Lars P. Syll — Blog Balanced budget religion

Paul Samuelson quote you may wish to keep on file if you don't already have it.

Lars P. Syll’s Blog
Balanced budget religion
Lars P. Syll | Professor, Malmo University

The Corruption of Capitalism by Guy Standing: review by Brian Davey

Guy Standing’s The Corruption of Capitalism (Biteback Publishing 2017) is a powerful attack on rentier capitalism and, very explicitly, a call to revolt. It is very informative and the detailed factual descriptions that Standing puts before his readers are intended to make them angry. He succeeded with me and probably will with most readers. Standing is at his best describing the features of crony capitalism that are totally different from the neo-liberal story of free markets that justifies it. His charge is that neo-liberal economic policies are based on lies which he lists in order to describe what really happens....

Corporate statism.

Feasta
The Corruption of Capitalism by Guy Standing: review by Brian Davey

Cameron K. Murray — Decent criticisms of economics? Here are 111 of them.

Just about any one of them is fatal.

Fresh Economic Thinking
Decent criticisms of economics? Here are 111 of them.

Cameron K. Murray

Pedro Nicolaci da Costa — Fed rebel warns businesses to stop 'whining' about a shortage of workers

It’s an all-too common refrain among US corporations: we have jobs available, but simply can’t find qualified workers to fill them.

Economists, including top Federal Reserve officials, lend credibility to this dubious claim by arguing there is a "skills gap" among US workers that is preventing firms from finding employees with the right backgrounds.

However, ample research and basic common sense suggests that wage stagnation, which has dominated the US job landscape in recent decades, is a symptom of an anemic labor market, not a fully recovered one.

Credit to Minneapolis Fed President Neel Kashkari for pointing that out during a speech to business leaders on Monday.

"If you're not raising wages, then it just sounds like whining," he told a group of business people at a Rotary Club meeting in Sioux Falls, S.D., according to the Washington Examiner.

Business insider
Fed rebel warns businesses to stop 'whining' about a shortage of workers
Pedro Nicolaci da Costa

ht Brad DeLong at Grasping Reality
 

Gavin Kennedy — Paul Samuelson's Awesome Error

Certainly, none of Smith’s contemporaries mentioned Smith’s use of the invisible hand. Only in the mid-20th century was that assertion made and believed, thanks to Paul Samuelson’s awesome reputation legitimising his wholly invented error.

Adam Smith's Lost Legacy

Paul Samuelson's Awesome Error

Gavin Kennedy | Professor Emeritus, Heriot Watt University

Dirk Ehnts — Structuralist Macroeconomics

I have recently ordered a copy of “Structuralist Macroeconomics – Applicable Models for the Third World” by Lance Taylor. However, I did not read very far into the book. Let me explain why. On p. 12, chapter 2 – titled “Adjustment Mechanisms – the Real Side” – starts with the sentence:

“MACROECONOMICS begins with the notion that the value of saving generated by all participants in the economy must by one means or another come into equality with the value of investment in the short run.”

While most economists will probably nod their heads, I don’t. Informed by a book chapter written by Basil Moore (download) and my own research, let me point out the fundamental problems with this statement. The first is trivial, the second not so....

econoblog 101
Structuralist Macroeconomics
Dirk Ehnts | Lecturer at Bard College Berlin

Gavin Kennedy — Kenneth Arrow And The Invisible Hand

Adam Smith scholar and biographer Gavin Kennedy further exposes the myth of "the invisible hand" originated by Paul Samuelson, after which it went viral. Those who have fallen victim to it are likely exculpable since it is not their business to know the fine points. But economists? It's their field. What is their excuse?

