Saturday, November 30, 2013

Since the EMU Was Such A Successful Disaster: East African Trade Bloc Approves Monetary Union Deal

(commentary posted by Roger Erickson)

(hat tip Pedro da Costa ‏@pdacosta)

"The leaders of five East African countries signed a protocol on Saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade."
"In a monetary union, the absence of currency risk provides a greater incentive to trade"  [they claim*]
"Adjusting to a single monetary and exchange rate policy is an inescapable feature of monetary union ... but this will take time and may be painful for some," [a rube, ... er 'spokesman'] said, referring to the fact that some countries may struggle to meet agreed benchmarks.


Deja vu? Corrupt Neo-Liberals in corrupt countries perceive familiarity as a positive? Does pegging allowable looting levels to "banking stability" constitute a felony yet?

*Standard disclaimers apply. Euro experiences may diverge from the claims made in advance. See your local 1% for protection racket access.

Connie Cass — Poll: Americans Less Trusting Of Each Other

These days, only one-third of Americans say most people can be trusted. Half felt that way in 1972, when the General Social Survey first asked the question....

Does it matter that Americans are suspicious of one another? Yes, say worried political and social scientists.
What's known as "social trust" brings good things.
A society where it's easier to compromise or make a deal. Where people are willing to work with those who are different from them for the common good. Where trust appears to promote economic growth.

Distrust, on the other hand, seems to encourage corruption. At the least, it diverts energy to counting change, drawing up 100-page legal contracts and building gated communities.
Even the rancor and gridlock in politics might stem from the effects of an increasingly distrustful citizenry, said April K. Clark, a Purdue University political scientist and public opinion researcher.
"It's like the rules of the game," Clark said. "When trust is low, the way we react and behave with each other becomes less civil."...
Trust has declined as the gap between the nation's rich and poor gapes ever wider, Uslaner says, and more and more Americans feel shut out. They've lost their sense of a shared fate. Tellingly, trust rises with wealth.
"People who believe the world is a good place and it's going to get better and you can help make it better, they will be trusting," Uslaner said. "If you believe it's dark and driven by outside forces you can't control, you will be a mistruster."
The Huffington Post
Poll Reveals Americans Don't Trust Each Other Anymore
Connie Cass | AP

Gennaro Zezza — Internal Devaluation in Greece

Summing up, internal devaluation has so far had negligible effects on Greek exports, while the fall in the purchasing power of wages has added to the fall in domestic demand generated by fiscal austerity, and thereby contributed to the unprecedented crisis in Greece.
Our July projections have so far been on track, and we predict that even if prices keep falling, as advocated by the troika plan, the response of the current account will be too slow to compensate for fiscal austerity. Strategies to increase employment and income are urgently needed.
Multiplier Effect
Internal Devaluation in Greece
Gennaro Zezza | Associate Professor in Economics at the Department of Economics of the University of Cassino, Italy, and a Research Scholar at the Levy Institute of Economics

Lord Keynes — Why Hayek’s Theory of Prices and Knowledge is Flawed

Frederic S. Lee explains in the passage below from insights by the British economist George Richardson....
Social Democracy For The 21St Century: A Post Keynesian Perspective
Why Hayek’s Theory of Prices and Knowledge is Flawed
Lord Keynes

Greg Mankiw — The Pope's Rhetoric

Greg Mankiw weighs in on Evangelii Guadium — quite predictably, of course. You don't need to read it to know how he feels: "Capitalism" has raised global GDP more than any alternative ever did, so this alone excuses anything else that happened. Even Karl Marx attributed that positive attribute to capitalism, while documenting its excesses. Mankiw argues to the contrary that free market capitalism has led to economic growth and economic growth has resulted in a more moral society.

Greg Mankiw's Blog
N. Gregory Mankiw | Professor of Economics at Harvard University

Friday, November 29, 2013

Arturo Garcia — ‘They’re blackmailing us’: Online retailer bills Utah couple $3,500 for negative review (via Raw Story )

‘They’re blackmailing us’: Online retailer bills Utah couple $3,500 for negative review (via Raw Story )
A Utah couple is facing an uphill legal battle after being slapped with a $3,500 fine by an online retailer for posting a negative review of the company years after it failed to ship the products they ordered. CNN reported on Friday that John and Jen…

Jan Kregel: The Continuing Risk of Derivatives - Interview with Marshall Auerback [Video]

Jan Kregel: The Continuing Risk of Derivatives

Steve Keen — The International Financial Order

I was invited to give a speech on that topic to the Sec­ond Meet­ing of Min­is­ters of Finance of the CELAC in Quito, Ecuador today (Novem­ber 29 2013). In it I out­lined Keynes’s Ban­cor pro­posal from Bret­ton Woods, explained why White’s plan was adopted instead, sup­ported the pro­posal by Zhou Xiaochuan, the Gov­er­nor of the Cen­tral Bank of China, to insti­tute Keynes’s scheme, and pro­posed that Latin Amer­ica could try a regional ver­sion of the same via the Bank of the South.
The International Financial Order
Steve Keen

"The Poor" in the Greek Scriputures

With the recent release by the Pope and the Vatican that focused on the subject of "the poor" among us, and the resulting debate over these economic issues, perhaps it would be a good time to review the Greek scriptures to see how the actual word of God refers to and uses this human cohort that is termed the "poor ones".

First principles:  What is this word and what does it mean?

The Greek word commonly translated into the English word "poor" is ptochos, which is best translated in personal form as a person "lacking means of subsistence", lacking economic flow, rather than a person who is lacking an economic stock measure of wealth or possessions.

Human subsistence requires flow.  Even a person with great stock measures of wealth or possessions will have to, as we would term it today "liquidate" these economic stocks in order to create a flow that can then sustain a human being.   For instance you can't eat property, common stock certificates, or precious metals (although some do try RIP).

With this definition of a human being termed ptochos, or a "poor-one", as one of our fellow human beings being cut-off or separated from this sustaining flow, here are all of the occurrences of this word in the Greek scriptures in some local context in the scripture:

The word "poor" appears 5 times in Matthew:

1 And, at His being seated, His disciples came to Him.2 And opening His mouth, He taught them, saying,3 "Happy, in spirit, are the poor, for theirs is the kingdom of the heavens.  Mat 5
Jesus said to them, "Go, report to John what you are hearing and observing:5 The blind are receiving sight, and the lame are walking; lepers are being cleansed, and the deaf are hearing, and the dead are being roused, and to the poor the evangel is being brought.  Mat 11
20 The youth is saying to Him, "These all I maintain. In what am I still deficient?"21 Jesus averred to him, "If you are wanting to be perfect, go, sell your possessions and be giving to the poor, and you will be having treasure in the heavens. And hither! Follow Me."22 Now, hearing this word, the youth came away sorrowing, for he had many acquisitions.  Mat 19
6 Now at Jesus' coming to be in Bethany, in the house of Simon the leper,7 a woman came to Him having an alabaster vase of attar, very precious, and she pours it down on His head at His lying back at table.8 Now perceiving it, His disciples resent it, saying, "Why this destruction?9 For this could be disposed of for much and given to the poor."10 Now, knowing it, Jesus said to them, "Why are you affording the woman weariness? For she works an ideal work for Me.11 For you always have the poor with you, yet Me you have not always.  Mat 26

