William Mitchell — Australian National Accounts—GDP growth in decline, expect unemployment to rise—courtesy RBA sabotage

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, December 2022 – today (March 1, 2023), which shows that the Australian economy grew by 0.5 per cent in the December-quarter 2022 and by 2.7 per cent over the 12 months. This is a significant decline in growth, which is now insufficient to prevent unemployment from rising over the coming period. Growth is being driven largely by continued (but moderating) growth in household spending. This was augmented by the strong rebound in the Terms of Trade (commodity prices), which helped net exports make a positive growth contribution. There was growth in employee compensation (the wage measure from the national accounts) of 3.2 per cent but that was largely due to administrative decisions (for example, minimum wage increases) that impacted in this quarter rather than being the result of market pressures. Households are now saving less relative to their disposable income in an effort to maintain consumption growth in the face of rising interest rates and temporary inflationary pressures. I expect growth to decline further and we will be left with rising unemployment and declining household wealth as a result of the RBA’s poor judgement....

William Mitchell — Modern Monetary Theory
Australian National Accounts – GDP growth in decline, expect unemployment to rise – courtesy RBA sabotage
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

China identifies roots of US crackdown on TikTok — RT

The US has been over-stretching the concept of national security and abusing state power to suppress foreign companies,” she continued. “We firmly oppose those wrong actions. The US government should respect the principles of market economy and fair competition.”...

RT — Question More (Russian state-sponsored media)
China identifies roots of US crackdown on TikTok

Logistics of the 21st Century & New Economic Order: Prospects for a New North-South Transport Corridor — Muhammad Athar Javed

The emergence of “New Economic Order” would transform the way logistics and transport in global market is being carried out. The North-South Transport Corridor (INSTC) member countries must contribute effectively for the overall development of corridor i.e., the improvement of inland waterways, security of container and general cargo terminals in Caspian ports, the modernization of border crossing points and the construction of logistics hubs and roadside service facilities, writes Muhammad Athar Javed, founder, CEO of Pakistan House, especially for the 12th Valdai Club Middle East conference.

The big news now is that the Global South/East are coming online economically as decolonization proceeds and is now picking up speed. Until recently, "the world economy" largely meant that of the Global North/East, with the Global South being relegated to colonial status. That is ending as the pcae of development increases in Asia, Latin America, and Africa and they become more assertive, demanding a proportionate piece of the pie, since growth in this century promises to come largely from this area.

Javed observes that owing to the current conflict and imposition of sanctions on Russia, Russia has become more active in developing its relations with other countries of the Global South/East, thereby opening economic corridors that previously had only been contemplated. 

Longer term, either Europe joins this endeavor or isolates itself from the major sources of growth on the world island, as British geographer Halford Mackinder called Eurasia/Africa in his influential 1904 lecture/article, "The Geographical Pivot of History" that launched the study of geopolitics and geostrategy. His thesis was that whoever controls Eurasia controls the world. As a result, Russia has been viewed as a geopolitical football.

Javed concludes with the warning that other interested parties will try to sabotage this economic trend toward the Global South/East.

This is an important article as a backgrounder.

Valdai Club (Russia)
Logistics of the 21st Century & New Economic Order: Prospects for a New North-South Transport Corridor
Muhammad Athar Javed, founder and CEO of Pakistan House, an independent policy institute based in Bronshoj, Denmark, and Islamabad

We were promised ‘economic shock and awe’ against Russia — Andrew Cockburn

Maybe economic warfare is not all that it was cracked up to be. Or maybe not. Blowback from it is rocking the NATO alliance as NATO countries buckle economically. The only NATO country profiting from the crisis is the US and other NATO countries view this as at their expense, although, being vassal states, they can only whine about it.

What went wrong? The world economy is a system and the US failed to grasp Russia's place in the system and also the state of the system itself. As a result, assumptions turned out to be wildly wrong since they were not reality-based but rather figments of fantasy. 

Thus far, this has turned out to be a monumental strategic blunder.

The overall result is biasing the world system against the Global North/West in the Global South/East much to Western consternation as its former dominance fades markedly. The information war on the part of the West has failed in the Global South/East as China and India support Russia economically and Russia supports them with resources.

However, the game is far from over. The combined West is still powerful economically and is reacting. But this West now facing a strategic alliance of Russia, China and Iran that is open about its aims, which it views as existential. Putin declared recently that this conflict is existential for Russia, fulfilling the requirement for the first use of nuclear weapons. Moreover, Russian nuclear doctrine is under revision to bring it in line with US doctrine, which allows for a preemptive first strike. (And while North Korea is not usually mentioned as part of this alliance, it is for all practical purposes.) 

This is US foreign policy realists' worst nightmare scenario, since China reputedly having great national capacity than the US, UK and continental Europe combined, and Russia is a nuclear peer.

And it could get worse if Russia shares military technology with China, Iran and North Korea. Moreover, no one in the West seems to know if this has already occurred and if so, to what degree.

Not to mention that the pace is increasing one might say, "exponentially," chiefly owing to US and UK brinksmanship.

So, failure of the economic war that was supposed to crash the Russian economy in weeks has resulted in a strategic upheaval following the US refusal to acknowledge Russia's security needs.

Responsible Statecraft
We were promised ‘economic shock and awe’ against Russia

Andrew Cockburn

See also

Strategic Culture Foundation (sanctioned by the US Treasury Department)
Manichaeism and ‘An Ideology of Liberal Empire’ – Biden’s Forever Cosmic War Against Russian ‘Evil’
Alastair Crooke | founder and director of the Conflicts Forum, former British diplomat and senior figure in British intelligence and in European Union diplomacy

Euro stoxx banks reached highest since 2018 on inflation data

 

ECB finally went non-negative IOR….

Euro stoxx banks reached highest since 2018 on inflation data. pic.twitter.com/sxCz7ratzu

— 🅰🅻🅴🆂🆂🅸🅾 (@AlessioUrban) February 28, 2023

Europe bourses following their banks back up… same thing should happen here on the rate increases…  Brandon starting WW3 not withstanding…

BofA now joining JPM with a call for 6%:

Fed Might Raise Policy Rates To 6%, BofA Says - RTRS https://t.co/Nt9xA46vZE

— LiveSquawk (@LiveSquawk) February 28, 2023

🤑🤑🤑🤑🤑

China's first ChatGPT-like software to be made open source — China Daily

MOSS, the first large-scale conversational language model in China, will be made open source by the end of March, said the research and developing team on Sunday.

Named after the artificial intelligence featured in the Chinese Sci-fi movie The Wandering Earth II, MOSS became the first ChatGPT-like software unveiled in China when it was made available to the public for testing on Feb 21....

Socialsim.

ECNS (Chinese official English news service)
China's first ChatGPT-like software to be made open source

Satellite to deliver stellar internet
China Daily (Chinese state media)

Government Bonds As Money — Brian Romanchuk

This debate in itself is not particularly significant (other than possibly showing up in internet MMT arguments), but it does provide another vantage point on the problematic nature of “money” in economic theory.…

Bond Economics
Government Bonds As Money
Brian Romanchuk

Reports of Adani’s eclipse are greatly exaggerated — M.K. Bhadrakumar

The matter has gone to India’s Supreme Court via a public interest litigation seeking probe against Hindenburg “for exploiting innocent investors.” Interestingly, Hindenburg also holds short positions in Adani companies through US-traded bonds and non-Indian-traded derivative instruments.

Hindenburg’s actions have been controversial. The firm’s financial model involves identifying “bad” firms, investing to profit from the company’s price collapsing, and then publishing a negative report about the company....

