Wednesday, June 3, 2020

Moon of Alabama — The U.S. Economy Is Down By 50% - Where Are the Job Programs It Needs?


Pretty decent economic analysis.

I posted the following comment there:

Not all Democrats are missing in action on calling for federal support for full employment, already mandated by the Humphrey-Hawkins Full Employment Act of 1978 (15 USC § 3101). AOC and the squad, for example, have proposed adopting the universal job guarantee that is foundational to Modern Monetary Theory aka MMT. Stephanie Kelton, one of the most prominent MMT economists was Bernie Sander's chief economic advisor. The problem is not so much "Democrats" as the Democratic leadership under Clinton, Obama, Biden, Pelosi, the DNC, etc. The US Democratic Party needs an overhaul.— Posted by: Tom Hickey | June 03, 2020 at 23:02

A mysterious company’s coronavirus papers in top medical journals may be unravelling



I've was debating hard with the C19 conspiracists and then this article turned up. Although I never did debate with them about this topic that much. The conspiracists think that Bill Gates and Big pharma closed this research down as it competed with the new medicines they are developing, but maybe there was just some kind of error? We will have to see.

On its face, it was a major finding: Antimalarial drugs touted by the White House as possible COVID-19 treatments looked to be not just ineffective, but downright deadly. A study published on 22 May in The Lancet used hospital records procured by a little-known data analytics company called Surgisphere to conclude that coronavirus patients taking chloroquine or hydroxychloroquine were more likely to show an irregular heart rhythm—a known side effect thought to be rare—and were more likely to die in the hospital.

Within days, some large randomized trials of the drugs—the type that might prove or disprove the retrospective study’s analysis—screeched to a halt. Solidarity, the World Health Organization’s (WHO’s) megatrial of potential COVID-19 treatments, paused recruitment into its hydroxychloroquine arm, for example. (Update: At a briefing on 3 June WHO announced it would resume that arm of the study.)


Kelly Servick, Martin Enserink, Science

Let’s not deny it; we’re facing fascism — Richard Murphy


Richard Murphy says out loud for all to hear what a lot of people are thinking to themselves and whispering about. This is starting to evoke memories of the 1930's. "Antifa" (antifascism) has been saying this for some time and has been marginalized for it. Now it is becoming an issue.

There is a tendency to blame the president and his administration for this, that that would be incorrect given the history. This doesn't happen overnight and has been a long time in the building. Arguably, it began before the undertaking of "the great experiment," and in my own memory it was clear by the Nixon era, brought to the fore by the Civil Rights Movement under the leadership of Dr. Martin Luther King.

Tax Research UK
Let’s not deny it; we’re facing fascism
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Racism in America — Peter Radford


Peter Radford makes some observations and offers friendly advice to Americans.

I would add that in an environment of globalization owing to advances in communications and transportation technology, America is hemorrhaging soft power over issues like institutional racism. This is not just immoral but it is also not pragmatic. It belies the principles that American and Western liberalism supposedly stand for and seeks to imposes on others, even the unwilling, by violent means if deemed appropriate.

The Radford Free Press
Racism in America
Peter Radford

Bill Mitchell — Australia national accounts – early stages of the virus recession now clear

...The obvious conclusion is that the Federal government has not supported an ailing economy enough to avoid the damage that negative growth brings. An urgent and major shift in fiscal policy towards further expansion is definitely required....
Bill Mitchell – billy blog
Australia national accounts – early stages of the virus recession now clear
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — MMTed Q&A – Episode 1 – streaming tonight

MMTed is launching its new on-line show – MMTed Q&A – tonight. Live streaming begins Wednesday Night 20:00 East Coast Australia Time. We will be answering questions and introducing a special guest each episode....
Bill Mitchell – billy blog
MMTed Q&A – Episode 1 – streaming tonight
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Comments On John Quiggin's "Motte and Bailey" Complaint — Brian Romanchuk

 Brian writes: The rest of the John Quiggin article discusses how MMT is a continuation of existing Keynesian theory (at least Old and Post-Keynesian theory). Note that this is actually what MMTers themselves have said.
I think it is necessary to emphasize here that "continuation" doesn't mean just "repetition," lest anyone miss it. MMT economists have observed the principle, "Imitate and innovate." MMT is not just a rehash.

While MMT economists draw on the past and develop their position based on it, at last to some extent, MMT economists would also point to other influences such as institutionalism and a great deal of MMT has to do with understanding institutional arrangements that affect economics, money & banking, and finance. This is a contribution, even though it has been mentioned in the past by others, James Tobin and Hyman Minsky come to mind, but not in the same comprehensive way as the basis for a macroeconomic theory.

Not only have MMT economists brought new material to the discussion but also elaborated a synthesis of old and new that provides a new lens through which to view economics and finance, which are joined at the hip according to MMT. The juncture between economics and finance is accounting and money & banking. Even if one argues that there is nothing "new" in MMT, the synthesis they elaborate and the lens it makes available are significant innovations.

Warren Mosler would observe further that he was the first to point out that currency sovereigns have a monopoly on the currency in a floating rate system, which enables them to set the "own rate" (policy rate) and to set the value of the currency through the prices they pay in the marketplace. 

For example, a job guarantee that sets the compensation for an hour of unskilled labor would establish a real anchor for the currency in terms of units of labor time (hourly rate) and labor power (unskilled).

I also think that John Quiggin "doth protest too much" about "vulgar MMT." (I have concerns here, too, and try to make corrections from time to time on social media, but that hole is just too big to plug. Also considerable background is needed to capture the nuance.)

But kudos for John Quiggin for acknowledging MMT economists actual contributions. Another sign of progress.

Tuesday, June 2, 2020

State Terrorism Across America — Joe Giambrone


The growth and extension of the police state has been bipartisan and has increased greatly since the passage of the Patriot Act suspending constitutional rights and civil liberties, along with police militarization, and illegal civilian surveillance.

OpEdNews
State Terrorism Across America
Joe Giambrone

Also

"Us against them."

AlterNet
Trump, fear and racism: How our brains can be manipulated to tribalism
Arash Javanbakht

Also

The Baffler
Insurrection in the Eye of the Beholder
Hawa Allan

Sputnik — Trump Signs Order to 'Advance' International Religious Freedom Through the Use of 'Economic Tools'

In its 2020 annual report on international religious freedom, the United States Commission on International Religious Freedom (USCIRF) has claimed that several nations, including Russia, China, Iran and, for the first time, India, should be included in the list of so-called "countries of particular concern".
Another terrible idea that will be viewed by traditional societies as an illiberal liberal attack on them.

And selective. There is apparently no mention of Saudi Arabi or any of the other Islamic states. Or Israel, which defines itself as the nation-state of the Jewish people in which only Jews have the right to self-determination.

Sputnik International
Trump Signs Order to 'Advance' International Religious Freedom Through the Use of 'Economic Tools'

'It just doesn't seem right': Pentagon officials on edge over military leaders' dealings with Trump — Lara Seligman And Bryan Bender


Another strategic blunder undermining soft power. This is all too reminiscent of the 1930's, especially given the administration's rhetoric and behavior. Wrong move at the wrong time.

Politico
'It just doesn't seem right': Pentagon officials on edge over military leaders' dealings with Trump

Flying-cab drivers wanted — Uri Pelli and Robin Riedel


The future is now — well, almost.

