Bill Mitchell – Investigation into BBC bias misses the point really

This week, the British Broadcasting Commission (BBC) released the results of an independent review into its coverage of economic matters – Review of the impartiality of BBC coverage of taxation, public spending, government borrowing and debt – which was completed in November 2022. The problem is that the Investigation conducted by this Review, while interesting and providing some good analysis, misses the overall source of the bias that our public broadcasters have fallen into. The problem is not that they might be favouring political positions of one party or another. Rather, the implicit framing and language they use to discuss economic matters is largely flawed itself. And the journalists who uncritically use these concepts and terms just perpetuate the fiction and mislead their audiences....

Bill Mitchell – billy blog
Investigation into BBC bias misses the point really
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The EU’s Response To Biden's Inflation Reduction Act Is Finally Here — Felicity Bradstock

Tax credits.

Oilprice
The EU’s Response To Biden's Inflation Reduction Act Is Finally Here

Felicity Bradstock 

Also at Oilprice
Gold Demand Soars To Hit 11-Year High In 2022

"Objectivity Has Got To Go": News Leaders Call For End Of Objective Journalism — Jonathan Turley

Advocacy journalism is a euphemism for propaganda.

JonathanTurley.com
"Objectivity Has Got To Go": News Leaders Call For End Of Objective Journalism
Jonathan Turley | Shapiro Professor of Public Interest Law at George Washington University

Why I prefer perpetual/premium bonds to the platinum coin — JP Koning

 To my mind, issuing consols as JP Koning suggests is the simple solution and to be preferred over the coin, which has no precedent and appears gimmicky. In addition, he points out that consols fir with existing Fed policy and operations whereas the coin does not.

However, my preferred solution would be for the president to order the treasury secretary to ignore the debt ceiling as contradicting previous legislation without repealing it. Then there is also the Fourteenth Amendment. 

Short and worth a read in full.

Moneyness
Why I prefer perpetual/premium bonds to the platinum coin
JP Koning

Inflation has peaked, the supply side is recovering, and the interest rate rises were for what? — Bill Mitchell

So the IMF has come late to the transitory inflation party. What was obvious months ago is now at the forefront of IMF forecasts. Better late than never I suppose. It is becoming clear that most indicators are still not predicting a major demand-side collapse in most nations. Growth has moderated slightly and the forward indicators are looking up. At the same time, the inflation data around the world is suggesting the price pressures have peaked and lower inflation rates are expected. Real wages continue to fall, which means that the inflationary pressures were not being driven by wages. So no wage-price spiral mechanism at play. And PMI data and related indicators (such as shipping costs, etc) suggest the supply constraints which drove the inflationary pressures are easing. So has all this been the work of the interest rate rises imposed on nations by central bankers (bar Japan)? Not likely. The rising interest rates and falling inflation are coincidental rather than causal. Which means the damage to low income debt holders and the bank profits boom from the higher rates was for what?...

For what? To look they are doing something. This accounts for a lot decision making.

Bill Mitchell – billy blog
Inflation has peaked, the supply side is recovering, and the interest rate rises were for what?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Reuters — ECB can't go bankrupt even it suffers losses

ECB President Christine Lagarde lets the cat out of the bag.

“As the sole issuer of euro-denominated central bank money, the Eurosystem will always be able to generate additional liquidity as needed,” Lagarde said in response to a question by an Italian member of the European Parliament.

“So, by the definition, it will neither go bankrupt nor run out of money. In addition to that, any financial losses, should they occur, would not impair our ability to seek and maintain price stability....

Alan Greenspan testified to a congressional committee about the Fed's ability to do this, adding that the issue was availability of real resources rather than affordability…

Some people still don't get it. They can't get beyond the idea of money being a"thing" and can't fathom the concept of money as entries on a spreadsheet, now a digital spreadsheet and created merely by stroking a keyboard.

