Thursday, March 21, 2019

Peter Coy - A Beginner’s Guide to MMT

Another excellent article about MMT.

The reason the government doesn’t need to sell treasury securities, or levy taxes, to spend money is that the central bank, under the control of the treasury, can pay for everything by conjuring up electronic money. In MMT’s ideal world there would still be taxes, but their main purpose, aside from lessening inequality, would be as “offsets” to keep inflation under control. Taxes would drain just enough money from consumers and businesses so total spending in the economy won’t be excessive.

It’s tempting to view MMT’s conception of fiscal policy as essentially similar to that of the mainstream—“Hey, they believe in taxes, too!”—but that’s not quite right. MMTers hold that inflation isn’t primarily the result of excessively strong growth. They blame much of it on businesses’ excessive pricing power. So before trying to choke off growth to kill inflation, they would try to break up monopolies and stop banks from making too many loans.

“The more actively we regulate big business for public purpose, the tighter the full employment we can achieve,” three MMTers wrote in a letter to the Financial Times’ Alphaville column that was published on March 1.

Bloomberg




Ellen Brown - Bank Interest

Excerpt from Monetary Policy Takes Center Stage: MMT, QE or Public Banks?


Now I think this is interesting, Prof. Mary Mellor says that banks issue loans but not the interest the bank requires back, so new money needs to be always lent into existence so that previous borrowers can earn it to pay back the interest they owe.

That sounds alarming to me, but Prof. Steve Keen says the velocity of money will pay the interest as it cycles many times through the banks and then back out again into society as they pay for their services, rates, and wage bills. Phew, I feel happier now, but who is right?

UK professor Richard Murphy adds another role for the central bank – as the issuer of new money in the form of  “Green Infrastructure Quantitative Easing.” Murphy, who was a member of the original 2008 UK Green New Deal Group, explains:
All QE works by the [central bank] buying debt issued by the government or other bodies using money that it, quite literally, creates out of thin air. … [T]his money creation process is … what happens every time a bank makes a loan. All that is unusual is that we are suggesting that the funds created by the [central bank] using this process be used to buy back debt that is due by the government in one of its many forms, meaning that it is effectively canceled.
The invariable objection to that solution is that it would act as an inflationary force driving up prices, but as argued in my earlier article here, this need not be the case. There is a chronic gap between debt and the money available to repay it that actually needs to be filled with new money every year to avoid a “balance sheet recession.” As UK Prof. Mary Mellor formulates the problem in Debt or Democracy (2016), page 42:
A major contradiction of tying money supply to debt is that the creators of the money always want more money back than they have issued. Debt-based money must be continually repaid with interest. As money is continually being repaid, new debt must be being generated if the money supply is to be maintained.… This builds a growth dynamic into the money supply that would frustrate the aims of those who seek to achieve a more socially and ecologically sustainable economy.

Ellen Brown - Monetary Policy Takes Center Stage: MMT, QE or Public Banks?

The whole article is good with Varies Varafoukis suggesting public banks in Europe to fund the New Green Deal.

This is an excerpt about MMT and its critics which I have put up for discussion.

MMT advocates say the government does not need to collect taxes before it spends. It actually creates new money in the process of spending it; and there is plenty of room in the economy for public spending before demand outstrips supply, driving up prices.
Critics, however, say this is not true. The government is not allowed to spend before it has the money in its account, and the money must come from tax revenues or bond sales.
In a 2013 treatise called “Modern Monetary Theory 101: A Reply to Critics,” MMT academics actually concede this point. But they write that “these constraints do not change the end result,” and here the argument gets a bit technical. Their reasoning is that “The Fed is the monopoly supplier of CB currency [central bank reserves], Treasury spends by using CB currency, and since the Treasury obtained CB currency by taxing and issuing treasuries, CB currency must be injected before taxes and bond offerings can occur.”
The counterargument, made by American Monetary Institute researchers among others, is that the central bank is not the monopoly supplier of dollars. The vast majority of the dollars circulating in the United States are created, not by the government, but by private banks when they make loans. The Fed accommodates this process by supplying central bank currency (bank reserves) as needed; and this bank-created money can be taxed or borrowed by the Treasury before a single dollar is spent by Congress. The AMI researchers contend, “All bank reserves are originally created by the Fed for banks. Government expenditure merely transfers (previous) bank reserves back to banks.” As the Federal Reserve Bank of St. Louis puts it, “federal deficits do not require that the Federal Reserve purchase more government securities; therefore, federal deficits, per se, need not lead to increases in bank reserves or the money supply.”
What federal deficits do increase is the federal debt;  and while the debt itself can be rolled over from year to year (as it virtually always is), the exponentially growing interest tab is one of those mandatory budget items that taxpayers must pay. Predictions are that in the next decade, interest alone could add $1 trillion to the annual bill, an unsustainable tax burden.
To fund a project as massive as the Green New Deal, we need a mechanism that involves neither raising taxes nor adding to the federal debt; and such a mechanism is actually proposed in the US Green New Deal – a network of public banks. While little discussed in the US media, that alternative is being debated in Europe, where Green New Deal proposals have been on the table since 2008. European economists have had more time to think these initiatives through, and they are less hampered by labels like “socialist” and “capitalist,” which have long been integrated into their multiparty systems. 
Ellen Brown



