Tuesday, September 30, 2014

Peter Radford — Study the Shocks

Black humor.

The Radford Free Press
Study the Shocks
Peter Radford

When Will Our Electorate Realize That NO-ONE They've Elected Has Any Idea How To Respond To Current Challenges ... & Go Into Distributed Bathrooms To Vomit?

   (Commentary posted by Roger Erickson)

A “Perfectly Legal” Scam is Perfectly Unacceptable to Real Bank Supervisors

When will our Middle Class vomit from the building tension? Hopefully before half-time of the next SuperBowl. At least before they disappear forever.

Fiat forbid the 1st two events coincide this coming year. Plumbing may be down for 40 days and 40 nights, and not even another TARP would cover the stench.

Just remember that we select the people we allow to select our realities for us. Wise up and choose more wisely, before our aggregate throws up more than just it's hands.

Ming Chun Tang — Hong Kong’s Fight Against Neoliberalism

As protesters flood the streets of Hong Kong demanding free elections in 2017, the international media puts on its usual spin, characterizing the struggle as one between an authoritarian state and citizens who want to be free.… 
But regardless of what the BBC wants the world to believe, Occupy Central isn’t so much a fight for democracy as a fight for social justice.… 
The list of people who have spoken out against Occupy Central is particularly revealing – oligarch Li Ka-shing, HSBC, the world’s four largest accounting firms, among others in business circles. The main issue with CY Leung’s administration isn’t the fact that it wasn’t democratically elected, but that it serves two main groups: Beijing on one hand, and local elites on the other – in other words, far from democratic in its representation. It’s not hard to see why big business and the oligarchs are terrified of Occupy Central: any movement towards real democracy would see them losing power and losing their grip over the territory. The status quo, on the other hand, serves them well.
Hong Kong’s Fight Against Neoliberalism
Ming Chun Tang | Hong Kong-born writer and a student at Hamilton College (New York), currently at the London School of Economics

Google Does Interdependent Series ... Someday This (And Currency Operations) Will Be Routine For Jane & Joe Sixpack Too

   (Commentary posted by Roger Erickson)

Google this.
Once the intricacies of infinitely expanding public Policy Space options becomes routine for Jane/Joe Sixpacks of the future, then maybe fiat currency operations will be trivial or at least pragmatic and straightforward again, rather like in 1933, and 1776, and 1729, and 1686 ... and ... (how far back?). Only the lineage of common sense knows.

David Bollier — Faircoin as the First Global Commons Currency?

It’s hard to find many co-operatives with the kind of practical sophistication and visionary ambitions as CIC – the Catalan Integral Cooperative -- in Spain. CIC describes itself as a “transitional initiative for social transformation from below, through self-management, self-organization, and networking.” It considers the state unable to advance the public good because of its deep entanglements with market capitalism -- so it has set about building its own working alternatives to the banking system and state.

Since its founding in May 2010, CIC has developed some 300 cooperative projects with 30 local nodes, involving some 4,000 to 5,000 participants. You can get an idea of the impressive scope of CIC’s work through this interview with Enric Duran by Shareable magazine in March 2014. It’s fairly clear that CIC is serious about building a new global economic system – and not just as a rhetorical statement. CIC builds real, working alternatives, showing great sophistication about politics, law, economics and digital platforms.
CIC has now started Fair.Coop to help build a set of free economic tools that will “promote cooperation, ethics, solidarity and justice in our economic relations.” A key element of the Fair-Coop vision is a cryptocurrency, Faircoin, which has been designed to adapt the block-chain technology of Bitcoin with a more socially constructive design. (Faircoin relies less on "mining" new coins than on "minting" them in a more ecologically responsible, equitable ways.)
Many skeptics might scoff at the brash, utopian feel of this initiative. But in many respects, Faircoin is the ultimate realism. CIC correctly recognizes that the existing monetary system and private banks pose insuperable barriers to reducing inequality and ensuring productive work and wealth for all. The only "realistic" alternative to existing fiat currencies and foreign exchange is to invent a new monetary system! Fortunately, thanks to the pioneering examples of Bitcoin and other cryptocurrencies and the evolving powers of software, that idea is actually within reach these days.…
David Bollier — news and perspectives on the commons
Faircoin as the First Global Commons Currency?
David Bollier

Att. Gen. Holder Talks As Though All Criminals Are Equally Bad ... Some Are Just More Equal In Impunity Than Others

   (Commentary posted by Roger Erickson)

Is this who we are? WWGW think?

Dear Att. Gen. Eric Holder,
How about leaving some WHITE COLLAR CRIME backdoors open for regulators?
For Pete's sake! Get a clue.

This guy can't see context for the mirror?

In what follows, the semantics have been blatantly translated to more relevant analogies, in an attempt to redirect the topic to protecting the innocent.

What about all the forms of BS which are locking law enforcement regulators out of understanding increasingly popular Control Fraud methods?

Surely it is fully possible to permit private enterprise to provide personal incentives while still adequately protecting aggregate options?

When a Middle Class is in danger, law enforcement and Public Policy needs to be able to take every legally available step to quickly find and protect Main Street and to stop those that abuse both the Middle Class and democracy. It is worrisome to see both Control Frauds AND public officials thwarting our ability to do so.

In his recent comments, Holder became just the latest government official to willingly be a hypocrite ... for financial gain, no matter how indirect.

Though Holder didn’t mention Goldman-Sachs or any other TBTJ banks by name, his remarks systematically avoided mentioning the documentation repeatedly offered by Bill Black since the resolution of the S&L Crisis 20+ years ago.

National, state and local citizen and law enforcement officials have complained loudly that the TBTJ banks are undermining efforts to fight White Collar Crime, including money-laundering and financial terrorism. The TBTJ's newest lobbying system, BS-8, has Congress so thoroughly bought that the lobbyists brazenly say that White Collar Crime is itself no longer illegal. Citibank's & JP Morgan's lobbying and "revolving door" system 
automatically began using direct and indirect incentives and re-election pressures decades ago, on all regulators and Congresspeople, unless they specifically opt into the bankster protection racket, described in unwritten agreements never intended to be released to honest citizens. (It will take months or years for reality to filter out and reach most people currently attempting to honestly participate in democracy.)

TBTJ financial industry executives have consistently said that less regulation better protects the privacy of Control Frauds by reducing the security of the Middle Class against a wide range of intrusions, by co-opted governments, White Collar criminals and Innocent Frauds on the bankster's payroll. American financial companies have been particularly eager to demonstrate their commitment to reduced citizen rights in the aftermath of the revelations by former litigation director of the Federal Home Loan Bank Board, Bill Black, detailing the extensive overreach of TBTJ financial lobbies.

