Swedish prime minister Olof Palme was assassinated on this day in 1986. He was an internationalist and the last social-democratic leader to really believe in a world beyond capitalism.Jacobin
Mainstream finance theory suggests that money is the life blood of the real economy, helping to provide liquidity, means of payment, store of value, market price discovery and risk management, and reinforcing credit and governance discipline.
These basic functions appear as self-evident truths — logical, consistent and convincing. But the 2007 global financial crisis revealed that these four functions can only operate depending on at least five more key interrelated preconditions of stability. Change in any one element would destabilise money and finance. These are: law and institutions, technology, politics, social inequality and climate change.Mentions MMT skeptically.
The United States signed a historic Peace Treaty with Taliban militants on Saturday, aimed at ending the 18-year war in Afghanistan that began after the Sept. 11, 2001 terrorist attacks. 🤝 #PeaceDeal#PeacePlan https://t.co/JhXqIC1jxD pic.twitter.com/ZRxbC8XztJ
— Angela DuHart (@AngelaDuhart) March 1, 2020
For your entertainment, watch how the only people falling for the new "Trump called Coronavirus a hoax" hoax are artists of one sort or another (mostly writers).
— Scott Adams (@ScottAdamsSays) February 29, 2020
When the market is 30K: I wish I had bought ag 25K
— Read Cernovich dot com (@Cernovich) February 28, 2020
When the market hits 25K: Too risky to buy the market
When the market hits 35K: I wish I had bought at 25K
Hydrogen is often hailed as a silver bullet solution to emissions-free fuel since it burns clean, leaving nothing but water vapor, but the reality of using and producing green hydrogen is much more complicated. Hydrogen is already used as a power source in a lot of modern industries, including ammonia production, in refineries and as a feedstock for chemicals. The vast majority of the hydrogen in use, however, is not green hydrogen, but instead is what is known as “gray hydrogen.” While the hydrogen itself burns clean, the means of producing that hydrogen is actually fossil-fuels intensive (most often using coal or natural gas) and therefore does nothing in the way of decarbonizing the industries in which it is used.
While gray hydrogen is currently the industry standard, however, green hydrogen is already in production as well--albeit at a much higher cost. But, as Oilprice reported earlier this month, all that is about to change. The green hydrogen revolution is upon us. While system costs of green hydrogen are standing in the way of scaling up production today, that won’t last long, according to Recharge News. “Everybody is predicting that the cost curve will come down, just as it has with solar and wind power,” they report. “Though, to get the price point right, you have to reach economies of scale. Then it’s just a matter of when, and industry is primed to take the next step.”
And now, less than a month after that report, oil supermajor Royal Dutch Shell has announced a new large-scale project to create green hydrogen using offshore wind farms in the Dutch North Sea instead of the traditional fossil fuels....Important. Lots of hype around hydrogen as a transportable fuel, but it usually ignores the production costs in carbon units. Until recently the ratio between clean energy output and carbon input has not been encouraging.
The Trump administration is reportedly considering the possibility of re-implementing the Defense Production Act. Originally enacted during the Korean War, the Act essentially empowers the President to control the means of production—the idea being that it would be in the interest of the nation's defense to force private manufacturers to focus their production efforts on things that would benefit the country in a time of tenuous resources...."Reportedly." Rumor maybe, but interesting.
Dr. Bruce Aylward, who led the 25-member team, said that in absence of a drug or vaccine which could have fought the virus, China resorted to publicly available standard health tools like case finding and contact tracing with the kind of rigor and innovation “on a scale that we have never seen in history.”...
Dr. Aylward also said that China’s response was agile and science-driven. It was said that by the time the report had been compiled, the Chinese government had updated its clinical guidance six times in total as new findings about the virus and the illness kept coming in.
Stringent measures such as sealing off towns and ordering people to stay in their homes changed the course of the outbreak, Dr. Aylward said, mentioning that the decline is now happening sooner than expected....
