Sunday, August 31, 2014

Randy Wray — Where Danger Lurks: The Dark Recesses of the Orthodox Mind

Here’s an unintentionally–but riotously–hilarious mea culpa by Olivier Blanchard.…
In the world that Blanchard and other mainstreamers modeled, “economic fluctuations occurred but were regular, and essentially self correcting. The problem is that we came to believe that this was indeed the way the world worked.” …
In other words, like the drunks who look for their keys under the street lights, Blanchard preferred to model impossible worlds because the math was easier. The world—obviously—is not linear, but the math skills of economists were not sufficient to model real, nonlinear worlds.
New Economic Perspectives
Where Danger Lurks: The Dark Recesses of the Orthodox MindL.
Randall Wray | Professor of Economics, University of Missouri at Kansas City

The first principle of general semantics is, "The map is not the territory." The great temptation of rationalism is confusing maps with territory. It's why the scientific method is empirically grounded in testing in addition to being rationalistic with respect to theory. Theory alone is speculation.

Stephen D — Fastest Internet in US? It's Chattanooga, TN, Thanks to Local and Fed $ (Ps. Big Cable Very Angry)

Yes, you read that right.  Internet speeds as fast as 1 gigabit gigabyte per second are the norm in the city of Chattanooga, Tennessee.…
Yes, these young groups of local tech entrepenuers are important, but they couldn't have created this turnaround alone. They are receiving help help from the city's Democratic Mayor, Andy Berke, but the real driver of the boom comes from the efforts of the city's municipally owned electrical provider, EFB, which decided to fast track a high speed fiber optics network, rather than settle for slower service from the big cable company internet providers….
Across the country, twenty states prohibit or restrict municipalities from doing what Chattanooga has done - create their own high speed broadband networks to compete with the big telecom and cable companies, who have a stranglehold on providing slower, crappier, more expensive internet service to most of us. So, it should come as no surprise that the big telecoms are concerned that other municipalities will see what Chattanooga has accomplished, and are taking legal steps to stop any further expansion of EFB's internet service.
At present, they are practically printing money while we get internet service that is worse than thirty other countries, including, among others, Uruguay.

Yeah, let that sink in. Uraguayans have better internet service than citizens of the "greatest nation on earth." Pretty damn embarrassing, if not a big surprise. Ever since we began to glorify Big Business and denigrate government during the Reagan years, we've seen America go from being a leader in many fields to falling further and further behind even many third world countries, all so our multinational, tax dodging corporations can feed off ordinary Americans like so many parasites, slowly draining the lifeblood out of our nation even as they steal whatever is left in our pocketbooks.
Daly Kos
Fastest Internet in US? It's Chattanooga, TN, Thanks to Local and Fed $ (Ps. Big Cable Very Angry)
Stephen D

Denise Oliver Velez — White man jaywalks with gun...guess what happens?

What happens? Nothing, of course.

Daily Kos
White man jaywalks with gun...guess what happens?
Denise Oliver Velez

Lars P. Syll — Neoliberalism — a self-serving con

Characteristically trenchant quote from George Monbiot exposing neoliberalism as the farce it is.

Lars P. Syll’s Blog
Neoliberalism — a self-serving conLars P. Syll | Professor, Malmo University

Digby — Can't help lovin' those commie strongmen

So panic artist Ted Cruz called Obama a pussy (well, "kitty cat" but please ...) and expresses his admiration for Vladimir Putin --- a real bear of a man. How typical. One of the defining characteristics of the modern conservative movement has been their deep admiration for the machismo of their adversaries. 
Here's a little blast from the past on this lazy holiday week-end:
Grover Norquist, is reported to have said back in the 1980's,"We must establish a Brezhnev Doctrine for conservative gains. The Brezhnev Doctrine states that once a country becomes communist it can never change. Conservatives must establish their own doctrine and declare their victories permanent…A revolution is not successful unless it succeeds in preserving itself…(W)e want to remove liberal personnel from the political process. Then we want to capture those positions of power and influence for conservatives. Stalin taught the importance of this principle."
Inspired as he is by all things totalitarian, Norquist went on to do a number of things that Uncle Joe would be proud of, one of which was The Legacy Project.
Can't help lovin' those commie strongmen

Department of the Army ATP 3-39.33 — Civil Disturbance


ATP 3-39.33 provides discussion and techniques about civil disturbances and crowd control operations that occur in the continental United States (CONUS) and outside the continental United States (OCONUS). United States (U.S.) forces deploy in support of unified action, overseas contingency operations, and humanitarian assistance worldwide. During these operations, U.S. forces are often faced with unruly and violent crowds who have the intent of disrupting peace and the ability of U.S. forces to maintain peace. Worldwide instability coupled with U.S. military participation in unified-action, peacekeeping, and related operations require that U.S. forces have access to the most current doctrine and techniques that are necessary to quell riots and restore public order.

 The principal audience for ATP 3-39.33 is Army commanders and staff elements at all echelons who are tasked with planning and directing civil disturbance missions. 

Commanders, staffs, and subordinates ensure that their decisions and actions comply with applicable U.S., international, and host nation (HN) laws and regulations. Commanders must ensure that Soldiers operate according to the law of war and the rules of engagement (ROE) (see FM 27-10). Unless stated otherwise, masculine nouns or pronouns do not refer exclusively to men.…

ATP 3-39.33 applies to Active Army, Army National Guard/Army National Guard of the United States, and U.S. Army Reserve unless otherwise stated.

The proponent of ATP 3-39.33 is the U.S. Army Military Police School (USAMPS). The preparing agency is the Maneuver Support Center of Excellence (MSCoE) Capabilities Development and Integration Directorate; Concepts, Organizations, and Doctrine Development Division; Doctrine Branch.

Department of the Army ATP 3-39.33
April 2014
Approved for public release; distribution is unlimited

David Ruccio — What is inflation?

What is inflation? = What does "inflation" mean?

Many things, and different things to different people, since it is not an observable but an estimate based on choice of standards of measurement and subject to the limitations of measuring aggregates. There is no such "thing" as inflation, and economists even disagree over its technical definition and measurement.

Professor Ruccio is unimpressed with the official narrative:
My own view, for what it’s worth, is the real rate of inflation for consumer goods is higher than the official rate of 2.2 percent (over the past 12 months), thereby understating the extent to which working people are facing rising prices for the commodities they need to purchase in order to maintain themselves and their families. In addition, most people are receiving wages and salaries that simply are not rising much more, from one year to the next, than the official inflation rate. 
Therefore, it’s not surprising that people are feeling squeezed and find the kinds of economic policies advocated by mainstream economists quite strange—both the call for austerity by conservative economists (based on the idea that galloping inflation is right around the corner) and the call for more inflation (based on the idea that real interest rates should be negative, in order to boost economic activity). Neither policy—abounding as they are in metaphysical subtleties and theological niceties—would help working people who, right now, are facing both rising prices and stagnant incomes.
Then there is the issue of assets "appreciating" (good) but not "inflating" (bad) whereas goods prices are never said to "appreciate" but only "inflate." Disconnect?