Ann Coulter - Tax the rich tweet

Ann Coulter
@AnnCoulter


Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax.

YANIS VAROUFAKIS - Stagnant Capitalism

Left to its own, free market capitalism trends to stagnate, says Yanis Varoufakis, unless there is a stimulus, he adds.

The free marketeers believe there is a magic number for interest rates, which the free market will set, but in practice this never happens, as Varoufakis explains.

Time for MMT. 
A decade after the 2008 financial crisis, faith in markets' self-regulating abilities once again lies in tatters. There simply is no single real interest rate that would spur investors to funnel all existing savings into productive investments, and employers to hire all who wish to work at the prevailing wage.
Setting aside the magical interest rate’s non-existence, capitalism’s natural tendency to stagnation also reflects the failure of money markets to adjust. Free marketeers assume that all prices magically adjust until they reflect commodities’ relative scarcity. In reality, they do not. When investors learn that the Federal Reserve or the ECB is thinking of reversing its earlier intention to increase interest rates, they worry that the decision reflects a gloomy outlook regarding overall demand. So, rather than boosting investment, they reduce it. 
Instead of investing, they embark on more mergers and acquisitions, which strengthen the technostructure’s capacity to fix prices, lower wages, and spend their cash buying up their companies’ own shares to boost their bonuses. Consequently, excess savings increase further and prices fail to reflect relative scarcity or, to be more precise, the only scarcity that prices, wages, and interest rates end up reflecting is the scarcity of aggregate demand for goods, labor, and savings.
What is remarkable is how unaffected free marketeers are by the facts. When their dogmas crash on the shoals of reality, they weaponise the epithet “natural”. In the 1970s, they predicted that unemployment would disappear if inflation were subdued. When, in the 1980s, unemployment remained stubbornly high despite low inflation, they proclaimed that whatever unemployment rate prevailed must have been “natural”.

James K. Galbraith - Is there a better model to explain economics in the Trump era?

The mainstream economists are running scared, as more and more academics look into MMT and see that it is viable. If neoclassical and Austrian School economists shout loud enough together they are hoping it will go away, but it's a good working model ready to be tried, and then people will find out that they didn't understand economics, despite their prestigious awards and acclamation, and that they had wrecked our economy.

MMT is built on the work of John Maynard Keynes and Hyman Minsky. A core insight is that money in “modern States” — meaning, as Keynes wrote, for the “past four thousand years at least” – is defined by government. Money is created (mostly) by public spending and bank loans. Money is not something “out there” that the government must borrow from the public in order to function. It is created as government functions; only afterward, those who take payment may then trade the cash for a bond.

MMT is about the way the world actually works. It explains why big deficits do not drive up interest rates or “crowd out” private investment, and why big governments in big countries don’t go bankrupt.


Boston Globe

James K. Galbraith - Is there a better model to explain economics in the Trump era?

Wednesday, March 20, 2019

Thom Hartmann - Are Trump Supporters the Most Gullible People on Earth?


When I look around the internet and see what conservatives hate the most, it's welfare. 

Trump intends to cut over 200 $billion from welfare, but poor white people, most of whom voted for Trump, are the biggest beneficiaries of welfare. 


Back before most of us were born, President Harry Truman called out the GOP for lying to the American people, saying they were using “the best propaganda money can buy.”

Stephen Mihn - American Colonists Had a Modern Monetary Theory of Their Own

This article was tweeted by Stephanie Kelton and fits in well with my own theories with how MMT works, which I have printed here before.

I would like to add, that money does not create wealth, work does. I can create wealth by growing potatoes in my back garden, or some fruit, or by making things in my shed, or just by offering my labour. But what if there is not enough money in society because people don't want to take out anymore loans, or the banks don't want to lend to poor people, or because there is too much in debt in society, then transactions between people may become difficult as bartering is very cumbersome and inefficient?

