Monday, May 10, 2021

Cost of Living Versus Inflation — Brian Romanchuk

One thing I have discovered when discussing inflation is that discussions very rapidly get derailed into discussions of the “cost of living.” I take a view that is conventional within market and economic discussion: inflation is a macroeconomic concept, and the consumer price index is one way to measure it. However, many people view inflation as rising cost of living.

There is a link between these two ideas, but they are not the same thing. It is entirely possible that the reader might disagree with my views on the distinction, but if they are to get any value from this book at all, they need to understand what I am referring to....
Bond Economics
Cost of Living Versus Inflation
Brian Romanchuk

China on the horizon as ‘world’s pharmacy’ — M. K. Bhadrakumar


India Punchline
China on the horizon as ‘world’s pharmacy’
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

Michael Hudson & Jonathan Wilson-Hartgrove — Imagining An End to Poverty and Economic Dependence

Interview and transcript.

Yves here. We are delighted to feature another talk by Michael Hudson and Jonathan Wilson-Hargrove of the Poor People’s Campaign, hosted by Jim Vrettos of The Radical Imagination. Topics include an assessment of the Biden Administration and who really benefited from its relief to lower-wage workers. They also discuss the role of preachers in promoting economic justice, and how the business community enlisted some as early as the Great Depression to promote “free market” ideology.

Naked Capitalism
Michael Hudson & Jonathan Wilson-Hartgrove: Imagining An End to Poverty and Economic Dependence

How America Became the Money Laundering Capital of the World — Peter Stone

Experts and former prosecutors say that such fines have essentially become the cost of doing business, and that America’s entire approach to money laundering needs radical rethinking....
"Capitalism" again.

The New Republic
Peter Stone

What are the real reasons behind the New Cold War? — William I. Robinson

The US is launching a New Cold War against Russia and China in an attempt to deflect our attention from the escalating crisis of global capitalism....

Making the world safe for democracy capitalism. 

On the systemic level, it is about Western resistance to losing the half-millennium of dominance the West enjoyed during an age of imperialism and colonization, as well as enclosure (privatization) of the commons domestically. 

When a moment expires in the historical dialectic, resistance is futile. (See link below)


What are the real reasons behind the New Cold War?
William I. Robinson | professor of sociology at the University of California, Santa Barbara

See also

East Asia Forum
US Pacific Deterrence Initiative too little, too late to counter China
Hugh White | Emeritus Professor at the Strategic and Defence Studies Centre, The Australian National University

Matt Stolller - Why Joe Biden Punched Big Pharma in the Nose Over Covid Vaccines

 Last week, the Biden administration asked for a global waiver on vaccine intellectual property protections. What is this waiver? Why does it matter? And why did Biden stand up to big pharma? 

Unless Covid is brought under control, if could near bankrupt the rest of the world, with much of the cost falling back on the United States, but Big Pharma only cared about its bottom line. Even the Biden administration thought letting neoliberalism run amok was too much in the middle a global pandemic. But there are other reasons why Biden took the decision he did - see below. 

There are two reasons the administration then supported the waiver. The first is that the Biden administration really does not want Covid variants to return and force another lockdown. The second is, geopolitics, and ‘vaccine diplomacy.’ China’s vaccines, which use traditional methods, are not as effective as the mRNA treatments, but they exist. And China is sending its vaccines to more than 80 countries, with Russia also pushing its influence through its own effective vaccine. These countries are, rightfully, making a big deal of how the U.S. isn’t doing any exporting, and generating leverage as a reliable partner when the West is absent.

As a result, the traditional calculation within the U.S. government changed from pro-pharma to anti-pharma. The people in charge of money and guns took the progressive position, because the progressive position was a way to counter Russian and Chinese vaccine diplomacy, and to keep the economy free from a renewed pandemic threat. Treasury and State Departments, the National Security Council, and the National Economic Council, all supported the waiver. So did the United States Trade Representative Office, led by Katherine Tai, who made the final case to Biden.

(As an aside, I worked on the Hill for six years, and USTR was always the center of corporate power in government. For USTR to go against pharma is truly the world turned upside down.)

