December 2017 ~ Mike Norman Economics

Sunday, December 31, 2017

Bruce Lesnick — The Unemployment Conspiracy

JG v. UBI

Counterpunch
The Unemployment Conspiracy
Bruce Lesnick

Sputnik — Transnational Networks are 'Disempowering Parliaments' - 'Shadow Powers' Author

Does a country like Germany actually need a real government and a proper parliament? For global business, at least, the answer is no. Transnational structures have long taken over the tasks of parliaments and governments, telling them what they should do. Politicians, who are officially responsible, are no more than discussion partners and implementers.
This is the situation described by commentator Fritz R. Glunk in his new book, "Shadow Powers: How transnational networks determine the rules of our world" (Schattenmächte: Wie transnationale Netzwerke die Regeln unserer Welt bestimmen).

Sputnik International

Transnational Networks are 'Disempowering Parliaments' - 'Shadow Powers' Author

Sputnik Deutschland interviews Fritz R. Glunk, author of Shadow Powers: How transnational networks determine the rules of our world

John McMurtry — Life Grounding Marx 150 Years After Capital

If you are at all interested in Marx, you will likely find this interesting and even provocative. It views Marx's work in terms of evolutionary theory and introduces "life-capital."

Counterpunch
Life Grounding Marx 150 Years After Capital
John McMurtry

John McMurtry is a Fellow of the Royal Society of Canada whose work is translated from Latin America to Japan. He is the author of the three-volume Philosophy and World Problems published by UNESCO’s Encyclopedia of Life Support Systems (EOLSS), and his most recent book is The Cancer Stage of Capitalism: from Crisis to Cure.

Marshall Steinbaum — Why Are Economists Giving Piketty the Cold Shoulder?

Important.

Marshall Steinbaum catches us up on what's happened since the publication of Piketty's Capital in the 21st Century three years ago. Actually, lots.

But the economics profession has largely ignored it since it involves distribution and the economics profession doesn't consider distribution to be relevant to economic analysis or policy formulation. Distribution is assumed to be the result of marginal product of capital and marginal product of labor. So, in aggregate everyone deserves what they get.

Boston Review
Why Are Economists Giving Piketty the Cold Shoulder?
Marshall Steinbaum | Fellow and Research Director at the Roosevelt Institute

Other voices on Iran — links

What you won't hear in the lamestream media aka the spin room and the echo chamber.

The Vineyard of the Saker
Iran protests: Western salivation, agitation & desperation

Ramin Mazaheri | chief correspondent in Paris for Press TV

LobeLog
Iran Protests: Civil Rights Movement Or Revolution?

Reza Marashi | director of research at the National Iranian American Council and previously served in the Office of Iranian Affairs at the U.S. Department of State

Moon of Alabama
Iran - Early U.S. Support For Rioters Hints At A Larger Plan

Sputnik International
Peaceful Protests Constitutional Right of Iranians - President Rouhani

LobeLog
Spinning the Iranian protests

James M. Dorsey | senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture

The Unz Review

Iranomaidan
Anatoly Karlin

Sputnik International

Iranian Protests: The Story So Far

Fort Russ
Iran Protest Crisis: Everything You Need to Know

Joaquin Flores | Chief Editor of FRN and Director of the Center for Syncretic Studies, Belgrade.

Fort Russ

Extremist terrorist groups infiltrating Iranian cities to turn protests into armed uprisings - Iranian media

FAKE NEWS surrounding the Iran Protests

WATCH as Iranian official says two dead protesters were killed by foreign agents and not by police

Paul Antonopoulos

William J. Astore - Ellsberg’s The Doomsday Machine: The Madness of America’s Nuclear Weapons

We all know here what is going on with the US military, and surely the MSM journalists must know too, so why are they not concerned? Perhaps they are but are just hoping for the best. If they write the truth their editors will just throw it out, and if they keep writing the truth they will lose their jobs. I have sent to the editor of the Guardian and many of its journalists articles written by Paul Craig Roberts warning about Armageddon. I have sent lots of stuff off to George Monbiot but I have never had a reply.

I just finished Daniel Ellsberg’s new book, The Doomsday Machine: Confessions of a Nuclear War Planner. Talk about hair-raising! Ellsberg, of course, is famous for leaking the Pentagon papers, which helped to end the Vietnam war and the presidency of Richard Nixon as well. But before Ellsberg worked as a senior adviser on the Vietnam war, he helped to formulate U.S. nuclear policy in the late 1950s and early 1960s. His book is a shattering portrayal of the genocidal nature of US nuclear planning during the Cold War – and that threat of worldwide genocide (or omnicide, a word Ellsberg uses to describe the death of nearly everything from a nuclear exchange that would generate disastrous cooling due to nuclear winter) persists to this day.

4) When the atomic bomb was first tested in 1945, there were fears among the scientists involved that the atmosphere could be ignited, ending all life on earth. The chance was considered remote (perhaps 3 in a million), so the scientists pressed ahead.

Most Americans still don’t understand that even a smallish nuclear exchange involving a few hydrogen bombs could very well lead to nuclear winter and the deaths of billions of people on the earth (due to the widespread death of crops and resulting famine and disease).
Despite the genocidal threat of nuclear weapons, the US is persisting in plans to modernize its arsenal over the next 30 years at a cost of $1 trillion.

Ellsberg sees this all as a form of collective madness, and it’s hard to disagree. He quotes Nietzsche to the effect that madness in individuals is rare, but that it’s common among bureaucracies and nations. The tremendous overkill inherent to US nuclear weapons – its threat of worldwide destruction – is truly a form of madness. For how do you protect a nation or uphold its ideals by launching a nuclear war that would kill nearly everyone on earth? How does that make any sense? How is that not mad?