Dr. Aylward also noted that the world is not ready to tackle the epidemic yet, but with the model that China has produced, the process can be sped up. He urged countries on the brink of the epidemic to take up tough and aggressive programs, mentioning that key steps could be planning for the heavy demand on hospitals, providing respiratory support such as ventilators and deployment of staff for contact tracing....Peoples Dispatch
The coronavirus news flow is getting worse, and generating corresponding news flow. I just want to make a couple comments that stick close to my limited expertise. From a markets standpoint, the market that matters is the credit market, and not equities. I am not plugged into the credit market news flow, but I do not see anything that indicates that anything is irreversibly broken. Otherwise, the situation underlines the big difference between randomness and uncertainty. This is a geeky distinction, but is one of the things that distinguishes post-Keynesian thinking from neoclassical....Bond Economics
Karl Polanyi’s masterpiece The Great Transformation was written during the Second World War and published in 1944, but the relevance and importance of this preeminent book has continued to grow. 75 year later, The Great Transformation — an admirable treatise debunking the false creed of economic determinism and market fundamentalism, and elaborating on their hazardous ramifications — remains fresh and enlightening, and it is indispensable for understanding the current phenomena of our turbulent time. The book was slow in arriving at public and scholarly domains, but has kept on surfacing and then gradually become a canonical text and highly influential research in social science and humanities. Since the 1980s, this Polanyi’s classic work and his other writings have greatly inspired and impelled the rebirth and development of economic sociology, political economy and history of capitalism....Economic Sociology and Political Economy
In an important new book Keynes Against Capitalism: His Economic Case for Liberal Socialism (Routledge, 2019) James Crotty argues that Keynes was a socialist who advocated a much more radical economic agenda than most mainstream economists and political analysts realize. Based on a very close reading of Keynes’ work, Crotty argues that core Keynesian economic ideas should inform democratic socialism today....Progressive Economics Forum
According to its main authors, MMT is not “ultimately” about money. Money is just a prerequisite for addressing the more important issue of mobilizing domestic resources for the full employment of the labour force and other public endeavours....Good introductory article.
Abstract
The power to coin money is a fundamental constitutional power and central element of fiscal policymaking, along with spending, taxing, and borrowing. However, it remains neglected in constitutional and administrative law, despite the fact that money creation has been central to the United States’ fiscal capacities and constraints since at least1973, when it abandoned convertibility of the dollar into gold. This neglect is particularly prevalent in the context of debt ceiling crises, which emerge when Congress fails to grant the executive sufficient borrowing authority to finance spending in excess of taxes. In such instances, prominent legal and economic scholars have argued that the President should choose the “least unconstitutional option” of breaching the debt ceiling, rather than impeding on Congress’s even more fundamental powers to tax and spend. However, this view fails to consider a fourth, arguably more constitutional option: minting a high value coin under an obscure provision of the Coinage Act, and using the proceeds to circumvent the debt ceiling entirely. Reintroducing coinage into our fiscal discourse raises novel and interesting questions about the broader nature of, and relationship between “money” and “debt.” It also underscores how legal debates over fiscal policy implicate broader social myths about money. As we enter the era of digital currency, creative legal solutions like high value coinage have the potential to serve as imaginative catalysts that enable us to collectively develop new monetary myths that better fit our modern context and needs.The platinum coin redux.
Last week I gave a lecture in the seminar series on Marxist political economy organised by the Department of Development Studies at the School of Oriental and African Studies (SOAS). The Marxist Political Economy series is a course mainly for post-graduates and has several lecturers on different aspects of Marxian economics. Course Handbook – Marxist Political Economy 2019-20 (8)Michael Roberts Blog — blogging from a marxist economist
Mine was on Marx’s law of the tendency of the rate of profit to fall. Not surprisingly, the department team has noticed that I am apparently ‘obsessed’ by this law, at least according to critics of it.
Anyway, I thought it might be useful to go through my lecture in a post, with the accompanying slides referred to. So here goes....
Karl Marx sought to further distinguish between the personal possession of (mainly) consumer goods, which he termed “personal property”, and the absentee ownership of capital goods, which he somewhat confusingly termed “private property”. Marx then went on to critique the exploitation that arises structurally when the means of production are privatised.