Adam Smith's Lost Legacy

Kenneth Arrow And The Invisible Hand

Gavin Kennedy | Professor Emeritus, Heriot Watt University

Dani Rodrik — Straight Talk on Trade

This reluctance to be honest about trade has cost economists their credibility with the public. Worse still, it has fed their opponents’ narrative. Economists’ failure to provide the full picture on trade, with all of the necessary distinctions and caveats, has made it easier to tar trade, often wrongly, with all sorts of ill effects.…

Ideology? Paternalism? Trade is not the only thing that economists refuse to be honest about, as Randy Wray pointed out about Paul Samuelson and deficit myths.

Project Syndicate
Straight Talk on Trade
Dani Rodrik | Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government

Simon Wren-Lewis — Why was austerity once so popular?

A pretty good one. It argues indirectly for the need to educate voters that the currency issuer is the mirror image of the currency users, so their accounting statements are complementary rather than similar. Government deficits are non-government income and government debt is non-government net financial wealth in aggregate.

Mainly Macro
Why was austerity once so popular?
Simon Wren-Lewis | Professor of Economics, Oxford University

Mean Squared Errors — The Microfoundations Hoax

Demolition work on the rotten edifice of "modern macroeconomics" continues apace. The emperor, it turns out, is not merely without clothes. Upon closer inspection, he appears to be simply an empty cardboard box with the words "Emperor Inside" scrawled across its surface in felt-tip pen. Paul Romer's devastating critique really deserves to be the final word on the matter. But even Paul leaves one stone unturned, an element of modern macro so transparently intellectually dishonest that it may properly be termed a hoax: its so-called "microfoundations."
No modern macro model is complete without a pean to the virtues of its own microfoundations. It seems that the word "microfoundations" is not allowed to appear unaccompanied by at least one self-congratulatory adjective -- "careful," "well-specified," even (shudder) "rigorous." But, as diligent readers of George Orwell will recall, war is not peace, freedom is not slavery, ignorance is not strength, and representative agent models are not rigorously microfounded.
But let's back up a step. What is this "microfoundations" business anyway, and why should anyone not currently seeking a tenure-track appointment in econ care even a tiny bit? Here's a short version of the very long story:

Mean Squared Errors
The Microfoundations Hoax
JEC

Lord Keynes — The Cult of Free Trade in a Nutshell

Debunking another economic myth.

You might wish to save these sources for future reference and citation.

Social Democracy For The 21St Century: A Post Keynesian Perspective
The Cult of Free Trade in a Nutshell
Lord Keynes

Gavin Kennedy — Jeffrey Madrick's Quite Wrong Account Of Adam Smith

Oh, and incidently, Adam Smith never mentioned ‘laissez-faire” in his entire writings.

Adam Smith's Lost Legacy
JEFFREY MADRICK'S QUITE WRONG ACCOUNT OF ADAM SMITH
Gavin Kennedy | Professor Emeritus, Heriot Watt University

Bill Black — The Unprincipled and Mythical Mankiw Principles of Economics

In this first installment I discuss the unacknowledged contradiction that lies at the core of the two meta-myths in the preface to N. Gregory Mankiw’s textbooks. Mankiw is among the leading providers of introductory economics textbooks. In his preface to these volumes he preaches his first meta-myth in his first substantive sentence about economics.…

New Economic Perspectives
The Unprincipled and Mythical Mankiw Principles of Economics
William K. Black | Associate Professor of Economics and Law, UMKC

ModernMonetaryTheorist — Implications Of Trump's Statement 'U.S. Can Print Money'

Summary

• Presumptive Republican Nominee Trump has set off a firestorm economic debate declaring "United States government. First of all, you never have to default because you can print the money.".
• Trump introduces the key tenant of Modern Monetary Theory into the economic debate. The key part theorizes sovereign nations that borrow in own currency should spend to boost their economy.
• As this debate widens, it will spill into the gold markets as some people falsely fear the U.S. may kick off a bout of hyper-inflation if Trump wins the Presidency.