Antiwar.com: W.A.Store - Ellsberg’s The Doomsday Machine: The Madness of America’s Nuclear Weapons

Alastair Crooke — Behind Korea, Iran & Russia Tensions: The Lurking Financial War

While out of paradigm with MMT, the conventional thinking underlying the scenario that Crooke depicts reflects a widespread view that is shared by most political leaders who are responsible for shaping the world through their decisions. This thinking lies at the basis not only of global finance but also geopolitics and geostrategy. So, it is important to understand it because it is shaping emerging events of great consequence. Financial warfare can easily turn into military warfare, and there are a number of hotspots already as we enter 2018 — North Korea, the South China Sea, Taiwan, Ukraine, Syria, Iran, Yemen, etc. The fuse is burning.

Strategic Culture Foundation
Behind Korea, Iran & Russia Tensions: The Lurking Financial War
Alastair Crooke | Former British diplomat, founder and director of the Beirut-based Conflicts Forum.

Livia Gershon — The Different Meanings of Monopoly

The history of the board game.

JSTOR Daily

The Different Meanings of Monopoly
Livia Gershon

Saturday, December 30, 2017

Tyler Durden — US State Department Hints At Iran Overthrow: Are We Witnessing The Early Stages Of Regime Change?

Are we witnessing regime change agents hijacking economic protests?

Zero Hedge

US State Department Hints At Iran Overthrow: Are We Witnessing The Early Stages Of Regime Change?

Tyler Durden

See also

SouthFront
US Defense Secretary Warns Assad From Attacking US-backed Forces, Claims US Shifts Strategy In Syria
lkb22

Nick Routley — China’s Digital Wallets Offer a Glimpse at the Future of Payments

The numbers are astounding. Most people outside of China probably have no ideal what is happening and how quickly it is happening.

Visual Capitalist
China’s Digital Wallets Offer a Glimpse at the Future of Payments
Nick Routley

And now it is official: the official non-Trumpist Republican line is now that all of that stuff about the tax "reform" bill delivering materially faster economic growth in exchange for widening inequality was just boob bait for the bubbas.

Marco Rubio has second thoughts. Watch GOP candidates up for reelection in 2018 backpedal.

Grasping Reality
And now it is official: the official non-Trumpist Republican line is now that all of that stuff about the tax "reform" bill delivering materially faster economic growth in exchange for widening inequality was just boob bait for the bubbas.
Brad DeLong | Professor of Economics, UCAL Berkeley

Alexander — Navalny’s phoney Presidential bid and the Russian Presidential election

Another side of the story that you won't find in Western media.

Russia Feed
Navalny’s phoney Presidential bid and the Russian Presidential election
Alexander

Ekaterina Blinova — CCTV Commentator: Trump Dashes Hopes of Clinton-Backing Chinese Elites

CCTV is China Central Television. The article provides insight into the thinking of Chinese elites, business and political.

The Chinese business elites backed the wrong horse, CCTV Panview editor and commentator Tom McGregor has told Sputnik, speaking about them pinning their hopes on Democratic presidential nominee Hillary Clinton. According to McGregor, some of them still believe Donald Trump will fail and maintain ties with the Clintons and George Soros....

Sputnik International | Opinion
CCTV Commentator: Trump Dashes Hopes of Clinton-Backing Chinese Elites
Ekaterina Blinova

Bloomberg - The U.S. Is Becoming the World’s New Tax Haven

Seven years ago, the US led an effort to address a problem facing governments everywhere. Each year, people manage to avoid paying an estimated $2.5 trillion in income tax — a giant sum that could be used to combat poverty, update infrastructure or lower tax rates for law-abiding citizens.

Now, however, the US is becoming one of the world’s best places to hide money from the tax collector. It’s a distinction that the country would do well to shed.

In 2009, amid growing budget deficits and a tax-fraud scandal at Swiss bank UBS AG, the Group of 20 developed and developing nations came to an agreement: they would no longer tolerate the network of havens, shell companies and secret accounts that had long abetted tax evasion.

A year later, the US passed the Foreign Account Tax Compliance Act, which required foreign financial institutions to report the identities and assets of potential US taxpayers to the Internal Revenue Service.

Under threat of losing access to the US financial system, more than 100 countries — including such traditional havens as Bermuda and the Cayman Islands — are complying or have agreed to comply.

The US was expected to reciprocate, by sharing data on the accounts of foreign taxpayers with their respective governments. Yet Congress rejected the Obama Administration’s repeated requests to make the necessary changes to the tax code.

As a result, the Treasury cannot compel US banks to reveal information such as account balances and names of beneficial owners.

The US has also failed to adopt the so-called Common Reporting Standard, a global agreement under which more than 100 countries will automatically provide each other with even more data than Fatca requires.

While the rest of the world provides the transparency that the US demanded, the US is rapidly becoming the new Switzerland.

Financial institutions catering to the global elite, such as Rothschild & Co and Trident Trust Co, have moved accounts from offshore havens to Nevada, Wyoming and South Dakota. New York lawyers are actively marketing the country as a place to park assets.

A Russian billionaire, for example, can put real-estate assets in a US trust and rest assured that neither the US tax authorities nor his home-country government will know anything about it. That’s a level of secrecy that not even Vanuatu can offer.

From a certain perspective, all this might look pretty smart: shut down foreign tax havens and then steal their business. That would be the kind of thinking that’s undermining America’s standing in so many areas, from trade to climate change.

Instead of using its power to establish an equitable system of global governance, it’s demanding a standard from the rest of the world that it refuses to apply to itself. That isn’t leadership.

