Why Nations Fail has been widely praised for its explanatory power. But it oversimplifies the workings of global capitalism.Jacobin
When Sanders says — as he does in every speech — that he’s seeking to build “a revolution,” that’s not just rhetoric. What Sanders understands in his bones is that every period of progressive reform in U.S. history has come as a result of massive street heat, of energized movements that push policymaking elites to the left. Abolitionists pressured the Lincoln Republicans toward a policy of emancipation. Militant workers and a socialist left, whose general strikes shut down several major cities in 1934, prompted Franklin D. Roosevelt’s Democrats to legalize collective bargaining and create Social Security in 1935. The civil rights movement enabled the Kennedy-Johnson Democrats to pass the landmark legislation of the ’60s. Progressive reform doesn’t happen absent a large and vibrant left.
A large and vibrant left, however, has been missing from the American political landscape since the ’60s. Precisely because Sanders has staked out the most distinctly leftist terrain of any major candidate in decades, and because so many Americans (young Americans in particular) have rallied to his cause, his campaign holds the promise of recreating that missing left.…Both promise and problems. If he wins, much more promise and less problems than if he loses. FDR created a long-lived legacy. The McGovern left fizzled after his loss.
So, once again, Mr. Obama had a shot at leading from the moral high ground, and once again, he blew it. He had the Republicans on the ropes, with all their warts on full display, but then he squandered an opportunity to effect even a pretense of challenging a thoroughly corrupt system.
Obama’s most recent performance is yet more proof that he is no change agent. A better characterization would be that he is merely another Manchurian Candidate, whose role is to protect the interests of the factions making up the shadow government that is now running the show — what former Republican congressional staffer Mike Lofgren calls the U.S. “deep state.”Consortiums News
In a previous piece, I described how the Republican Party and its ideological allies in the fundamentalist churches have confected a comprehensive media-entertainment complex to attract low-information Americans and turn them into partisans.…Not just the GOP, but also the Deep State.
Think of Robert Gates, Ashton Carter, Timothy Geithner or Eric Holder. On the surface, they seem the very antithesis of the Tea Party fanatic, gibbering about ISIS training camps in America. The preferred pose of these establishment personages is that of the politically neutral technocrat offering well-considered advice based on their profound expertise.
That pose is nonsense. They are deeply dyed in the hue of the official ideology of the governing class, an ideology that is neither specifically Democrat nor Republican. Domestically, whatever they might privately believe about essentially diversionary social issues (“rube bait”) like abortion or gay marriage, they almost invariably believe in the “Washington Consensus”: financialization, outsourcing, privatization, deregulation and the commodification of labor.
Internationally, they espouse Twenty-first Century American Exceptionalism: the right and duty of the United States to meddle in every region of the world, coercive diplomacy, boots on the ground, and the right to ignore painfully-won international norms of civilized behavior. To paraphrase what Sir John Harrington said over 400 years ago about treason, now that the ideology of the Deep State has prospered, none dare call it ideology.
Let us consider some of the tenets of their faithI would add that conventional economics based on the principles of economic liberalism is also an ideology based on assumptions derived from and supporting a POV. Conventional economists are agreed that Marxist are ideological economics are ideological, in addition to it being wrong, but they are also agreed that all "heterodox" economics is also either wrong or unworthy of consideration because "the debate over method is settled" — by them. Even though Marxists, Marxians, and Post Keynesians, for example, warned about the approach of the global financial crisis that conventional economists largely missed and haven't been able to address satisfactorily. Their response is denial.
During research for an article on Brexit, which will be published on WOLF STREET in the next day or two, I stumbled across an undetonated bombshell of a pìece from the Internet 1.0 era. Written by the DT’s Ambrose Evans Pritchard, the article reveals documentary evidence of historic U.S. covert (read: CIA) support for Europe’s federalist project. Part of that support was funded by (cue drum roll…) the Ford and Rockerfeller Foundations.…The usual suspects were involved.
I just notice that in the second quarter of 2015 US real gross private domestic investment surpassed US real government consumption expenditures & gross investment for the first time since the data have been collected (1947).
The long era of US socialism as lead by Eisenhower, Nixon, Reagan and the Bushs has ended under raging capitalist Barack Obama (and the insane Republican posse in congress and the 50 little Hoovers).
When I was studying economics in college, the most surprising thing I learned is that economics is what happens when you combine psychology with resources. I had assumed economics was more of a math/formula sort of discipline. There is plenty of that too, but the core of economics is human psychology.