Matt Stolller - Why Joe Biden Punched Big Pharma in the Nose Over Covid Vaccines

Sunday, May 9, 2021

Two problems with Modern Monetary Theory — John Quiggin

I spend quite a bit of time (more than I should) engaged in Twitter debates with advocates of Modern Monetary Theory (MMT). Some are generally sensible, while others are convinced they have learned a deep secret which enables us to have whatever we want without paying for it. Unfortunately, the sensible ones (Meaningful Monetary Theory) don’t do the hard work of correcting the others (Magical Monetary Theory)….
I think MMT economists and advocates face a problem from two directions. The first is, of course, criticism of MMT that more caricature than fact. The second is MMT advocates that don't understand the nuances of MMT. Both are unqualified.

I don't think that it is reasonable to suggest, however, that MMT economists or others highly literate in MMT should spend time addressing such misunderstandings or misrepresentations, since they abound on social media.

John Quiggin's Blog
Two problems with Modern Monetary Theory
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Bill Mitchell — US labour market goes backwards with mixed signals – but significant slack remains

Last Friday (May 7, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2021 – which showed that the recovery since the catastrophic labour market collapse in March and April 2020, has substantially slowed after signs in March that the revovery was accelerating. The change in payroll employment fell from 770 thousand in March 2021 to a miserly 266 thousand and unemployment edged up slightly to 6.1 per cent. The broader labour wastage captured by the BLS U6 measure fell by 0.4 points to 10.7 per cent. The US labour market is still 8,215 thousand jobs short from where it was at the end of February 2020 and the unemployment to job openings ratio also suggests significant slack remains....
Bill Mitchell – billy blog
US labour market goes backwards with mixed signals – but significant slack remains
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

How weak US jobs data could hurt emerging markets, but boost China's exports — Wang Bozun

A bit of a mishmash economically but it mentions MMT anyway. 

The major point of the article is that a lot of the fiscal relief that the US federal government is into the economy is likely to flow to Chinese exporters in that they already have a significant share of the US market and now the pandemic has resulted in economic contraction that is not yet moving very swiftly toward recovering. 

Global Times (Chinese state-sponsored media)
How weak US jobs data could hurt emerging markets, but boost China's exports

Alex Krainer - Is The Age Of Permanent War Finally Over?

Recent events in the world have given me great hope that we might finally emerge from the century of permanent war.

The Great Reset agenda seems to be losing steam and those in charge of implementing it are losing conviction (with the exception, perhaps, of the very top echelon in power). At the same time, the ranks of people who are opposed to it and are willing to take a stand, appear to be swelling.

Russia’s build-up of an overwhelming military force on its border with Ukraine was therefore not a preparation for war. To the contrary, it was a move to prevent one from erupting. As Victor David Hanson recently wrote, “Wars often arise from uncertainty. When strong countries appear weak, truly weaker ones take risks they otherwise would not.” Thus for now, the Ukraine tensions have abated – but had Ukraine faced a weak and indecisive Russia, the leadership in Kiev and their Western backers might have made a very different gamble and today the war might already have started. 

The cabal that’s been dominating the western world for the past two centuries is rapidly running out of time and out of options. Their plans for the one world government are now in tatters and without a new world war, the best they can hope to achieve is to carve out a geopolitical block and erect a new iron curtain around it. The most likely candidate for that block is Western Europe consisting of the old colonial powers and their satellites. However, even this consolation prize will not be viable. As the Soviet experience has taught us, even with an iron fist and heavy-handed repression, the edifice can sustain itself at best for a few decades. But as populations awaken, and awakening they are, the sun will finally set on their system, hopefully for good.

Renegade Inc

Debt Ceiling July 31


Summer recess from end July thru after Labor Day... recent analysis projects “extraordinary measures“ can allow Treasury to function somewhat normally until October so no real problem until then...

They keep doing the same thing so you can’t expect a different result...

Saturday, May 8, 2021

The Concept of an Optimal Currency Area, and why the EU has failed to create it. — Carlos García Hernández

 In his book “Eurozone Dystopia”, Bill Mitchell quotes the three conditions that Mundell believed were necessary to achieve an OCA...

From the outset, and today more than ever, it was clear that none of these three conditions is even remotely fulfilled in Europe....

The Gower Initiative for Modern Money Studies
The Concept of an Optimal Currency Area, and why the EU has failed to create it.
Carlos García Hernández

Washington is playing a losing game with China — Ambassador Charles W. Freeman, Jr.

Foreign policy realism.

East Asia Forum
Washington is playing a losing game with China
Ambassador Charles W. Freeman, Jr. | visiting fellow at Brown University's Watson Institute for International and Public Affairs, and retired US Foreign Service

Ford on Wages — NeilW

Henry Ford quote.