McKinsey
Flying-cab drivers wanted
Uri Pelli and Robin Riedel

This is already now.

New Geography
Amazon Air: 2020's Transportation Juggernaut
Joseph Schwieterman | professor and director of the Chaddick Institute for Metropolitan Development at DePaul University in Chicago. Schwieterman’s new co-authored study, Insights into Amazon Air: 2020’s Transportation Juggernaut, is available here.



Sputnik — Former US President George W. Bush Says It’s 'Time for America to Examine Our Tragic Failures'


Never thought I'd  have a good word to say about W after the Iraq debacle, but this deserves commendation. It's still some way to redemption though.

Sputnik International
Former US President George W. Bush Says It’s 'Time for America to Examine Our Tragic Failures'

Sputnik — Hong Kong’s [Chief Executive] Lam Blasts US for ‘Double Standard’ Security Law Criticism Amid Protest Repressions

Hong Kong Chief Executive Carrie Lam sharply criticized the US on Tuesday for applying a “double standard” to the city’s new national security law being drafted by Beijing, as the US has seen widespread police repression and violence against Black Lives Matter protesters....
The new law comes after months long destructive protests in Hong Kong against further incorporation into China that were fueled by Western support. However, while Washington extensively criticized the Hong Kong police’s handling of the protests, now the US is seeing its own mass demonstrations and meeting them with even greater repressive force.
“For some countries that have had a high-profile response and claimed they will take action, I can only describe them as upholding double standards,” Lam said at a Tuesday news conference. “They value very much their own national security but are biased in viewing ours.”...
Sputnik International
Hong Kong’s [Chief Executive] Lam Blasts US for ‘Double Standard’ Security Law Criticism Amid Protest Repressions

TASS — Putin sets conditions for Russia’s nuclear weapons use


Clarifying MAD.

Pretty well guarantees that any conflict with Russia will go nuclear and continental US will be targeted by ICBMs.

In spite of this, US policy makers are pressing on.

TASS
Putin sets conditions for Russia’s nuclear weapons use

More Self-Inflicted Risks Than We Need — Tim Duy

Bottom Line: On a certain level this shouldn’t be that hard, at least from a macro-policy perspective. Keep pumping money into the economy to support incomes as you build out the public health infrastructure to contain the virus while gradually ramping back up the economy. We just can’t fully commit to that program. That lack of commitment leaves us with a few more downside risks than I would like.
Tim Duy's Fed Watch
More Self-Inflicted Risks Than We Need
Tim Duy | Professor of practice and senior director of the Oregon Economic Forum at the University of Oregon

Energy expenditures as a percentage of PCE at All Time Low — Bill McBride


Calculated Risk
Energy expenditures as a percentage of PCE at All Time Low
Bill McBride

Zero Hedge — Getting Out Of Dodge: After Exiting Loans And Hiking Mortgage Standards, JPMorgan Stops Accepting HELOCs


The sky is falling.

Zero Hedge
Getting Out Of Dodge: After Exiting Loans And Hiking Mortgage Standards, JPMorgan Stops Accepting HELOCs
Tyler Durden

GOP Lawmakers Craft Plan to Battle China in Emerging Tech — Adam Kredo

The United States is falling behind China when it comes to emerging technologies such as artificial intelligence and quantum computing, according to Rep. Cathy McMorris Rodgers (R., Wash.), who told the Washington Free Beacon she is working on a package of legislative measures that would boost public-private partnerships to ensure the United States does not lose its competitive edge in these markets.
As China invests $1.4 trillion over the next five years to dominate the field of cutting-edge technologies, the United States must create its own plan to foster innovation in this area, McMorris Rodgers said. Her plan, which is garnering support among House Republicans, would increase federal research into new technologies and remove much of the bureaucratic red tape currently restraining the private sector. While the United States cannot compete by throwing money at the problem, it can eliminate many of the restrictions that have prevented the federal government from partnering with private tech startups already making inroads into these technologies....
Interesting that it is the GOP, the champion of economic liberalism and the enemy of big government and government intrusion in the economy is spearheading this.

Washington Free Beacon
GOP Lawmakers Craft Plan to Battle China in Emerging Tech
Adam Kredo

Zero Hedge — 2020: The Year The Chairman Of The Joint Chiefs Went To "Check On The Troops" In D.C. Streets


Can't make this stuff up. Who woulda thunk? Even though the impending signs were known for some time.

And the post is scarier than the headline.

Zero Hedge
2020: The Year The Chairman Of The Joint Chiefs Went To "Check On The Troops" In D.C. Streets
Tyler Durden

See also at ZH

Zero Hedge
Shocking Evidence Suggests Coordinated Effort To Orchestrate An Uprising Inside The United States
Michael Snyder via TheMostImportantNews.com

Also

We're In The Thick Of It Now – What Happens Next?Authored by Mike Krieger via Liberty Blitzkrieg blog

What the Democrats Must Do: Project Syndicate — Brad DeLong

Although the United States has entered a period of deepening social strife and economic depression, the Republicans who are in charge have neither the ideas nor the competence to do anything about it. The Democrats must start planning to lead, starting with a commitment to full employment…. A federal commitment to full employment is not a new idea. The US Employment Act of 1946 embraced the principle.... The best response to... objections has always been John Maynard Keynes.... “Anything we can do, we can afford.”...
Far from acting as an independent binding constraint on economic activities, the financial system exists precisely to support such activities. Finding useful jobs for willing jobseekers is surely something we are capable of doing....
First and foremost, the Democratic Party must commit unconditionally to the principle that every American who wants a job should be able to find one. And while that job need not be great, it must pay enough to keep the worker’s family above the poverty line. Every policy under consideration should be judged by whether it accords with this principle....
Grasping Reality
What the Democrats Must Do: Project Syndicate
Brad DeLong | Professor of Economics, UCAL Berkeley

Michael Hudson: Fed’s $10 Trillion Defends Assets of the Rich — Interview by Paul Jay


Video and transcript.

Naked Capitalism
Michael Hudson: Fed’s $10 Trillion Defends Assets of the Rich
Interview by Paul Jay
Originally published at The Analysis

The Big Failure of Small Government — MARIANA MAZZUCATO , GIULIO QUAGGIOTTO

It is no coincidence that countries with mission-driven governments have fared better in the COVID-19 crisis than have countries beholden to the cult of efficiency. Effective governance, it turns out, cannot be conjured up at will, because it requires investment in state capacity....
Project Syndicate
The Big Failure of Small Government
Mariana Mazzucato, Professor of Economics of Innovation and Public Value and Director of the UCL Institute for Innovation and Public Purpose, and Giulio Quaggiotto, Head of the Regional Innovation Center in the Asia Pacific at the United Nations Development Programme.