Holder never bothers speaking honestly to the Global Alliance Against Financial Abuse of the Middle Class and Democracy in General, regardless of where their diverse chapters try to meet. In fact, to my knowledge he's never raised the issue of preserving civic protections from large-scale Financial Control Fraud.

Sure, recent gutting of diverse Federal regulatory agencies has already greatly emboldened White criminals, as TARP and the aftermath showed, including providing implicit guarantees for abusers to avoid detection. In a snowballing number of cases, perpetrators are using clouded policy to cheaply and easily bypass tens of thousands of lines of former legal protections that had existed for 70 years or more - and to leverage that ability to operate from anywhere in the world. It shouldn't be a surprise that many Control Frauds rush to take advantage of "regulatory encryption" and anonymizing White Collar Crime practices to conceal contraband practices and disguise perpetrator positions.

In response to all this, Holder has essentially called on all citizens to work with him to look the other way while Wall Street guts Main Street, and ensures that law enforcement ignores the ability, with court-authorization, to at least attempt to obtain enough information to even initiate White Collar Crime investigations, such as catching mega Control Frauds.

Even with the new forms of Control Fraud, government officials maintain access to many sources of data related to the execution of Elite Financial Fraud, including the records of calls, texts and other communications kept by lobbyists, Congressional staff and Public Regulators alike. Even worse are the extensive, passive collusion agreements that most regulatory agencies now take for granted, by claiming that they "can't afford to prosecute rampant White Collar Crime," resulting in paltry fines for massive frauds against Jane and Joe Sixpack. Police and District Attorneys rarely even get search warrants on which to use third-party tools to try to unravel the levels of corruption involved in on decisions to not prosecute massive mortgage frauds and other financial schemes. Courts can and often have ordered the entire Middle Class to furnish up the keys that would otherwise preserve the future of entire generations against domination by a few Super Crooks.


Andrés Velasco — The Third Way's Second Chance

Remember Tony Blair and Bill Clinton’s Third Way? It is back. The faces and names have changed, but the idea that governments can – and should – combine social-democratic values and modern liberal economics has returned to center stage.
Triangulation and trickle down. Heaven help us.

Project Syndicate
The Third Way's Second Chance
Andrés Velasco | Professor of Professional Practice in International Development at Columbia University's School of International and Public Affairs

Dan Frommer — PayPal is finally free—let the real mobile-payments battle begin

It’s finally happening: eBay is officially spinning PayPal off as a separate company. And it comes at a crucial time, just as the budding mobile-payments industry—which many see as the future of payments and commerce—is getting interesting.
While PayPal has very done well for itself—payment volume grew 29% from a year earlier in the June quarter to $55 billion—things are about to get more competitive.

Brookings Institute Discussion ft. Larry Summers: Debt Management in an Era of Quantitative Easing: What Should the Treasury and the Fed Do?

Earlier this morning I listened in to a panel discussion hosted by the Brookings Institute on  US debt management since the crisis, and how the Fed and Treasury at time seemed to be working against each other. Unfortunately, the debate stayed within a rigid neoliberal paradigm, with no one suggesting that such debt management operations were convoluted and unnecessary. None of the panelists came close to clearly admitting that the Fed Sets Rates, or the implications of being a sovereign currency issuer. There were no mentions of the changes from Interest on Excess Reserves or the Term Deposit Facility, and the discussion centered mostly on how private investment firms were affected by the change in maturity composition as a result of QE.

To my horror, Mary John Miller, the Former Under Secretary for Domestic Finance at the Treasury, repeatedly used the phrases "taxpayers money" and "reducing costs for the taxpayer" in regards to Treasury's debt management operations, clearly indicating that despite decades in the fixed income sphere she still doesn't quite "get it." Larry Summers was actually quite boisterous and energetic during this discussion, and seemed to come closest to admitting that maturity structure doesn't' really matter for public policy.

As limited as this discussion was intellectually, its worth taking some time to understand how the current people in power think and operate. The audio is now available here, with video to follow.

With Gross's departure maybe Morningstar should upgrade Pimco, not downgrade it

Morningstar downgraded Pimco's Total Return Fund today, from a gold rating to bronze, because of the departure of Bill Gross.

But wait...wasn't Gross doing poorly? Didn't he get pretty much everything wrong over the past few years with respect to his trades and bond outlook? We documented a lot of his comments on this blog.

Wasn't it Gross who tweeted, "Who's gonna buy them now?" suggesting that there would be no one to buy Treasuries once the Fed ended its Quantitative Easing that it had been doing at the time?

It almost seemed like Gross became very dogmatic in recent years, like a Peter Schiff or something, with a questionable lack of understanding of the bond market, the Fed's role and sovereign money. (Recall his misguided, "America is like a spendthrift family" analogies.)

If that's the case, why downgrade Pimco? Maybe some better performance is in store.

I take nothing away from Gross; he's compiled an amazing long-term track record and his marketing savvy when it came to building Pimco was amazing, but...

Let's not mistake a 30-year bull market in bonds for genius and let's also take into account that the guy was saying some pretty wacky stuff.

Hey Morningstar...maybe you got this all wrong.

Richard Rowe — Bernie Sanders Goes There: 'We Need A Political Revolution In This Country'

Yep. A political revolution against oligarchic democracy.

Crooks and Liars
Bernie Sanders Goes There: 'We Need A Political Revolution In This Country'
Richard Rowe

Peter Van Buren — Ex-CIA Analyst Ray McGovern Triumphs Over the State Department

Think you live in a free country in America?


Neil Wilson — UK Sectoral Balances - Q2 2014

Today's Quarterly figures represent a complete review of the National Accounts framework in the UK to bring it up to the latest European Standards - ESA10. There have been quite a few alterations to the structure which have altered the net-lending positions of the sectors. The main one is the alteration to the pension accounting which is now on an actuarial basis and alters the position between the household sector and the finance sector a bit. The private debt calculations I usually put out will need checking first to make sure I've still got everything in there after the reclassification. Hopefully I'll be able to work that out and publish them soon.
Additionally the figures are now only available from the beginning of 1997.…
UK Sectoral Balances - Q2 2014
Neil Wilson

The London Economic — Re-thinking Economics Teaching

“Economics teaching has failed to convey the exciting progress made in many fields in economics over recent decades in addressing the big questions about the economy,” Professor Antonio Cabrales of the University College London said in the run up to the launch of a new curriculum in economics at the university. “We are hoping to change that.”

