Film "Official Secrets" Points to a Mammoth Iceberg — Sam Husseini

Review.

Two-time Oscar nominee Keira Knightley is known for being in "period pieces" such as Pride and Prejudice, so her playing the lead in the new film Official Secrets, scheduled to be release in the U.S. this Friday, may seem odd at first. That is until one considers that the time span being depicted-- the early 2003 run-up to the invasion of Iraq-- is one of the most dramatic and consequential periods of modern human history.

It is also one of the most poorly understood, in part because the story of Katharine Gun, played by Knightley, is so little known. I should say from the outset that having followed this story from the start, I find this film to be, by Hollywood standards, a remarkably accurate account of what has happened to date. "To date" because the wider story still isn't really over....

Just to remind. The escalation of the Vietnam war was also based on a lie, the Gulf of Tonkin incident that never happen, but it was not outed at the time. Outing didn't stop Iraq either and no one was ever held accountable for either deception of the public.

The Pentagon papers were not published until 1972 and the war continued for several years thereafter. Edward Snowden's whistle blowing doesn't seem to have changed anything, and John Kirikou was the only person to be held accountable for the official torture program that took place during the Iraq war and that was for revealing classified information about it. Other whistleblower, the same. All it did was result in some embarrassment for people at the top, and they responded by taking revenge.

Is liberal democracy a waste of time that actually serves as a veneer and veil?

Down with Tyranny
Film "Official Secrets" Points to a Mammoth Iceberg

Sam Husseini

Links — Are the natives getting restless? 1968 redux?

Defend Democracy Press
Yellow Vests Gather for 42nd Week of Protests in Paris

‘Stop the Coup, Defend Democracy’, Thousands Shout in the UK

Second ‘yellow vests’ protest in Geneva draws several hundred

SI
‘Stop the Coup Coup Kachoo!’: Glasgow Protesters Rally Against Prorogation

Protests Over PM Johnson's Move to Suspend Parliament Take Place in Glasgow - Video

Reuters

Hong Kong commercial centers paralyzed as protesters, police exchange petrol bombs and tear gas

TASS
About 750 protesters taking part in unsanctioned rally in central Moscow

Reuters
Thousands of Russians rally to demand free elections

Hundreds of Russians rally to demand free elections

SI
Ex-DoD Chief Mattis Calls Trump ‘Unusual’, Warns ‘Rabid’ State of US Politics Could ‘Tear Country Apart’

People's Dispatch
Tens of thousands of Argentinians mobilize against the ‘trigger-happy’ police

People with disabilities in Copenhagen protest new cuts in municipal provisions

Justin Fox - Most Canadians Are Now Better Off Than Most Americans

Middle-class people in the U.S. are losing ground to their peers in other rich countries. 

U.S capitalism is falling the middle and lower classes. Trickle down is not working.

Our income estimates may actually underestimate the economic well-being of Canadians relative to Americans. Indeed, Canadians usually receive more in-kind benefits from their governments, including notably in health care (as noted also by Wolfson and Murphy, 1998). Had these benefits been included in the estimates, the median augmented household income in Canada would likely surpass the American median by a greater margin. While these benefits also come with higher taxes, the progressivity of the income tax system is such that the median household is most likely a net beneficiary.

Finally, and this is of course totally anecdotal, but I think most Americans who have visited Canada lately would attest that it feels like a more broadly affluent place than the U.S. does. That is, the claim that most Canadians are more prosperous than most Americans is not patently unreasonable.

Bloomberg 

Justin Fox - Most Canadians Are Now Better Off Than Most Americansrue

Production and then distribution, or distribution and production together — Branko Milanovic

Must-read! Branko Milanovic sums up the fundamental issue affecting political economy as economics in relation to society.

Neoclassical economic is like doing engineering with a total focus on efficiency and ignoring resilience. This approach views redundancy as inefficient. This is like eliminating the emergency brake on vehicles.

An economy is the material life-support system for a society and its culture. It is the welfare and progress of the society that set the priorities.

Neoliberalism is based on the view that society does not exist. Go figure.

As Branko Milanovic points out, following the classical economists and Marx, it's the endowments, stupid. This results in market asymmetries that determine who wins and who loses, not the assumed spontaneous natural order that arises spontaneously as a result of the operation of a free market that leads to equilibrium characterized by optimality

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

Aaron Maté demolishes Lawrence O'Donnell's embarrassing Russiagate retraction

Aaron Maté's round up of the Russia-gate nonsense, which has discredited mainstream journalism as well as distract it from analysing Trumps' terrible policies.

Aaron Maté slams MSNBC's latest Russiagate dud, exposing how Lawrence O'Donnell's embarrassing retraction is part of a pattern of bogus conspiracy theories that push the limits of political self-satire.

Links — 30 Aug 2019

The Vineyard of the Saker
BRICS was created as a tool of attack: Lula
Pepe Escobar

The Vineyard of the Saker
New World Order in Meltdown, But Russia Stronger Than Ever
John Hellevig | Awara Group

Sputnik International
Indian GDP Growth Falls to Six-Year Low, Gov't Advisor Blames US-China Trade Tensions

Southfront
Trump Seeks To Use Chinese Imperial Debt Bonds to Pressure Beijing In Trade War: Bloomberg

Sputnik International
Bolton Excluded From Afghan Policy Decisions After Irritating Trump - Reports

Reuters
China's service sector activity grows at quicker pace in August: official PMI

China August factory activity shrinks for fourth month: official PMI

China July factory activity shrinks for fourth month: official PMI

Two Systems, One World — Joschka Fischer

Like the twentieth-century Cold War between the United States and the Soviet Union, the new rivalry between China and the West is a contest between fundamentally incompatible political systems. And the idea that freedom and democracy will prevail can no longer be taken for granted.…

While this is an interesting read, I don't think he frames it quite right. Alexander Dugin has pointed out that there are three modern political theories, liberalism, communism, and fascism, and one ancient one, traditionalism. Communism and fascism are now visible only as remnants and the major dialectical opposition presently is that between liberalism and traditionalism. This is the case not only internationally and regionally, but also within countries, e.g., as "traditional values," religious traditions, and cultural traditions and customs.

Joschka Fischer is also mistaken in claiming that Enlightenment liberalism was founded on the principle of freedom based on all men being equal. History contradicts that. The actual meaning was "all white males that owned property" rather than all human beings. Current events reveal that this has not changed all that much, only the narrative and façade.

Let's be real and call a spade a spade. Confucius was big on rectification of names.

Project Syndicate
Two Systems, One World
Joschka Fischer | German Foreign Minister and Vice Chancellor from 1998-2005

Billionaires are a Sign of Economic Failure — Max Lawson

Historically, and especially in the United States in the early part of the 20th century, monopoly power was rightly viewed as a serious threat to the economy and to society, and steps were taken to break up monopolies. It was President Franklin Roosevelt who famously said that “government by organized money is just as dangerous as government by organized mob.” However, in recent decades, neoliberal economics has led a much more benign view of monopoly power, and very little action is now taken to dismantle them. I think this is a key distinction between neoliberalism and classical liberal economics. These monopolies impose hidden monopoly taxes on every consumer, as it enables these companies, and their wealthy shareholders, to extract excessive profits from the market, directly fueling the growth in extreme wealth at the expense of ordinary citizens.

Two failures are involved, one entailed by the other.

The first failure is market failure. Asymmetry enables rent extraction.

The second fairlure is policy failure. Government capture generates policy that enables rent extraction.

