There is not much new in this but it is a reminder of current events picking up speed, bringing about both promise and turmoil.
Mike Norman Economics
An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Tuesday, May 30, 2023
Escobar: Eurasian Heartland Rises To Challenge The West — Pepe Escobar
There is not much new in this but it is a reminder of current events picking up speed, bringing about both promise and turmoil.
The Deficit Myth is Hanging On for Dear Life — Stephanie Kelton
For months, Speaker McCarthy has been telling the American people that republicans wouldn’t agree to raise the debt limit without a plan to get the nation’s “fiscal house back in order.” Never mind that he and most of his republican colleagues voted—without any preconditions—to lift the debt ceiling on three separate occasions when Donald Trump was president. To retain his gavel McCarthy needed to cut a deal that his members could get behind....The Lens
In response, President Biden said, “Speaker McCarthy and I have a very different view of who should bear the burden…to get our fiscal house in orde…...
The Deficit Myth is Hanging On for Dear Life
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
U.S. Breakeven Inflation Comments — Brian Romanchuk
I just refreshed my favourite U.S. breakeven inflation chart (above), and I was surprised by how placid pricing has been. This article gives a few observations regarding the implications of TIPS pricing....Bond Economics
U.S. Breakeven Inflation Comments
Brian Romanchuk
Achieving by Undermining — Radhika Desai and Michael Hudson
RADHIKA DESAI: Hello and welcome to the 10th Geopolitical Economy Hour, the fortnightly show in which we discuss the political and geopolitical economy of our times. I’m Radhika Desai.
MICHAEL HUDSON: And I’m Michael Hudson.
RADHIKA DESAI: And as last time, we have once again with us today, Professor Mick Dunford, professor emeritus at Sussex University and visiting scholar at the Chinese Academy of Sciences.
Mick is based in Beijing and his work focuses on world development, especially in Eurasia and China. And as you know from the last episode, Mick is here to help us discuss the political and geopolitical economy of the conflict over Ukraine....
Radhika Desai, Professor at the Department of Political Studies, and Director, Geopolitical Economy Research Group, University of Manitoba, Winnipeg, Canada; and Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University
The Arc of Time: Pro-Creditor History
Monday, May 29, 2023
Chartbook 216: When was the era of Bretton Woods? — Adam Tooze
As Perry Mehrling has recently argued in his intellectual portrait of economic historian Charles Kindleberger, the true undergirding continuity of international finance were not inter-governmental arrangements about national currencies, but the interlocking balance sheets of private finance stretched between the City of London and Wall Street. These made the Bretton Woods system increasingly unworkable by the late 1960s but they also ensured that the end of the system in the early 1970s did no produce a bottomless collapse of the dollar.
***
So this question - when was the era of Bretton Woods? - is, in fact, anything but simple. And its implications for how we think about global political economy are clearly non-trivial.
This is at least a should-read for those into monetary systems or global finance. The conventional view of Bretton Woods is unrealistic, as is the conventional view of just about everything. Adam Tooze attempts to set the record straight in terms of the history.
Tooze shows how Bretton Woods was implicitly doomed from the outset since fixed exchange rates are not compatible with modern growth. Class structure and the resulting power distribution were incompatible with it. And global asymmetries resulted in disruptive effects.
The conclusion is that a flexible system was needed to adapt quickly to changing conditions, but adopting too much flexibility simply accommodates the issues of class structure and power distribution, as well as global asymmetries. This affects the world system economically, politically, and socially in adverse ways. So a satisfactory solution was not attainable within the bounds of the Bretton Woods system. The breakdown did not happen at once but was a gradual affair until it was finally recognized that the system was unworkable for the major players and their interests.
The reality is that every solution has its pros and cons so adaptation is a constant requirement. A major con is that powerful forces are afoot and perverse incentives prevail. Hence, adaptation is not always benign for the world system.
For those wondering why my light posting lately, there are several reasons. First and most immediately, I was out of town for a week and had no opportunity. I just got around to reading this, for example.
Moreover, some of my current projects are requiring more of my time than previously.
Concerning the longer term, the era of blogs is going the way of email, being replaced by social media, Twitter and Facebook, and subscription services like Substack. That is to say, blogs are "losing market share."
My focus in econ and finance is MTT, and there is little new being put up on blogs on MMT. Moreover, the political orientation is growing and the theoretical is shrinking. I am interested neither in keeping up to date on the other venues nor do I have the time. So in the future, I will only be calling attention to things I think are should-reads or must-reads on MMT and related subjects. So expect only occasional posting unless conditions change.