Let’s talk about that.
The reason I say economics is psychology plus resources is that every transaction is based on human expectations. Businesses will invest heavily today if they believe customers are optimistic and likely to spend. If the mood is pessimism, and people are saving their pennies, those expectations stifle business investment.
I could go on for an hour about how your expectations are what creates value in this world. For example, you only make deals with people that you expect to perform. You only hire people you expect to do the job well. You only spend money if you expect to someday make more. You only buy a home when you expect real estate values to be strong in the future. And so on.
Economies run on expectations. And expectations are the result of our complex human psychology.…Scott Adams' Blog
History has a jolly habit of repeating itself as surrealist farce. Is it 1683 all over again, with the Ottoman Empire laying siege to Vienna just to be defeated by the “infidels” at the last minute?
No; it’s 2015 and a Caliph simulacrum – Ibrahim, a.k.a. Abu Bakr al-Baghdadi — has prompted a gaggle of world powers, lesser powers and assorted minions to converge to Vienna to discuss how to defeat him.
Westphalians, we got a problem. None of this makes any sense if Iran is not at the table discussing a solution for the Syrian tragedy. Moscow knew it from the start. Washington — reluctantly — had to admit the obvious. But the problem was never Iran. The problem is the ideological matrix of goons who metastasize into Caliphs: Saudi Arabia.…Asia Times
The central Bank of #Russia (#CBR) decided to leave the interest rates unchanged at its monetary policy meeting at 11% .
— Gopinath Chimirala (@Gopi_Chimirala) October 30, 2015On January 6, 2004, Senator Charles Schumer and I challenged the erroneous idea that jobs offshoring was free trade in a New York Times op-ed. Our article so astounded economists that within a few days Schumer and I were summoned to a Brookings Institution conference in Washington, DC, to explain our heresy. In the nationally televised conference, I declared that the consequence of jobs offshoring would be that the US would be a Third World country in 20 years.
That was 11 years ago, and the US is on course to descend to Third World status before the remaining nine years of my prediction have expired.…Paul Craig Roberts
A Saudi blogger sentenced in 2012 to 10 years in prison and 1,000 lashes for insulting Muslim clerics has won the European Union's prestigious Sakharov Prize for Freedom of Thought.
EU lawmakers said Thursday that they had chosen to honour Raif Badawi as a symbol of the fight for freedom of speech. The prize was to be announced publicly later at the European Parliament in Strasbourg, France.
Correa, a trained economist who received his doctorate from the University of Illinois in 2001, was joined by the Ecuadorean Coordinating Minister of Political Economy Patricio Rivera and Finance Minister Fausto Herrera. Former Economy Minister Mauricio Pozo; former President of the Ecuadorean Social Security Institute Ramiro Gonzalez, and the former Ecuadorean Vice President Alberto Dahik represented the opposition in the debate.teleSUR
China is planning to build the world's largest super-collider. According to China Daily, scientists have already completed an initial conceptual design of the mega facility. With construction slated to begin as early as 2020, the super, super-collider will be double the size of the Switzerland-based CERN LHC, with seven times the power.…
Islamic State evolved from the Arab Spring and gained momentum due to the duplicity of certain world powers, the head of Russia’s Federal Security Service (FSB) has told a meeting of top security heads of ex-Soviet states (CIS) in Moscow on Wednesday.
There are world powers that are using Islamic State (IS, former ISIL/ISIS) as a kind of “terror battering ram” to ensure their interests in Asia and Africa, said FSB director Aleksandr Bortnikov. In pursuing their goals with IS, these countries have put the world on the verge of a global religious and civilizational crisis, he added.…RT
For America to come home and untangle itself from the Imperial Project, it will have to do more than not meddle in everyone else's affairs; it will have to learn to live within its means--what it earns from producing goods and services, not what it skims from global financialization.Extraction is a characteristic of empires. It's a raison d'être, although not the only one. Some are into wealth accumulation, and others into projection of power, some into both simultaneously. However, a particular characteristic of the Post WWII American empire is global financialization, a point that Michael Hudson has been making for some time.
Abstract
This paper argues that high marginal labor income tax rates are an effective tool for social insurance even when households have high labor supply elasticity, make dynamic savings decisions, and policies have general equilibrium effects. We construct a large scale Overlapping Generations Model with uninsurable labor productivity risk, show that it has a realistic wealth distribution and then numerically characterize the optimal top marginal rate. We find that marginal tax rates for top 1% earners of close to 90% are optimal as long as the earnings and wealth distributions display a degree of concentration as observed in US dataHigh Marginal Tax Rates on the Top 1%?