See also
“State capacity and a collective culture are the two uniquely strong characteristics of China’s political system and social construct that will ultimately enable the country to successfully combat this crisis”.
And
“there is a community that matters more than the individual” [This is an example of the trolley problem in ethics.]
Bill Totten's Weblog
Eric Li: “How do you block a country of 1.4 billion people?”
Gideon Rachman, FT‘s chief foreign affairs commentator
Originally at the Financial Times (February 07 2020)

David Ellerman — Comments on Universal Basic Income

This is a draft paper called “UBI: A Bad Idea Whose Time has Come?”. The income supplements supplied due to the coronavirus pandemic have put the UBI back on the policy agenda, so it is appropriate to re-examine the idea. Click here to download the draft paper.
David Ellerman
Comments on Universal Basic Income

David P. Ellerman works in the fields of economics and political economy, social theory and philosophy, mathematical logic, and quantum mechanics. His undergraduate degree was in philosophy at M.I.T. (’65), and he has Masters degrees in Philosophy of Science (’67) and in Economics (’68), and a doctorate in Mathematics (’71) all from Boston University. He has been in and out of teaching in economics, mathematics, accounting, computer science, and operations research departments in various universities (1970-90), founded and managed a consulting firm in East Europe (1990-2), and worked in the World Bank from 1992 to 2003 where he was an economic advisor to the Chief Economist (Joseph Stiglitz). He is currently a visiting scholar at the University of California/Riverside and at the University of Ljubljana (Slovenia), and a Fellow of the Stellenbosch Institute for Advanced Study.

What’s the Earliest a Progressive Democrat Can Be Elected President? — Thomas Neuberger


I am already on record as saying that I don't see much of a chance that a progressive wins a general election before 1932, which is in basic agreement with the Thomas Neuberger's assessment. He provides some of his reasons.

Naked Capitalism
What’s the Earliest a Progressive Democrat Can Be Elected President?Thomas Neuberger
Originally published at DownWithTyranny!

More Words That Matter: Capital and Labor, Part One — Peter Radford

This is super-significant. It's why I put "capital" and "labor" in quotes or use so-called capital and so-called labor.

Peter Radford concludes.
I realize that this is very crude, for which I apologize. It began this morning in my rejection of the word capitalism, which is a distraction from our understanding of the creative process we apply to our environment to make the stuff we both like and need. But I do see the economy as a cycle of creativity wherein our skills are enabled by what we learned in the past and the harnessing of energy, to fashion a substrate into an order we value in its destruction.
The post is valuable for laying out the problems with "capital" and "labor" in economics and the production function in particular.

The current approach is not working. It needs to be revisited. Peter Radford suggests some important matters like energy, but there are others, e.g, technology, which becoming increasingly important in relation to "capital" and "labor" as "capital" is substituted for "labor." There are many more.

This shift of viewpoint calls attention to the intersection of philosophy (since economics is a "moral science), social science, and psychology, biology, especially evolutionary theory, and ecology. In fact, economics studies a subset of society and societies are embedded in the ecosystem.

The Radford Free Press
More Words That Matter: Capital and Labor, Part One
Peter Radford

Bill Mitchell — Why do currency-issuing governments issue debt? – Part 2

This is Part 2 of the two-part series which focuses on the question: If governments are not financially constrained in their spending why do they issue debt? Part 1 focused on the historical transition of the monetary system from gold standards to the modern fiat currency systems and we learned that the necessity to issue public debt disappeared as fixed exchange rates and convertibility was abandoned in the early 1970s. However, there are many justifications for continuing to issue debt that circulate. In this Part, I consider those justifications and conclude that the on-going practice of government’s issuing debt to the non-government sector is primarily an exercise in corporate welfare and should not be part of a progressive policy set....
Bill Mitchell – billy blog
Why do currency-issuing governments issue debt? – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

KV - A Man and His Dog

They say dog owners get to look like their dogs in the end.


Monday, June 1, 2020

It's the Russians.


It's the Russians. See? (Sputnik International is sponsored by the Russian Federation.)

Sputnik International
‘No Quarter’: US Senator Tom Cotton Calls for Military Invasion of American Cities

Sputnik International
‘You Have to Dominate’: Trump Blasts ‘Weak’ State Governors, Urges ‘Take Back Your Streets’

See also

Former National Security Advisor Susan Rice "confirms" it.

Zero Hedge
Susan Rice Goes Full Conspiracy Rant On CNN: 'Russians Behind Race Protest Mayhem!'
Tyler Durden

Then, this,

Not to be outdone by his boss.

Southfront — U.S. Strategic Bombers Trained Strikes On Territory Of Russia When They Were Intercepted By Fighter Jets Over Black Sea


US confrontational behavior increasing. Boys and their toys.

Southfront
U.S. Strategic Bombers Trained Strikes On Territory Of Russia When They Were Intercepted By Fighter Jets Over Black Sea

Also at Southfront

Drone and robot swarms and swarms of swarms. The direction that militaries are taking.

Technical And Operational Sspects Of Robot Swarms: UNIDIR Report

Protests In U.S. Couldn’t Last A Week Before Being Blamed On Russia

"We Have Capitalism for the Poor and Socialism for the Rich" - Mark Blyth

Quite a good one from Mark Blyth. He says the US economic system is like a Mustang which has been prioritised for maximum speed but with less spent on safety features. Europe is more like an Audi, he continues, which may be slower, but it has loads of stafety system - crash it, and you will probably survive in one piece.

Europe’s automatic stabilisers may be expensive but they can greatly minimise the harmful effects of an economic crash or a natural disaster, like a pandemic. The UK is a train wreck too, he adds.









RT — America is CHRONICALLY ILL with racism, Beijing proclaims, as George Floyd rallies blight US cities


This is the first time in my recollection that China has ever criticized human right in the US the way that the US regularly does China. I have often wondered about it. Well, it appear that era is over.

I doubt this is tit-for tat. The Chinese leadership would not be taking this decision if they did not  perceive US leadership declining, China rising, and a vacuum asking to be filled.

That said, China and Asia in general, are not free of ethic exceptionalism and of superiority of traditions. either. This is already an issue going forward in globalization.

RT

5 Economists Redefining… Everything. Oh Yes, And They’re Women — Avivah Wittenberg-Cox

Esther Duflo, Stephanie Kelton, Mariana Mazzucato, Carlota Perez and Kate Raworth are united in one thing: their amazement at the way economics has been defined and debated to date. Their incredulity is palpable....
Like Dorothy in The Wizard of Oz, when they get a glimpse behind the curtain, they discover the machinery of power can be more bluster than substance. As newcomers to the game, they can often see this more clearly than the long-term players. Henderson cites Tom Toro’s cartoon as her mantra. A group in rags sit around a fire with the ruins of civilisation in the background. “Yes, the planet got destroyed” says a man in a disheveled suit, “but for a beautiful moment in time we created a lot of value for shareholders.”

You get the same sense when you listen to the female economists throwing themselves into the still very male dominated economics field. A kind of collective ‘you’re kidding me, right? These five female economists are letting the secret out – and inviting people to flip the priorities. A growing number are listening – even the Pope (see below)....
Mention women in economics previously and likely only Joan Robinson came to mind. Now that is changing, maybe just in time.