Occasional Links & Commentary
What is inflation?
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Foreign Affairs — Why the Ukraine Crisis Is the West’s Fault

Foreign Affairs, published by the Council on Foreign Relations, gets it and is saying it.
According to the prevailing wisdom in the West, the Ukraine crisis can be blamed almost entirely on Russian aggression. Russian President Vladimir Putin, the argument goes, annexed Crimea out of a long-standing desire to resuscitate the Soviet empire, and he may eventually go after the rest of Ukraine, as well as other countries in eastern Europe. In this view, the ouster of Ukrainian President Viktor Yanukovych in February 2014 merely provided a pretext for Putin’s decision to order Russian forces to seize part of Ukraine. 
But this account is wrong: the United States and its European allies share most of the responsibility for the crisis. The taproot of the trouble is NATO enlargement, the central element of a larger strategy to move Ukraine out of Russia’s orbit and integrate it into the West. At the same time, the EU’s expansion eastward and the West’s backing of the pro-democracy movement in Ukraine -- beginning with the Orange Revolution in 2004 -- were critical elements, too. Since the mid-1990s, Russian leaders have adamantly opposed NATO enlargement, and in recent years, they have made it clear that they would not stand by while their strategically important neighbor turned into a Western bastion. For Putin, the illegal overthrow of Ukraine’s democratically elected and pro-Russian president -- which he rightly labeled a “coup” -- was the final straw. He responded by taking Crimea, a peninsula he feared would host a NATO naval base, and working to destabilize Ukraine until it abandoned its efforts to join the West.

Putin’s pushback should have come as no surprise.…
Foreign Affairs
Why the Ukraine Crisis Is the West’s Fault — The Liberal Delusions That Provoked Putin (Free registration required to read the whole article)
John J. Mearsheimer
(ht Lambert Strether at Naked Capitalism)

Fortune — This pope means business

Everything you always wanted to know about how the Roman Catholic Church is run, and the consequences of "the Francis effect."

This pope means business
Shawn Tully, with additional reporting by Anna Artymiak
(ht Lambert Strether at Naked Capitalism)

Peter Martin — MMT – Economics for the Political Right?

MMT is becoming to be generally well regarded on the political left. Part of that acceptance is due to MMT’s insistence that unemployment isn’t an insoluble problem and that deficits don’t matter, or at least not in the way the neoliberals claim they do. There’s an obvious way for the left to find their spending money to fund their social programs and at the same time fix the unemployment problem which plagues nearly all western economies. 
That may not have quite the same appeal to the right, but nevertheless, there is something in MMT for them too. MMT in itself isn’t a prescription for what Governments should do, but rather an economic theory which explains how real economies function and therefore how they react to applied fiscal and monetary policies. So, if MMT is right, and the evidence is very much in its favour, it would make sense to look at how it would help all shades of the political spectrum. 
One of the major questions to answer , from all political viewpoints, is ‘how big should the State be’? Hardly anyone is saying 0% of GDP. Hardly anyone is saying 100%. So there is really no correct answer. Everyone has their own opinion. I’d be happy with a State sector which was about 40% of GDP. Others, on the left, may prefer, 50% or more. On the right they may prefer 25% or less.

So, using MMT how should anyone argue for a State sector of only 25%? …
Modern Monetary Theory: Real Economics
MMT – Economics for the Political Right?
Peter Martin

Is Inflation Really Dead? — Pat Regnier interviews Paul McCully

We put the question to Pimco Chief Economist Paul McCulley, who explains why you don't have to worry about rising prices—and why Forrest Gump was a great economist.
Time — Money
Is Inflation Really Dead?
Pat Regnier interviews Paul McCully

Saturday, August 30, 2014

Xinhua Business — China's fast-moving consumer goods market saturating, less room for new products

China's fast-moving consumer goods market is becoming saturated with a wide variety of good products for consumers and it was more difficult for new product launches to achieve incremental growth, a latest research has found. 
Fast-moving consumer goods (FMCG) refer to food and non-food everyday consumer products that are sold quickly and at relatively low cost. 
FMCG brands should aim for innovations that can bring incremental growth, rather than launch the biggest seller in the market, according to the research, sent to Xinhua on Saturday. 
The research was jointly conducted by research company Kantar Worldpanel China and pollster TNS, which analyzed 210,000 new products launched in 77 categories over the past three years in China.
Xinhua Business – English
China's fast-moving consumer goods market saturating, less room for new products

Max Fisher — Why no one wants to call Russia's invasion of Ukraine an invasion



Al Jazzera — Top EU official says sanctions will be tightened as he warns Ukraine conflict with Moscow threatens peace in Europe

Top EU official says sanctions will be tightened as he warns Ukraine conflict with Moscow threatens peace in Europe.
European Union leaders are poised to impose new sanctions against Russia as Ukraine's president warns the conflict with Moscow threatens peace and stability for Europe as a whole.
European Commission President Jose Manuel Barroso said on Saturday the EU was prepared to toughen sanctions against Russia but added that the bloc also wanted a political deal to end the confrontation.
Al Jazzera
EU leaders to impose more Russia sanctions

Zachary Keck — China Eyes Russia’s S-400, Taiwan Seeks New Air Defense System

China and Taiwan are both seeking significant upgrades to their air defense systems in the years ahead...
The Diplomat
China Eyes Russia’s S-400, Taiwan Seeks New Air Defense System
Zachary Keck

Foreign Policy — Preparing for War with Ukraine’s Fascist Defenders of Freedom

On the frontlines of the new offensive in eastern Ukraine, the hardcore Azov Battalion is ready for battle with Russia. But they're not fighting for Europe, either.

MARIUPOL, Ukraine - Blue and yellow Ukrainian flags fly over Mariupol's burned-out city administration building and at military checkpoints around the city, but at a sport school near a huge metallurgical plant, another symbol is just as prominent: the wolfsangel ("wolf trap") symbol that was widely used in the Third Reich and has been adopted by neo-Nazi groups.
The Azov Battalion -- so named for the Sea of Azov on which this industrial city is located -- is one of dozens of volunteer battalions fighting alongside pro-government forces in eastern Ukraine. After separatist troops and armor attacked from the nearby Russian border and took the neighboring town of Novoazovsk, this openly neo-Nazi unit has suddenly found itself defending the city against what Ukrainian President Petro Poroshenko called a Russian invasion.
Foreign Policy

See also, How can you tell whether Russia has invaded Ukraine? ClubOrlov by Dmitry Orlov, ClubOrlov .

Edward Lambert — Blanchard & Krugman are trying to understand Effective Demand

…Effective Demand. This is a term so rarely used in economic discourse. It is not understood. For me, effective demand sets a "definable" limit upon the utilization of labor and capital. So it follows that lower effective demand leads to lower investment, lower output, lower productivity, lower taxes and less ability to pay debts.
Effective demand is based upon labor's share of a national income.…
…sufficient Effective Demand depends upon labor receiving a larger share of national production than they currently receive. No one is going to just give it to them. Labor will have to fight for it.  
Effective Demand
Blanchard & Krugman are trying to understand Effective Demand
Edward Lambert

Domestic private sector over-saving (hoarding), which is due to the ratio of capital share to labor share being excessively high since unspent income increases proportionally with income and wealth, results in insufficient effective demand to sustain output at full employment unless offset by the sum of the government and external balances.

Consolidated domestic private sector balance + government balance + external sector balance = zero (by accounting identity).

Given output of production is less that its aggregate potential using available resources including labor, if the capital to labor share in the consolidated domestic private sector is not reduced by giving labor a greater sharer and capital a lesser, thereby reducing unspent income (saving), then the sum of the government fiscal balance and the external sector balance must increase to offset the shortfall in consumption that would otherwise send a signal to firms to reduce output to less than aggregate potential at full employment in order to prevent an increase in unplanned inventory.