From October 1st London will become part of a worldwide beta test of The Economy, a new online introduction to the field, which will – the course materials say – teach economics ‘as if the last 30 years had happened’. The course is also being piloted at Columbia University, Central European University and University of Sydney along with a number of other institutions world-wide and will look to educate a contemporary crop of economists with a fresh perspective on the global economy.

“Economists in universities and central banks were found wanting when the financial crisis hit,” Carlin said. “Students from Manchester to Santiago Chile demanded courses that helped them understand and engage with the big questions they faced – not only financial crisis, but rising inequality and environmental degradation.”

The course is based on an ebook – the beta version of which is now available to anyone for free online at www.core-econ.org – and combines text with pop-up questions to track learning and spark discussion as well as videos of Economists in Action. Students can click on an Einstein pop-up for help with difficult concepts. Models and data come to life with interactive diagrams. Though the project has not been advertised and is barely launched it already has almost 4,000 registered users.

The London Economic
Re-thinking Economics Teaching

Chris Dillow — The deficit: blame foreigners

Chris Dillow does sectoral balances.

Stumbling and Mumbling
The deficit: blame foreigners
Chris Dillow | Investors Chronicle

Bill Mitchell — Another Eurozone plan or two that skate around the edges

There was an article in UK Guardian last week (September 26, 2014) – Debt forgiveness could ease eurozone woes – which was interesting and showed how far the debate has come. The outgoing European Commissioner for Employment, Social Affairs and Inclusion, László Andor also gave a speech in Vienna yesterday – Basic European unemployment insurance: Countering divergences within the Economic and Monetary Union – which continued the theme from a different angle. While all these proposals will be positive rather than negative they essentially are not sufficient to solve the major shortcoming of the Eurozone – its design will always lead it to fail as a monetary system because they have not accepted that all citizens in each country have equal rights to avoid economic vulnerability in the face of asymmetric aggregate spending changes. That lack of acceptance means the political leaders will never create an effective federal fiscal capacity and the member nations will always be vulnerable to major recessions and wage deflation, which undermine living standards. 
I have received E-mails recently and there have been some comments posted in relation to some blogs I have written on the Eurozone which say essentially that I unfairly bracket those who propose solutions to retain the euro but ameliorate the consequences of that retention as being either explicit or implicit supporters of the common currency.
Various justifications are used for arguing within the neo-liberal ‘tent’ for ad hoc solutions, which retain the euro and the fiscal constraints that are associated with it, including – political difficulties in challenging the very existence of the euro, unfairness to international creditors and financiers if the euro is abandoned by any particular nation, increased cross-border transaction costs, and other claims.
All of which have elements of truth. But a progressive position that argues from within the mainstream ‘tent’ inevitably becomes captured by the essential elements of the mainstream view even if the underlying ideology is rejected.…
Bill Mitchell – billy blog
Another Eurozone plan or two that skate around the edges
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Lars P. Syll — Neoclassical economics and neoliberalism — two varieties of market fundamentalism

Is neoclassical economics, based on its interpretation of "the invisible hand" as underlying self-regulating and self-adjusting efficient markets, which is the basis for market fundamentalism, the foundation of the economic liberalism on which neoliberalism is based?

Lars P. Syll’s Blog
Neoclassical economics and neoliberalism — two varieties of market fundamentalism
Lars P. Syll | Professor, Malmo University

Monday, September 29, 2014

Nathan Gardels — Xi Launches Cultural Counter-Revolution to Restore Confucianism as China's Ideology

Excerpts from Xi's speech.

Matt Bruenig — Cutting Poverty Is Super Easy: A Response to Sumner

I am not really sure what Scott Sumner is all about these days. Many years ago, he was like “monetary policy should utilize an NGDP target” and people were like “that’s an interesting thought.” But now, he’s kind of gone into mission creep mode where he comments on things that he’s not so knowledgeable on.
One of the more glaring versions of this creep is his armchair commenting on wealth inequality. Again and again, he has called wealth inequality data “nonsense on stilts” because it ignores the fact that wealth inequality is just a life-cycle phenomenon. This is straightforwardly false, but to know it’s false, you have to actually be familiar with the wealth data and ambitious enough to run some age-controlled wealth inequality calculations. Sumner is neither of those things.
More recently, Sumner’s mission creep has him opining rather strangely about poverty in America, with a focus on yours truly. The post is such a complete mess that I will utilize a line-by-line approach to explaining where it has gone wrong.
Cutting Poverty Is Super Easy: A Response to Sumner
Matt Bruenig

Simon Johnson — Two Views of Finance

The first view is that “we have done a lot” since the global financial crisis erupted in 2008. According to this view, which is put forward on a regular basis by some US Treasury officials and their European counterparts, there may be a bit more to do in terms of implementing reforms, but our banks and other financial firms have already become much safer. The crisis of 2008 cannot soon be repeated.
The second view is that we are a long way from completing the far-reaching changes that we need. Even worse, on at least one key point, the very language used among policymakers and leading journalists to describe finance is badly broken.
The issues are complex and nuances abound, but much of what divides the two sides in this debate comes down to this: Is it acceptable to say that banks “hold” capital?
If you have been following MMT, you likely know that bank capital is equity rather than assets held in reserve against losses.

Project Syndicate
Two Views of Finance
Simon Johnson | former chief economist of the IMF, a professor at MIT Sloan, and a senior fellow at the Peterson Institute for International Economics

Izabella Kaminska — It all makes sense when you realise there are TWO US dollar currencies

USD inside and outside the US. One is subject to US regulation, the other is not.

The Financial Times — FT Alphaville
It all makes sense when you realise there are TWO US dollar currencies
Izabella Kaminska

See also, BitCon: The book. Izzy looks at Jeffrey Robinson's book, BitCon: The Naked Truth About Bitcoin.

ITAR-TASS — Poroshenko says Ukraine rejects racial discrimination, fascism

Ukraine will prevent racial discrimination and fascism, President Petro Poroshenko said on Monday during a wreath-laying ceremony at the monument to victims of World War Two's Babiy Yar massacre, desecrated days before by unidentified vandals daubing Nazi symbols on the granite memorial.…
On this day 73 years ago, Nazi invaders embarked on mass executions of civilians and Soviet prisoners-of-war in Babiy Yar, a north-western district of Ukraine’s capital, Kiev. From September 29, 1941, to 1943 between 70,000 and 200,000 Jews were killed in this part of the city.
Poroshenko says Ukraine rejects racial discrimination, fascism

Joe Firestone — The Re-invent Democracy Platform and MMT

Joe shares his ideas for making MMT more influential politically.