India Punchline

Reports of Adani’s eclipse are greatly exaggerated
M.K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

William Mitchell — Abandoning the euro would have essentially zero negative income effects for the vast majority of Member States

If you cast your mind back to the peak of the GFC, when people were actually talking about the dissolution of the Economic and Monetary Union (EMU), a.k.a. the Eurozone, or more specifically, a unilateral exit by Greece or Italy, we were told by the ‘experts’ that it would be catastrophic. Over and over, headlines shouted at us how disastrous it would be if the Eurozone failed. Well, guess what, even pro-Euro researchers have come to the conclusion that the effects of collapsing the monetary union would be minimal, to say the least. And when we dig into their analysis a bit deeper, using technical knowledge, the results are even more devastating for the pro-Euro camp. Mostly, using techniques that give pro-Europe narratives the best chance of delivering supportive empirical results, they find mostly impacts that are not statistically different from zero, of an abandonment of the common currency and a return to currency sovereignty for the 20 Member States. I haven’t seen any attention given to this in the mainstream media or from those pro-Euro Tweeters that tweet away with all sorts of nonsense about how good the common currency has been. But then that would be a bridge to far for them I guess..…

William Mitchell — Modern Monetary Theory

Abandoning the euro would have essentially zero negative income effects for the vast majority of Member States
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Oxford Business Group — Shifting oil market creates export opportunities for emerging markets producers

 In spite of all the emphasis on the need for going green, oil consumption is not falling and a grey market is developing as a result of sanctions.

Oxford Business Group
Shifting oil market creates export opportunities for emerging markets producers

The rise of US dollar imperialism, and why it failed – with Radhika Desai & Michael Hudson

Video and transcript.

In this episode of their program Geopolitical Economy Hour, economists Radhika Desai and Michael Hudson explain the end of the British empire’s sterling area with the rise of the US dollar system, its central role in imperialism, and why it ultimately failed to accomplish Washington’s hegemonic goals.

RADHIKA DESAI: Hello everyone. Welcome to the fourth Geopolitical Economy Hour, our fortnightly show on the political and geopolitical economy of our times....

Geopolitical Economy
The rise of US dollar imperialism, and why it failed – with Radhika Desai & Michael Hudson

The Guardian view on Germany’s economic miracle: it was built on debt relief — Editorial

Cancelling loans put the Wunder into Wirtschaftswunder. Treat poor nations the same today.

The Guardian
The Guardian view on Germany’s economic miracle: it was built on debt relief
Editorial

See also

Notayesmanseconomics's Blog
Germany revises GDP growth further into recessionary territory

Shaun Richards

More on the Interest-Income Channel — Stephanie Kelton

Short read. Nothing Mike has not gone into already.

The Lens
More on the Interest-Income Channel
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

5 Reasons Why Much of the Global South Isn’t Automatically Supporting the West in Ukraine — Krishen Mehta

In October 2022, about eight months after the war in Ukraine started, the University of Cambridge in the UK harmonized surveys conducted in 137 countries about their attitudes towards the West and towards Russia and China.

The findings in the study, while not free of a margin of error, are robust enough to take seriously.

These are:

• For the 6.3 billion people who live outside of the West, 66 percent feel positively towards Russia and 70 percent feel positively towards China, and,
• Among the 66 percent who feel positively about Russia the breakdown is 75 percent in South Asia, 68 percent in Francophone Africa, and 62 percent in Southeast Asia.
• Public opinion of Russia remains positive in Saudi Arabia, Malaysia, India, Pakistan, and Vietnam.

Sentiments of this nature have caused some ire, surprise, and even anger in the West. It is difficult for them to believe that two-thirds of the world’s population is not siding with the West.

What are some of the reasons or causes for this? I believe there are five reasons as explained in this brief essay....

That Westerners should be surprised at this is itself surprising.

Naked Capitalism

5 Reasons Why Much of the Global South Isn’t Automatically Supporting the West in Ukraine
Krishen Mehta, a member of the Board of the American Committee for U.S.-Russia Accord (ACURA), and a Senior Global Justice Fellow at Yale University. Published by Globetrotter in partnership with ACURA

From special operation to full-scale war — Alexander Dugin

This is a useful analysis from a conservative Russian point of view of the unfolding of the present situation globally and the alternative scenarios for the Ukrainian conflict.

english.almayadeen.net
From special operation to full-scale war
Alexander Dugin

Corruption watch

Corruption watch. (h/t Naked Capitalism)

Glenn Greenwald
New SBF Indictment Exposes How Washington Really Works. Plus, Investigative Reporter Lee Fang In-Studio!

Eschaton
Everything Is Corrupt

Atrios

White House Believed ‘Economic Nuclear Weapon’ Would End Russian War in Ukraine — Kyle Anzalone

Dud. The weapon failed to explode and to the degree it did detonate, it was a direct hit on US allies in Europe.

AntiWar
White House Believed ‘Economic Nuclear Weapon’ Would End Russian War in Ukraine

Kyle Anzalone

The evolution of mainstream economics in five political-economic questions — Aabid Firdausi

The trajectory of mainstream economics can be understood in terms of how the discipline historically responded to moments of crises by attempting to “theoretically fix” the understandings related to five core “questions” of capitalist political economy – namely land, trade, labour, state, and legal-institutional framework. This involved legitimising improvements in land that led to the dispossession and the destruction of the commons, justifying free trade based on comparative advantage as opposed to mercantilist state intervention, reducing labour to a factor of production that was supposedly rewarded based on its marginal productivity and hence not being exploited, legitimising state intervention to stabilise capitalism and developing a legal-institutional framework to protect markets from popular democratic pressures. These “theoretical fixes” served to ideologically legitimise, preserve, and perpetuate the core content of capitalist social relations even as it corresponded with the modification of the surface-level appearances of capitalism.

The history of mainstream economics is closely tied to the history of capitalist development. However, the discipline of economics attempts to obscure this relationship, mostly by asserting its value-neutrality through a positivist approach. Despite criticisms, mainstream economics continues to retain its core postulates by reasserting the naturality and inevitability of capitalist social relations by dismissing questions of political economy. The outsized influence of economics in policymaking necessitates consistent critique and engagement with the assumptions and implications of mainstream economic theories and models. There is a wealth of literature that critiques different aspects of mainstream economics from different perspectives (see Chang 2015; Fine and Milonakis 2008; Kvangraven and Kesar 2021; Lee 2009; Mezzadri 2020; Reinert, Ghosh & Kattel 2016; Selwyn 2016). This essay contributes to this rich tradition of critique and argues that the trajectory of mainstream economics can be understood in terms of five core “questions” – namely land, trade, labour, state, and legal-institutional framework....

This is an article on economic sociology that also includes issues relevant to the philosophy (read foundations) of economics.

Firdausi's thesis is similar to the point I have made previously about the methodological assumption of naturalism integral to scientific method is conflated with the ontological/metaphysical, epistemological and ethical assumptions concerning materialism and positivism. This conflation involves both logical fallacies and also involves semantic difficulties with theory and modeling being representative of the actual.

While the methodological assumption of naturalism may be justified in the case of the natural sciences, at least to a great degree, it is less solid in the life and social sciences, which involve organic and psychophysiological processes in addition to mechanistic. In the social sciences, especially, this conflation is unjustified and vitiates theories and models based on it from being representative of reality.

Moreover, the assumption of positivism has been shown to be deficient. The problem is that the sharp dichotomy drawn between fact and value contradicts the findings of cognitive scientists about the enmeshment of thought and feeling at the neurological level and the discovery that that estimation of "reality" is dependent on worldview, which is both individual, cultural and subcultural, leading to the seemingly strange phenomenon of "alternative facts" unless one is aware of the underlying dynamics.

Firdausi argues that these methodological assumptions are shape economics to benefit the interests of capital accumulation resulting in distributional inequality that is justified spuriously.

