Wednesday, September 30, 2015

Beatrice Cherrier — There is no longstanding theory/applied pecking order in economics

History of economics lesson.

The Undercover Historian
There is no longstanding theory/applied pecking order in economics
Beatrice Cherrier

Lord Keynes — Post Keynesian Economics: A Bibliography of Recent Introductory and Advanced Books (Updated)

Like it says.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Post Keynesian Economics: A Bibliography of Recent Introductory and Advanced Books (Updated)
Lord Keynes

Karl Widerquist — Nobel Laureate, Joseph Stiglitz, Endorses Unconditional Basic Income

Joseph Stiglitz, during the question and answer session after his talk at the World Summit on Technological Unemployment in New York on February 29, 2015, was asked whether he supported an Unconditional Basic Income as a policy response to technological unemployment. He replied, “Yes, that’s part of the solution. He quickly went on to say that Basic Income is not….
Stiglitz joins a long list of Nobel-prize winning economists who have endorsed some form of Basic Income Guarantee, including James Tobin, Milton Friedman, James Buchanan, James Meade, Paul Krugman, F. A. Hayek, Herbert A. Simon, and Robert Solow.
Bien — Basic Income Earth Network
UNITED STATES: Nobel Laureate, Joseph Stiglitz, Endorses Unconditional Basic Income
Karl Widerquist

Why the self-imposed rule preventing the Treasury from overdrafting at the Central Bank is irrelevant.

The first Fed chairman of the modern Federal Reserve (post-Banking Act of 1933) explains, under oath, in his testimony to the US House of Representatives committee on banking and currency in March of 1947 that the requirement of the US Tsy dept to have a positive balance in its account at the Fed (The TSY General Account aka TGA) is no barrier to Govt spending and deficits. And that preventing TGA overdrafts does not put the "market" in control of Govt interest rates. This means there is no such thing as a bond vigilante, and that the loanable funds theory is a myth. Its amazing that this can be such easily found information and yet all modern mainstream economics books teach these falsehoods as an article of faith. The economics orthodoxy is an embarrassment to science and an anvil around the welfare of society. This includes all mainstream left "progressive" economists like Krugman, Baker, Reich, and Stiglitz. Saying this better than I ever could is the aforementioned patriarch of the Federal Reserve, Marriner Eccles. Save this one for your bookmark collection.

Mr. SPENCE. I assume the reason the authority w^as repealed in 1935 was because of the existing conditions, then, when there was no reason for the authority: is that correct? 

Mr. ECCLES. Well, as I remember the discussion—and I have referred to it in this statement—there was a feeling that this left the door wide open to the Government to borrow directly from the Federal Reserve bank all that was necessary to finance the Government deficit, and that took off any restraint toward getting a balanced budget. Of course, in my opinion, that really had no relationship to budgetary deficits, for the reason that it is the Congress which decides on the deficits or the surpluses, and not the Treasury. If Congress appropriates more money than Congress levies taxes to pay, then, there is naturally a deficit, and the Treasury is obligated to borrow. The fact that they cannot go directly to the Federal Reserve bank to borrow does not mean that they cannot go indirectly to the Federal Reserve bank, for the very reason that there is no limit to the amount that the Federal Reserve System can buy in the market. That is the way the war was financed. Therefore, if the Treasury has to finance a heavy deficit, the Reserve System creates the condition in the money market to enable the borrowing to be done, so that, in effect, the Reserve System indirectly finances the Treasury through the money market, and that is how the interest rates were stabilized as they were during the war, and as they will have to continue to be in the future. So it is an illusion to think that to eliminate or to restrict the directborrowing privilege reduces the amount of deficit financing. Or that the market controls the interest rate. Neither is true."

This comment also puts into focus the myth of Central Bank independence. The CB is not independent of the Govt and the legislative body that makes the final decisions about economic society. The elected legislators are the highest authority and the CB has no choice but to follow its orders, which in a democracy are The Peoples aka "Our" orders.

John Helmer — MH17 – Why The Investigation Will Never End, The Evidence Never Seen

Another official investigation hopelessly compromised.

Dances with Bears
John Helmer

Mariana Mazzucato — Jeremy Corbyn’s Necessary Agenda

When the Labour Party lost the election last May, it received considerable criticism – even from its own frontbenchers – for failing to embrace the business community as “wealth creators.” But while businesses clearly create wealth, so do workers, public institutions, and civil-society organizations, which, through dynamic partnerships, drive long-term growth and productivity. Indeed, a progressive economic agenda must begin with the recognition that wealth creation is a collective process and that market outcomes are the product of how these various “wealth creators” interact.
We must drop the false dichotomy of governments versus markets and begin to think more clearly about the market outcomes we want. There is plenty to learn from public investments that were mission-oriented, instead of focused on “facilitating” or “incentivizing” business. Policy should actively shape and create markets, not just fix them when they go wrong.…
Project Syndicate
Jeremy Corbyn’s Necessary Agenda
Mariana Mazzucato | Professor of the Economics of Innovation at the Science Policy Research Unit of the University of Sussex, and author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths

Lars Syll — Limits of formalization in economics

Keeper quote from Sheila Dow.

Lars P. Syll’s Blog
Limits of formalization in economics
Lars P. Syll | Professor, Malmo University

World’s Largest Hydrogen Electrolysis Facility

Does it scale?

Saudi Arabia's foreign minister said Syrian President Assad must give up power

Looks like no more guessing required.

Tuesday, September 29, 2015

Michael Hudson — My Education as an Economist: How I Learned to Reject the Market Dogma That Dominates the Profession

Excerpt from MH's new book, Killing the Host.

My Education as an Economist: How I Learned to Reject the Market Dogma That Dominates the Profession
Michael Hudson

teleSUR — 'Socialism is the Radical Transformation of Democracy,' Says Bolivian Vice President

Democracy is in need of a major overhaul and the socialist movements of Latin America are the ones to deliver it, Bolivian Vice President Alvaro Garcia Linera said Tuesday. Speaking at the Meeting for Latin American Progressives conference in Quito, Ecuador, the Bolivian leader criticized the way democracies operate in the world today.
The vice president listed two main areas of concern: a lack of citizen participation in decision making processes and the monopolization of power by elites. “In many societies, not even 2 percent of the population participate in making decisions,” said Garcia Linera. These include the “false democracies of the North ... and it is not a model we want to imitate or follow,” he added….
Above all, added Garcia Linera, people must fight for sovereignty and the right to participate in making decisions that affect their surroundings and not be controlled by other foreign powers, particularly global neoliberal interests, said the vice president.
'Socialism is the Radical Transformation of Democracy,' Says Bolivian Vice President

From the Saker’s inbox — caution about the Glaziev report

Dear friends,
I got the following email this morning and I want to share it with you:

“I see that you’ve posted a translation of the report attributed to Sergei Glazyev. While parts of it “ring true” because of SG’s similar formulations in the past, you might want to make your readers aware that this is a leaked text. My information is that it is, at best, a rough draft of what he may have reported before the Security Council. Some suspect that elements were doctored, to make it easier for the liberal financial press to attack it, as they have been doing for the past couple of weeks. See, for example: (not that everything in that article is right; the point about the corporate foreign debt is not so strange, for example, and is one that Yevgeni Primakov often made). Academician Glazyev did, however, present the entire, genuine article at today’s MEF session“.
Therefore, dear friends, caveat emptor (as always!).
The Saker
The Vineyard of the Saker
From the Saker’s inbox: caution about the Glaziev report
The Saker

Dan Froomkin — Edward Snowden Is On Twitter: @Snowden

He recently engaged in a wide-ranging interview with astrophysicist Neil deGrasse Tyson. Part two of that interview was posted on Friday night, and in it, Tyson asked Snowden why he’s not on Twitter.
“You kind of need a Twitter handle. So like @Snowden, maybe? Is this something you might do?” Tyson asked.
“That sounds good, I think we’ve got to make it it happen,” Snowden replied.
The Intercept
Edward Snowden Is On Twitter: @Snowden
Dan Froomkin

Lord Keynes — John E. King’s Advanced Introduction to Post Keynesian Economics

Supplement to Lavoie.