5 times in Mark:

19 With the precepts you are acquainted: You should not be murdering. You should not be committing adultery. You should not be stealing. You should not be testifying falsely. You should not be cheating. 'Be honoring your father and mother.'"
20 Now he averred to Him, "Teacher, all these I maintain from my youth."
21 Now Jesus, looking at him, loves him, and said to him, "Still one thing you are wanting. Go. Whatever you have, sell, and be giving to the poor, and you will be having treasure in heaven. And hither! Follow Me, picking up the cross."  Mark 10 
41 And Jesus, being seated facing the treasury, beheld how the throng is casting the coppers into the treasury. And many rich cast in much.
42 And one woman, a poor widow, coming, cast in two mites, which is a quadrans.
43 And, calling His disciples to Him, He said to them, "Verily, I am saying to you that this poor widow casts in more than all who are casting into the treasury.
44 For all cast out of their superfluity, yet she, out of her want, cast in all, as much as she had -- her whole livelihood."  Mark 12 
"For what has this destruction of the attar occurred?
5 For this attar could have been disposed of for over three hundred denarii, and given to the poor." And they muttered against her.
6 Yet Jesus said, "Leave her! Why are you affording her weariness? For it is an ideal work she works in Me.
7 For you always have the poor with you, and whenever you may be wanting, you can always do well to them, yet Me you have not always.  Mark 

(I have to provide some commentary here to point out that with the Lord's words here:  "and whenever you may be wanting, you can always do well to them"  He is letting His disciples know that we humans have been granted ABSOLUTE AUTHORITY to be correcting these flows at any time we are led to so decide. This economic adjustment is not the most important take away from the lesson about what has occurred before them.  It should be a minor issue for us, an after thought really. "Helping the poor" is NOT the priority take away here and really never is in any of these scriptures I am excerpting, it is implied that the real issue the Lord is teaching about is BIGGER than just helping these "poor ones".)

10 times in Luke:

17 And handed to Him was a scroll of the prophet Isaiah, and, opening the scroll, He found the place where it was written,
18 "The spirit of the Lord is on Me, On account of which He anoints Me to bring the evangel to the poor. He has commissioned Me to heal the crushed heart, To herald to captives a pardon, And to the blind the receiving of sight; To dispatch the oppressed with a pardon.
19 To herald an acceptable year of the Lord..."  Luke 4 
19 And the entire throng sought to touch Him, for power came out of Him, and He healed all.
20 And He, lifting up His eyes to His disciples, said "Happy are the poor, for yours is the kingdom of God.  Luke 6 
21 In that hour He cures many of diseases and scourges and wicked spirits, and to many blind He graciously grants sight.
22 And answering, Jesus said to them, "Go, report to John what you perceived and hear: that the blind are receiving sight, the lame are walking, lepers are being cleansed, and the deaf are hearing, the dead are being roused, and to the poor the evangel is being brought.  Luke 7 
12 Now He said to him also who has invited Him, "Whenever you may be making a luncheon or a dinner, do not be summoning your friends, nor yet your brothers, nor yet your relatives, nor yet rich neighbors, lest at some time they also should be inviting you in return, and repayment may come to you.
13 But, whenever you may be making a reception, invite the poor, the cripples, the lame, the blind,
14 and happy will you be, for they have nothing to repay you, for it will be repaid you in the resurrection of the just."  Luke 14 
21 "And, coming along, the slave reports these things to his lord. Then being indignant, the householder said to his slave, 'Come out quickly into the squares and streets of the city, and lead in here the poor, and cripples, and blind, and lame.'  Luke 14
19 "Now a certain man was rich and he dressed in purple and cambric, daily making merry splendidly.
20 Now there was a certain poor man named Lazarus, who had been cast at his portal, having ulcers,
21 and yearning to be satisfied from the scraps which are falling from the rich man's table. But the curs also, coming, licked his ulcers.
22 Now the poor man came to die and he is carried away by the messengers into Abraham's bosom.  Luke 17 
22 Now hearing this, Jesus said to him, "Still one thing you are lacking. All, whatever you have, sell, and distribute to the poor, and you will be having treasure in the heavens. And hither! Follow Me."  Luke 18 
7 And perceiving it, all grumbled, saying that with a man who is a sinner He entered to put up for the night.
8 Now standing, Zaccheus said to the Lord, "Lo! the half of my possessions, Lord, I am giving to the poor! And if from anyone I get anything by blackmail, I am giving back fourfold."
9 Now Jesus said to him that "Today salvation came to this home, forasmuch as he also is a son of Abraham.
10 For the Son of Mankind came to seek and to save the lost."  Luke 19 
2 Yet He perceived a certain widow also, a drudge, casting there two mites.
3 And He said, "Truly, I am saying to you that this poor widow casts in more than all.
4 For all these cast out of their superfluity into the approach presents of God, yet this woman, out of her want, casts in all the livelihood which she had."  Luke 21

4 times in John:

4 Now Judas of Simon Iscariot, one of His disciples (who is about to give Him up) is saying,5 "Wherefore was not this attar disposed of for three hundred denarii and given to the poor?"6 Now this he said, not that he cared concerning the poor, but that he was a thief, having the coffer also, and bore what is cast into it.7 Jesus, then, said, "Let her be, that she should be keeping it for the day of My burial.8 For the poor you have always with you, yet Me you have not always."  John 12 

26 Jesus, then, is answering and saying, "He it is to whom I, dipping in the morsel, shall be handing it." Dipping in the morsel, then, He is taking it and giving it to Judas, son of Simon Iscariot.27 And after the morsel, then, Satan entered into that man. Jesus, then, is saying to him, "What you are doing, do more quickly."28 Now no one of those lying back at table knew to what purpose He said this to him.29 For some supposed, since Judas had the coffer, that Jesus is saying to him, "Buy what we have need of for the festival," or, that he may be giving something to the poor.30 Getting the morsel, then, that man came out straightway.   John 13

The word "poor" does not appear in Acts of the Apostles

One time in Paul's letter to the Roman's:

25 yet now I am going to Jerusalem, dispensing to the saints.26 For it delights Macedonia and Achaia to make some contribution for the poor of the saints who are in Jerusalem.27 For they are delighted, and they are their debtors, for if the nations participate in their spiritual things, they ought to minister to them in fleshly things also.  Romans 15

The word "poor" does not appear in 1 Corinthians.