Developing Economics
The evolution of mainstream economics in five political-economic questions
Aabid Firdausi

See also

The tendency to create the world market is directly given in a concept of capital itself. Every limit appears as a barrier to be overcome…In accord with this tendency, capital drives beyond national barriers and prejudices as much as beyond nature worship, as well as all traditional, confined, complacent…reproductions of old ways of life. It is destructive towards all of this, and constantly revolutionizes it, tearing down all the barriers which hem in the development of the forces of production, the expansion of needs…”

 Karl Marx

Grundrisse: Notebook IV – The Chapter on Capital

The Volcker Myths — Eric Tymoigne

Federal Reserve Chairman Paul Volcker is widely acclaimed as the person who vanquished and conquered inflation in the early 1980s. By implementing a monetary policy inspired from Monetarist prescriptions, he is thought as having restored the ability of the Fed to control the money supply and to bring down price instability. Yes, the economy suffered but the pain was worth it. Volcker received many accolades with Chairman Alan Greenspan considering him the “most effective chairman in the history of the Federal Reserve System”.

A careful reading of the Federal Open Market Committee (FOMC) transcripts and data available, however, provides quite a different narrative. Aside from a few true believers, nobody at the FOMC took Monetarism seriously.…

Monetary Policy Institute Blog (Feb 20)

The Volcker Myths
Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College

Rising Economic Polarization in the United States: Truth and Facts — Xinhua

China criticizes the distributional structure of the US economy. China appears to be becoming more aggressive in the information war that the US has dominated until recently.

ECNS
Rising Economic Polarization in the United States: Truth and Facts

Xinhua

Weekend wilderness survival skills course

 I don't know if any of you saw this, but last weekend I was in Granite Falls, WA, doing a wilderness survival training course. 

It was the hardest thing I ever did. Tested me to the limit, even more than my rim-to-rim Grand Canyon day hike in 2021.

Nonstop rain, cold. Slept outside under a tarp. Had really poor equipment. I had to learn to compartmentalize my thoughts into half hour intervals just to get through the night. No sleep, by the way. I simply couldn't.

Frankly, I am still processing the whole thing in my head. Like, what did I do this for? What did I get out of it? Did it make me stronger, more resilient, expose me in any way? (The latter, YES.)

I always think of myself as a physically strong person. I wake up at 4am every day and workout out, then run outside, shirtless, regardless of temperature. (This morning was 25 degrees Farenheith.) 

Nevertheless, I think I am still mentally weak. The course exposed me.

Why are people so triggered? What's going on?

 I did a video on attachments and how attachments are a source of our suffering. (Buddhist concept.) I related it to investing and trading. (i.e. we are "attached" to the outcomes.)

People got pissed off. They unsubscribed or criticized me on talking about this.

Is this normal? I've been trading for over 40 years. Been a member and floor trader on 4 exchanges. Managed money for a major hedge fund. Ran a proprietary trading desk for a major international bank.

Economist by education. (Wharton, UCLA.)

Is talking about a non-Western philosophy so triggering to people? I don't fucking get it. I think we are ALL screwed up.

China’s Position on the Political Settlement of the Ukraine Crisis — Chinese Foreign Ministry

Full text.

Ministry of Foreign Affairs of the People's Republic of China
China’s Position on the Political Settlement of the Ukraine Crisis
2023-02-24 09:00

Russian Oil Sanctions Have Redrawn Global Trade Maps — Irina Slav

• Both India and China are importing Russian crude at a record pace.
• Energy Intelligence: at least 20 trading companies—but probably a lot more—are sending Russian oil around the world.
• According to Trafigura, the total number of tankers that have been “reserved” to carry Russian oil could be as high as 600, of which 400 crude tankers.

Vitol, Trafigura, BP, Shell, Equinor—all of them upped and left whatever business they had in Russia, leaving an empty space. It did not take very long for this space to fill, it seems. It has been filled with newly set up trading firms, most of them set up very recently and outside Europe. And they are not trading in dollars or euros.

The trades that these companies are conducting with Russian oil and fuels are being financed by banks in the United Arab Emirates and Turkey, with European banks, like European commodity traders, “out of the picture,” as Energy Intelligence puts it.

Who is being "isolated"?

Oilprice
Russian Oil Sanctions Have Redrawn Global Trade Maps

Irina Slav

Wolf Knows Better. I know He Does — Peter Radford

Does Martin Wolf make a sophmore error in thinking that saving causes investment? It appears so.

The Radford Free Press
Wolf Knows Better. I know He Does
Peter Radford

$3 beers

 

B-dubs advertising a $3 beer for happy hour 4-7..  I believe this may be a 22oz draft … maybe only a 16.. … whichever I haven’t seen this type of price in quite a while…

Farm Prices

 

Mom & Pop meat store over on the eastern shore:

These prices aren’t too bad… $35 for 40lb leg segments…  right now the closer you can get to the farm gate the better the prices…

Middle men getting excess margin right now… won’t last…

RBA appeal to NAIRU authority is a fraud — Bill Mitchell

The mainstream press is now seeing through the Reserve Bank of Australia’s behaviour, which I take as a sign of progress. For example, there was an article on the ABC News Site yesterday – Reserve Bank accused of ‘economic gaslighting’ as wages growth misses forecasts, again. I noted yesterday that the latest evidence contradicts the RBA’s claims that wages are growing too fast and provide it with a rationale for further interest rate increases, despite the inflation rate falling over the last several months, and real wages declining by more than has ever been recorded. Last week, the RBA Governor and his staff appeared before a parliamentary committee to justify thee rate hikes. We learn a lot from the session – none of it good. The basic conclusion is that the RBA thinks they can hoodwink our politicians into believing that their is a ‘technical authority’ based in statistics for their actions, when in fact, no such authority exists.

William Mitchell — Modern Monetary Theory
RBA appeal to NAIRU authority is a fraud
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Assessing the Economic Value of Military Material — Philip Pilkington

Important. 

This reflects what former USSR naval officer Andrei Martyanov has been saying and writing books about for a long time. The West is using the wrong standards of comparison, like nominal GDP rather than national capacity. In this light, Russia and China are far stronger than the West realizes using Western-preferred metrics. 

This has been brought out by industrial warfare. Pursuit of neoliberalism has apparently weakened the West's industrial capacity as factories were moved to locations of cheap labor, notably China. 

The West not only misjudged the power of sanctions but also underestimated relative national capacity in relation to Russia with respect to effect on war-making. This was a double failure on the part of intelligence that amounts to a serious strategic blunder.

American Affairs
Assessing the Economic Value of Military Material

Philip Pilkington

Who’s Winning and Losing the Economic War Over Ukraine? Medea Benjamin and Nicolas J. S. Davies

You probably already know most of this if you have been following economic developments resulting from sanctions.

Naked Capitalism
Who’s Winning and Losing the Economic War Over Ukraine?

Medea Benjamin and Nicolas J. S. Davies

See also

"Putin," or Russia?

Asia Times
How Putin has shrugged off Western sanctions

Peter Rutland

Related

One year does not a make a trend, but.…

RT — Question More (Russian state-sponsored media)
US no longer attracts world’s rich – study

Also

TASS (Russian state media)
China ready to join forces with Russia to decisively defend national interests — Wang Yi

Ukraine “out of money!”

 

Ukraine must have ran out of munnie so now the Biden regime has to send some USDs so they can pay pensions and fund other initiatives… 😂

Biden on aid to Ukraine - "It's going to allow pensions and social support to be paid to the Ukrainian people so they have something in their pocket."

Biden is guaranteeing pensions and welfare for Ukrainians but can't guarantee aid for Ohio.

America last. pic.twitter.com/2Qvdgt7Ce4

— MAZE (@mazemoore) February 17, 2023

Chinese Foreign Ministry—The Global Security Initiative Concept Paper

Just released.