Chartbook
Chartbook 216: When was the era of Bretton Woods?
Adam Tooze | Shelby Cullom Davis chair of History at Columbia University and Director of the European Institute.
Debt Ceiling Deal
Still requires approval but current form would suspend until January 2025 … after next presidential election… good riddance…
For the curious, here’s the part on how the suspension of the debt limit will work.
— Justin Slaughter (@JBSDC) May 28, 2023
TLDR: Treasury will again be able to use measures to delay hitting the debt ceiling come 2025. https://t.co/tZY41wWvWY pic.twitter.com/mkNsCUvi04
Sunday, May 21, 2023
McCarthy bringing out the big guns
McCarthy with the big 1-2 combination….
Here he leads with the good ole “borrowing from the Chinese!” Art degree moron analogy figurative language:
I literally asked the president: "What is the number? How much debt must America have before you say, 'let's stop borrowing from China?'" pic.twitter.com/nAd1wMtDOw
— Kevin McCarthy (@SpeakerMcCarthy) May 21, 2023
And then the big combo “spending money we don’t even have!” unqualified Art degree moron figure of speech:
Just got off the phone with the president while he’s out of the country.
— Kevin McCarthy (@SpeakerMcCarthy) May 21, 2023
My position has not changed. Washington cannot continue to spend money we do not have at the expense of children and grandchildren.
Tomorrow, he and I will meet in person to continue negotiations.
Devastating combination…
GOP position looking good to the many dialogic Art degree morons and the others that are completely uneducated … which is a plurality… polling supports GOP morons over Democrat morons…
Art degree morons still winning…. 🙁
Saturday, May 20, 2023
Thursday, May 18, 2023
Debt deal “aftershock!”
lol… the good ole’ “crowding out!” Art degree thesis … yo it’s probably going to cause a short term >$500B reserve drain at Depositories …. 🚀
Markets will suffer a $1 trillion aftershock once a debt limit deal is struck
— Saleha Mohsin (@SalehaMohsin) May 18, 2023
A supply burst to restock Treasury 's cash will raise short-term funding rates and tighten the screws on the US eco just as it’s on the cusp of recession
By @mccormickliz
https://t.co/WeW92l0b25
Monday, May 15, 2023
The EU Looks Doomed to Repeat its Russia “De-Risking” Strategy with China — Conor Gallagher
The EU Looks Doomed to Repeat its Russia “De-Risking” Strategy with China
Conor Gallagher
MAGA: No Nation Has Ever Returned From The Economic Crisis U.S. Currently In
Perfect follow to Tom’s Pepe le Pew post below.. Here this MAGA gold seller douchebag went to the same Art degree school as Escobar and is predicting the same debt doomsday apocalypse….
Both probably alienated somehow…
Pepe Escobar — US Empire of Debt Headed for Collapse
Review of Michael Hudson's latest book, The Collapse of Antiquity: Greece and Rome as Civilization’s Oligarchic Turning Point — and its contemporary implications. Embellished with personal interaction with Michael Hudson.
Michael Hudson is becoming the go-to economist for reformers.
Also of note is the venue. Michael Hudson has been an influencer in China for years. Is Russia next?
Unfortunately, most of the people reading Hudson don't seem to be aware of the difference between public and private debt, or of the difference in monetary systems, at least those I have encountered.
Sputnik International (Russian state-sponsored media)Quote of the week: Steve Keen’s concerns about a Job Guarantee, Part 2 — Nick Johnson
The transition from a culture based on work to one based on leisure is likely going to be more gradual than sudden, although ecological necessity might speed that up. An alternative is culling the population of redundancy, something that many believe is "the plan."
The Political Economy of Development
Quote of the week: Steve Keen’s concerns about a Job Guarantee, Part 2
Nick Johnson
Money Multiplier Mudslinging — Brian Romanchuk
Economics famously suffers from a “which way is up?” problem. The issue is whether an economy is suffering from too much demand or too little demand. On its face, that seems like it should be a very simple question, but in fact it can be complicated and people often get it wrong, with very serious consequences.