New Wayland
Ford on Wages

Nobel prize-winning economist Paul Krugman on inflation, Modern Monetary Theory, and why ... Ben Winck interviews — Paul Krugman

Same old New Keynesian monetarism and reliance on IS-LM model.

Nobel prize-winning economist Paul Krugman on inflation, Modern Monetary Theory, and why ...
Ben Winck interviews Paul Krugman

Existential Economic Threats: How US States Can Survive Without Federal Money — Brandon Smith

Bonkers Watch.

ZH outdoes itself. States can save the day by 1) taking over federal property and 2) issuing commodity-backed money.

Zero Hedge
Existential Economic Threats: How US States Can Survive Without Federal Money
Brandon Smith via

Abby Martin - The Woke CIA PsyOp

WOKE CIA: The vast majority of the American youth are liberal, anti-racist, pro LGBT, for minority rights, and are anti-imperialist. So what's the CIA up to? Abby Martin explains what's behind the cringe ‘Humans of CIA’ recruitment ad promoting themselves as a place of ‘intersectional’ social progress

(45) The Woke CIA PsyOp - YouTube

Susan K. Sell - What COVID-19 Reveals About Twenty-First Century Capitalism: Adversity and Opportunity

 A brilliant article, which captures much of what is wrong with our present economic and political system.

The neoliberal/libertarian mantra of individual responsi-bility and self-reliance has tattered social bonds and commu­nal responsibility. It provides an excuse or rationale for the public sector to step back. Social safety has been removed as a legitimate public responsibility (Azmanova 2014: 361). And yet, as Bregman points out, ‘humankind evolved to cooperate’ and this insight can provide the basis for moving toward ‘a government based on trust, a tax system rooted in solidarity, and the sustainable investments needed to secure our future’ (Bregman 2020). Around the globe, governments have stepped up to provide temporary social protection in the pandemic at a massive scale. This has demonstrated that the public sector can mobilize vast resources in times of crisis— this time not to bail out banks that were too-big-to-fail, but to provide more social safety nets. The crisis has resuscitated serious conversations about a Universal Basic Income (UBI) to create conditions of economic certainty.

The rise of populism on the left and the right reflects a fear of freedom in a world that seems out of control. In the centre many are calling for reform to make capitalism more inclusive. But some call for a radical overhaul of the socio-economic system to develop a ‘political economy of trust’ to counter the ‘systemic logic of domination at work in the contemporary modality of capitalism’ (Azmanova 2014: 362). To begin to build such a system of trust, Azmanova advocates that those seeking to transform contemporary cap­italism should challenge the rules that generate and sustain injustice rather than political actors (parties, states, foreign­ers etc.) (Azmanova 2018: 10).

Susan K. Sell - What COVID-19 Reveals About Twenty-First Century Capitalism: Adversity and Opportunity

Friday, May 7, 2021

Chris Kanthan: China, China, Chyyna!: Greatest Disruption to American Century

The book has six long chapters debunking the Uyghur/ Xinjiang myth. 

Why 100,000+ words in this book to talk about China? First, we are living through a historic geopolitical disruption that happens once every century or so — a rising power is poised to surpass an established hegemon as the largest economy in the world. Mainstream media and experts are living in denial, but China’s GDP will be #1 within five years. Second, the inexorable rise of China and a multipolar world will have profound consequences: end of the American Century and erosion of dollar supremacy. Third, great power rivalry could lead to catastrophic wars.

Thirty years ago, most Chinese didn’t have basic home appliances. How did this poor communist country become the world’s #1 manufacturer, largest trading nation, and the largest market for e-commerce, electric cars, and mobile payments? China now publishes more scientific papers and international patents than anyone else. It leads in critical technologies like 5G, AI, drones, and blockchain.

China eradicated extreme poverty and created the world’s largest middle class. There are more Chinese than Americans in the Top 10% of the world’s richest individuals. China has even surpassed the U.S. in the Fortune Global 500 firms list.

America missed the rise of China and still doesn’t understand China.

Through the lenses of geopolitics, economics, trade, history, and culture, this book explains the rise of China and how the U.S. must reinvent its strategies for a multipolar world. While America’s primacy is on a relative decline, China is not going to rule the world. Eschewing Cold War ideology, America must compete and cooperate with China. And we can even learn a few things from China.


 BRI opening up Central Asia through mountains and deserts with Chinese engineering.