Ministry of Foreign Affairs of the People's Republic of China

The Global Security Initiative Concept Paper
2023-02-21 11:12

See also

English Transcript

President of Russia

Presidential Address to Federal Assembly

February 21, 2023, 13:50 Moscow

Related

The Vineyard of the Saker
Vineyard of the Saker White Paper: the China-Russia Double Helix
Larchmonter 445

Patrick Lawrence —Totalized Censorship

Content warning, canceling, de-platforming, denying access: The fate of Sy Hersh’s Democracy Now! interview on YouTube is the latest indication of how much rougher press suppression is in this new media era....

The take-away from the article is that society in so-called liberal democracies are as controlled as in so-called authoritarian "regimes." Society in  (read capitalist) countries is as controlled by the ruling elite that either belong to the ownership class (haute bourgeosie) or are beholden to it. 

While Patrick Lawrence doesn't go into how this is accomplished, others have. Control is secured both through ownership of the "commanding heights" of the economy and the fact that the state has been captured through campaign finance, since campaigns are now so expensive that politicians have become dependent on large contributions and the implicit quid pro quo. 

A so-called deep state is put in place to ensure continuity of policy on one hand and also to remove the reins of real power from politicians. With personality and increasingly celebrity being a major factor in political success rather than ability to govern, a system has been established to ensure that policy decisions that serve the interest of the ruling elite are uniform across administrations.

A primary factor in controlling a state in the age of near instantaneous communication is controlling the narrative. This used to be much simpler before the internet and the media is still rather easily controlled. Now with the advent of the Internet, it has become necessary to control that too in order to maintain control of the narrative. The push has been on to do so for some time.

Consortium News

Patrick Lawrence: Totalized Censorship

Related

Gizmodo (May 18, 2018)
Google Removes 'Don't Be Evil' Clause From Its Code of Conduct
Kate Conger

Also

Scheerpost
Patrick Lawrence: Munich as Propaganda Fest

Also

Nonpartisan, publicly funded media is "an idea that we should explore," said the senator

Lame, but at least some politician is thinking about it.

Common Dreams

Sanders Proposes 'New Deal for Journalism' to Ensure Media Serves Public Interest

Julia Conley

Also

Why of course the people don't want war. Why should some poor slob on a farm want to nak his hite in a war when the best he can get out of it is to come back to his farm in one piece? Naturally the common people don't want war... after all it is the leaders of the country who determine the poly and it is always a simple matter to drag the people along... the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the peacemakers for lack of patrotism and exposing the country to danger. It works the same in any country.

Nuremberg Diary - by Gustave Gilbert
Interview with Herman Goering

 

U.S. Hegemony and Its Perils — Xinhua

 Conclusion

While a just cause wins its champion wide support, an unjust one condemns its pursuer to be an outcast. The hegemonic, domineering, and bullying practices of using strength to intimidate the weak, taking from others by force and subterfuge, and playing zero-sum games are exerting grave harm. The historical trends of peace, development, cooperation, and mutual benefit are unstoppable. The United States has been overriding truth with its power and trampling justice to serve self-interest. These unilateral, egoistic and regressive hegemonic practices have drawn growing, intense criticism and opposition from the international community.

Countries need to respect each other and treat each other as equals. Big countries should behave in a manner befitting their status and take the lead in pursuing a new model of state-to-state relations featuring dialogue and partnership, not confrontation or alliance. China opposes all forms of hegemonism and power politics, and rejects interference in other countries' internal affairs. The United States must conduct serious soul-searching. It must critically examine what it has done, let go of its arrogance and prejudice, and quit its hegemonic, domineering and bullying practices. 

Cold War in progress. China has been taking off the gloves verbally after constantly being "humiliated" by the US.

The white paper is extremely harsh and pulls no punches. It reads like a declaration of war.

Is Chimerica about to fall to decoupling? Where is this headed economically? Are investors taking such developments sufficiently into account?  

ECNS (Chinese official English news service)

U.S. Hegemony and Its Perils

Xinhua (Chinese state media)

Originally at the official website of the Ministry of Foreign Affairs of the People's Republic of China

UPDATE: 

Here is the link to the Ministry of Foreign Affairs of the People's Republic of China that published this white paper.

UPDATE: 

Geopolitical Economy

West tells Global South ‘you can’t be neutral’ in Ukraine war: You are either with us, or against us

Ben Norton

Also at Xinhua

China to maintain open, orderly int'l trade environment: senior diplomat

Also at Xinhua

Calling BS on neoliberalism, neo-imperialism and neocolonialism.

Global South calls for fairer, win-win int'l order, blaming West for ignorance

MMT After The Pandemic Shock — Brian Romanchuk

It is likely that I will be participating (remotely) in an academic panel about Modern Monetary Theory (MMT), with a “pro” and “con” side at a Canadian academic conference. This article is my initial thinking, and is a way of soliciting feedback. The “story” behind the panel is whether we learned anything from the pandemic shock....

Bond Economics
MMT After The Pandemic Shock
Brian Romanchuk

The Keynes-Tinbergen debate on econometrics — Lars P. Syll

 Another post of conventional economists not being keen on applying logic to their reasoning.

Lars P. Syll’s Blog
The Keynes-Tinbergen debate on econometrics
Lars P. Syll | Professor, Malmo University

Politics seems to suffer from a similar syndrome. While economists sacrifice logic for mathematical modeling including tractability, some politicians appear to be mathematically challenged.

Degrowth, food loss and food waste – Part 7 — Bill Mitchell

Last Monday, I wrote about the global need for us to abandon meat production for food, and, instead take up plant-based diets. Many people interpreted that argument as a personal attack on their dietary freedom, which indicates they fell into a fallacy of composition trap and declined to see the global issue. As part of my series on the Degrowth agenda, the other aspect about food which is important is that we have a propensity to produce too much food and distribute what we produce unfairly. I will deal with the distributional issues in another post. Today, I want to talk about the over-abundance of food in nations which means too much land, water and other resources is devoted to its production with commensurate negative environmental consequences. One manifestation of that phenomenon is food loss and food waste, which are different terms for the segment of the food supply chain where wastage occurs. If we are serious about dealing with the environmental disaster then we have to eliminate or dramatically reduce wastage. This will require significant investments in some nations to improve storage etc and a dramatic change in other nations in terms of attitudes to aesthetics, packaging, and more....

William Mitchell — Modern Monetary Theory
Degrowth, food loss and food waste – Part 7
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Reversing 30 Years of Damage from the Clintons, the DOJ Closes A Price-Fixing Loophole Wide Enough to Drive a Truck Through — Conor Gallagher

Between 1993 and 2011 the Department of Justice Antitrust Division issued a trio of policy statements (two during the Clinton administration and one under Obama) regarding the sharing of information in the healthcare industry. These rules provided wiggle room around the Sherman Antitrust Act, which “sets forth the basic antitrust prohibition against contracts, combinations, and conspiracies in restraint of trade or commerce.”

And it wasn’t just in healthcare. The rules were interpreted to apply to all industries. To say it has been a disaster would be an understatement. Companies increasingly turned to data firms offering software that “exchanges information” at lightning speed with competitors in order to keep wages low and prices high – effectively creating national cartels....

Naked Capitalism

Reversing 30 Years of Damage from the Clintons, the DOJ Closes A Price-Fixing Loophole Wide Enough to Drive a Truck Through
Conor Gallagher

Thoughts on CBO's Budget and Economic Outlook — Stephanie Kelton

None of us should put too much stock into any long range economic outlook. But CBO’s economic outlook impacts its (baseline) budget projections, which matter for policymaking in all kinds of ways.

By assuming a gloomier economy—no growth, higher unemployment, stickier inflation, and more aggressive rate hikes in the near term (among other things)—CBO is telling lawmakers that projected deficits over the period 2023-2032 will be $900 billion higher than previously forecast (back in May 2022). Part of that jump is due to higher (revised up $295B) projected debt service over that period.