Forbes
5 Economists Redefining… Everything. Oh Yes, And They’re Women
Avivah Wittenberg-Cox

Lawyers of George Floyd Family to Open UN Human Rights Case, Seek Sanctions Against US — Raul Dieg

Lee Merritt and Benjamin Crump, attorneys for the families of the three victims of police brutality mentioned above, have announced that they intend to bring a case before the United Nation Human Rights Committee on behalf of their clients and seek sanctions against the United States for violating the human rights of African Americans.
Should they be successful in this legal endeavor, it would be almost unprecedented and significant. But certainly not new. Other minority groups have attempted a similar tack, such as the Native American community of Standing Rock, which tried – but failed – to bring a similar suit against the United States through the OAS in 2016. Another hurdle for Merritt, a civil rights attorney himself, and Crump, is the fact that Donald Trump pulled out of the UN human rights council in 2018, leaving the question of how far-reaching any potential judgment in favor of the families may ultimately be.
Nevertheless, taking advantage of the global spotlight that George Floyd’s murder and the subsequent social unrest has that is has brought upon the U.S. to bring such a case before an international body like the UN may have a ripple effect throughout the world and open other avenues to hold the U.S. accountable for its continued treatment of African Americans and other minorities....
MintPress News

Trump’s China policy at a cul-de-sac — M. K. Bhadrakumar


Bull in the china shop diplomacy. (Pun intended)

India Punchline
Trump’s China policy at a cul-de-sac
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

ANGELA STENT INFLATES BALLOON IN US WARFIGHTING AGAINST RUSSIA — John Helmer


Fisking more imperial propaganda.

Dances with Bears
ANGELA STENT INFLATES BALLOON IN US WARFIGHTING AGAINST RUSSIA
John Helmer

Police Act Like Laws Don’t Apply to Them Because of ‘Qualified Immunity.’ They’re Right — Patrick Jaicomo


Something you should be aware of if you aren't already. Qualified immunity from legal accountability and redress.

Blank check.

Things like this reveal how and why the system cannot be reformed but rather must be entirely redesigned and restructured.

Anti-Empire
Police Act Like Laws Don’t Apply to Them Because of ‘Qualified Immunity.’ They’re Right
Patrick Jaicomo

Hong Kong: A Brief Overview — Frank Li


Overview by a Chinese native-American engineer and entrepreneur.

To sum up his view of China  governance versus that of the US, the difference is between a highly qualified and competent meritocracy based on the ancient Mandarin system and a series of popularity contests in which money plays an outsized part.

economic intersect
Hong Kong: A Brief Overview
Frank Li | Chinese ex-pat, Founder and President of W.E.I. (West-East International), a Chicago-based import & export company, B.E. from Zhejiang University (China) in 1982, M.E. from the University of Tokyo in 1985, and Ph.D. from Vanderbilt University in 1988, all in Electrical Engineering

Also at economic intersect

Trump Is Hurting Hong Kong Far More Than China
John Furlan

How the Libertarian Right Plans to Profit From the Pandemic — Quinn Slobodian

Most people would read the pandemic as a sign that populations and nation states should band together, and for the people “at the head of the rope” to pull even harder, to use the metaphor favoured by the French president, Emmanuel Macron. But there are others who see matters quite differently. They spy opportunity in the crisis, and wager that we might be able to ride the wave of the pandemic into a new tomorrow, where the virus shatters the global map – and undermines the power of democratic nation states.

The US is ground zero for this type of thinking. Across the country, regions have broken up into “compacts”, with states competing against each other for life-saving ventilators and PPE. The atmosphere is one of competitive federalism, where states are reconfigured as economic units bidding in a marketplace....

In the established mode of disaster capitalism, Laffer and Moore’s analysis appears to see the pandemic as a way to compel “anti-growth” states to adopt ever lower tax rates in order to attract mobile capital and labour. It suggests those who resist will not be bailed out by redistribution from the central government, but left to languish in a deserved economic depression. The effect is reminiscent of social Darwinism, applied as a philosophy of government.

You probably know this already, but this post fills in some details and names names. You can't tell the players without a scorecard.

The post is also significant in that it is posted on the blog of the Stigler Center at the University of Chicago Booth School of Business.

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
How the Libertarian Right Plans to Profit From the Pandemic
Quinn Slobodian | an associate professor of history at Wellesley College, US


American Banker — The write-downs are coming. Start preparing now.


You probably don't need to be concerned with the nitty gritty of non-performing loans, but bankers do.

American Banker
The write-downs are coming. Start preparing now.
Eugene Ludwig, Wayne Rushton, Tom Freeman and Jeff Glibert

Also

8.46% may seem like a leap, but the percentage of loans in forbearance is still low. Mortgages don't seem to be a significant factor at this point.

Calculated Risk
MBA Survey: "Share of Mortgage Loans in Forbearance Increases to 8.46%" of Portfolio Volume

Bill McBride

Trump’s war on Huawei is self-defeating — George Koo


This could turn out to be shooting oneself in the head rather than the foot.

And it is not just the economic consequences, but also the erosion of American soft power.

The downside is the perceived necessity to rely on hard power.

Asia Times
Trump’s war on Huawei is self-defeatingGeorge Koo | founder and former managing director of International Strategic Alliances, and currently a board member of Freschfield’s, a novel green building platform

Exclusive: Russia to roll out its first approved COVID-19 drug next week — Andrew Osborn

Avifavir, known generically as favipiravir, was first developed in the late 1990s by a Japanese company later bought by Fujifilm as it moved into healthcare.
RDIF head Kirill Dmitriev said Russian scientists had modified the drug to enhance it, and said Moscow would be ready to share the details of those modifications within two weeks.
Reuters
Exclusive: Russia to roll out its first approved COVID-19 drug next week
Andrew Osborn




Zero Hedge — Here Is The Stunning Chart That Blows Up All Of Modern Central Banking


Gets it right that lowering the interest rate is deflationary. It also makes the point that if fiscal injections are predominantly saved, the result will not break a deflationary trend in progress. Since the propensity to save is elevated during deflationary periods, fiscal injection will tend to be saved rather than spent into the economy. Breaking a deflationary cycle is difficult once it set in and expectations change en mass.
Tyler Durden

MMT: unemployment a policy choice — Amanda White


Bill Mitchell on MMT.

Top1000Funds
MMT: unemployment a policy choice
Amanda White

Who is right? Or is this just more great power competition?

But, in spite of often voiced fears, China does not threaten liberal democracies or a “liberal rule-based world”. Unlike Western nations with their long history of military and political intervention around the world, China has shown little interest in how other countries are governed and is not in the habit of imposing regime change. Moreover, it has learned to benefit from peaceful conditions of free trade and globalization, both of which were promoted by the United States and the institutions it helped to create. China’s Belt and Road initiative is meant to capitalize on this success by improving inter-regional connectivity and logistics...
Bill Totten's Weblog
The Spectre of a “China-centric World”
Yakov M. Rabkin | professor emeritus of contemporary history at the Université de Montréal
Originally at Koine

Contrast with
“It’s a different Chinese Communist Party today than it was 10 years ago,” Pompeo told Maria Bartiromo on Fox News' "Sunday Morning Futures." “This is a Chinese Communist Party that has come to view itself as intent upon the destruction of Western ideas, Western democracies, Western values. It puts Americans at risk.” — US Secretary of State Mike Pompeo
Politico
Pompeo says China poses an ongoing threat to the West
Oma Saddiq

Who is right? Or is this just more great power competition? In my view, it is a matter of what kind of globalization the world will have — neoliberal globalization under the "leadership" (read "control") of the US, Where "the US rather than a country like China makes the rules" (Obama), or a multilateral type of globalization that seeks win-win  and places the emphasis on eradication of poverty (China's publicly stated position)

Whether one agrees that this is China's actual intention, it is reasonable goal. The other is a not so subtle push for continuation and extension of US and Western hegemony and the extension of Western empires that dominated the world for the previous 500 years, the last being the British Empire now having morphed into the American empire post-WWII.