Hence we arrive at the first problem with private property, in that there exist two conflicting interpretations, neither of which has gained universal acceptance. That said the broader Lockean take tends to prevail in common usage, which can be somewhat problematic when discussing the abolition of exploitative arrangements arising from private property....The phrase "private property" is ambiguous. In the terminology of John Locke it includes personal property. In the terminology of Karl Marx it doesn't. When Marx spoke of the need to abolish private property to put an end to capitalist expropriation of surplus value from workers, he meant changing the relations of production. He excluded personal property from the category of private property and he was not advocating collectivizing a tradesperson's tools, for example.
As part of my recent European speaking engagements, I went to Rome on February 5, 2020 to speak at the Italian Senate on Modern Monetary Theory (MMT) and the dysfunctional state of the European Union. The next day I had long discussions with one of my co-authors, Thomas Fazi, who I wrote – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017) with. We have been working on the sequel to that book for some time, and, in the process, have had to work through some difficult issues on which there has been some degree of difference in our viewpoints. While I was in Rome, Thomas and I also recorded a video of a conversation where we talk about our sequel. We provide that video here as well as a brief discussion outlining some of the major issues that the book will address....Bill Mitchell – billy blog
Damien Riehl and Noah Rubin generated and saved every possible melody to a hard drive, then turned it back around to the commons.Vice
Last Saturday, I held an MMT Masterclass or Teach-In in London. It was an experimental session because I wanted to see what level of difficulty people would find useful as we work on developing the pedagogy and materials for MMTed, which is intending to provide free teaching resources for those interested to learning Modern Monetary Theory (MMT) from first principles. Given the time constraints, I didn’t quite finish Module 1. So I thought I would provide the slides here with a written explanation of what I would have said so that you get the complete context and application of the concepts that we developed together during the class. So this blog post completes the lecture. Thanks to all those who attended and to those who have sent me the requested feedback. This will help us improve the material and presentation approach....Bill Mitchell – billy blog
Until Nevada, all the presidential candidates except for Bernie Sanders were playing for a brokered convention. The party’s candidates seemed likely to be chosen by the Donor Class, the One Percent and its proxies, not the voting class (the 99 Percent). If, as Mayor Bloomberg has assumed, the DNC will sell the presidency to the highest bidder, this poses the great question: Can the myth that the Democrats represent the working/middle class survive? Or, will the Donor Class trump the voting class?
This could be thought of as “election interference” – not from Russia but from the DNC on behalf of its Donor Class. That scenario would make the Democrats’ slogan for 2020 “No Hope or Change.” That is, no change from today’s economic trends that are sweeping wealth up to the One Percent.
All this sounds like Rome at the end of the Republic in the 1st century BC....Markets in everything, including political office.
There could be a fecal-oral route for coronavirus after live virus particles were found in stool specimens, according to Chinese researchers https://t.co/UgD3ohUomv
— Bloomberg (@business) February 22, 2020
Shares of Juventus fell as much as 14% in two days amid fears the coronavirus outbreak in northern Italy could lead to some top division matches being played in empty stadiums https://t.co/xiMEcPBfMt
— Bloomberg Markets (@markets) February 25, 2020
After studying trade and finance as the main use of the blockchain, the bank launched the first sovereign blockchain in 2018, registering a couple of patents along the way. So far, the country ranks as the largest blockchain patent holder in the world.
The PBoC maintains the bank will not support any public blockchain yet as it focuses on its own blockchain project. So far, its blockchain project that offers multi-stage accounts receivable financing, a fast track for rediscounts and supervision over foreign trade payments is on the rise. Watch out for blockchain adoption across China.CoinGape
The reality is, if you really break it down, socialism is just some system of governance which affords some form of social ownership over the means of production. Democrats and Republicans alike have almost always supported some variant of socialist policy when it suits them. I myself follow a decidedly purist strain of this philosophy often referred to as libertarian socialism.