Two times in 2 Corinthians:
the word of truth, in the power of God, through the implements of righteousness of the right hand and of the left,8 through glory and dishonor, through defamation and renown, as deceivers and true,9 as unknown and recognized, as dying, and lo! we are living, as disciplined and not put to death,10 as sorrowing, yet ever rejoicing, as poor, yet enriching many, as having nothing, and retaining all.2 Cor 6
9 For you know the grace of our Lord Jesus Christ, that, being rich, because of you He became poor, that you, by His poverty, should be rich.  2 Cor 8

Two times in Paul's "Galatians":

9 and, knowing the grace which is being given to me, James and Cephas and John, who are supposed to be pillars, give to me and Barnabas the right hand of fellowship, that we, indeed, are to be for the nations, yet they for the Circumcision-
10 only that we may be remembering the poor, which same thing I endeavor also to do.  Gal 2
9 Yet now, knowing God, yet rather being known by God, how are you turning back again to the infirm and poor elements for which you want to slave again anew? Gal 4

The word "poor" does not appear in Paul's "Ephesians".

The word "poor" does not appear in Paul's "Philippians".

The word "poor" does not appear in Paul's "Colossians".

The word "poor" does not appear in either of Paul's letters to "Thessalonians".

The word "poor" does not appear in either of Paul's letters to "Timothy".

The word "poor" does not appear in of Paul's letter to "Titus" or "Philemon".

The word "poor" does not appear in the epistle to "Hebrews".

4 times in the letter from James to the 12 tribes in the dispersion:

2 For if there should be entering into your synagogue a man with a gold ring, in splendid attire, yet there should be entering a poor man also, in filthy attire,
3 and you should be looking on the one wearing the splendid attire and be saying, "You sit ideally here," and to the poor one be saying, "You stand there," or, "Sit here under my footstool,"
4 were you not discriminating among yourselves, and did you not become judges with wicked reasonings?
5 Hear, my beloved brethren! Does not God choose the poor in the world, rich in faith and enjoyers of the allotment of the kingdom which He promises to those who are loving Him?
6 Yet you dishonor the poor one. Are not the rich tyrannizing over you? And they are drawing you to tribunals.
7 Are not they blaspheming the ideal name which is being invoked over you?  James 2

The word "poor" does not appear in either of the 2 letters from Peter to the dispersion.

The word "poor" does not appear in any of the 3 epistles of John or the epistle of Jude.

2 times in the book of "Revelation" or "Unveiling":

17 Seeing that you are saying that 'Rich am I!' and 'Rich have I become, and of nothing have I need!' and you are not aware that you are wretched and forlorn and poor and blind and naked,
18 I am advising you to buy of Me gold refined by the fire, that you should be rich, and white garments, that you may be clothed and the shame of your nakedness may not be made manifest, and eye-salve to anoint your eyes, that you may be observing.  Rev 3 
16 And it is causing all, the small and the great, and the rich and the poor, and the free and the slaves, that they may be giving them an emblem on their right hand, or on their forehead,
17 and that no one may be able to buy or sell except the one having the emblem of the wild beast, or its name, or the number of its name.  Rev 13

That is all the occurrences of the the word "poor" or ptochos in the Greek scriptures.

Generally, the context of the use of this word "poor" to identify a cohort of our fellow members of mankind is NOT to inform us that these "the poor" among us should be receiving a conscience soothing, self-aggrandizing, one-time economic adjustment or 'redistibution' to help these "the poor" among us, i.e. those among us who are prevented access to a robust "means of subsistence"; but rather, the poor should be receiving a continuous economic justice, a sustained economic flow, for other, more glorious purposes.

Purposes that remain hidden and unrevealed in the present popular debate around this economic issue that we witness within the overwhelming majority of humanity that is blind to the authority that WE can see.

An authority of mankind that can guaranty access to a never ending, robust means of subsistence to all of our fellow man... but for HIS glory... NOT ours.

Pope Francis — Evangelii Gaudium, 56

Conservatives seem to have caught their breath and are now attacking the Apostolic Exhortation of Pope Francis as "Marxist." Here is the passage in especially in question.
56. While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule. — Evangelii Gaudium
Marxist? Really?

Travis Gettys — Muslim scholar Reza Aslan: Rush Limbaugh and Sarah Palin would call Jesus a ‘Marxist’ (via Raw Story )

Muslim scholar Reza Aslan: Rush Limbaugh and Sarah Palin would call Jesus a ‘Marxist’ (via Raw Story )
Religious scholar Reza Aslan said American conservatives are basing their criticism of recent comments made by Pope Francis on a “profoundly unhistorical view of Jesus.” The pontiff has ruffled the feathers of U.S. conservatives with comments suggesting…

Scott Kaufman — Noam Chomsky: Modern universities designed to ‘deprive you of your freedom’ (via Raw Story )

Noam Chomsky: Modern universities designed to ‘deprive you of your freedom’ (via Raw Story )
The World Innovation Summit for Education (WISE) released an interview with Noam Chomsky recently in which the noted linguist discussed, among other things, how high student tuition indoctrinates students into corporate culture. “There’s no economic…

Eric Dolan — Conservative activist: Pope Francis exposed the ‘Marxist problem’ inside the Catholic Church (via Raw Story )

Conservative activist: Pope Francis exposed the ‘Marxist problem’ inside the Catholic Church (via Raw Story )
Pope Francis’ recent publication highlights the “troubling” influence of Marxism within the Catholic Church, according to Accuracy in Media director Cliff Kincaid. “Ladies and gentlemen, I’m not here to beat up on the pope,” he said in a…

Why Is It That So Few Key People Come To This Realization - Soon Enough to Matter?

(commentary posted by Roger Erickson)

So few.

Darwin, Gandhi, CH Douglas, Walter Shewhart, Marriner Eccles, WE Deming, John Boyd, Warren Mosler ... and yes, always a few others ... but seemingly always too few to trigger lasting change.
"Constant development is the law of life, and a man who always tries to maintain his dogmas in order to appear consistent drives himself into a false position." Gandhi
And an entire policy bureaucracy - or culture, or religion, or ethnicity - that tries to maintain their Doctrine and/or Dogmas? Such bureaucracies vainly pursue consistency over adaptation ... and thereby consistently lead entire electorates, countries and cultures into untenable dead ends, from which not all return.

Why is constant, unpredictable options worth openly exploring such a novel concept for most of our citizens? This is NOT how past human "Context Nomads" spread out to successfully explore planet Earth. Why are we failing now? Because we are subtly failing to adequately develop our tens of millions of students?

There are incredibly few things every student must know, in order to help make a more perfect union.

Yet we struggle endlessly to select and transmit those few things.

Why? Perhaps, for most of us the following is a sad truth. We didn't get enough practice seeing the necessity for the noise?

Therefore "we," easily 99% of us, are incapable of easily teaching that skill to our own children?

Aunt Samantha Needs YOU! To Help Our Country Use Our Group Brain - Not Just Sit On It.

(commentary posted by Roger Erickson)

How Many Dogs and How Many Bones?

And the "solution" is to hire outside dogs to keep the starving dogs from fighting ... TOO aggressively?

I'm weeping for my country, my Middle Class, and my people.

Someone has my people right where they want 'em. 

Yet why do they want 'em there? Purely out of boredom? Now progressed to OCMD? (AKA, obsessive-compulsive merchant disorder; AKA 1% disease?)

WalMart has become the modern gladiatorial games, staged purely for the bloodfinance-thirsty lust of the OCDM 1%.