Bloomberg - The U.S. Is Becoming the World’s New Tax Haven

Puppet President: Trump to arm Ukraine with lethal weapons as push for major war increases

It doesn't look like there is any let up to Washington aggression around the world, and apparently the US is also trying to restart the war in Syria as well. And most people in the West are asleep blissfully unaware of what's going on, but I argue with people in the Guardian's CiF who tell me, 'Putin is a bully who must be taught a lesson', but then I ask them is it worth everyone they know and love, and the town they love, and their favourite street, and their favourite pub, and the country they love, all getting blown off the face of the planet for?

Editor’s note: You won’t see Infowars, Alex Jones or much of the other ‘alternative’ media report on the Trump administration arming countries like Ukraine and Saudi Arabia with billions of dollars of lethal weapons. So much for peace and America first. All rhetoric that the gullible sheep lap up.

Russia has reacted fiercely to the end of week breaking news that President Trump plans to approve the legal sale of US antitank missiles and possibly other advanced systems to the Ukrainian government in a move that could change the battlefield calculus of the war between Ukrainian and Russian-aligned forces in the Donbass region along the Russian border.

ABC News described the “total defense package of $47 million includes the sale of 210 anti-tank missiles and 35 launchers” which will be sure to harm Trump’s longtime stated goal of improving relations with Moscow.

Though Kiev has long had limited access to US lethal arms through private contracts with American and international arms producers, this represents a significant escalation involving the likelihood that advanced US systems would be used directly on Russian-aligned militias in the eastern Donbass region and potentially Russian forces along the border. Up until now, the White House has been reluctant to escalate the war so openly, as it did when it supplied anti-Assad fighters in Syria with sophisticated TOW anti-tank missiles.

While the US State Department claims the move is “defensive” in nature, Russian deputy foreign minister Sergei Ryabkov charged the US with deliberately “crossing the line” and pushing the Ukrainian authorities “towards new bloodshed,” adding that “American weapons can lead to new victims”.

“Kiev revanchists are shooting at Donbass every day, they don’t want to conduct peace negotiations and dream of doing away with the disobedient population. And the United States has decided to give them weapons to do that,” Ryabkov said. He further slammed the US as an “accomplice in igniting a war” whose political leadership is “blinded by Russophobia and eagerly applaud the Ukrainian nationalist punitive battalions.”

Hang The Bankers

Puppet President: Trump to arm Ukraine with lethal weapons as push for major war increases

David F. Ruccio — It’s the profits, stupid!

I would phrase it somewhat differently: "It's the distribution, stupid."

The social and political problems arise from grossly asymmetrical distribution and the ensuing distributional effects economically through highly asymmetrical income and wealth.

Occasional Links & Commentary
It’s the profits, stupid!
David F. Ruccio | Professor of Economics, University of Notre Dame

Leit Motif

Here:

NAFDAC hereby alerts members of the public on the circulation of fake Coartem tablets. The active ingredients on the sachet of the fake Coartem tablets are written as ARTMETHE/UMFANTRNE while the manufacturer is written as NOVRTS. pic.twitter.com/J2auTl1nZ0
— NAFDAC NIGERIA (@NafdacAgency) December 28, 2017

Then here:

Plenty of dupes while toiletry shopping in Venezuela: Hoed & shouders shampoo, Yahnsan's soap and more pic.twitter.com/U6SVo3ship
— Patricia Laya (@PattyLaya) November 22, 2017

See it? It's called capitalism with Chinese characteristics...

All aboard the $1T deficit train

EVERYBODY is on board.

We are about to hit trillion dollar deficits, and unlike last time, they'll be self-inflicted. https://t.co/4DE5Mt6OJ4
— Maya MacGuineas (@MayaMacGuineas) December 29, 2017

Makes me wish there were futures contracts for the deficit instead of bitcoin...

Friday, December 29, 2017

Peter Radford — 1937

Hayek, Coase and uncertainty.

In any case I find it fascinating that the two, Hayek and Coase, both in their own way, brought the impact of uncertainty to the fore in the same year.

It’s a shame that economics has never fully embraced, nor realized, the full richness of their ideas. Neither author was willing to step into the world that they clearly understood existed. Hayek was right about universal central planning: it is an impossibility. He was wrong to assert that this implied anything about the market place or prices. By his own argument we simply cannot know whether something is optimal. Uncertainty makes such a thing inscrutable too us. And Coase was equally correct when he saw the need for local central planning: it is the only way we can organize production adequately in the face of uncertainty. But his focus on transactions was a legacy of the classical emphasis on exchange. It ignored the need for active coordination. He missed the requirement for management. He should have talked about “management cost” not “transaction cost”. They’re different animals.

So: an interesting question is this: what happens to Coase’s “institutional structure of production” when information, and by association knowledge, is less clumpy in the economic landscape? Does something like the Internet, which is a vector for information and knowledge, obviate the need for such structure? Does it smooth that landscape out sufficiently for firms not to exist?

We need to think about that.

We need a new version of the discussion that ought to have taken place in 1937.

The Radford Free Press
1937
Peter Radford

RT - Debates Max Keiser and Dr Jack Rasmus 211217

A very heated debate between Max Keiser and Dr Jack Rasmas. Max Keiser says central banks will be buying Bitcoin in 2018.

Russia Insider - The Gas Fight Between Ukraine and Russia is Finally Settled - Who Really Won?

Ukraine’s Naftogaz and the Kiev administration have been praising themselves as victors after nearly four years of litigation against Russia’s Gazprom and the long-term gas contract signed in 2009. This legal adventure finally ended through arbitration in Stockholm this past Friday.

Ukraine proudly declared themselves the winners as they narrowly escaped what could have been a national default. In truth, the Stockholm judgment does not look like a win for Naftogaz, and if the law and principles governing contractual commitments matter anymore, then Gazprom has set a good example.