Keynes defined effective demand as the point at which the the aggregate supply curve and aggregate demand curve intersect. Aggregate demand falls when decreasing demand in one industry is not offset by increasing demand in another. As demand spreads across industries, effective demand drops blow the point at which the the aggregate supply curve and aggregate demand curve intersect at full employment.
Let Z be the aggregate supply price of the output from employing N men, the relationship between Z and N being written Z = φ(N), which can be called the Aggregate Supply Function.[5] Similarly, let D be the proceeds which entrepreneurs expect to receive from the employment of N men, the relationship between D and N being written D = f(N), which can be called theAggregate Demand Function. 
Now if for a given value of N the expected proceeds are greater than the aggregate supply price, i.e. if D is greater than Z, there will be an incentive to entrepreneurs to increase employment beyond N and, if necessary, to raise costs by competing with one another for the factors of production, up to the value of N for which Z has become equal to D. Thus the volume of employment is given by the point of intersection between the aggregate demand function and the aggregate supply function; for it is at this point that the entrepreneurs’ expectation of profits will be maximised. The value of D at the point of the aggregate demand function, where it is intersected by the aggregate supply function, will be called the effective demand. Since this is the substance of the General Theory of Employment, which it will be our object to expound, the succeeding chapters will be largely occupied with examining the various factors upon which these two functions depend. — General Theory, 3, I
What this says when worked out is that if consumption demand is insufficient to result in production at potential output using available resources, then for output at full employment to occur, the domestic private sector saving desire must either reduced, or be accommodated by an offsetting combination of the government fiscal balance (by running a deficit) and the external saving desire in the currency (increasing net exports).

One way to reduce private sector saving is by reducing capital share to distributed labor share, since consumption is inversely proportional to income and wealth. If capital and labor share are such that saving is nil so that all output at full is purchased, then the government and external balances can be zero. However, this is unrealistic since some saving is required for future use and also to hedge against uncertainty. So some desire to save must be accommodated in achieving full employment. But excessive saving at the top will result in social, political and economic asymmetries.

From this it follows that either the capital to labor share of income decreases, thereby reducing income that flows to wealth at the top, leading to asymmetrical social status and political power, or that this saving desire be fully or mostly accommodated with the resulting increase of these asymmetries.

From a purely economic perspective, which of the two takes place is more or less irrelevant unless the asymmetries can be shown to introduce inefficiencies owing to income and wealth inequality. Economically, distributional effects are not relevant unless they can be shown to have economic consequences.

However, from the social and political perspective, bringing labor share in line with productivity would result in greater income and wealth equality, hence, greater social and political equality, which are arguably more conducive to democracy than social and political asymmetries based on income and wealth inequality that lead to de facto oligarchy through capture.

It can be argued that simply accommodating consolidated domestic private saving without regard for capital and labor share achieves full employment that the expense of social, political and economic asymmetries that tend toward oligarchy and disrupt democracy and democratic processes. This results in legal and other institutional effects that have economic consequences that create augmenting feedback loops.

Optimal economic policy would balance growth, employment and price stability, and also encourage distributed prosperity. It would also promote social (class), political (power), and economic (income and wealth) symmetry conducive to liberal participatory democracy.

The way to achieving this is by inquiring into how to live a good life in a good society, which has been the basis for ethical, social and political inquiry since the dawn of the Western intellectual tradition. This requires an integrated and balanced approach, which necessitates using a systems approach that draws on all relevant inputs.

Problems arise when economics and economies are abstracted from the societies that they serve as material life-support systems, which is only one aspect of holistic community.

Lars P. Syll — Original sin in economics

Tony Lawson on the ontological poverty of rationalism as the conflation of the logical and the real, the abstract and the concrete, the sign as symbol and what it symbolizes.

Lars P. Syll’s Blog
Original sin in economics
Lars P. Syll | Professor, Malmo University

Ludwig Wittgenstein, Philosophical Investigations:
109. Philosophy is a battle against the bewitchment of our intelligence by means of language. 
133. It is not our aim to refine or complete the system of rules for the use of our words in unheard-of ways. 
For the clarity that we are aiming at is indeed complete clarity. But this simply means that the philosophical problems should completely disappear 
The real discovery is the one that makes me capable of stopping doing philosophy when I want to.—The one that gives philosophy peace, so that it is no longer tormented by questions which bring itself into question. Instead, we now demonstrate a method, by examples; and a the series of examples can be broken of.—Problems are solved (difficulties eliminated), not a single problem. 
There is not a philosophical method, though there are indeed methods, like different therapies. 
255. The philosopher's treatment of a question is like the treatment of an illness.
In Lawson's analysis of economic methodology, the rationalistic approach of constructing mathematical models involves modeling possible worlds. The scientific question is how closely does the model fit the actual world of experience.

Based on results there seems to be discrepancy between modeled worlds and the actual world. How does do these discrepancies arise? Is it due to measurement, for instance, or does it arise from assumptions not being semantically true?

On one hand, measurement can be an issue if an unrealistic degree of precision is assumed, or poor data selection or construction resulting in GIGO.

On the other hand, conflation of thought and reality may lead to false assumptions about the method itself, e.g., stock-flow inconsistency or ignoring complexity, or methodological assumptions, such as a presumption of individual choice independent of institutional influences and other system relationships.

This is often based on at least a tacit assumption of essentialism, in which intuition is presumed to capture the essence of things so that the thought is identical with the essence of reality and therefore necessarily reflects reality. The praxeology of Ludwig von Mises is an explicit assertion of this relationship between thought and reality on Kantian assumptions.  In the absence of empirical warrant, it would appear that neoclassical assumptions based on logical pedigree are similarly rationalistic, although tacit.

One of the knottiest issues is that of causality, especially since Hume's challenge to provide an empirical basis for assuming causal connections, in order to avoid the post hoc ergo propter hoc fallacy, for example, or mistaking a residual effect for a cause, like the so-called money multiplier.

Friday, August 29, 2014

Mark Blyth and Eric Lonergan — Print Less but Transfer More

Actual helicopter money.
Why Central Banks Should Give Money Directly to the People
Foreign Affairs
Print Less but Transfer More
Mark Blyth, Professor of Economics, Brown University, and Eric Lonergan, hedge fund manager living in London and the author of Money.

BBC — News Ecuador gives details of new digital currency

The Ecuadorean government has released more details of its plans to create what it calls the world's first digital currency issued by a central bank. 
Central bank officials say the electronic money, as yet unnamed, will start circulating in December. 
The new money will be used alongside the existing currency in Ecuador, the US dollar. 
President Rafael Correa has said the digital currency will help those who cannot afford traditional banking. 
Central bank officials say the electronic money will be used to pay government bureaucrats in a "hygienic manner". 
The electronic currency is also designed to help poorer Ecuadoreans make and receive payments using mobile phone technology.…
BBC News
Ecuador gives details of new digital currency

Ron Jacobs — The Rational Unreason of Imperial War

I’m not one to disparage the potential and real violence of the entity calling itself the Islamic State. Then again, I am also not one to call for the unleashing of violence by the entity calling itself the United States. As the entire world knows, it is due in large part to the latter’s violence that we are where we are today—in Iraq and elsewhere. Those champions of US military violence who insist on its innate humanitarianism also want us to believe that the violence is undertaken with no economic or hegemonic designs real or implied. Of course, this is nonsense. Powerful states do not intentionally act against their own interests, especially when it comes to military intervention. 
Instead of humanitarianism, one should always consider power and money when it comes to the machinations of empire.…
Psychopaths are highly rational.
By pretending war is reasonable, the possibility of preventing it becomes ever more remote.
Dissident Voice

The Guardian — Putin likens Ukraine's forces to Nazis and threatens standoff in the Arctic

Amping up the rhetoric.