Social Democracy For The 21St Century: A Post Keynesian Perspective
John E. King’s Advanced Introduction to Post Keynesian Economics
Lord Keynes

Scott Adams — History’s First Quadruple-Wizard

Trump. Read why.

Scott Adams
History’s First Quadruple-Wizard

Sputnik — 10 Surprising Facts About Russian Exports You Might Not Know

For one thing Russia now exports more agricultural products than weapons
President Obama: "Russia doesn't make anything." Sen. John McCain: "Russia is a gas station masquerading as a country."

Russia Insider

Sharun Mukand and Dani Rodrik — The political economy of liberal democracy

There are more democracies in the world today than non-democracies, according to data from Polity IV.1 Yet, few of those are what we would call liberaldemocracies – regimes that go beyond electoral competition and protect the rights of minorities, the rule of law, and free speech and practice non-discrimination in the provision of public goods.
Hungary, Ecuador, Mexico, Turkey, and Pakistan, for example, are all classified as electoral democracies by the Freedom House.2 But in these and many other countries, harassment of political opponents, censorship or self-censorship in the media, and discrimination against minority ethnic/religious groups run rampant. Fareed Zakaria coined the term ‘illiberal democracy’ for political regimes such as these that hold regular elections but routinely violate rights (Zakaria 1997). More recently, political scientists Steve Levitsky and Lucan Way (2010) have used the term ‘competitive authoritarianism’ to describe what they view as hybrid regimes between democracy and autocracy.…
Freedom House and Fareed Zakaria are tipoffs of false narrative.

More ideological musings by economists pontificating beyond their field using selective sources that agree with their views.

This post is only interesting for the title. Too bad that they did not do justice to this important subject that is also timely in current affairs, but rather took a neoliberal view of it.
The political economy of liberal democracy
Sharun Mukand, Professor of Economics, University of Warwick, and Dani Rodrik, Albert O. Hirschman Professor at the School of Social Science, Institute for Advanced Study; and CEPR Research Fellow

BBC — News Bank of England's Carney warns of climate change risk

The Bank of England governor has given a stark warning that climate change poses a huge risk to global stability.
At a gathering of leading insurers at Lloyd's of London, Mark Carney pointed out the rapid increase in weather-related catastrophes and the jump in both the physical and financial costs.
He said the challenges currently posed by climate change "pale in significance compared with what might come".
He said this generation had little incentive to avert future problems.
He avoided spelling out what was causing this apparent change, but said evidence was mounting of man's role in climate change.…
Currency irresponsibility may lead to financial instability in the future.
"The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security."
But he said because the cost would fall on future generations there was little impetus on the current one to fix it: "In other words, once climate change becomes a defining issue for financial stability, it may already be too late."
And social, political and economic stability as well.

For example, while not related directly to solely to climate change, Europe was unprepared for the influx of refugees from MENA.

Michael Hudson — Orwell at the UN: Obama Re-Defines Democracy as a Country That Supports U.S. Policy

Obama gives UN speech in double-speak instead of English.

Incidentally, this was my impression of the speech, too.

Bush was just blunter about it when he announced, "You are either with us or against us." That's empire speaking.

Orwell at the UN: Obama Re-Defines Democracy as a Country That Supports U.S. Policy
Michael Hudson

See also

Video and transcript

Democracy Now!
Noam Chomsky: The United States, Not Iran, Poses Greatest Threat to World Peace
Amy goodman interviews Noam Chomsky

Lars Syll — Newspapers make you stupid: Christopher Lydon interviews Nassim Nicholas Taleb

How the narrative that passes for conventional wisdom gets creates through "the news."

What Taleb doesn't mention is  deep state use of disinformation for propaganda and psy-ops in order to shape a narrative to influence perception (perception is reality) and manage populations by manufacturing consent.

Lars P. Syll’s Blog
Newspapers make you stupid
Lars P. Syll | Professor, Malmo University

Bill Mitchell —The non-austerity British Labour party and reality – Part 2

In Part 1 of this two-part blog I laid out a general analytical framework for considering fiscal rules that might allow governments to borrow for infrastructure as long as all current expenditure is at least matched by taxation and other current receipts. This is more or less the rule that the British ‘Charter of Budget Responsibility’ imposes and the approach that the new (previously called radical left) British Labour Party leadership aspires to obey. I use previously called ‘radical left’ advisedly because as the days pass the utterances of the economic leadership make it difficult to differentiate between Labour and the Tories. The main difference appears to be the worn out “we will tax the rich and the crafty tax dodgers to balance the budget”. A nonsensical stance for a progressive political force and verges on Game Over syndrome. John McDonnell’s presentation to the National Labour Conference yesterday was a further walk into obscurity. By claiming they are not “deficit deniers” and will close the deficit as a priority they have walked right through the Tory framing door. Not lingered on the doorstep and then sought more salubrious premises. But they are right inside – trapped into the same mantra – yes, they will cut the deficit but it will be a fairer cutting. The rich will pay. And pigs might fly.

Part 1 – British Labour Party is mad to sign up to the ‘Charter of Budget Responsibility’.…
Bill Mitchell – billy blog
The non-austerity British Labour party and reality – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

It’s almost impossible to list all the ways Obama has been one of the worst presidents in American history.

Obama failure

Here are some of the things I came up with. Let me know if you have things to add.

Record numbers of kids and families on food stamps
Record numbers of Americans on welfare
Lowest labor participation rate in over 40 years
Rampant criminality on Wall Street that went unpunished and even rewarded
Unprecedented wealth and income inequality
Trillion dollar corporate giveaways while passing cuts to safety nets and social spending
Decaying infrastructure
Trillions to banks while at the same time, record number of Americans who lost their jobs and homes
Out of control police brutality and consequent social unrest
Exploding homelessness and poverty
Continued NSA spying
Iraq in chaos
The rise of ISIS
Ukraine coup

Interesting comments from Carl Icahn. Quite egalitarian coming from a major Wall Street speculator.

Icahn gets a lot of stuff wrong (out of paradigm), but even so, the thing's he's saying are pretty egalitarian coming from such a big, Wall Street player. This guy is not only in the 1% (more like, .0001%), but he's the quintessential finance capitalist.

Team McDonnell: meet Labour’s seven economic advisers

From the FT here.

Can you spot the qualified/competent technocrat in this list?  I don't see it...
David Blanchflower
Mariana Mazzucato
Anastasia Nesvetailova
Ann Pettifor
Thomas Piketty
Joseph Stiglitz
Simon Wren-Lewis
I'm sure these ideologue people have the best goals and intentions, but that is never enough to get the job done.

Where is a Bill Mitchell or a Neil Wilson here?  Ignored.