Keep this in mind, because I’m going to write more about rate hikes and their budgetary impacts in my next post....

The LensQuick 

Thoughts on CBO's Budget and Economic Outlook
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Contradictions within economic theory. All well known but still important and, I think, not taken as seriously as they should be. — Andrew Gelman

 Funny … and sad.

Sometimes it’s hard to talk about economists about this sort of thing because they get all defensive about it.

Statistical Modeling, Causal Inference, and Social Science

Contradictions within economic theory. All well known but still important and, I think, not taken as seriously as they should be.
Andrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University

The glossary is live — Richard Murphy

 New resource that complements Michael Hudson's Junk Economics.

Tax Research UK
The glossary is live
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

Two articles by Pepe Escobar about China and Iran

Iran turns East (along with Russia), forsaking former ambitions with the West after being rejected. China is waiting with open arms to take advantage of Kissinger's nightmare scenario now become a reality.

However, this is not a military alliance (yet) but rather an economic benefit for all sides, including other countries in the region, not the least of which is India, which will receive Eurasian resources through the New Silk Road (BRI) that is being developed, although the West is trying to disrupt it.

The Vineyard of the Saker
Two articles by Pepe Escobar about China and Iran
Pepe Escobar

Europe nat gas at 17 month low

 

Ok fixed the gas supply…. FTSE at all time highs and STOXX just shy of it….  ECB close to terminal rate… So now the drunk neo-Soviet commies are just left with their war… 

Futures have plunged by more than 80% from their August peak when Russia’s gas cuts hit Europe with about $1 trillion in energy costs, hammering the region’s economy and pushing inflation to the highest in decades. Now, the continent is seeing a sharp turnaround as relatively mild weather, efforts to reduce fuel consumption and strong inflows of liquefied natural gas from the US to Qatar take the edge off.

European gas falls below €50 as historic energy crisis recedes https://t.co/tonfJSip9E via @a_shiryaevskaya @MaznevaElena pic.twitter.com/sATNG0CGwD

— Zoe Schneeweiss (@ZSchneeweiss) February 17, 2023

PPI

 

2% cumulative over last 8 months … who cares… ofc Art degree monetarist zombies freaking out over their figure of speech “inflation!”… losers…

Inside Latin America’s new currency plan, with Ecuador’s presidential candidate Andrés Arauz — Ben Norton interviews Andrés Arauz

Video and transcript.

Geopolitical Economy Repor
Inside Latin America’s new currency plan, with Ecuador’s presidential candidate Andrés Arauz
Ben Norton interviews Andrés Arauz

Military Watch — NATO Turning to Target China? Western Alliance Developing Plan For Multiple Simultaneous Conflicts

On February 14 a high ranking NATO source, cited by Bloomberg, warned that NATO members were preparing plans for the alliance to involve itself in multiple conflicts simultaneously - including conflicts beyond its traditional areas of responsibility. During meetings in Brussels on February 14-15 NATO Defence Ministers will sign a classified guidebook containing plans of action for "high intensity" conflicts and conflicts "beyond the area of responsibility" of the alliance, which will include requirements for NATO members’ military investments. Members will additionally be directed to redirect investments to the sectors seen as most important for collective security - whether it be tank forces or missile defences - to strengthen the military bloc’s collective warfighting capabilities. The report comes as NATO members have not only increasingly involved themselves in the ongoing Russian-Ukrainian War, whether by dispatching hundreds of Marines to the battlefield as in Britain’s case, or providing even larger personnel contributions through private military contractor groups as was done by Poland among others. As Western intervention in the conflict has continued to increase, NATO members have also expanded their military footprints in the East Asia aimed at China - most recently in the form of aerial warfare drills involving the U.S., Britain and Australia.…

Military Watch Headlines
NATO Turning to Target China? Western Alliance Developing Plan For Multiple Simultaneous Conflicts

Editorial Staff

Also

This is not only against international law but also long tradition that regards an SOS call as paramount on the sea. I recall our US Navy vessel picking up an SOS call from a looong way away. Although we were unlikely to be be the closest ship, since it would take us several days to arrive at that point, the captain gave the order to change course immediately. Shortly thereafter it became clear that our held would not be needed so we resumed our previous course.

"SOS Humanity" is an apt title for this. Bad sign coming from the home of "Western values."

Pressenza

SOS Humanity: The new Italian law about search and rescue operations violates international and European law

Redazione Italia

RBA governor thinks massive bank profits are good while he wants unemployment to rise — Bill Mitchell

It’s Wednesday and a lot is going on. The RBA governor appeared before the Commonwealth Senate Estimates Committee today and demonstrated what a troglodyte he is, defending massive bank profits and deliberately trying to cause unemployment. Meanwhile, US data shows that inflation has peaked and is now falling. The pace of the deceleration is picking up. Meanwhile – MMTed – is active and our 4-week course began today (see details below) and we are helping a new radio show to launch next week – Radio MMT. And we cannot go a Wednesday without some great music. All in a day....

William Mitchell — Modern Monetary Theory

RBA governor thinks massive bank profits are good while he wants unemployment to rise

Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

FTSE

FTSE keeps making new all time highs… hard to understand vs US stocks which remain discounted ….  🤔

BOE has been significantly increasing UK risk free rate also…

One difference between the US and UK systems is that BOE never did very much QE in the first place and perhaps more importantly doesn’t count BOE liabilities to UK banks against the banks regulatory total asset constraints…

May be allowing UK banks to apply higher prices to these financial assets vs. otherwise…

New Paper: Rethinking Supply Constraints — JW Mason

I have a new paper on how we conceptualize the supply side of the economy, coauthored with Arjun Jayadev. I presented a version of this at the Political Economy research Institute in December 2022. You can watch video of my presentation here — I come on, after some technical difficulties, around 47:00. (The other presentations from the conference are also very worth watching.) The paper will be published in the upcoming issue of the Review of Keynesian Economics. (The linked version is our draft; when the published version comes out I’ll post that.)

Our fundamental argument is that while macroeconomic supply constraints are normally conceptualized in terms of a level (or level-path) of potential output, in many contexts it would be better to think in terms of a constraint on the rate of change — a speed limit rather than a ceiling.…

J. W. Mason's Blog

New Paper: Rethinking Supply Constraints
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

Pavlina Tcherneva — Frequently Asked Questions About the Job Guarantee

Cheat sheet on the MMT JG. Useful reference.

Pavlina Tcherneva
Frequently Asked Questions About the Job Guarantee
Pavlina Tcherneva | Associate Professor of Economics at Bard College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability

Devolution or Decapitation? Decentralization and the War in Donbas — Elliot Dolan-Evans

More neoliberalism gone bad.

Overall, the main takeaway is that decentralization is not a silver bullet that occurs in an abstract environment. As in other contexts, decentralisation can worsen problems when pursued within insecure environments, where people are already marginalised and/or elite capture is rife, as in Ukraine. Despite promises that decentralization in Ukraine would reduce oligarchic power and empower marginalised groups, it seems these aims have not been met and may now, post-reform and with the 2022 Russian Invasion, be even more difficult to achieve. For Ukrainian decentralization to meet its laudatory aims, concurrent fundamental structural change must dismantle elite patrimonial-criminal nexuses, bring political and economic power to regular and marginalised Ukrainians, and unravel violent capitalist relations.

Progress in Political Economy (PPE)

Devolution or Decapitation? Decentralization and the War in Donbas
Elliot Dolan-Evans

Climate Change Is Shifting Voter Behavior in Low-Income Countries — Amrit Amirapu, Irma Clots-Figueras, Juan Pablo Rud

Farmers in low-income countries have multiple channels through which they respond to climate change. Some switch to growing more heat-resilient crops or crops that require less water. Others migrate or leave agriculture altogether. In new research, Amrit Amirapu, Irma Clots-Figueras, and Juan Pablo Rud find that temperature shocks to agricultural production in India increase voter turnout in rural areas and push rural voters to elect candidates who are on average poorer, less tainted by corruption, and have a background in agriculture....