New Economic Perpsectives
The Re-invent Democracy Platform and MMT
Joe Firestone

GOP Divided Over Oil Export Ban

Via Politico:

"The petroleum industry’s crusade to lift the four-decade-old ban on crude oil exports is shaping up as next year’s hottest energy debate, and potential White House contenders like Gov. Chris Christie and Sens. Rand Paul and Marco Rubio are already on board.

Some GOP fans of crude exports are ready to move even without party unity. Asked if he had qualms about getting ahead of his leaders in pushing to end the ban, Oklahoma Sen. Jim Inhofe said, “No. Because it’s right.”

Another outspoken export advocate is Alaska Sen. Lisa Murkowski, who’s in line to chair the Energy and Natural Resources Committee if Republicans retake the chamber.
Democrats face their own divide on the issue. The White House has left the door open to re-examining the ban, former top economic adviser Larry Summers called for its demise this month, and Energy Secretary Ernest Moniz last year described barring exports as a 20th-century policy. In June, the Commerce Department caused a stir with the news that it had approved licenses for two oil producers to export limited amounts of a lightly processed ultralight crude known as condensate. The administration appears “ready to go where the Hill is on this,” Catanzaro added."

The fact that this issue in now being seriously debated points to the stupidity and corruption of our Congress. Exporting oil and gas makes absolutely no sense for US consumers. For years, all we heard was that we had to develop domestic oil resources to rid ourselves of foreign oil imports--and the second that trend starts to reverse, the Republicans want us selling our natural resources to foreigners. Whatever you may think about fracking and drilling in environmentally sensitive areas, at the very least you should want these fuels to by consumed by Americans, since we are the ones taking all the health/environmental risks from the extraction processes.

In all honesty I hope the Repubs continue to push forward on this issue, because it would perfectly demonstrate how they never really cared about reducing gas prices-- it was always about profits for their industry donors. It would be impossible for them to ever construe oil exports as a good thing for the American consumers for whom they pretend to care so much about. And this is from the same people that always said we cant afford environmental protections because it may cause energy prices to rise. Now they want to be able to sell our oil to higher bidding foreigners, which borders on treason in my book. Selling our domestic energy for foreign fiat...brilliant idea guys!

Crafting a [Logical] Response to Mounting Power Grabs by Corporations Over Democracy

   (Commentary posted by Roger Erickson)

Regardless of how you feel about faith-based organizations, this is an opportunity to practice "Yes, And" instead of "No, But" on a larger scale ... while also practicing return on coordination.

"A [Reasoned] Response to Corporate Power" webinar series

And if you want to actually build a future worth having, you better also remember where that future comes from, and have faith in feedback from those people as well.

Marshall Auerback — Does Parity Between The Euro And The Dollar Loom In Our Future?

Reuters says that predictions by some of the top currency banks including Goldman, Barclays and Morgan Stanley point to a retreat in the euro to parity or near-parity with the dollar. The expected weakness is based on the view that a radically weaker currency is the only tool left to the ECB.…
Macrobits by Marshall Auerback
Does Parity Between The Euro And The Dollar Loom In Our Future?
Marshall Auerback

Steve Roth — Lefty – Libertarian Cage Fight! Get Out the Popcorn…

Matt Bruenig and Demos have thrown down the gauntlet against libertarian ideology. Trevor Burrus at Cato has picked it up. Should be worth tuning in.
Matt pulls no punches. He’s emerged in the last year as one of the mediasphere’s most convincing voices for progressive ideas and policies, based (IMO) on air-tight arguments and thinking, backed by solid, well-presented facts and data. He’s front and center for DemosGordon Gamm Initiative to counter libertarian ideology.
Lefty – Libertarian Cage Fight! Get Out the Popcorn…
Steve Roth

New Research Shows Pollution Inequality in America is Even Worse Than Income Inequality — Lynn Parramore interviews James K. Boyce

Lynn Parramore interviews James K. Boyce, professor of economics at the University of Massachusetts, Amherst, who directs the environment program of the Political Economy Research Institute, where his research focuses on the effects of inequalities of wealth and power and the dynamics of conflict.

New Research Shows Pollution Inequality in America is Even Worse Than Income Inequality
Lynn Stuart Parramore | AlterNet senior editor

David Ruccio — In the US since 1949 inequality has increased with each expansion, with most gains going to the 1%

We have to face the fact that capitalism’s crises have become increasingly severe, and the solutions to those crises have increasingly involved redirecting the income gains to a tiny minority at the top. Everyone else is being left behind. Is it any wonder that the current economic system is facing a legitimation crisis?
The ruling elite make both during the boom and in the busts. Such a deal. That's the beauty of capitalism, which by definition prioritizes money and machines over people and the environment. 'Cause its all about growth, which requires capital formation and preservation, right?

Real-World Economics Review Blog
In the US since 1949 inequality has increased with each expansion, with most gains going to the 1%
David Ruccio

Damir Marinovic — Watch Poroshenko Award Medals to Neo-Nazis (captions, 1 minute)

Russia Insider
Watch Poroshenko Award Medals to Neo-Nazis (captions, 1 minute)
Damir Marinovic

Also, World's Most Important Jewish Advocacy Group "Horrified" by Nazi Resurgence in Ukraine

The WJC president wrote: “I was horrified to see photographs […] of young Ukrainians wearing the dreaded SS uniform with swastikas clearly visible on their helmets as they carried the caskets of members of this Nazi unit."

Adam Ozimek — Enough Already With The Sweeping Claims That Economics Is Unscientific

Ozimek asks the right question, Is economics scientific?, rather than is economics a science? It is possible for a discipline to be scientific without being a science like physics and biology with a well-developed generally agreed upon paradigm that defines normal science in the discipline. This is not the case with psychology or the social sciences, however, where there is no normal paradigm. This does not preclude using scientific method to do research, however. These disciplines are scientific but without being sciences in the sense of having a normal paradigm that defines the existing state of the discipline. 

Orthodox economists have done their best to establish the neoclassic ally based paradigm as the norm for doing economics science. However, there are too many working out of heterodox paradigms to support that claim, especially in light of heterodox successes and criticism of orthodox methodology.

Moreover, there are no overarching criteria that delimit scientific method and determine what is correctly called "scientific" rather than rigorous. "Science" and "scientific" connote "true knowledge" in the ancient sense of episteme (knowledge) versus doxa (opinion) or pistis (conviction or belief). This involves establishing criteria for distinguishing among them, and debate over this has been raging for millennia. The jury is still out.

Much of the controversy is over representation and therefore, misrepresentation. Orthodoxy in whatever field has represented itself as the owner of the true knowledge — "The ocean is in my bucket" — while heterodoxy has disputed that claim as baseless and biased, holding that it rests on an argument from authority based on a good deal of sophistry and reliance on power. These are attributes of dogmatism that rather science.