That's neoliberalism in a nutshell, and using these failures neoliberals are out to dominate the world politically through control of the global economy. Economic warfare to destroy potential competitors and the uncompliant is evidence of this.

Ironically, the only countries that prosecute billionaire ("oligarch") for transgressions are Russia and China. The West? Not so much.

Counterpunch
Billionaires are a Sign of Economic Failure
Max Lawson | Head of Inequality Policy at Oxfam International

See also

Naked Capitalism
Marshall Auerback: We Are Clearly Living in a Bizarro Capitalism Era—And It’s Time to Change How the World Manages Economies

Gold Reminds Governments That They're Still Not In Control — Jeffrey Snider

This is not your typical gold buggy "argument" against MMT although it is pro-gold standard. Jeffrey Snider goes through the history and lays out a case. It is worth a read. 

Edison was exactly right about the nature of gold as money. Everything boils down to who gets to control it. If you believe as Edison and Ford the government can be and most often is a force for good, then monetary restraint is a barbarous evil. But what if the government is populated, always, by bumbling incompetents masquerading themselves as technocratic geniuses?

Real Clear Markets
Gold Reminds Governments That They're Still Not In Control
Jeffrey Snider | Chief Investment Strategist of Alhambra Investment Partners

"Natural Rate"–What if it isn't? — Matt Reed

Users of Twitter know the thrill of seeing a tweet so good that you want to have it embroidered on pillows. The form lends itself to aphorisms or clever asides; Oscar Wilde and Dorothy Parker would have loved it. This week, the economist Stephanie Kelton posted a tweet for the ages: “What is the natural rate of college enrollment?”

It’s slyly great. It’s a play on the “natural rate of unemployment,” a discredited concept popular in the 90’’s. The NAIRU was supposed to represent the unemployment rate an economy couldn’t go below without triggering runaway inflation. (It was based, in turn, on the “Phillips curve.”) The assumption underlying the NAIRU was that unemployment and inflation were inversely related, so if unemployment got too low, inflation would result....

Inside Higher Ed
"Natural Rate"— What if it isn't?
Matt Reed

Links — 29 Aug 2019

Valdai Analytics
Prelude to a Conflict: The Psychology of Modern Warfare

Sputnik International
Leaked UN Climate Report Forecasts Rising Oceans, Superstorms, Mass Displacement

Internationalist 360º
President Evo Morales Joins Firefighters to Battle Wildfires in Bolivia

The Grayzone
Western regime change operatives launch campaign to blame Bolivia’s Evo Morales for the Amazon fires

Wyatt Reed

Zero Hedge
"People Will Be Shocked" - Bannon On Huawei & The Communist China Threat
Tyler Durden

Reuters
Huawei under probe by U.S. prosecutors for new allegations: WSJ

SI
Huawei's New Smartphone Barred From Using Google Software - Report

Reuters
Trade war dims outlook for U.S. business operations in China: survey

Reuters
Trump promises ethanol-related 'giant package' to please farmers

Zero Hedge
Trump Made Up "High Level Phone Calls" With China To Boost Markets, Aides Admit: Report
Tyler Durden

SI
Venezuelan Opposition ‘Non-Existent’ in Caracas – Politician

TASS
Minister: 80 million tonnes of cargo to be transported along Northern Sea Route by 2024

TASS
Russia testing fundamentally new electronic warfare system

SI
Trump Claims US is 'Always Going to Keep a Presence in Afghanistan'

Reuters
China's defense ministry says Hong Kong protests must respect law

Peter Cooper — Macro Dynamics with a Job Guarantee – Part 2: Keynesian Cross Diagram

As a preliminary exercise, it may be instructive to modify the familiar Keynesian cross diagram to include the effects of a job guarantee within a simple short-run framework. The diagram includes two key schedules. The first is a 45-degree line showing all points for which actual expenditure equals actual income. The second is a line with lesser slope depicting the level of planned expenditure (total demand) at each level of income. Under appropriate conditions, the two schedules intersect at a steady-state level of income.…

Longish and wonkish.

heteconomist
Macro Dynamics with a Job Guarantee – Part 2: Keynesian Cross Diagram
Peter Cooper

The Key to a Sustainable Economy Is 5,000 Years Old — Ellen Brown

Ellen Brown summarizes Michael Hudson 's ..and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year (THE TYRANNY OF DEBT Book 1).

Truthdig
The Key to a Sustainable Economy Is 5,000 Years Old

Ellen Brown

Gerald Epstein — What’s Wrong With Modern Money Theory — Ramanan

Gerald Epstein has written a book critiquing neochartalism from a policy perspective. On an initial look he seems to attack the neochartalists on two things: their reluctance to talk about rise in tax rates and the international aspect — the limited applicability of their ideas to a few rich countries....

Good. The debate is engaged. Having written a book about MMT, the author has no excuse for not knowing the MMT literature in detail and citing it where appropriate for a scholar. I am sure that MMT economists will be vigilant about this in their response.

The Case for Concerted Action
Gerald Epstein — What’s Wrong With Modern Money Theory

V. Ramanan

Once upon a time — Diane Coyle

Diane Coyle reviews Robert Shiller's new book, Narrative Economics: How Stories Go Viral and Drive Major Economic Events, on the power of narrative, i.e., story. The most ancient from of knowledge transmission in social reproduction was myth. Mythos means "story" in Greek. Ancient cultures were characterized by teaching stories.

This so-called primitive technology (concepts and numbers) still works to influence. Why? Because it is holistic, engaging the spectrum of human response. MMT presentation makes liberal use of narrative technique, e.g., "ten dogs and nine bones." Anyone can get that.

As the preface notes, the idea isn’t new; the 1894 Palgrave’s Dictionary of Political Economy mentions narrative economics. Robert Merton’s well-known concept of self-fulfilling (or self-averting) prophecies covers much of the territory of narrative dynamics. But perhaps today’s economy is more vulnerable than ever to contagion. An early chart in the book illustrates the surge in the proportion of articles across several socal science and humanities disciplines that contain the word ‘narrative’. Economics and finance are well behind history (of course) but also anthropology, sociology and political science.

Anyway, the book is about how narrative contagion affects economic events. It has in mind epidemic models, as well as – well, narratives. Each chapter focuses on a number of examples. The first section starts with Bitcoin as an example of how narrative affected behaviour and outcomes, then introduces some of the concepts concerning how narratives ‘go viral’ and the psychology of contagion. Part 2 is a brief section setting out ‘seven propositions of narrative economics’ (including ‘truth is not enough to stop false narratives’. Quite.) Part 3 describes recurring economic narratives such as financial boom and bust, or automation and jobs. The final part of the book sets out questions for research....

The Enlightened Economist
Once upon a time
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Late Imperialism—Fifty Years After Harry Magdoff's The Age of Imperialism — John Bellamy Foster

Important. This is a view of neoliberal globalization in terms of the history of imperialism and its financial and economic analysis. It emerges as a natural extension of liberal capitalism in the Western liberal ideology that came to dominate the world scene after the colonial period. Ironically, the practical application of this world view took place in the transition of America from a British colony to the first Western liberal democracy constructed in terms of Enlightenment philosophy and political theory.

Ironically, American became the inheritor of the British imperial mantle post WWII, continuing the global dominance of sea power (thassalocracy) over land power (tellurocracy). Now land powers Russia and China are rising to challenge Anglo-American sea power. Also emerging is the importance of air power, cyber power, and space power that reduces the land-sea dichotomy, although it is still crucial strategically.