The bottom line of the Stockholm decision is that Gazprom, a major Russian gas provider, does not owe or need to refund Ukraine anything, and Ukraine must still honor its now minimized contractual commitments and pay. True, the Ukrainian side will not have to pay the tens of Billions which were initially on the table when this legal spat began, but pay they must, albeit a lesser sum.

Russia Insider - The Gas Fight Between Ukraine and Russia is Finally Settled - Who Really Won?

Money, happiness and eternal life - Greed (director's cut) | DW Documentary

An interesting documentary about greed, happiness, Buddhism, and eternal life. Is our capitalist way of life making us happy, it seems for many, maybe not? Even with lots of possessions many people are still not fulfilled and keep on buying more things to get that short lasting thrill.

But are we trying to bury the thought of our deaths when we buy more and more stuff we don't need, or when we are always desperately trying to have more fun? The documentary says how we feel spiritual but it irks us when realize that we aren't so different from the animals. This documentary talks a lot about death, but there's hope, at 1:14 Eben Alexander, a neurosurgeon, describes his near death experience and why he doesn't fear death anymore.

In the documentary is a psychologist who is studying greed. He has developed software simulating financial investing and most people stop when the risks get too big, but stockbrokers tend to keep on going until it all goes bang. He says it's only a matter of time until the financial system crashes again.

Rudolph Elmer, a Swiss banker who worked on the Caiman Islands, alerted his management about the criminals using the bank and the money laundering going on. They fired him. He then sent a CD off with all the evidence on to the Swiss tax authorities but he ended up being followed everywhere by black cars which really scared him, because, he says, some Swiss bankers working in the Caiman Islands had ended up dead. He eventually did two and a half years in prison, some of it in solitary confinement. He says he learnt the hard way how governments always protect their biggest companies. This section starts at about 28:00 and there's a bit more at 51:00.

Money, happiness and eternal life - Greed (director's cut) | DW Documentary

Can money and power ever make us happy? How much is enough? Our constant desire for more is part of our human nature. Some call it a useful dowry of evolution, others a fault in the human genetic make-up: The old mortal sin Greed seems to be more ubiquitous than ever. Why can't people ever get enough, where is this self-indulgence leading - and are there any ways out of this vicious circle of gratification? "People like to have a lot of stuff because it makes them the feeling of living forever," says American social psychologist Sheldon Solomon, who believes today's materialism and consumerism will have disastrous consequences. Anyone who fails to satisfy his or her desires in this age of the Ego is deemed a loser. But with more than 7 billion people on the Earth, the ramifications of this excessive consumption of resources are already clear. Isn’t the deplorable state of our planet proof enough that "The Greed Program," which has made us crave possessions, status and power, is coming to an end? Or is the frenzied search for more and more still an indispensable part of our nature? We set off to look for the essence of greed. And we tell the stories of people who - whether as perpetrators or victims or even just as willing consumers - have become accomplices in a sea change in values.

Simon Johnson And Jonathan Ruane — China, the Innovation Dragon

Given its own policies, and those of the US, China is on track to become the world’s innovation leader. By the end of 2018, it will likely be apparent to all just how quickly and easily this latest chapter in the Chinese success story will be written.

China poised to leapfrog the West?

Project Syndicate
China, the Innovation Dragon

Simon Johnson, former chief economist of the IMF, is a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-founder of a leading economics blog, The Baseline Scenario, and Jonathan Ruane, co-founder of the Global Business of Artificial Intelligence and Robotics course at MIT’s Sloan School of Management, is a lecturer in the Global Economics and Management group at MIT and an adjunct professor at Trinity College Dublin

The Saker — 2018 - War or No War?

The Saker is pessimistic.

Delusional imbeciles giving orders and dishonorable cowards mindlessly executing them. That is the setup we are dealing with....

All my education has always been based on a crucial central assumption: the other guy is rational. That is a huge assumption to make, but one which was fundamentally true during the Cold War. Today I find myself inclined to think that psychologists are probably better suited to make predictions about the actions of the rulers of the AngloZionist Empire than military analysts. Furthermore, history shows us that the combination of delusional imbeciles and dishonorable cowards is what typically brings down empires, we saw a very good example of that with the collapse of the Soviet Empire....

The Saker assumes that the neocons are back.

Col Pat Lang disagrees. Lang holds that Trump is in charge and no one in the military is going to try and end run him. That includes "the generals." In addition, it's hard to know what DJT really thinks, since he is an experienced negotiator who holds his cards close to his chest and knows the value of keeping opponents off balance.

On the other hand, I agree with the Saker that the likelihood of more war in 2018 is high. For one thing, Trump is likely to decide on upping the ante and it is questionable if he really understand this game. Negotiating skills are not directly transferable from business to international relations.

The Unz Review
2018 - War or No War?

The Saker

Also

The US is far from accepting defeat in Syria.

Strategic Culture Foundation
All Is Not Quiet on the Syrian Front: US to Launch Another War

Alex Gorka

War Without a Rationale

Scott Horton

Publius Tacitus — Looks Like FBI or McCain May Have Paid for the 16th Report of the Steele Dossier

The plot thickens.

Sic Semper Tyrannis
Looks Like FBI or McCain May Have Paid for the 16th Report of the Steele Dossier

Publius Tacitus

Pan Wang — Chinese dating shows are changing traditional views on love and marriage

Why is this important to know about? Liberalization is changing the conditions for sexual selection, a primary evolutionary input.

This is taking place not only in China but also in some other traditional societies, although it is resisted in others.

From the standpoint of evolutionary theory and group selection, it is a big deal.

Arguably, one factor in America's success has been "the melting pot," and the looser ground rules for sexual selection are key.

This is just one of the many evolutionary effects of liberalization going global. History has a liberal bias, and it has been given a big push.