The Guardian
Putin likens Ukraine's forces to Nazis and threatens standoff in the Arctic
Shaun Walker in Mariupol, Leonid Ragozin in Moscow, Matthew Weaver and agencies

The world situation is now pretty clearly focused on the West's addiction to energy. China is a major consumer, too, and it will be serviced by Russia and Iran, likely creating an economic alliance opposed to Western interests.

BBC News — Russia warns EU of Ukraine gas shortage

Russia says there is a risk that gas shortages this winter could force Ukraine to siphon off supplies of Russian gas meant for EU customers. 
Ukraine's gas reserves have reached a "critical" state, Russian Energy Minister Alexander Novak said. 
He was speaking after talks in Moscow with EU Energy Commissioner Guenther Oettinger. The EU is anxious to ensure secure gas supplies for the winter.
Well played.

BBC News
Russia warns EU of Ukraine gas shortage

Owen Jones — It's socialism for the rich and capitalism for the rest of us in Britain

Who are the real scroungers? Free-marketeers decry 'big government' yet the City and big business benefit hugely from the state – from bailouts to the billions made from privatisation. Socialism does exist in Britain – but only for the rich.
Class war in the UK.

The Guardian (UK)
It's socialism for the rich and capitalism for the rest of us in Britain
Owen Jones

McClatchey — Treasury hits Iran with new, wide-ranging sanctions

Ramping up economic war.

Expect retaliation in the form of cyber warfare.

Treasury hits Iran with new, wide-ranging sanctions
Kevin G. Hall

Reuters, U.S. slaps more sanctions on Iranian banks, firms

‘Hollywood techniques used to create pretext for war between Ukraine and Russia’ — RT interviews Daniel Schechter

It is very suspicious there are no facts or proof of the activities Russia is blamed for in Ukraine, areas that are subjected to a high level of surveillance by satellites and all kinds of technology, author and media analyst Daniel Schechter told RT.
‘Hollywood techniques used to create pretext for war between Ukraine and Russia’
RT interviews Daniel Schechter

Max Fisher — How Putin backed himself into a Ukraine invasion he never wanted

A Western view.

How Putin backed himself into a Ukraine invasion he never wanted
Updated by Max Fisher

Stephanie Nebehay — U.N. urges U.S. to stop police brutality after Missouri shooting

The U.N. racism watchdog urged the United States on Friday to halt the excessive use of force by police after the fatal shooting of an unarmed black teenager by a white policeman touched off riots in Ferguson, Missouri.
Minorities, particularly African Americans, are victims of disparities, the U.N. Committee on the Elimination of Racial Discrimination (CERD) said after examining the U.S. record.
"Racial and ethnic discrimination remains a serious and persistent problem in all areas of life from de facto school segregation, access to health care and housing," Noureddine Amir, CERD committee vice chairman, told a news briefing.
US shredding moral authority and soft power, reversing the direction of the election of the first person of color.


Simon Maloy — What their next shutdown will really be about

Yes, they are going to do it again, because — Obama.
Republicans know shutdowns are toxic, but that doesn't mean they won't do one. They'll just blame you-know-who

Lee Fang — Charles Koch Personally Founded Group Protecting Oil Industry Hand-Outs, Documents Reveal

‘Lifestyles of the Rich Environmentalists,’ produced by a group called the Institute for Energy Research, is a slick web video campaign designed to lampoon Leonardo Dicaprio and as hypocrites for supporting action on climate change. The claim is that wealthy celebrities who oppose industrial-scale pollution supposedly shouldn’t fly in airplanes that use fossil fuels. The group, along with its subsidiary, the American Energy Alliance, churns out a steady stream of related content, from Facebook memes criticizing the Environmental Protection Agency, to commercials demanding approval of new oil projects like the Keystone XL, to a series of television campaign advertisements this year attacking Democratic candidates in West Virginia, Colorado, North Carolina and Alaska. On Capitol Hill, IER aggressively opposes any effort to repeal tax breaks afforded to the oil and gas industry.
Documents obtained by Republic Report reveal for the first time that the group was actually founded by none other than Charles Koch, the petrochemical, manufacturing, and oil refining tycoon…
Republic Report
Charles Koch Personally Founded Group Protecting Oil Industry Hand-Outs, Documents Reveal
Lee Fang

DSWright — Ukraine Seeks NATO Membership As Putin Addresses Separatists As ‘New Russia’

The question that remains, and one that is of great consequence, is whether or not NATO will accept Ukraine as a member. If they do and follow their own rules the head to head military exchange between the US and Russia that was successfully avoided during the Cold War could take place. Managing to keep a ground war between Russia and the US – which NATO membership would likely lead to – limited to conventional weapons may prove impossible.
Ukraine Seeks NATO Membership As Putin Addresses Separatists As ‘New Russia’

See Reuters, Ukraine seeks NATO membership in response to Russia joining war, by Richard Balmforth.

The proxy war with Russia is heating up.

Jay Riestenberg — Seven Disturbing Quotes From the Koch Summit Speeches

Today, The Nation and The Huffington Post published speeches from Senate Minority Leader Mitch McConnell and three other GOP Senate candidates, Rep. Tom Cotton (AR), state Sen. Joni Ernst (IA), and Rep. Cory Gardner (CO), at a secretive donor summit hosted in June by billionaire industrialists Charles and David Koch.
The candidates make the case for overturning Citizens United and getting big money out of politics better than we ever could.
Truthout | Op-Ed

Dean Paton — Poverty Is Not Inevitable: What We Can Do Now to Turn Things Around

Having poor people in the richest country in the world is a choice. We have the money to solve this. But do we have the will?
Some good points, but he needs to read Warren's Seven Deadly Innocent Fraud.

It's the capital share to labor share ratio, stupid. He gets this right.
Between 1945 and 1973, [Hedrick] Smith notes, U.S. workers’ productivity grew by 96 percent, and they were rewarded with a 94 percent increase in their wages. Between 1973 and 2011, years that parallel a collapse of the middle class, U.S. workers’ productivity grew by 80 percent, yet those evermore-productive employees saw only a 10 percent increase in their wages. Millions who created that wealth were thus pushed into poverty or to its precipice, while those who fancy a neomedieval economic system transferred billions in profits, generated by that labor, upward to themselves.
Poverty Is Not Inevitable: What We Can Do Now to Turn Things Around
Dean Paton | Executive Editor

The Vineyard of the Saker — August 29th 15:35 UTC/ZULU Ukrainian SITREP

Status update. Very different story from the one told by the US.
The Ukrainian civil war has reached a turning point and a lot of separate facts point to this conclusion:
The Vineyard of the Saker
August 29th 15:35 UTC/ZULU Ukrainian SITREP

Edward Hadas — The colour of money

MMT to the rescue. Excellent post. Short, too.