So, there's plenty of wealth, but not enough money, and the gold standard would make things worse by making money even more scarce. Then, what's the solution: one is for the government to inject money into the system, and one way to do this would be for the government to create the money and spend it on government services. Then the wages of the public staff would filter out into the private sector enabling more work to be done.

The private sector would then expand and employ more staff who will do the work which pays for the public services. Therefore, the rest of society gets and excellent deal: low cost public services because people who were idle before are now in work contributing to society. And they won't need anymore government assistance either.

It's a great deal for everyone: the capitalists who run industry will get richer,  the underemployed will find work, and  those already in work get low cost public services. Conservatives will come onboard.

Eventually, the government will need to tax the money it put in back out again, but with so many more people in work, the tax burden will be shared more widely. 

 Hutchinson and the others devised an unusual solution to the problem. They issued what is generally recognized as the first fiat currency in the Western world. The twenty-shilling notes they printed cheekily claimed that they “shall be in value equal to money”  meaning that they were equivalent to silver coin.
This was, on the face of it, preposterous. Massachusetts had no ability within its borders or beyond to compel people to accept the money at face value. Despite its promise to redeem the money at a “convenient time,” the colonial treasury could not do so when it first issued the bills.
Dror Goldberg, the leading historian of this formative episode, summed up this venture: “Never before has history seen such a weak money.” Which begs the obvious question: Why would any self-respecting soldier accept it, or for that matter, a shopkeeper, merchant, or anyone else?
The answer lies with the other language that appeared on the bill. It declared that they “shall be accordingly accepted by the Treasurer, and receivers subordinate to him, in all public payments.” They could be used to pay taxes.
Hutchinson and his allies spent before they taxed. And it was precisely that fact  that the money they injected into the economy would then be withdrawn via taxation  that gave the money its value. And it worked. The money circulated in the colony, greasing the wheels of commerce, and then disappearing at tax time.
They didn’t realize it at the time, but this group of dour Puritans had effectively invented a crude forerunner of MMT, though they would have probably called it PMT (Puritan Monetary Theory). A government spent before it taxed, creating money in the process; this money fueled economic activity; and then taxation sucked the money out of the economy.
It was a brilliant invention, and as Goldberg notes, “The currency we use today is essentially the same as the money created in Massachusetts.” But before anyone reads this as an unqualified endorsement of MMT, consider the rest of the story.
Other colonies, mindful of the success of Massachusetts, also issued paper currency structured along the same lines. Sometimes it worked. But sometimes, the money lost its value. The reason lay with tax policies: It’s one thing to create money via government expenditures. But some colonies forgot to raise taxes high enough to pull it out of circulation.
Bloomberg

Tuesday, March 19, 2019

Adam Ramsey - Revealed: How dark money split the Tories’ ruling elite

More depressing stuff about the evil thugs who rule this world, and it's all about money. Steve Keen, Michael Hudson, and many other fine people said it was best for the UK to leave the E.U., but according to this article, that's not such a good idea.

The British ruling elite are split into two groups: the old industrialists who want easy access into Europe, and the military-industrial-financial-complex which wants closer ties with the U.S. and its war machine.

Boris Johnson says, "f*ck industry".

Yep, the money is in endless wars, mercenaries, money laundering, and dodgy finance. We're taking about pure evil again!

There’s the people who funnelled dark money into the Leave campaigns – the cash openDemocracy revealed, which went through former Scottish Tory golden boy Richard Cook to the DUP, and the cash which came through Arron Banks, via Gibraltar, and which we’ve spent much of the last two years tracing.
Then there’s the tangle of dark money funded think tanks – groups like the IEA and the Taxpayers’ Alliance, who have been toiling away for unknown clients, promoting a hard Brexit for more than a year now.
As my openDemocracy colleagues have revealed, they have unprecedented access to government at the moment.
This network works closely with America’s corporate funded neo-con world, including groups like the American Legislative Exchange Council (ALEC), who spend their time fighting against action on climate change or restrictions on gun sales, and are closely connected to both Trump’s White House, and British Trade Secretary Liam Fox.
Last year, for example, IEA director general Mark Littlewood toured the US, fundraising from wealthy donors and promising to “shred” EU regulations, according to a Greenpeace undercover investigation.
Littlewood’s colleague, Shanker Singham, was essentially the author of the famous “Malthouse compromise”.
One of the main groups Littlewood visited was agribusiness firms, keen to shape UK farming regulations after CAP.
Then there’s the military and the mercenaries. Brexit group Veterans for Britain had on its advisory board a string of powerful figures, including the former head of British Armed Forces, Field Marshal Lord Guthrie (who’s from just outside Dundee).
These people are connected to a string of private intelligence companies – Guthrie now works for the private intelligence agency Arcanum, whose chair has described Brexit as an “opportunity for American business”, while privatised military propaganda companies like Cambridge Analytica and AggregateIQ played contentious roles in the Brexit campaign.
These firms shouldn’t be underestimated – the UK is now the world centre for mercenary companies, not something it can say about many business sectors.
Though there is another notable one: money laundering.
And in two years investigating the Brexit elite, it’s very clear that most of the money launderers are desperate to leave the European regulated space.
More here - a chilling read.
The National