This bias toward freer choice affects social, political and economic development hugely. For example, it is has direct bearing on collective consciousness in addition to individual consciousness as the group mindset shifts, which gets reflected in culture and institutions like marriage. As a result the change become culturally heritable through memes rather than genes.

Quartz
Chinese dating shows are changing traditional views on love and marriage

Pan Wang | Lecturer, University of Technology Sydney

James Carden — Russiagate Is Devolving Into an Effort to Stigmatize Dissent

An amicus brief to a lawsuit filed against Roger Stone and the Trump campaign raises troubling questions over the right to political speech.

Intimidation.

...as of this writing, the Russia-Trump collusion narrative is fast devolving into an effort to stigmatize and marginalize expressions of dissent, with the overarching aim of short-circuiting and stifling debate over US-Russia policy.

The Nation
Russiagate Is Devolving Into an Effort to Stigmatize Dissent
James Carden | executive editor for the American Committee for East-West Accord

DownWithTyranny! — The Smartest Economist In America Explains What Deficits Really Mean

Who is the smartest economist in America? None other than — Stephanie Kelton.

DownWithTyranny!
The Smartest Economist In America Explains What Deficits Really Mean

Tax cuts for the rich?

aka 'How dumb is the left?'

...the new law requires charges in the near-term as foreign earnings face taxation and the value of deferred tax assets declines. Citigroup Inc. said it expects a hit of as much as $20 billion, while Bank of America Corp. will take a $3 billion charge and Credit Suisse Group AG is at risk of posting a third consecutive annual loss.

The old tax regime allowed companies to defer U.S. taxes until they brought back earnings held abroad. Under the new law, U.S. companies’ overseas income held as cash would be subject to a 15.5 percent rate, while non-cash holdings would face an 8 percent rate. Companies can make the payments in eight annual installments.

Goldman Sachs takes a one-time $5 billion hit from the U.S. tax bill https://t.co/Ua2QNWlqHV pic.twitter.com/BcFe8JXffw
— Bloomberg Markets (@markets) December 29, 2017

Previous reports estimate that these earnings saved offshore at $2.5T, so a 15.5% tax on that would be about $400B. A straight-line realization of that over the 8 years would result in about a $50B annual rate of new taxes into the Treasury account.

If the firms choose to accelerate that then it may result in a short term windfall of deposits for the Treasury account.

Thursday, December 28, 2017

Clint Ballinger — Of Bitcoins and Balance Sheets: The Real Lesson From Bitcoin

From an MMT perspective.

Clint Ballinger
Of Bitcoins and Balance Sheets: The Real Lesson From Bitcoin

How the rich get richer – money in the world economy | DW Documentary

A superb documentary about the Western financial system that could go bust any time it says. It describes how the central banks have been flooding the system with cheap money since 2008 to try to keep the financial system afloat, but the private banks have been able to multiply this many times over flooding the system with cheap money. This has created asset price inflation through ponzi schemes by flipping companies, shares, and property where the One Percent have been able to make a fortune but who pays in the end? Money equals work-done when a product is made, or money can be used to hire people to do work, and this means that when the One Percent make a fortune out of the cheap money created by banks it's society that pays in the end when it does the work.

The documentary shows you very clever young people who are designing fantastic new green products but they can't get a bank to loan them any money, so they are trying crowd funding instead. Capitalists tell us about how the rich deserve their wealth because they design products and services people want, but it is very difficult for real entrepreneurs to break through. The very smartest people are designing computer algorithms to extract money out of the system, and as these people tend to be financially secure, they are able to take huge risks because the worst that can happen if it all goes wrong is that they will lose their jobs, then they will just retire to live the good life. This isn't a meritocracy at all.

The documentary says how money creation is not considered important subject by economists and yet the banks can create almost near infinite amounts of it out of thin air which distorts the whole economic system, so it calls for only central banks to be allowed to create money. Margret Thatcher and Bill Clinton created this mess when they deregulated the financial system, it says.

Andrew McCarthy — Was the Steele Dossier the FBI’s ‘Insurance Policy’?

In conclusion, while there is a dearth of evidence to date that the Trump campaign colluded in Russia’s cyberespionage attack on the 2016 election, there is abundant evidence that the Obama administration colluded with the Clinton campaign to use the Steele dossier as a vehicle for court-authorized monitoring of the Trump campaign — and to fuel a pre-election media narrative that U.S. intelligence agencies believed Trump was scheming with Russia to lift sanctions if he were elected president. Congress should continue pressing for answers, and President Trump should order the Justice Department and FBI to cooperate rather than — what’s the word? — resist. —

This is longish and detained, but important in light of the implications. Was the crime actually an attempted by the deep state to influence the election and afterward to negate it? This suggests it was on the part of the FBI.

Did CIA director John Brennan and DIA chief James Clapper know about it. Seems unlikely they would not.

This would be the real undermining of American "democracy" if so. If this is even plausible, the Trump administration and Congress should find out and inform the American public.

That is unlikely to happen since the ruling class never outs itself. A few people might be implicated, but the whole thing is likely to go the way of the G. W Bush administration policy of torture.

National Review
Was the Steele Dossier the FBI’s ‘Insurance Policy’?
Andrew C. McCarthy is a senior fellow at the National Review Institute and a contributing editor of National Review

See also

Consortium News (Dec 15, 2017)
The Scary Void Inside Russia-gate
Stephen F. Cohen is a professor emeritus of Russian studies and politics at New York University and Princeton University and a contributing editor of The Nation

Lars P. Syll — The causes of secular stagnation and the loanable funds theory

Like Keynes said.

Lars P. Syll’s Blog
The causes of secular stagnation and the loanable funds theory
Lars P. Syll | Professor, Malmo University

Direction of Deficit

For the record, EVERYBODY is 100% long on deficit going up... and I mean EV-ER-Y-BOD-Y is long the deficit.