Asia down $300B so far

Picketty better hurry up and get his so-called "wealth" tax implemented or soon his source of "money" might be completely blown out...

Monday, September 28, 2015

Chuck Spinney — Why is US Foreign Policy a Shambles?

The only way to restore coherence in America’s dysfunctional foreign policy is to follow the money and change its flow.
The Blaster
Why is US Foreign Policy a Shambles?
Chuck Spinney


Daily Kos
Pope Francis: 'Many powerful people don't want peace because they live off war'
Jen Hayden

Gen. Smedely Butler, "War is a racket" (1935)

BTW, my current impression is that the US is no longer stumbling toward war but rushing headlong into it with no prospect in sight for changing course.

Robert Parry — The Power of False Narrative

“Strategic communications” or Stratcom, a propaganda/psy-op technique that treats information as a “soft power” weapon to wield against adversaries, is a new catch phrase in an Official Washington obsessed with the clout that comes from spinning false narratives, reports Robert Parry.
Complement of the false flag operation and often the preparation for it.

Is there an economic counterpart?

Consortium News
The Power of False Narrative
Robert Parry

Saker — Sergey Glazyev’s Report: “About urgent measures to counter threats to the existence of Russia”

“Business Online» for the first time publishes the full text of the widely discussed analytical document that will be presented today at the Security Council of the Russian Federation. Today, presidential adviser Sergey Glazyev will be presenting at the closed session of the interdepartmental commission of the Security Council the same report, which became widely known thanks to front-page article in the newspaper “Kommersant”, where it was named as the most complete presentation of the program outlined by the supporters of the “modernization breakthrough.” At the same time, at the disposal of both critics and apologists of these ideas was a biased set of fragments, but not the text itself – “Business Online» fills this gap.
Today, presidential adviser Sergey Glazyev will be presenting at the meeting of the interdepartmental commission of the Security Council a report on additional measures to overcome the economic sanctions against Russia

The report “On urgent measures to strengthen the economic security of Russia”, will be presented today at the inter-ministerial committee of the Security Council, which, after reading will pass it to the “Grand Council” chaired by Russian President Vladimir Putin. Proposals for the change of economic policy were prepared under the supervision of the Presidential Adviser Sergey Glazyev, although not by him alone, but by a group of about fifteen associates. Most of them belong to the domestic scientific community, moreover, the adviser to the president is a member of the Academy of Sciences.
Meanwhile, last week, the document acquired notoriety because of freestyle exposition of its ideas in the newspaper “Kommersant” – many economists and liberal journalists criticized the report. Yet no one could read the ” Pasternak himself”, because the report has not been published anywhere. As explained one of our well-known economists, head of the Institute of dynamic conservatism Andrey Kobyakov, the quotes from the report in “Kommersant” were “completely torn out of context,” and in this distorted form caused quite a stir in the Internet and in the liberal press. Meanwhile, in his view, the document offers practical measures to prevent the collapse of the Russian economic and public institutions in a standoff with the West.
“Business Online» is the first of the Russian Media to offer its readers the opportunity to to make up their own minds about the report of Sergey Glazyev. For ease of reading, we have divided it into chapters.
Full English translation.

The Vineyard of the Saker
Sergey Glazyev’s Report: “About urgent measures to counter threats to the existence of Russia”
The Saker
Translated by KAElonaSeva, Eugenia

Top level UK Labour presentation from earlier today

View from the political left Labour Party in the UK from earlier today. Good values, vision and goals but still much needed technically to be revealed about their plans.

Pres. Obama UN Speech from today

Obama makes his case at the UN from earlier today, in light of the current much chaos in MENA and Europe.  Not too bad imo as far as values, vision and goals, but he has access to NO qualified technical people who can implement it for him.

(FD: I did not vote for him)

Trump calls BS on "phony unemployment rate"

Calls for bottom up tax cuts on income ... no mention of FICA and plenty of out of paradigm statements.

Container rate volatility

Lots of volatility in the Asia-Europe rates lately... Asia-US not so much.

Bill Mitchell — British Labour Party is mad to sign up to the ‘Charter of Budget Responsibility’

In the UK Guardian article (September 26, 2015) – John McDonnell: Labour will match Osborne and live within our means – analysis of the position being taken by the new Shadow Chancellor in Britain, John McDonnell was provided. I have to say it seems to have caused some serious conniptions among those disposed to Modern Monetary Theory (MMT) if I am to judge by the E-mails I have received in the last 36 hours and the tweeting activity that followed the publication. But if we consider what he said carefully, it may not be as bad as the Guardian headlines suggest. However, his statement discloses a deep insecurity in the Corbyn camp that leaves them adopting fiscal rules that are the hallmark of the neo-liberals. It retains focus on the fiscal balance, however, decomposed into current and capital, whereas the focus should be on creating full employment and prosperity. The adoption of the Tory fiscal rule – the so-called – Charter of Budget Responsibility – still provides some flexibility for government to avoid harsh austerity. However, it can easily become a source of unnecessary rigidity, which prevents the government from fulfilling its responsibilities to advance welfare. Overall, the insecurity it betrays is the worrying part of this statement. This blog is in two parts – today is more conceptual (and longer). Tomorrow – will be more empirical (and much shorter). We will conclude that the British Labour Party is mad to sign up to the ‘Charter of Budget Responsibility’, which is a chimera – it is not a responsible framework at all.…
Sigh. "We'll match you and raise you."

Bill Mitchell – billy blog
British Labour Party is mad to sign up to the ‘Charter of Budget Responsibility’
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, September 27, 2015

Reuters — The myth of China’s ghost cities

There is hardly a single new urban development in the country that has yet gone over its estimated time line for completion and vitalization, so any ghost city labeling at this point is premature: Most are still works in progress. But while building the core areas of new cities is something that China does with incredible haste, actually populating them is a lengthy endeavor.
When large numbers of people move into a new area, they need to be provided for; they need public services like healthcare and education. Therefore, a population carries a price tag and there is often an extended period of time between when cities appear completed and when they are actually prepared to sustain a full-scale population. This could be called the “ghost city” phase.
Most large new urban developments in China eventually move through this phase and become vitalized with businesses and a population. Essential infrastructure gets built, shopping malls open, and places where residents can work are created. In many of the biggest new cities, new university campuses will emerge and government offices and the headquarters of banks and state owned enterprises will be shipped in, essentially seeding these fresh outposts of progress with thousands of new consumers. From here, more businesses are attracted — often drawn by favorable subsidies like free rent — and more people trickle in as the city comes to life.
Some of China’s most notorious ghost cities saw phenomenal population growth in recent years, according to a report by Standard Chartered. In just a two year period from 2012 to 2014, Zhengdong New District’s occupancy rate rose doubled, while Dantu’s quadrupled and Changzhou’s Wujin district increased to 50 percent from 20 percent. Though there is still an excess of vacancies in these places, when urban areas of high-density housing are even half full there’s still a large number of people living there — more than enough for the place to socially and economically function as a city.
It generally takes at least a decade for China’s new urban developments to start breaking the inertia of stagnation. But once they do, they tend to keep growing, eventually blending in with the broader urban landscape and losing their “ghost city” label.…
Reuters – April 22, 2015
The myth of China’s ghost cities
Wade Shepard

Russian Marines on the move in Syria, showdown with ISIS expected soon

Can't wait to read Chomsky's reporting on the body-counts...

