Zero Hedge — How To Explain The Cause Of The Syrian War In 2 Minutes

Good on Jeff Sachs. He has redeemed himself (in two minutes) in my book.

Zero Hedge

How To Explain The Cause Of The Syrian War In 2 Minutes

Tyler Durden

RT — US stuck in 20th-century foreign policy with wars & bases across globe – leading economist [Jeffrey Sachs]

Instead of building a global economy and solving problems like climate change in order to save the planet, the US is waging wars and maintaining military bases across the world, pursuing Cold War policies, Jeffrey Sachs says.

RT
US stuck in 20th-century foreign policy with wars & bases across globe – leading economist

Yannis Palaiologos — Parallel currency would have led to Grexit, says Jeffrey Sachs

Jeffrey Sachs confirms Yanis Varoufakis's side of the story.

ekathimerini
Parallel currency would have led to Grexit, says Jeffrey Sachs
Yannis Palaiologos
ht Clonal

Yanis Varoufakis — A New Approach to Eurozone Sovereign Debt – op-ed in Project Syndicate

The eurozone is unique among currency areas: Its central bank lacks a state to support its decisions, while its member states lack a central bank to support them in difficult times. Europe’s leaders have tried to fill this institutional lacuna with complex, non-credible rules that often fail to bind, and that, despite this failure, end up suffocating member states in need. One such rule is the Maastricht Treaty’s cap on member states’ public debt at 60% of GDP. Another is the treaty’s “no bailout” clause. Most member states, including Germany, have violated the first rule, surreptitiously or not, while for several the second rule has been overwhelmed by expensive financing packages.

The problem with debt restructuring in the eurozone is that it is essential and, at the same time, inconsistent with the implicit constitution underpinning the monetary union. When economics clashes with an institution’s rules, policymakers must either find creative ways to amend the rules or watch their creation collapse.…

Yanis Varoufakis
A New Approach to Eurozone Sovereign Debt – op-ed in Project Syndicate

Also

My question to Christine Lagarde, Eurogroup 25th June 2015 – as narrated by Landon Thomas in the NYT

Greece’s Third MoU (Memorandum of Understading) annotated by Yanis Varoufakis

Yanis Varoufakis — Death by Debt: My Response to The German Finance Ministry, by Jeffrey Sachs

Sachs is a debt dove.Jef

Yanis Varoufakis

Death by Debt: My Response to The German Finance Ministry, by Jeffrey Sachs

See also

Something is rotten in the eurozone kingdom – my op-ed in the Financial Times

Picketty et al — Austerity Has Failed: An Open Letter From Thomas Piketty to Angela Merkel

The never-ending austerity that Europe is force-feeding the Greek people is simply not working. Now Greece has loudly said no more. 

As most of the world knew it would, the financial demands made by Europe have crushed the Greek economy….

The Nation
Austerity Has Failed: An Open Letter From Thomas Piketty to Angela Merkel
Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance; Thomas Piketty, Professor of Economics at the Paris School of Economics; Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University; Dani Rodrik, Ford Foundation Professor of International Political Economy, Harvard Kennedy School, and Simon Wren-Lewis, Professor of Economic Policy, Blavatnik School of Government, University of Oxford

Marshall Auerback — Jeff Sachs vs. Paul Krugman

Distinguishing "good deficits" and "bad deficits."

Macrobits by Marshall Auerback
Jeff Sachs vs. Paul Krugman
Marshall Auerback

Bill Mitchell — Sachs v Krugman – No contest, Krugman wins

There was an interesting article written by one Jeffrey Sachs, whose only notoriety, despite his own self-promotion, is that he was the principle promoter of the ridiculous doctrine of – Shock Therapy – which systematically ruined the nations it was applied to under the aegis of IMF structural reform. The latest article (January 6, 2015) – Paul Krugman has got it wrong on austerity – published by the UK Guardian, is a direct attack on Paul Krugman. I have no interest in defending Paul Krugman (nor would he be interested in such a defense). Rather, my interest is that Sach’s intervention is one of a growing number of articles that claim that austerity has worked! An extraordinary new historical revisionism is underway. The conservatives always try to rewrite history to suit themselves. This is the latest version of that long-standing exercise and deception....