Listen up, dawgs. If you want your own idiot-savant "master" merchants to "provide" you with ACCESS TO MORE OF YOUR OWN FIAT, then simply lead the idiot-savant OCMDs to direct a policy of seeking national goals WORTHY of your country's full mobilization.

You want an example?

1% Idiot Savant Gentry: [What do they do for fun? Oh, try to own and run the country.]

CODDLED 1% Kiddies: "We're BORED. There's NOTHING to DO outside with the country! We want more toys. Waah."

Middle Class Mommy-to-1% (Aunt Samantha): "Nonsense! You have a group brain. So USE it, and FIND something worth having the country do! Now get OUT of my way.
   I've got work to do just feeding this growing country. 
   Now, out, out. Get out of the kitchen.
   And don't come back 'til suppertime!
   And QUIT whining - or I'll give you something worth whining about!"
(Under her breath: "1% kids today! They were running the country into the ground anyway. 'Bout time they start learning how to use their country's group brain, not just sit on it.")

That's what YOU get when YOU let your mega-merchants try to run the country all by themselves. If war is too important to leave to the generals, then surely EVERY process and policy is too important to be left to the PRESUMED process owners?

Aunt Samantha and Uncle Sam need YOU, to help us all use OUR group brain - not just sit on it!

The only cure for obsessive-compulsive merchant disorder; AKA 1% disease, is to create, and then hoard Dynamic Assets (coordination capabilities), not Static Assets.

Steve Keen — Mun iteration of Minsky now available

The “Mun” iter­a­tion of Min­sky, the Open Source sys­tem dynam­ics pro­gram with spe­cial fea­tures to han­dle mon­e­tary mod­el­ing, is now avail­able at SourceForge
Mun iteration of Minsky now available
Steve Keen

Brett Scott — Building Creative Commons: The Five Pillars of Open Source Finance

This is an article about Open Source Finance. It's an idea I first sketched out at a talk I gave at the Open Data Institute in London. By 'Open Source Finance', I don't just mean open source software programmes. Rather, I'm referring to something much deeper and broader. It's a way of framing an overall change we might want to see in the financial system. To illustrate this, I set up an analogy between computer systems and economic systems, and I then explore what financial 'code' might be. I then sketch out the five pillars that could underpin an open finance movement.
Building Creative Commons: The Five Pillars of Open Source Finance
Brett Scott

Bill Mitchell — External economy considerations – Part 10

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime in 2013. Our (very incomplete) textbook home page – Modern Monetary Theory and Practice – has draft chapters and contents etc in varying states of completion. Comments are always welcome. Note also that the text I post here is not intended to be a blog-style narrative but constitutes the drafting work I am doing – that is, the material posted will not represent the complete text. Further it will change as the drafting process evolves.

Chapter 21 Policy in an Open Economy: Exchange Rates, Balance of Payments, and Competitiveness
This material updates the work already done on Chapter 21 that appeared in the following blogs:
Today, I am just continuing filling in the gaps in the Chapter.
21.7 Currency crises
The South East Asian Debt Crisis 1997
Bill Mitchell – billy blog
External economy considerations – Part 10
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Joe Weisenthal — Goldman’s top economist explains his big call for the U.S. economy

Goldman's Jan Hatzius on the three sector model of sectoral balances and a transcript of an interview with Hatzius.

Jan Hatzius may turn out to be the pivot point in the recognition of Godley's contribution and the spread of his ideas beyond the Post Keynesian cohort of economists that have been using this approach for some time but have not been able to crack the mainstream economics profession with it.

Hatzius is not the only well-known Wall Street insider to use the Godley sectoral balances approach to good effect. There is also Paul McCulley, formerly chief economist at Pimco. McCulley also endorsed MMT.

Business Insider
Goldman’s top economist explains his big call for the U.S. economy
Joe Weisenthal

Lars P. Syll — Economics textbooks – how to get away with scientific fraud

Lars is on a tear.
As is well-known, Keynes used to criticize the more traditional economics for making thefallacy of composition, which basically consists of the false belief that the whole is nothing but the sum of its parts. Keynes argued that in the society and in the economy this was not the case, and that a fortiori an adequate analysis of society and economy couldn’t proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts.
This fact shows up already when orthodox – neoclassical – economics tries to argue for the existence of The Law of Demand – when the price of a commodity falls, the demand for it will increase – on the aggregate. Although it may be said that one succeeds in establishing The Law for single individuals it soon turned out – in the Sonnenschein-Mantel-Debreu theorem firmly established already in 1976 – that it wasn’t possible to extend The Law of Demand to apply on the market level, unless one made ridiculously unrealistic assumptions such as individuals all having homothetic preferences – which actually implies that all individuals have identical preferences.
This could only be conceivable if there was in essence only one actor – the (in)famousrepresentative actor. So, yes, it was possible to generalize The Law of Demand – as long as we assumed that on the aggregate level there was only one commodity and one actor. What generalization! Does this sound reasonable? Of course not. This is pure nonsense!
How has neoclassical economics reacted to this devastating finding? Basically by looking the other way, ignoring it and hoping that no one sees that the emperor is naked.
Economics textbooks – how to get away with scientific fraud
Lars P. Syll | Professor, Malmo University

The Depth of Interdependencies Which Have an Effect on "Economics"

(commentary posted by Roger Erickson)

If you read the following article, it's hard not to appreciate the cascade of events and policy decisions which can alter the economics of the outcome state.

A Canadian Looks At Decision-Making In American Policy Outcomes

If we make enough elected officials exempt from enough things .... then anything is possible, right? Even on Wall St.

If we imagine going even a little way further down that path, we can then easily imagine a situation when overt preparations for and outright practice of even the most heinous of crimes, physical or financial, are not technically illegal. Right?

So group success tracks the quality of ALL prior decision-making? Where have we heard that before? Evolution as the sum of all Adaptive Rates? No wonder current NRA leadership is hiding some of it's narrow-minded excesses behind the excuse of religion. It's not even easy to discover who NRA leaders are, except through critics of the NRA, so alternate views of NRA leaders are offered here.

It's always time to consider how and when and why we should be actively shedding maladaptive habits, as well as searching for the rare, new cultural tools that actually improve, not just complicate, our cultural adaptive rate. When considering the economics of a group adaptive race, shedding burdensome habits and policies is usually more important than adding new ones, just like shedding unnecessary weight from a race car is more productive than adding more engine power.

That immediately brings up the question of group-wide assessment methods. Without adequate assessment methods, how will we - as a culture - ever know if we're making progress ... or regressing? The quality of our distributed decision-making obviously tracks our ability to gather a NET assessment of the sum of our distributed outcomes.

At this point you may be wondering how measures as diverse as GDP, childhood deaths, mental health costs, interest rates, security costs, fiscal spending and net policy development all intertwine.  Good!

Is the return on coordinating all those things discussed by economists? If not, how do you quickly explain return-on-coordination to our legions of under-prepared politicians and policy staff?  It's obvious that no one person can answer that question adequately. It takes a nation to raise and select a productive policy office holder.