Monthly Review
Late Imperialism—Fifty Years After Harry Magdoff's The Age of Imperialism

John Bellamy Foster

The benefits of a global digital currency — Antonio Fatás, Beatrice Weder di Mauro

Economists have reacted negatively to the prospect of Facebook's Libra cryptocurrency. This column, part of the VoxEU debate on the future of digital money, outlines how if we focus exclusively on the efficiencies a currency like Libra brings to payment, there are arguments in its favour. A global digital currency provided by central banks may be preferable, but a private version would offer many of the same benefits....

The Libra operates on a fixed exchange rate with reference to floating national currencies.

In response to the high volatility of Bitcoin and other cryptocurrencies, developers have created 'stable coins', currencies whose value is tied to a traditional currency. Libra belongs in this category. Economists are familiar with fixed exchange rates, so this is not new. The stability of Libra is guaranteed by a redemption mechanism supported by assets that back the value of the currency in circulation. This mechanism, used by other stable coins, is equivalent to a currency board.

Libra is global, so it is pegged to a basket of currencies. There are precedents in this for fixed exchange rates, although it is not common for currency boards.3 Of course, fixing the value of Libra to a basket of currencies implies that its value will fluctuate relative to any single currency.

Owing to efficiencies and to preempt rivals, something like this is almost certain to happen and central banks are already discussing it. To say that this a "disruptive technology" would be an understatement. But the alternative is attempting to criminalize use of digital currencies in order to preserve the current system, and that is impractical. What remains to be determined is what it is going to look like and who is going to be in control.

I don't see Facebook owing it. That would just add to the present issues around monopoly and anti-trust. Eventually, the digital world is going to be publicly controlled. How that is going to transpire will involve major issues in the future.

ConclusionTaking the Libra proposition at face value, we made the best economic case we could by focusing on it as a means of payment, domestically and internationally. We wanted to understand whether the potential benefits of a means of payment could compensate for the risks of holding a volatile asset. Our estimates suggest that the overall risk of holding a global currency may not be large for plausible exchange rate volatility and risk aversion. On the other hand, the potential gain in lowering transaction costs in retail cross-border payments and even local payments are large.

While a global currency may be desirable, this currency does not have to be Libra. There are many other concerns not discussed here, such as privacy, data control, operational risk, regulatory consequences, or dominance. In his speech at the 2019 Jackson Hole conference (Carney 2019), Carney discussed the benefits of a global currency that would be provided by a network of central banks, which he called a Synthetic Hegemonic Currency. But, without a coordinated effort by policymakers and regulators to create this currency, a private solution such as Libra might end up partially fulfilling this need.

VOX.EU
The benefits of a global digital currency

Antonio Fatás, Beatrice Weder di Mauro

See also at VOX.EU

Libra: The known unknowns and unknown unknowns

Barry Eichengreen

The rise of digital currency
Tobias Adrian, Tommaso Mancini-Griffoli

The Future of Digital Money
Stephen Cecchetti, Antonio Fatás

Marty Weitzman’s Noah’s Ark Problem —Alex Tabarrok

Marty Weitzman passed away suddenly yesterday. He was on many people’s shortlist for the Nobel. His work is marked by high-theory applied to practical problems. The theory is always worked out in great generality and is difficult even for most economists. Weitzman wanted to be understood by more than a handful of theorists, however, and so he also went to great lengths to look for special cases or revealing metaphors. Thus, the typical Weitzman paper has a dense middle section of math but an introduction and conclusion of sparkling prose that can be understood and appreciated by anyone for its insights.

The Noah’s Ark Problem illustrates the model and is my favorite Weitzman paper....

Marginal Revolution
Marty Weitzman’s Noah’s Ark Problem
Alex Tabarrok | Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, and a research fellow with the Mercatus Center

Milton Friedman's Thermostat, redux — Jason Smith

Pesky physicists. 😃

Jason Smith "converses" with Milton Friedman.

Short, fun, and not wonkish.

Information Transfer Economics
Milton Friedman's Thermostat, redux
Jason Smith

The Sacrificial Rites of Capitalism We Don’t Talk About — Lynn Parramore

Lynn Parramore reviews Suprita Rajan's A Tale of Two Capitalisms, which is about the intersection of economics with anthropology and sociology and the distinction between homo economicus of economics and homo communis (aka homo socialis) of anthropology and sociology — and ethics.

Ethos (ἦθος, ἔθος; plurals: ethe, ἤθη; ethea, ἤθεα) is a Greek word originally meaning "accustomed place" (as in ἤθεα ἵππων "the habitats of horses", Iliad 6.511, 15.268),[2] "custom, habit", equivalent to Latin mores.

Ethos forms the root of ethikos (ἠθικός), meaning "moral, showing moral character".[3] As an adjective in the neuter plural form ta ethika (τὰ ἠθικά), used for the study of morals, it is the origin of the modern English word ethics.

In modern usage, ethos denotes the disposition, character, or fundamental values peculiar to a specific person, people, corporation, culture, or movement. — Wikipedia

The etymology of the term "ethics" reveals that it can be traced to the customs of a people and later morphs into the dual meaning of the spirit of a people and the character of an individual. From this emerges the contemporary meaning of "ethics" as both individual and social in terms of right action and community-approved behavior.

While an act may not be illegal, that is, contra to positive law, it may be unethical in terms of an unwritten "law" as a tradition. Thus, liberalism is permeated with traditionalism. This is often overlooked in the narrow interpretation of liberalism, as in "Well, I didn't break any laws" as exculpatory. That excuse doesn't fly with the public.

INET
The Sacrificial Rites of Capitalism We Don’t Talk About
Lynn Parramore, Senior Research Analyst

Crossposted at Naked Capitalism

Bill Mitchell — Spending equals income whether it comes from government or non-government

It is now clear that to most observers that the use of monetary policy to stimulate major changes in economic activity in either direction is fraught. Central bankers in many nations have been pulling all sorts of policy ‘rabbits’ out of the hat over the last decade or more and their targets have not moved as much or in many cases in the direction they had hoped. Not only has this shown up the lack of credibility of mainstream macroeconomics but it is now leading to a major shift in policy thinking, which will tear down the neoliberal shibboleths that the use of fiscal policy as a counter-stabilisation tool is undesirable and ineffective. In effect, there is a realignment going on between policy responsibility and democratic accountability, something that the neoliberal forces worked hard to breach by placing primary responsibility onto the decisions of unelected and unaccountable monetary policy committees. And this shift is bringing new players to the fore who are intent on denying that even fiscal policy can stave off major downturns in non-government spending. These sort of attacks from a mainstream are unsurprising given its credibility is in tatters. But they are also coming from the self-proclaimed Left, who seem opposed to a reliance on nation states, and in the British context, this debate is caught up in the Brexit matter, where the Europhile Left are pulling any argument they can write down quickly enough to try to prevent Britain leaving the EU, as it appears it now will (and that couldn’t come quickly enough).

Bill addresses the charge from the Left that MMT is not Marxian enough.

I would also say that my career in economics has been inspired by the basic insights about Capitalism provided by Karl Marx (and Friedrich Engels) and the writers that followed in that tradition.

But I would also be sure to disagree with Michael Roberts assertion that “MMTers deny the validity and relevance of Marx’s key contribution to understanding the capitalist system: that is it is a system of production for profit; and profits emerge from the exploitation of labour power – where value and surplus value arises” (Source).

As one of the developers of MMT, I have always made it explicit that Marx’s ideas on class and exploitation lie at the basis of Capitalist dynamics and should be the starting point for a progressive understanding.