Reuters
ECB can't go bankrupt even it suffers losses

Staff

China bans export of core solar panel technologies — Jeff Pao

In a mirror image of what the United States has been doing with semiconductor lithography technology, China has recently amended its rules to ban the export of several core solar panel technologies in order to maintain its leading status and global market share in the sector.

A solar panel on a rooftop may include a hundred pieces of silicon and China has the lead now in machinery to manufacture those. Now Chinese manufacturers have been forbidden to use their large silicon, black silicon and cast-mono silicon technologies overseas, according to the newly-amended export guidelines published by the Ministry of Commerce and the Ministry of Science and Technology.

Asia Times
China bans export of core solar panel technologies

Jeff Pao

Also

Reuters
U.S. stops granting export licenses for China's Huawei - sources
By Karen Freifeld, Alexandra Alper and Stephen Nellis

Also

Google translation of Telegraph post.

Dmitry Medvedev

There is no way for the courage to enemy countries to admit that their "hellish" sanctions failed with a bang. Does not work. The vast majority of industrial products and consumer goods managed to replace their, Russian, and the missing - Asian stamps. The parallel import also works, from which we receive the same Western brands, and their owners - nothing. So everything is as always: Americans earn in humiliated Europe. Crowned Europe suffers and loses money. At the same time, even the IMF predicts in Russia an economic growth this year.

It remains only to accept the rules on the use of their intellectual property. Without any licenses and paying the author's reward. This, in particular, will be our response sanctions on their property rights. For everything: from films to industrial software. By the way, thanks to those who have developed various programs for the unlimited use of their expensive intellectual products. In short, for pirate use in personal sanctions😄. And what, à la Guerre Comme à la Guerre ...

T.ME/MEDVEDEV_TELEGRAM

/261

1

International "competition" heating up. Who started this anyway?

Russia’s “Sanction-Proof” Trade Corridor to India Frustrates the Neocons — Conor Gallagher

This is a huge deal not because of avoiding sanctions but because of its impact on world trade, the global economy, the Global South and East, and the shifting world order in the direction of multipolarism. It is also a signal that India is taking its place on the world stage as a principal player. This is a huge deal for the world system and it represents a concrete reconfiguration of this system taking place at present. 

The Global North and West will likely work at disrupting this transformation since it threatens Western dominance. Any disruption will be temporary, since the direction of development is toward that East now that the West is already developed. Subjugation of the East to the West is no longer possible in the longer run. Globalization will happen, just not linearly and not always in line with the Western agenda, especially as the level of development equalizes.

Naked Capitalism

Russia’s “Sanction-Proof” Trade Corridor to India Frustrates the Neocons
Conor Gallagher

see also

This may all be moot if Martin Armstong's algorithm is correct.

I can object all I want, but our computer will be right and we are looking at World War III between 2025 and 2027. So batten down the hatches.

Our computer, which tracks the global capital flows thanks to the cooperation with raw data, we can see that the money is still migrating out of Europe. Russians and the Chinese are pulling money out of Europe as well. So far, it is still underpinning the US marketplace.

Armstrong Economics

Europe will be Destroyed over Ukraine
Martin Armstrong

Also

NATO’s top military spokesman called Saturday for members of the US-led military alliance to transition to a “wartime economy” in order to “increase the production in the defense industry.”

In the interview, aired Friday on Portugal’s public broadcaster RTP News, Rob Bauer, Chairman of NATO's Military Committee, said the US-led NATO alliance is prepared for a “direct clash with Russia.”

Revealing mindset. The military mind is a thing of its own. In addition, Western leaders seem to have watched Patton (the movie) too many times. 

Neither the remarks of Bauer and Nuland nor the Rand report cited above have been reported on the front pages of any major US newspapers, or cited on the evening news. While US and NATO officials are openly talking about a direct conflict with Russia and China, the public is not being notified about the extraordinarily dangerous and reckless escalation of the war that is taking place.

WSWS
Top NATO spokesman calls for “wartime economy”
Andre Damon

Economic forecasting—why it matters and why it is so often wrong — Lars P. Syll

The problems that economists encounter when trying to predict the future really underline how important it is for social sciences to incorporate Keynes’s far-reaching and incisive analysis of induction and evidential weight in his seminal A Treatise on Probability (1921)....