A fundamental feature of scientific method is that assumptions, hypotheses and conclusions are always tentative. Theories may be very robust based on criteria of consistency, correspondence, pragmatism, and elegance, but a theory is never timeless true and beyond question, revision, or even replacement by a new paradigm.

Forbes — Modeled Behavior
Enough Already With The Sweeping Claims That Economics Is Unscientific
Adam Ozimek | economist at Moody's Analytics
h/t Mark Thoma at Economist's View

Kenneth D. Garbade — Direct Purchases of U.S. Treasury Securities by Federal Reserve Banks

From time to time, and most recently in the April 2014 meeting of the Treasury Borrowing Advisory Committee, U.S. Treasury officials have questioned whether the Treasury should have a safety net that would allow it to continue to meet its obligations even in the event of an unforeseen depletion of its cash balances. (Cash balances can be depleted by an unanticipated shortfall in revenues or a spike in disbursements, an inability to access credit markets on a timely basis, or an auction failure.) The original version of the Federal Reserve Act provided a robust safety net because the act implicitly allowed Reserve Banks to buy securities directly from the Treasury. This post reviews the history of the Fed’s direct purchase authority. (A more extensive version of the post appears in this New York Fed staff report.) 
FRBNY Liberty Street Economics
Direct Purchases of U.S. Treasury Securities by Federal Reserve Banks
Kenneth D. Garbade | senior vice president in the Federal Reserve Bank of New York’s Research and Statistics Group

Lars P. Syll — NAIRU — a failed metaphor legitimizing austerity policies

NAIRU — another neoclassical myth based on simplistic assumptions and ignoring the elephants in the room.

Lars P. Syll’s Blog
NAIRU — a failed metaphor legitimizing austerity policies
Lars P. Syll | Professor, Malmo University

Sunday, September 28, 2014

Joe Weisenthal — Here's The Investment Outlook From The New Managers Who Just Took Over PIMCO's Flagship Fund

With Bill Gross' abrupt departure, PIMCO's flagship Total Return Fund has been taken over by Scott Mather, Mark Kiesel and Mihir Worah. 
Maher, Kiesel, and Worah have just published a Q&A about their investment approach, and what opportunities they see now 
Here's the relevant part
Business Insider
Here's The Investment Outlook From The New Managers Who Just Took Over PIMCO's Flagship Fund
Joe Weisenthal

MMT criticism from the far left

The far left joins the far right in attacking MMT.

The Real World

MMT and the United States as the international monetary sovereign

Fuck MMT: The Left had better start looking for an exit from capitalism


Michael Pettis — How much longer can the global trading system last?

My last blog entry inspired an old Brazilian friend of mine, with whom I hadn’t had any contact for years, to comment on this section of the interview:
"It seems to me that the US is becoming increasingly isolationist, largely because it is increasingly uncertain that the benefits to the US of a US-dominated world order still exceed the costs. When the US comprised a much larger share of the “globalized” part of the world, it retained a greater share of the benefits of a stable trading environment and it cost less to maintain that environment. As the US becomes a declining share of the globalized world, the costs of imposing stability (and I have no illusions that this is done for charity) rise, and its share of the benefits decline. It is only a matter of arithmetic that at some point the costs will exceed the benefits."
 My friend is a very thoughtful economist who writes often about global governance and trade, and I really enjoyed and learned from the subsequent discussion, which quickly became a three-way conversation with one of his friends. In the conversation I tried to explain why I think the break-up of the current monetary and trading regime that governs much of the world, and an American turn inward towards isolation, are very likely over the next few years, and indeed almost inevitable.…
China Financial Markets
How much longer can the global trading system last?Michael Pettis | Professor of Finance at Peking University’s Guanghua School of Management

Peter Cooper — MMT is a Good Bet For Progressives and the Left

There has been discussion in the economic blogosphere recently, from a left perspective, about the merits or otherwise of employing an understanding of Modern Monetary Theory (MMT) in debates over policy and efforts to transform the economic system. There is an interesting post, for example, by Dan at Pruning Shears (h/t Tom Hickey) suggesting that MMT might be a “dicey bet for liberals”. In reading this and similar arguments presented elsewhere, I find myself agreeing on some (though certainly not all) points, but differing in the conclusion to be drawn from them.
Peter Cooper

Econ_unmasked — The Unraveling of Economics

The goal of this essay is radical: build a new theory of economics to make sense of the historical success of protectionism. If you're a supporter of free trade, I strongly welcome your critique, because I believe economics can only be fixed with a very healthy national debate. A national debate is needed, for several reasons. First, this is not a task for a single individual, since the literature is immense and the essence of each school of economics is open to interpretation. Secondly, the political body needs to become aware of the fact that economics does not consist of a single school. In fact it is a 'science' of warring factions. I would go so far as to suggest, that Congress needs national hearings on the various schools so as to cast some doubt on our present direction towards the economic abyss. The new model is based on nearly six years of research and 200 plus textbooks of economic theory and history. In a nutshell, it argues the core error lies in an incomplete economic definition of money.
Given this picture, it is not difficult to imagine that these men would have predicted a boom for China and a bust for America. Yet, a modern economist would very likely argue that free trade, not protectionism is the road to prosperity. To make sense of this contradiction, I begin with a very daring proposition: there has never been a sound theory of economics. The key intellectual error of all schools of economics is the incomplete economic definition of money: 1) medium of exchange, 2) store of value, and 3) unit of account. Note this definition completely ignores money's link to wages so that labor content maybe tracked in industrial goods in order to measure productivity gains. Tracking productivity gains is absolutely critical to worker mobility from one sector to another as short term unemployment results from such gains. The cost savings are passed on to the consumer in a price reduction, which in turn is spent in a new sector providing new employment opportunities. More importantly, a correct definition of money is not only needed for a labor theory of value (abandoned by mainstream economics), but that it is ultimately a domestic phenomenon. 
Three critical components give money its domestic basis and its rigidity. The first aspect results from the establishment of a national minimum wage. Thus as James Steuart writing prior to Adam Smith in the 1700s understood, money is nothing more than an "arbitrary scale" which arises out of an infinite and worthless paper money supply or credit system. Thus a minimum wage definition provides the point of gravitation from which a national wage structure is established via supply and demand for skill sets. The second component is wage negotiation process itself. As Keynes observed it is a relative comparison process (an American steelworker compares his wage to another American steelworker, not a foreign steel worker). A necessarily rigid wage system is established so that labor content of industrial goods can be rationally tracked for measuring productivity gains. The properly handling of productivity gains, and the short term resulting unemployment, requires a common language component, a critical theoretical oversight which in my view will prove to be the Euro's undoing. In other words, a French worker will be hard pressed to move should the superior competitor (greatest industrial productivity) happen to be in Germany for example. Thus Steuart's phrase more accurately would be described as "a domestic arbitrary scale that can only be maintained in a closed economy."…
Longish but worthwhile. This is also a good post from the perspective of economic history and history of economics, and it touches on the foundations of economics, aka philosophy of economics.