And looks like the Chinese want a piece of them too:

Trump is probably pleased:

Interfax — Vladimir Putin: Syria has only one lawful army, President al-Assad's army

President Vladimir Putin has said that in Syria Russia recognizes only the lawfulness of the army subordinate to President Bashar al-Assad and drawn attention to the lamentable results of the combat training of the Syrian opposition by the U.S. military.
"There is only one regular legitimate army there. It is the army of Syrian President Al-Assad. And it is confronted by what some of our international partners interpret as the opposition. In fact, in real life al-Assad's army is fighting against terrorist organizations," Putin said in an interview to U.S. journalist Charlie Rose for CBS and PBS TV channels ahead of his participation in the UN General Assembly.…
President Vladimir Putin has said that Russian presence in Syria is based on fundamental principles of present-day international law and is exercised at the request of the Syrian government.
"We proceed from the UN Charter, i.e. fundamental principles of present-day international law according to which some one or other type of assistance, including military assistance, can and should be rendered solely to the lawful governments of countries with their consent or at their request or under a resolution of the UN Security Council," Putin said in an interview to U.S. journalist Charlie Rose for CBS and PBS TV channels ahead of his participation in the UN General Assembly.

"In this case we have a request of the Syrian government for rendering them military-technical assistance which we are doing in the framework of absolutely legal international contracts," the Russian president added. Asked about the purpose of Russian presence in Syria Putin said: "Today it amounts to arms deliveries to the Syrian government, personnel training and rendering humanitarian assistance to the Syrian people."
Putin reminds the world of the obvious.

Russia Beyond the Headlines
Vladimir Putin: Syria has only one lawful army, President al-Assad's army

No Brains In Washington — Paul Craig Roberts

Paul Craig Roberts was the Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration and one of the developers of supply side economics. He was also associate editor of the Wall Street Journal. When he starts agreeing with Noam Chomsky and Michael Hudson about "neoliberal economics" being the problem, you know that something is up. This is not supposed to happen in a normal world.

No Brains In Washington — Paul Craig Roberts

Merijn Knibbe — The return of ‘land’ in macro economic discourse. Wonkish

Summary. One of the most influential critics of the ideas of Piketty is Matthew Rognlie – who, to be able to write down his criticisms and following the national accounts, reintroduced the idea of ‘land’, or unproduced inputs like land and natural resources including land underlying buildings, in a neoclassical world. Herewith he undid the work of John Bates Clark, who purged ‘land’ from the concept of capital of classical economics, therewith enabling the rise of neoclassical economics. But this is not the only example of the return of land into economic discourse – land has made quite a return.…
Real-World Economics Review Blog
The return of ‘land’ in macro economic discourse. Wonkish
Merijn Knibbe

Ekathimerini — Washington guided Greece in bailout talks, envoy reveals

Panagopoulos also explains in his note that Washington’s strategy was to stress the geopolitical importance of keeping Greece in the single currency and the need for the eurozone to agree a further reduction of Greek debt. The Greek ambassador suggests that the US government also encouraged the International Monetary Fund to be vocal on the issue of debt relief.
Sources also told Kathimerini that it was Washington who emphasized the geopolitical angle to the Greek issue through NATO. On June 19 NATO deputy Secretary General Alexander Vershbow said a Greek exit would “indeed have repercussions” for the alliance. He told a security conference in Bratislava that NATO was “worried about” a Grexit. His comments came just after Greece and Russia agreed a pipeline deal.
Panagopoulos describes in his telegram that there was frequent and extensive contact between Athens and Washington, including officials from the Treasury and the State Department, during the protracted negotiations that led to the signing of the third bailout in Brussels.
Turns out that the US did play a role in the process but left Greece to hang out to dry instead of pressuring Merkel to cut a deal that had a chance of actually working rather than being resulting in a German occupation of Greece.

Did Tsipras tell Varoufakis?

Turns out that the leaders of Syriza weren't even pseudo-Marxists.

Washington guided Greece in bailout talks, envoy reveals
ht Random in the comments

Saturday, September 26, 2015

Ecns — China still land of opportunity: the Caterpillar story

Caterpillar has been doing business with and in China since 1975.
Will U.S. heavy equipment giant Caterpillar become a Chinese company one day? For Chen Qihua, vice president of Caterpillar Inc. and chairman of Caterpillar China, it's a matter of not ownership but commitment.…
China still land of opportunity: the Caterpillar story

See also

Not just about Kobe. But Kobe's taking it seriously enough to begin learning Chinese.

China's e-commerce, a slam-dunk for Kobe Bryant

Xinhua — Central bank vows continuity, stability in monetary policy

The People's Bank of China (PBOC), the central bank, said on Friday that it would maintain continuity and stability in its monetary policy.
Going forward, the PBOC will continue with a prudent monetary policy and be more focused on striking a balance between tight and loose, it said in a meeting regarding the third quarter.
The central bank will employ multiple monetary policy tools to maintain "moderate" liquidity and realize proper expansion in credit and social financing.
It will continue with financial reforms to improve efficiency and try to lower financing costs.
Effort will be made to promote interest rate liberalization, improve the RMB exchange rate mechanism and keep the RMB exchange rate generally stable at an equilibrium level, it added.
Translation: We will try to look more like A Western central bank.

China Daily
Central bank vows continuity, stability in monetary policy
Stressing that China's economy will keep growing at a "medium-high" pace in the coming years, President Xi Jinping has offered reassurance to global investors during his United States visit.
"China's economic fundamentals remain solid and will continue to maintain long-term steady growth," Xi told more than 30 executives from top Chinese and U.S. enterprises in Seattle on Wednesday.…
In the first half of 2015, China's GDP expanded by 7 percent, its slowest pace in nearly a quarter of a century but still standing out from other major economies.
As long as China keeps this up, the country can realize its goal of doubling national GDP and per capita income by 2020 from their 2010 levels.…
China can no longer afford reckless expansion as resource supply and the environment become strained and the external market is limited, Bai said, arguing that the economy will get healthier and stronger by transforming its industrial structure to make it higher-end, cleaner, more innovative and driven by domestic consumption.
"Foreign firms in China should catch up with the transition and upgrade their technologies and strategies in the country," he concluded.

The BRICS Post — Xi announces $2bn South-South Fund to aid poor nations

At the UN General Assembly on Saturday, Chinese President Xi Jinping announced a $2 billion South-South Cooperation aid fund to help developing countries in their efforts towards sustainable development over the next 15 years.
“China will continue to increase investment in the least developed countries, aiming to increase its total to $12 billion by 2030,” Xi said the UN sustainable development summit in New York.
China will exempt the debt of the outstanding intergovernmental interest-free loans due by the end of 2015 owed by the relevant least developed countries, landlocked developing countries and small island developing countries,” he added.
China will also push for immediacy in operations of the newly launched BRICS Bank and the Asian Infrastructure Investment Bank, Xi said.…
The BRICS Post
Xi announces $2bn South-South Fund to aid poor nations


India’s Modi lists poverty as challenge to SDG
“It is not just about fulfilling the needs of the poor and upholding their dignity, nor about assuming moral responsibility for this, but realising that the very goal of a sustainable future cannot be accomplished without addressing the problem of poverty,” he said.