Lars P. Syll’s Blog
Economic forecasting — why it matters and why it is so often wrong
Lars P. Syll | Professor, Malmo University

How They Paid for the War — Sam Levy

I am certainly not the first person to point to wartime mobilization as a model for our response to climate change. Alexandria Ocasio-Cortez made headlines3 for it within politics, but academics such as JW Mason, Andrew Bossie, and Isabella Weber have also worked to extract lessons from World War II for today.4 In my research I zero in on the Treasury, a key nexus of macroeconomic policymaking, and compare and contrast their view specifically with that of MMT.

The method is historical: I dug through various sources, primary and secondary, to piece together the worldview held by Treasury officials. The result is a surprisingly long list of direct quotations that you could easily mistake for having come from an MMT economist.…

Of course, the MMT economists noticed this too.

Good article based on MMT principles but which is framed to appeal to the progressives looking at a Green New Deal rather than as a tract promoting MMT.

Strange Matters
How They Paid for the War
Sam Levy, doctoral candidate in Economics at the University of Missouri - Kansas City with a co-discipline in Public Administration, and a research fellow with the Global Institute for Sustainable Prosperity. His work looks at how Modern Monetary Theory can be extended and modeled, and how the economics of wartime mobilization can inform rapid decarbonization.

Russia and Iran launch payment system as an alternative to Swift — Middle East Eye

Iran and Russia have linked their banking systems, a senior Iranian official said on Monday, a move that will allow the two heavily sanctioned countries with deepening economic ties to trade and conduct business outside the US financial system.

The two connected their interbank communication and transfer systems. Since the 2018 reimposition of sanctions, Iran has been disconnected from the western-based Swift financial messaging system, while many Russian banks were kicked off the platform following Moscow’s invasion of Ukraine.

"Iranian banks no longer need to use SWIFT ... with Russian banks, which can be for the opening of Letters of Credit and transfers or warranties," deputy governor of Iran's Central Bank, Mohsen Karimi, told the semi-official Fars news agency.…

Middle East Eye
Russia and Iran launch payment system as an alternative to Swift
Middle East Eye Staff

The "National Debt" is No One's Fault — Stephanie Kelton

Let's stop the finger-pointing and have an honest conversation. Neither side is responsible for our debt crisis, because there isn't one....

 Substantial post.

The Lens
The "National Debt" is No One's Fault
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

Cargo cult economics — Chris Dillow

Even a little "MMT" thrown in.

Of course, a wealth tax would raise money. But the government does not need money: it can print as much of it as you want. It needs real resources: nurses, care-workers, builders, quality managers and so on.

Stumbling and Mumbling
Cargo cult economics
Chris Dillow, Investors Chronicle

The common currency for the Mercosur — Matias Vernengo

Lula's visit to Argentina, during the Community of Latin American and Caribbean States (CELAC) meeting, brought about a brief discussion of the possibility of a common currency. I have discussed here (as well as many guest bloggers) both currency unions, in particular the euro, and it's consequences. Note that the FT piece linked suggested that the common currency was the first step in a long process. I doubt it, in part because, if the end goal is a real currency union, it would be a terrible idea. The actual proposal by the current finance minister, Fernando Haddad, and one of his collaborators, Gabriel Galípolo, falls short of a common currency area. It is still a bad idea....

In my view, the point of this announcement was purely political, and to suggest that the integration between the two countries, one with a threatened economy [Argentina], the other with a threatened democracy [Brazil], is a priority. Both left of center presidents stand together.… There is no circumstance in which a movement in the direction of a common currency makes any sense. 