Xinjiang's Alataw Pass sees robust rise in China-Europe freight train trips

Xinjiang's Alataw Pass sees robust rise in China-Europe freight train trips

Aerial view of Guozigou Bridge in NW China's Xinjiang

Video of highway across sand desert in Xinjiang

ECNS — Digital RMB unveiled at China International Consumer Products Expo in Haikou

Another pilot

Space Colonization Is A Capitalist Perception Management Op — Caitlin Johnstone

Space colonization is largely a capitalist perception management op promoted by the likes of Musk and Bezos to strengthen the narrative that it’s okay to continue the world-raping global capitalist principle of infinite growth on a finite world because we can escape the catastrophic ecological consequences of that paradigm by fleeing to space.

“Ecocidal capitalism is fine, we’ll just go to space before it kills us!” is the message we’re all meant to absorb. And too many do. A large obstacle to waking people up to the existential crises we are facing as a species is the blind faith that technology will save us from the consequences of our mass-scale behavior, and therefore we don’t need to change. Which suits the world’s richest men perfectly.
Contemporary capitalism is based on advertising-driven consumerism to fuel "growth," which results in massive unnecessary overuse of limited resources by manufacturing wants, together with negative externalities of production that are socialized. It's a dumb system based on greed and selfishness that is supposed to result in spontaneous natural ordering for the great good. Does anyone actually believe that stupid story?

See also
By destroying traditional social habits of the people, by dissolving their natural collective consciousness into individual constituents, by licensing the opinions of the most foolish, by substituting instruction for education, by encouraging cleverness rather than wisdom, the upstart rather than the qualified, by fostering a notion of getting on to which the alternative is a hopeless apathy, Liberalism can prepare the way for that which is its own negation: the artificial, mechanized or brutalized control which is a desperate remedy for its chaos.
– TS Eliot
Well-written article on liberal overreach. How liberalism got unhinged from rationality and spun off into unenlightened self-interest with destructive consequences.

In terms of the historical dialectic, 18th century classical liberalism can be view as a reaction to the dogmatism prevalent in the West since the rise of Christendom as a social and political force. IN such reactions, the pendulum often swing too far in the other direction and stands in need of correction. Then another moment in the historical dialectic supervenes to restore balance. Then the cycle repeats in the new moment.
Liberalism is paradox. This is the conclusion drawn by Domenico Losurdo in his “counter-history” of the project. There’s the contradiction just alluded to: its unencumbered economy being born from, and dependent on, ravaging its accompanying society in order to survive. (The host has the unenviable task of regulating its own devourment.) But there’s also the uncomfortable fact that, right at the moment liberalism was most vociferously demanding liberty, it did so while upholding the most depraved chattel slavery. When it declared the necessity of self-determination, its ideologues were undertaking the almost total annihilation of North America’s first nations. The continent had to be made safe for the free market.
But today’s [neo]liberals can’t countenance this reality, it doesn’t fit with their cognitive maps. To them, the logic of the market — that leviathan that they will sacrifice everything to — is above criticism. After all, through it we have equality (in that, with enough money, intrinsic qualities are no constraint), freedom (regardless of previous error there’s always the option of succumbing to exploitation or starving), and smart phones (late modernity’s bread). This perfect system, which works best of all in minds poisoned by game theory, is forced into every part of society. The idea of a moral economy — i.e. all economies that existed before the Industrial Revolution — is lost; a dangerously utopian one is born....
Utopian thinking is a type of magical thinking.

Liberalism’s Last Legs?
Luke O'Brien 

See also
"Incredibly but while openly undermining international law Western politicians don’t hesitate to say that the key task of global politics is to counter Russia’s and China’s attempts to change the rule-based order," he told an online UN Security Council meeting. "Such statements came after a recent G7 ministerial meeting in London. In other words, this is nothing but double-talk. The West no longer cares for norms of international law and now insists everyone obey by its rules and stick to the order based on these rules."

"We think that such steps geared to impose totalitarianism in global affairs are inadmissible but they are widely practiced by our Western colleagues, first of all, the United States, the European Union and its other allies, who reject all principles of democracy and multilateralism insisting on everything be done their way and threatening punishment," Lavrov said.…
"My way or the highway" aka "You're either with us or against us."

Adam Smith On The Source Of Profits And Rents In The Exploitation Of The Worker — Robert Vienneau

Adam Smith's labor theory of value in a nutshell. Short.

Why is is this significant now? Because rising income and wealth inequality are breathing life into defunct economists that dealt with these issues.