teleSUR Evo Morales: War is the Most Lucrative Business for Capitalism

Bolivian President Evo Morales delivered a speech on Friday at the U.N. General Assembly calling on world leaders to work together to provide more opportunities to economically disadvantaged populations.
In efforts to achieve this, the Bolivian leader encouraged countries to curb what he described as “unprecedented military spending.”
“War is the most lucrative business for capitalism,” President Morales said.
He also warned of ongoing efforts by wealthy countries to “demonize and criminize leaders of progressive governments with anti-capitalist agendas.”
During his speech, Evo Morales criticized the current global economic system, calling on the international community to genuinely examine the root causes of poverty.
“If we get rid of the capitalist system, then we will get rid of poverty,” Morales added.
In his address, President Morales also highlighted the importance of nationalization polices as a strategy to provide governments with greater economic sovereignty over its wealth and natural resources.
Since Morales came to power in 2005, the Bolivian government has become the main wealth generator in the country, distributing this funding through programs and social investments. As a result, since 2006, social spending in the area of health, education, pensions, and poverty alleviation programs has increased over 45 percent.
Evo Morales: War is the Most Lucrative Business for Capitalism

TASS — Bank of Russia ready to provide systemically important banks with special loan facilities

The Bank of Russia is ready to provide ten systemically important banks with special loan facilities to meet the liquidity coverage ratio (LCR), the press service of the regulator told TASS on Friday.
"The Bank of Russia may provide systemically important banks and credit institutions in their groups with irrevocable loan facilities secured by papers from the Lombard List of the Bank of Russia, gold and non-marketable assets for the purposes of covering the shortage of highly liquid assets used in LCR calculations," the Central Bank said.…
Taking a cue from the Fed.

Bank of Russia ready to provide systemically important banks with special loan facilities

Stephen F. Cohen — By Toppling Assad US Will Open Damascus' Doors to ISIL

"Russia has said for nearly a decade and certainly since the beginning of the Arab Spring that every time the United States begins a "regime change" the result is something much worse. Russia points to what happened in the aftermath of the American war in Iraq, it points more recently to what happened when we abetted the overthrow of Gaddafi in Libya. And when these things happen: failed states, civil wars, extremists… who pays the price? Not the United States. It's these countries. And now we see Europe itself facing a refugee crisis," professor of Russian studies at Princeton University and New York University Stephen F. Cohen emphasized in his interview with US author John Batchelor.
Sputnik International
By Toppling Assad US Will Open Damascus' Doors to ISIL 
Stephen F. Cohen | Professor emeritus at New York University and Princeton University

RT — US ‘preparing’ for hybrid warfare with Russia in Baltics – report

US has been getting ready for a possible war involving Russia in Europe’s Baltic States, German media reports. The report says all the NATO war games organized in the region by Washington have been intended to prepare various military response scenarios.

The Pentagon has shifted its military thinking when it comes to Moscow, selecting Russia’s direct neighbors in the Baltic region as the battleground, Deutsche Wirtschafts Nachrichten (DWN) writes.

What the US sees playing out is hybrid warfare, which employs irregular troops and focuses on destabilizing the region via mass rallies as well as cyber-attacks on critical infrastructure, according to the newspaper.…
After reports of “American missiles put in a certain location and about certain ammunition depots in Eastern European countries and the Baltic,” Russian Deputy Defense Minister, Anatoly Antonov, stated that NATO is provoking Russia into an “arms race.”
US ‘preparing’ for hybrid warfare with Russia in Baltics – report

Speaking of a renewed arms race,

Sputnik International
Rail Phantom: Russia Developing Invisible 'Death Trains' With Nukes

Neil Wilson's View of "Corbynomics" demonstrated in Living Color

See the video below for a youtube depiction of what Neil is talking about here:

Corbynomics and the Current Budget Balance.

"Build it and they will come" was the theme of a fictional Kevin Costner baseball movie.

Graham Allison — The Thucydides Trap: Are the U.S. and China Headed for War?

Must-read weekend reading. This is where the action will in this half of the 21st century. (The second half will be occupied with the consequences of climate change.)

The Atlantic
The Thucydides Trap: Are the U.S. and China Headed for War?
Graham Allison | Director of the Belfer Center for Science and International Affairs at the Harvard Kennedy School

See also

This is extremely relevant to the above and suggests that the US will inevitably fall into the Thucydides trap owing to "messianic universalism follows easily from providential exceptionalism" as a longstanding foundation stone for the edifice of US foreign policy culturally and institutionally.

How America built its empire: The real history of American foreign policy that the media won’t tell you
Patrick L. Smith interviews Perry R, Anderson, Distinguished Professor of History, UCLA

Tomgram: Nick Turse, A Secret War in 135 Countries
ht Yves Smith at Naked Capitalism

Robert Legvold — Lowdown: What Russian Citizens Really Think of Putin and Why

Setting Washington and US pundits straight on wishful thinking up in the clouds versus reality in the ground.

The National Interest
Lowdown: What Russian Citizens Really Think of Putin and Why
Robert Legvold | Marshall D. Shulman Professor Emeritus in the Department of Political Science at Columbia University, where he specialized in the international relations of the post-Soviet states.
[All of the data I cited are from surveys conducted by the Levada Center, Russia’s most professional polling organization.]
See also by Professor Legvold
RD Interview: Professor Emeritus of Columbia University Robert Legvold argues that Russia and the U.S. are in the second phase of a new Cold War that has the potential to exacerbate the situation in Syria and become another missed opportunity for cooperation.
Russia Direct, Syria is now in the middle of a new, more dangerous Cold War

Maxfux — Reports: Chinese ships head to Syria

China deploys troops to help Russia in Syria
Remember the joint military exercises of Russia and China in the sea and on land? With landing on shore and fighting against terrorists?
And here is the answer to the question of why they trained together.
"An Arab news source [Al Masdar News] reports that a military contingent of the PRC is on the way to Latakia and will arrive in Syrian ports any day. Chinese transport with military cargo was spotted on Tuesday morning, passing through the Suez canal.
Information about the Chinese military experts heading to Tartus was confirmed by the commander of the Syrian army. The report concludes that Moscow will create in Syria an anti-terrorist coalition that will become the alternative version of the military alliance formed by the US for dropping supplies to ISIS. Military entrance of China into the struggle for Syria will be an important addition to today's statement by the Iranian Foreign Ministry. At a press conference with "Russia Today" deputy foreign minister of Iran, Hossein Amir Abdollahian stated that Iran will fight ISIS together with Russia. Notably Amir talked not just about an alliance, but a creation of a broad military coalition.…
The presence of the international coalition significantly changes the balance of power in favor of Moscow, untying Russian hands for direct military action in the Middle East."
It seems that Russia has finally returned to the Middle East.
Fort Russ
Reports: Chinese ships head to Syria
Translated by Kristina Rus

Tyler Cowen — Is this the most effective development program in history?

A study of Nigerian government funding entrepreneurs as a development program, taking advantage of the entrepreneurial spirit.

Marginal Revolution
Is this the most effective development program in history?
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

David F. Ruccio — When people start to ask questions

When capitalism stops working for the broad middle class….  Marx starts popping up and becomes a topic of conversation.

Occasional Links & Commentary
When people start to ask questions
David F. Ruccio | Professor of Economics, University of Notre Dame

Dirk Ehnts — Adam Smith on tax-driven paper money

I am teaching Origins of Political Economy this fall which allows me to (re)read some classical books starting with Adam Smith. Having read Ricardo, students were wondering whether the metalist view still holds today and if not, what replaced it. I found this paper by Stephanie Bell [now Kelton] very enlightening, which contains a quote from Adam Smith. Here is the full paragraph (source) from ‘Chapter II (continuation): On Money considered as a particular Branch of the general Stock of the Society, or of the Expense of maintaining the National Capital‘:
You might want to keep this quote.

econoblog 101
Adam Smith on tax-driven paper money
Dirk Ehnts | Lecturer at Bard College Berlin

Matias Vernengo — Material well being and morality

Is there a contradiction in the pope's condemnation of capitalism and the demonstrable fact that the developed world is capitalist and as poor countries adopt capitalistic economics they develop more quickly, so that everyone is better off. In other words is the pope wrong about trickle down, that is, a rising tide does lift all boats?

