Radford

MMTed Q&A – Episode 6 — Bill Mitchell

Here is Episode 6 in our weekly MMTed Q&A series. This is the second-part of my discussion on the Job Guarantee with Dr Pavlina Tcherneva and in this episode we discuss the central role that employment buffer stocks play in Modern Monetary Theory (MMT), a point that is often missed by those who think it is just a job creation program and of secondary (and dispensable) importance to the ‘banking’ aspects of MMT. As you will hear (and see), the Job Guarantee is an integral part of MMT and that status is derived from the elemental insights that MMT offers about the way a currency works. If a person thinks the Job Guarantee is an unnecessary add-on to MMT, then they haven’t understood the basics of MMT. It is as simple as that.
Point of clarification: Bill writes, "If a person thinks the Job Guarantee is an unnecessary add-on to MMT, then they haven’t understood the basics of MMT." 

MMT is often taken to be only or chiefly the operational description of monetary systems based on institutional arrangements. including legal. But MMT means Modern Monetary Theory or, alternatively, Modern Money Theory (Wray), with the emphasis here on "theory." MMT purports to be an explanation of macroeconomics based on a new way of seeing, or "new lens." This lies in the assumptions, including methodological assumptions, and how they are developed into a systematic explanation, which is what a theory is. 

MMT is not a formal axiomatic theory in emulation of physics but rather recognizes that the sciences — natural or physical, biological, and social — are similar but difference, hence, the different categories that affect not only subject matter but differences in subject matter that result in the necessity for difference in approach. 

There are three fundamental categories of being — physical, life, and intelligent. The three categories of science investigate these ontological categories using methods appropriate to them to generate representative models, conceptual and mathematical. Conceptual models can also be formal since they follow the rules of logic including  those of abstraction, e.g., set theory. Since social science is concerned with not only the physical and biological but also the intelligent, its methods must incorporate more than the previous two, e.g., different scales of complexity.

The theoretical part is the macroeconomic theory built the foundation of operational and institutional analysis of "the money system." MMT is a macro economic theory. The "holy grail" of macro is resolving the trifecta of optimal growth, full employment, and price-level stability. Economists is generally assume that this is impossible:  only two of the three can be achieved simultaneously over time. MMT says no, it is possible.

MMT claims that the apparent contradiction between actual full employment and acceptable price-level fluctuation can be resolved using the MMT JG as a price anchor along with the other tools in the MMT toolbox. 

The currency issuer uses its monopoly power to set the price of a single real good — a unit of unskilled labor. The government does this by offering a universal job guarantee at a fixed compensation, presumably a living wage.

According to Warren Mosler's White Paper:
  • The price level is necessarily a function of prices paid by the government’s agents when it spends, or collateral demanded when it lends.
  • In what’s called a market economy, the government needs to set only one price, as market forces continuously determine all other prices as expressions of relative value, as further influenced by institutional structure.
This implies that if the currency issuing government sets the price level of any real good, this acts as a price anchor since the rest of prices adjust automatically to this benchmark through market adjustments, given the overall framework adopted.

The MMT JG is therefore one of the lynchpins of MMT as a macroeconomic theory, along with stock-flow consistent accounting based on double-entry bookkeeping and functional finance as opposed to so-called sound finance.

Ignoring this misses the contribution of MMT economists in drawing on the past and synthesizing previous knowledge into a new approach to macroeconomics by innovating. This is an aspect of the dialectics at the basis of free inquiry and informed debate. MMT did not fall from heaven. MMT economists hammered it out over close collaboration.

Bill Mitchell – billy blog
MMTed Q&A – Episode 6
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Opinion: Iain Macwhirter: There is method to the madness of spend, spend, spend — Iain Macwhirter


Grudgingly positive about MMT. Worth a read to gauge direction.

The Herald (Scotland) — Editorial Opinion
Opinion: Iain Macwhirter: There is method to the madness of spend, spend, spend
Iain Macwhirter, Political Editor

New MSc Degree program from BOE in Central Banking and Regulation


Looks pretty popular and has nothing to do with MMT... Monetarist..link here.......