Seeking Alpha
Implications Of Trump's Statement 'U.S. Can Print Money'
ModernMonetaryTheorist

Bill Mitchell — Don’t fall for the AAA rating myth

We once believed the Earth was flat. Then someone sailed out to the edge and came back the other way or something like that with apologies to Pythagoras and others in 5BC. At some other point in history, alchemists were convinced that they could take base metals (for example, lead) and turn them into ‘noble’ metals (like gold). More recently, the German Nazis convinced a nation that there was a Master Race (them) which had to purify civilisation by exterminating the parasitic (non-Aryan) races. The lowest races were considered to be Lebensunwertes Leben. Millions died unnecessary and cruel deaths as a result of that piece of national deception. Sometimes these demonstrations of national ignorance are relatively benign. Other times, as history shows the outcomes are devastating. The World is, once again, in the grip of another major deception, which is generating negative consequences at the worse end of the scale. As Australia approaches May, fiscal hysteria reaches its apex each year. Add the prospect of a general election (as early as July 2016) and the lying politicians and the media frenzy that support them extend themselves beyond the normal day to day idiocy and prevarication. On the world stage, the IMF prances around, wiping the blood of millions of citizens that it has impoverished over the years with its incompetence and bloody-mindedness, lecturing nations on what they should do next. Whenever, a nation follows their advice unemployment and poverty rises and the top-end-of-town walk off with even more loot. Loot is what pirates stole. These looters, however, do not even have the panache and elan that we associate with the romance of piracy. They are just sociopaths and cheats. Welcome to a new day in neo-liberal hell!…

Bill is on a roll.

Bill Mitchell – billy blog
Don’t fall for the AAA rating myth
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Brad DeLong — Avi Rabin-Havt: “Why Is the CBO Concocting a Phony Debt Crisis?

Been reading too much of the propaganda from the Peterson people? They are just making stuff up.

WCEG — The Equitablog
Must-read: Avi Rabin-Havt: “Why Is the CBO Concocting a Phony Debt Crisis?Brad DeLong

William K. Black — Democrats Need to Give Up Being Deficit Hawks Even When it Feels Good Politically

No, we need to return to non-simplistic, real economics, and stop spreading simplistic myths about money and federal deficits spread by Wall Street vultures eager to profit from the destruction of the safety net.

This is what Bernie should be saying.

I am not so sure that the Democrats are as guilty of playing politics as Bill is. I would say that they are simply financially and economically illiterate — morons rather than manipulators. They have bought into all the myths and associated shibboleths.

New Economic Perspectives
Democrats Need to Give Up Being Deficit Hawks Even When it Feels Good Politically
William K. Black | Associate Professor of Economics and Law, UMKC

Yves Smith — Investment Manager GMO Debunks Mythology of “Sound Finance,” or Deficit Hawkery

Word is getting around. The last mile continues to close. GMO is not the Bank of England, but it is influential in financial circles.  This will be widely read.

Naked Capitalism
Investment Manager GMO Debunks Mythology of “Sound Finance,” or Deficit Hawkery
Yves Smith

Cameron K Murray — More unpopular economic opinions

Attacking conventional assumptions, intuitions, and stylized "facts."

Fresh Economics Thinking
More unpopular economic opinions

Cameron K Murray

Eric Michael Johnson — What Philanthropic Organizations Need to Know about Giving – Is philanthropy driven by morality or markets?

The notion that philanthropy resulted from the invention of money is a pillar of classical economics. It is also a myth. After more than two centuries of searching for an indigenous society that approximates Adam Smith’s parable of the original barter system, anthropologists have concluded that it can only be imaginary. “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing,” wrote Cambridge anthropologist Caroline Humphrey in a 1985 paper titled “Barter and Economic Disintegration” in the journal Man. Instead, researchers have discovered that philanthropy is far more central to human social organization than economists had ever imagined.

The notion that philanthropy resulted from the invention of money is a pillar of classical economics. It is also a myth.…

This suggests that Adam Smith wasn’t so much chronicling the evolution of modern market economies as he was observing what existed during his time and then projecting it onto the human past.…

Evonomics

What Philanthropic Organizations Need to Know about Giving

Eric Michael Johnson