A growing academic literature documents how farmers in low-income countries respond to the harmful effects of extreme heat on agricultural production. In many cases, farmers can change the way they produce, by using more land or labor or by switching crops. They can also try to move out of agricultural activities, sell assets, or migrate. Alternatively, citizens in rural areas may look to change the political and economic institutions that they deem are not taking their concerns seriously enough, sometimes leading to conflicts in response to adverse shocks..…

Promarket

Climate Change Is Shifting Voter Behavior in Low-Income Countries
Amrit Amirapu, Irma Clots-Figueras, Juan Pablo Rud

Will China Dump Its Dark Deal with America? — Yanis Varoufakis

A new cold war is upon us, but only China is in a position to push it beyond the point of no return. That moment will come when China’s policymakers cross the Rubicon and decide to wean Chinese economic growth off the US trade deficit.

Interesting article about the symbiotic relationship and the changing conditions that threaten it. One of these factors is the development of the Chinese economy beyond the point that the Americans that entered into the deal foresaw.

Yanis Varoufakis points out, correctly in my view, that neither side wants to end this "dark deal" since it is highly beneficial to powerful interests in both countries. But US attempts to undermine China's development and challenge it militarily through creation of a "Pacific NATO" may force its closure. 

YV doesn't explore the ramifications of this but they would be considerable for both sides as well as the world, since it affects global trade and therefore impacts the global economy. This is coming sooner of later since it is the natural course of development, but it looks to me like it is coming sooner than later. China is already taking steps to prepare for it and has for some time, just as Russia acted to increase self-sufficiency as a result of sanctions.

Project Syndicate
Will China Dump Its Dark Deal with America?
Yanis Varoufakis

One Weird Trick That Neoclassical Economists Hate! — Brian Romanchuk

Blair Fix caused a bit of a stir last week on economics Twitter with a cleaned up version of the above chart taken from his article on interest rates and inflation. My chart is a scatter plot of the U.S. annual CPI inflation rate versus the effective funds rate, from 1954-2022. The blue line is the best linear fit of the two variables. The “linear model” suggests that inflation is an increasing function of the nominal interest rate.

Blair was met with a predictable howl of indignation on Twitter. Why predictable? The belief that higher interest rates reduce inflation (with a technical twist I note below) is pretty much enshrined as an assumption in neoclassical economics. (I use “neoclassical” as a fancy-pants word to describe “mainstream academic economics,” as “mainstream” is somewhat ambiguous if we are not referring to academia.)

Although the firestorm of indignation the article created was fun and if I had any commercial sense I would pile into it (and I did in the past). However, I have gotten more boring as I have aged. The real answer is that “things are complicated.”

It's the methodology, stupid. As usual.

Bond Economics
One Weird Trick That Neoclassical Economists Hate!
Brian Romanchuk

Degrowth, food and agriculture—Part 6 — Bill Mitchell

This is Part 6 of a series on Deep Adaptation, Degrowth and MMT that I am steadily writing. I have previously written in this series that there will need to be a major change in the composition of output and the patterns of consumption if we are to progress towards a sustainable future. It will take more than cutting material production and consumption. We have to make some fundamental shifts in the way we think about materiality. The topic today is about consumption but a specific form – our food and diets. Some readers might know that there has been a long-standing debate across the globe on whether a vegetarian/vegan diet is a more sustainable path to follow than the traditional meat-eating diet. Any notion that the ‘meat’ industry is environmentally damaging is vehemently resisted by the big food corporations. Like anything that challenges the profit-seeking corporations there is a massive smokescreen of misinformation created to prevent any fundamental change. New research, however, makes it clear that we can achieve substantial reductions in carbon emissions by abandoning meat products in our diets and the gains are disproportionately biased towards the richest nations. I have long argued that I find a fundamental contradiction in those who espouse green credentials and advocate dramatic behavioural shifts to deal with climate change while a the same time eating meat products. The recent research supports that argument. So Greenies, give up the steaks and the chickens and get on your bikes and head to the greengrocer and start cooking plants....

It looks to me like any serious attempt to address climate change through lifestyle changes and especially anything that is perceived as reducing the standard of living is DOA unless government mandates it. This would be extremely unpopular and probably politically suicidal so it is unlikely to happen and if it happens it is unlikely to stick across elections when the new measure begin to bite. 

In addition, business is opposed to anything that reduces profits. 

Furthermore, without international cooperation, the level of change required is beyond reach and at present international cooperation is off the table as countries compete for resources to maintain lifestyle and developing countries to increase the living standard as well.

One way to address issues like climate change, pollution that are all externalities is to impose true cost accounting so that market prices reflect true cost inclusive of externalities. This would act like a tax in dampening demand but it would be selective based on market prices. There are also challenges in the way of such an approach and the same forces would work to render it ineffective.

What would it take to surmount such obstacles. Probably disaster threatening civilization as a wake-up call. Predictions of looming disaster is not doing it yet.
 
William Mitchell - Modern Monetary Theory
Degrowth, food and agriculture – Part 6
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Eight States Have Joined Forces to Raise Taxes on America's Wealthiest — Stephanie Kelton

Unlike the federal government, individual states really do need to “find the money” to pay for their spending. And since more than 60 percent of the nation’s wealth resides in these states, it’s easy to see why lawmakers have focused on their high net worth residents.

The Lens
Eight States Have Joined Forces to Raise Taxes on America's Wealthiest
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Ford and Edison, the anti gold bugs — Steve Keen

I guessed that most people would think that industrialists like Ford and Edison were opposed to fiat money, and in favour of "sound money"—money backed by gold or some other commodity. As this post will show, that is a false belief. These two industrialists were outright fans of fiat money—money created by the government—and critics of both the gold standard and, to some degree, private bank-created money as well./.…

Building a New Economics
Ford and Edison, the anti gold bugs
Steve Keen

China’s ‘Bismarck’ moment is finally afoot — William Pesak

Ambitious social security and health care reforms aim to coax the masses into saving less and consuming more   

This could be big. Saving preference is inversely proportional to consumption preference. Saving reduces consumption spending, that is, demand. Low consumption to investment and low domestic to external are a major factors holding the Chinese economy back from expansion. 

Even the IMF is recommending a version of this — from the neoliberal perspective, of course. But China has its own plan in the works. Hopefully, it will be more welfare-oriented than stimulative-directed. 

Well targeted, that is, welfare-oriented, this kind of program would also be a factor in stabilizing China's population and reversing the present decline that will adversely affect growth over time absent offsetting increases in productivity — which is one factor in China's emphasis on innovation.

This would also make China more self-sufficient, and it is likely that China is observing Russia's demonstrated success in achieving this.

Asia Times 

China’s ‘Bismarck’ moment is finally afoot

William Pesak  

The Ultimate Resource is Peaking — Charles Kenny

Human resources (qualified people). This is a failure of education.

Download PDF.

Center for Global Development

The Ultimate Resource is Peaking 

Charles Kenny

Bill Mitchell — (in the future: William Mitchell - Modern Monetary Theory) Administrative update: My blog has a new home

I have finally moved my blog and integrated in within my long-standing home page. The new blog address is – http://www.billmitchell.org/blog – although the old address will work forever. However, I do urge you to update your bookmarks to the new address....

Bill Mitchell – billy blog (in the future:  William Mitchell - Modern Monetary Theory)

Administrative update: My blog has a new home
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Do Interest Rate Hikes Worsen Inflation? — Tim Di Muzio

Weekend reading on monetarism and its woes. Lots of data.