Tuesday, July 7, 2020

A universal jobs guarantee is the bold new solution for how to bring back all the workers sidelined — Allana Akhtar

  • Pavlina Tcherneva, a Bard professor and one of the economists pioneering research into Modern Monetary Theory, said federally guaranteed jobs may address poverty and help communities better than universal basic incomes.
  • The coronavirus pandemic wiped out millions of jobs, and one report estimated that 17.6 million unemployed Americans may not return to their pre-pandemic jobs.
  • Tcherneva said guaranteeing a public service job could lead to improvements on community-wide issues like public health and access to food — while eradicating unemployment completely. 
Business Insider

US lobbyists set the Indian narrative on China border — M. K. Bhadrakumar


Foreign meddling.

India Punchline
US lobbyists set the Indian narrative on China border
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

Zero Hedge — Wal-Mart Plans To Launch Its "Amazon Prime Killer" Later This Month


"Capitalist competition."

Zero Hedge

China's yuan policy has made Hong Kong redundant — Paola Subacchi


Hong Kong no longer plays the same financial role for China as it once did. Most of the rest of the world hasn't realized this yet. Hong Kong will continue as a financial hub of Asia, but it won't be the top dog anymore, and it is not now. Shanghai aims to be the major competitor of New York and London in a world in which the renminbi (RMB) plays a major role.

The renminbi is the Chinese currency, and the yuan (CNY) is the unit of account. "Renminbi" means "the people's currency" in Chinese.

Nikkei Asian Review
China's yuan policy has made Hong Kong redundant
Paola Subacchi
(h/t Automatic Earth)

Mariana Mazzucato — Public Policy for Inclusive, Sustainable Growth


Public policy for public purpose, taking into consideration changed conditions.

MARIANA MAZZUCATO — Economics - Innovation - Inclusive Growth
No More Free-Lunch Bailouts

The coronavirus recovery is an opportunity to do everything differently, not go back to normal
Mariana Mazzucato | RM Phillips chair in the Economics of Innovation at SPRU in the University of Sussex

Modern monetary theory: the rise of economists who say huge government debt is not a problem — John Whittaker


Another economist offers a weak criticism of MMT.

The lack of affordability argument based on government as a big firm or household has been tossed in the trashing. The rebuttal is so obvious not one wants to touch it anymore.

The pivot is to eventual inflation looming — some day. Like MMT economists have ignored that.

The Conversation John Whittaker | Senior Teaching Fellow in Economics, Lancaster University

A Pair Of Weaker MMT Critiqiues... — Brian Romanchuk

I ran into a pair of MMT critiques recently. Since I am writing a chapter on MMT criticism, I want to see whether I can use them as material. Unfortunately, I am not sure whether either qualifies as being of enough interest to qualify for inclusion into my book. This is slightly surprising, since one of the articles was the John H. Cochrane review of The Deficit Myth that free marketeers were gushing about. I am noting these articles and making a quick response as a placeholder.... 
Bond Economics
A Pair Of Weaker MMT Critiqiues...
Brian Romanchuk

Bill Mitchell – We can have full employment again in a green world

Must-read.
Last Saturday, the Weekend Australian, Rupert Murdoch’s daily national newspaper, had a relative Modern Monetary Theory (MMT) avalanche, with two core MMT-style articles published and two that were supportive rather than hostile. That tells you something about the way the world is shifting. I have received a bit of flack for publishing an Op-Ed piece in that newspaper from those who style themselves as Leftists. It is the same old argument – dealing with the devil. And the same old reply – if you want to influence policy then you have to talk to those who make policy. It is easy plotting revolutions over lunch. There has been a lot of groundwork laid over the last several months to bring people into the conversation. It is quiet stuff. Discreet. And as things unfold I will make some of the developments public. At present, all I can say is that I have a document before the Prime Minister today and there is a lot of behind-the-scenes workshops/briefings going on at state-level. And, while activists spend a lot of time ‘pressuring’ this person and that person on social media, the big shifts that are going on at present, including the publication of Noel Pearson’s piece and my article, are not being helped by aggressive social media confrontations. Sometimes it is better to work in a subtle way and exploit networks where they are available. That is not to say that activism to promote MMT is not appreciated and helpful. But we do need to pick our path. Anyway, a number of people asked me to publish my article here because they cannot get behind The Australian’s paywall. So here is the penultimate version which is a few hundred words longer than the actual article, which I cannot provide due to copyright restrictions. I also cannot provide Noel Pearson’s accompanying and complementary article but it was magnificent.
I think we can safely say that this behind the scenes maneuvering is going on elsewhere, too. In fact, likely for some time in the US given Stephanie Kelton's high profile position.