On the Ground in Venezueola vs. the Media Spectacle by PAUL COCHRANE

I don't know if their film will be seriously edited, or not shown at all, but these two journalists, who work for a major TV company, found Venezuela to be completely different to how it is portrayed in the Western media. Venezuelans are not hungry and now grow a lot of their own food. And as it's tropical, there's plenty of fruit around, much of it for free just hanging off trees.
They say one mistake Maduro made was to pay off Venezuela's different debt too early, in light of how the country was going to be economically attacked later on. They also mention how Columbia laundered its cocaine money through Venezuela which effected its currency, and how the Venezuelan elite tried to ruin its currency too. 
British photojournalist Alan Gignoux and Venezuelan journalist-filmmaker Carolina Graterol, both based in London, went to Venezuela for a month to shoot a documentary for a major global TV channel. They talked with journalist Paul Cochrane about the mainstream media’s portrayal of Venezuela compared to their experiences on the ground.
Paul Cochrane (PC): What were you doing in Venezuela, how long were you there and where did you go?
Alan Gignoux (AG): We went in June 2018 for a month to shoot a documentary; I can’t disclose what channels it will be on right now, but it should be on air soon. We visited the capital Caracas, Mérida (in the Andes), Cumaná (on the coast), and Ciudad Guayana (near the mouth of the Orinoco river).
PC: How did being in Venezuela compare to what you were seeing in Western media?
Carolina Graterol (CG): I am a journalist, I have family in Venezuela, and I knew the reality was very different from what the media is portraying, but still I was surprised. The first thing we noticed was the lack of poverty. Alan wanted to film homeless and poor people on the streets. I saw three people sleeping rough just this morning in London, but in Venezuela, we couldn’t find any, in big cities or towns. We wanted to interview them, but we couldn’t find them. It is because of multi disciplinary programmes run by the government, with social services working to get children off the streets, or returned to their families. The programme has been going on for a long time but I hadn’t realized how effective it was.
PC: Alan, what surprised you?
AG: We have to be realistic. Things look worn down and tired. There is food, there are private restaurants and cafes open, and you could feel the economic crisis kicking in but poverty is not as bad as what I’ve seen in Brazil or Colombia, where there are lots of street children. Venezuela doesn’t seem to have a homeless problem, and the favelas have running water and electricity. The extreme poverty didn’t seem as bad as in other South American countries. People told me before going I should be worried about crime, but we worked with a lady from El Salvador, and she said Venezuela was easy compared to her country, where there are security guards with machine guns outside coffee shops. They also say a lot of Venezuelan criminals left as there’s not that much to rob, with better pickings in Argentina, Chile or wherever.
CounterPunch 


Dr Lisa Johnson - The Psychology Of Getting Julian Assange, Part 1: What’s Torture Got To Do With It?



Dr Lisa Johnson - The Psychology Of Getting Julian Assange, Part 1: What’s Torture Got To Do With It?

In the first part of a special New Matilda investigative series, clinical psychologist Dr Lissa Johnson exposes the ‘science’ behind the hunt for Julian Assange, and the tactics those in power use to keep you in the dark.