Only if TINA ("there is no alternative"), and that is an unproven assumption. It also disregards the effect of neoliberalism on the developing world though the attendant neo-imperialism and neocolonialism.

Naked Keynesianism
Material well being and morality
Matias Vernengo | Associate Professor of Economics, Bucknell University

See also

WCEG — The Equitablog
Plutocratic Self-Justification as a Dissipative Activity…
Brad DeLong

"The lady doth protest too much, methinks." — William Shakespeare, Hamlet

Branko Milanovic — Imperialism and World War I

A review of Dominic Lieven’s new book “The end of Tsarist Russia: The march toward World War I and Revolution” (Viking, 2015, 430 pages). It is about the intersection of politics (power) and economics (possession) in imperialism and colonialism — and how it can lead to stumbling into war.

Global Inequality
Imperialism and World War I
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

Izabella Kaminska — Bearers

Who knew. The Bank of England still issues bearer bonds — in foreign currencies. Izzy finds that curious.

Izabella Kaminska

Anatole Kaletsky — Why the Fed Buried Monetarism

The US Federal Reserve’s decision to delay an increase in interest rates should have come as no surprise to anyone who has been paying attention to Fed Chair Janet Yellen’s comments. The Fed’s decision merely confirmed that it is not indifferent to international financial stress, and that its risk-management approach remains strongly biased in favor of “lower for longer.” So why did the markets and media behave as if the Fed’s action (or, more precisely, inaction) was unexpected?
What really shocked the markets was not the Fed’s decision to maintain zero interest rates for a few more months, but the statement that accompanied it. The Fed revealed that it was entirely unconcerned about the risks of higher inflation and was eager to push unemployment below what most economists regard as its “natural” rate of around 5%.
It is this relationship – between inflation and unemployment – that lies at the heart of all controversies about monetary policy and central banking. And almost all modern economic models, including those used by the Fed, are based on the monetarist theory of interest rates pioneered by Milton Friedman in his 1967 presidential address to the American Economic Association.
Project Syndicate
Why the Fed Buried Monetarism
Anatole Kaletsky | Chief Economist and Co-Chairman of Gavekal Dragonomics and a former columnist at the Times of London, the International New York Times and the Financial Times
ht MoveThroughit in the comments

Still dealing with Milton' Friedman's contemporary reading of Hume. However, this paper argues that David Hume's views on this subject were more liberal on inflation then Friedman's. 

The debt fallacy is starting to catch on.

Jeb's Big Economic Plan

I would like to think that Trump and maaaayyybbbeeee 50% of the GOP knows this is pure bullshit being dispensed by incompetent people ... big league!

Might be wishful thinking on my part...

UK Labor Faction: "We are not deficit deniers"


“We accept we are going to have to live within our means and we always will do – full stop,” the shadow chancellor said ahead of the Labour conference, which opens in Brighton on Sunday. 
He added: “We are not deficit deniers."  
It commits the government to delivering an overall surplus by 2019-20 and to running an overall budget surplus in “normal times”. 
The shadow chancellor said: “We will support the charter. We will support the charter on the basis we are going to want to balance the book, we do want to live within our means and we will tackle the deficit.

Meanwhile, over here in the US on the right we read perhaps just the opposite policy is emerging within the GOP faction:

Maybe the best advice for the left is to just follow the lead of the right on fiscal policy.

Anyways, looks like Dan is getting his wish.

Friday, September 25, 2015

Bill Mitchell — lightweight garbage from The Economist

Bill initially smacks down The Economist as a propaganda rag, but the rest of the article is an excellent primer on PQE and the difference between QE and the misnamed  PQE. QE is a monetary operation and PQE is a fiscal operation.
The differences are (see PQE is sound economics but is not in the QE family:
1. QE does not change the net financial asset position of the non-government sector at all – that is, the net wealth remains unchanged. It is an asset swap. The non-government sector just rearranges is wealth portfolio – more cash, less bonds. No net change.
That is the essence of a – monetary policy operation – which alters the liquidity in the economy. It does it by portfolio swaps and in doing so influences the interest rates and the term structure.
2. PQE (or OMF) means the central bank, as one part of the consolidated government sector, the other being the Treasury, would use the currency-issuing capacity of the government to facilitate the purchase of real goods and services to build productive infrastructure.
The NIB [National Investment Bank] is just a fancy title for a government agency and would be engaged in public spending – that is, in a fiscal operation. It would be spending out of some account the Bank of England created on its behalf and filled with numbers, presumably with many zeros after the first few digits.
PQE is not QE because it is a fiscal operation, which means it would increase the net financial assets in the non-government sector because it would increase national income (via spending on infrastructure).
PQE as envisaged is a fiscal operation, not a monetary operation, whereas QE as practiced by the Bank of England, the Federal Reserve Bank of America, the Bank of Japan etc are not fiscal operations.
Bill Mitchell – billy blog
lightweight garbage from The EconomistBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Have you seen this idiot, Charlie Rose, conduct an interview with Vladimir Putin?

This is the state of our media. Fools like Charlie Rose getting paid millions to ask ridiculous questions of the leaders like Putin who sits atop the world's largest nuclear arsenal.

Rose: "Some have called you an interesting 'character'"

A "character"? Really? Do you think the American president would ever be referred to as a character? Like some cartoon character?

Rose: "Are you a czar?"

WTF??? Are you kidding.

Putin looks rightfully stunned. I'm surprised he didn't walk out.

Charlie Rose, you hunchbacked moron. Anyway the full interview is on this Sunday on 60 minutes after the game. CBS is teasing it.

Boehner is resigning. Maybe that explains some of the crying yesterday.

Just heard this news. Boehner is resigning from Congress at the end of October. Maybe the Pope got to him. He was crying nonstop yesterday. Maybe the Pope made him realize what a group of sadistic creeps he is the leader of and he doesn't want any part of it. If so, good for him. The question is, who will replace him? Another sadist?

S&P Cash

Firms are making big "money" as government continues to spend at an annual rate in excess of $4.2T.

This amount reflected 5.5% growth on a year-over-year basis and 3.9% growth quarter-over-quarter. 
Seven out of nine sectors posted positive year-over-year growth, with the Consumer Discretionary (-0.8%) and Industrials (-0.9%) sectors being the only decliners.

German Steel Prices

Still bearish.

Fed Chair still expects US rate rise this year

Looks like the US is ready to go first, if so then UK will likely soon follow.  Looks like Mike's prediction in this regard is turning out to be correct.

Still no mention of pulling back on the QE, only discussion is about rates.  Via this continuing QE, the Fed is still stepping in front of savers and taking probably $100B of interest income from them even at today's near zero rates.

Thursday, September 24, 2015

Sputnik International — NATO to Examine Full Spectrum Deterrence Against Russia By 2016

More evidence that Cold War 2.0 and renewed arms race are on.