What else can we add to this discussion of policy interdependencies? Maybe the observation that group success and survival is not purely about our distributed methods and distributed rights? And that adaptive policy development is obviously also about how we collectively use those methods and right.  Do we use them in ways that make as a nation greater than the sum of it's parts, or as a disorganized mob? Answering that question also takes a nation.

Where can we start? Everywhere, of course. Here's just one of many places to start. Are all members of the NRA our enemies? Or is it just a question of - quickly - bringing them into our NET assessment methods? Can all citizens reach consensus on desired-outcomes? If so, adaptive usage patterns for all our methods and rights will fall into place. If not, we're already on the path to civil war. Chew on those economics.

Thursday, November 28, 2013

Izabella Kaminska — Pope Francis: Jedi

Extended Star Wars analogy — which is interesting in itself since George Lucas aimed at creating  a modern epic that would become the contemporary cultural myth. Lucas consulted with über-mythologist Joseph Campbell on shaping this. He succeeded with Star Wars, which shares the field with J. R. R. Tolkien's contemporary rendition of the ancient ring of power myth as the predominant contemporary myths that children now grow up with. Kaminska's use of the analogy reminds of the formerly de rigeur convention of employing classical allusions in sophisticated writing. Fun read.

Pope Francis: Jedi
Izabella Kaminska

Lynn Stuart Parramore — Is the Pope Getting the Catholics Ready for an Economic Revolution? (Maybe He Read Marx)

The pope's relationship with Liberation Theology. We are going to be hearing a lot more about this. Long overdue.

Is the Pope Getting the Catholics Ready for an Economic Revolution? (Maybe He Read Marx)
Lynn Stuart Parramore

Here's a comment I left at Aziznomics about this.

Tom Hickey | November 28, 2013 

Francis is addressing neoliberalism as a political theory based on a market state rather than a welfare state. He is not opposing all market-based economies or lobbying for socialism or communism. 

Assuming that capitalism = neoliberalism/laissez-faire is incorrect in that neoliberalism is exclusionary of many other possibilities. Minsky said that there are 57 flavors of capitalism. 

And assuming that neoliberalism and Marxism/socialism/communism as the only two options possible is the fallacy of the excluded middle aka false dilemma. 

The pope is in opposition to deifying markets in the sense of making markets the sole or even chief arbiter of social, political and economic policy and outcomes. Markets are to serve people, rather than people, markets. 

Peter F. Drucker is credit with saying, “Efficiency is doing things right and effectiveness is doing the right things.” Effectiveness is about goals and objectives, and efficiency is about means for achieving goals and objectives. Goals are chosen based on policy and policy is based on values. Objectives are subsidiary to this choice. 

Markets don’t provide either values or goals, and they cannot set objectives. They are simply efficient means of distribution through rationing by price and may be effective in many cases but not all. 

Robert Skidelsky — Four Fallacies of the Second Great Depression

Robert Skidelsky demolishes of four popular fallacies:

1. That because it makes sense for a household to live within it’s means, that therefor the private sector as a whole should live within its means in the sense of saving up ever increasing stocks of money.

2. That government cannot spend money it doesn’t have.

3. That the national debt is deferred tax.

4. That the national debt is a burden on future generations.

Project Syndicate
Four Fallacies of the Second Great Depression
Robert Skidelsky | Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords
(h/t Ralph Musgarve via email)

Theory of Free National Currencies - MMT Round Table in Bulgaria [video]

Ryan Markov has posted a couple of excellent videos from the MMT Round Table that was held in Sofia, Bulgaria on 9 November 2013. The presenters were Warren Mosler, Pavlina Tcherneva and Ryan. The latter two spoke in Bulgarian. Warren spoke in English. The first video is of the main presentation. The part in English takes up the first 53 minutes or so. The second video is of answers to questions. The part in English comprises the first 25 minutes. The Round Table focused on fundamental aspects of sovereign currencies, the benefits of going off a currency board and the steps to take in doing so.
Theory of Free National Currencies - MMT Round Table in Bulgaria
Posted by Peter Cooper

Video — New Economic Perspectives on the Government Budget, Deficits, and the National Debt

New Economic Perspectives on the Government Budget, Deficits, and the National Debt
Posted by Jon Krajack

Happy Thanksgiving

I'll take the liberty to offer Happy Thanksgiving to all of our readers on behalf of MNE.

Here are some links to some previous Thanksgiving themed posts from a few years back now taking some shots at some revisionist history propaganda from Limbaugh and the horrible Stossel.

Here and here.  Let's be "unthankful" for the disgraced Limbaugh and Stossel!

Don't eat too much out there ;)

Wednesday, November 27, 2013

Don't Tell Me ... They're Worried Canada Might Run Out Of Loonies? :(

(commentary posted by Roger Erickson)

The daily news only gets more bizarre.

IMF recommends Canada scale back CMHC
The International Monetary Fund says Canada is exposing itself to risk by insuring mortgages through the Canada Mortgage and Housing Corporation and recommends scaling back the federal housing agency.
Don't tell me ... they're worried Canada might run out of loonies? :(

This is the International Monetary Fund that we're talking about here?

What's that saying about SETI? That the best proof that extraterrestrial intelligence exists is that it HASN'T tried to contact us yet?

Can you imagine if some ETI did actually visit Earth, and met the IMF first of all? 

They'd probably gracefully wipe all Lagard's memories of the mtg, exit quietly, and bookmark us with a note to check back for signs of TI after another 1000 years.

ps:  Any one see any Public Purpose in the IMF's advice to Canada?

Eric Dolan — Fox Business host Stuart Varney lectures Pope Francis about capitalism (via Raw Story )

Fox Business host Stuart Varney lectures Pope Francis about capitalism (via Raw Story )
Fox Business host Stuart Varney expressed his displeasure with Pope Francis on Wednesday, claiming the pontiff was wrong to attack “deified markets” and the idolatry of money. “Capitalism, in my opinion, is a liberator,” he said. “The free…

Tim Harford — A universal income is not such a silly idea

Tim Harford looks at the BIG and likes what he sees, sort of.

Tim Harford — The Undercover Economist

Stephanie Kelton — MMT Coloring Book! What Does the Owl Say?


MMT Coloring Book! What Does the Owl Say?
Stephanie Kelton

Tony Ortega — Rush Limbaugh blasts ‘pure Marxism’ coming from Pope Francis’ critique of capitalism

Here it comes from the right.
“Somebody has either written this for him or gotten to him,” Rush said. “This is just pure Marxism coming out of the mouth of the pope.”
The Raw Story
Rush Limbaugh blasts ‘pure Marxism’ coming from Pope Francis’ critique of capitalism
Tony Ortega

For another view, see John Aziz, Hey, Pope Francis: Markets are the solution, not the problem at The Week.