Sunday, May 31, 2020

Bill Mitchell — Why do currency-issuing governments issue debt – Part 1

One question that continually comes up when I do interviews is this: If governments are not financially constrained in their spending why do they issue debt? Usually, the question is expressed in an incredulous tone, meaning that the person asking the question considers this to be the gotcha moment, when they pierce the impeccable logic of Modern Monetary Theory (MMT) and show it for what it is – a sham. One problem is that there is a tendency to confuse motivation with function and many people sympathetic to MMT reduce it to simple statements that belie the reality. One such statement, relevant to this topic, is that government’s issue debt to allow the central bank to maintain a specific short-term interest rate target. Central banks have traditionally used government debt as an interest-rate maintenance tool. But that is a function of the debt rather than being the motivation for issuing the debt in the first place. So we explore those differences today as a means of clarifying the questions and confusions around this issue. This is Part 1 of a two-part series, which I will finish tomorrow....
Bill Mitchell – billy blog
Why do currency-issuing governments issue debt – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

China

Zero Hedge"The Dollar Is Out Of Stock Everywhere": Hong Kong Money Exchangers Turn Away Clients Amid Run On US Dollars

Pompeo: China Is Intent Upon The Destruction Of Western Ideas, Western Democracies, And Western Values

Large domestic disturbances, the U.S. Military, and the Insurrection Act — Robert Willmann


The relevant law.

Sic Semper Tyrannis
Large domestic disturbances, the U.S. Military, and the Insurrection Act
Robert Willmann

RT — Elon Musk tweets IN RUSSIAN to accept co-operation offer from Russia’s space agency


Classy — for a change.

RT
Elon Musk tweets IN RUSSIAN to accept co-operation offer from Russia’s space agency

TASS

National Guard, Now Authorized to Use Live Ammo, Flood America’s Streets — Alan Macleod


"Move on. Nothing to see here. Hong Kong, Uyghurs, Chinese flu, Russia, Iran...."

Note: "use live ammo" is unclear. The Guard is authorized carry live arms, but rules of engagement have not been revealed to my knowledge. These folks are trained and equipped for combat and not policing.

Mint Press News
National Guard, Now Authorized to Use Live Ammo, Flood America’s Streets

Why? — Andrei Martyanov

So, Trump wants to exclude China from "international community" by holding this gathering which decides nothing and is worthless in terms of any practical solutions to an unfolding catastrophe which is global economic crisis. So, anyone can explain what Russia is to gain, other than some photo-ops for Trump, from this meeting? Why should Vladimir Putin even be there? Moscow and New Delhi have a direct line and can solve their issues by talking directly, Europe, frankly, is economically suicidal, Australia is a non-entity for Russia, so why? I don't know, but Trump, evidently thinks that this is a good idea. I think it is a waste of time, because the settling of global issues must happen first between G-3: China, US and Russia. Until something is decided within this triangle no other meetings will produce any sensible world order which will reasonably satisfy everyone. The United States is not ready to deal with this issue yet, but US has only two options here: war and getting back to the reality. What will be this choice we don't know yet, hopefully the latter one.
Reminiscence of the Future
Why?
Andrei Martyanov

Also

Good luck with that.

Defend Democracy Press
Trump wants an anti – China alliance


Why making economic predictions now is useless — Branko Milanovic


Shouldn't need saying, but it does. Obvious is not always obvious to everyone. And Branko Milanovic only lists a few of the reasons. There are a lot of balls in the air — or knives.

Global Inequality
Why making economic predictions now is useless
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, 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

Breakingviews - Review: MMT lives up to some of its promises — Edward Hadas


Generally favorable review of about to be released, The Deficit Myth by Stephanie Kelton.

Strategically, I am good with "generally favorable" reviews with qualification. Effusively positive reviews would likely get a similar reaction to negative rants. I would say that "balanced" reviews like this will help sales and that will help to get the word out there as well as influence "influencers."

Reuters
Breakingviews - Review: MMT lives up to some of its promises
Edward Hadas


North Atlantic vs Eurasia — Paul Antonopoulos


Germany wobbling?

Bill Totten's Weblog
North Atlantic vs Eurasia
Paul Antonopoulos
Originally at Infobrics

Some Critical Responses — Peter Radford

I happen to think that the ignorance revealed by total factor productivity could be reduced by the abandonment of both “capital” and “labor” from a production function and replaced by more accurate inputs such as energy, raw materials, skill, and information or knowledge. Heck, I would even find room for management in there. I don’t think it possible to “maximize” anything in an economy because of the irreducible uncertainty facing decision makers. Equilibrium is more an illusion than a fact because the system is bothy open and dynamic. It may be useful as an investigative tool, but as a description of reality? Oh, and I tend to see the world through the prism of evolution and complexity.
The Radford Free Press
Some Critical Responses
Peter Radford
 
 

Now there's trouble busin' in from outta state...


From the 'Nebraska' album... The Boss' best work imo...


Now there's trouble busin' in from outta state
And the D.A. can't get no relief 
Gonna be a rumble out on the promenade...

Well now everything dies baby that's a fact 
But maybe everything that dies someday comes back 
Put your makeup on, fix your hair up pretty 
And meet me tonight in Atlantic City









John Quiggin — Modern Monetary Theory: Neither modern, nor monetary, nor (mainly) theoretical?


John Quiggin reviews the MMT textbook, Macroeconomics by William Mitchell, Randall Wray and Martin WattsMore favorable than the title suggests, although with qualifications. Importantly, the review distinguishes academic MMT from popular MMT. Worth reading.

John Quiggin's Blog
Modern Monetary Theory: Neither modern, nor monetary, nor (mainly) theoretical?
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Government Spending Comes First in a Sovereign Currency System — Peter Cooper


Mini-article. Keeper.

heteconomist
Government Spending Comes First in a Sovereign Currency System
Peter Cooper

Scientist posits ‘wild’ hypothesis that cross immunity could slow pandemic

WHO expresses caution on whether there may be protection from prior exposure to some cold viruses; scientists examine if some people are more vulnerable to infection than others


The conspiracists are saying that C19 is not particularly harmful to the vast majority of people, and if their figures are correct, could this explain the mystery of why C19  never did as much harm as the scientists expected. It is only an hypotheses, and more research is needed.

If this turns out to be the case, we were lucky this time. Let's hope we are better prepared for future pandemics.


In a recent post on Twitter, Francois Balloux of University College London noted an “intriguing” lack of an immediate resurgence in COVID-19 cases following the easing of lockdowns in several countries.

...that a “proportion of the population might have pre-existing immunity to #SARSCoV2, potentially due to prior exposure to ‘common cold’ coronaviruses.”


Times of Israel 

Scientist posits ‘wild’ hypothesis that cross immunity could slow pandemic


George Szamuely on the US riots.

Russia is getting blamed for the US riots, rather than the US economic and political failed policies.

I read an article yesterday about GMOs, which said that Russia had spread conspiracy theories about their dangers. These conspiracy theories are getting out of hand. Although GMOs do appear to be safe.