Read the whole thing. It's happening.
Breaking News
The colour of money
Edward Hadas | Economics Editor at Reuters Breakingviews
(ht Charles Hayden)

Dmitry Orlov — Propaganda and the lack thereof

With regard to the goings-on in Ukraine, I have heard quite a few European and American voices piping in, saying that, yes, Washington and Kiev are fabricating an entirely fictional version of events for propaganda purposes, but then so are the Russians. They appear to assume that if their corporate media is infested with mendacious, incompetent buffoons who are only too happy to repeat the party line, then the Russians must be same or worse.
The reality is quite different. While there is a virtual news blackout with regard to Ukraine in the West, with little being shown beyond pictures of talking heads in Washington and Kiev, the media coverage in Russia is relentless, with daily bulletins describing troop movements, up-to-date maps of the conflict zones, and lots of eye-witness testimony, commentary and analysis. There is also a lively rumor mill on Russian and international social networks, which I tend to disregard because it's mostly just that: rumor. In this environment, those who would attempt to fabricate a fictional narrative, as the officials in Washington and Kiev attempt to do, do not survive very long.
There is a great deal to say on the subject, but here I want to limit myself to rectifying some really, really basic misconceptions that Washington has attempted to impose on you via its various corporate media mouthpieces.
Propaganda and the lack thereof
Dmitry Orlov

Paul B. Farrell — Opinion: 7 reasons women will lead the new world order

“Men are losing their grip,” wrote Jennifer Homans in her New York Times review of “The End of Men and Rise of Women,” Hanna Rosin’s bestseller. “Patriarchy is crumbling. We are reaching ‘the end of 200,000 years of human history and the beginning of a new era’ in which women, and womanly skills and traits, are on the rise.” Warning guys, this is the last gasp of your male-dominated patriarchy.
I always enjoy Farrell's writing. This is a good one.

Market Watch
Opinion: 7 reasons women will lead the new world orderPaul B. Farrell

Thursday, August 28, 2014

Noah Smith — Thursday Roundup, 8/28/2014

15. All MMT people should watch Chris Sims talk about how he thinks money and inflation work. Also, all MMT people should dress in gold spandex and throw tomatoes at cars while playing "She Loves You" by the Beatles on kazoos and doing a little bow-legged jig.
Thursday Roundup, 8/28/2014
Noah Smith | Assistant Professor of Finance, Stony Brook University

Not MMT, but interesting comparison of the monetarist theory of the price level and fiscal theory of the price level. A step in the right direction though.

BBC News — India's Narendra Modi launches bank accounts for all

Officially launching the project on Thursday, Mr Modi said it would give the poor "renewed strength to fight poverty". 
"When a bank account is opened, it's a step towards joining the economic mainstream." 
Under the banking scheme, account holders would receive a debit card and accident insurance cover of up to 100,000 rupees ($1,654; £996). They would also get an overdraft facility of up to 5,000 rupees

But one of the main impediments to the plan could be the lack of identity documents among the poor - people have to produce a number of papers, including birth certificates and proof of address, to open a bank account in India.
"For the common man, the opening of a bank account is a Herculean task," NSN Reddy, chief manager of the state-run Andhra Bank said. 
BBC News India
India's Narendra Modi launches bank accounts for all

RT — Russia’s Defense Ministry ridicules NATO’s photo-proof of invasion in Ukraine

It makes no sense to comment in detail on the satellite imagery released by NATO as “proof” of Russia’s military involvement in Ukraine, Defense Ministry’s spokesman said, pointing out that even high NATO officials were hesitant to put their names on it.
Referring to NATO Secretary General Anders Fogh Rasmussen, Supreme Allied Commander Europe Philip Breedlove, and NATO Spokesperson Oana Lungescu, Russia’s Defense Ministry spokesman Major-General Igor Konashenkov ridiculed the so-called NATO proof.
“You know, it has become ridiculous… If earlier, someone would at least put their names on those images, be it Breedlove, Rasmussen, or even Lungescu, now, they are hesitant,” Konashenkov said as cited by RIA Novosti. “It makes no sense to seriously comment on this.”
The General also criticized western media outlets for accepting such images and anti-Russian stance at face value.…
Russia’s Defense Ministry ridicules NATO’s photo-proof of invasion in Ukraine

Neil Wilson — Scottish Independence Myths - How to buy imports?

I've been amazed at how poor the understanding is on how cross border trade actually work in a modern financialised world. It's almost like they've never spent any time at the sharp end of a firm's invoicing and payment operation, and exposed to the constant stream of marketing from banks.
The introduction of an independent free-floating Scottish currency is no barrier at all to cross border trade - because the banks are already setup to support it and make money doing so. It's very straightforward.…
Scottish Independence Myths - How to buy imports?
Neil Wilson
Neil also sends up to, The euro has failed to boost trade between the countries that adopted it, By Allister Heath at The Telegraph.

Neil: "an interesting post here about how the introduction of the Euro has not changed the amount of trade one jot - which of course means that an independent currency can therefore be no barrier to trade."

Bryan Caplan — Why Do Government Enterprises Work So Well?

Even the best government enterprises are slow to cut costs. They're bad at innovation. And they're almost uniformly terrible at putting aside Social Desirability Bias to answer every enterprise's most fundamental question: Is this worth doing at all? Yet the anomaly remains: Simple economics implies that government enterprises should be far worse than they really are.
Unfortunately, I doubt the economics profession will ever take this anomaly seriously. Left-leaning economists don't want to grant the obvious case against government enterprise - and market-leaning economists would rather reiterate the obvious case against government enterprise than calmly test it against the facts.
Why Do Government Enterprises Work So Well?
Bryan Caplan | Professor of Economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute

John J. Heldrich Center for Workforce Development Survey — Unhappy, Worried, and Pessimistic: Americans in the Aftermath of the Great Recession

The protracted and uneven recovery from the Great Recession has led most Americans to conclude that the U.S. economy has undergone a permanent change for the worse. Seven in ten now say the recession’s impact is permanent, up from half in 2009 when the recession officially ended. Much of this is rooted in direct experience. Fully one-quarter of the public says there has been a major decline in their quality of life owing to the recession, and 42 percent say they have less in salary and savings than when the recession began. Despite five years of recovery, sustained job growth, and reductions in the number of unemployed workers, Americans are not convinced that the economy is improving. Only one in three thinks the U.S. economy has gotten better in the last year and only one-quarter thinks it will improve next year. Moreover, just one in six Americans believe that job opportunities will be better for the next generation of workers, down from four in ten five years ago. These are some of the findings of a new survey conducted between July 24 and August 3, 2014 by the Heldrich Center with a nationally representative sample of 1,153 Americans.

John J. Heldrich Center for Workforce Development — Rutgers University
Unhappy, Worried, and Pessimistic: Americans in the Aftermath of the Great Recession
Cliff Zukin, Ph.D., Carl Van Horn, Ph.D., and Allison Kopicki

David Glasner — Real and Pseudo Gold Standards: Could Friedman Tell the Difference?