New Maltida 



Asa - Winstanley - Watch the film Labour MPs didn’t want you to see

The official online debut of the new film WitchHunt has arrived, and you can watch the entire thing in the video above.
The film has faced severe censorship, including a bomb threat which successfully canceled one preview.
It tells a story about Israel’s alliance with the global far-right that Israel’s supporters would rather you not hear.
Acclaimed British directors Mike Leigh and Peter Kosminsky have praised WitchHunt.
Leigh said it “exposes with chilling accuracy the terrifying threat that now confronts democracy.”
Kosminsky said it “packs a powerful punch” and is “telling a story we just aren’t hearing at the moment.”
Last month, left-wing member of Parliament Chris Williamson was suspended as a Labour Party member – after a long campaign by Israel lobby groups against him.
Williamson had booked a room in Parliament on behalf of the group Jewish Voice for Labour so that WitchHunt could be screened.
But it was canceled after the Labour leadership came under severe pressure by right-wing and pro-Israel Labour MPs.
Unless Williamson’s Labour suspension is reversed before the next election, the move will make it hard for him to return as an MP.
Video embedded 
The Electronic Intifada

Monday, March 18, 2019

Friday, March 15, 2019

James K. Galbraith — Modern Monetary Realism

Kenneth Rogoff's criticism of Modern Monetary Theory assumes that MMT advocates don't care about budget deficits or the independence of the US Federal Reserve. But these assumptions are wide of the mark, and Rogoff himself sometimes undermines his own arguments.
Project Syndicate
Modern Monetary Realism
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin

Thursday, March 14, 2019

Dirk Ehnts — A simple macroeconomic model based on Modern Monetary Theory (and published in 2014 in a peer-reviewed journal

There is a lot of talk about how MMT would lack a “model”. Some commentators on Twitter even claim that MMT would have “no model” and that they just created one themselves. Others believe that stock-flow consistent (SFC) models are basically SFC models. All of that is not quite right!
I think that the only model that can really claim to be a “MMT model” is the one I published in a peer-reviewed journal in 2014. The article in the International Journal of Pluralism and Economics Education (IJPEE) was named “A simple macroeconomic model of a currency union with endogenous money and saving-investment imbalances” (link). With hindsight, it was not a good title, since there is nothing specific about “currency union” or (private!) “saving-investment imbalances” in the model. It is really a replacement of the IS/LM-model and nothing else. The working paper version is accessible freely and was written in 2012 (link). During that year, I was at the Hyman-Minsky summer school at the Levy Institute of Bard College, NY. I showed the model to Randy Wray and Scott Fullwiler and some other people and they all liked it. Given that my model has the sectoral balances at its core that did not surprise me.
Since the model has not gotten a lot of attention so far – I presented it at University of Cassino in Italy after being invited there to spend a week with SFC modeler Gennaro Zezza and in some other place – I would like to use this blog post to explain the model briefly. Of course, the IJPEE paper is the long version. (The working paper contains some minor flaws that had been fixed in the journal version.) For those who can’t wait to see it, you can download a spreadsheet file of the ISMY model here. It has all the equations and is solvable by toying around with it....
econoblog 101

Bill Mitchell — Travelling across the world today to escape the famine that MMT will cause

For now a brief excursion into the Dutch press, which has decided to join the wannabees attacking Modern Monetary Theory (MMT). The scenario outlined in the article I read earlier today takes the criticisms to a new level. We are no longer worried about hyperinflation, crowding out, sky high interest rates. No, things are likely to get much worse than that. If any government takes on MMT (noting it is not a regime that can be taken on) to operationalise a Green New Deal then tax rates will have to rise to around 100 per cent, households and firms will stop working and producing, and a massive famine in possible where millions die. Sort of Project Fear stuff that has marked the Remain position in the Brexit debate!
Just when you thought it couldn't get any more ridiculous. TPTB becoming unhinged over MMT?

Bill Mitchell – billy blog
Travelling across the world today to escape the famine that MMT will cause
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity
(CofFEE), at University of Newcastle, NSW, Australia

See also
My guess is that every prominent economist that wants to mouth off about Modern Monetary Theory (MMT) has already said their piece, and the arguments that swamped my Twitter feed may finally go back to their earlier levels. It is abundantly clear that the prominent New Keynesians who attacked MMT want it to disappear, but that seems unlikely (although I am obviously biased in that assessment). From the perspective of the history of economic theory, the neoclassical reaction was following past form, and we can expect the same patterns in the future.
Bond Economics
What Did We Learn From The MMT Maelstrom?
Brian Romanchuk

Wednesday, March 13, 2019

Rob Larson — Capitalist Freedom Is a Farce

Milton Friedman was wrong. Capitalism doesn't foster freedom — it produces autocratic workplaces and tyrannical billionaires....
Another paradox of liberalism that arises from economic liberalism and affects social and political liberalism, too.

Jacobin
Capitalist Freedom Is a Farce
Rob Larson

Renegade Inc: Myth Busting the European Dream

I once believed in the EU as I loved its social democracy and I would argue in defence of it with everyone. But in the end I voted to leave the EU and my friends never forgave me because they still had an old fashioned view of Europe as the great social democracy.