William Mitchell — The end of the common currency (euro) cannot come soon enough
In my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015) – I traced in considerable detail the events and views that led to the creation of the Economic and Monetary Union (EMU, aka the Eurozone) once the Treaty of Maastricht was pushed through as the most advanced form of neoliberalism at that time. The difference between the EMU and other nations who have adopted neoliberal policies is that in the former case the ideology is embedded in the treaties, that is, in the constitutional system, which is almost impossible to change in any progressive way. In the latter case, voters can get rid of the ideology by voting the party that propagates it out of office. It is true that in current period, even the parties in the social democratic tradition have become neoliberal and there is little choice. But the EMU is different and has entrenched the most destructive ideology in its legal structures. We are reminded of this recently (April 26, 2023), when the European Commission released its latest missive – Commission proposes new economic governance rules fit for the future. Once operational, the policies advocated in this new governance structure will ensure that Europeans are once again made to endure persistent and elevated levels of unemployment and continued deterioration in the quality and scope of public infrastructure and welfare provision. The collapse of this ideological nightmare cannot come soon enough.It will likely also involve the collapse of the EU. See Victor Orban's recent remarks about the EU being supposedly created for "peace and prosperity" and delivering neither, in fact, the opposite. So just what is it actually for, he asks.
William Mitchell — Modern Monetary Theory
The end of the common currency (euro) cannot come soon enough
Bill Mitchell |rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia P
Saturday, May 13, 2023
Almost Every Powerful Economist We Have Went to 1 of 6 Schools. That’s Not Great! — Pete McKenzie
Slate
Almost Every Powerful Economist We Have Went to 1 of 6 Schools. That’s Not Great!
What will it take to kill a Zombie? — Max Lawson
Equals Blog
What will it take to kill a Zombie?
Max Lawson, Head of Inequality Policy at Oxfam International & EQUALS Podcast co-host. He is also Chair of the Global People’s Vaccine Alliance
Marx’s Alienation
Short explainer on Marx’s theory of Alienation…
There is apparently a whole big thing under Marx wrt this “Alienation” … So if you are believing Marx here on alienation (uneducated climate nutter Greta Thumberg e.g.) you’re likely to form apocalyptic beliefs as a result…
Not ideal imo…
I wonder where Christendumb gets theirs? All the debt doomsday morons? The perma bears? 🤔
Thursday, May 11, 2023
Social Alienation
This is what is happening with all of the doomsday/apocalypse stuff you see out there these days… whether it’s “dollar crash!”… “debt doomsday!”… Christian “end times!” … “climate!”… etc…
Social alienation is a person's feeling of disconnection from a group – whether friends, family, or wider society – to which the individual has an affinity. Such alienation has been described as "a condition in social relationships reflected by (1) a low degree of integration or common values and (2) a high degree of distance or isolation (3a) between individuals, or (3b) between an individual and a group of people in a community or work environment [enumeration added]".[1] It is a sociological concept developed by several classical and contemporary theorists.[2] The concept has many discipline-specific uses, and can refer both to a personal psychological state (subjectively) and to a type of social relationship (objectively).
When you find yourself thinking there is going to be some sort of apocalyptic disaster consider you are somehow feeling alienation and that is making you think there is going to be an apocalypse…
The US National Security Budget for 2023/24 is … approximately $1.5 Trillion — Winslow Wheeler,
Summary: The Department of Defense uses obscure accounting to conceal its true cost from America’s citizens, assisted by the mainstream press. Long-time DoD expert Winslow Wheeler shows the real cost for our War Department. Like all debunking of our mad military industrial complex since President Eisenhower warned us in 1961, he has been ignored....Defense spending and the interest on the national debt approach 3T. Add non-discretionary spending like SS and Medicare and that's some real fiscal stimulus on an ongoing basis.
The US National Security Budget for 2023/24 is …
approximately $1.5 Trillion
Winslow Wheeler, Director of the Straus Military Reform Project of the Project On Government Oversight
William Mitchell — The climate emergency requires us to reset our understanding of fiscal capacity. It is already, probably, too late.
In Tuesday’s fiscal statement, the Australian government made a lot of noise about dealing with the climate emergency that the nation faces but in terms of hard fiscal outlays or initiatives it did very little, deferring action again, while ‘the place burns’. The Climate Council assessment was that the government “still seems to be on a warm-up lap when it comes to investing in climate action” (Source) and recommended the nation moves from a “slow job” to a “sprint”. I have previously written about the myopic nature of neoliberalism. There are countless examples of governments penny pinching and then having to outlay dollars to fix the problem they create by the austerity. The climate emergency is of another scale again though. And penny pinching now will cause immeasurable damage to humanity. Food security will be threatened. Urban environments will become unliveable. Pandemics will increase if we don’t stop clearing and if we release viruses stored in permafrost. And all the rest that awaits us. Now is the time to reset our understanding of fiscal capacity. It is already, probably, too late....No problem financing war-making though. It's not like they don't get available fiscal space in a floating rate system. It's the political priorities.