Economic rent was front and center in classical economics and, of course, Marx. It was treated by Veblen also, who can be viewed as the forerunner of what came to be institutional economics. Economic rent is explained away in neoclassical economics (marginalism) based on marginal productivity and "just deserts" in the (free) marketplace by assuming that free markets are perfect markets, that is, minimal asymmetry of power and information.

Thoughts On Economics
Adam Smith On The Source Of Profits And Rents In The Exploitation Of The Worker
Robert Vienneau

Fed warns of risk of asset price drop


When the price monopolist (MMT 101)  has prepared its system to withstand a 55% price reduction it increases the likelihood of it happening...

2 states end unemployment benefits

Dominoes falling... Chamber of Commerce POV winning.... 

And no more stimmy until probably October:

We’re on our own for a while....

Thursday, May 6, 2021

Free Speech For Me, Not You — Blair Fix

Drawing lines is the bane of liberalism.

Economics from the top down
Free Speech For Me, Not You
Blair Fix

See also

It’s aggression when ‘they’ do it, but defense when ‘we’ do worse
Alan MacLeod

The U.S.-China Confrontation: "We Need To Avoid Stumbling into a Major War" — Bernhard Zang interviews Admiral James Stavridis

[Four star] Admiral James Stavridis has commanded U.S. warships in the South China Sea. In his new novel, he writes about a war between China and America – a scenario he considers to be extremely realistic.…
Sounds like an intriguing novel by a guy who knows whereof he writes. He says it's aim in anti-war.  This is not a situation for sleepwalking or bluff. Accidents happen and commitments can backfire.
Graham Allison [author of "Destined for War: Can America and China Escape Thucydides's Trap?"] went back 2,500 years to ancient Athens and Sparta and looked at what happens when an established power is challenged by a rising power. The last time that happened is certainly familiar to Germans: It was when the British Empire was challenged by the Kaiser’s Germany. The reason we wrote "2034" was not to predict a conflict but to warn people, to write a cautionary tale which could allow us to figure out what we need to do to avoid stumbling into a major war.…

Good read. 

Spiegel Online — English
The U.S.-China Confrontation: "We Need To Avoid Stumbling into a Major War"
Bernhard Zang interviews Admiral James Stavridis, US Navy (retired)

See also
There’s no question that, in the national security state, there’s a search for the new enemy that will maintain the ability of the national security state to lay claim to resources on a mammoth scale.
Andrew Bacevich on Ending the US’s Forever Wars
Interview with Andrew Bacevich, professor emeritus of international relations and history at Boston University

Visual Capitalist — Ranking U.S. Generations on Their Power and Influence Over Society

Boomers remain dominant in economic and political power.

Visual Capitalist
Ranking U.S. Generations on Their Power and Influence Over Society
Carmen Ang

Marx in Amerika — Branko Milanovic

But is Marx’s capitalism at all similar to the capitalism of today? Can his ideas be relevant now, more than a century since they were formulated and during which time the world’s per capita income was multiplied by seven, and US per capita income by more than eight times?

The main differences between the classical capitalist world of the 19th century and today is not however that wages are higher (Marx would not have been much surprised since he held that wages reflect “moral-historical” conditions of each country) or that the welfare state is much broader. The main differences are in the nature of the ruling class, and the effects on the middle classes in the globally dominant countries....
Global Inequality
Marx in Amerika
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

See also

MR Online
More young Japanese look to Marx amid pandemic, climate crisis
Originally published: Kyodo News (May 5 2021)

RT — China suspends economic dialogue with Australia ‘indefinitely’ amid spat over Belt & Road Initiative

Beijing has axed a high-level channel for economic talks with Canberra, blasting Australian leaders for having a “Cold War mentality” after the country canceled two contracts linked to its Belt and Road project.

In a harshly worded statement on Thursday, China’s economic planner, the National Development and Reform Commission, said the China-Australia Strategic Economic Dialogue would be paused indefinitely....

While relations have been frosty for some time, halting the negotiation channel could spell further trouble for Canberra as it seeks to resolve trade disputes that affect $20 billion in Australian exports, including in key industries such as coal, timber, seafood, wine and barley. As of March, trade between the two countries had dropped by 40% overall, compared to the period before the commerce battle, with Beijing maintaining tariffs on a number of goods....

Import substitution. 

China suspends economic dialogue with Australia ‘indefinitely’ amid spat over Belt & Road Initiative