China, India, Iran and Turkey have offered to use the barter system in the food industry with Russia to avoid transactions in dollars, Russian agricultural watchdog aide Alexei Alekseyenko told Sputnik News.
“We have been getting suggestions from various countries that accounts should be handled in national currencies, or even using mutual goods, that is the barter system, “Alekseyenko told the news agency. “We’ve had negotiations in Tehran, Ankara, New Delhi, Beijing, and so forth.”Russia Beyond the Headlines
Reforming the international monetary system: a stock-flow-consistent approachSebastian Valdecantos Halporn and Gennaro ZezzaJournal of Post Keynesian Economics, vol. 38, n.2, 2015, pp. 167-191
Abstract: The emergence and persistence of large trade imbalances as well as the volatility of financial flows among countries have been attributed, at least in part, to the inadequacy of the current international monetary system after the breakdown of Bretton Woods. From a different perspective, the current eurozone crisis is also the result, in our view, of a flawed institutional setting. These problems call for reforms to mitigate or avoid the recessionary bias that is the outcome of current systems, as Keynes predicted in the discussion preceding the Bretton Woods agreements. In this paper we briefly review the evidence on international imbalances, and survey the rapidly growing literature on the subject. We introduce a set of models based on the stock-flow-consistent approach pioneered by Godley (1999) and Lavoie and Godley (2003). We discuss how to use these models to explore potential reform of the international monetary system.
The first version of this paper dates back to 2011… but it has been written to provide a benchmark model so that other researchers could expand on it, so it should not become obsolete too quickly!sfc-models.net
China has scrapped its one-child policy, allowing all couples to have two children for the first time since draconian family planning rules were introduced more than three decades ago.
The announcement followed a four-day Communist party summit in Beijing where China’s top leaders debated financial reforms and how to maintain growth at a time of heightened concerns about the economy.
China will “fully implement a policy of allowing each couple to have two children as an active response to an ageing population”, the party said in a statement published by Xinhua, the official news agency. “The change of policy is intended to balance population development and address the challenge of an ageing population.”The Guardian
Flat product transaction prices in the United States have plummeted to lows not seen since the last recession in 2009. Global oversupply is leading to strong import competition, heightened by the strength of the US dollar. expect the negative price trend to continue. There is no urgency to build stocks since domestic mill delivery lead times are short and the availability of third country material at the ports is plentiful. Service centre inventories are on the high side, as a result of slow sales to end-users, who are keeping their stocks as low as possible.
Chinese participants have now returned to the market... only to see steel prices continue on their negative path. The main issue is one of oversupply, as growth in the economy slows. Local steel demand appears to be peaking. We have yet to see any significant production cuts, despite many steelmakers operating at a loss. Producers are increasingly focussing on overseas sales. Export volumes are likely to remain high until anti-dumping duties start to bite.
THE MEPS OCTOBER GLOBAL #STEELPRICE DOWN 26 PERCENT YEAR ON YEAR https://t.co/iWLT9KLAiE
— Meps International (@mepssteelprices) October 29, 2015
Western states have blundered spectacularly and repeatedly in recent years – invading Iraq, bombing Libya, supporting the overthrow of the Ukrainian government. Viewing all this, Putin, along with a lot of Russians, seems to be telling himself, ‘They can’t be that dumb. They must have some sinister motive.’ And that’s where he makes his big mistake. We are that dumb. If only Russians could understand that, they would realize that they don’t need to feel so threatened by us, and Russian-Western relations might become a whole lot better.Irrussianality
@JohnStossel Who's ignorant? Manufacturing sector as % of GDP. @realDonaldTrump is correct. pic.twitter.com/D1ATVDwE8W
— Michael Norman (@mikenorman) October 29, 2015
Some things are worth fighting for. What about a few desert islands occupied mainly by birds, goats and moles? China and Japan seem to think so, the rest of the world is alarmedand a look at other territorial disputes around the globe shows that stranger things have happened. There are about 60 such conflicts simmering worldwide. Most will bubble along, unresolved but harmless, 400 years after the Peace of Westphalia established the notion of national sovereignty. Others are more dangerous.Bloomberg Quicktake
…the whole point of monetary policy is to stabilize output. For monetary policy to work, it needs to able to reliably offset lower than normal spending in other areas with stronger than normal investment spending. If after six years of extraordinarily stimulative monetary policy (and extraordinarily high corporate profits), business investment is just “where one would expect given that the overall recovery has been disappointing,” that’s a sign of failure, not of success.Is the conclusion that monetary policy was wrong (should have been tighter), or that it was not up to the job. Those advocating for the primacy of fiscal policy would argue for the latter.