These Peterson people are saying it is going back to $1T:

Kick of the New Year with #NEC's first event of 2018: Marc Goldwein (@MarcGoldwein ) speaks on "The Return of Trillion Dollar #Deficits". Register here: https://t.co/k6UZQwC0zr
— Natl Economists Club (@NatlEconClub) December 27, 2017

This level of conviction is the same as the position taken in the face of Fed doing the QE was going to cause inflation back in 2009-2010 timeframe.

Even if the deficit just stays the same they will all be discredited.

Wednesday, December 27, 2017

Tracy Chen — Chinese Consumers Now Rule the World. Get Used to It.

It’s way past time to stop calling China the world’s factory.

The country is increasingly the world’s consumer. Forget the old investment and export-focused growth model. Even more important is the changing nature of consumption, which no longer revolve around staples: Increasing sums are being plowed into movies, tourism and health care. Investors ignore this seismic shift at their peril....

The dragon is waking up.

Bloomberg View

Chinese Consumers Now Rule the World. Get Used to It.
Tracy Chen

Bill Mitchell — The path out of the low wage trap is limited by fiscal austerity

During my postgraduate study years I read a 1954 article by American economist Clark Kerr entitled – The Balkanization of Labor Markets – which attacked the mainstream labour market views that there was mobility within labour markets such that poverty arising from low-pay was a function of workers’ preferences for low education and more leisure (that is, unemployment). As such, there was no reason for the government to intervene to improve wages or job security. Kerr’s thesis was that there was not a ‘single’ labour market accessible to all, where individual mobility would result from personal investment in education and skill development. Instead, he argued that the US labour market was “segmented” by institutional arrangements, which trapped some demographic cohorts into low-pay and insecure jobs. Poverty could arise from these traps. The idea morphed into the segmented labour market literature of the late 1960s and early 1970s. The applications were mostly Anglo because in non-Anglo countries there appeared to be more resistance to institutional arrangements that undermined the chance for workers to enjoy job security with decent pay. However, in recent years (decade) the trend towards precarious work where certain groups (women, youth, migrants) are trapped in low pay and frequent spells of unemployment has spread, with devastating consequences. The largest European economies – Germany and France – are now bedevilled with this issue and with a bias towards fiscal austerity, the path for workers out of the trap is limited....

Bill Mitchell – billy blog
The path out of the low wage trap is limited by fiscal austerity
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Official identification in China and the US

Different approaches to official ID.

RT
Social network profile to become official ID in China

Travel & Leisure
Driver Licenses From Nine States Won’t Be Valid IDs for Domestic Flights in 2018

Thinking Clearly About Collective Intelligence: A Conversation with Geoff Mulgan about his new book Big Mind — David Sloan Wilson interviews Geoff Mulgan

Knowing all of this has tremendous potential for recognizing collective intelligence in human life where it currently exists and socially constructing it where it is needed. However, most of what I have recounted is new, emerging only within the last two or three decades, and is often not reflected in the thinking of otherwise smart people on the subject of collective intelligence. In particular, there is a tendency to naively assume that collective intelligence emerges spontaneously from complex interactions, without requiring a process of selection at the level of the collective unit.

It was therefore with trepidation that I began reading Big Mind: How Collective Intelligence Can Change Our World, by Geoff Mulgan—founder of the think tank Demos, director of the UK Prime Minister’s Strategy Unit and head of policy under Tony Blair, and current chief executive of Nesta, the UK’s National Endowment for Science. That made him smart—but was he smart about collective intelligence from a modern evolutionary perspective?

To my delight, I found him very well informed, clearly recognizing that collective intelligence only exists under very special conditions, which makes it both present and absent in human life. In addition to his conceptual understanding, his book is filled with examples from his extensive policy experience that were previously unknown to me, along with practical advice about how to enhance collective intelligence where it does not already exist….

This View of Life
Thinking Clearly About Collective Intelligence: A Conversation with Geoff Mulgan about his new book Big Mind

David Sloan Wilson, SUNY Distinguished Professor of Biology and Anthropology at Binghamton University and Arne Næss Chair in Global Justice and the Environment at the University of Oslo. interviews Geoff Mulgan, Chief Executive of the National Endowment for Science Technology and the Arts (NESTA)

See also

Science Alert
Plants Are Better at Complex Decision-Making Than We Ever Realised

David Nield

The Asian century?

Will the 21st century be the Asian century?

The growing importance of Asia's major economies will continue in 2018 and beyond, according to a league table that sees the region dominating in terms of size in just over a decade.

The report by the Centre for Economics and Business Research in London sees India leapfrogging the UK and France next year to become the world's fifth-biggest economy in dollar terms. It will advance to third place by 2027, moving ahead of Germany.

In 2032, three of the four largest economies will be Asian - China, India and Japan - and, by that time, China will also have overtaken the U.S. to hold the No. 1 spot. India's advance won't stop there, according to the CEBR, which sees it taking the top place in the second half of the century.

Also by 2032, South Korea and Indonesia will have entered the top 10, supplanting Group of Seven nations Italy and Canada.

In October 2014, the International Monetary Fund said that China had overtaken the US as the world's largest economy when it is measured by purchasing power parity. The PPP measurement is based on the rationale that prices of goods are not the same in individual countries.…

Ecns
World economies head for a shake upChina Daily

Farron Cousins - Trump Administration Cuts Aide For Homeless Veterans

In a truly heartless move by the Trump Administration, they have announced that they're going to be ending a program funded by the Federal Government that is supposed to house homeless United States veterans. Now, the program costs about $460 million every year, and the reason they're trying to end it is because, again, they're trying to reduce the deficit that they created with their massive tax breaks. One of the ways they're going to do that is to stop trying to find homes for homeless veterans in this country. Ever since the Bush Administration, and we did plenty of stories on this back in the day, Republicans have always claimed to be the party that supports the troops. However, during the Bush Administration, they sent them to war with subpar equipment that resulted in far more deaths than should've taken place, and then they did absolutely nothing to protect those veterans when they came back to the United States. Here, today, Donald Trump is continuing this tradition. They love to go out there and campaign with the military and say, "We want a strong military. We want to protect. We support our troops," but the fact is, they don't. Once you get back from war, and, hell, even before you get sent off to war, they don't give a damn about the military. Those soldiers, who are going out every day and fighting on behalf of the United States ... The Republicans view you as no more than cannon fodder, and, once you get back, once you're no longer over there fighting for us, they don't care. They don't care if you're homeless. They don't care if you come back addicted to drugs. They don't care if you come back with PTSD, because they're not going to provide you services to help make it better. They don't do anything.

Ellen Brown - Student Debt Slavery: Bankrolling Financiers on the Backs of the Young

Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors.

The advantages of slavery by debt over “chattel” slavery – ownership of humans as a property right – were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part:

Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages.

Slaves had to be housed, fed and cared for. “Free” men housed and fed themselves. For the more dangerous jobs, such as mining, Irish immigrants were used rather than black slaves, because the Irish were expendable. Free men could be kept enslaved by debt, by paying them wages that were insufficient to meet their costs of living. On how to control wages, the Hazard Circular went on:

This can be done by controlling the money. The great debt that capitalists will see to it is made out of the war, must be used as a means to control the volume of money. . . . It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we cannot control that.

Student Debt Peonage

Slavery by debt has continued to this day, and it is particularly evident in the plight of students. Graduates leave college with a diploma and a massive debt on their backs, averaging over $37,000 in 2016. The government’s student loan portfolio now totals $1.37 trillion, making it the second highest consumer debt category behind only mortgage debt. Student debt has risen nearly 164% in 25 years, while median wages have increased only 1.6%.

Unlike mortgage debt, student debt must be paid. Students cannot just turn in their diplomas and walk away, as homeowners can with their keys. Wages, unemployment benefits, tax refunds and even Social Security checks can be tapped to ensure repayment. In 1998, Sallie Mae (the Student Loan Marketing Association) was privatized, and Congress removed the dischargeabilility of federal student debt in bankruptcy, absent exceptional circumstances. In 2005, this lender protection was extended to private student loans. Because lenders know that their debts cannot be discharged, they have little incentive to consider a student borrower’s ability to repay. Most students are granted a nearly unlimited line of credit. This, in turn, has led to skyrocketing tuition rates, since universities know the money is available to pay them; and that has created the need for students to borrow even more.

Students take on a huge debt load with the promise that their degrees will be the doorway to jobs allowing them to pay it back, but for many the jobs are not there or not sufficient to meet expenses. Today nearly one-third of borrowers have made no headway in paying down their loans five years after leaving school, although many of these borrowers are not in default. They make payments month after month consisting only of interest, while they continue to owe the full amount they borrowed. This can mean a lifetime of tribute to the lenders, while the loan is never paid off, a classic form of debt peonage to the lender class.

All of this has made student debt a very attractive asset for investors. Student loans are pooled and repackaged into student loan asset-backed securities (SLABS), similar to the notorious mortgage-backed securities through which home buyers were caught in a massive debt trap in 2008-09. The nameless, faceless investors want their payments when due, and the strict terms of the loans make it more profitable to force a default than to negotiate terms the borrower can actually meet. About 80% of SLABS are backed by government-insured loans, guaranteeing that the investors will get paid even if the borrower defaults. The onerous federal bankruptcy laws also make SLABS particularly safe and desirable investments.

But as economist Michael Hudson observes, debts that can’t be paid won’t be paid. As of September 2017, the default rate on student debt was over 11% at public colleges and was 15.5% at private for-profit colleges. Defaulted borrowers risk damaging their credit and their ability to borrow for such things as homes, cars, and furniture, reducing consumer demand and constraining economic growth. Massive defaults could also squeeze the federal budget, since taxpayers ultimately cover any unpaid loans.

Ellen Brown - Student Debt Slavery: Bankrolling Financiers on the Backs of the Young

Jeff Spross — Radical economic populism is the only thing that can save the Democrats now

The Democrats can do this. But first, they must clean house ideologically, and finally abandon the Republican-light, free-market-friendly technocracy that has guided the party for decades.

Many on the left will write off the Democratic Party until they do this. But the entrenched politicians will not give up easily. It make take at least a decade for them to retire and be replaced by millennials.

The Week

Radical economic populism is the only thing that can save the Democrats now

Jeff Spross

Mike Kimel — The National Debt Disappeared

I commented there.

Angry Bear
The National Debt Disappeared
Mike Kimel

Ian Welsh — Russia As An Enemy Of The United States

Ian sums it up. Short and harsh.

Ian Welsh
Russia As An Enemy Of The United States

Tuesday, December 26, 2017

Bill Mitchell — Germany – a most dangerous and ridiculous nation

Germany’s domination of the EMU is clear both in political and economic terms. The current political impasse within Germany will not change that. Once resolved the on-going government will continue in the same vein – running excessive fiscal surpluses and huge external surpluses. It can sustain those positions because it dominates European policy and can force the adjustment to these overall ‘unsustainable’ positions onto both its own citizens (lowering their material living standards), and, more obviously, onto citizens of other EMU nations, most noticeably Spain and Greece. If it couldn’t bully nations like Greece, Italy, Spain and even France, Germany’s dangerous domestic strategy would be less effective. If all EMU nations followed Germany’s lead – then there would be mass Depression throughout Europe. This dangerous and ridiculous nation is a blight. Only by exiting the Eurozone and floating their currencies against the currency that Germany uses can these beleaguered EMU nations gain some respite. When the Europhile Left come to terms with that obvious conclusion things might change within Europe.