Just to digress for a moment, I will admit that when I first read this paper as an undergraduate I was deeply impressed by his introductory statement, but found much of the rest of the paper incomprehensible. Still awestruck by Friedman, who, I then believed, was the greatest economist alive, I attributed my inability to follow what he was saying to my own intellectual shortcomings. So I have to admit to taking a bit of satisfaction in now being able to demonstrate that Friedman literally did not know what he was talking about.
Uneasy Money
Real and Pseudo Gold Standards: Could Friedman Tell the Difference?David Glasner

Izabella Kaminska — The tribute and organisation theory of value – Part 1, Part 2, Part 3

From Part 3:
In this tribute series, I’ve been trying to get people to stop thinking about money in the abstract or intrinsic value sense.
My proposition instead is that money is about muscle. Always has been and always will be. Riches are the product of the authority or gravitas that affords you well being, a.k.a wealth. A muscle, of course, being a biological machine which optimizes energy efficiently so as to create power with.
But by muscle, I don’t necessarily only mean brute force. I mean all systems that are better organised than other systems and thus stronger and more capable of enforcing their will or alternatively of creating value. Whether that means they are better at collecting favours due, cultivating the land, confiscating assets directly or manipulating you into doing what they want, doesn’t really matter. What matters is that they are just better at doing it. 
Not to say that reciprocity doesn’t encourage value creation but simply that when it happens it’s mostly incentivized by a need to join forces so as to organise against a stronger enemy, whether that enemy is a stronger person, a nation or nature itself. 

Philip Pilkington — Understanding the Current/Capital Account and the Value of the Currency

One thing that I notice on the blogs is that I don’t think I have ever seen anyone give a clear description of the external trade account of a country. Nor have I seen anyone give a clear explanation of what determines the value of a given currency….
Fixing the Economists
Understanding the Current/Capital Account and the Value of the Currency
Philip Pilkington

Kenneth Thomas — Understanding Piketty, part 4

We now come to the exciting conclusion of Thomas Piketty's monumental work, Capital in the Twenty-First Century. This is not an exaggeration: the final part of the book contains findings that I consider to be simply bombshells in their significance.
Middle Class Political Economist
Understanding Piketty, part 4
Kenneth Thomas | Professor of Political Science at the University of Missouri-St. Louis

Peter Cooper — Government Spending and Financially Sustainable Growth [wonkish]

Private and public exogenous expenditures have opposite impacts on the sectoral balances. The same rate of growth in income has different implications for the domestic private sector’s financial balance (saving minus investment or, equivalently, income minus private spending) depending on the composition of the demand driving that growth. An increase in private investment pushes the private sector toward deficit. Even though the investment boosts income, saving will not rise as much as investment because of leakage to taxes and imports. In contrast, government spending adds income and saving for a given level of investment. An implication is that growth driven by private expenditure that occurs without compensating growth in government spending pushes the private sector into deficit except to the extent that net exports counter the effect. 
A growth regime reliant on private sector deficits is likely to come unstuck sooner or later. It implies depletion of net financial wealth and a likelihood of growing private indebtedness. Since households and firms, unlike a currency-issuing government, are financially constrained, this process has financial limits. Recent history culminating in the global financial crisis reflects this. Eventually, households and firms are compelled by circumstances to restore balance sheets to more normal levels. For growth to be sustained without exacerbating the tendencies to financial fragility already inherent in the present economic system, demand, and government spending in particular, would have to grow in a way that is compatible with ongoing domestic private sector surpluses.
Needless to say, government spending growth of this nature is not the only condition for financial stability under capitalism. Most notably, far-ranging financial reform and tight regulatory oversight are imperative if there is to be any hope of somewhat stable capitalist growth. Although the present focus is on the role of government expenditure, this is not to downplay other requirements of a stable growth regime. Nor is it to defend capitalism. It could be argued that what follows underscores the unlikelihood of stable growth in the present system given the powerful political opposition currently standing in the way of sound macroeconomic policy. But, by the same token, invoking “politics” in response to macroeconomic analysis on the grounds that progressive policy will not be pursued in the absence of mass mobilization from below doesn’t really solve anything either. That same radical mobilization, and then some, will be required if we are to put in place an alternative system to capitalism. In the meantime, understanding the sectoral balance effects of different growth regimes offers some insight into the workings of the current system.…
Government Spending and Financially Sustainable Growth
Peter Cooper

Anyone Worried Yet? CBO "Warns" That One Indicator of Public Initiative Is Set To Rise Sharply

   (Commentary posted by Roger Erickson, hat tip to Alice Marshall)

Federal "Deficit" Is Set to Rise Sharply, CBO Warns

So? No reason to panic. Just relabel this article as "CBO Says Indicator of Public Initiative Set To Rise Sharply"

Unless taxes rise just as sharply, that also equates to "Net Private Financial Savings To Rise Sharply" - which doesn't sound so scary.

How well that rise in private liquidity is distributed is the bigger issue - which too few are talking about. If there's too much income & wealth disparity, it's very much analogous to generals hoarding all the weapons. On paper they still have an army, but in practice it's toothless. Same for an economy. If too few are allowed to hoard most of the currency, the first thing lost is national agility.

What's really happening here is that the CBO staff are Semantic Weasels and sophists, and they're crying about a nominal wolf at a fictional door. The only question savvy citizens should be answering is "WHY are they crying that."

Brad DeLong — When Do We Start Calling This “The Greater Depression”?

When we hit the second leg down.

WCEG — The Equitablog
When Do We Start Calling This “The Greater Depression”?
Brad DeLong

Bill Mitchell — Why we should close the ‘unemployment industry’

Answer: Useless and destructive the way it is configured.
I take no umbrage with individuals who work in the ‘industry’ but its productivity is close to zero (you cannot search for jobs that are not there) and they have become co-opted servants of the pernicious government policy regime. The facts are clear – we have erected a massive corporate sector funded by government to manage the fiscal failure. The problem is that all these job service providers are not just shunting inanimate widgets around into so-called training schemes etc but are dealing with very disadvantaged people, which the capitalist system is excluding from the opportunity to engage in paid and productive work. The ‘unemployment sector’ is the Government’s front-line attack dog on the victims of the policy failure.
Bill Mitchell – billy blog
Why we should close the ‘unemployment industry’Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Warren Mosler — Comments on Professor John Cochrane’s "A Few Things the Fed Has Done Right"

Warren fisks John Cochrane's recent paper.

The Center of the Universe
Comments on Professor John Cochrane’s – A Few Things the Fed Has Done Right
Warren Mosler

Noah Smith — Economics Isn't Science or Literature

Economics as rhetoric, and math as a rhetorical device. After all economics is about policy, strategy and tactics in an uncertain world rather than general description and experimental testing, as in natural science. Like lit, it's about story telling, but with a purpose. I'd say this is a pretty honest appraisal by an economist also trained in physics.

As someone trained in philosophy, economics strikes me as closest to philosophy. Both philosophy and and economics build their foundations on assumptions that look like general descriptions but actually function as norms and criteria in the construction of worldviews.

Philosophers attempt to defend their foundations by logical reasoning, while economists add mathematical reasoning to the mix, giving its stories about what is inherently uncertain and unknowable the appearance of greater precision. In other words, sophistry rather than science, especially when traceable to conflict of interest and special pleading, as it often is when money, power and property are involved.