As published in the Social Sciences Research NetworkMichael-Hudson.com
The head of China's steel industry says demand is collapsing at an unprecedented rate. https://t.co/KIjkVEw6Nd pic.twitter.com/TQksYREote
— Joseph Weisenthal (@TheStalwart) October 28, 2015
Nuclear winter would cause average global surface temperatures to become colder than they were at the height of the last Ice Age. Such extreme cold would eliminate growing seasons for many years, probably for a decade or longer. Can you imagine a winter that lasts for ten years?
The results of such a scenario are obvious. Temperatures would be much too cold to grow food, and they would remain this way long enough to cause most humans and animals to starve to death.
Global nuclear famine would ensue in a setting in which the infrastructure of the combatant nations has been totally destroyed, resulting in massive amounts of chemical and radioactive toxins being released into the biosphere. We don’t need a sophisticated study to tell us that no food and Ice Age temperatures for a decade would kill most people and animals on the planet. Would the few remaining survivors be able to survive in a radioactive, toxic environment?
It is, of course, debatable whether or not nuclear winter could cause human extinction. There is essentially no way to truly “know” without fighting a strategic nuclear war. Yet while it is crucial that we all understand the mortal peril that we face, it is not necessary to engage in an unwinnable academic debate as to whether anyhumans will survive.
What is of the utmost importance is that this entire subject –the catastrophic environmental consequences of nuclear war – has been effectively dropped from the global discussion of nuclear weaponry. The focus is instead upon “nuclear terrorism”, a subject that fits official narratives and centers upon the danger of one nuclear weapon being detonated – yet the scientifically predicted consequences of nuclear war are never publically acknowledged or discussed.
Why has the existential threat of nuclear war been effectively omitted from public debate? Perhaps the leaders of the nuclear weapon states do not want the public to understand that their nuclear arsenals represent a self-destruct mechanism for the human race? Such an understanding could lead to a demand that nuclear weapons be banned and abolished.
Consequently, the nuclear weapon states continue to maintain and modernize their nuclear arsenals, as their leaders remain silent about the ultimate threat that nuclear war poses to the human species.Federation of American Scientists
Talbot and his research associate Karen Croft, to whom he dedicated his book, have found all sorts of nuggets in Allen Dulles’s papers, his appointment calendar, oral histories, and other less-used sources. In addition, Talbot infuses his book with anecdotes from interviews he personally conducted. While I found some points I could nitpick in various episodes, overall this is a worthy addition and a much-needed perspective that elucidates how we came to have two governments: the elected one and the one that doesn’t answer to the elected one.Scary stuff.
Two recently posted papers by Brookings colleagues purport to show that “even a large increase in the top marginal rate would barely reduce inequality.”[1] This conclusion, based on one commonly used measure of inequality, is an incomplete and misleading answer to the question posed: would a stand-alone increase in the top income tax bracket materially reduce inequality? More importantly, it is the wrong question to pose, as a stand-alone increase in the top bracket rate would be bad tax policy that would exacerbate tax avoidance incentives. Sensible tax policy would package that change with at least one other tax modification, and such a package would have an even more striking effect on income inequality.…Brookings
The scientist elaborated that in a tornado a powerful anti-gravitational effect takes places. Remarkably, the effective height of this anti-gravitational phenomenon is not limited to the height of the atmosphere. In the event of multiple simultaneous powerful tornadoes, we may face a phenomenon of suction of the earth atmosphere into space.…
Dr. Sarg noted that Mars once had liquid water and purportedly an atmosphere that mysteriously disappeared one day.
"If the scenario described above takes place, the Earth will become a dead planet like Mars," the scientist stressed.Then there is the Russian and Chinese doomsday strategy of exploding a nuclear device over Wyoming that would ignite the super-volcano under Yellowstone, burying North America in volcanic ash.
Unmitigated climate change is likely to reduce the income of an average person on Earth by roughly 23 percent in 2100, according to estimates contained in research published today in the journal Nature that is co-authored by two University of California, Berkeley professors.