Ross Ashcroft was always pro the EU up to now but I think he has changed his mind after this interview with David Rose who says that the EU has been destroyed by neoliberalism. The left politicians gave up the fight and decided that nice jobs within the corporations and fiancee would do them just fine.  Now the right are leading in the polls but  finance would prefer that to the left, and so people are being hoodwinked if they think the right will change things all that much.

David Rose asks how did mortgages end up taking half of people's wages, which made them poor and wrecked the economy. I remember getting my first flat (apartment) when I was 26 years old and my active social life got wrecked over night as I no money left. Well, you have to move out sometime so I had to lump it, but I suppose I was excited about owning my own home too, except I have never been all that wealthy being a home owner. What a life hey, you only live once and there I am always skint, just getting by. I was skilled and yet I was poor.

The middle class has collapsed, says David Rose, as financialisation has hollowed it out. And yet millions of British people today feel wealthy because their home are worth a fortune - on paper! But how many hours at work did they have to do to buy them, and how much did their families go without. Is that leading a wealthy life? Personally, I like to buy everything cheap, including my house, and so it might not be worth much now, but I wouldn't have paid much for it either, and that's fine by me.

Before moving out, I could figure out the value of things like a pint of beer, or some a hi-fi, a car, a holiday, a phone, a calculator, a meal out, etc, but when I bought a one bed-roomed flat it was a massive leap in price in relation to everything else, and it didn't make to me sense to me in value for money terms. And renting a flat cost the same, which baffled me too,

The average German is not well off anymore, says David Rose, and in fact they are poorer now than 15 years ago, but Germany commands Europe. He says the whole European Union is corrupt and what the bankers did to Greece was a crime. Nowadays financial warfare is used to conquer nations and it is much cheaper to do too.

The whole of the West has gone wrong and greed has hollowed it out. Now China zooms ahead and the U.S. is looking for war to bring them down.  I thought we were intelligent creatures and that we would just invent better technology to make ourselves richer.

After the devastation and hell of WW2 I thought wars were over, but now they say that a nuclear war is winnable. It's mad. What kind of crazy risk is that just to grab few more billions that won't increase their standard of living?




   


Umair Haque — The Birth of Predatory Capitalism—How the Free World Took Four Giant Leaps to Self-Destruction

A (successful) American politician who cries: “God is a white supremacist!”Neo-nazis in the Bundestag. The extreme right rising in Italy. Poland’s authoritarians purging its Supreme Court .
How did we get here? To a world where the forces of intolerance and indecency are on the rise, and those of decency, wisdom, and civilization are waning? Is something like a new Dark Age falling?
I think it has everything to do with predatory capitalism, and so I want to tell you a story. Of how it came to be born, in four steps, which span three decades.
Eudaimonia 
Umair Haque

Lizzy Francis - What Is Modern Monetary Theory? An MMT Theorist Explains

A resurgence in a popular economic theory might make it possible for Universal Child Care and other programs to actually see the light of day


MMT makes a distinction between the issuer of the currency, which is the federal government, and the users of the currency, which is everybody else. States, municipalities, us, individuals, families, households, and companies, and the rest of the world. Once we look at that distinction, it becomes illogical to say the government needs to borrow money in order to spend it. In order for the U.S. dollar to exist in circulation in the economy, it must come from the only source: the federal government.
What do you mean?
The federal government spends money into existence. That’s what allows for the circulation of currency in the system, so that the rest of us can use, spend, borrow, and lend it to each other and use it to pay taxes back to the government. So, in MMT, first, the government spends, then taxes some of it back. Then the question becomes: if taxation doesn’t fund government programs, what’s the purpose of taxation?
MMT’s explanation: Because taxation is required for everyone, it creates demand for an otherwise useless piece of paper. The US dollar is not backed by gold or silver. So that in and of itself gives it value. It’s required via the coercive authority of the government. It’s required for the payment of taxes.
Okay, so taxation gives money value, but it isn’t required for enacting new programs that would require a lot of federal spending. So, why are taxes still important in the MMT framework?
Taxation also withdraws money from the system. So, yes, the government can spend anything it wants, but that would put too much money in the system, which would allow consumers to go on a shopping spree and could cause inflation. So taxation takes some of that money out of circulation. It can tame inflation.
What’s stopping us from adopting an MMT mindset and just going right into funding a huge social program right now, tomorrow?
Inflation is the limit. Let’s say, tomorrow, we decide as a nation that dental care is a human right, and we are going to provide it to every person in this country. Anyone can call up their dentist and schedule an appointment without insurance. The government is going to pay for it. I call my dentist and say, ‘I’d like to schedule an appointment.’ They say, ‘Sure. We’ll put you on the list and we’ll see you in 2035.’ And I say, ‘Why?’ They’ll say: ‘Because everyone is calling and everyone is scheduling because they were excluded before that.’
What good does it do for us, having the government pay for dental care, if we don’t actually have the physical resources and productive capacity to provide those things? The dentist will say, ‘By the way, we have this premium platinum service where you pay $7,000 and we put you in an elite club and you can schedule your appointment next week.’
If you have a shortage of productive capacity, and a huge amount of demand, regardless of whether we have the money or not, that will cause inflation. MMT says let’s increase the productive capacity of all the things that we care about: renewable energy, medical services, whatever the national priorities are. The good thing is those resources are producible. Dentists can be trained.