While in the past I've danced with the devil of full-tilt Bolshevism and I continue to stubbornly defend the legacy of Third World state socialists like Hugo Chavez and Fidel Castro, I've come to the hard fought conclusion that the only way for truly empowered social ownership of basic human rights like healthcare and education to exist is for it to be wholly decentralized, voluntary and operated from the bottom up. The idea of Bernie's Medicare for All just sounds like swapping masters to me, from corporate bag munchers to federal bag munchers. I'm already experiencing Medicare for Some as a legally disabled agoraphobic and let me tell you, there is exactly nothing empowering about it. I feel like shit being barely strung along by the very same folks who brought us Waco, Ludlow and My Lai, and that brings me to the biggest bug I have up my ass about millennial socialism....Exile in Happy Valley
With all this “living history” in mind, Putin’s plan for such large-scale (and rapid) investment has generated the controversy in Moscow and resulted in three positions within the policy class. One fully supports the decision on the essentially Keynesian grounds that it will spur Russia’s annual economic growth, which has lagged below the global average for several years. Another opposes such massive expenditures, arguing that the funds must remain in state hands as a safeguard against the US-led “sanctions war” (and perhaps worse) against Russia. And, as usual in politics, there is a compromise position that less should be invested in civilian infrastructure and less quickly....The Nation
Stony Brook University economist Stephanie Kelton is a proponent of something called modern monetary theory (MMT), a new school of economics that argues that as long as a country is in charge of issuing its own sovereign currency, it can't "run out of money." According to MMT, if Greece were still using its own currency, the drachma, instead of the euro, then it could have printed more money to pay off its debts, especially if inflation was low to begin with. Instead, as part of the European Union, it had to turn to the European Central Bank which dictated the terms of Greece's bailout.
Kelton argues in the New York Times that the way we think and talk about deficit is entirely wrong. When governments run up deficits, it's because they're pumping money into their economy or spending it on social welfare programs. Kelton writes, "The problem is that policy makers are looking at this picture with one eye shut. They see the budget deficit, but they’re missing the matching surplus on the other side. And since many Americans are missing it, too, they end up applauding efforts to balance the budget, even though it would mean erasing the surplus in the private sector."...GQ
Russia’s new initiatives associated with sizeable increases in social spending and outlays on national projects as outlined by President Putin in his address to the Federal Assembly in the beginning of this year mark a new beginning in Russia’s economic policy. After extended periods of prioritizing the accumulation of savings and building of reserves, Russia’s economy is switching into spending mode, with greater weight accorded to economic growth compared to an overarching emphasis on securing macroeconomic stability in the past. In effect Russia’s economic model becomes more open and more geared towards development as compared to a defensive mode of economic policy, which sought to minimize external shocks and prioritize self-sufficiency and import-substitution.Summary: The Russian leadership believes to have beaten back the sanctions and is now striking out on new path to build the domestic economy while also increasing exports....
Ultimately, within the new paradigm of Russia’s economic policy, which may be likened to a “Big Push” modernization effort (see Russia’s “Big Push paradigm”, Valdai discussion club, October 8, 2019) fiscal policy is likely to take precedence over monetary policy in delivering the growth stimulus. After amply showing that Russia is capable of notably increasing fiscal revenues and tax compliance the key goal is now to demonstrate the capability to attain modernization via significant increases in the efficiency of fiscal spending. In a way with fiscal policy shifting into spending gear, monetary policy is likely to be relatively more conservative with continued emphasis accorded to macroeconomic stability. The CBR is likely to closely follow the implications of fiscal loosening with respect to inflation and may limit the scope for further reductions in the key rate if inflation risks start to increase.
An important element of Russia’s “Big Push” to increase fiscal spending will need to be the maintenance of the fiscal rule and a rules-based framework more generally. This implies conservatism in allowing the change in the cut-off oil price for the budget’s fiscal rule operation as well as the existence of clear targets on the evolution of the overall fiscal balance and the non-oil budget deficit. The maintenance of the fiscal rule together with the relatively more conservative stance of the CBR are likely to be sufficient in ensuring the maintenance of the bulk of macroeconomic stability secured in the preceding years....