The findings indicate climate change will widen global inequality, perhaps dramatically, because warming is good for cold countries, which tend to be richer, and more harmful for hot countries, which tend to be poorer. In the researchers’ benchmark estimate, climate change will reduce average income in the poorest 40 percent of countries by 75 percent in 2100, while the richest 20 percent may experience slight gains.Berkeley News
As you can see, the circle of credit-insurance-low liability becomes a perfect money filtering machine. This is not new mind you, the system has been in place since the fall of the Soviet Union. As was the case with La Cosa Nostra, or the Sicilian mafia in US lore, the system resembles racketeering, with everybody involved taking a piece of the pie. In the case of Ukraine, the pie is in fact the hard earned livelihoods of every-single-solitary Ukrainian citizen. They are the ones “guaranteeing” the oligarchs’ investment, which is in fact no investment at all. Now for the interesting part, let me tell you about the part where Western oligarchs take over. This is where the battle for Ukraine has been settled, not at a conference in Minsk, but high atop some skyscraper owned by fabulously wealthy men.…New Eastern Outlook
In general, economics treats money as an "illusion" in that it facilitates the trade and exchange of real goods and services, but fundamentally does not impact or distort that exchange (at least to no great degree). A rose is a rose is a rose, and therefore a good is a good is a good regardless of whether it's prices in dollars or shekels. Therefore, money in general and banks in particular do not play a central role in macro monetary models, which instead focus on things like time preference, consumer expectations, etc.
In reality, money, or more particularly credit, plays a central role in the economy because of how bank lending works. When banks lend, they lever up their balance sheet, and therefore create money out of "thin air", constrained only by capital requirements on the supply side, and the number of qualified borrowers on the demand side.…
These two $6T are not comparable. In the dot-com bubble, the loss wiped out venture accounts and household wealth in brokerage accounts, but neither was enabling additional lending (and therefore money supply). In the housing bust, $6T of bank capital (which collateralized the loans) was propping up an additional $120T or so (at a 5% capital requirements ratio) of money supply, so the impact on the economy was over an order of magnitude greater.…Winterspeak.com
Alexander Zinoviev, along with Solzhenitsyn and Sakharov, was one of the three great intellectual giants who became dissidents during the late Soviet period.
This remarkable and prophetic interview was originally published in 1999 in the French Figaro Magazine. Its original title was: ”The West and Russia - A Controlled Catastrophe”
An annual conference attended by Russian and foreign luminaries and Zinoviev fans in memory of Zinoviev's work will be held in Moscow on October 27.
Translated from Russian especially for RI by Sergei Malygin and Andrey Medvedev
Alexander Zinoviev was exiled from the Soviet Union with his wife and daughter on 6th August 1978, principally on account of his writings on the nature of Soviet communism.
They spent the next twenty years based in Munich. On 30th July 1999 they returned to Moscow, principally on account of his writings on the West. Zinoviev died in 2006 and his remains are buried in the Novodeviche convent.
These few lines suggest that he must have been a remarkable man. He was. Born in 1922 to a Russian peasant family, he was the sixth of eleven children who became an international phenomenon in a variety of fields: philosophy (particularly in the field of many-valued logic), literature (novels, novellas, poetry), politics, sociology, and painting. The two books which, for me, best illustrate the reasons for his exile and rehabilitation are, respectively, The Reality of Communism and The West.
This, Zinoviev’s last interview before returning to Russia provides an excellent example of his unmatched forensic gifts as a sociologist.
I look forward to sharing with friends of RI further details of the life and work of Aleksander Aleksandrovich in future columns.
Michael Kirkwood | Leading specialist on Zinoviev, professor emeritus, University of Glasgow.
Trump: "We are led by very, very stupid people.... very, very stupid people..."
U.S. Plans to Sell Down Strategic Oil Reserve to Raise Cash https://t.co/lHM7oXmLYr
— adeca (@laadeca) October 27, 2015
Revenue rose 9 percent to $38.1 billion. Ford’s global market share (7.6 percent) and automotive operating cash flow ($2.8 billion positive) both increased for the third consecutive quarter. Its pretax automotive operating profit more than tripled, from $686 million to $2.2 billion.