Bill takes Jeff to the woodshed.

Bill Mitchell – billy blog
Sachs v Krugman – No contest, Krugman winsBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Jeffrey Sachs, Paul Krugman and Brad DeLong square off

Is the glass half full or half empty. It depends on the perspective from which one is looking. Krugman reflects the popular perception that workers, that is, most of the economic participants, are being left out, while Sachs cherrypicks the numbers and finds that all is getting better under austerity.

However, Sachs agrees that "better" is not good enough.

To be clear, I believe that we do need more government spending as a share of GDP for education, infrastructure, low-carbon energy, research and development and benefits for low-income families. But we should pay for this through higher taxes on high incomes and high net worth, a carbon tax, and future tolls collected on new infrastructure. We need the liberal conscience, but without the chronic budget deficits. 

There is nothing progressive about large budget deficits and a rising debt-to-GDP ratio. After all, large deficits have no reliable effect on reducing unemployment, and deficit reduction can be consistent with falling unemployment.

The Guardian
Paul Krugman has got it wrong on austerity
Jeffrey Sachs

Grasping Reality
Why Yes, I Do Believe Jeffrey Sachs Has Lost His Mind. Why Do You Ask?
Brad Delong

It seems to me that the fundamental question is whether it is progressive to accommodate saving desire in an economic environment based chiefly on rent-seeking and rent-extraction.

Bill Black — Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him Too

Jeffrey Sachs is finally redeeming himself from the destruction wrought by "the Harvard boys"on the post-USSR emerging economies, especially Russia, which turned Russia into a neoliberal Mafia-style state. Now he is waking up to the criminogenic environment called Wall Street and call them on it.

New Economic Perspectives
Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him TooWilliam K. Black | Associate Professor of Economics and Law, UMKC

Jonathan Larson — Sachs on climate change

Oh goody. Jeffrey Sachs has decided to bring his wisdom and expertise to the topic of climate change. Things are going to get better now, I'll bet. NOT 

Sachs comes late to the environmental debates. He's been busy. In 1985, he was the leader of a team from Harvard who decided that Bolivia's economic problems weren't caused by global macroeconomic trends but the fact that her tin miners were making too much money. So he designed a bundle of programs that openly assaulted the social fabric which he called "shock therapy." (Yes indeed, he really takes credit for inventing that ghastly expression.) 

Fresh off his "success" at teaching neoliberalism to the Bolivians, Sachs would take his show on the road to Poland, Slovenia and Estonia. But his most notorious job was with the Yeltsin government between 1991-94. His lovely advice set Russia on a downward spiral that made the Great Depression look tame. Ever wonder how a bunch of corrupt kleptocrats made off with virtually everything of value and triggered an economic catastrophe that saw the Russian middle class destroyed? Ask Jeff. He was in the room when most of the decisions were made. In fact, the corruption surrounding Sachs was so odious, Harvard would eventually lose the contract with Russia and Sachs, who was once the youngest member of the Harvard faculty to have been granted tenure, was asked to leave. This is how he became a member of the Columbia faculty where he now spends his time defending his role in the Russian debacle and running their Earth Institute. 

Unfortunately, since Sachs' first priority is still to defend his role in Russia, he is forced to come up with environmental "solutions" that don't contradict his neoliberalism. Good luck with that. (The floggings will continue until morale improves.) And because his premises are so fundamentally dishonest, his advice on climate problems range from crackpot to goofy. For example, in his latest efforts, he claims that coal burning can continue because successful methods of carbon sequestration are just around the corner. His beliefs in saving the planet on the cheap are so bad they actually make Al Gore's look sane by comparison. 

Fortunately for the rest of us, Sachs the environmentalist cannot do nearly as much damage as Sachs the economic crackpot has already done.

The sad thing is that Sachs really believes in his heart that he is doing good.