The Grayzone - Why a Wall Street banker joined Venezuela's revolution

I'm inspired!


In Caracas, Ben Norton interviewed Venezuelan financial analyst Juan Carlos Peraza, who gave up a lucrative job as a Wall Street banker and returned home to support Hugo Chávez and the Bolivarian Revolution.

Gilad Atzman - Nazis didn't like Jazz, The Corbynites are following their path

You can see that Gilad Atzman is under enormous pressure. Poor guy, he's only trying to do the right thing. But now Corbyn has capitulated too.



In the last three years we saw the Labour party suspending and harassing its own party members for thought crimes. Now the purge is escalating, the party is now terrorising private citizens. I seem to be their prime target. My crime, I told the truth...

Whitney Webb - ‘Lights out!’ Did Trump and his neocons recycle Bush-era plan to knock out Venezuela’s power grid?


Even as the Venezuelan government blamed the power outage on U.S.-led ‘sabotage,’ the U.S. has long had a plan on the books for targeting the civilian power grid of adversarial nations.


CARACAS, Venezuela—For nearly a week, much of Venezuela has been without power, bringing the country’s embattled economy to a near standstill. The outage saw U.S. officials and politicians blame the Venezuelan government for the crisis while officials in Caracas accusedthe U.S. of conducting “sabotage” and launching cyberattacks that targeted its civilian power grid as well as of employing saboteurs within Venezuela.
Although many mainstream media outlets have echoed the official U.S. government response, some journalists have strayed from the pack. One notable example is Kalev Leetaru, who wrote at Forbes that “the United States remotely interfering with its [Venezuela’s] power grid is actually quite realistic.”
Leetaru also noted that “timing such an outage to occur at a moment of societal upheaval in a way that delegitimizes the current government, exactly as a government-in-waiting has presented itself as a ready alternative, is actually one of the tactics” he had previously explored in a 2015 article detailing U.S. government hybrid warfare tactics “to weaken an adversary prior to conventional invasion or to forcibly and deniably effect a transition in a foreign government.”
In addition to Leetaru’s claims, others have asserted U.S. government involvement after U.S. Senator Marco Rubio (R-FL), who is deeply involved in Trump’s Venezuela policy, appeared to have prior knowledge that the blackouts would occur when he tweeted about them only three minutes after they had begun.
Intrepid Report

Eric Zuesse - Syria Accuses US of Stealing 40+ Tons of Gold



How imperialism works.

And as we are the good guys we can sleep soundly at night knowing our honourable leaders are making the world safe for is by getting the all bad guys, like Maduro - who is sitting on all that oil wasting it giving it to peasants.