Sputnik International
NATO to Examine Full Spectrum Deterrence Against Russia By 2016

Washington's plan to modernize NATO's nuclear arsenal in Germany has triggered a heated debate across Europe and prompted concerns in Moscow; if the information is confirmed it would "shock Europe into reality," French journalist and founder of Agora Erasmus political organization Karel Vereycken told Sputnik.…

It is worth mentioning that US tactical nuclear armaments are currently stationed in Belgium, Germany, the Netherlands, Italy and Turkey.…
The irony of the situation is that while Germany's population remains widely opposed to nuclear power, the country is now being forced by Washington to station new nuclear bombs on its territory.…

Shocked Into Reality: Europeans Find Themselves Caught in US Nuclear Trap

LifeNews — Vladimir Putin to meet Barack Obama - Kremlin Confirms

The program of President as follows: Putin first will listen to colleagues and then he will speak at the General Assembly, and then hold a conversation with UN Secretary General Ban Ki-moon. After that, will hold talks with Prime Minister Shinzo Abe, and then there will be a meeting with Barack Obama - said Peskov.
I guess Putin and Russia are not all that isolated after all. The US right will be duly outraged, of course.

Fort Russ

Vladimir Putin to meet Barack Obama - Kremlin Confirms

LifeNews - translated by J. Flores


Russia Beyond the Headlines
Obama to use meeting with Putin to discuss Ukrainian crisis

They'll really be talking about Syria and ISIS.


Putin tells Elton John by phone he is ready to meet with him
Vladimir Putin spoke to British singer Elton John by telephone on Sept.24, asked him not to take offense at the telephone pranksters and said he is ready to meet with him to discuss any topic, presidential press secretary Dmitry Peskov said.
"After a meeting [on agricultural development, in the Rostov region] the president has just spoken by telephone with Elton John. He did actually," Peskov told reporters in the Rostov Region.

Misunderstanding Xi and China, and Putin and Russia

Good article. Those looking at China with Western neoliberal eyes misunderstand both China and Xi, and as a result the US likely to miss opportunities developing there that others will pick up instead.

Economy Watch
Is America at Risk of Not Participating in a Changing China?
Dan Steinbock

Russian expert Paul Robinson corrects recently published misunderstandings and mischaracterizations of Putin and Russia, base on the writings of Ivan Ilyin, whom Putin as acknowledged as an influence.

Incidentally, Putin recommended Vladimir Solovyov and Nikolai Berdyaev, and Ivan Ilyin to other leaders, and not only Ilyin or even Ilyin in particular. This mix reveals the distortion involved in selecting isolated quote from Ilyin alone and representing them as Putin's views.

In the comments Paul Grenier, the foremost Western expert on Ilyin, agrees with Robinson.

Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

Identity Politics and the Sclerosis of the American Left

We are at an interesting point in American history. We are at the apex of a 40-year triumph of neoliberal ideology in the US, and in fact, the world. At a time where public policy challenges are greater, and more global than ever, governments are less capable and less functional than ever. As a gridlocked Congress and lame-duck executive now struggle to pass the most basic of bills to keep the government open, its worth taking a look at how exactly we got here.

A quick look at our own history reveals it was not always this way. The Greatest Generation of voters and policymakers dug the country out of the Great Depression, fought a massive war on two fronts, and completely re-built the American economy in relatively short period of time. They were driven by more than just the necessities of winning wars and stopping depressions; they knew their work was deeply meaningful. They were changing not just their own lives but the entire trajectory of human society.

The unparalleled prosperity in the years that followed became its own worst enemy. The relative peace and prosperity of the post-war years led to a vacuum of meaningful employment and public engagement. The advertising Mad Men of Madison Avenue took full advantage of this vacuum, filling it with a potent, but pernicious focus on the self, on consumption, on branding, and in the process created a radical new way of forming human identities.

No longer was self-sacrifice  for the greater good a significant focus of people's lives. As the first generation of humans to be inundated with advertising from birth, the baby boomers unwittingly became a massive experiment in human social psychology. The new self-importance of post-New Deal American politics served perfectly the social movements that followed, and coalesced easily into the economic revolution of the last three decades.

The movements that shaped the baby boomer identities were uniquely uneconomic in nature, standing in stark contrast to those of their fathers. The Civil Rights, gay, and women's rights movements, along with sexual liberation while important, were movements focused exclusively on human identities. Discussions of economic power were almost entirely absent from these movements.

Perhaps no man embodies the rise of neoliberalism than Milton Freidman. Through his adept use of public media outlets to promote his radical message of market fundamentalism, Freidman was able to direct his message of individualism to a young audience eager to separate itself from the New Deal mentality of its parents. While the baby boomer motto of "dont trust anyone over 30" expressed frustration with the social conservatism and militarism of the previous generation, it, perhaps unintentionally, also condemned the New Deal values of class solidarity and economic struggle that had created the American middle class. As these values faded from America's political consciousness, they were replaced by the Freidman-esque focus on individual identity, freedom of self promotion, and adversity to leadership from the national government.

The last 30 years has show us that these identity-bases affiliations are as fragile as they are convenient. The absolute lack of any meaningful leadership from American politicians since the 1970's is plain evidence of the weakness of identity based politics. Not since Lyndon Johnson has a progressive politician taken the national stage and gone to bat for the bread-and-butter issues that are most important to America's middle class. The rise of identity politics has limited liberal movements to peripheral social issues, that while important, were addressed at the neglect of the core purposes and functions of national government. And once Ronald Reagan appeared on the scene, preaching an unapologetic message of greed, selfishness, and material prosperity, the identity politics generation was pulled right in. By this point, the Democratic party had been weakened by such an extent by identity politics, and had moved so far away from the bread-and-butter issues that had been its core, that it could not muster an effective opposition to the Reagan Revolution (and still cannot, to this day).

Neoliberalism thrives on identity politics. At first glance, neoliberalism is sleek, modern, and unoffensive. It can be easily explained and transmitted, like a zombie virus, through introductory college textbooks. It does not trip the political sensors of the identity politics generation. Unlike racism, sexism, or homophobia, it does not seek to deliberately sensor, constrain, or manage human behavior. But it ultimately does so, to a much greater extent, through a crushing blend of government power and corporate avarice. As a result, it has successfully slipped under the radar of so called "liberals" in the United States to an incredible degree, leading us to the economic dystopia we find ourselves in at the present day.The rise of unconventional candidates like Donald Trump and Bernie Sanders are clear indicators of the anger of the mass of America which has slowly and quietly been economically dispossessed by neoliberalism.

The state of black America is perhaps the clearest example of how identity politics feeds neoliberalism. The civil rights movement was a legal victory that culminated with the passage of the Civil Rights Act of 1964 and Voting Rights Act of 1965. The passage of those laws finally brought an end to the overt, institutional racism of American government. No longer was political power being used to constrain minorities in such obvious ways. Ironically however, these legal victories created a veneer of political success that allowed neoliberal economic policy to thrive, which in the end dis-empowered and dispossessed Americans of all stripes, to a degree not seen since before the civil rights victories had been achieved. Poverty, unemployment, and discontent--all the products of neoliberalism- are now nearly as tragically common as before the civil rights victories of the 1960s.