The Economic Populist
The Unraveling of Economics

See also, Michel Pettis, How much longer can the global trading system last?

The necessity for "open economics" that considers the world economy as a closed system. Otherwise, countries will come into continually conflict over economic policy, and the large will dominate the smaller. Protectionism is no lasting solution and only kicks the can down the road.

I would say rather that "free trade" needs to be reinterpreted with respect to balance development of a global economy that is a a complex adaptive closed system. The US has successfully worked this out with respect to the federal government as currency issuer and the states as currency users.

It's the working model that now exists. But owing to a broad range of differences it would be difficult to implement elsewhere. Europe is good example, so far. The economics got ahead of the politics and the result is mess.

What Do We Call People Who Hoard Coordination Skills, Rather Than Merely Static Assets?

   (Commentary posted by Roger Erickson)

We're universally familiar with the concept of a billionaire.

It denotes hoarding of significant STATIC assets.

Yet it's obviously better to have DYNAMIC assets vs static assets. Evolution - and wars - have already proven that without a doubt.

So what would we call people who hoard coordination skills, rather than static assets?


How would we differentiate skill levels?
Community organizers? CoordiMillionairs? 
Regional organizers? CoordiBillionairs ? 
National organizers? CoordiTrillionairs?
Or just leaders?

Statespeople = ???

Yet in this context, what's the significance of another decimal point in a given metric, or another order of magnitude in whatever the assessment system is?

Do we focus on the size of the asset hoarded, or focus on the implications of the Desired Outcome?

Magpie — The Marx of the Master Class

Short review of Hofstadter's essay "John C. Calhoun: The Marx of the Master Class"

Magpie's Asymmetric Warfare
The Marx of the Master Class

America ... NOT using, or knowing, what Americans know (why not? and what to do about it?)

(Commentary Posted by Roger Erickson)

How To Do More Than Just Carp Uselessly From The Sidelines?
ps: relevant Daily Edge image seen today

David F. Ruccio — Who wants to be a billionaire?

In other words, most billionaires acquired their fortunes—now or in the past—by helping themselves to the surplus created by their employees.
Occasional Links & Commentary
Who wants to be a billionaire?
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame


David Ruccio,  Map of the day : the world’s billionairs

Dean Baker, Unmentioned Myth About Billionaires: They Know Anything About Public Policy at CEPR
 The Washington Post treated us to "five myths about billionaires" this morning. Incredibly, they missed the most obvious one: that billionaires know anything special about what is good for the country and the world.

Brian Romanchuk — Consequences Of A Basic Income Guarantee

The idea of a Basic Income Guarantee (hereafter known as BIG) has become increasingly a topic of interest. My views have been greatly influenced by Hyman Minsky and Modern Monetary Theory (MMT), where a guaranteed job was preferred to guaranteed income. (Minsky referred to this as an Employer of Last Resort programme; MMT refers to this as a Job Guarantee.) I explain why I view a BIG as being essentially unfeasible within Canada, using logic similar to their analyses.
Bond Economics
Consequences Of A Basic Income Guarantee
Brian Romanchuk

circuit — Anthony Atkinson on the public debt and intergenerational equity

Much of my spare time has been spent reading books and thinking about the best way to think about the economy. In the end, I've come to the conclusion that it's the big picture that matters. 
Take the question of the public debt. Much of the discussion in the popular press relating to the national debt focuses on the liabilities of the government and actuarial concerns (dealing with "how to pay it off"), but it rarely discusses the link between public debt and private wealth, wealth distribution and intergenerational equity. 
Anthony Atkinson, I believe, summarized it best here
Fictional Reserve Barking
Anthony Atkinson on the public debt and intergenerational equity

Saturday, September 27, 2014

Ingrid Robeyns — Why Tony Atkinson should get the Nobel Prize in Economics (but perhaps not alone)

Atkinson, Piketty, or Atkinson and Piketty?
[Atkinson] also repeatedly argued that economics is a moral science and that it should, once again, understand itself as a moral science….
Crooked Timber
Why Tony Atkinson should get the Nobel Prize in Economics (but perhaps not alone)
Ingrid Robeyns | Ingrid Robeyns holds the Chair Ethics of Institutions at Utrecht University, Faculty of Humanities and the associated Ethics Institute, and is also a Fellow of the Human Development and Capability Association.

Rob Crawford — The CIA, the President, and the Senate’s Torture Report

Powerful forces on both sides of the partisan divide want the torture issue to disappear altogether. Many military, security and political elites recognize that U.S. torture, approved at the highest levels of government, created an unsurpassed crisis of legitimacy for the country. Their foremost objective is to restore that legitimacy. 
Arguably, this is the principal reason why Obama issued his executive order rejecting torture in 2009 (I believe that McCain would have likely done the same). It is why the new president counseled amnesia about torture and why he refused to initiate criminal investigations or even a commission of inquiry. It is why he has fallen mostly silent about the issue of torture. The U.S. relies on an image that it conducts its wars humanely and in accordance with international law. Brutality and illegality belong to the enemy. 
Occasionally, however, the brutal and unlawful exercise of state violence becomes public knowledge. The inhumanity of violence “shocks the conscience.” Legitimacy crises follow. For the U.S., the Abu Ghraib photos were a disaster but the disaster kept growing with a cascade of revelations that included documentation of torture of prisoners in Guantanamo, Iraq, Afghanistan and CIA kidnapping, renditions, and torture in secret prisons. The reverberations are still being felt 
In 2014, national security elites in both political parties, including those who disagree about the permissibility of “enhanced interrogation,” are worried that the Senate report will further aggravate the prolonged crisis of legitimacy caused by U.S. torture—a crisis made worse by the government’s refusal to undertake criminal proceedings and support civil suits, and partisan politics resulting in continuing indefinite detention at Guantanamo prison camp and military commission trials that admit torture as evidence. Most Americans are still unfamiliar with the grizzly details of what their government authorized and which high officials did the authorizing. Globally, especially in the Middle East, the report will likely reactivate multiple resentments; and it may reinforce dismay among allies.…
For the national security elite as a whole, the history of state violence is better left buried or forgotten and dissident voices about current inhumane operations ignored. Above all, the use of violence as an instrument of policy must remain unencumbered.
For these reasons, even though the CIA will be rebuked by liberal Democrats and perhaps some legislative reforms will be attempted, calls for accountability will continue to be opposed. For national security elites, the release of the Senate report summary will be treated as the end of the story—time to turn the page to narratives more consistent with the myth of American Exceptionalism. 
The CIA, the President, and the Senate’s Torture Report
Rob Crawford | Professor of Interdisciplinary Arts and Sciences University of Washington, Tacoma