Strange Matters
Do Interest Rate Hikes Worsen Inflation?

Tim Di Muzio is an Associate Professor in International Relations and Political Economy at the University of Wollongong, Australia.

Economics from the Top Down
Do High Interest Rates Reduce Inflation? A Test of Monetary Faith
Blair Fix

I am going on a wilderness survival training course

Next weekend, I will be doing this wilderness survival training course in Granite Falls, WA. These are skills I want to learn. Still some space available if you want to join me.

After I do this, I would like to organize a Mike Norman Economics, MMT, outing of the same kind of physical, mental and emotional test. Who would be up for it?

Amartya Sen’s Work Shows Us the Human Cost of Capitalist Development — Benjamin Selwyn

What happens when capital (ownership, property accumulation, "growth") is favored over the other factors of production, labor (workers, people, welfare) and land (the environment, ecology).

Developing Economics 
Amartya Sen’s Work Shows Us the Human Cost of Capitalist Development
Benjamin Selwyn, professor of international relations and international development at the University of Sussex.

Related

Tax Research UK
Anyone who seriously thinks GDP measures prove that the country is succeeding economically is seriously economically deluded

GDP

Flatlining
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

National Currencies: it is happening! — amarynth

• First, the Euro is getting to be completely excluded in Russia
• Second, the use of national currencies through BRICS is moving ahead
• [Third], the Brazilian Central Bank and the People’s Bank of China signed a memorandum of understanding allowing bilateral trade IN YUAN for Brazilian and Chinese companies, investors, and institutions

Global South
National Currencies: it is happening!

amarynth

The Big Stiff: Russia-Iran dump the dollar and bust US sanctions — Pepe Escobar

News of Russian banks connecting to Iran’s financial messaging system strengthens the resistance against US-imposed sanctions on both countries and accelerates global de-dollarization.

The Cradle
The Big Stiff: Russia-Iran dump the dollar and bust US sanctions

Pepe Escobar

See also

“One factor that could well be keeping the gold price so supported is the strength of buying from central banks, including those in China, India and Turkey. As these fast-growing economies look to diversify away from the hegemony of the US dollar, these banks have bought considerable volume last year with that trend expected to continue into this year.”

Oilprice

Central Bank Buying Spree Lifts Gold Prices

City AM

Related

The buying coming from China is in preparation for war – not bullish gold for the sake of gold.… 

They know war is coming and they can no longer maintain their reserves in dollars, euros, or yen no less than anyone else in the West – it all must go! Gold offers a non-political affiliation – neutrality. This is not buying gold as if it were an investment. We have completely different motives going on. Our own model warns that by 2032, there will be no United States acting as the reserve currency. The Biden Administration has done everything perfectly to destroy the world economy and the sad part about it, these morons do not even understand what they have done.

Armstrong Economics

China Buying Gold for a Very Important Reason
Martin Armstrong

Bill Mitchell – Central banks accounting losses are rising but are of no importance to anything important

There are regular interventions from commentators over time who repeat the same thing over and over – usually some prophesy that a currency (for example, the Yen or the USD) will collapse soon, and life goes on until they come out with the same predictions, which never turn out. The mainstream media loves to give these characters a platform because the headlines are sensational and I guess that sells ‘units’ for the companies. The latest I saw was from Mr. Roubini in the Financial Times, who has been predicting the collapse of the USD regularly. Time to give him a miss I think. A related topic of hysteria that ordinary folks seem to get agitated about but clearly don’t understand even the first principles involved is the old canard – central bank losses. This gets a little more abstract for most relative to the Roubini-type currency collapse headlines but the mainstream press still manage to whip up a doom scenario that somehow the central bank is about to go broke and governments will have to bail them out and taxes and debt will rise, and, somehow, ultimately, our grandchildren will find themselves in penury trying to pay back the debts our current governments ran up. A recent Bank of International Settlements Bulletin article (No. 68)- Why are central banks reporting losses? Does it matter? (released February 7, 2023) – bears on this issue. Conclusion: nothing to see here....

Bill Mitchell – billy blog
Central banks accounting losses are rising but are of no importance to anything important
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — RBA loses all credibility with further interest rate increases

Yesterday, the Reserve Bank of Australia lifted the interest rate target for the ninth consecutive time (they didn’t meet in January) claiming that they had to do this to stop inflation accelerating and restoring price stability. Except inflation already peaked in the March-quarter 2022 as a result of the driving factors abating. Further, none of the major driving factors are remotely sensitive to domestic interest rate movements. The RBA’s excuse is that there are dangerous domestic demand pressures that need to be curtailed. Except the evidence for that claim is lacking. Most of the demand measures are in retreat. So what gives? Well there is a massive income redistributing being engineered by the RBA from poor to rich and if they keep going unemployment will certainly rise, in part, because the lame Australian government is claiming it has to engage in fiscal restraint to ensure the RBA doesn’t hike rates even more than they are. It would be comical if it wasn’t damaging the prosperity and solvency of tens of thousands of the most vulnerable Australians. Disgraceful.

Bill Mitchell – billy blog
RBA loses all credibility with further interest rate increases
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

GOP policy

GOP sees higher rates and higher taxes as the enemy… 

Cuts to Medicare and Social Security are off the table.

Defaulting on our debt is not an option.

But neither is a future of higher taxes, higher interest rates, and an economy that doesn’t work for working Americans. pic.twitter.com/KhLEEhaNNx

— Kevin McCarthy (@SpeakerMcCarthy) February 6, 2023

 

Democrats = Higher taxes + higher interest rates… GOP = lower taxes + lower interest rates

Inflation Index Calculation Basics — Brian Romanchuk

There are three main steps needed to calculate a consumer price index.

• Determine weightings based on consumption.
• Go out and measure prices in the economy.
• Aggregate the measured prices into sub-indices which are in turn aggregated into an overall price index.

Statistical issues ensue.

Bond Economics
Inflation Index Calculation Basics
Brian Romanchuk

Lowering inflation isn’t a job for a one-trick pony — Yeva Nersisyan

Op-ed by MMT economist Yeva Nersisyan.

The Hill
Lowering inflation isn’t a job for a one-trick pony

Yeva Nersisyan | Associate Professor of economics at Franklin and Marshall College

Reuters — Saudi minister warns sanctions, underinvestment may cause energy shortages

In response to a question on how the sanctions environment would affect the energy market, bin Salman told an industry conference in Riyadh: "All of those so-called sanctions, embargoes, lack of investments, they will convolute into one thing and one thing only, a lack of energy supplies of all kinds when they are most needed".

Reuters
Saudi minister warns sanctions, underinvestment may cause energy shortages

Related

Europe was forced to abandon [cheap] long-term contracts and make the transition to [expensive] spot-based pricing/

TASS (Russian state media)

EU completely loses access to cheap and reliable energy resources of Russia — Rosneft CEO

The Economics of the Ukraine Proxy War with Michael Hudson and Radhika Desai — Danny Haiphong interviews Michael Hudson and Radhika Desai

Video and transcript. The video is from  4 days ago. The transcript takes a couple of days to prepare.

Naked Capitalism
The Economics of the Ukraine Proxy War with Michael Hudson and Radhika Desai

Danny Haiphong at the Left Lens channel interviews Michael Hudson and Radhika Desai

Forecasting a recession with construction data — Philip Pilkington

Forecasting recession for the end of year unless construction data reverses. Single variable thinking based on one key factor only, or is he onto something?

Macrocosm
Forecasting a recession with construction data

Philip Pilkington

See also

Amid labor-supply constraints and economic shocks, the case for productivity-boosting interventions is clear. Unless US policymakers use a combination of investment and incentives to reverse negative productivity trends, the US will achieve modest growth, at best.…

Project Syndicate

America’s Widening Productivity Gap
Michael Spence

Jeffrey D. Sachs – The New Geopolitics

Geopolitics, the global economy, and the future. Longish but important. 