Why anti-vaxxers will refuse the coronavirus vaccine

I was reading what I thought was a good article earlier about C19 conspiracies and I thought I might tweet it, except two thirds of the way through it blamed Russia and China for spreading some of the these theories to sow discord in the West. Fortunately, this Guardian video doesn't go there.


Saturday, May 30, 2020

Southfront — CNN Pushes ‘Russian Meddling’ Version In Its Coverage Of Minneapolis Riots


Finally, CNN found whom to blame for the recent spike of violence in the United States. It’s the ‘Russian trace’ that, according to CNN, should be checked in the case of Minneapolis riots.
Donald Trump calls it "fake news" on Twitter.

Meanwhile the wheels aren't just falling off, they are being burned up.

Southfront
CNN Pushes ‘Russian Meddling’ Version In Its Coverage Of Minneapolis Riots

John Maynard Keynes: How Much Does Finance Matter? Brad DeLong


Keeper Keynes quote anticipating the fundamental assumption of MMT that the only actual constraint is real resources, which is the foundation of Stephanie Kelton's new book, The Deficit Myth (available June 9).

Professor DeLong does not state this explicitly, but we can probably assume that this post is not a coincidence and it is as close as he wants to get.

Anyway, Keynes make the point that so-called affordability is a non-issue.  Austerity in the name of fiscal responsibility is a monumental error the cost of which through needlessly foregoing inherent potential is incalculable.

Grasping Reality
John Maynard Keynes: How Much Does Finance Matter?
Brad DeLong | Professor of Economics, UCAL Berkeley

Beijing sees Trump’s hand and won’t fold — Pepe Escobar

Team Trump has vociferously announced its own strategy. Expect serial, silent Sun Tzu counterpunches.
Asia Times
Beijing sees Trump’s hand and won’t fold
Pepe Escobar

Comments On Tyler Cowen's Review Of "The Deficit Myth" — Brian Romanchuk

Tyler Cowen did a review of "The Deficit Myth" by Stephanie Kelton, which is to be released June 9 (Amazon affiliate link). Since I have not read the book yet myself, I cannot comment on his views about the book. However, Cowen makes some criticisms of Modern Monetary Theory (MMT) that are worthwhile responding to.
I am turning to writing a short primer on MMT, and will probably have a chapter on critiques that I feel are useful. (My estimate is that over 90% of "MMT critiques" consist of people making stuff up, based on the contents of other "critiques.") I expect that I could use some of the discussion here as examples. The review consists of a dozen numbered short points, and I will only respond to the ones that I see as being useful, and not solely related to the book....
Bond Economics
Comments On Tyler Cowen's Review Of "The Deficit Myth"
Brian Romanchuk

China Is Not the Enemy — Neoliberalism Is — Isabella Weber, Hao Qi, and Zhongjin Li


Another side of the story.

Isabella Weber, Hao Qi, and Zhongjin Li

See also

The Diplomat is usually pretty US and Western-centric in its viewpoint. However, the unique American and geographically delimited Western liberal views are foundationally different from other views, such as the Chinese and other Asian, Islamic, etc. Viewing one predominantly of exclusively through the lens of another skews the analysis away from objectivity.

This article is more balanced and nuanced, and is worth a read. The author seems to be personally familiar with the Chinese and Western viewpoints.

The Diplomat
How Chinese Nationalism Is Changing
Brian Wong

RT — AI to choose your news? Microsoft to get rid of journalists & replace them with ROBOTS


Coming to a job near you soon?

Interestingly, there is push on the "far left" to completely automate and robotize, making wage workers obsolete.* These "futurologists" see this quantum leap in technological innovation and its scaled application as a "new mode of production" in the Marxist sense of making possible "new relations of production" based on treating technology as a public utility under public control and operated for public purpose rather than subject to private ownership. No Luddites allowed.

MMT would suggest that this transition from private investment as the driver to public investment as entirely possible since the constraint is availability of real resources rather than finance.

This also accords with R. Buckminster Fuller's vision of design science as doing more with less, his systems approach through the world game, and his view that while material resources may be finite, "metaphysical resources" (his words), that is, knowledge and know-how, are infinite in potential and only need to be developed through education in the broadest sense. While physical (biological) evolution underlies individual reproduction, psychic evolution underlies social reproduction.

RT
AI to choose your news? Microsoft to get rid of journalists & replace them with ROBOTS

* Aaron Bastani, Fully Automated Luxury Communism – A Manifesto (Verso). Short review here.

Patrick Lawrence — America: The Deluded Superpower

China and Russia, because they have given up exceptionalism, full spectrum dominance and all those other fantasies, only have to counter the U.S. military and only in their home neighbourhoods. That is much cheaper and much easier. What’s really expensive, because unattainable, is chasing after the exceptionalist goal of dominance in everything, everywhere, all the time. That’s a “tried and true” road to oblivion.
Defense is a lot less costly than offensive, especial "full spectrum dominance." Also, anyone with any familiarity with Chinese martial history knows that it’s a history of weapons innovation and countering.

Strategic Culture Foundation
America: The Deluded Superpower

also

TASS
Too late to deal with New START extension after US presidential election - [Russian] diplomat

Also
America’s status as a superpower has been damaged by its inability to beat the Taliban in nearly 20 years of war
America pulls out of another quagmire (after Vietnam), now bogged down in Syria.

The Independent
Donald Trump’s withdrawal of troops from Afghanistan is an unavoidable recognition of failure
Patrick Cockburn

Also

The Unz Review
What Happens Next in Afghanistan? the Neo-Taliban
Ted Rall

Sputnik — Donald Trump and Angela Merkel Reportedly Clash Over Nord Stream 2 Gas Pipeline

Donald Trump, writes the outlet, has repeatedly criticised Germany, and Chancellor Merkel specifically, over issues such as Berlin's defence spending and commitment to NATO, while Merkel, in turn, publicly took issue with the Washington administration's “unilateral approach” to a succession of foreign policy issues.
Sputnik International
Donald Trump and Angela Merkel Reportedly Clash Over Nord Stream 2 Gas Pipeline

Sputnik — Exclusive: Ex-Ukrainian President’s Aide Opens Up on Biden Tapes, Democrats' Money Laundering


Biden lawyering up?

Sputnik International
Exclusive: Ex-Ukrainian President’s Aide Opens Up on Biden Tapes, Democrats' Money Laundering

Southfront — U.S. Seizes $1.1 Billion Of Russian-Printed Libyan Currency In Joint Operation With Malta


Short and of interest about "parallel currency."
The [US State Department] spokesman, Morgan Ortagus, called the bank an “illegitimate parallel entity,” stressing that the Government of National Accord (GNA) bank, the Central Bank of Libya, is the country’s only legitimate central bank.
Southfront
U.S. Seizes $1.1 Billion Of Russian-Printed Libyan Currency In Joint Operation With Malta

See also

The Russian Foreign Ministry begs to differ.