Naked Keynesianism — Hemlock for economics students
The common currency for the Mercosur
Matias Vernengo | Professor of Economics, Bucknell University, and formerly Senior Research Manager at the Central Bank of Argentina (BCRA) as well as an external consultant to several United Nations organizations like the Economic Commission for Latin America and the Caribbean (ECLAC), the International Labor Organization (ILO), the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Program (UNDP)

Russia’s gas union eyes Pakistan, India — M. K. Bhadrakumar

The big growth in this century is expected to be in Asia, including Central Asia and Southeast Asia, and Africa — unless the West can either control the regions or disrupt their growth. Growth requires increased energy use and alternative energy other than nuclear is not there yet. And even with nuclear energy, much of the planet's uranium now comes from Kazakstan and Russia. Russia also constructs nuclear power plants. 

This article is mostly about natural gas along with the geopolitics and geo-economics involved.

India Punchline
Russia’s gas union eyes Pakistan, India
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

Core Inflation Woes — Brian Romanchuk

Alex Williams recently wrote “What Is ‘Core PCE Services Ex-Housing’ Anyway?,” which dissects the measure that the Fed is using to get a handle on “underlying” inflation. The most interesting bit (for me) is that about 1/4 of this measure is an imputed price index, based on wages. This means that this component will track wages (giving a convenient analytical relationship) by definition.

The logic of following this measure is that the Fed convinced itself that the core (ex-food and and energy) personal consumption expenditure is the best measure of “underlying” inflation, but it turns out that the housing part of that has construction issues (too smoothed to pick up current events), and so they wanted to strip that out of the measure.

This measure is obviously problematic. Its use reflects intellectual herding: following the methodologies of previous academics, without stopping to ask basic “why are we doing this?” questions. This is a typical feature of areas of academic failure. Since it is impossible to come up with useful results, the “publish or perish” imperative means that what gets published are marginal changes to an existing literature that has serious defects. (Source for that assertion: what I saw in my career in academia.)...

Bond Economics
Core Inflation Woes
Brian Romanchuk

British voters depressingly caught between a rock and a hard place — Bill Mitchell

Britain is now in a very undesirable state. The governing Tories are bereft of any sensible ideas and likely to lose the next General election in 2024 to Labour, who are promising to be the party of ‘sound finance’, which means they will be incapable of dealing with the challenges that face the nation in a highly volatile world and will likely end up losing popularity and ceding government back to the Tories. And just as in 2010, the Labour reputation will tarnished and they will be lost again for another sequence of elections. That sort of future prospect is not inspiring is it. Caught between a rock and a hard place.

Bill Mitchell – billy blog
British voters depressingly caught between a rock and a hard place
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

‘Tombstone for a Tombstone’: Dealing with the ‘bad science’ behind mainstream criticism of MMT — Phil Armstrong

The problem with conventional economics is that it requires that the "settled methodology" define both the questions and how they are answered, insuring that their mathematical models will be tractable. That is inappropriate for complex adaptive systems. All life systems and especially social systems are complex adaptive systems that are appropriately modeled using organic models rather than mechanistic models suitable for the natural sciences.

While MMT does not use organic modeling based on the life sciences, neither does it use mechanistic modeling based on the assumption that economics is comparable to the natural sciences and can be modeled on similar principles. But this assume non-existent conditions such as homogeneity and ergodicity, which do not apply to social systems that are historical and influenced by culture and institutions.

Why haven't organic models replaced mechanistic models? We aren't there quite yet although much work is being done in this directions. Economics is data-based and therefore limited by path dependence and hysterisis whereas complex adaptive systems involve synergy and therefore emergence due to reflexivity.

Therefore, MMT analysis is based on ex post data from accounting on the one hand and counterfactuals with respect to future contingency. While the future cannot be predicted, it can be forecast to some degree based on the presence or absence of certain conditions that can be specified. 

But this approach does not result in models based on "settled methodology" so it is rejected by the mainstream as deviant. Krugman: "Where is your model?" The retort is, "Your modeling doesn't work and here is why. Ours does to a useful degree and therefore it should be adopted."