Brave New World
Jeffrey D. Sachs – The New Geopolitics

Jeffrey D. Sachs | University Professor and Director of the Center for Sustainable Development at Columbia University, where he directed The Earth Institute from 2002 until 2016. He is also president of the U.N. Sustainable Development Solutions Network and a commissioner of the U.N. Broadband Commission for Development. He has been adviser to three United Nations secretaries-general and currently serves as an SDG advocate under Secretary-General Antonio Guterres.

Strong US labour market results – further evidence that mainstream monetary theory is flawed — Bill Mitchell

Well, things are getting interesting in the US. The Federal Reserve started hiking interest rates in April 2022 and its decisions are underpinned by an theoretical framework that suggests the unemployment rate is below what it thinks is the natural rate (the rate where inflation is stable). So the rate hikes are meant to slow spending and increase the unemployment rate and cause price setters to stop accelerating prices up. Except the data isn’t obeying the theory and inflation is falling despite the rate hikes rather than because of them. This is another demonstration of how flawed the dominant mainstream economics has become. Last Friday (January 3, 2022), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – January 2023 – which revealed on-going and very robust employment growth, rising participation and falling unemployment. These are good signs for American workers. Further, as inflation is now in decline, most sectors recorded both modest nominal wages growth is some real wages growth – another virtuous sign. The latest data is certainly not consistent with the Federal Reserve type narratives. The point is that the labour market is not behaving at all like the assumed model deployed by the Federal Reserve....

Bill Mitchell – billy blog
Strong US labour market results – further evidence that mainstream monetary theory is flawed
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

China spy balloon

 

MNE dispatched its roving reporter to the Atlantic coast today to cover the shoot down of the China spy balloon here is the footage:

Our reporter on the scene heard 2 explosions… This may have been an initial miss:

Then this might have been the hit:

1 points to the China spy balloon and might be the location of the hit … 2 might be the area of an initial miss… and 3 is the interceptor aircraft exiting the space to the south…

MNE can report we last saw it deflated and falling slowly towards the ocean right off South Carolina coast…hopefully the US Navy can fish it out and we can figure out what it was doing…

James Galbraith — The Quasi-Inflation of 2021-2022—A Case of Bad Analysis and Worse Response

Pandemic stimulus not the cause. Fed runs its accustomed playbook to screw labor and reward capital based on junk economics.

Naked Capitalism
James Galbraith: The Quasi-Inflation of 2021-2022 – A Case of Bad Analysis and Worse Response
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin

Originally at INET

Danger Ahead: Mike Pence Would Pick Up Where Paul Ryan Left Off — Stephanie Kelton

Same old, same old. The push for repeal began with the passage of the New Deal and the push won't end until it is repealed or effectively neutered by privatization. The push for austerity of which this is just a part risks another depression, and some would argue that it guarantees it.

The Lens
Danger Ahead: Mike Pence Would Pick Up Where Paul Ryan Left Off
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Utopia or Bust — Brad DeLong

What's next. Brad DeLong makes some observations and poses some questions. He suggests that the answers the future will provide are dialectical, that is, an attempt to deal with the various facets these questions suggest. The outcomes, yet to be determined, will be the results of political struggles.

It is a usual piece to provoke thinking but it is too short and summary to include all the relevant factors. After all, the world system is a complex adaptive system with many gears and these issues are, as hie points out, age-old. They now appear in a new form.

Where I think he is right is in saying to forget the utopian thinking. We are back to the old slog, arguing over production-distribution-consumption based on self-interest. What is needed to break out of this endless cycle is a rise in collective consciousness at the individual level sufficient to raise the quality of the culture and various institutions, here especially those that sit on the commanding heights of the world economy.

This is what the US-led "rules-based order" for organizing the world system is advertised as providing, but under it the increase of inequality of income and wealth has gone exponential. De-globalization in response is not unexpected.

 
Project Syndicate
Utopia or Bust

Brad DeLong | Professor of Economics, UCAL Berkeley

The Strong Conflict Between Human Behavior and Economic Theory — Asad Zaman

Over the past century, the theory that rational behavior involves maximization of utility has become central to Economic theory. In economics, this theory is established on axiomatic grounds, and supported by intuitions and speculations. However, When psychologists examined this theory of behavior by carrying out actual experiments on human behavior, they found that the theory leads to wrong predictions in many examples. By now, an overwhelming amount of evidence has emerged to show the strong conflict between economic theories of human behavior and actual behavior; a survey of is given in “Empirical Evidence Against Neoclassical Utility Theory: A Survey of the Literature,” This post provides the details of this conflict in one example taken from the paper, where four major predictions of economic theory are all in direct conflict with the experimental evidence.…

Values are non-rational but not irrational either. Values are the ultimate criteria of individuals, societies, and cultures. They shape worldviews. Worldviews justify what is accepted as "rational." Values provide specific criteria for judgement.

Some values are socially determined while the most fundamental ones are natural in the sense of common to humans and seem to emerge from the evolutionary process, for example, reciprocity and fairness. All wisdom traditions, some of which are instantiated in the various religions, have some version of "the golden rule."

The problem with conventional economics in this regard is that economic rationality is conflated with human rationality when the former is a subset of the latter. Thus, the empirical disconfirmation of the economic theory of value extended to value theory and theory of action. It is fallacy of overgeneralization, and logical fallacies are failures of reason.

Incidentally, this is another indication of the conflict between (bourgeois) liberalism (in which economic liberalism dominates over social and political liberalism) and most forms of traditionalism. Western liberalism is chiefly bourgeois liberalism; it is not surprising that most conventional economists fall into the trap of overgeneralization regarding "rational choice."

An Islamic Worldview
The Strong Conflict Between Human Behavior and Economic Theory
Asad Zaman | Vice Chancellor, Pakistan Institute of Development Economics and former Director General, International Institute of Islamic Economics, International Islamic University Islamabad

A simple way Biden could stop this drama and ignore the debt limit — Zachary B. Wolf

Robert Hockett proposes essentially the same solution that I have recently — ignore the debt ceiling it is invalid legally.

Hockett: The budget is its own debt ceiling.…

We don't need gimmick vs. gimmick when we have budget law

WOLF: What about the other ideas to get past the debt ceiling? Trillion dollar coins and such?

HOCKETT: The wonderful thing from my point of view here is we don't need any of those gimmicks. We just have a little garden-variety budget law on our side, and so we don't really have to resort to anything kind of unusual or surprising or gimmicky..…

Kake News
A simple way Biden could stop this drama and ignore the debt limit
Zachary B. Wolf, CNN interviews Robert Hockett, a law professor at Cornell University who specializes in public finance and consults for the International Monetary Fund and the Federal Reserve Bank of New York

Revolver: Sorry Zero Hedge, For Better or Worse the US Dollar Will Remain the King of Currencies

Nice troll of the dumb ZH monetarists… 

Revolver people:

It is the empirical fact of apparently lucrative borrowing in one’s own currency over the last thirty years that underlies the Biden administration’s confident experiments in fiscal irresponsibility. If you talk to intelligent economists who endorse “Modern Monetary Theory,” you often find that it boils down to the above fact and does not contribute a single new insight that would justify the Biden administration’s recent fiscal choices. Nonetheless, unemployment is falling, real wages are only falling slowly, and the U.S. appears in no risk of a depreciation-driven debt crisis).

Sorry Zero Hedge, For Better or Worse the US Dollar Will Remain the King of Currencieshttps://t.co/zTB9HgqKPa

— Darren J. Beattie 🌐 (@DarrenJBeattie) February 2, 2023

The tl;dr on Powell — Stephanie Kelton

The coin.

The Lens
The tl;dr on Powell
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders