Moon of Alabama — China's 'Shared Future'

China's new policy paper on a multipolar world.

Moon of Alabama
China's 'Shared Future'

US wealth distribution – fiscal policy increases private net worth but the poor miss out — Bill Mitchell

I read an interesting report this morning, which resonated with some other work I had been looking into earlier in the week. The Australian Council of Social Services (ACOSS) released a report yesterday (September 27, 2023) – Inequality in Australia 2023: Overview – which shows that “The gap between those with the most and those with the least has blown out over the past two decades, with the average wealth of the highest 20% growing at four times the rate of the lowest”. It is one of the manifestations of the neoliberal era and is ultimately unsustainable. Earlier in the week, I spent some time analysing the latest data from the US Federal Reserve on the distribution of wealth among US households. The US data goes a long way to explaining why the recent interest rate hikes have been inflationary in themselves.

As an aside, one of the characteristics of neoliberalism that is not often recognised is the way in which it has created schizoid welfare institutions – where key organisations that deliver or advocate for improved safety nets or poverty relief adopt internally inconsistent positions without, seemingly, knowing it.…

William Mitchell — Modern Monetary Theory

US wealth distribution – fiscal policy increases private net worth but the poor miss out
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also

Economics from the Top Down — new ideas in economics and the social sciences
How the Rich Get Richer

Blair Fix, a PhD-trained political economist based in Canada, author of the book Rethinking Economic Growth Theory from the Biophysical Perspective, and self-described "economic heretic"

War of Economic Corridors: the India-Mideast-Europe ploy — Pepe Escobar

 The India-Middle East-Europe transportation corridor may be the talk of the town, but it will likely go the way of the last three Asia-to-Europe connectivity projects touted by the west - to the dustbin. Here's why.…

The Cradle
War of Economic Corridors: the India-Mideast-Europe ploy

Pepe Escobar

Challenges to the strong golden rule: MMT and bond market paranoia — Simon Wren-Lewis

SWL is still caught in the monetarist fallacy. 

MMT has two arguments against the golden rule, which I will call reasonable and unreasonable. The unreasonable argument is that interest rate increases do not reduce aggregate demand and inflation, and therefore fiscal policy has to play the macro stabilisation role at all times. It is an unreasonable claim because it contradicts the large amount of evidence that higher interest rates do reduce aggregate demand and inflation, evidence that you will find in the academic economic literature.

Those who watch Mike Norman's YouTube channel, which is MMT-based financial analysis, will find evidence presented that contradicts this.

Mainly Macro
Challenges to the strong golden rule: MMT and bond market paranoia
Simon Wren-Lewis | Emeritus Professor of Economics, Oxford University

Trump is Fighting an American Class War – and Winning — Joel Kotkin

 The most important political event this week will not be the upcoming GOP debate but Donald Trump’s expected visit with striking UAW workers as the walkout expands to other states. In that one appearance, Trump demonstrates one of the most critical parts of political change, the emergence of the populist right.…

Once hostile to unions, Republicans like Florida’s Senator Marco Rubio, Ohio’s JD Vance and Missouri’s Josh Hawley have all pledged support to the strikers. Union-affiliated Democrats may find this “laughable,” but perhaps not so amusing on election day. Certainly, Biden is doing his best to expand his working-class base. 

The rest of the article is about how workers have been disadvantaged by Democratic economic policy. This began in the Clinton administration when Bill Clinton followed Dick Morris's advice to "triangulate," which meant essentially shifting the focus of the Democratic Party away from the New Deal, with its support for labor, following political losses as a result of the Gingrich revolution in the GOP.  Now the GOP is aiming at pick up the labor vote.

In other words, the demographics of the US are shifting politically in a way that challenges old stereotypes.

Newgeography.com
Trump is Fighting an American Class War – and Winning
Joel Kotkin

Remembering Jim Crotty — JW Mason

Perhaps the most distinctive aspect of Jim’s pedagogy and scholarship, almost alone among economists we have known, was his ability to synthesise these two thinkers in ways that gave equal weight to both, that placed them in conversation rather than in tension. Crotty’s Marx anticipates Minsky, while his Keynes is a political radical – a socialist – in ways that few others have recognized.

Perhaps his most profound contribution to both traditions was the brilliant 1985 article “The Centrality of Money, Credit, and Financial Intermediation in Marx’s Crisis Theory” (Crotty 1985). There, he developed the idea that the Marxian vision of capitalist crises could only be understood in terms of the development of the credit and the financial system – that it was only via financial commitments that a fall in the profit rate could lead to an abrupt crisis rather than just a slower pace of accumulation. His reconstruction of a vision of the credit system that may either dampen or amplify disruptions to the underlying process of production suggests that Marx anticipated the ideas about financial fragility later developed in the Post Keynesian tradition. With a critical difference: While Minsky has finance calling the tune, in the Marx-Crotty version the ultimate source of instability is in the real world of labor and capital.

J. W. Mason's Blog

Remembering Jim Crotty
JW Mason | Associate Professor of Economics at John Jay College, City University of New York and a Fellow at the Roosevelt Institute

At Least It's Not As Bad As 1994 — Brian Romanchuk

The current Treasury bear market has been impressive, and unfortunately for the bond bulls, there is no valuation reason for it to stop. For example, the 5-year Treasury is still trading well below the overnight rate. If we look back to the 1994 bond bear market, the 5-year traded about 250 basis points above cash — versus about 100 basis points below now.

The explanation for this disparity can be pinned on the Fed reaction function....

Bond Economics

At Least It's Not As Bad As 1994

Brian Romanchuk

Trump up 10% over Brandon

 

If this thing holds Trumps going to immediately slash rates in half on day 1 in January 2025… lock it…

Meanwhile all the Art degree morons are all going around saying “ the Fed is independent! … the Fed is independent!…. the Fed is independent!”  

It will end badly if we rely on the speculators and gamblers for a climate change solution — Bill Mitchell

I am now in a very hot and humid Kyoto having left Australia yesterday in weather that was in some places 20 or more degrees Celsius above the norm for early Spring. The heat here and back home at this time of year is rather scary given what it portends. I also do not have much time today given I have been contending with various ‘moving in’ requirements. But I read an article on the plane last night which I think marks a divide between what ‘green’ progressives think and what I think is needed. I was talking to a friend the other day who remarked he was enduring what he termed ‘ecological anxiety’. In the week that followed, bushfires across Australia have started burning some months earlier than has been the typical pattern over a long period. There are massive ‘weather’ events now all around the globe and it is becoming increasingly difficult for the sceptics to dismiss these conjunctions as random or ‘we just haven’t had data long enough’ type ruses. Some ‘green progressives believe the solution lies in governments inducing the financial speculators to shift funds into ‘green’ investments so that profitability can be safeguarded. They also believe that governments will get more money to invest this way (through providing inflation-indexed sovereign bonds). Talk about a vision for increased corporate welfare. My starting point is that we should do everything possible to keep the speculators out of our policy moves to decarbonise. It will end badly if we rely on the gamblers for the solution.

William Mitchell — Modern Monetary Theory
It will end badly if we rely on the speculators and gamblers for a climate change solution
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

MMT Money Story - Print and Shred Edition — NeilW

Print and Shred is how the system works. All modern monetary systems work this way, no matter how much they try and hide the fact.

The MMT money story explains where the ‘why not print more money’ idea falls over. The government only prints more money to buy more stuff..…

New Wayland

MMT Money Story - Print and Shred Edition
NeilW

Trump bemoans high interest rates and indicates he might pressure Fed to lower

 

CNBC here…

Again politics.. You knew this was coming.. can’t wait to now watch all the political biased leftist MMT people flip and join with the monetarist morons and start to advocate for higher interest rates in response.. wait for it…

“Interest rates are very high. They’re too high. People can’t buy homes. They can’t do anything. I mean, they can’t borrow money,” Trump told MTP host Kristen Welker

Using the platform formerly known as Twitter, Trump often berated Fed officials, once calling them “boneheads,” and compared Powell to “a golfer who can’t putt.” Those remarks came while the Fed was raising interest rates in 2018 and 2019.

 

“We do know that I put a lot of pressure on him,” Trump told Welker. “It was outside pressure, because nobody knows whether or not you can really do that, but I did, because I thought his interest rates were too high. And he ultimately dropped his interest rates.”

Politics

 

Agree with Ehnts here but if you listen to 99% of the MMT commie Art degree or no degree left the current most regressive economic outcome I’ve ever experienced in my adult life is allegedly the result of improper technocracy by the monetarist morons in the academe…

LOL can’t be both!  Which one is it? 🤔

In Vladivostok, the Russian Far East rises — Pepe Escobar

Russia's pivot to the Far East, and away from the West.

The Cradle
In Vladivostok, the Russian Far East rises
Pepe Escobar

Oldest employed Americans have left the workforce never to return

Here for you left wing commie Art Degree MMT dumb fucks:

 S&P Global Market Intelligence 

Oldest employed Americans have left the workforce never to return

The oldest workers in the US labor force, edged out during the pandemic by retirements and health concerns, are unlikely to ever return, potentially ending a decades-long trend amongst working seniors in America and contributing to the ongoing imbalance in the jobs market.

Doesn’t have anything to do with whether your fellow Art degree morons think money is real and we can run out of it as usual… Senior cohort of productive workers being somehow disincentivized to work compared to previous..

MMT “brain trust” (I use that term loosely) somehow blaming their current figure of speech “inflation!” on government’s policy risk free interest rates…

Their as bad as their fellow Art degree monetarists…

Capitalist wants government to drive up unemployment by 40-50 per cent and inflict more ‘pain in the economy’ on workers — Bill Mitchell

Two items this Wednesday before the music segment. First, we saw the stark ideology of the elites on full display in Sydney yesterday with a property developer demanding the government increase unemployment by 40-50 per cent to show the workers that the employer is boss and redistribute more national income back to profits. For anyone who doubts the relevance of a framework based on underlying class conflict between labour and capital, then this outburst should eliminate those doubts. On the same day, a leading research group in the welfare sector released an update in their series tracing poverty in Australia. It demonstrated a rising incidence of poverty (nearly 20 per cent of the population) and 1 in 6 children living in impoverished conditions. And the profit takers want more of that to enrich (engorge) themselves even further. A shocking indictment of what has gone wrong with this nation....

While this may seem shocking to some, it is just the way the system works based on its foundational assumptions. Capitalism favors capital (ownership) over labor (people) and land (environment). The purpose of capitalism is the accumulation of capital, the argument being that growing capital increases growth and growth "trickles down" and "lifts all boats. The environment is assumed to be an infinite resource for growth. 

So nothing surprising about this attitude. It's the way the system is structured. According to economic liberalism, optimal growth results from agents pursuing their own interests maximally, which is assumed to be rational economic behavior. 

Economic liberalism favors markets free of government intrusion, whereas neoliberalism promotes growth by governments favoring capital as an economic factor

.

William Mitchell — Modern Monetary Theory
Capitalist wants government to drive up unemployment by 40-50 per cent and inflict more ‘pain in the economy’ on workers
Bill Mitchell |rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also

The details and commentary from another Aussie.

“We need to remind people that they work for the employer, not the other way around. We need to see unemployment rise, unemployment has to jump 40–50 percent.”

CaitlinJohnstone.com

Wealthy Capitalist Accidentally Makes Great Argument For Revolution

Caitlin Johnstone 

Russia And China Channeling Hamilton — Mark Wauk

Read the remarks of Glenn Diesen, Professor at the University of South-Eastern Norway, and Editor at Russia in Global Affairs, about how Russia and China are now following the Hamiltonian plan of the American System or National System, later developed by economist Friedrick List. In other words, these countries are not doing what the nascent US did when breaking away from the British Empire, which was not only political and military but also economic and financial. And the ROW is watching.

Diessen also sees Central Bank of Russia head Elvira Nabiullina as a key player in implementing this plan rather than as the neoliberal she is usually viewed as.

Meaning in History
Russia And China Channeling Hamilton
Mark Wauk, retired FBI agent

See also

 Wallerstein’s first breakthrough came during his experiences in Africa during the process of “decolonization,” where he became aware that young militants in Africa possessed a conceptual framework that was entirely at odds with that of Europeans resident in Africa, a framework in which the African militants defined their reality as a “colonial situation.”  This awareness led Wallerstein to appreciate that a correct understanding must be based in a grasping of the colonial relation between Europe and Africa, which required moving beyond the assumption that society is the correct unit of analysis and moving toward the establishment of the world-system as the correct unit of analysis.…

Knowledge, ideology, and real socialism in our times

The World-Systems Perspective [of Immanuel Wallerstein]- An alternative, incomplete in its formulation and implementation

Charles McKelvey, Professor Emeritus at Presbyterian College in Clinton, South Carolina, author of The Perspectives of The Colonized (Palgrave)

See also

De Gaulle said: “France’s objective is to build Europe [...] The whole point is that Europe should want to exist as its own self, independently from the U.S.[NATO is] quite simply putting Europe’s defense, nuclear and conventional, in the hands of the U.S. Europe is useless if it doesn’t control its own defense and therefore its own policy. NATO is a subterfuge. It’s a machine to disguise the stranglehold of America over Europe. Thanks to NATO, Europe is placed under the dependence of the U.S. without seeming to be.”

Twitter

A helpful reminder of what De Gaulle used to say about NATO and American hegemony over Europe.

Arnaud Bertrand @RnaudBertrand

Moon of Alabama — Kasandras Beware - China Economy Will Not Hit A Wall

Contra Krugman.

Moon of Alabama
Kasandras Beware - China Economy Will Not Hit A Wall

Also

ECNS
Western journalist claiming Shanghai a 'Ghost Town' faces backlash

William Mitchell — The Chilean coup just one link in a complicated right-wing economics agenda to empower capital

Several related strands have come together in the last week of work and thinking. Today (September 11, 2023), of course, is a massive day in history and I am not referring to the year 2001. Today marks the 50th anniversary of the overthrow of the Salvatore Allende’s democratically-elected government in Chile by the US CIA and there local puppets under the leadership of General – Augusto Pinochet. I have also been following a trail of the antecedents of the Powell Manifesto (thanks to Jonathan for a tip), which helps understand how the neoliberals infested every institution in the US and beyond. And the Chilean coup d’état in 1973 was followed by – Operation Condor – which together with the coup demonstrated the principle terrorist organisation in the world has been the US government and its agencies. Tracking the Powell trail also took me to old research about the so-called ‘Manne Programs in Economics for Federal Judges’ – which was a program mostly taught by Chicago School economists that indoctrinated US judges into free market economic thinking and has distorted US judicial decisions ever since. And the circle closes when we investigate the role played by the so-called – Chicago Boys – who were Chilean PhD graduates from that school, who went back to Chile and ravaged the prosperity of the people with their extreme neoliberal ideas. All interlinked events on the path to global neoliberal domination. History is worth studying and it is striking how interrelated all these things are that have come together in my work the last week or so.

Not exactly MMT, but crucial for appreciating the dynamics of the world system and the role of politicized ideological economics in it. This post is about the role of neoliberalism. Presently, both the so-called left and right in the US are deeply entrenched in neoliberal ideology, although this post is about the right.

William Mitchell — Modern Monetary Theory

The Chilean coup just one link in a complicated right-wing economics agenda to empower capital
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Russia defies sanctions with homemade Sukhoi Superjet — Scott Foster

A Russian passenger jet built almost entirely with domestically manufactured components completed its first test flight on August 29, a launch that gave Yakovlev Design Bureau and United Aircraft Corporation’s (UAC) respective shares on the Moscow Exchange a buoyant lift.


Designed by Yakovlev and manufactured by UAC at its Komsomolsk-na-Amure factory, the new Sukhoi Superjet 100 (SSJ-100) is a narrow-body regional aircraft with a range of 4,578 kilometers (2,472 nautical miles) that can carry 87 to 108 passengers depending on seat configurations....

Coupled with Huawei's new chip, Russia indigenously produced commercial aircraft erode the Western lead in these key fields. 

Asia Times
Russia defies sanctions with homemade Sukhoi Superjet
Scott Foster

The Rise of BRICS and the Fall of the G20 — Larry Johnson

You should not look at the war in Ukraine as an isolated phenomena with no bearing on the global economic order. The war in Ukraine is a symptom of the breakdown in the Western dominated “rules based” international order and this disruption is reverberating around the world. The recent coups in Africa, for example, are another sign that the vassals of the Western feudal lords are no longer willing to be de facto colonial subjects. They want some measure of independence and are turning to Russia and China to find a way out.

Don't focus on particular events, especially shiny objects. Look at the dynamics of the world system.

A Son of the New American Revolution
The Rise of BRICS and the Fall of the G20
Larry C. Johnson | CEO and co-founder of BERG Associates, LLC, an international business-consulting firm with expertise combating terrorism and investigating money laundering, formerly Deputy Director in the U.S. State Department’s Office of Counter Terrorism (1989-1993, and CIA operations (1984-1989)

RT — Moscow releases Russia-China de-dollarization update

The de-dollarization of Russia-China trade is practically complete, according to Georgy Zinoviev, the director of the Russian Foreign Ministry’s First Asian Department, as cited by RIA Novosti.…

The share of national currencies in Russian-Chinese payments is growing at an extremely rapid pace,” Zinoviev told the news agency. “At the beginning of 2022 it was hovering around 25%, now it is exceeding 80%.”...

RT — Question More (Russian state-sponsored med
Moscow releases Russia-China de-dollarization update

Pepe Escobar — No Respite for France as ‘New Africa’ Rises

 "The natives are getting restless." 

Once the bear's claws tore away the veneer, a new era was launched. But it would not have happened without a fire-breathing dragon in the background. Now the long oppressed colonies are standing up. Empire is about securing cheap resources and cheap labor from the colonies, without which the lifestyle of the imperial elite  cannot be sustained.

Consortium News
Pepe Escobar: No Respite for France as ‘New Africa’ Rises

William Mitchell — The tax extreme wealth to increase funds for government spending narrative just reinforces neoliberal framing

Despite the rabble on the Right of politics that marches around driven by conspiracies about government chips in the water supply or Covid vaccines and all the rest of the rot that lot carry on with, the reality is that well-funded Right that is entrenched in the deepest echelons of capital are extremely well organised and strategic, which is why the dominant ideology reflects their preferences. That group appears to be able to maintain a united front which solidifies their effectiveness. By way of contrast, the Left is poorly funded, but more importantly, divided and on important matters appears incapable of breaking free from the fictions and framing that the Right have introduced to further their own agenda. So, the Left is often pursuing causes that appear to be ‘progressive’ and which warm their hearts, but which in reality are just reinforcing the framing that advance the interests of the Right. We saw that again this week with the emergence of the Tax Extreme Wealth movement and with the release of their open letter to the G20 Heads of State – G20 Leaders must tax extreme wealth. This ia the work of a group which includes the so-called Patriotic Millionaires, Oxfam, Millionaires for Humanity, Earth4All and the Institute for Policy Studies. It demonstrates perfectly how these progressive movements advance dialogue and framing which actually end up undermining their own ambitions.

I am not sure whether "right" and "left" are useful descriptors. As Bill observes, the positions are conflated and the real differences of positions are obscured. The differences are in rhetoric only. There are strong cultural and institutional biases operative that act as hidden assumptions influencing the framing in a neoliberal direction. 