The Gower Initiative for Modern Money Studies
‘Tombstone for a Tombstone’: Dealing with the ‘bad science’ behind mainstream criticism of MMT
Phil Armstrong

Russia’s intentions are clarifying — Alasdair Macleod

Gold ruble in the works? Longish. Many details. Speculative so far.

Sergei Glazyev has apparently shifted from a commodity basket toward international settlement in gold with the value of gold being anchored to a barrel of oil.

Goldmoney
Russia’s intentions are clarifying
Alasdair Macleod

Hyman Minsky and the IS-LM obfuscation — Lars P. Syll

Setting the record straight. New Keynesianism (typified by Paul Krugman) is not Keynes, nor is it a faithful rendition of John Hicks either.

Lars P. Syll’s Blog
Hyman Minsky and the IS-LM obfuscation
Lars P. Syll | Professor, Malmo University

Can You Smell What the Year of the Rabbit Is Cooking? — Pepe Escobar

The New Silk Roads, or BRI, as well as the integration efforts of BRICS+, the SCO and the EAEU will be on the forefront of Chinese policy.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
Can You Smell What the Year of the Rabbit Is Cooking?
Pepe Escobar

See also

Russian Foreign Minister Lavrov informed Africans during a press conference while on his latest tour of the continent that India is an independent multipolar powerhouse. His exact words were as follows: “Those powerhouses of their respective regions and to the large extent for the world economy as China and India – you cannot ignore them and you cannot dictate to them -- that they should develop the way that will continue to enrich the West – this is colonialism.”

Andrew Korybko's Newsletter

Lavrov Informed Africans That India Is An Independent Multipolar Powerhouse
Andrew Korybko, American geopolitical analyst and independent journalist based in Moscow, and member of the expert council for the Institute of Strategic Studies and Predictions at the People’s Friendship University of Russia

Also

Blowback.

MR Online

‘The Cry Is “Lumumba Lives”—His Ideas, His Principles’

Janine Jackson interview of  Friends of the Congo’s Maurice Carney

Originally published: FAIR (Fairness & Accuracy in Reporting) 

For US, foreign arm sales boom amid Russian invasion, Chinese intimidation — Lee Ferran

Total US arms transfers for fiscal 2022 topped $50 billion, up nearly 50 percent from prior year.

"Winning bigly." MICIMATT (Military-Industrial-Congressional-Intelligence-Media-Academia-Think-Tank complex), that is. 

Breaking Defense

For US, foreign arm sales boom amid Russian invasion, Chinese intimidation
Lee Ferran

Bill Mitchell — Bank of Japan continues to show who has the power

Its been around 9 months since the central banks of the world (bar Japan) started to push up interest rates. This reflected a return to the dominant mainstream view that fiscal policy should aim to support monetary policy in its fight against inflation and thus be biased towards surpluses, while central banks manipulated interest rates to deal with any inflationary pressures. The central banks would somehow form a ‘future-looking’ view that inflation was about to spring up and they would push rates up to curb the pressures. The corollary was that full employment would be achieved through price stability because the market would bring the unemployment rate to a level consistent with stable inflation. So full employment became defined in terms of inflation rather than sufficient jobs to meet the desires of the workforce. This is the so-called NAIRU consensus that has dominated the academy and policy makers since the 1970s. During the pandemic, it was abandoned and there was hope, particularly after statements made by the US Federal Reserve that this approach had unnecessarily resulted in elevated levels of unemployment for decades, that central bankers would target low unemployment as well as price stability. Progressive economists, of course, rejected the whole deal, noting that monetary policy shifts created uncertain distributional outcomes (creditors gain, debtors lose when rates rise) and also rising interest rates add to business costs which provoke further price rises. Anyway, after a short respite from this pernicious NAIRU logic, we are back to square one with central banks pushing up rates. The Bank of Japan is now standing, again, in the wilderness, resisting this logic and demonstrating how government should deal with the sort of pressures being felt around the globe. And who isn’t happy? The grandstanding financial markets who thought they could make a quick buck but have come up against an ideology that rejects their claim to dominance. That is a happy story....