So it is hard at times to know what being ‘Marxist’ means, which is especially the case when we consider the post-modern distractions that made ‘Marxism’ appear recondite, to say the least....

Longish and detailed, but one of Bill most significant posts on political economy. Necessary to understand nuances of MMT from a left perspective, and MMT is now being attacked from both right and left.

Bill Mitchell – billy blog
Spending equals income whether it comes from government or non-government
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Why I dress as a Regency gentleman... everyday of my life - BBC News

I wish I had thought of it as I'm quite good with my hands. It seems like a very rewarding business.

 I thought I was doing well with my trilbys, bowler, fedora, and fez hats with a waxed handlebar moustache.

Jesuitic Casuistry

Interesting from Taleb in arguing with some Jesuit priest about genetics of St. Augustine or wtf (who cares?!?!) .... just sounds like a Roman Catholic flavor of your typical Liberal Art/Platonist methodology 101 to me...i.e. in figurative language "the broad gate" (Mat 7:13)   in any case still not appropriate for use in material endeavors...

For those who (thankfully) don't know what Jesuitic casuistry is, see below.
(BTW my father and grandfather were educated by Jesuits; it has been my dream ---for years -- to find a Jesuit casuist for a good Twitter fight). pic.twitter.com/HCVSE4eM41

— Nassim Nicholas Taleb (@nntaleb) August 28, 2019

Swedbank: Fiscal more effective than Monetary

The ONLY reason fiscal may be being looked at lately is that Trump has taken direct action against the perennial export USD zombie surplus nations policies thru tariffs and other threats of executive action ... Trump is acting in support of perennial deficit US's domestic employment and production..

The perennial surplus USD zombie nations are having to start to come up with a contingency Plan B if Trump reelected...

This has NOTHING to do with MMT ... you're dreaming in f-ing left-wing fantasy la-la land if you think it does...

If Trump loses it goes right back to perennial US deficits and ROW USD zombie nation surpluses fiscal goes right back in the shitter....

The USD zombies only have about a year to kill before US elections so don't look for any widespread fiscal support for another year and then only if Trump is reelected you may see some start... they won't punt another 4 years if Trump reelected...

New #SwedbankEconomicOutlook released today!
*The global economy is in for a marked downturn.
*We advocate that fiscal policy, if used wisely, is more effective than monetary policy to counteract the downturn.
Read more here: https://t.co/6EL2beMmTF#Riksbank #ECB #Fed pic.twitter.com/1ZdYnwzniT

— Anna Breman (@BremanAnna) August 27, 2019

Links — 28 Aug 2019

Sic Semper Tyrannis
Fabricating the Russian DNC Hack
Larry C. Johnson | CEO and co-founder of BERG Associates, LLC, an international business-consulting firm with expertise combating terrorism and investigating money laundering, formerly Deputy Director in the U.S. State Department’s Office of Counter Terrorism (1989-1993, and CIA operations (1984-1989)

Sic Semper Tyrannis
First McCabe, then; Brennan, Clapper, Comey, Strzok, the Ohrs, Stee
Col. W. Patrick Lang, US Army (ret.), formerly Defense Intelligence Officer (DIO) for the Middle East, South Asia and counter-terrorism, and later, the first Director of the Defense Humint Service

The Vineyard of the Saker
The Saker interviews Max van der Werff about the MH-17 conspiracy

Michael Roberts Blog — blogging from a marxist economist
The trade trigger
Michael Roberts

Zero Hedge
Mnuchin Says Issuance Of 50 And 100 Year Treasuries Under "Very Serious Consideration"
Tyler Durden

Zero Hedge
In Ominous Warning, Ray Dalio Says The Current Period Is Just Like 1935-1945
Tyler Durden

Zero Hedge
After Trump Leaves France, Macron Warns World "Is Living The End Of Western Hegemony"
Tyler Durden

Zero Hedge
China's New Hypersonic Missile Threatens Regional Stability, Analyst Warns
Tyler Durden

Zero Hedge
Google Latest Company To Abandon China, Shifts Smartphone Production To Vietnam
Tyler Durden

Is The Treasury Market Wrong Because Of Hedgers? — Brian Romanchuk

I have some seen some commentary about hedging demand and Treasury yields. One typical interpretation is that hedging demand is pushing Treasury yields "too low," and so the signal from the yield curve is distorted. Furthermore, one could argue that this represents some form of "bond bubble.

Since I do not give unsolicited investment advice to random strangers over the internet, I cannot give an answer to those questions. However, I can safely discuss the background behind these arguments, which have some merit (but are perhaps dangerous)....

Bond Economics
Is The Treasury Market Wrong Because Of Hedgers?
Brian Romanchuk

The CIA’s Dark Prince Doesn’t Want War With Iran — Simon Watkins

Opening Panadora's box. And because the Afghanistan, Iraq and Libya affairs were so successful. Iran would potentially be far worse, not least owing to oil price.

Oilprice.com
The CIA’s Dark Prince Doesn’t Want War With Iran

Simon Watkins

Lula tells world he’s back in the game from jail — Pepe Escobar

Lula's recent interview with Pepe Escobar and others.

Asia Times
Lula tells world he’s back in the game from jail

Pepe Escobar

Why Costco Had To Close Its First Chinese Store Early On Day One? — Dawn Geske

Assignment. Pick out the propaganda.

International Business Times
Why Costco Had To Close Its First Chinese Store Early On Day One?
Dawn Geske

Capitalism vs democracy: Europe’s hard problem — Mark Mazower

Modern Europe’s political structure is based on the supposition that capitalism and democracy can be compatible – so the most urgent challenge of our times is reconciling the two.

In short, economic liberalism and political liberal generate paradoxes that require a comprehensive worldview (systematic set of presumptions) that balances social, economic and political liberalism for Western liberalism to survive.

New Statesman
Capitalism vs democracy: Europe’s hard problem

Mark Mazower, director of the Columbia Institute for Ideas and Imagination in Paris

See also

Monthly Review
The systemic crisis of world capitalism
Prabhat Patnaik
Originally published: Peoples Democracy (August 25, 2019)

Economic Policy Institute — Labor Day Series

Economic Policy Institute

Black workers endure persistent racial disparities in employment outcomes

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: Black workers are twice as likely to be unemployed as white workers overall (6.4% vs. 3.1%). Even black workers with a college degree are more likely to be unemployed than similarly educated white workers (3.5% vs. 2.2%). When they are employed, black workers with a college or advanced degree 3h

Working people have been thwarted in their efforts to bargain for better wages by attacks on unions

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: The share of workers represented by unions has dropped by more than half since 1979—from 27.0% to 11.7% in 2018. Not coincidentally, the share of income going to the top 10% has escalated in this period—these high earners now capture nearly half of all income. The decline of unions is not beca3h

Low-wage workers are suffering from a decline in the real value of the federal minimum wage

Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People? Summary: The real value of the federal minimum wage has dropped 17% since 2009 and 31% since 1968. Workers earning the federal minimum wage today have $6,800 less per year to spend on food, rent, and other essentials than did their counterparts 50 years ago. Some states have raised their minimum wages 3h

Wage growth is being held back by political decisions and the Trump administration is on the wrong side of key debates

Part of the series Labor Day 2019:The fact that the unemployment rate has averaged 3.8% over the past year (its lowest 12-month average since 1970) might make one think that times are flush for American workers and that there is widespread agreement that the U.S. economy is being well managed by elected officials. But while times are better for workers today than they were 10, five, or even three years ago, a crucial ingredient for workers’ well-being—faster-growing wage growth—still hasn’t appeared. This wage failure might be why the public seems unwilling to give President Trump (and his Republican supporters in Congress) credit as good economic managers despite today’s low unemployment rate. In fact, the president and his supporters in Congress are responsible for a number of policy decisions that will reliably harm workers’ future prospects for wage growth.1

Review of Money and Totality by Fred Moseley — The Internationalists

This is a substantial book which the author admits has been 20 years in the making. [1] It deals primarily with Moseley’s own “Macro-Monetary” interpretation of Marx’s economic writings and takes up and rebuts criticisms of this interpretation. However, the book also looks critically at the major interpretations of Marx’s economic work, by Marxist academic economists, which have emerged in the last 100 years, giving a brief description of them and critically examining their failings. Many people may not realise this, but for the greater part of the twentieth century the accepted view among academic Marxist economists, which was generally known as the Standard Interpretation (SI), was that Marx made a fundamental mistake in his economic analysis which needed to be corrected. The key issue behind this is the so-called “transformation” problem, namely the transformation of values into prices of production. The SI and its offshoots claim that Marx failed to do this correctly and his work needs to be corrected. A number of corrections have been proposed and a further number of variations of these corrections themselves put forward in ever greater complexity. Moseley shows how these criticisms and corrections are founded on a misinterpretation of Marx’s work; and that the corrections each violate some other key aspect of Marx’s work. Moseley argues that Marx did not make a mistake and there is no transformation problem whatsoever....

Important if at all interested in Marx and Marxist/Marxian economics.

Monthly Review
Review of Money and Totality by Fred Moseley

Originally published: The Internationalists (August 22, 2019)

The case for a guaranteed job — Robert Skidelsky

“Any government,” writes the economist and hedge fund manager Warren Mosler, “can achieve full employment by offering a public service job to anyone who wants one at a fixed wage.” Versions of this idea have received powerful endorsements from prominent Democratic politicians in the US, including presidential candidate Bernie Sanders and Rep. Alexandria Ocasio-Cortez, who has linked a government job guarantee to a Green New Deal. Moreover, versions of a job-guarantee program (JGP), more or less connected to green economics, have been implemented in Argentina, India, South Africa, and – whisper it quietly – Hungary under its illiberal populist leader, Viktor Orbán....

World Economic Forum
The case for a guaranteed job

Robert Skidelsky | Professor Emeritus of Political Economy at Warwick University, fellow of the British Academy in history and economics, member of the British House of Lords, and author of a three-volume biography of John Maynard Keynes

Originally published at Project Syndicate and picked up by World Economic Forum

Revisiting Education of Economics – Dr. Omer Javed

Economics and teaching economics in Pakistan. Good short summary of the history of economics. Curiously, he doesn't mention MMT or even Post Keynesianism, taking a decidedly institutional approach. MMT economists draw on Post Keynesianism and institutional economics heavily, although these are not the only influences. 

Global Village Space
Revisiting Education of Economics – Dr. Omer Javed

Omer Javed, institutional political economist,who previously worked at International Monetary Fund

Is Fiscal The New Monetary? — Nicola Mai, Peder Beck-Friis

Curiously, no mention of MMT. But useful for the analysis showing that monetary policy is not cutting it and that fiscal policy will inevitably gain in prominence. It is now pretty widely recognized that the period of monetarism spearheaded by Milton Friedman (and the Chicago School) as the "successor" of John Maynard Keynes as international policy guru is over. The question now is, who will the new gurus be? Will the pendulum swing back to Cambridge and Wynn Godley?

FA — Financial Advisor
Is Fiscal The New Monetary?

Nicola Mai, portfolio manager and a sovereign credit analyst and Peder Beck-Friis is a portfolio manager, both at PIMCO

Is a Big Jump in Federal Spending Now Inevitable? — Michael Rainey

Barry Ritholtz, a Bloomberg columnist who runs an eponymous wealth management firm in New York, published a piece in Bloomberg Businessweek Tuesday that describes the most recent session of “Camp Kotok,” an informal, wine-fueled gathering of bankers, analysts and investors that occurs each summer in Maine.

The focus of this year’s meeting was the Federal Reserve’s struggle to deal with a slowing economy against a background of low inflation, plunging interest rates, a burgeoning trade war and a president who has sought to undermine the bank’s independence, Ritholtz writes.

At a debate led by analyst Jim Bianco of Bianco Research, the group focused on a controversial but increasingly prominent approach to federal spending known as Modern Monetary Theory, or MMT, which holds that the government should spend as necessary to move the economy toward full employment without worrying about growing deficits, as long as inflation remains low.

Given the weak hand the Fed is currently playing, with little room to cut interest rates and a lack of policy tools to deal with trade conflict, the participants largely agreed that policymakers will at some point in the not too distance future pick up the tools recommended by supporters of Modern Monetary Theory:

“The surprising consensus was that whether it comes from the political Left or Right, MMT is inevitable,” Ritholtz writes. “Expect future infrastructure projects, Medicare for all, and/or tax cuts to be funded by bonds authorized by Congress, issued by the Treasury, and purchased by the Federal Reserve." ...

Winning!

The Fiscal Times
Is a Big Jump in Federal Spending Now Inevitable?

Michael Rainey

Lars P. Syll — a primary reason for the rise of inequality

Economic liberalism expressed as "free market capitalism" aka neoliberalism is incompatible with political liberalism as liberal democracy owing to the social effects of the inequality that favoring economic liberalism in the above sense leads.

Lars P. Syll’s Blog
Economics — a primary reason for the rise of inequality
Lars P. Syll | Professor, Malmo University

A spreadsheet version of the IS/MY model (alternative to IS/LM model) — Dirk Ehnts

I hope that this model will be taken up by more colleagues as it is very clear now that the IS/LM model “does not work”. If you make it more realistic by saying that investment does not depend on the rate of interest (vertical IS curve) and that the central bank determines the interest rate (horizontal LM curve), then you will have wasted 3-4 lectures to explain the goods market (IS curve) and the money market (LM curve) only to conclude that both do not matter in practice. It is only a small step from there to conclude that teaching the IS/LM model is a waste of time. You might just say that “demand determines supply, which determines employment” and that “government spending and private investment, which both do not depend on the rate of interest, increase demand”. Your students will easily get it and you save 3-4 lectures for something else, like my IS/MY model.

Bravo! A big step in the right direction in teaching Econ 101. And it is not just Econ 101, Paul Krugman has basically stated that he uses the IS/LM as his macroeconomic lens.

econoblog 101
A spreadsheet version of the IS/MY model (alternative to IS/LM model)
Dirk Ehnts | Lecturer at Bard College Berlin, research assistant at the Technical University of Chemnitz, and spokesperson of the board of Pufendorf-Gesellschaft eV in Berlin

Bill Mitchell — Japan again demonstrates basic errors in mainstream macroeconomic theory

It is Wednesday and a quite blog writing day for me. I have to catch a flight a bit later and finish some other things before I do that. But I receive a lot of E-mails from readers puzzled by the fact that the low-interest rate environment (even negative) has not stimulated economic activity to the point of accelerating inflation. As part of the paradigm shift that is now, finally, occurring in macroeconomic policy-making, the RBA governor Phillip Lowe continued his theme that monetary policy has basically exhausted its counter-stabilisation potential, when he made his – Remarks at Jackson Hole Symposium (August 25, 2019). He talked about the “the elevated expectations that monetary policy can deliver economic prosperity” against the reality that central banks do not have “the best lever” to manage the economy. This theme has been expressed by many central bankers now. And there is emerging research to show that the low-interest rate environment is actually achieving the opposite – reducing the inflationary pressures. This is no surprise to Modern Monetary Theory (MMT) economists. Our basic presumption is that monetary policy is an ineffective tool for modifying aggregate spending and that rising interest rates, which are designed to quell inflationary pressures, probably actually intensify those pressures through their impact on business costs. Today, I will briefly discuss a paper I read yesterday that adds to the growing research evidence on this theme....

Basically, monetary policy involves a "shotgun" approach while fiscal policy can be as tightly targeted as policy makers wish. A "shotgun" approach means that interest rates affect everyone financially and economically across the board, but the effects on different parties, classes, sectors, etc. is different to the degree that the policy involves choosing winners and losers. That is to say, there are trade offs instead of the assumed binary independent variable-dependent variable function that is naively assumed. e.g., by NAIRU and the Phillips curve. 

As a result, instead of an input (interest rate setting to target inflation and unemployment) resulting in optimizing inflation rate and employment rate, "interference patterns" to use an analogy from acoustics are generated, such that different "waves" (flows) are mutually cancelling to some degree. That is to say, evidence of the value of monetary policy is sparse. It does not work as advertised, and central banks are now admitting this.

On the other hand, fiscal policy, being a political choice by those in control of appropriations, can be targeted to affect different parties, classes, sectors, regions, etc. Again, the policy will inevitably choose winners and losers, but based on a rationale that is simultaneously social, political, financial and economic. Then the principle of the greater good applies, that is, national interest in the case of a national government.

These are simple principles but widely misunderstood and misrepresented, even by some naive MMT proponents, especially those attempting to compromise with the mainstream conventional view. MMT economists have stood their ground, on the other hand, they are finally getting some traction in changing this erroneous view that has been so costly socially, politically, financially, and economically.

Bill Mitchell – billy blog
Japan again demonstrates basic errors in mainstream macroeconomic theory
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

On James Buchanan (yeah that one!), European Greatness and the fate of Good Ideas — Eric Schliesser

[James] Buchanan (who won a Nobel 1986) is the kind of economist that did not disguise he read and engaged with philosophers (especially Rawls) throughout his life.…

Digressions&Impressions
On James Buchanan (yeah that one!), European Greatness and the fate of Good Ideas
Eric Schliesser | Professor of Political Science, University of Amsterdam’s (UvA) Faculty of Social and Behavioural Sciences

Links — 27 Aug 2019

Reminiscence of the Future
Picture Speaks Louder Than Words.

Operation "Detachment".

Andrei Martyanov

The American Conservative
The Media’s Russian Radiation Story Implodes Upon Scrutiny

Scott Ritter

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

Oilprice.com
Tariffs To Decimate China’s US Crude Oil Imports

Strategic Culture Foundation
The First of Many Cauldrons Form in the Middle East

Tom Luongo

Watch Costco Chaos at Its China Debut — Johanna Ramsey

Costco Wholesale Corp.’s first outlet in China opened on Tuesday and was soon overrun with customers willing to fight over discounted products and wait hours to pay for their purchases.

The American retail giant had to suspend operations in its Shanghai store in the afternoon citing “heavy traffic and customer flows”, according to a text message sent by the company to consumers holding its membership card. The message was shared on Weibo, China’s micro-blogging website.

The frenzy at Costco’s store comes at a time when the U.S. and China are locked in a tit-for-tat tariff war that shows no signs of abating and is making American firms wary of investing in the largest Asian economy.…

China's consumer society in training. Sounds like Filene's basement in the good old days.

I would be a shame if American business got shut out of this just as the Chinese domestic economy is set for growth as China shifts from export-led to domestic-led.

Fortune
Watch Costco Chaos at Its China Debut

Johanna Ramsey

Flailing at China — Stephen S. Roach

Despite years of denial, there can no longer be any doubt that the US is pursuing a bipartisan containment strategy vis-à-vis China. Whether justified or not, the real problem with this strategy is less the merits of the allegations leveled by US politicians than the incoherence of the Trump administration’s policies to address them....

It's still "Red China," after all.

Stephen Roach understand Chinese political economy. This is a good summary of his course at Yale on "The Next China."

Project Syndicate
Flailing at China

Stephen S. Roach, faculty member at Yale University and former Chairman of Morgan Stanley Asia

Thorstein Veblen: Economics "is a `Science' of Complaisant Interpretations, Apologies, and Projected Remedies" — Timothy Taylor

I always enjoy reading Thorstein Veblen, partly because his writing strays back and forth across the line between "raising questions of real interest" to "just plain old dyspeptic and cantankerous." His 1918 essay "The Higher Learning In America:A Memorandum On the Conduct of Universities By Business Men" is full of comments from both categories, often closely overlapping.

It's also the source of one of the liveliest insults to the field of economics, that economics is "a `science' of complaisant interpretations, apologies, and projected remedies." Veblen also argues that this isn't because economists and other academics have been paid off, but only because they have been selected and trained for their narrow intellectual horizons....

Compare Upton Sinclair:

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" — I, Candidate for Governor: And How I Got Licked (1935); repr. University of California Press, 1994, p. 109.

Once an investment in education is built up providing access to academia, it is difficult to think in ways that challenge this investment.

Veblen noticed this of economists back in 1918 and called attention to it.

Conversable Economist
Thorstein Veblen: Economics "is a `Science' of Complaisant Interpretations, Apologies, and Projected Remedies"
Timothy Taylor | Managing editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota

Bernie making waves

Presidential contender Sen. Bernie Sanders (I-Vt.) on Monday released a plan to protect independent news outlets and journalists from the effects of widespread media consolidation.
Sanders, decrying the mega-mergers he says have led to a handful of large corporations acting as gatekeepers for the information most Americans receive, calls for concrete steps “to rebuild and protect a diverse and truly independent press so that real journalists can do the critical jobs that they love” in an editorial for the Columbia Journalism Review.

"Today, after decades of consolidation and deregulation, just a small handful of companies control almost everything you watch, read, and download," Sanders writes. "Given that reality, we should not want even more of the free press to be put under the control of a handful of corporations and 'benevolent' billionaires who can use their media empires to punish their critics and shield themselves from scrutiny."

Going for the throat. Who controls the narrative controls the world.

As an aside, "who controls the narrative controls the world," used to apply to American soft power. Over the past several decades the US has managed to shrink its formerly awesome soft power considerably through endless war and imperial arrogance.

The Hill
Sanders releases media plan: Press shouldn't be controlled by corporations, 'benevolent' billionaires
Zack Budryk

Bernie Sanders recently released his plan for implementing the Green New Deal. These include such comprehensive goals as transitioning to 100% renewable energy for electricity and transportation by 2030 and decarbonizing the entire economy by 2050 (full details here).

To get there, Sanders plans a number of ambitious projects, including massive and job-creating infrastucture spending and "declaring climate change a national emergency." The implications of the latter are not entirely spelled out. A number of candidates have proposals that "declare a national emergency" regarding climate change, but not in the same sense that George W. Bush, for example, may have meant had he declared the 9/11 attacks a national emergency (he didn't, but he could have).

That kind of national emergency, a Bush-Cheney kind, implies an exercise of presidential power that approaches martial law, something that most pro-climate Democrats don't contemplate. Does the Sanders plan contemplate a stronger-than-rhetorical response to climate change? It's not clear yet from Sanders camp messaging.