Real Economics
Sachs on climate change

Jonathan Larson

Randy Wray — Brad DeLong to Paul Krugman: Yes Deficits DO Matter in MMT

Randy weighs in.

Economonitor — Great Leap Forward
Brad DeLong to Paul Krugman: Yes Deficits DO Matter in MMT
L. Randall Wray | Professor of Economics, UMKC

One final note. In his piece, Brad Delong summarizes the main contentions of MMT, following Warren Mosler’s exposition. Brad concludes—as we do—that a sovereign currency-issuing nation like the USA cannot be forced into involuntary insolvency as it can always pay all debts as they come due by issuing currency.
So far, so good. However he disagrees with Warren’s claim that the US government cannot face a “financial risk” because if inflation occurs, it is paying with cheaper money. Some claim that is a kind of default—as the real value of the promised interest and principal payments are inflated away.

In my view this argument is confused on two levels—terminology and theory.

Look, if I promise to pay you $10 a year hence, and I deliver to you $10 in 365 days, by no stretch of the language can you claim I defaulted on my promise. If instead I promised to deliver to you a sum of money that would allow you to buy some pre-specified box of commodities, that is a different matter entirely. Occasionally such contracts are written. And a government can offer inflation-indexed bonds. If it then refused to increase its payment to account for inflation, one could rightly call that a default. But nominal contracts are nominal and no court of law in this country (or any other) is going to rule that if I promised $10 and paid $10 that I’ve defaulted when inflation occurred meantime.

And here’s the more important point. Why is only government blamed for “default” when inflation occurs? Almost all of us have outstanding debts; and I suspect that very few readers have inflation-indexed their liabilities. So all of you are “defaulting” all the time on your commitments because you are not compensating lenders for inflation. Indeed, outside the rare case of Japan, it’s not a stretch to argue that all debtors default all the time in the sense that inflation exists everywhere.

Yes, I know that the goldbugs claim that inflation is everywhere and always government’s fault—so these “defaults” are due to government’s propensity to run up inflation in an attempt to deflate away its debt.

But that is silly. The two postwar high inflation periods in the USA (1974, 1979) were largely due to OPEC oil price hikes. You can go through a long-winded round-about geopolitical argument to blame that on Uncle Sam, I suppose. But it was oil, not budget deficits or helicopter money drops that caused inflation. In other words, out in the real world, the nongovernment sector plays a vital role in initiating price increases. So we might as well say that OPEC caused the inflation that led to “defaults” by government and nongovernment that repaid debt in cheaper dollars.

And, by the way, if it were so easy for government to create inflation through Obama-style deficits and Bernanke-style helicopters, why they heck can’t the Japanese get inflation going after a whole generation of desperate attempts to do so?
So kudos to Brad for recognizing that MMT does believe deficits matter, and that one of the ways deficits can matter is in sparking inflation. But let’s not confuse inflation with default.

Mark Thoma — Crude Sachsism

Economist's View
Crude Sachsism
Mark Thoma | Professor of Economics, University of Oregon

Why Paul Krugman is not going to espouse MMT anytime soon. Jeff Sachs has already attacked him for asserting that deficits don't matter, even though Krugman had qualified that with "in a liquidity trap."

I'll reassert what I've said many time before. Jeff Sachs's heart may be in the right place, but he pulls his economics from where the sun don't shine.

Robert Skidelsky — Keynes said one simple thing…

I dashed off a letter in response to a rather odd article by Jeffrey Sachs in yesterday’s FT [£] (We must look beyond Keynes to fix our problems), which mixed a sensible call for increased investment with an assault on the Keynesian ideas which underpin it:

Keynesians of the world, unite!
Keynes said one simple thing…
Robert Skidelsky

Sachs on Libertarianism

...the error of libertarianism lies not in championing liberty, but in championing liberty to the exclusion of all other values. Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable -- all are to take a back seat.

When libertarians translate the idea of liberty into the political and economic spheres, they argue that government should operate only to protect personal liberty and not for any other cause. According to libertarians, the sole role of government is to enforce private contracts and to keep the peace so that no one can use force to deprive the liberty of another. In English political theory, this is called the "night watchman state."

Read it at The Huffington Post

Libertarian Illusions

by Jeffrey Sachs

UPDATE:
Consortiumnews.com
Ron Paul’s False Founding Narrative
By Robert Parry

Rep. Ron Paul and other right-wingers have lured many average Americans into their camp by creating a false narrative about America’s Founding, claiming that the drafters of the Constitution wanted a weak central government. But that’s not the real history, Robert Parry writes.

Jeffrey Sachs gets it right

This is a eulogy dedicated to Václav Havel, but it is actually a pean to Mohandas Gandhi's satyagraha, usually rendered as "the power of truth." It speaks implicitly to the strategy of Occupy and the 99% movement, too.

Read it at Project Syndicate
The Power of Living in Truth
Jeffrey D. Sachs

(h/t Mark Thoma)

Jeffrey Sachs gets one (mostly) right

A recent Wall Street Journal article by Arthur C. Brooks on the Occupy Movement and fairness ("Fairness and the 'Occupy' Movement, November 25) says some interesting things about potential common ground between free-market ideas and the Occupy movement. Yet Brooks also commits some very important errors. Perhaps with clearer facts there could be more common ground on reforming the economy and politics.

Read the rest in The Huffington Post
Fairness and the Occupy Movement Revisited

by Jeffrey Sachs

The problem "bringing both sides together" with Sachs proposals is that his post underlines the differences between OWS and the 99% movement and the Tea Party.

Today's free-marketers are different. They downplay the suffering of the poor and the extent of inequality. They deny the science of climate change. They stand by as the public infrastructure collapses. They disdain the hallowed tradition of federal support for science and education.

They subscribe instead to the ugly philosophy of Ayn Rand, who preached that there is no such thing as society or social responsibility, only a collection of individuals. Rand's philosophy is a tribute to greed, hate, and ruthlessness. Smith, Hayek, and Friedman would have been aghast. So are most Americans.

That's heresy on the far right.

But it is nice to see neoliberals like Sachs in the corner of the left on the side of"fairness and justice" instead of on the side of  "freedom for just us."

Did Paul Krugman just start something?

Jeff Sachs calls out Newt over his remarks characterizing the protests as DHF's.

Check it out at Raw Story

Professor: Gingrich is ‘a disgusting person’

Maybe the mainstream economics profession is growing a spine?

Maybe someone needs to say something about this guy, too.


Rep. Joe Walsh: Veterans at ‘Occupy Wall Street’ protests are anti-American

Note: The mother of Walsh's children alleges that he owes $117, 000 in child support — at the same time he was lending himself $35, 000 for his campaign.

Jeff Sachs picks up and runs with the economics of happiness

The concept of an economics of happiness rather than an economics of growth is picking up steam as Jeff Sachs throws his weight behind it.

It's a short post and cuts to the chase.

The mad pursuit of corporate profits is threatening us all. To be sure, we should support economic growth and development, but only in a broader context: one that promotes environmental sustainability and the values of compassion and honesty that are required for social trust. The search for happiness should not be confined to the beautiful mountain kingdom of Bhutan.

Read it all at Project Syndicate, The Economics of Happiness.

UPDATE: Jeffery Sachs at Huffington Post, America and the Pursuit of Happiness

Jeff Sachs rants about corruption

"Corporate corruption is out of control for two main reasons. First, big companies are now multinational, while governments remain national. Big companies are so financially powerful that governments are afraid to take them on.

"Second, companies are the major funders of political campaigns in places like the US, while politicians themselves are often part owners, or at least the silent beneficiaries of corporate profits. Roughly one-half of US Congressmen are millionaires, and many have close ties to companies even before they arrive in Congress."

Read the whole thing, The Global Economy’s Corporate Crime Wave.

Nothing here we didn't already know from Bill Black, Frank Partnoy, Janet Tavakoli, Yves Smith, Elliot Spitzer and others. But it is nice to see a major economist saying it so forcefully. The question is whether anyone is listening?

UPDATE: The Destruction of Economic Facts by Hernando de Soto