Bloomberg View
Economics Isn't Science or Literature
Noah Smith

Tim Johnson — A short comment on money and independence

During the (now ironically labelled) 'Arab spring' I read Alistair Horne's A Savage War of Peace: Algeria 1954-1962. Reading the introductory chapters describing the state of the French Departments of Algeria in the first half of the twentieth century it struck me that control of the financial system was essential for a political entity to be truly democratic....
Fundamentally I think the whole focus on the currency issue is an expression of the alienation of people from money. If people appreciated money as a social relationship, the significance of the currency would be obvious but the debate would be on the nature of the relationship between England and Scotland, not the embarrassing, unproductive slanging match that, unfortunately, has been the reality of the independence debate….
Money, Maths and Magic
Tim Johnson | Lecturer (associate professor) in the Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh

Russell Means — "For America to Live, Europe Must Die"

It takes a strong effort on the part of each American Indian not to become Europeanized. The strength for this effort can only come from the traditional ways, the traditional values that our elders retain. It must come from the hoop, the four directions, the relations: it cannot come from the pages of a book or a thousand books. No European can ever teach a Lakota to be Lakota, a Hopi to be Hopi. A master's degree in "Indian Studies" or in "education" or in anything else cannot make a person into a human being or provide knowledge into traditional ways. It can only make you into a mental European, an outsider.

I should be clear about something here, because there seems to be some confusion about it. When I speak of Europeans or mental Europeans, I'm not allowing for false distinctions. I'm not saying that on the one hand there are the by-products of a few thousand years of genocidal, reactionary, European intellectual development which is bad; and on the other hand there is some new revolutionary intellectual development which is good. I'm referring here to the so-called theories of Marxism and anarchism and "leftism" in general. I don't believe these theories can be separated from the rest of the of the European intellectual tradition. It's really just the same old song....
Being is a spiritual proposition. Gaining is a material act. Traditionally, American Indians have always attempted to be the best people they could. Part of that spiritual process was and is to give away wealth, to discard wealth in order not to gain. Material gain is an indicator of false status among traditional people, while it is "proof that the system works" to Europeans. Clearly, there are two completely opposing views at issue here, and Marxism is very far over to the other side from the American Indian view. But let's look at a major implication of this; it is not merely an intellectual debate. The European materialist tradition of despiritualizing the universe is very similar to the mental process which goes into dehumanizing another person...
In terms of the despiritualization of the universe, the mental process works so that it becomes virtuous to destroy the planet. Terms like progress and development are used as cover words here, the way victory and freedom are used to justify butchery in the dehumanization process. For example, a real-estate speculator may refer to "developing" a parcel of ground by opening a gravel quarry; development here means total, permanent destruction, with the earth itself removed. But European logic has gained a few tons of gravel with which more land can be "developed" through the construction of road beds. Ultimately, the whole universe is open--in the European view--to this sort of insanity....
Most important here, perhaps, is the fact that Europeans feel no sense of loss in all this. After all, their philosophers have despiritualized reality, so there is no satisfaction (for them) to be gained in simply observing the wonder of a mountain or a lake or a people in being....
There's a rule of thumb which can be applied here. You cannot judge the real nature of a European revolutionary doctrine on the basis of the changes it proposes to make within the European power structure and society. You can only judge it by the effects it will have on non-European peoples. This is because every revolution in European history has served to reinforce Europe's tendencies and abilities to export destruction to other peoples, other cultures and the environment itself. I defy anyone to point out an example where this is not true....
I do not believe that capitalism itself is really responsible for the situation in which American Indians have been declared a national sacrifice. No, it is the European tradition; European culture itself is responsible. Marxism is just the latest continuation of this tradition, not a solution to it. To ally with Marxism is to ally with the very same forces that declare us an acceptable cost.

There is another way. There is the traditional Lakota way and the ways of the American Indian peoples. It is the way that knows that humans do not have the right to degrade Mother Earth, that there are forces beyond anything the European mind has conceived, that humans must be in harmony with all relations or the relations will eventually eliminate the disharmony. A lopsided emphasis on humans by humans--the Europeans' arrogance of acting as though they were beyond the nature of all related things--can only result in a total disharmony and a readjustment which cuts arrogant humans down to size, gives them a taste of that reality beyond their grasp or control and restores the harmony. There is no need for a revolutionary theory to bring this about; it's beyond human control. The nature peoples of this planet know this and so they do not theorize about it. Theory is an abstract; our knowledge is real....
At this point, perhaps I should be very clear about another matter, one which should already be clear as a result of what I've said. But confusion breeds easily these days, so I want to hammer home this point. When I use the term European, I'm not referring to a skin color or a particular genetic structure. What I'm referring to is a mind-set, a worldview that is a product of the development of European culture. People are not genetically encoded to hold this outlook; they are acculturated to hold it. The same is true for American Indians or for the members of any culture. 
It is possible for an American Indian to share European values, a European worldview. We have a term for these people; we call them "apples"--red on the outside (genetics) and white on the inside (their values). Other groups have similar terms: Blacks have their "oreos"; Hispanos have "Coconuts" and so on. And, as I said before, there are exceptions to the white norm: people who are white on the outside, but not white inside. I'm not sure what term should be applied to them other than "human beings."...
Black Hawk Productions
"For America to Live, Europe Must Die"
Russell Means | Lakota Sioux

See also, THE SOUL OF THE INDIAN: An Interpretation by Charles Alexander Eastman (Ohiyesa) at Project Gutenberg. Also download at

Wednesday, August 27, 2014

Cosme Caal — A Warning: The Latin Americanization of U.S. Police Forces

A Warning 
The Latin Americanization of U.S. Police Forces 
Guatemala City
From Guatemala City I have been keeping up with the events in Ferguson, Missouri and my heart goes out to those United States citizens who are actively resisting a brutal local police state. I sit awake at night and contemplate how one of the greatest nations in the world has become militarized and despotic. Impunity is now normalized in most police departments across the United States and in the minds of many Americans. I did not know I would live to see this phenomenon, yet, the more I peruse online news feeds, the more evident it is to me that Americans, especially minorities, are in great danger of militarized suppression as a matter of state policy. 
From our experience in half a century in Latin America I can tell you that, once the human rights of a minority are compromised, it is only a matter of time before they are compromised for an entire nation. From that same experience I can tell you it will take decades before they can be regained. Militarized police forces take on a life of their down, at the expense of the society’s well-being. The social contract that gives the state the duty to organize police forces itself becomes obsolete, almost a joke. Citizens begin to obey agents of the state not out of respect or cooperation, but out of fear of those sworn to protect them. Eventually, the militarized power of the police reaches such magnitude that political leaders lose all ability to rein them in. We experienced this USA-backed militarized transformation of the police in Guatemala, El Salvador, Honduras, Chile, and Colombia. What the U.S. helped do to Latin America, it is now doing to itself. 
Even when there will officers who want to adhere to the law, militarized policing organizations become an unstoppable and despotic force. The very ideologies that give them life become obsolete, as do all existing laws that protect citizens. Central American dictatorships backed and armed by the United States government in the 1970’s built police forces, outfitted them with military gear, and allowed them to brutalize and kill with impunity. The murder or incarceration of progressive democratic leaders who resisted this transformation was sanctioned by United States intelligence agencies.....