Information from local sources said that US army helicopters have already transported the gold bullions under cover of darkness on Sunday [February 24th], before transporting them to the United States.
 The sources said that tens of tons that Daesh had been keeping in their last hotbed in al-Baghouz area in Deir Ezzor countryside have been handed to the Americans, adding up to other tons of gold that Americans have found in other hideouts for Daesh, making the total amount of gold taken by the Americans to the US around 50 tons, leaving only scraps for the SDF [Kurdish] militias that serve them [the US operation]. 
Recently, sources said that the area where Daesh leaders and members have barricaded themselves in, contains around 40 tons of gold and tens of millions of dollars.
So, regardless of whether the US Government uses jihadists as its proxy-forces, or uses fascists as its proxy-forces, it grabs the gold — and grabs the oil, and takes whatever else it can.
This is today’s form of imperialism. Grab what you can, and run. And call it ‘fighting for freedom and democracy and human rights and against corruption’. And the imperial regime’s allies watch in amazement, as they take their respective cuts of the loot. That’s the deal, and they call it ‘fighting for freedom and democracy and human rights and against corruption around the world’.
That’s the way it works. International gangland. That’s the reality, while most of the public think it’s instead really “fighting for freedom and democracy and human rights and against corruption around the world.” For example, as RT reported on Sunday, March 3rd, about John Bolton’s effort at regime-change in Venezuela, Bolton said: “I’d like to see as broad a coalition as we can put together to replace Maduro, to replace the whole corrupt regime,’ Bolton told CNN’s Jake Tapper.”
Trump’s regime wants to bring clean and democratic government to the poor Venezuelans, just like Bush’s did to the Iraqis, and Obama’s did to the Libyans and to the Syrians and to the Ukrainians. And Trump, who pretends to oppose Obama’s regime-change policies, alternately expands them and shrinks them. Though he’s slightly different from Obama on domestic policies, he never, as the US President, condemn’s any of his predecessors’ many coups and invasions, all of which were disasters for everybody except America’s and allies’ billionaires. They’re all in on the take

Tyler Durden - Putin Now Thinks Western Elites Are "Swine"


And so, in last month’s address to Russia’s National Assembly Putin sounded note of complete and utter disdain and contempt for his “Western partners,” as he has usually called them. This time he called them “swine.”


The address contained almost no bad news and quite a lot of very good news. Russia’s financial reserves are more than sufficient to cover its entire external debt, both public and private. Non-energy-resource exports are booming to such an extent that Russia no longer needs oil and gas exports to maintain a positive balance of trade. It has become largely immune to Western sanctions. Eurasian integration projects are going extremely well. Russian government’s investments in industry are paying dividends.
The government has amassed vast amounts of capital which it will now spend on domestic programs designed to benefit the people, to help Russians live longer, healthier lives and have more children. “More children—lower taxes” was one of the catchier slogans.

This was what most of the address was about: eradication of remaining poverty; low, subsidized mortgage rates for families with two or more children; pensions indexed to inflation above and beyond the official minimal income levels (corrected and paid out retroactively); high-speed internet for each and every school; universal access to health care through a network of rural clinics; several new world-class oncology clinics; support for tech start-ups; a “social contract” program that helps people start small businesses; another program called “ticket to the future” that allows sixth-graders to choose a career path that includes directed study programs, mentorships and apprenticeships; lots of new infrastructure projects such as the soon-to-be-opened Autobahn between Moscow and St. Petersburg, revamped trash collection and recycling and major air pollution reductions in a dozen major cities; the list goes on and on.




Tuesday, March 12, 2019

Max Blumenthal — US Regime Change Blueprint Proposed Venezuelan Electricity Blackouts as ‘Watershed Event’ for ‘Galvanizing Public Unrest’

The US-funded CANVAS organization that trained Juan Guaido and his allies produced a 2010 memo on exploiting electricity outages and urged the opposition “to take advantage of the situation…towards their needs”
Hybrid warfare?

The Gray Zone
US Regime Change Blueprint Proposed Venezuelan Electricity Blackouts as ‘Watershed Event’ for ‘Galvanizing Public Unrest’
Max Blumenthal

Caroline Alexander and Amy Teibel — Netanyahu Tells Arab Citizens They’re Not Real Israelis

The prime minister has made it clear that Israel is not a state of all its citizens.
So there you have it.

Bloomberg
Netanyahu Tells Arab Citizens They’re Not Real Israelis
Caroline Alexander and Amy Teibel

MMT Links — 12 Mar 2019 – 1st UPDATE


Firing back at big guns taking pot shots at MMT.

The Hill
Setting the record straight on GND and Modern Monetary Theory
L. Randall Wray | Professor of Economics, Bard College

Multiplier Effect
Big Guns Shooting Holes in the Sky
Jörg Bibow | Associate Professor of Economics at Skidmore College and Research Associate at the Levy Economics Institute of Bard College

New Economic Perspectives
MMT Takes Center Stage – and Orthodox Economists Freak
William K. Black | Associate Professor of Economics and Law, UMKC

Mario Seccareccia, Professor of Economics, University of Ottawa and Marc Lavoie. Professor of Economics, University of Ottawa

UPDATE 1

New Economic Perspectives
MMT Responds to Brad DeLong’s Challenge
L. Randall Wray | Professor of Economics, Bard College


Another fictional characterisation of MMT finishes in total confusion
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia