Wednesday, July 31, 2019

Links — 31 July 2019

Optimizing for Human Well-Being
Douglas Rushkoff | Professor of Media Theory and Digital Economics at CUNY Queens College, and host of the Team Human podcast and author of Team Human

Oxfam Blogs — From Poverty to Power
‘This Shit is Killing Me’: Dalit rights and Mumbai’s sewers
Monica Moses

Judge dismisses DNC suit against Trump campaign, Russia over email hack
Josh Gernstein

Management Today
What is modern monetary theory - and what does it mean for business?
Paul Simpson

Reminiscence of the Future
Didn't Take Long
Andrei Martyanov

Checkpoint Asia
Carried by Patriotism Huawei’s Market Share Hits Record 38% in China
Finance Twitter

Elijah J. Magnier — Middle East Politics
Why did the UK commander of HM Montrose refrain from firing on the IRGC? Who in Iran gave orders to capture the “Stena Impero”?
Elijah J. Magnier

India Punchline
Ruminations on the ‘Vimochana Samaram’
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

Moon of Alabama
Violent 'Color Revolution' In Hong Kong Fails Despite Strong NYT Support

China and The Conclusion of American Power
Christopher Black

Sputnik International
Butina’s Lawyer Says Prosecutors Withheld Exculpatory Evidence During Trial

Mint Press News
How a Small Group of Pro-Israel Activists Blacklisted MintPress on Wikipedia

Twitter suspends Russian embassy in Syria after it criticized White Helmets

1 comment:

AXEC / E.K-H said...

MMT: Wondering where the catastrophe is
Answering Michael Norman’s tweet

Michael Norman asks: “Can anyone in the debt/doomsday crowd explain why, after rising nearly 30-fold since 1980, the debt hasn’t created catastrophe? And why interest rates and inflation are lower? Do they care or is it just about incessantly spewing hysterics? Do they even pay attention?”#1

The macroeconomic Profit Law Q=Qm+Qn with Qm=Yd+(I−Sm)+(G−T)+(X−M) boils down to Public Deficit (G−T) = Private Profit Qm. So, by deficit-spending/money-creation the government continuously fills the coffers of the Oligarchy which, in turn, is looking out for some safe and juicy assets. Again, the government lends a helping hand and offers treasuries/bonds/etcetera thereby consolidating its overdrafts at the Central Bank. This is a case of simultaneous supply/demand creation: the government continuously accumulates overdrafts at the Central Bank and the Oligarchy continuously accumulates deposits. All other influences excluded, this should drive the interest rate for ultra-safe treasuries down over time because in a fiat money regime, the Oligarchy needs safe financial assets more than the government needs the Oligarchy’s money.

Deficit-spending/money-creation causes a one-off price hike but NO inflation. Inflation depends on the relation of wage rate increases to productivity increases.#2

MMT is a free lunch program for the Oligarchy. Financial wealth and public debt grow in lockstep. The Profit Law explains how billionaires are able to accumulate that much money and why they can buy all the bonds the Treasury issues and cash in the ultra-safe interest that is reliably taxed from WeThePeople as long as the debt is rolled over. This can function for a very long time but eventually, the economy breaks down because infinite growth is impossible on a finite planet and this holds also for public debt.#3

In the meantime, the catastrophe Michael Norman is wondering about has already materialized in the distribution of income and wealth. After the debt rising 30-fold since 1980: “The 400 richest Americans, the top 0.00025%, have tripled their share of the nation’s wealth.”#4 Admittedly, in the eyes of Michael Norman and the rest of Wall Street this does not exactly fit the definition of catastrophe.

The MMT Ponzi scheme works (i) as long as public debt grows, (ii) as long as the redistributive interest payments on government debt do not wreck the budget, (iii) as long as the Oligarchy sticks to the scheme even at negative interest rates, (iv) as long as the general public can maintain the illusion that public debt is nobody’s debt, (v) as long as the Central Bank supports the scheme.

Egmont Kakarot-Handtke

#1 Twitter
#2 MMT was right all along: Gov-Deficits do NOT cause inflation
#3 The decisive reason to worry about government debt
#4 Washington Post