@iauto update: Ford posts highest-ever N.A. profit as global earnings double: Ford had its best-ever quarter i... https://t.co/t3QURT2Ny5
— Auto Insider (@iauto) October 27, 2015
#BREAKING US nat #gas prices plunge below $2 per mBtu for first time since 2012 (and only 4th time in 15 years) #oil pic.twitter.com/fqLBbgS9Pu
— Javier Blas (@JavierBlas2) October 27, 2015
The tale of two nations – two monetary systems – two continents – Canada and Portugal. It is reasonable to assume that when voters in so-called free democracies elect members to their parliaments who then freely coalesce across ‘party’ lines to form an absolute majority that they will be given the right to govern irrespective of the ideology they represent and the policies that they have put forward to the voters to win their approval. That seems to happen in Canada. It definitely doesn’t happen in Portugal. The Portuguese President dropped his so-called “bomba atómica” last week when he refused to endorse the coalition of parties that held the absolute majority of seats in the Assembly as a result of the recent national election. He indicated that he would not allow a government that would relax the fiscal austerity and consider exiting the Eurozone. His motivation was that financial markets had to remain appeased. It was an extraordinary intervention and will come back to haunt the nation given that the conservative austerity government will lose its authority as soon as it puts its platform to the new Parliament for endorsement (within the next 10 or so days). Then the nation is in chaos and the President will be compelled to accept the anti-austerity left coalition or something worse will happen. But, happily, in Canada, the election of the Liberal Party is a rejection of the obsession with fiscal surpluses – at least for now.…Bill Mitchell – billy blog
Experts warn that Department of Defense espionage program places international NGOs at great riskAnd the US government is all up in a tizzy about Russia and China clamping down on NGOs. More hypocrisy from the hegemon. More US soft power down the drain, along with US credibility.
JUST IN: Obama & Congress near deal to raise debt ceiling, set budget for 2 years https://t.co/2t4NZEURFp pic.twitter.com/nO8PQ5hDfn
— The Hill (@thehill) October 26, 2015
So there aren’t even 30 Republicans in the House willing to keep the United States government from defaulting on its debts. How did we get here?
All this suggests that every force involved is propelling Republicans not just toward forcing a crisis, but forcing an actual default. At some point, they might realize that “Republicans are holding a gun to the head of the American economy and they’ll fire unless we let them slash Social Security and Medicare” isn’t exactly a winning political message to send. But who knows how much damage will be done before they realize that?This is an opportunity that Democrats can't afford to miss. Everyone at the WH must be laughing hysterically. Especially after already declaring that the president will not use either the 14th Amendment or the platinum coin gambit that the right could howl over.
Several days ago Steven Hill presented at the Graduate Center CUNY in New York his new book “Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers”. It discusses (according to Steven’s presentation; I have not read the book yet) the decline of trade unions, the future of jobs and robotics. It struck me that there are (In his presentation as well as in most of what we read), when it comes to the future of work, two narratives that often seem contradictory. There is a narrative of job-automatization and robotics whereby most of our jobs end up taken by the robots. Then there is a narrative of people working more and more hours as work intrudes into their leisure time: instead of taking it easy throughout the day as the first narrative implies, we would use our “free” time to rent apartments we own or drive our cars as taxis. According to the first narrative, we are in danger of having too much leisure time; according to the second, of having none.
Let’s consider the two scenarios in turn, and separately.…
But perhaps it may be better to think of the two scenarios as just one scenario that would combine lots of labor substitution with heavy segmentation of tasks (and much more intense labor discipline made possible thanks to automation). In that case, jobs to which we have become accustomed would cease to exist: lots of today’s functions will be automated, and for many others, “amateurs”, not professionals, would do them.…Global Inequality
Actually they’ve done no such thing. But they do effectively assume that it’s unnecessary all the time...
Hayek’s main target here were socialists who believed that a complex economy could be centrally planned—thus doing away with markets institutionally. But he also criticized his mainstream rivals for assuming the existence of all-seeing, all-knowing “economic agents” to overcome mathematical problems in their equilibrium-obsessed models of the economy. Here he was actually in agreement with his great rival Keynes, since they both said that the only way equilibrium could be achieved would be if people’s expectations about the future were both shared and correct.…Forbes
The output gap is a key concept in mainstream economic analysis of inflation. Although I am not happy with the details of the standard analysis of what determines inflation, I use a weaker version of the standard output gap in my thinking. I refer to this version as the generalised output gap (GOG). In this article, I give a simplified summary of economic theories of inflation and how various conceptions of the output gap relate to this.Bond Economics
A great deal has been said in the press, in France in particular, that the right coalition emerged victorious in the recent election for the legislature in Portugal. This is false. The right parties, led by Prime Minister M. Pedro Passos Coelho, won only 38.5% of the vote and lost 28 seat in parliament. A majority of Portuguese voters voted against the current austerity measures, in fact 50.7%. These voters cast their votes for the moderate left but also for the Portugese Communist Party and other factions of the radical left. De facto, the Socialist has Party 85 seats, the Left Bloc (radical left) 19, and the Communist Party 17. Out of 230 seats in the Portugese Parliament, this gives 121 to the anti-austerity forces, when the absolute majority is 116…RussEurope
The socialists and the left bloc clearly said that this accord [imposing austerity] must be revised. This is what motivated President Cavaco silva in his decision to reject the program for governance presented by the Left. But the motivs went further. He said: "After all the sacrifices made in the framework of an important financial accord, it is my duty and within my constitutional prerogatives, to do everything possible to prevent false signals from being sent to financial institutions and international investors." It is this statement that poses the real problem. What M. Cavaco thinks about a government of the united left is his right, and it is very likely the case. But in a parliamentary republic, as Portugal actually is, it is not in his power to interpret future intentions in order to oppose the will of the voters. If a coalition of the left and extreme left has a majority in Parliament, and if it presents — as is the case — a program for government, he must give it a chance. Any other decision is as an unconstitutional act, a "coup d'Etat."