What has confused economists for centuries is that they’ve focused on what’s inside the fence of property rights, not the fence itself. And who can blame them? Historically, the things that were owned were easy to see. In contrast, the act of ownership — the institutional fence of private property — was abstract. And so economists tied wealth to property, not the property-rights fence.…
In reality, wealth had always been non-material — a social relation of exclusion. The digital revolution just laid this fact bare because it emptied out property, leaving only the fence of property rights. The digital revolution got rid of land. It got rid of physical capital. It got rid of all the physical things on which to pin wealth. All that was left (in digital tech firms) was the fence of property rights. And this fence was put up around the most non-material of things — ideas themselves..…
One of the pieces of pseudo-science that floats around in popular discussion of bonds is the belief that bond investors are deadly afraid of inflation. In particular, bonds "lose money" every time the Consumer Price Index rises -- which is most months, in most developed countries. As far as I can tell, this is the legacy of some Economics 101 textbook story that has been passed on from "expert" to "expert" over the decades.
The correct answer is that nominal yields largely reflect the expected path of the short-term nominal policy rate, and is thus a reflection of the central bank's "reaction function." (At this point, some people will jump in and start going on about the term premium. However, unless we using an obviously dysfunctional term premium model, the term premium is only a small deviation from the fair value determined by rate expectations.)
The advent of inflation-linked bond markets adds some extra qualifications to the previous statements. (My previous book discusses the inflation-linked markets.) If a bond investor is overweight inflation-linked bonds, they can get a big fat bonus if inflation turns out higher than expected. However, the beliefs about bond investors that I am discussing here were formed in an era when inflation-linked markets did not exist, so economics textbook writers were free to write in whatever campfire ghost story they wished....Bond Economics
Beijing is still pretty empty pic.twitter.com/yQNpglHADi
— Cathy Zhang🌻 (@CathyYZhang) February 19, 2020
The last 10 years have seen the collapse of neoliberalism. The question now is, what comes next?
For 40 years, we have lived in a neoliberal era, an era defined in public policy by deregulation, liberalization, privatization, and austerity. Starting with the Thatcher and Reagan revolutions, neoliberal ideas spread to capture the center and even the left, ultimately becoming the reigning policy consensus by the mid-1990s.
But over the last decade, that neoliberal consensus has collapsed. We can now see that its results were disastrous....
The central question of our time is what comes after neoliberalism. New political paradigms emerge in response to the challenges and failures of the preceding era, and today, four possibilities for the future are emerging.
- The first possibility is reformed neoliberalism.…
- The second possibility is nationalist populism, which combines ethnic, religious, or cultural nationalism with economic populism.…
- The third possibility, which many refer to as authoritarianism, has gotten the most attention.… The better term for this third future is “nationalist oligarchy,” and Trumpism is its American variant..…
- The final possibility is that a new era of democracy will follow the age of neoliberalism.…
The neoliberal era has put us in this moment of crisis, and the central battle of our time is now between nationalist oligarchy and democracy. The fight for a great democracy will require boldness and creativity, courage and resolve. If we want to save democracy, we will first need to achieve democracy.Insightful.
The long-awaited "phase one" deal between the United States and China has not ended US trade warfare. Instead, President Donald Trump's administration has devised yet another tool with which to tilt the playing field against foreign competitors, all but ensuring that damaging and unnecessary trade conflicts will continue.
Treasury Secretary Steven Mnuchin isn’t convinced. In fact, he suggested such a shift could lead to even bigger financial-stability problems. “If you’re a regulator, you wouldn’t want a major bank’s balance sheet to go up and down based upon what could be very, very large cash movements,” he told Bloomberg News in an interview last month. “It shouldn’t impact the market one way or another whether we put money at the Fed or at a bank.”
Fed Chairman Jerome Powell said in December that bank officials had yet to discuss the topic with their Treasury counterparts. Nevertheless, he added that “there may come a time when we talk about that.”
The Treasury Department isn't helping the Federal Reserve's efforts to calm short-term lending markets https://t.co/7mQpSmROet pic.twitter.com/2VLDyDBadj— Bloomberg Markets (@markets) February 18, 2020