TASS
US Department of State statements are counterfeit, not dinars seized in Malta - ministry
Related

Sputnik International
US May Send Troops to Tunisia Over Alleged Russian Campaign to Destabilize Region, AFRICOM Says

Friday, May 29, 2020

Our Grim Future: Restored Neoliberalism or Hybrid Neofascism? — Pepe Escobar


Pepe Escobar is emerging as a public intellectual in addition to being a reporter on geopolitics as someone worth taking into account. He is accomplished in several languages, widely read and widely travelled, and also well-connected. He brings a different lens to examine the world scene than most national reporters. His nationality is Brazilian but Brazil is not his focus.

Strategic Culture Foundation
Our Grim Future: Restored Neoliberalism or Hybrid Neofascism?
Pepe Escobar

Thursday, May 28, 2020

We’ll Need Mass Debt Forgiveness to Recover From the Coronavirus — Eric Levitz


MMT friendly.

Favorite lines:
Money is created in one of two ways: by the government making payments (Uncle Sam writes you a check, the bank then credits that to your account) or the bank extending a loan, in which case the bank credits money to your account against a contract saying you’re going to pay it back. The government extinguishes money by taking in taxes; the bank extinguishes it by taking in loan repayments.
The question of how much money is created is determined by how much activity the public and private sectors are willing to animate. How many loans does the banking sector wish to extend? How much spending will the public sector approve?
Regarding the title, I would not say debt "forgiveness" but "restructuring." Only debts that cannot be repaid need to be discharged. This would reduce or prevent Chapter 7 bankruptcies and evictions, that can cascade and produce a domino effect. Other debts can be restructured, which is what Chapter 11 is about. This would apply to essential production and services, for example.

The trick is to head off systemic risk that results in a deep recession or even a debt-deflationary depression.

This could be avoid by an economic snap-back, a so-called V-shaped contraction. However, absent an quite recovery, debt can become a problem.

The Intelligencer
We’ll Need Mass Debt Forgiveness to Recover From the Coronavirus
Eric Levitz

Albert Einstein Explains Why We Need to Read the Classics — Josh Jones


Now that many people have time on their hands...

Open Culture
Albert Einstein Explains Why We Need to Read the Classics
Josh Jones

See also
For these reasons, we should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society....

See also

Perhaps one of the clearest and simplest statements of an outline of an argument for socialism. 

Monthly Review
Why Socialism?
Albert Einstein

The Investment Cost of the U.S.-China Trade War — Mary Amiti, Sang Hoon Kong, and David E. Weinstein

In sum, we find that the U.S.-China trade war lowered the market capitalization of U.S. listed firms by $1.7 trillion and will lower their investment growth rate by 1.9 percentage points by the end of 2020.
FRB — Liberty Street Economics
The Investment Cost of the U.S.-China Trade War
Mary Amiti, vice president in the Federal Reserve Bank of New York’s Research and Statistics Group; Sang Hoon Kong, economics Ph.D. student at Columbia University; and David E. Weinstein Carl S. Shoup Professor of the Japanese Economy at Columbia University

You can now buy used clothes online from Walmart — Elizabeth Segran


Recycling moves to another level.

Fast Company
You can now buy used clothes online from Walmart
Elizabeth Segran

Who pays for Covid-19? Assessing seven potential options — Arvind Ashta


Arvind Ashta rejects MMT as hyerinflatonary, and the other options as problematical. He then proposes a Tobin tax and admits that it is probably unrealistic, too, since the finance sector bear the burden of being taxed.

LSE
Who pays for Covid-19? Assessing seven potential options
Arvind Ashta is a Senior Professor in the Burgundy School of Business, Université Bourgogne Franche-Comté, Dijon, France

*The Deficit Myth* and Modern Monetary Theory — Tyler Cowen


An Austrian economist reviews Stephanie Kelton's new book.

Marginal Revolution
*The Deficit Myth* and Modern Monetary Theory
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

Washington Post Tells Readers About Trump’s “Existential” Threat to China — Dean Baker


Shooting from the hip and hitting oneself in the foot?

Beat the Press
Washington Post Tells Readers About Trump’s “Existential” Threat to China
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C.

Also

Project Syndicate
Cooperate with China or Suffer
Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable Finance, and a former chairman of the Hong Kong Securities and Futures Commission; and Xiao Geng, President of the Hong Kong Institution for International Finance, and a professor and Director of the Research Institute of Maritime Silk-Road at Peking University HSBC Business School







Two Definitions — Peter Radford

In recent weeks we have become accustomed to calling someone an ‘essential worker’. These are our most important people. They are, if the dictionary doesn’t lie, indispensable. They are extremely important. They are key, crucial, vital, and needed. They sound pretty darned special to me. They must be doing things that, were they not doing them, would bring the economy to a screeching halt.
My goodness, they must be paid a lot. Surely anyone who is a vital cog in the machinery is paid commensurately with that importance.
Not really. Not at all for most of them — the exception here in the U.S. being doctors. No, most of our ‘essential workers’ are amongst our least well paid....
The Radford Free Press
Two Definitions
Peter Radford

Bill Mitchell — ECB asset purchase programs are the only thing keeping Member States solvent

I haven’t had time yet to fully work through the decision by the European Commission yesterday to provide grants and loans to struggling Eurozone countries. I will comment on that when I have had time to understand the implications and be in a position to provide fair comment. It seems to be a vastly inadequately response in quantum, on top of an existing lack of fiscal support. But more on that another day. Today, I am investigating the latest data from the ECB. On May 26, 2020, the ECB released its bi-annual – Financial Stability Review, May 2020 – which seemed to excite some journalists to advance narratives that ‘sovereign debt’ investors (although none of the Eurozone nations are sovereign) will soon become spooked by the sharp rise in public debt levels in Europe, which will “threaten to undermine private-sector spending” and stall any growth prospects. The quote is from a Financial Times article (May 26, 2020) – ECB warns of challenge for eurozone from soaring public debt – which followed the release of the ECB’s Review. The elephant is, of course, the ECB assets and its ability to control all yields on public debt at will....
Bill Mitchell – billy blog
ECB asset purchase programs are the only thing keeping Member States solvent
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Rebel Wisdom - Conspiracy, Sensemaking & Truth. An Inquiry

Rebel Wisdom take a Jungian look at conspiracy theories. A myth in Jungian psychology doesn't mean something is untrue because it's not historically true: The story, or myth, is symbolic of a greater truth. Millions of people in the West feel they have been lied to by the establishment, so now they don't believe anything they say.

How can we make sense of the enormous changes going on in the landscape right now, as the growing crisis uproots everything we thought we knew.

Rebel Wisdom recently brought out a series of films about conspiracy and sensemaking, around the recent David Icke interviews on the channel London Real. They caused a huge, and hugely polarised reaction.

In this inquiry with Peter Limberg of the Intellectual Explorer's Club, Rebel Wisdom's David Fuller explores the topics raised by the films, and tries to make sense of the deeper questions they raise.



Wednesday, May 27, 2020

Bailout Watch


Continuing our new feature during the COVID shutdown:







Lefty morons call this a "bailout!"....



Moving Into The New "Normal" Brian Romanchuk


Cannada-centric.

Bond Economics

Pandemic Triggers Record $400 Billion Drop In Energy Investment — Tsvetana Paraskova


Energy units expended rather than currency units, as in GDP, are the true measure of productive economic activity. But energy investment is an indication of anticipated future direction.

Oilprice
Pandemic Triggers Record $400 Billion Drop In Energy Investment
Tsvetana Paraskova

$82 trillion over 5 years? Cambridge study counts the cost of coronavirus — Shalini Nagarajan


Worst-case scenario numbers.