I don't think that the pope is opposing markets by equating markets with the type of capitalism is he denouncing as unjust and immoral. He is pretty specifically opposing the contemporary neoliberal brand of "capitalism," as in "economic liberalism (laissez-faire) is the sine qua non of democracy." Not! 
Economic liberalism is the enemy of democracy in that in a democracy workers have the political means to redistribute wealth. As a result, owners of capital have to be creative in maintaining power by convincing workers to vote against their interests. Billions are spent in this endeavor, but it's a pittance compared with the ROI. The pope is saying enough is enough.

Eric Dolan — Bill Ayers: Right-wing media convinced leftists that Obama was a secret leftist (via Raw Story )

Bill Ayers: Right-wing media convinced leftists that Obama was a secret leftist (via Raw Story )
Leftists in the United States were mistaken to view President Barack Obama as one of their own, according to education activist and former revolutionary Bill Ayers. During an appearance last Friday at D.C.’s legendary Politics and Prose bookstore,…

What Would Abe Lincoln Think? And Say? And Do?

(commentary posted by Roger Erickson)

Abe Lincoln: "Call in General Grant. We need this man. He fights. Against, stupidity, sloth, ignorance and corruption. Oh, and Control Fraud too."

Meanwhile, in WalMart land, 150 years later:

Wages as a percent of the economy are at an all-time low.
Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those "wages" represent spending power for consumers. And consumer spending is "revenue" for other companies. So the profit obsession is actually starving the rest of the economy of revenue growth.
RGE: So WHY are companies obsessing over profit competition? Oh, maybe because if they don't, some other business will? Yet that only begs the question of WHY so many companies are competing in old-fashioned business lines - instead of exploring ways to service emerging group options? Oh, maybe because "we the people" aren't turning, fast enough, to NEW desired outcomes for our nation, and exploring newly emerging national options, fast enough? Hence, firms are over-competing to solve "OLD" requirements? In short, our economy is getting stale?

All we need are a steadier stream of new national goals? Some wag in St. Croix calls that seeking Public Purpose.

(Preferably national goals different than just bombing yet another country, in order to feed a MICC that is even more profit obsessed than WalMart is.)

Charlie Sheen-O-Nomics

Some light-hearted ramblings to ease your Thanksgiving boredom:

The Federal Government can't run out of money. Any economist, politician, or crazy uncle who says otherwise is an ignoramus. The government can't run out of money any more than I can run out of letters to type into this blog. Saying that the government can run out of money is like saying we will run out of emails to send to each other. Both are just forms of digital data communications, not anything physical or tangible. When I receive an email, the pixels on my computer screen change as directed by the electronic message. When I receive a payment from the government, the pixels on my computer screen change as directed by the electronic message. They are the same damn thing. Emails from my boss instruct me to do something. Checks from the government also reward or instruct us to do a myriad of different things which our legislators have deemed important to the nation. Thus federal spending is just a huge series of digital instructions. It is the QUALITY, NOT THE QUANTITY of these instructions that really matters. Instead, most people in Washington insist on obsessing over meaningless quantities which they don't even understand.


Even worse, people think we are losing the international trade game, when in the timeless words of Charlie Sheen, we are in fact "Winning!". The Chinese, and the Japanese before them, made themselves the world's slaves. They were willing to work extremely hard to send us real goods and services in exchange for....that's right, digital data. For some reason, they prefer to have digital numbers on a spreadsheet at the Federal Reserve (aka the "trade deficit") instead of the real goods and services which they produced. Why they did this is beyond me. And even worse, America thinks that it is are losing, when in fact it is winning! We have gotten all these other countries to send us real stuff, in exchange for digital data which is utterly cost-less to produce- by pressing on a keyboard! The Japanese have run persistent trade deficits with the US. You know all those checks for $2000 that we send them in the 1980's in exchange for those tiny cars? Guess what, those dollars balances are still sitting at the Fed. If they ever decide to spend those checks (ie run a trade surplus with the US), they will get significantly less real stuff than they could have in 1985. US: 1- Foreigners: 0.

I like to joke that if some clutzy intern at the Federal Reserve spilled coffee on the hard drive somewhere in the Fed's basement where all this data is stored, the hard drive would be fried, and the "trade deficit" would be gone! Just like that! Zap! What are they going to do, call the manager? We have the real fruits of their labor, and they have nothing.

This is called real terms of trade (h/t Warren Mosler.) In this crazy, convoluted world, people have come to care more about digital entries on spreadsheets instead of real, tangible things. At any point in time, the US can decide to reduce the value of existing dollars, thereby reducing the purchasing power of the previous Chinese labor. At any point in time, the US can decide to charge export tariffs on products going to China (Chinese Exclusion Laws 2.0?), or impose capital controls on Chinese claims. This too would reduce the real purchasing power of the money that the Chinese have already earned from us. Or, we could do as we are doing now, and bring down the interest rates that the Chinese earn on the dollars they already got from us, IE quantitative easing. The Chinese, and all other countries that chose to run a trade surplus with the US, put themselves in this incredibly vulnerable position voluntarily. US: 2 -Foreigners: 0.

Of course, I am in no way suggesting we do any of these things. I think the Chinese have worked very hard to improve their lives, and they deserve to earn some interest, or otherwise maintain the purchasing power, of the dollars they have earned from us. My point is that we remain in control, and can make their maintenance of spending power contingent on whatever we want. For example, I suggest we threaten to tax Chinese dollars claims until/unless they stop abusing the peaceful Tibetans, stop killing 100's of millions of sharks for their fins, or reduce their CO2 emissions.

Psssst! Here's a dirty little secret: China is also a sovereign currency issuer. There is no reason why the Chinese could not have always afforded to purchase every shoe, sock, and cellphone they were also capable of producing, and send us nothing. They would have been much materially wealthier in that scenario. They could have been real-stuff-rich, and dollars-poor, and nobody would have given a shit. WTF do the Chinese need dollars for? Do they want or even need anything that the US produces? Apparently not. Instead, they have made it their explicit policy to keep their currency weak in order to maintain their status as the world's slaves. Yes, its stupid, and they finally seem to be catching on, as are the Germans. But it works for us, so I'm not complaining, because after all, we're WINNING!

Paul Davidson — Bitcoin and MMT

What is Bitcoin? According to Modern Money Theory, bitcoin can not be money since it is not accepted in payment of taxes by any government — nor is it issued by any government via the governed purchase of goods and/or services from the private sector. So what is bitcoin in terms of MMT?? I do not know what MMT proponents would respond to this query?
Professor Davidson seems to be confused over necessary v. sufficient conditionality wrt state money aka currency (Chartalism), and money as an IOU that is transferrable (Innes, Minsky).

Requirement of state money aka currency is sufficient to create demand for the unit of account that the state issues as the sole provider. In this sense, currency is a tax credit. Other forms of money are not unless the state agrees to accept them at its payment offices. If it doesn't then they must be exchanged for currency for payment of taxes, fees, fines, or other financial obligations to the state required to be settled in the state's unit of account.

Any IOU can serve as "money" as an exchange medium if a counterparty will accept in exchange.

However, the rest of Davidson's post is interesting. Bitcoins are neither issued by any state, nor does any state accept them in payment of taxes as far as I know, and they are not anyone's IOU either, in that they are "mined" digitally as an analogy to precious metals, gold in particular. Is gold bullion money? Some would say yes. Others would say it remains a commodity that can be bartered for other commodities, unless it is minted and issued as a money thing. How does Bitcoin fit into this scheme?