And these legal victories were not economic ones. As Dr. King knew all to well, the larger struggle was for economic rights. After the 1965 Voting Rights Act, King focused his efforts largely on economic issues, fighting for higher wages, union rights, and job guarantees. His assassination took place following a march in Memphis, Tennessee, in support of the black sanitary public works employees who were striking for higher wages. None knew better than King the importance of universal, guaranteed employment. Far more effective than any handout, subsidy, or welfare program, a job guarantee is all inclusive. It hires anyone wiling and able to work. Unlike other welfare programs, it could never be perceived as a special advantage given to favored minorities. This latter part of his legacy has been largely forgotten, but in King's own words it was equally important.

And while minority issues are important matters of national policymaking, they are, by definition, not the issues of importance to the majority of American citizens. In a nation built on the principles of majority rule, a focus on minority issues cannot be a successful electoral strategy. Therefore, the increasing focus of liberals on to issues that don't affect the majority of the country has created enormous political backlash, and come at the expense of the necessary focus on economics and the power dynamics of global capitalism.  Equal rights are much more effectively addressed through the court system, where calm, judicial analysis can be made on a case by case basis, away from the heat and tension of electoral politics. As the triumphant LGBT activists have recently demonstrated, using the judicial branch of government, instead of the politically sensitive legislative and executive branches, is a far more effective strategy for bringing about equality.

Perhaps nothing is more emblematic of the triumph of identity politics, and the sclerosis of the American left, than the ascendancy of Hillary Clinton as the heir-apparent of the Democratic party. In no other time in the history of the post-New Deal Democratic party would someone who had been so close with the economic and politically powerful be considered a viable candidate. In no other time in the party's history would someone whose main name recognition was largely due to spousal choice and not administrative success be an  implied front-runner. Yet here we are. The simplistic desire of the identity generation to have "the first female president" seemingly trumps her enormous flaws, both on her policy views, and as an effective candidate. The power of the Clinton dynasty is due entirely to the triumph of liberal identity politics.

On economic issues, the Clintons are far to the right of Richard Nixon (and their political cynicism makes Nixon look like a amateur). Their hostility to the well-being of the blue collar, unionized American working class is unparalleled in Democratic Party history, as is their post-government coddling by the corporate community.  It is only because of Hillary's perceived "progressivism" on the issues close to the bleeding hearts of identity liberals that she is anywhere close to being the party's nominee.

Never in the course of baby-boomer adulthood has a movement arisen to challenge the backward slide of the American middle class, the militarization of police, the rise of post-9/11 security state, or the impending catastrophe of climate change. No, as long as those 401(k) balances and home equity values kept going upwards, the boomers didnt make a peep. Identity politics ultimately makes for a crass, shallow, and fickle basis for political identification.

The rising insurgency of Bernie Sanders in the US and Jeremy Corbyn in the UK, along with the bold leadership of Pope Francis, may be indicators that this 40 year old political dynamic may be finally changing. The pendulum may now be swinging back to the bread and butter issues which delivered the New Deal Democratic party near total control of government for decades. Nothing could be more frightening to the global cabal of  neoliberal elites. And nothing could be more necessary to the prosperity of man and earth.

Boehner, Rubio, cry as the Pope speaks. Do they cry for the hungry and homeless when they cut their financial aid?

What a bunch of sadistic phonies. Blubbering John Boehner, crying like a baby as he introduces the Pope. Then there's Marco Rubio, who was seen crying as the cameras flashed to him.

What are these assholes crying for?

Do they cry when they cut food stamps to kids and the hungry?
Do they cry when they cut Medicare to the elderly?
Do they cry for the students who are charged interest on their loans and whose lives are wrecked when they can't pay because there's no jobs?
Do they cry for the vets and the wounded who fought in the wars they authorize?

What a bunch of phony hypocrites. They should rot in Hell.

Ken Houghton — Quote of the Day Last Thirty Years of Economics

From, naturally, Robert Waldmann, chez DeLong, pointing out that the Emperor not only has no clothes, but has been deliberately strutting his lack of stuff since the late 1970s….
Angry Bear
Quote of the Day Last Thirty Years of Economics
Ken Houghton

Bill Mitchell — The total Greek election farce – RIP democracy

Last weekend, the Greece people (or a declining proportion of them) elected a new national government. It was a farce. There was no competing electoral mandates sought. The population know what is in store for them. The policy mandate in force wasn’t even supported by popular vote. It comes from the Troika, which now effectively governs the Colony of Greece. The new Prime Minister, who sold the people out prior to the election, is now talking about making changes. Yeh, right! He is now just a tool for the Troika. National elections where the people do not vote for anything much don’t look like a healthy democracy to anyone who isn’t in denial as to what has been going on. Democracy is about the people being able to change governments that do them harm. In the Eurozone that is an old-fashioned idea. National elections have become a sop, a pretense. And the people knew it and stayed away in droves. The Greek election was a total farce – democracy died.…
Bill Mitchell – billy blog
The total Greek election farce – RIP democracy
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

National Review's Rich Lowry is a useless idiot.

Rich Lowry is a useless idiot

Conservative pundit and editor of the National Review, Rich Lowry, is a useless idiot. The other night on Fox News he said that Carly Fiorina "cut Trump's balls off" in the debate.

Lowry should check down between his own legs, the little twerp.

I've had conversations with Lowry in the past. He's another one of these conservative ideological morons who's all for endless war and the protection and enrichment of the billionaire class. Seems like Lowry's new macho chick, Fiorina, is into the same thing, which is why the GOP elite are suddenly falling in love with her.

I'm not surprised that Trump is ditching Fox News. My only question is what took him so long? It's insidious over there. A fortress mentality. I should know, I worked there for 10 years. You spout Roger Ailes' "party line" and you go far, just look at my former friend, Charles Payne, such a dope, but a huge career on Fox.

Poll has Trump getting 25% of Black Vote

If this thing is true, then it is already over right now.  And this result would be without Trump yet securing the public endorsement of a prominent wealthy black artist/entrepreneur like a Sean Combs or a Jay-Z.

Wednesday, September 23, 2015

Roderick MacFarquhar — China: The Superpower of Mr. Xi

In the almost one-hundred-year existence of the Chinese Communist Party (CCP), its current general secretary, Xi Jinping, is only the second leader clearly chosen by his peers. The first was Mao Zedong. Both men beat out the competition, and thus secured a legitimacy their predecessors lacked.

Why was Xi chosen?
Getting to know Xi Jinping as one of the most powerful men in the world and China's most powerful leader since Deng Xiaoping.

The New York Review of Books
China: The Superpower of Mr. Xi
Roderick MacFarquhar

Andrey Movchan — Glazyev’s Economic Policy of the Absurd

Absurd? If one is a neoliberal. Most of it sounds pretty reasonable to me.

Carnegie Moscow Center
Glazyev’s Economic Policy of the Absurd
Andrey Movchan

Money Morning — "Government Shutdown 2015" to Start Oct. 1!

"The October 2013 government shutdown came with a $24 billion price tag as hundreds of thousands of furloughed workers took home smaller paychecks and small businesses were hobbled by frozen government contracts and payments," Money Morning Chief Investment Strategist Keith Fitz-Gerald told his Total Wealth research service readers on Sept. 18. "Consumer confidence went into the proverbial toilet and quarterly GDP growth fell from 3% to a middling 2.4%."
Now, exactly two years later, we're about to do it all over again.
Here we go again (rolling eyes). The clowns are restless.

According to Fitz-Gerald. "The way I see it, wingnuts on both sides of the aisle are playing chicken with an $18 trillion economy and world markets once again."

Uh no. The wingnuts are all on one side of the aisle. The clown side.

"Government Shutdown 2015" to Start Oct. 1!
Money Morning