On a beaucoup dit, en France en particulier, dans la presse que la coalition de droite était sortie vainqueur des dernières élections législatives portugaises. Ceci est faux. Les partis de droite, emmené par le Premier-ministre M. Pedro Passos Coelho n’ont réuni que 38,5% des suffrages, et ont perdu 28 sièges au Parlement. Une majorité d’électeurs portugais a voté contre les dernières mesures d’austérité, en fait 50,7%. Ces électeurs ont porté leur vote sur la gauche modérée mais aussi sur le Parti Communiste Portugais et d’autres formations de la gauche radicale. De fait le Parti Socialiste portugais a 85 sièges, le Bloc de Gauche (gauche radicale) 19 et le Pari Communiste portugais 17. Sur les 230 sièges du Parlement portugais, cela en donne 121 aux forces anti-austérité, quand la majorité absolue est de 116[2].…
Les socialistes, et le « bloc de Gauche » ont clairement dit que cet accord devait être révisé. C’est ce qui a motivé le Président Cavaco Silva dans sa décision pour rejeter le projet de gouvernement présenté par la Gauche. Mais, les attendus de sa déclaration vont encore plus loin. Il a dit : « Après tous les importants sacrifices consentis dans le cadre d’un important accord financier, il est de mon devoir, et dans mes prérogatives constitutionnelles, de faire tout mon possible pour empêcher de faux signaux d’être émis envers les institutions financières et les investisseurs internationaux[3] ». C’est cette déclaration qui pose véritablement problème. Que M. Cavaco Silva pense qu’un gouvernement de la gauche unie puisse conduire à un affrontement avec l’Eurogroupe et l’UE est son droit, et c’est même très probablement le cas. Mais, dans une république parlementaire, comme l’est le Portugal actuellement, il n’est pas dans son pouvoir d’interpréter des intentions futures pour s’opposer à la volonté des électeurs. Si une coalition de gauche et d’extrême-gauche a une majorité au Parlement, et si elle présente – ce qui était le cas – un programme de gouvernement, il doit lui laisser sa chance. Toute autre décision s’apparente à un acte anticonstitutionnel, un « coup d’Etat ».
The debate amongst economists is just how bad the contraction is going to be this year - and while everyone agrees there will be a contraction, there is little consensus on how severe it will be.
Uralsib estimates Russia’s economy contracted 4.9% y/y in September versus 5.1% y/y in August. Russia’s Economy Ministry is more optimistic, estimating that GDP dropped just 3.8% y/y in September after falling 4.6% y/y in August. And clearly this year is going to be tougher than most were thinking in January following a raft of downgrades in the last weeks.BNE
The notion that philanthropy resulted from the invention of money is a pillar of classical economics. It is also a myth. After more than two centuries of searching for an indigenous society that approximates Adam Smith’s parable of the original barter system, anthropologists have concluded that it can only be imaginary. “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing,” wrote Cambridge anthropologist Caroline Humphrey in a 1985 paper titled “Barter and Economic Disintegration” in the journal Man. Instead, researchers have discovered that philanthropy is far more central to human social organization than economists had ever imagined.