Real-World Economics Review Blog
What is Bitcoin?
Paul Davidson | Holly Professor of Excellence, Emeritus at the University of Tennessee in Knoxville

A National Registry for Control Frauds & White-Collar Criminal Offenders? Make It OpenSource.

(Commentary posted by Roger Erickson)

Example: Secretary of Defense: Create a Central National Registry for Military Sex Offenders

However, instead of asking the Control Frauds to self-regulate, let's just create all the registries we need, ourselves.

There's a well known formula for mobilizing worthy campaigns:

1) poster child, to build affinity
       (same 4 states most cheated by CFs from Keating et al to Goldman et al?);
2) mom&apple-pie sponsor organization
       (hmmm, suggestions?);

3) national movement and an "Annual Day" to commemorate solidarity
       (e.g., EarthDay);

4) a ranking metric
       (the Control Fraud Keating Scale?).

While we're at it, Public Purpose day too? (use the Marriner Eccles Scale?)

Fiat week? (use the Mosler Scale?)

Instead of the Middle Class hunger games?

Joe Weisenthal — The Pope Just Published One Of The Most Powerful Critiques Of Modern Capitalism That You Will Ever Read

Some key passages and a link to the full text of Evangelii Gaudium.

The "Moneyball" of trading!

A student from my last Forex course called my techniques the "Moneyball" of trading.

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You learn how to trade the Forex market with true, "inside" information. If you've traded before, in anything, your view of the markets will never be the same again! I guarantee!
-Mike Norman

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Mario Seccareccia — Larry Summers, Secular Stagnation, and the Crisis of the New Consensus Model

Over a week ago Lawrence Summers stunned the world of economics by the remarks he made at the IMF‘s 14th Annual Research Conference on the Economic Crisis, where he pronounced the dreaded “SS” words: “secular stagnation”. His comments seem to have shocked much of the mainstream that still believes that the economy will return to the pre-2008 potential growth. Indeed, he surprised many by stating that, after effectively preventing the complete collapse of the financial system in 2008 through the government bailout and liquidity measures undertaken by the US Fed, there is still no real evidence that there will be a restoration of “normal” growth and that the “new normal” may well be secular stagnation. According to Summers, the principal culprit is the simple fact that nominal interest rates cannot fall below zero and that this zero lower bound will remain “a chronic and systemic inhibitor” of growth. While agreeing that Western economies are headed towards long-term stagnation, in this commentary I would like to question the analysis of the cause of this problem, as well as the solution being offered to address it.
Naked Capitalism
Mario Seccareccia: Larry Summers, Secular Stagnation, and the Crisis of the New Consensus Model
Mario Seccareccia | Professor of Economics, University of Ottawa

Tuesday, November 26, 2013

Guest Post: Ralph Musgrave — Scott Sumner, MMT, and irrational expectations

Scott Sumner, MMT, and irrational expectations
Ralph Musgrave

Sumner and MMTers don’t see eye to eye. He criticises MMT on his blog from time to time. And Randall Wray had a go at Sumner recently here and here. Anyway, I want to demolish an idea put by Sumner (and indeed many other economists). It’s that rational expectations / Ricardian nonsense. Bill Mitchell described Ricardianism as an idea from La-la land, and quite right. And Joseph Stiglitz said “Ricardian equivalence is taught in every graduate school in the country. It is also sheer nonsense.”

One nonsensical element in “rational” expectations is that economists like Sumner ascribe to households and firms expectation type ideas that are sometimes completely IRRATIONAL. Plus, more often than not, those economists don’t provide any empirical evidence that households and firms actually adhere to those ideas or expectations. A classic example of this is where Sumner claims that helicopter drops will be ineffective because everyone expects the policy to be reversed at some stage via tax increases. As he puts it, “the injections are not expected to be permanent”. Thus the private sector will supposedly hoard it’s helicopter money so that it can pay those taxes. Thus, so Sumner claims, heli-drops have no effect.

Now if government behaves in a rational manner, it won’t withdraw those “injections” at any old random point in time: the injections will be left in place as long as they’re needed. In fact the only reason to withdraw the injections, i.e. run a surplus, is when the private sector gets too confident, and inflation looks like becoming excessive. Put another way, if government behaves rationally, it will withdraw surplus monetary base from the economy only when that withdrawal controls inflation rather than actually reduces demand in real terms, or reduces incomes in real terms. So the typical private sector agent, if they’re 100% rational, and 100% clued up on central bank operations, deficits, etc will not hoard helicopter money. Quite the reverse: they’ll up their spending.

Of course the idea that the typical household or small firm is “100% clued up on central bank operations, deficits, etc is straight out of cloud cuckoo land. But it’s something of that sort that pro-Ricardian economists presumably have in mind when they refer to “rational expectations”. So let’s run with this cloud cuckoo land idea for bit. (I’ll abandon the idea shortly.)

Another point that 100% clued up private sector agents will understand is that it’s impossible for the private sector in the aggregate to get rid of monetary base until the government / central bank machine decides to withdraw it from the private sector. Thus the average or typical private sector entity will realise that when they do up their spending, they won’t actually lose their stock of monetary base because everyone else will be upping their spending as well, so the net effect is that the typical private sector entity’s stock of base remains constant.

Conclusion so far: 100% rational households and firms will not hoard their stock of helicopter money to such an extent that heli-drops are ineffective.

Of course, and to repeat, the idea that the typical household or firm is 100% clued up on central bank operations, deficits, fiscal stimulus, etc is straight out of La-la land, to use Bill’s phrase. And the empirical evidence seems to be pretty much in line with common sense, namely that when households and firms notice an increase in their incomes, they immediately up their spending by a significant amount. Certainly the evidence in relation to tax rebates is that households spend a significant proportion within a year. E.g. see here, here and here.

Of course tax rebates are not exactly the same as distributing helicopter money. But they’re FAIRLY SIMILAR. Plus at least I’ve provided SOME SORT OF evidence to back my points, which is more than most Ricardian enthusiasts do.

And finally there’s a technical point on monetary base I’d better address, as follows. I referred above to non-bank private sector’s stock of base, which conflicts with the popular belief that non-bank private sector entities don’t have access to monetary base. The reality is that if I get helicopter money in the form of a check for $X, I deposit that at my commercial bank, which in turn has it’s account at the Fed credited. And I can do whatever I want with that money. So in effect I do have access to monetary base: it’s just that some commercial bank acts as agent for me when I want my stock of base paid to someone, or if I want to withdraw it in the form of physical cash.