What Bill has called "neoliberal tendencies" go unnoticed, even among some MMT proponents, as Bill has also pointed out in his comment section over the years. Escaping the framing as a set of hidden assumptions is difficult and most don't make it out of the box. We see this is a strong monetarist bias in econ and finance as well as politics, for example.

William Mitchell — Modern Monetary Theory
The tax extreme wealth to increase funds for government spending narrative just reinforces neoliberal framing
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Michael Hudson — Naked Capitalism–Your Guide, Philosopher, and Friend in Times of Crisis

Fundraiser for a very worthy cause.

This is Naked Capitalism fundraising week. 155 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year,, and our current goal, strengthening our IT infrastructure.

Michael Hudson: Naked Capitalism – Your Guide, Philosopher, and Friend in Times of Crisis

Also

KLG: What Naked Capitalism Means to Me

On a different note, also at NC

Biden Approves $40 Billion Worth Of Drugs To Be Airdropped To Burning Man

Babylon Bee [satire]

Reuters — Teardown of Huawei’s new phone shows China’s chip breakthrough

 That didn't take long.

Huawei's Mate 60 Pro is powered by a new Kirin 9000s chip that was made in China by Semiconductor Manufacturing International Corp (SMIC), TechInsights said in the report shared with Reuters on Monday.

Huawei started selling its Mate 60 Pro phone last week. The specifications provided advertised its ability to make satellite calls, but offered no information on the power of the chipset inside....

Buyers of the phone in China have been posting tear-down videos and sharing speed tests on social media that suggest the Mate 60 Pro is capable of download speeds exceeding those of top line 5G phones…...

Reuters

Teardown of Huawei’s new phone shows China’s chip breakthrough

Also

Important.

Moon of Alabama

How Sanctions Failed To Hinder China's Development

Inflation And The Labour Market — Brian Romanchuk

The usual response to critics who state things like I just did is “give me a better model.” The idea is that we need to replace one reductionist model with another reductionist model. The reasoning seems to be that economics is like physics, where a lot of the history of the field is doing exactly that. (Physicists might be getting into “complexity,” which may or may not be a mathematical pseudo-science. In any event, this is not what people have in mind when they compare economics to physics.) If inflation is a complicated process, any reductionist model is going to fail.

Any empirical work on the link between inflation and the labour market is going to run into a snag that is the result of what I argue are relatively non-controversial positions.…

Bond Economics
Inflation And The Labour Market
Brian Romanchuk

Amazon is promoting the eBook version of The Deficit Myth. A one-day promotion @ $3.99

Stephanie Kelton
@StephanieKelton

Amazon is promoting the eBook version of The Deficit Myth. A one-day promotion @ $3.99

Vietnam, Philippines and Brunei to join cross-border QR payment scheme — Erwida Maulia And Ismi Damayanti

Vietnam, the Philippines and Brunei will join other major Southeast Asian economies in an interconnected QR code payment system that aims to promote use of local currencies and reduce dependence on the U.S. dollar.

Indonesia, Thailand, Malaysia and Singapore are already progressing with the implementation of bilateral transactions using QR codes among one another -- which was initiated last year, said Perry Warjiyo, governor of Indonesia's central bank, on Friday.…

Nikkei Asia
Vietnam, Philippines and Brunei to join cross-border QR payment scheme
Erwida Maulia And Ismi Damayanti, Nikkei Staff Writers

The US Problem With China: Beijing Is Better at Capitalism — Patrick Lawrence

As it provokes a new Cold War, the U.S. is warning that its corporate and financial interests, which came first after the 1980s Dengist reforms, no longer take precedence, writes Patrick Lawrence.

Consortium News
The US Problem With China: Beijing Is Better at Capitalism

Patrick Lawrence

GoFundMe, Go To Hell — Matt Taibbi

Censorship moves to a new level in denying funding.

Racket News
GoFundMe, Go To Hell
Matt Taibbi