We aren't there yet, but when climate change becomes front page news we will be and people will be demanding that a national emergency be declared, as coastal cities are threatened by rising sea level, for example.

Down with Tyranny

Bernie Sanders' GND Plan Will Nationalize Power Generation in the U.S.

See also

The continued inability of America’s liberal democratic establishment to address the ills besetting the country—climate change, unregulated global capitalism, mounting social inequality, a bloated military, endless foreign wars, out-of-control deficits and gun violence—means the inevitable snuffing out of our anemic democracy. Overwhelmed by the multiple crises, the liberal elites have jettisoned genuine political life and retreated into self-defeating moral crusades in a vain and futile attempt to deflect attention away from the looming social, political, economic and environmental catastrophes.

These faux moral crusades, now the language of the left and the right, have bifurcated the country into warring factions. Opponents are demonized as evil. Adherents to the cause are on the side of the angels. Nuance and ambiguity are banished. Facts are manipulated or discarded. Truth is replaced by slogans. Conspiracy theories, however bizarre, are incredulously embraced to expose the perfidiousness of the enemy. Politics is defined by antagonistic political personalities spewing vitriol. The intellectual and moral sterility, along with the inability to halt the forces of societal destruction, provides fertile soil for extremists, neofascists and demagogues who thrive in periods of paralysis and cultural degeneracy.

Liberals and the left have wasted the last two years attacking Donald Trump as a Russian asset and look set to waste the next two years attacking him as a racist. They desperately seek scapegoats to explain the election of Trump as president, no different from a right wing that tars its Democratic Party enemies as America-hating socialists and that blames Muslims, immigrants and poor people of color for our national debacle. These are competing cartoon visions of the world. They foster a self-created universe of villains and superheroes that exacerbates the mounting polarization and rage.

“Bourgeois society seems everywhere to have used up its store of constructive ideas,” Christopher Lasch wrote in 1979 in “The Culture of Narcissism.” “It has lost both the capacity and the will to confront the difficulties that threaten to overwhelm it. The political crisis of capitalism reflects a general crisis of western culture, which reveals itself in a pervasive despair of understanding the course of modern history or of subjecting it to rational direction. Liberalism, the political theory of the ascendant bourgeoisie, long ago lost the capacity to explain events in the world of the welfare state and the multinational corporation; nothing has taken its place. Politically bankrupt, liberalism is intellectually bankrupt as well.”...

Truthdig
The Curse of Moral Purity
Chris Hedges

Trade war fractures Asian global value chains Jayant Menon

Smoot-Hawley redux? 

Tariffs and trade wars have knock-on effects. It's impossible to tell that this point where this is all leading, but one thing is sure, the status quo ante is dead. What will emerge is uncertain.

The presumption in the US that things will get better. This is yet to be determined and it isn't possible to  know from the data. In addition, the policy is in constant flux. 

As a result, expectations are becoming more and more subject to "animal spirits," and less and less rationally based. This means one thing for markets and another for corporate planning. 

Markets are already responding negatively to increasing uncertainty. "Recession" is the world of the day, even though the economic data do not yet support this view decidedly. 

US finance and business are also getting rattled and asking the president to tone it down and dial at least some of it back. No evidence he is hearing it yet.

Sensitive to history and humiliation, China is digging in for the long haul. Are Americans? And what about Europe, which is also in the administration's cross hairs as a competitor trading bloc, while also being affected by the trade war with China and sanctions on Russia and Iran.

Asian Correspondent
Trade war fractures Asian global value chains

Jayant Menon | Lead Economist (Trade and Regional Cooperation) in the Office of the Chief Economist at the Asian Development Bank (ADB), Manila

China Goes Generic! — Dean Baker

Must-read. It's short.

Not only does this have a potentially huge impact on Big Pharma, but it is also China poking the US in the eye in retaliation for it regards as humiliation. So it is also "saving face."

Perhaps the largest and longest lasting impact of the trade war that is already occurring is the change in attitude of Chinese consumers about American products. The Chinese are very nationalistic and patriotic. They are also ethnically proud and justifiably so based on being able to boast of the longest functioning culture on earth that is still going strong.

Insulting the China, which means the Chinese people, is a bad idea in a lot of ways, not the least owning to economic reasons. China has not only the largest market but also the fastest growing middle class of large developed countries. And there is a long way to go, even though China has the largest economy based on PPP. Loosing its initial foothold that market would/will be difficult for the US to deal with. This is, of course, especially true if Chimerica decouples, as the China hawks wish.

Worst of all, President Trump recently labeled President Xi an "enemy." The Chinese will understand "Xi" here as identical with "China," and that the US regards China as an enemy. This was a really, really dumb move that is impossible to reverse without kowtowing, which, of course, the American president would never do. It goes far beyond a strategic blunder. It changes the entire game.

At this point, it's "locked and loaded," and it is turning into more than a war of words. It didn't need to go this way.

Beat the Press
China Goes Generic!
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Talk is cheap — David F. Ruccio

The same day I wrote that capitalism was coming apart at the seams, indicated by the shocking disparity between the compensation of corporate CEOs and workers, the Business Roundtable published its new statement of purpose of a corporation.* The 180 or so corporate executives who signed the statement declared that all their stakeholders, not just owners of equity shares, were important to their mission.

Many business pundits, such as Andrew Ross Sorkin, greeted the new statement as a sign that the era of shareholder democracy (what he refers to as “shareholder primacy”) had finally come to an end and that a “significant shift” in corporate responsibility to society would be ushered in. Readers, however, had their doubts, most of them echoing JDK’s response to Sorkin’s piece: “Talk is cheap.”

As long as stock price and CEO compensation linked to stock price are the chief criteria, "shareholder value" will be the primary objective of corporations. This is a feature/bug of "free market capitalism" as a mindset. Changing mindsets is not simple. So talk about such change is likely cheap.

Occasional Links & Commentary
Talk is cheap
David F. Ruccio | Professor of Economics, University of Notre Dame

Is a different type of economics the answer? — Stephen Hail

The rest of the media is catching on to the fact that there is a paradigm shift underway in economics.

This won’t be a surprise to you if you are a regular reader of Independent Australia. I’ve writtenabout two dozen articles on the main challenger to the old paradigm, which is modern monetary theory (MMT). Others have also written on this topic for IA. If you’ve been relying for news and current affairs on the usual suspects, however, the current controversy might have crept up on you.

For the most part, the rest of the media has been asleep on this one, even if they are latterly waking up.

There are more and more mentions of MMT in the mainstream media, and an increasing number of whole articles which are partly, if not entirely, supportive of this new frame for thinking about the economy and the role of the federal government within the economy.

Why the sudden interest? It is becoming clear to all but the most blinkered that was for many years the near-consensus view on the best way of managing the economy is broken. It certainly doesn’t work any longer and perhaps it could only ever work for a while because it depended on things which are unsustainable. What is unsustainable, naturally, tends not to be sustained....

Independent Australia
Is a different type of economics the answer?

Stephen Hail | Lecturer in Economics, University of Adelaide

Bill Mitchell — On money printing and bond issuance – Part 2

This is Part 2 (and final part) of my series on printing money, debt and power. The two-part series is designed to draw a line through all the misconceptions and errors that abound on the Internet about the Modern Monetary Theory (MMT) treats deficit spending and bond issuance. The social media debate about MMT is at time nonsensical, thriving on falsehoods and fantasy. I get many E-mails after some robust Twitter exchange between some self-proclaimed expert who has found the latest fatal flaw in our work. Often these characters have just stumbled across MMT for the first time and, full of dissonance, wade into the discussion without thinking for a moment that we have been working on this Project for 25 or more years and, just may have, come across these points before. In other cases, the critics just make stuff up to make themselves sound erudite. In the process, well motivated readers get confused. In the first part I dealt with the ‘money printing’ story about MMT. Today I want to discuss the issue of bond issuance and whether MMT economists are Wall Street stooges who want to perpetuate the interests of the financial sector over all else. Seriously!...

Bill Mitchell – billy blog
On money printing and bond issuance – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Trump - Make Iran rich again!' - Trump at G7

I don't know what to make of this. Is it that the Iranians didn't back down so Trump is trying a different approach? Was it always just a bluff? Or is he still saying, "do as we tell you, or else?"

The Great Switch: The Geo-Politics of Looming Recession — Alastair Crooke

This post is a review of British historian Adam Tooze's histories of WWII (The Wages of Destruction) – and of WWI (The Deluge), which Alastair Crooke applies to current world affairs based on US strategy to diminish political and economic rivals through economic (trade) policy that is really economic warfare. He posits that Tooze's work establishes a precedent for this

Strategic Culture Foundation
The Great Switch: The Geo-Politics of Looming Recession

Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

See also at SCF

American Apocalypse

John W. Whitehead

Bill Mitchell — On money printing and bond issuance – Part 1

There are continual Twitter type debates and Op Ed/Blog-type articles going on about whether MMT says this, or that, or something else. The critics are refining their attacks by hammering on about “printing money” and hyperinflation, and, more recently that MMT ignores ‘power’ (whatever that is). The latter leads them to conclude that MMT is thus a naive approach and is inapplicable to a political agenda aiming at changing things for the better. These debates (if you can call them that) are also a very American-centric sort of to and fro, which exemplifies the tendency of the US to think the world and all ideas stop at its borders. In this two-part series, I seek to clarify some of the points that are raised (not for the first time) (-:, which, in turn, demonstrates how poorly constructed these attacks. I know it is often said that attackers haven’t read the literature. But in these situations it is a fact. In part 2 tomorrow, I will also touch on why I think some MMTers are becoming defensive in the wake of these attacks. So, in Part 1 I consider the ‘money printing’ story. Specifically, is MMT just about ‘printing money’? The answer is obvious – profoundly no, but we need to understand where these types of allegations come from (which swamp!)....

Bill Mitchell – billy blog

On money printing and bond issuance – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

So Are We All MMTists Now? — Brian Romanchuk

Larry Summers attracted a great deal of attention with arguments that post-Keynesian theories ought to be taken into account, and the ability of central banks to stimulate the economy are limited. One could argue that the zeitgeist is shifting in the direction of Modern Monetary Theory (MMT): the role of fiscal policy may be increasingly important. However, I am unsure how far actual economics debates will shift.

One may note that Summers dodged discussing MMT in his initial tweets; in fact, he referred to Thomas Palley, whose main contributions in recent years has been his sectarian attacks on MMT. My guess is that this will be a fairly standard approach...,

I have said previous, this is about control of the Democratic Party going forward — the Democratic Establishment (the Clinton-Obama camp) versus the progressives (the Bernie-Squad camp). Stephanie Kelton has put MMT at the center of it owning to her association with Bernie and AOC's endorsement of MMT.

The former is backing way from New Keynesian but is not willing to throw in the towel and support MMT. Now the battle is engaged. So far the victories are going in the right direction if one is an MMT supporter. Monetarism is effectively dead and New Keynesian is becoming untenable as a policy position.

There has been an ongoing battle between one faction of Post Keynesians and others that support MMT. Larry Summers just cast his hat with the former.

Bond Economics
So Are We All MMTists Now?
Brian Romanchuk

Sputnik — Trump Says He Has ‘Absolute Right' to Order US Companies Out of China Based on 1977 Law

When leaving the White House for the G7 summit in France, Trump told reporters that he has "the absolute right to do that, but we'll see how it goes." He later explained that he was referring to the 1977 International Emergency Economic Powers Act (IEEPA) ….

Sputnik International

Trump Says He Has ‘Absolute Right' to Order US Companies Out of China Based on 1977 Law

What does Putin’s staffing decision vis-à-vis Glazyev mean — The Saker

This is important. But if you have not been following Russia, then its level of detail may obscure the key point. Sergei Glazyev is the closest to MMT of all the Russian economists of influence, and he was in Putin's inner circle of advisors until this announcement.

The Saker unpacks its implications for Russia. He views it as good move by Putin, since it is simply not possible to implement a Glazyev program in Russia. Neither is Putin that powerful if he wanted to do so, but other conditions supervene even if he did want to.

Note: "Liberal" in the Russian context means neoliberal, and the neoliberals see their future in alliance with Europe and the US. Russia is basically a conservative traditionalist country and the stavka (military general staff) and siloviki (deep state) are very conservative, so that is not going to happen on their watch, especially after neoliberalism almost destroyed Russian society in the aftermath of the collapse of the USSR.


The Vineyard of the Saker
What does Putin’s staffing decision vis-à-vis Glazyev mean
The Saker

Moon of Alabama — Moon of Alabama U.S. Decoupling From China Forces Others To Decouple From U.S.

The now not-so-hidden agenda is to take Chimerica apart, although I haven't seen it in the Western media yet, and this is decidedly not where American business and finance want to go.

Moon of Alabama
U.S. Decoupling From China Forces Others To Decouple From U.S.

Links — 23 Aug 2019

RT
Epstein: The Maxwell Connection (by George Galloway)

Consortium News
The Missing Howls of Denunciation Over Major Sex Trafficking

Mint Press News
From “Spook Air” to the “Lolita Express”: The Genesis and Evolution of the Jeffrey Epstein-Bill Clinton Relationship

Whitney Webb

Caitlin Johnstone — Rogue Journalist
How To Awaken From The Matrix Using Self-Enquiry
Caitlin Johnstone

The Babylon Bee
Reality Criticized For Not More Clearly Distinguishing Itself From Satire

Defend Democracy Press
If Politicians Can’t Face Climate Change, Extinction Rebellion Will

David Graeber, New York Times

Spiegel Online
Extinction Rebellion: A New Kind of Climate Protest Movement

Georg Fahrion

Fort Russ News
Putin’s Full Statement: America’s missile test proved Russia right about INF Treaty

Drago Victorien

RT
Putin orders ‘exhaustive’ response to US missile test, says it shows Washington worked to breach INF

Free West Media
The Hipster ‘revolution’ in Hong Kong

Manuel Ochsenreiter

SouthFront
Google, Twitter And Facebook Corodinate Efforts To Supress Non-Mainstream Coverage On Hong Kong Protests

Irrussianality
The Greenland Connection

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

Lobe Log
The Trump Administration Has Criminalized the Iranian Economy

Tyler Cullis

Moon of Alabama
U.S. Says Israel Bombed Iraq

SouthFront
Netanyahu Loosely Confirms Israel Carried Out Strikes In Iraq

RT
Israel preparing to bomb Houthis in Yemen to warn them away from Iran – reports

The Unz Review
The Saker Interviews Professor Marandi

Zero Hedge
Ex-Overstock CEO Byrne Reveals FBI's Peter Strzok Manipulated Him For 'Political Espionage'
Tyler Durden