Bill Mitchell – billy blog
Bank of Japan continues to show who has the power
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Goodbye empire? US sanctions are failing in the face of multipolarity — Felix Livshitz

Published by the Council on Foreign Relations NGO, Foreign Affairs provides space for officials within the US military industrial complex to communicate with one another on matters they believe to be of the utmost significance. Therefore, it is important to pay attention when the magazine makes major pronouncements on any issue.

It recently published an appraisal of US sanctions – the conclusion being that they are increasingly ineffective, have prompted Beijing and Moscow to create alternative global financial structures to insulate themselves and others from punitive actions, and that Washington and its acolytes will no longer be able to force countries to do their bidding, let alone destroy dissenting states, through such measures in the very near future.

RT — Question More (Russian state-sponsored media)

Goodbye empire? US sanctions are failing in the face of multipolarity
Felix Livshitz

Debt, Deficits, Secular Stagnation and the Which Way Is Up Problem in Economics — Dean Baker

Dean Baker does some MMT — sort of, anyway.

CounterPunch
Debt, Deficits, Secular Stagnation and the Which Way Is Up Problem in Economics
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Mike’s prediction from 2016

 

Nothing has changed since… This current “debt ceiling!” episode could be the big one… 🤞

Migrating to Mastodon and some additional announcements — Bill Mitchell

Today, I have a few news and information items. First, I detail how to migrate to Mastodon so that you can continue to follow me as I escape Twitter. Second, I provide enrolment details for the next offering of our MMT edX MOOC. Third, I provide access details to my annual Helsinki public lecture which will take place tomorrow starting at 19:00 EAST.

Bill Mitchell – billy blog
Migrating to Mastodon and some additional announcements
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australiael

MMT And Banking — Brian Romanchuk

Since I am in the Modern Monetary Theory (MMT) camp, I cannot write a book on baking without covering some of the critiques of MMT and banking. I wrote about this topic in Section 5.7 of my earlier book, Modern Monetary Theory and the Recovery. In this section, I am give a minimal explanation of the topic, without covering too much of the same ground of that earlier text.

Note: This is a draft of a section that will go into my banking primer manuscript.

Bond Economics

MMT And Banking
Brian Romanchuk

The Most Egregious Mistake — Alastair Crooke

The situation is more complicated than this but Alastair Crooke brings out some key factors. There were actually two big mistakes that he mentions. 

First is the mistake of overestimating finance and underestimating productive capacity. Andrei Martyanov had been writing about this for some years.

The second, which is related to the first, is the abject failure of intelligence to properly access the strength of the Russian economy. This is seldom mentioned but it is a huge factor. Alastair Crooke served in British intel so it is well aware of it.

These mistakes together constitute a blunder that is leading to disaster. The US and its allies either have not yet realized this or have backed themselves into a corner from which they cannot escape without climbing down, and that threatens bringing down their house.

The analysis is sort of a combination of Michael Hudson and Andrei Martyanov without mentioning either. It's not fully MMT-compliant but the thrust of the article is not dependent on this.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
The Most Egregious Mistake
Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

A Second Civil War — Aidan Simardone

The article is really about the economic "war" underway in the US between rural and urban areas rather than mostly political differences. So was the Civil War, which was about the abolition slavery, a political matter, but emancipation resulted in huge loss of capital. The Civil War was also about the urban-rurual divide, with the urban North dominated by factories and the rural South dominated by agriculture, chiefly cotton production.

According to Bouie, slavery’s abolition was an existential threat to White slaveowners, whereas he’s “not sure there’s anything in American society right now that plays the same role”.

Bouie is right. Ideas and beliefs are important, but without an economic basis, they cannot generate war. However, he is wrong that post-1991 polarization has no economic basis. There are real economic interests that divide Democrats and Republicans. In the 1860s it was between North and South. Today it is between rural and urban capitalists....

The analysis is interesting not so much for the conclusions as the information used to substantiate them.

Counterpunch

A Second Civil War

Aidan Simardone