Tuesday, May 30, 2023

Escobar: Eurasian Heartland Rises To Challenge The West — Pepe Escobar

As a result of BRI, the New Silk Road, CSTO, SCO, the explosive growth in the coming years is likely to come from the developing world, not only Africa and Latin America but also the countries of Central Asia lying between and linking Russia and on to Europe and China as a gateway to Asia.

Central Asia is part and parcel of the Western foreign policy position regarding Russia and China. It is about who is going to control the Heartland and dominate the World Island (Halford Mackinder, Nicholas Spykman and Zbigniew Brzezinski.

BRICS+ is also bringing Africa and Latin America into the mix, also threatening Western hegemony.

Decolonization is in the air.

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....

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 Lens
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....
Michael Hudson
Achieving by Undermining
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

See also by Michael Hudson

The Arc of Time: Pro-Creditor History
Ben Norton interviews Michael Hudson

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…








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:




And then the big combo “spending money we don’t even have!” unqualified Art degree moron figure of speech:




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…. 🙁

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 …. 🚀




Monday, May 15, 2023

The EU Looks Doomed to Repeat its Russia “De-Risking” Strategy with China — Conor Gallagher

Shooting yourself in the other foot?

Naked Capitalism
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

I think Steve Keen has a point worth considering about fixation on a JG — with a caveat — I don't think he is right about canning a JG at this point.

While innovation has in the past led to an increase in leisure, the digital age promises to deliver the potential for much greater leisure since the need for human labor ("jobs") will decrease. To continue focusing on "jobs" (full employment) is a sort of Luddite stance standing in the way of both increased leisure and also better ecology.

The caveat is that changing our attitudes toward "work" as making a social contribution as well as an economic one is difficult is there is always resistance to cultural change.  Increased distribution of labor is a political choice and in liberal democracies this depends at least on part on the attitude of the electoral albeit more on the elite (oligarchy, really) in that contemporary liberal democracies tend to be plutocracies. The elite has no great motivation to be concerned with the increasing distribution of leisure as a result of investment in technological innovation.

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."

So, while the need for a job guarantee will continue for some time, forward-looking people will realize that the digital age promises a level of distributed leisure that is unprecedented and that we need to change the culturally embedded view of the value of work. One way to do this is to realize that the definition of leisure is not "goofing off," but rather, engaging in a lifestyle and activity of one's choice.

Leisure is often viewed economically as "non-productive time" (Veblen), or "free time." But this view is based on comparing and contrasting leisure (not working) with employment (working). This is not the classical view of leisure, however. Athens enjoyed the opportunity for the informed debate necessary for direct democracy because the work was done by slaves. 

When slavery was replaced, part of the replacement was with technology, the cotton gin, for example. An opportunity is developing with the introduction not only of machinery but also automation and robotics based on AI.  This is an opportunity to be seized through both cultural and political change.

History reminds us that the increased distribution of leisure made available by technological innovation resulting from science and the knowledge revolution, including universal education, was not a gift of the owners of capital to workers but it came as a result of political activism.

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

Oliver Blanchard's revised textbook revisits "the money multiplier." Brian explains that he does not dismiss it but adds an "epicycle."

To clarify terminology, this is treated in the philosophy of science, for example, by Thomas Kuhn in his influential book on revolutions in science. According to Kuhn, science exhibits paradigms in terms of which hypotheses are advanced and theories developed. 

This is the process of "normal science." But as dominant theories are developed and hypotheses tested, anomalies crop up. However, the scientific community is resistant to dropping its normal paradigm in addressing anomalies unless there is a compelling alternative to replace it. 

So "ad hoc adjustments" are made and "ad hoc hypotheses are formulated to extend the life of the normal paradigm. These ad hoc measures are also called resorting to epicycles as a criticism of the practice, referring to the adjustment made to the Ptolemaic system of astronomy prior to the adoption of the Copernican. However, the Copernican system was not adopted exactly when Copernicus proposed it, but rather it met resistance. 

There is always resistance to change owing to investment in the status quo, but in this case, there were also cultural reasons. While these reasons may not be relevant today since the world has moved on, other cultural reasons may be.

This presents a particular issue in contemporary economics in that the majority of influencers in the economics profession are committed to the presumption that "the methodological debate is now settled," hence further discussion is precluded from the mainstream and is relegated to "heterodox" thinkers and schools. Since the influencers control academia, this makes it very difficult for a revolution to occur in economics. 

So the alternative is resorting to ad hoc adjustments, derogatorily called "epicycles," along with the development of heterodox approaches. So far, none of the heterodox approaches has been compelling enough to force a revolution in economic thinking and praxis in general, which would involve adopting a new paradigm to replace the normal paradigm.

Bond Economics
Money Multiplier Mudslinging
Brian Romanchuk

Also
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.
Real-World Economics Review Blog
The “Which way is up?” problem in economics
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

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

Harvard, MIT, Stanford, Princeton, Chicago, and the University of California, Berkeley.

Slate
Almost Every Powerful Economist We Have Went to 1 of 6 Schools. That’s Not Great!
Pete McKenzie
h/t Naked Capitalism

What will it take to kill a Zombie? — Max Lawson

The Zombie in question is neoliberalism.

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 


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.

Fabius Maximus
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

 

👍





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…. 🤔






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…




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…




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

Video and transcript.
 
Ben Norton interviews Michael Hudson for the Geopolitical Economy Report

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

Will The Fed Keep Reacting With A Lag To Lagging Data? — Brian Romanchuk

Short update.

Bond Economics
Will The Fed Keep Reacting With A Lag To Lagging Data?
Brian Romanchuk

Thursday, May 4, 2023

Google AI expert warns of massive uptick in productivity growth: No problems with Social Security — Dean Baker

No Luddites allowed.

Is slated to replace rote workers.
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.

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....
Real-World Economics Review Blog
Google AI expert warns of massive uptick in productivity growth: No problems with Social Security
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C


US Treasury Can Print $1,000,000,000,000 Coin To Pay Bills, Avoid Debt Ceiling Crisis — Economist Paul Krugman

Krugman backs the coin. Very short post.

Daily Hodl 
US Treasury Can Print $1,000,000,000,000 Coin To Pay Bills, Avoid Debt Ceiling Crisis: Economist Paul Krugman
Staff