The notion that philanthropy resulted from the invention of money is a pillar of classical economics. It is also a myth.…
This suggests that Adam Smith wasn’t so much chronicling the evolution of modern market economies as he was observing what existed during his time and then projecting it onto the human past.…
Mateusz Piskorski, the leader of Zmiana, presented the closing and conversion of Lodz's factories as part of the US-NATO subjugation of Poland since the collapse of the Polish People's Republic and the transformation of the country into a victim of imposed liberal schemes and a semi-colonial reservoir of cheap labor for Western corporations. The situation of Lodz is the same in many other Polish cities according to Piskorski.Fort Russ
Jarek Augustyniak, another of Zmiana's leaders and a long-time resident of Lodz who, like many others, was forced to migrate from the city due to harsh economic conditions, explained that Lodz was a city "built by an extremely exploitative and harsh capitalism in the 19th century, and destroyed by capitalism in the late 20th and early 21st century." Only an industrial, social Poland, with strong industrial cities like Lodz, can be truly independent, Augustyniak emphasized.
Portugal's opposition Socialists pledged on Friday to topple the centre-right minority government with a no-confidence motion, saying the president had created "an unnecessary political crisis" by nominating Pedro Passos Coelho as prime minister.
The move could wreck Passos Coelho's efforts to get his centre-right government's programme passed in parliament in 10 days' time, extending the political uncertainty hanging over the country since an inconclusive Oct. 4 election.
Coelho was named prime minister on Thursday after his coalition won the most votes in the national election but lost its majority in parliament, which swung to leftist parties.Reuters (UK edition)
This set up a confrontation with the main opposition Socialists, who have been trying to form their own coalition government with the hard left Communists and Left Bloc, who all want to end the centre-right's austerity policies.
Barcelona will not be the first European city to launch such a scheme. Local currencies are all the rage these days. There could be as many as 3,000 forms of local money in use around the globe, says Community Currencies in Action, a global partnership promoting such schemes that is part-funded by the European Union’s Regional Development Fund. Which begs the question…
Why’s the EU promoting parallel local currencies around the world?Wolf Street
In these senses, Marxian questions are relevant today: how does social change or government policy affect classes differently? Are individual choices consistent with aggregate well-being or not? Do capitalistic property rights increases economic growth or hold it back?
I'd add something else. Marx asked, and answered, a fundamental question: what is the point of economic life? For him, it was to increase real freedom and self-realization. Capitalism, he said, doesn't do this but instead alienates us:…Like I have been saying. The fundamental issue for Marx, who was not only doing economics and political theory but also philosophy, is achieving personal freedom within a sustainable social, political and economic structure. Marx regarded "the sovereign state" acting though the government as the agent of class interests and not the people. In this respect, he was in agreement with classical liberals whose aim was to replace the feudal order under which monarchs and aristocrats had ruled Europe for centuries. This dialectic between different forms of liberalism continues to the present, and Marx still has important things to say about it.
On June 3rd at De Balie in Amsterdam, ‘angry old man’ Yash Tandon presented his new book Trade is War: The West’s War Against the World (2015) – a new perspective in the debate on the Transatlantic Trade and Investment Partnership (TTIP), the controversial trade agreement which the EU is currently negotiating with the US. In Europe, opponents of TTIP are mainly concerned about transparency, ever-increasing corporate power and the impact on the environment. But what does the treaty imply for North-South relations and what are the geopolitical dynamics behind it?
The debate on Trade is War – organised by TNI, SOMO and Both ENDS – places TTIP in a broader perspective. Tandon passes a devastating judgement on free trade. “Since colonial times, global trade has been aimed at Western world domination”.…The nascent US realized that the British system of "free trade" was for the benefit of the British Empire and not the countries it was supposed to benefit. Hence, the American system of tariffs and protection of infant industries under which the US prospered was developed, based on Alexander Hamilton's American School of Economics and the National School of Friedrich List and Henry Carey.
Sure, humans often make calculated decisions, but the more I learn about the nexus between individual behaviour and how we behave in groups, the more I see very little value in rational-individualist views of economic systems that see all behaviour arising from God-given personal tastes. Without acknowledging the necessity of group-coordination mechanisms intrinsic in our behaviour, we are missing the main story.Fresh Economic Thinking
[Oskar] Morgenstern proposed that candidates be required to“have done some econometric work in the strictest sense” and be “in actual contact with data they have explored and exploited for which purpose they may have even developed new methods.” Though remembered as the coauthor of one of economics’ most prominent theoretical treatise, The Theory of Games, Morgenstern also had a longstanding interest in statistical work. His feeling was that the Econometric Society and Econometrica editors overvalued “purely abstract work,” while stimulus should be give, to “papers involving data.”The Undercover Historian