Apparently, Shared Sacrifice Means Sixteen Cents on the Dollar [Detroit]

I have no idea what these retirees are supposed to do (boldface mine):
Allen and his colleagues are among 30,000 Detroit city workers, past and present, who are about to learn what will happen to their pensions and healthcare if the city is allowed to file for a historic bankruptcy – the largest of its kind in history…
The affected workers are owed about $3.5bn, in total, in pension payments, and another $6bn in healthcare benefits. The average Detroit pensioner gets $19,000 a year; a deal that gave 16 cents to the dollar would cut the benefit to $3,040.
Most aren’t eligible for Social Security either (they didn’t pay into it).
Mike the Mad Biologist
Apparently, Shared Sacrifice Means Sixteen Cents on the Dollar
(h/t Clonal)

Daniel Little — Who made economics?

The discipline of economics has a high level of intellectual status, even hegemony, in today’s social sciences — especially in universities in the United States. It also has a very specific set of defining models and theories that distinguish between “good” and “bad” economics. This situation suggests two topics for research: how did political economy and its successors ascend to this position of prestige in the social sciences? And how did this particular mix of techniques, problems, mathematical methods, and exemplar theoretical papers come to define the mainstream discipline? How did this governing disciplinary matrix develop and win the field?
Understanding Society
Who made economics?
Daniel Little | chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Ellen Brown — Monsanto, the TPP, and Global Food Dominance

Global food control has nearly been achieved, by reducing seed diversity with GMO (genetically modified) seeds that are distributed by only a few transnational corporations. But this agenda has been implemented at grave cost to our health; and if the Trans-Pacific Partnership (TPP) passes, control over not just our food but our health, our environment and our financial system will be in the hands of transnational corporations.
Web of Debt
Monsanto, the TPP, and Global Food Dominance
Ellen Brown

Edward Fulbrook — Tony Lawson has changed our conversation

The case for Lawson’s significance that I argued five years ago and appears below seems to me even truer today....
Real-World Economics Review Blog
Tony Lawson has changed our conversation
Edward Fulbrook

I left this comment.

Tom Hickey
November 27, 2013 at 1:40 am | #6
Reply | Quote
Your comment is awaiting moderation.

The history of Western through can be viewed in terms of three shifts. The first was the shift from mythological explanation to ontological at the time of the Presocratics. The fundamental question was, What is there? The solution sought was in terms of first principles involving real causes.

The second shift was from the ontological to the epistemological, effected by Descartes. The question then became, What can we know about what is? Descartes answer was in terms of introspection, reason, and mathematics. Conventional economics is largely pursued in the Cartesian mode of assumptions arrived at through introspection and the application of mathematical reasoning to the assumptions.

The third shift was from epistemological explanation to logical analysis. The fundamental question became, What can we say meaningfully about what we think we know what is? Wittgenstein is often credited with this shift. Wittgenstein held that philosophical problems were analyzable into attempts to push language beyond its limits as in controversies over realism, idealism, and empiricism, or competing theories of ethics or aesthetics.

The search for knowledge must be informed by these three questions. The third to emerge historically is logically prior. We must first inquire into what we can say meaningfully. Then we must inquire into what we can know and how we can know it. There are the boundary conditions of knowledge. What we actually want to know, what is there and how does it function, is the final stage of this process.

Skipping the first two risk landing outside the boundaries of language and cognition. In economics, some economists and Bayesians resist Knightian uncertainty, for instance, as well as what threatens ergodicity, e.g., complexity and emergence. Interestingly in this regard, Cognitive scientist and author of Descartes’ Error, Antonio Damasio, David Dornsife Professor of Neuroscience, USC, was recently the keynote speaker at an INET conference. At the next conference I would suggest also having an analytic philosopher whose specialty is economic discourse.

Of course, I am not implying that Lawson’s ontological approach is misguided. I am just saying that the approach ontology has to be critical because we see through a lens of brain functioning and framing, that is, we are fundamentally ideological and and respectively take our worldviews as reality — which is a reason for cultural and subcultural differences. What you see is not what you get if you are looking through glasses that introduce distortion.

John Aziz — Why the post-antibiotic world is the real-life version of the zombie apocalypse

The perverse economics of the antibiotics industry means the human race could be in trouble.
The Week
Why the post-antibiotic world is the real-life version of the zombie apocalypse
John Aziz | economics and business correspondent at

Dimitri Papadimitriou — Is an R&D-Led Export Strategy Our Best Shot?

Dimitri Papadimitriou, in Reuters’ “Great Debate” series:
The U.S. needs an export strategy led by research and development, and it needs it now. A serious federal commitment to R&D would help arrest the long-term decline in manufacturing, and return America to its preeminent and competitive positions in high tech. At the same time, increasing sales of these once-key exports abroad would improve our also-declining balance of trade.It’s the best shot the U.S. has to energize its weak economic recovery. R&D investment in products sold in foreign markets would yield a greater contribution to economic growth than any other feasible approach today. It would raise GDP, lower unemployment, and rehabilitate production operations in ways that would reverberate worldwide.For our R&D/export model, we posited a modest infusion of $160 billion per year — about 1 percent of GDP — until 2016. We saw unemployment fall to less than 5 percent by 2016, compared with CBO forecasts that unemployment will remain over 7 percent. Real GDP growth — instead of hovering around 3.5 percent, by CBO estimates, on the current path — gradually rose to near 5.5 percent by the end of the period.
The Multiplier Effect

Fredric S. Lee — What if There Are No Conventional Price Mechanisms?

Whether it be inflexible prices, wage rates that are too high and sticky, or interest rates that cannot become negative, they all have the common property of disrupting the smooth workings of the price mechanism, thereby causing recessions, preventing economic recovery, and creating unemployment. But what if there is no price mechanism that allocated scarce resources among competing ends? Then the ‘price problem’ would disappear and the causes of recessions and persistent unemployment would be quite different. Ignoring the issue whether scarce resources as defined in mainstream economics exist or not, I am going to interrogate the supposed existence of the price mechanism that lies at the theoretical core of all mainstream explanations of recessions and unemployment.....
New Economic Perspectives
What if There Are No Conventional Price Mechanisms?
Fredric S. Lee | Professor of Economics, University of Missouri at Kansas City

gjohnsit — 4 reasons sequestration cuts are about to get much worse

We are 8 months into sequestration, and if you think things are bad now just wait a few more months.
Here is a list and approximate timeline of things to expect in the near future.
Daily Kos
4 reasons sequestration cuts are about to get much worse

Travis Gettys — Pope Francis rips capitalism and trickle-down economics to shreds in new policy statement (via Raw Story )

Pope Francis rips capitalism and trickle-down economics to shreds in new policy statement (via Raw Story )
In case there was any doubt left, Pope Francis made it clear that he shares little in common with U.S. conservatives. The pontiff released his Evangelii Gadium, or Joy of the Gospel, attacking capitalism as a form of tyranny and calling on church and…


No, not Edward Snowden. The GOP leadership.

This is really raw, and if can be established as fact, damning.

Daily Kos
Eric Cantor & GOP Leaders Plot to Sabotage US Economy in Secret Meeting

Pope Francis: Out of Paradigm

Unfortunately for Christendom, I have to report that the falsehoods surrounding sovereign debt have manifestly penetrated the Vatican and have the Pope caught up in them.

From Francis' new release from earlier today:
Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power.
This is a POWERFUL untruth that we are wrestling with.