Jared Bernstein -- Dethrone ‘King Dollar’

New research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.
The reasons are best articulated by Kenneth Austin, a Treasury Department economist, in the latest issue of The Journal of Post Keynesian Economics... 
Americans alone do not determine their rates of savings and consumption. Think of an open, global economy as having one huge, aggregated amount of income that must all be consumed, saved or invested. That means individual countries must adjust to one another...
Dethroning “king dollar” would be easier than people think. America could, for example, enforce rules to prevent other countries from accumulating too much of our currency. In fact, others do just that precisely to avoid exporting jobs.
Jared Bernstein, New York Times

Cat Johnson — Worker Coops Redefining the Cooperative Movement

The worker cooperative movement has hit a new stride. Re-emerging in the 1960s, cooperatives tend to elicit thoughts of natural food stores and specialty bookshops but the movement has grown to include tech companies, coworking spaces, international businesses, large factories and much more. 
In an effort to find some of the most interesting and innovative worker cooperatives around, Shareable turned to the crowd. We asked our friends at the Sustainable Economies Law Center, the U.S. Federation of Worker Cooperatives, the P2P Foundation, the Democracy at Work Network, and our own Sharing Cities Network for their favorites. Here’s what we found.Shareable - Sharing by design
Worker Coops Redefining the Cooperative Movement
Cat Johnson

Greek Crisis and the Dark Clouds Over the American Economy — C.J. Polychroniou Interviews Dimitri B. Papadimitriou

Is the Greek crisis nearly over as the International Monetary Fund, the European Commission and the Greek government like to proclaim because of the sharp decline in Greek bond yields, the attainment of a primary surplus and an increase in foreign tourism? If so, what about the 27.2 per cent of the population that remains unemployed and the widespread poverty across the nation, the ever growing public debt ratio and the dismal state of Greek exports? And what about the United States? Is America on the way to becoming Greece as many Republicans claimed a couple of years ago? Dimitri B. Papadimitriou, executive vice president and Jerome Levy professor of economics at Bard College, and president of the Levy Economics Institute at Bard, who foresees Greece emerging into a debt prison and a rather gloomy economic future for the United States, discusses these questions in an exclusive interview for Truthout with C. J. Polychroniou.
Truthout | Interview
Greek Crisis and the Dark Clouds Over the American Economy: An Interview With Dimitri B. Papadimitriou
C.J. Polychroniou

Zero Hedge — Merkel Slams US Hegemony? "America Can't Solve All The World's Problems Anymore"

America's worst nightmare. Russia and Germany heart each other.

Zero Hedge
Merkel Slams US Hegemony? "America Can't Solve All The World's Problems Anymore"
Posted by Tyler Durden

Washington's Blog — Forget “Peak Oil” and “Peak Credit” … Are We On the Downslope of “Peak Intelligence”?

Does this explain the rise in moronism?

Washington's Blog
Forget “Peak Oil” and “Peak Credit” … Are We On the Downslope of “Peak Intelligence”?
George Washington

Izabella Kaminska — Money hierarchy, the global perspective

The Kaminska theory of money.

FT Alphaville
Money hierarchy, the global perspective
Izabella Kaminska

'I Could Have Stopped Them': Ex-CIA Lawyer Defends Waterboarding Decision — Holger Stark interviews John Rizzo

One of the architects of the torture program explains it.

Spiegel Online
'I Could Have Stopped Them': Ex-CIA Lawyer Defends Waterboarding Decision
Holger Stark interviews John Rizzo

A 47% Solution? Or Foot-in-Mouth & NRA Disease?

   (Commentary posted by Roger Erickson)

It's rudimentary, Dear McConnell!

These guys seem addicted to shooting any foot that slips out of their mouths! Theirs or others.

Deficit Doves Crowded Out By Semantic Weasels: FUD Over Public Investment, Private Savings, Distributed Liquidity and Public Initiative

(Commentary posted by Roger Erickson)
Result of Jane Sixpack listening to the Brookings Institute?  "Glazing Speed."

Here's what the Brookings Institute Hutchins Center on Fiscal and Monetary Policy says:

Is the federal debt really a crisis that demands immediate attention? The headlines suggest it is, but to understand the debt we must first put it into context.

A new three-minute video from the Hutchins Center on Fiscal and Monetary Policy boils down the facts about the outlook for the federal debt by tracing the recent ups and downs (yes, downs) of the projections for federal borrowing over the next decade. You can watch it here:
The animation presents the 10-year forecast for the federal debt made before the recession, how it rose when the recession hit, and how it rose still higher after Congress enacted President Obama’s American Recovery and Reinvestment Act, the fiscal stimulus of 2009. Despite the outlook brightening in 2013 with the tax increase on upper-income Americans, and a slowdown in the pace at which health care spending is rising, we’re not out of the woods yet.

As part of the Hutchins Center’s mission of improving public understanding of major budget issues confronting the U.S., the video explains projections of the federal debt made by William Gale, the Arjay and Francis Miller Chair in Federal Economic Policy at Brookings, and Alan Auerbach, Robert D. Burch Professor of Economics and Law at the University of California, Berkeley. I hope you enjoy.


David Wessel
Director, the Hutchins Center on Fiscal and Monetary Policy
Senior Fellow, Economic Studies

Oh. My. Fiat!!!  With Fiscal and Monetary Policy "Experts" like this .... who needs enemies?

Notice the clever repetition by these sophists of NOMINALLY scary terms - most of them wrongly defined, if at all. Federal debt? Budget Issues? Not out of the woods yet? Federal Debt as the difference between what a nation invests in itself and what it takes in in taxes?

And did I mention federal debt? 

No wonder this promotes fear, uncertainty and doubt. Yet citizens should be asking WHY sophists say there's a wolf at the door, and NOT how big it is.

At best, such "expert" sophist advice only increases public confusion by continuing to promote use of muddled semantics to discuss something as simple as the spreadsheet called a fiat currency system. With all due respect to David Wessel's civic loyalty, perhaps Deficit Dove is not an appropriate description. Semantic Weasel may be more appropriate. This guy could serve as the Undertaker for the Middle Class. He's all sympathy and understanding, as he nevertheless gently guides the widow's hand to sign over all of the family's remaining assets, to provide for the "properly grand burial" of the deceased Middle Class.

In reality, his condescending words only serve to grossly distort understanding of what are actually very straightforward methods for denominating any and all forms of inter-citizen credit, and hence any and all forms of distributed and Public initiative. 

Instead, Jane & Joe Sixpack could and should be urged to pay attention to which local, regional and national efforts are beneficial for our aggregate, and then Just Do It! What matters is our quality (including tempo) of distributed decision-making. We can always denominate any and all of the diverse tasks we agree to do for one another, in pursuit of national goals. So for Fiat's sake, quit confusing people with twisted semantics!

You don't efficiently recruit people to be pragmatically agnostic by endlessly telling them that there is no Devil, no God, no angels ... and that they aren't going to hell.

All that does is imprint in their minds the archaic terms which emerging adaptive pressures demand they forego using as their primary social construct. There's a reason why separation of state and religion evolved. It works.

Separation of ideology and fiat currency operations works too - if people will only keep them separated.

As always, there is a better way - and it is plainly obvious. To help more citizens see that, at least use accurate semantics to orient people to a context that's changed since their old textbooks were written.

And then cease, forever, the use of broken semantics and endless amounts of data-minus-context when trying to build an informed electorate. That's a slow train than never arrives .... in time to matter.

1) There is no REAL federal debt. Only private savings accounts offered by the public through government institutions.

2) There is no "Federal Borrowing". Only expression of Public Initiative. (Who could we borrow fiat from? Cheerleaders? Optimists? OCD patients?)

3) There are no "major fiscal budget constraints". Only aggregate investment of Public Initiative in public services and private saving reserves, to provide distributed liquidity.

4) Fiat is NOT dependent upon how many taxes we collect from ourselves! Taxes only serve to help regulate distributed aggregate demand and express aggregate policy.

Data without context is meaningless.

And, so is our perception or ideology without cultural agility and adaptive outcome.

Is David Wessel joining Erskine & Bowles in launching an Erble Logic Society?