Charles R. Larson — Slavery and the Making of American Capitalism – Edward E. Baptist’s "The Half Has Never Been Told"

During the 1930s, the WPA sent out workers to interview men and women who had been slaves before the Emancipation Proclamation. It was 72 years after slavery had been abolished and the interviewees were old but their memories were still vivid. When probed by an interviewee, Lorenzo Ivy responded, “Truly, son, the half has never been told.” After the Civil War, black life during slavery was sanitized, deodorized and, above all, reported by Caucasians—not by the people who had toiled under the murderous system. To a certain extent, that one-sided view has persisted. Historians of the South—largely while men—continued the subterfuge. And even recent attempts to set the record straight have followed in the steps of their predecessors: a chapter on families, one on women, etc., looking at groups instead of individuals.
Hence, the need for Edward E. Baptist’s monumental examination of slavery, presented in an entirely new way, extensively through the voices of the slaves themselves. Baptist has not simply read the WPA interviews but, apparently, every other account of what happened, particularly the many slave narratives published before and after the end of slavery. And, then—what is most original here—he has organized his own account by using parts of the body; for slavery was, above all, an affront to the basic dignity of the corporal body. These are the chapter titles: “Feet,” “Heads,” “Right Hand,” “Left Hand,” “Tongues,” “Breath,” “Seed,” “Blood,” “Backs,” and “Arms”—largely parts of the body. The Introduction (“The Heart”) and the Afterword (“The Corpse”) complete the picture.
What is generally not understood is that the emancipation of the American slaves was one of the largest destructions of capital in history until then. But more significantly, the nature of that capital is even less understood.

Slavery and the Making of American Capitalism — Edward E. Baptist’s "The Half Has Never Been Told"
Charles R. Larson | Emeritus Professor of Literature at American University

Pruning Shears — Why Modern Monetary Theory is a dicey bet for liberals

Political and economic elites have a pretty good track record of co-opting movements. One that has the enormous wiggle room of Modern Monetary Theory’s non-monetary theory components could be immediately put in their service, without even a brief period of progressive utility. 
That’s why I think it is better to make the case for liberal policy up front, instead of obscuring it behind a Rorschach test presented as a monetary theory. Make the case for a job or income guarantee, or better funding of social programs, or what have you, make that case directly. If anyone asks how to pay for it, MMT. But lead by arguing in terms of justice and equity. Modern Monetary Theory is the details, and details belong in the background.
Well, I'd say that the strategy is good but the tactics not well conceived. I'd rather lead with policy than the wonkiness of monetary economics. However, a major reason in the way of progressive policy being taken seriously is the belief in the false government as big household or firm analogy.

Without addressing the funding concern, progressive arguments are going nowhere. A lot of the political push for fiscal "discipline," getting the deficit under control, reducing the national debt, and, on the left, taxing the rich to pay for the welfare state, is coming from a public that believes that taxes and borrowing are needed to pay for expenditure. It's just not possible to have an intelligent policy debate without addressing funding concerns.

It's not a tough sell. Clearly in a fiat system, the government creates its funding through currency issuance. Anyone can easily see that. They can also see that the existing system based on funding specific programs with taxes, borrowing, or cutting other programs makes no sense.

It's true that the monetary description that MMT provides can be used by left and right. But at present only the top of the town knows this and is using this knowledge to its own advantage. The desire for at least some aspects of the welfare state are bipartisan at the popular level. It is the ruling elite that is frustrating the desires of the people and obfuscating by sophistry like the government as household analogy that even President Obama has used — the meme that America is going bankrupt.

This is designed to create fear, uncertainty, and doubt in order to bias the policy debate. MMT to the rescue!

Pruning Shears
Why Modern Monetary Theory is a dicey bet for liberals

Saker — The Russian response to a double declaration of war

The double declaration is a reference to Poroshenko's speech to the US Congress and Obama's remarks This post is long, 6000 words, and also rambling in parts as Saker addresses local concerns. But it contains some very useful information about what is going on between the US and Russia geo-politically and geo-strategically, so it is worth reading those parts. While it is written from one person's POV, Saker is a former intelligence analyst that understands this kind of analysis and he is intimately familiar with this area, fluent in the languages.

The Vineyard of the Saker
The Russian response to a double declaration of war

Vaclav Klaus, Former Czech President — "US/EU Propaganda Against Russia Ridiculous"

The English magazine The Spectator publishes an interview with him in this week's edition.
Vaclav Klaus is also a Euro-skeptic.

Russian Insider

Paul McCulley — Escape Fandango

Home run.

Escape Fandango
Paul McCulley
(h/t Ryan Harris in the comments)

Scott Sumner — Guaranteed Annual Income: Let’s talk numbers

Scott Sumner on problems with a GAI. (He doesn’t mention inflation.) Change is in the air with the buzz increasing about GAI, BIG, JG, etc.

The Money Illusion
Guaranteed Annual Income: Let’s talk numbers
Scott Sumner | Professor of Economics at Bentley University

Nick Rowe elaborates at Worthwhile Canadian Initiative.

Dumb questions about econometrics and GAI/NIT

Friday, September 26, 2014

Pravda — The Large Families that rule the world

Something to think about. Piketty's dynastic wealth?

The Large Families that rule the world
(h/t Don Quijones at Raging Bull-Shit)

Developing story- Former NY Fed bank examiner releases secretly recorded conversations

The radio show "This American Life" did an extended interview with a ex-bank examiner from the Federal Reserve Bank of New York. This woman, who has since been fired from the Fed, secretly recorded conversations between herself, her bosses, and Goldman Sachs employees. She was a permanent on-site examiner at Goldman Sachs during her brief tenure at the Fed, and claims that the Fed's lackadaisical approach to supervision led her to record, and later release, these conversations.

While she claims that she was unfairly terminated for speaking out about the captured culture of the FRBNY,  its worth noting that she also sued her former employer and sought a $7 million settlement. If you haven't picked up on this story yet, its worth checking out. You can also read the FRBNY's official response here.