Bill Mitchell – billy blog
Germany – a most dangerous and ridiculous nation
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Joseph Hickey — How Societies Form and Change

You might find this of interest. As a bonus, it explains some fundamental principles of mathematical modeling.

Hierarchy appears to be an inescapable feature of animal, including human, societies. There are dominants and subordinates, bosses and employees, rulers and subjects, and an individual’s position in the social hierarchy to a large degree determines fundamental aspects of his or her life, including one’s health, access to resources, and influence in society. From the individual’s point of view, the hierarchy provides security, but also reduces one’s freedom. What determines how oppressive society is toward the individual? Would more freedom be better for society? How bad does societal inequality have to become before things start getting better? Are there any fundamental laws or rules that control how social hierarchy forms and evolves in a complex society of many interacting individuals and groups?

I am doing my PhD research in physics on these questions. Something I’m often asked is how can the study of social hierarchy be considered “physics”? The answer is “simple” – physicists try to construct simple models to reveal essential or underlying features of complex natural phenomena. Such a model has to be as simple as possible, yet it must be cleverly constructed so that, in its simplicity, the model captures essential features of reality. If this is achieved, the model can provide insights about underlying rules that may control or influence the real phenomenon.

I have constructed a simple physics model of the formation and evolution of social hierarchies, based on interactions between the individual members of the society. Computer simulations of the model produce societies that resemble real-world societies, and we can study how the simulated societies are formed and how they change in time. A scientific article presenting the model has been submitted to a journal and can be read online at ResearchGate.1 In the following, I outline how the model works for a general (non-specialist) reader and briefly discuss what its results might mean in terms of understanding social hierarchy in the real world.

Dissident Voice
How Societies Form and Change
Joseph Hickey | Executive Director of the Ontario Civil Liberties Association(OCLA)

Anatoly Karlin — Russia Elections 2018: Elections as Regime Referendums

Anatoly Karlin explains the coming 2018 presidential election in light of contemporary Russian politics.

The Unz Review

Russia Elections 2018: Elections as Regime Referendums
Anatoly Karlin

David Parkman Interviw of Stephanie Kelton - Modern Monetary Theory & "The Value of Money"

And excellent interview of Stephanie Kelton which covers the difference between the Republicans and Democrats standpoint on the national deficit. Stephanie Kelton says why there would not be any inflation in an MMT economic system or with a job guarantee as spending would be carefully applied to where the economy is under performing which would increase products and services. She says how a UBI could create inflation as it would inject an enormous amount of new money into the economy without necessary creating new jobs and services. She then covers Bitcoin where she says neutral on it at the moment until she knows more about it. She says how the monetarists keep inflation down by maintaining some unemployment but MMT has an extremely efficient way of doing this while keeping full employment.

Goldman Bullish

Looking better than it has in a long time that is for sure. Still have monetarists out there who can do a lot of damage we just have to keep a weather eye out for trouble from them; but it seems like they are most likely to reverse bearish monetarist policies from this point not increase them.

VIDEO: “The bottom line is that this global economic environment really is about as good as it gets.” $GS' Chief Economist Jan Hatzius on the 2018 macro outlook: https://t.co/g47FYnKy5a pic.twitter.com/5Ij8y5hKgs
— Goldman Sachs (@GoldmanSachs) December 21, 2017

RT: Mike Papantonio - Asbestos Companies Still Killing Americans By The Thousands

Via America’s Lawyer: Most people in the United States are under the impression that our government banned the use of asbestos decades ago, but the truth is that’s a lie. Asbestos is still widely used in many objects that you use every single day and to make things worse, the amount of asbestos that we import into this country has doubled in the last two years. Mike Papantonio, host of America’s Lawyer, discusses this with Farron Cousins.

I remember a BBC program in the 1970's where it looked into where British asbestos company lawyers were forced in court to release letters they had sent to an asbestos company directors saying how they could drag out the court cases of plaintiffs long enough for them to die. The plaintiffs did die and this meant that other employees who were had asbestosis weren't able to push their claims through court successfully as well. No director or lawyer got sent to prison or was fined, but the company moved its operations to Africa and India instead.

The BBC journalist then went to those countries to check the companies and he saw workers walking about in inches of asbestos dust with no protective equipment or breathing masks. He asked them whether they knew asbestos was dangerous and they said they had heard it was but they had no choice but to work there as they had children to feed. They also said they wanted to send their children to good schools and universities so they wouldn't have to work in a place like this. The journalist showed photographs to the British company director who seemed genuinely surprised and then safety equipment was sent to the factories.

ClubOrlov - Review of Phil Butler’s Putin's Praetorians: Confessions of the Top Kremlin Trolls.

A most interesting book has recently come out: Phil Butler’s Putin's Praetorians: Confessions of the Top Kremlin Trolls. It’s a good book to read for all those who wish to peer behind the crazy funhouse mirror set up by Western media. It includes contributions from people who have been active in opposing the barrage of counterfactual press coverage emanating from “fake news” factories such as the Washington Post, the New York Times and CNN.

The title is a facetious one: the people in question are not trolls, and the trolls in question do not exist. “Kremlin trolls” is a fake meme that is consistently deployed to cover up one’s own failure but play no role in one’s successes.

For example: London’s political establishment successfully manipulated the Scottish independence referendum into failure by a combination of emoluments and scare tactics; therefore, phantom Kremlin trolls played no part in it. But London failed to do so with the Brexit referendum; therefore, out came Kremlin trolls, to be blamed for this unintended, unscripted result.