William Mitchell — Modern Monetary Theory
The climate emergency requires us to reset our understanding of fiscal capacity. It is already, probably, too late.
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Fiscal Flow from Interest payments now equals Defense payments
👍
U.S. Interest payment is now equal to Defense spending
— Mark Moss (@1MarkMoss) May 11, 2023
And 30% of the debt has to be refinanced in the next 12 months at todays higher rates!!
Hang on! 🚀 pic.twitter.com/stDRMEkpSm
And Fed’s IOR policy (now at over 5% annual) providing $14B/mo. of additional Capital to Depository system leading to a recent all time high in Depository system Residual:
Hard to imagine how the Art degree brain could see any of this as debilitating…. 🤔
Wednesday, May 10, 2023
NY Times is wrong on dedollarization: Economist Michael Hudson debunks Paul Krugman’s dollar defense — Ben Norton interviews Michael Hudson
Geopolitical Economy Report
NY Times is wrong on dedollarization: Economist Michael Hudson debunks Paul Krugman’s dollar defense
Tuesday, May 9, 2023
Presidential Polling
Trump has the ball in the red zone… lower interest rates and a shit-canning of monetarism seemingly on the way in 18 months…
Brandon needs to pivot on rates soon or he’s going to get Jimmy Cartered…
Left-wing polls show President Trump trouncing Joe Biden, while DeSantis loses Wall Street, which is bad for him since he relies on the donors because he doesn’t have the People!pic.twitter.com/nIpD3qRDVQ
— Liz Harrington (@realLizUSA) May 8, 2023
Debt ceiling poll
Polling not on Brandon's side... I assume most people blame Brandon stimmie and Brandon Russia sanctions for "inflation!"... so they probably think he should be the one to take the hit... people supporting GOP on budget because they are weary of prices going up ….
Brandon trying to blame “inflation!” on Monetarism is not working… people aren’t buying it…
Meanwhile Brandon no mention of rate policy moderation at all… might be ready to double down…
Who should compromise most to reach a debt ceiling deal?
— Rasmussen Reports (@Rasmussen_Poll) May 8, 2023
-By Party- https://t.co/1rWEomsSO0 pic.twitter.com/EBLq0MrZaH
Sunday, May 7, 2023
William Mitchell — US labour market continues to tick over – no sign of a major slowdown yet
Last Friday (May 5, 2023), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2023 – which revealed continuing employment growth and and modest declines in unemployment. While the US Federal Reserve is deliberately trying to undermine the labour market, even though the inflation rate is falling relatively quickly, the April data suggests that the interest rate increases are not achieving the aim. There is no surprise there. Monetary policy is a relatively ineffective tool to suppress demand. Most of the aggregates are steady and in terms of the pre-pandemic period, March’s net employment change was still relatively strong. Real wages finally showed some improvement in the face of a decelerating inflation rate. Overall, the US labour market is steady and doesn’t appear to be contracting in the face of the Federal Reserve interest rate hikes....William Mitchell — Modern Monetary Theory
US labour market continues to tick over – no sign of a major slowdown yet
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Friday, May 5, 2023
The Hard Iron Financial Fist — Ben Norton interviews Michael Hudson
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
The Hard Iron Financial Fist
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University
Thursday, May 4, 2023
Google AI expert warns of massive uptick in productivity growth: No problems with Social Security — Dean Baker
It is also worth noting that any concerns about the technology leading to more inequality are wrongheaded. If AI does lead to more inequality it will be due to how we have chosen to regulate AI, not AI itself.Real-World Economics Review Blog
People gain from technology as a result of how we set rules on intellectual products, like granting patent and copyright monopolies and allowing non-disclosure agreements to be enforceable contracts. If we had a world without these sorts of restrictions it is almost impossible to imagine a scenario in which AI, or other recent technologies, would lead to inequality. (Imagine all Microsoft software was free. How rich is Bill Gates?)
If AI leads to more inequality, it will be because of the rules we have put in place surrounding AI, not AI itself. It is understandable that the people who gain from this inequality would like to blame the technology, not rules which can be changed, but it is not true. Unfortunately, people involved in policy debates don’t seem able to recognize this point....
Google AI expert warns of massive uptick in productivity growth: No problems with Social Security
US Treasury Can Print $1,000,000,000,000 Coin To Pay Bills, Avoid Debt Ceiling Crisis — Economist Paul Krugman
Daily Hodl
US Treasury Can Print $1,000,000,000,000 Coin To Pay Bills, Avoid Debt Ceiling Crisis: Economist Paul Krugman
Staff