Bill Mitchell – billy blog
We can have full employment again in a green world
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Robert Kuttner - Neoliberalism: Political Success, Economic Failure

The invisible hand is more like a thumb on the scale for the world’s elites. That’s why market fundamentalism has been unmasked as bogus economics but keeps winning politically.





A long read, but excellent. 

Absolute freedom brings the opposite: oppression and control by the few. Libertarians and free market fundamentalists will give their blogs and sites names like, Liberty Radio, Liberty News, Learn Liberty, Freedom Radio, etc, but it's not freedom they offer, but enslavement: a harsh boss, long hours at work, poor pensions, low quality health care, anxiety and fear. 

The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact do not regulate themselves. Managed markets turn out to be more equitable and more efficient. Yet the theory and practical influence of neoliberalism marches splendidly on, because it is so useful to society’s most powerful people—as a scholarly veneer to what would otherwise be a raw power grab. The British political economist Colin Crouch captured this anomaly in a book nicely titled The Strange Non-Death of Neoliberalism. Why did neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy, but succeeded superbly as power politics for economic elites.

The neoliberal ascendance has had another calamitous cost—to democratic legitimacy. As government ceased to buffer market forces, daily life has become more of a struggle for ordinary people. The elements of a decent middle-class life are elusive—reliable jobs and careers, adequate pensions, secure medical care, affordable housing, and college that doesn't require a lifetime of debt. Meanwhile, life has become ever sweeter for economic elites, whose income and wealth have pulled away and whose loyalty to place, neighbor, and nation has become more contingent and less reliable.

The failed neoliberal experiment also makes the case not just for better-regulated capitalism but for direct public alternatives as well. Banking, done properly, especially the provision of mortgage finance, is close to a public utility. Much of it could be public. A great deal of research is done more honestly and more cost-effectively in public, peer-reviewed institutions such as the NIHthan by a substantially corrupt private pharmaceutical industry. Social housing often is more cost-effective than so-called public-private partnerships. Public power is more efficient to generate, less prone to monopolistic price-gouging, and friendlier to the needed green transition than private power. The public option in health care is far more efficient than the current crazy quilt in which each layer of complexity adds opacity and cost. Public provision does require public oversight, but that is more straightforward and transparent than the byzantine dance of regulation and counter-regulation.

The American Prospect

TGA balance still being maintained at 1.7T


Treasury still doing these pop up issues of Cash Management Bills to increase TGA and draining reserves ie “unprinting money!” this week.... to Kudlow and the other Monetarists there this should be a (to them) a bearish policy as it is reducing their “high powered money!”... also is in direct conflict with their own quarterly funding plan which said they wanted TGA at 800b by end of JUNE... missed their target by $1T.... hard to understand...





Nathan Rich - Hong Kong Security Laws Analyzed



US Security Law is more strict than Hong Kong's.

Monday, July 6, 2020

Andrew Batson' — China’s security fears and the Cold War economy


Historical backgrounder.

Andrew Batson's Blog
China’s security fears and the Cold War economy

Kazakhstan may hold the secret for Greater Eurasia — Pepe Escobar


Backgrounder on an increasingly important area.

The US is not hanging on in Afghanistan (Central Asia) to spread "freedom and democracy" or protect human rights. The interest there is strategic, as it must to justify the cost in blood and treasure.

Indeed, the US is lot more active in Eurasia than most people realize, since most of what they hear about is Russia, China, North Korea, Venezuela, and the Middle East.

For example, the recent kerfuffle in the "news" over Russian "bounties" is directed not only at Russia but also to undercut the president's determination to withdraw from Afghanistan.

Withdrawal is not in the strategic interest of the shadow government that maintains policy across administrations and feeds the institutions on which it it based. The "shadow government" well characterizes the bureaucracy that maintains the trajectory of government and policy through changing administrations. There has been  little change in this trajectory since the end of WWII, despite President Eisenhower's warning about it as he left office.

"Shadow government" is in my view a better term to characterize this phenomenon than the "deep state." However, this term has already been undermined by association with conspiracy theory that is tagged with that name. (Donald Trump calls it the "swamp," and Steve Bannon characterizes it as the "administrative state.")

They are correct in holding that the swamp must be drained for meaningful policy change not only to happen but also to persist. Bannon's term in government was short, and the president has faced an onslaught of opposition seeking to either remove him or neuter him. While I don't think either were suitable for the task, at least they recognized the problem and sought to address it, so far unsuccessfully. There is no one else doing so in any kind of meaningful way, nor is there either a vision to actualize or a plan to proceed.

Based on the "Red Scare," the shadow government has managed to preserve the policy since the Truman administration " Even today.

Notice, for example, how Secretary of State Mike Pompeo regularly refers to "Chinese Communist Party" as the enemy, and Vladimir Putin is typically referred to as "ex-KGB." See for example, the book review in Foreign Policy, How Putin and the KGB Took Control of Russia—and Duped the West: An important new book details the carefully calculated rise of a modern-day tsar (June 2020). It appears that this is not being offered  for its informational content as its persuasive value in demonizing the Russian "regime."

Eurasia is now the battleground from the vantage of the US ruling elite and the shadow government that maintains policy that it suits it. The opposition from the shadow government's vantage is "KGB Russia," "Communist China," and "Islamic terrorism."

This is all zeroed in on Eurasia and Central Asia as a pivot point in the unfolding historical dialectic of who is going to control the Eurasian land mass, Halford Mackinder's "world island" as the "geographical pivot of history."

This is the turf of Russia and China, traditional land powers. To control this pivot, the US, a sea power, has to submit Russia and China to regime change favorable to the US or attempt to prevent them from gaining control by sewing conflict in the region and creating chaos, since getting involved in a land war in Asia with peer adversaries would risk defeat.

The Vineyard of the Saker
Kazakhstan may hold the secret for Greater Eurasia
Pepe Escobar

Time for China to decouple the yuan from US dollar, former diplomat urges — Orange Wang

US will pose ‘increasingly severe threat’ to future Chinese development through dollar’s global monopoly

Preparations for gradual decoupling and internationalisation of the yuan should begin ‘now’

I have been been saying this for some time. It's even more essential now that Chinese policy is shifting from export-led to consumption-driven.

SCMP
Time for China to decouple the yuan from US dollar, former diplomat urges
Orange Wang

The United States needs a new Works Progress Administration to overcome the coronavirus recession — Delaney Crampton

This program would provide a needed boost for our economy. Analysis shows young and low-income workers have been particularly hit hard by layoffs. Workers earning less than $20 per hour were 115 percent more likely to be laid off than those earning $30 per hour or more. And workers under age 25 were 93 percent more likely to have been laid off than those who are 35 and older.
A WPA-like program in 2020 would create openings for safe job opportunities for the hardest-hit workers, particularly low-income and younger workers. Ideally, workers in these jobs would learn new skills and be able to transition into nursing and home healthcare jobs during the post-pandemic economic recovery should they choose to do so....

Why Isn’t Modern Monetary Theory Common Knowledge? — Blair Fix

I’m hardly the first to connect money creation with power. It’s been done countless times before. And yet many (most?) people still misunderstand money. Why? A good theory of money should explain this misunderstanding. Why — despite it being plainly true — do we recoil at the idea that anyone can create money, and as much of it as they want?
My suspicion is that accepting this fact is difficult because it means accepting that our existing social order is arbitrary. Those who create money do so not out of any natural right, but because of power that has been arbitrarily given to them. Nothing makes the human mind recoil like learning that the things we hold dear — the patterns and behaviors that dominate our lives — are arbitrary.
This points to a deep truth about human behavior. Our social conventions are, by definition, arbitrary. And yet the existence of these conventions is predicated on us believing that they are not arbitrary. One of the worst things you can say about a law is that it is ‘arbitrary’. Convince enough people of this fact and the law will soon change. Similarly, one of the worst things you can say about money creation is that it is ‘arbitrary’. Our social order depends on us forgetting (or refusing to see) this fact. The flip side is that changing the social order means remembering this arbitrariness.
Economics from the Top Down
Why Isn’t Modern Monetary Theory Common Knowledge?
Blair Fix 

US labour market reverses direction but for how long? — Bill Mitchell

How far the recovery can go depends on two factors, both of which are biased negatively: (a) How many firms have gone broke in the lockdown? (b) Whether the US states will have to reverse their lockdown easing in the face of a rapid escalation of the virus in some of the more populace states. But I do not see appropriate policy responses in place. The US government should have guaranteed all incomes and introduced large-scale job creation programs and a Job Guarantee as an on-going safety net....
There should also be a debt moratorium or restructuring of some sort in place.

Bill Mitchell – billy blog
US labour market reverses direction but for how long?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, July 5, 2020