Federico Pieraccini — Ukrainian Neo-Nazi Commander: "The US is Training and Funding Us"

A commander of one of the Ukrainian neo-nazi battalions, the Donbass, Semyon Semyonchenko, has just returned from the US…. 
He posted a comment on Facebook in which he gives a detailed explanation of this assistance.
The US-Russia proxy war is on. What could go wrong supplying the enemy of our enemy regardless, — yet again?

Marshall Auerback — Italy Is Now The Eurozone Weak Link

Mario Draghi, the ECB President, continues to profess optimism that the Eurozone will recover in the 2nd half of this year. Hopefully, his native country is not the basis for this optimism.

Italy was always going to be where the chickens returned to roost. It is in a dreadful state.…

Macrobits by Marshall Auerback
Italy Is Now The Eurozone Weak Link
Marshall Auerback

Peter Cooper — Technology Paves the Way for Basic Income More than a Job Guarantee

Regular readers will be aware that I would support either a basic income guarantee (BIG) or job guarantee (JG) as standalone programs, whichever happened to be on the policy agenda, but ideally would prefer a program that combined the positive elements of both into some form of ‘job or income guarantee‘. Much of my reasoning to date has been outlined in previous posts archived under the category Job & Income Guarantee. I won’t revisit those considerations in this post. The present focus is instead on which of the two programs — a BIG or JG — should be seen as primary.…
Technology Paves the Way for Basic Income More than a Job Guarantee
Peter Cooper

David Graeber and Thomas Piketty — Soak the Rich —An exchange on capital, debt, and the future

This exchange is from a conversation in Paris between David Graeber and Thomas Piketty, discoursing on the deep shit we’re all in and what we might do about climbing out. It was held at the École Normale Supérieure; moderated by Joseph Confavreux and Jade Lindgaard; edited by Edwy Plenel; first published by the French magazine Mediapart last October; and translated from the French for The Baffler by Donald Nicholson-Smith.
The Baffler
Soak the Rich —An exchange on capital, debt, and the future
David Graeber and Thomas Piketty
(h/t Ignacio in the comments)

What's The Dividing Line Between Cultural Evolution & Terminal Cancer?

   (Commentary posted by Roger Erickson.)

"The power of willful ignorance can never be overstated, because people are prepared to look the other way and believe anything." 
John Leonard (electrician's union)
Yes, and what do we do about it?* Well, doesn't that quickly force us to ask what culture is? You don't have to be able to state an answer to have culture, but it sure might help us to do so if we want to extend present Human Culture.

So much has been discovered, documented - and ignored - about diverse forms of culture that we are in dire need of summarizing, so we can get to the self-survival question of what to do next. How do we extend what we have?

Let's try one, terse summary of what we do have, and what we know about the process of building and extending culture.


1) Data is meaningless w/o context.

2) Construction of context = Interpretation of data = part of culture = outcomes from habits.

3) It takes LAYERS OF SUB-CULTURE to tune any & all cultural components w asynchronous & increasingly shorter time constants (i.e., cultural agility = adaptive rate).

4) Which is why we need progressively MORE self-governance infrastructure, just to maintain - let alone increase - net agility of a system growing in size &/or capability.
(Resiliency is NOT efficiency. Tuning to do ONE task involves dumbing down capabilities. Retaining ability of a growing system to respond to ANY contingency requires continuously added inter-dependencies among existing and emerging infrastructure components.)
5) Ergo.
Cost-of-coordination [C-O-C] is always the highest cost, by far. (Shewhart)
Return-on-total-coordination [R-O-TC] is the ONLY return worth chasing.
(Logic: R-O-TC = only return > C-O-C)
So what is the dividing line between evolution & terminal cancer?
Tuning return-on-coordination out of uncoordinated growth?

We're at another fork in that path. Since most paths are terminal, let's focus on taking the road less traveled.

It might also help to remind students and all citizens that culture didn't start with humans, or even with amoebas, or even with inorganic chemistry ...

... so that it doesn't come as a shock if they finally learn that culture will definitely not end with anything we can currently imagine.

Really, we're left with only a rather simple question.

How do we both successfully launch, and then stay out of the way of our own grandchildren, and the 7th generation yet unborn?

How that question is interpreted is entirely dependent upon the transition rate between the context which the group mind of our current electorate holds today, and the context perceived by our survivors a few generations out.

If we wisely choose which directions of change to accelerate, there will be more of those survivors, racing on sooner to new futures.

If we choose poorly, more of our descendants will suffer terminal consequences, and their journey to the future will be slowed.

Which outcome do we desire?
(very apt cartoon here, by Beatrice the Biologist; part of how brains work)

An inexperienced, out of practice cultural group-brain tends to work the same way.


Notice I didn't mention coincidental trivialities like economics, accounting, or regulation. Those are all standardized parts of cultural plumbing, to build upon, not constrain with.

Thursday, September 25, 2014

Gavin Kennedy — Reading Snippets Of Wealth Of Nations Can Be Misleading Out Of Context

Adam Smith did not try “to show that, in a free market, an individual pursuing his own self-interest tends to also promote the good of his community as a whole through a principle that he called “‘the invisible hand’.  He had no such a “principle” called “the invisible hand”.  Moreover, Smith did not “coin”  the “invisible hand” neither as a metaphor nor  as a “principle”.  The metaphor was in fairly common use in the 17th and 18th centuries, mainly, though not solely in theological contexts.  It also appeared in Shakespeare, poetry, general fiction (Defoe), political speeches and philosophy.
Adam Smith's Lost Legacy
Gavin Kennedy | retired Professor of Defence Finance in the Department of Accounting and Finance at Heriot-Watt University and Professor of Economics at Strathclyde University

Robert Steele: The New Story — Open Source Everything — The People’s World Brain

Public Intelligence
Robert Steele: The New Story — Open Source Everything — The People’s World Brain

Wednesday, September 24, 2014

JW Mason — Functional Finance in Rome and Kansas City

Arjun and I have continued to work on our project on fiscal and monetary policy, which develops the simple -- but strangely overlooked [1] -- point that both the level of output and the trajectory of the public debt-GDP ratio are jointly determined by both the government budget balance and the interest rate set by the monetary authority. (An early stage in our thinking on this was the subject of a post on this blog last year.) Part of our argument is that the fiscal space metaphor is backward -- that the case for countercyclical fiscal policy gets stronger, not weaker, when debt ratios are already high. I'm hoping there will be a working paper version of this soon. But in the meantime, the work is getting presented at various places -- by me at the Eastern Economic Association this past spring, by both of us at the International Economics Association in June, by Arjun at an OECD conference in Rome earlier this week, and by me at the University of Missouri at Kansas City tomorrow. If you're interested, here are our current slides.
The Slack Wire
Functional Finance in Rome and Kansas City
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York