ZH — Boeing Slashes 6,770 US Workers, Sees No Recovery In Air Travel For "Years"


Another ominous sign. Will the aircraft and airlines industries need a bailout?

Zero Hedge
Boeing Slashes 6,770 US Workers, Sees No Recovery In Air Travel For "Years"
Tyler Durden

Bill Mitchell — we remember the release of the 1945 White Paper on Full Employment

Some Wednesday snippets today. Tomorrow, I will write about what I have been thinking about the Eurozone. There has been a lot of hot air about the Franco-German accord that Emmanuel Macron and Angela Merkel came to recently. Hot air is the operative term. The fault lines in the Eurozone continue to widen and the policy dissonance is becoming more acute as they deal, not only with the health crisis, but also the 19 economies that have been starved of investment and infrastructure development. This Saturday (May 30, 2020) marks the 75th Anniversary of the release of the famous ‘White Paper on Full Employment’, which outlined the responsibilities that the Australian government took on to ensure there were jobs for all workers who were wanting work. This White Paper really defined the Post-WW2 consensus and began a period of low unemployment, upward social mobility, the development of public education and health, declining income and wealth inequality and stable wage shares as real wages kept pace with national productivity growth. It wasn’t nirvana because lots of issues were still in need of solutions (for example, gender attitudes, indigenous inclusion, etc). But it was a blue print for an inclusive society with growing material prosperity. The vision was abandoned sometime in the 1970s as neoliberalism took centre stage and political parties on both sides of the fence gave up talking about full employment. To restore full employment as a primary social goal and government responsibility is an agenda I have pursed all my career. We should all read the ‘White Paper’ and recast it in modern terms and fight like hell for a similar vision that is apposite for the times and crises we now face....
Bill Mitchell – billy blog
May 30, 2020 – we remember the release of the 1945 White Paper on Full Employment
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, May 26, 2020

Germany Aims To Become World’s Hydrogen Hotspot — Vanand Meliksetia

The energy transition can be compared to a marathon instead of a sprint. As the costs of photovoltaic cells and wind turbines have significantly decreased, decarbonizing the economy has become attainable. The wealthier countries of northern Europe are, arguably, some of the most ambitious societies when it comes to the energy transition. Germany, especially, is an important country due to the size of its economy, political influence in Europe, and technological prowess. Hydrogen is an essential part of the strategy to become carbon neutral by 2050....
Oilprice

Neochartalists’ Rhetoric Against Raising Taxes — Ramanan


Policy choices.

My policy solution is that economic liberalism and political liberalism are incompatible. So-called capitalism (including  capital and land ownership) cannot coexist with genuine democracy as rule of, by and for the people based on egalitarian community. 

The economic system that corresponds with so-called capitalism is plutocratic oligarchy, for which there is ample evidence in sociology and political theory. The economic system that corresponds with genuine democracy as rule of, by and for the people based on egalitarian community is so-called socialism. 

Choice between them is a value judgment, and in actuality such choices are generally made based on power relationships in social groups.

I would define "capitalism" as the range of economic systems that favor capital over people, and "socialism" is the range of economic systems that favor people and the environment over capital (including  capital and land ownership). But the devil is in the details, especially since under the present configuration in most of the developed world, capital controls the power and determines institutional arrangements and application.

Considered as an analytical tool that studies various monetary systems and their economic and financial implications under different institutional arrangements, MMT is policy neutral, since it is chiefly descriptive.  

As an macroeconomic theory that prioritizes full employment, it is value-based. Prioritizing full employment favors workers (the majority of people in most societies) over capital (ownership of means of production and finance dominated by a few).

Other economic theories that claim to be more "naturalistic" do not make such an assumption but leave outcomes to so-called free markets in models that relegate government to the function of umpire with laissez-faire as the basic rule. However, privileging "naturalism" over, e.g., system regulation based on "control theory," is also a value judgment. Proponents of such systems view MMT as socialistic.

On the other hand, some critics argue that MMT economists in general assume a capitalist model and stay pretty in the box. 

The Case for Concerted Action
Neochartalists’ Rhetoric Against Raising Taxes
V. Ramanan

Unsanitized: A Few Weeks to Stop a Depression — David Dayan

We’re back from a holiday weekend but the Senate is still out of session, having left Washington without acting on more economic aid. The official line from Republicans is that it’s time to see how previous efforts work before considering more. And anyway, the economy’s opening back up, maybe it won’t need federal support.
This is a dangerously wrong attitude, especially because of the realities of the political calendar. Decisions will be made in the next few weeks that will put the nation on a direct path to depression without Congressional intervention.
That’s because the fiscal year for many states begins on July 1, and budgets must be adopted between now and then. California has a June 15 deadline for how to fill its giant budget hole, which could be as much as $54 billion. Other states scheduled to adopt a budget within this period include Colorado, Delaware, Georgia, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Wisconsin....
The folks in charge don't seem to appreciate systemic risk.

American Prospect

The Primary and Secondary Market Corporate Credit Facilities — Nina Boyarchenko, Richard Crump, Anna Kovner, Or Shachar, and Peter Van Tassel

On April 9, the Federal Reserve announced that it would take additional actions to provide up to $2.3 trillion in loans to support the economy in response to the coronavirus pandemic. Among the initiatives are the Primary Market and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF), whose intent is to provide support for large U.S. businesses that typically finance themselves by issuing debt in capital markets....
Creditor of last resort.

FRBNY — Liberty Street Economics
The Primary and Secondary Market Corporate Credit Facilities
Nina Boyarchenko, Richard Crump, Anna Kovner, Or Shachar, and Peter Van Tassel 

Monday, May 25, 2020

Bill Mitchell – The Australia government is increasingly buying up its own debt – not a taxpayer in sight

In the wake of the $A60 billion bungle, the Australian government has turned its attention to creating smokescreens. Yesterday (May 25, 2020), the Treasurer released a statement – Temporary changes to continuous disclosure provisions for companies and officers – which effectively allows corporations to withold information from the public and investors about the state of their company finances. It will now be very hard to prove that company directors have mislead their investors. This is one of those thin end of the wedge trends that the Government has introduced under its emergency powers. For some time, the business peak bodies have been demanding the Government limit the capacity of shareholders to engage in class actions and for workers to pursue actions under industrial relations legislation (for example, QANTAS staff who have considered a class action against unsafe working conditions). But the point is that these diversions, which may or may not linger after the so-called 6-month sunset clause, take the pressure of the Government for their inept economic management, which is responsible for more than 2.4 million Australians (over 24 per cent of available workers) idle in one way or another. And when the question of economic management is raised we get a litany of lies reinforcing the fictional world that mainstream economists have created to prevent people from really understanding what the currency-issuing, Australian government can and cannot do. Today, I present some data on the RBA bond buying program and the way it is dovetailing with the debt-issuance activities of the Australian Office of Financial Management (AOFM). The Treasurer is in the National Press Club today and will spend his time lying about saving taxpayers’ money and reducing the debt burden for our grandchildren. Meanwhile 2.4 million Australians need more work....
Bill Mitchell – billy blog
The Australia government is increasingly buying up its own debt – not a taxpayer in sight
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia