Sunday, February 3, 2019
Richard Murphy—A challenge to Simon Wren-Lewis on modern monetary theory and Labour’s fiscal credibility rule
Richard Murphy challenges Simon Wren-Lewis to put up or shut up.
So my question is, I suppose, inevitable. What I would like Simon to do is show how he and Jonathan Portes have written, as he claims, a rule that delivers a real-world political economic solution (because that is what Labour's rule is, because it is not an academic paper) that is the same as modern monetary theory. And I want him to show this even though:
i) The rule he has written works subject to financial constraints, and not the constraints of the physical economy, and
ii) It does so even though it requires a balanced current expenditure budget and modern monetary theory quite specifically does not;
iii) MMT does not set time limits for actions to resolve funding issues and the Portes / Wren-Lewis rule does.
What I would also like to see is Simon's own explanation of why MMT does work, since he accepts it does, and his explanation as to why Jonathan Portes is wrong in that case.
Of course, the explanation can be theoretical, but I should add that this is really about the political economy. This would not matter nearly so much if Labour had not adopted the Portes / Wren-Lewis rule. So the explanation has to work at that political economic level as well: i.e. the power relationships inherent in the two approaches also have to be the same for the challenge to be achieved as that is what political economy is concerned with....Actual policy is where the rubber hits the road.
Tax Research UK
A challenge to Simon Wren-Lewis on modern monetary theory and Labour’s fiscal credibility rule
Richard Murphy
Michael Roberts Blog MMT 2 – the tricks of circulation
Michael Roberts needs to read more of the MMT primary literature if he wants to critique MMT in any detail.
MMT starts with the observation of Warren Mosler that under the current monetary system, a contemporary sovereign currency is a public monopoly, with the currency issuing government acting as the people's representative — popular sovereignty and all that. A monopolist is the price setter. The purpose of currency issuance is to provision the government in order to serve public purpose, public purpose being a political issue in a popular democracy.
While all currency sovereigns are the same operationally with respect to the currency, authoritarian governments are not restricted by public opinion and domestic political considerations. This includes oligarchies masquerading as popular democracies. Not all "democracies" are popular democracies, in spite of appearances (elections).
Therefore, power is an issue. Almost all contemporary states fall in this category to some extents at least. This needs to be addressed through policy changes that effect institutional change, e.g., to preempt rent extraction by special interests.
States that have given up currency sovereignty by either using a currency they do not themselves issue, or undertake obligations in a foreign currency are different operationally in that they are not monopoly providers of their currency. This includes the American states, which ceded currency sovereignty to the federal government, and the nations of the EZ, which ceded it to the ECB. Comparing currency sovereigns to currency issuers is like adding apple and oranges. Note that commercial banks do not issue currency. They extend credit denominated in the currency and are delegated a special relationship with the central bank as currency issuer that acts on behalf of the state as the government's fiscal agent.
In a modern monetary production economy (as described by Keynes, for example), this is how it begins — with "money." MMT agrees with Marx's observation that capitalism is based on using money to make more money — M-C-M', instead of starting the Robinson Crusoe just-so story about barter. This means that money is not neutral and that the loan funds theory is wrong. However, MMT defines "money" carefully. Failure to grasp these key distinctions will result in missing MMT.
Failure to begin at the beginning is to misunderstand MMT and sets up a straw man argument that is DOA. As Aquinas said, paraphrasing Aristotle, "A small mistake in the beginning is a big one in the end." Most economic theory stumbles out of the gate by getting this wrong.
Nevertheless, MMT starts with the conviction that it is the state (not capitalist commodity relations) that establishes the value of money.Not quite.
MMT starts with the observation of Warren Mosler that under the current monetary system, a contemporary sovereign currency is a public monopoly, with the currency issuing government acting as the people's representative — popular sovereignty and all that. A monopolist is the price setter. The purpose of currency issuance is to provision the government in order to serve public purpose, public purpose being a political issue in a popular democracy.
While all currency sovereigns are the same operationally with respect to the currency, authoritarian governments are not restricted by public opinion and domestic political considerations. This includes oligarchies masquerading as popular democracies. Not all "democracies" are popular democracies, in spite of appearances (elections).
Therefore, power is an issue. Almost all contemporary states fall in this category to some extents at least. This needs to be addressed through policy changes that effect institutional change, e.g., to preempt rent extraction by special interests.
States that have given up currency sovereignty by either using a currency they do not themselves issue, or undertake obligations in a foreign currency are different operationally in that they are not monopoly providers of their currency. This includes the American states, which ceded currency sovereignty to the federal government, and the nations of the EZ, which ceded it to the ECB. Comparing currency sovereigns to currency issuers is like adding apple and oranges. Note that commercial banks do not issue currency. They extend credit denominated in the currency and are delegated a special relationship with the central bank as currency issuer that acts on behalf of the state as the government's fiscal agent.
In a modern monetary production economy (as described by Keynes, for example), this is how it begins — with "money." MMT agrees with Marx's observation that capitalism is based on using money to make more money — M-C-M', instead of starting the Robinson Crusoe just-so story about barter. This means that money is not neutral and that the loan funds theory is wrong. However, MMT defines "money" carefully. Failure to grasp these key distinctions will result in missing MMT.
Failure to begin at the beginning is to misunderstand MMT and sets up a straw man argument that is DOA. As Aquinas said, paraphrasing Aristotle, "A small mistake in the beginning is a big one in the end." Most economic theory stumbles out of the gate by getting this wrong.
However, it is even more complicated. Good critique is far from simple in just about any field. For example, Michael Roberts is a Marxist economist. There are many interpretations favorable to Marx among Marxist and Marxian economist. There is no agreed upon "standard" interpretation of Marx that all Marxists and Marxians accept. Roberts's view is one among many. In addition, Marx has been criticized widely by just about everyone other school of economics and member of a school sometime disagree over how Marx should be criticized. Pinning Marx down to a particular interpretation has proved impossible.
The same might be said of Keynes, as any other thinker, theory or school. There are probably a dozen interpretations of what quantum mechanics "means." So criticizing across interpretations is difficult unless one truly understand the view that one is opposing. This is difficult if one doesn't see the world in that way. Then cognitive bias takes over.
This is not argue for relativism in interpretation. Some critiques are better than others, even though none has carried the day. so, it is not like all critiques standing on the same level. Some are very tightly argued, although disputed by other experts. Some are essentially emotional rants. There is broad middle range. All but the tightly argued ones can put aside as a waste of time to deal with. Tight argument implies command of the field and good documentation.
What distinguishes good critiques from less satisfactory is the level of knowledge of the work a critic exhibits in a critique through citations and evidence. Obviously, this requires deep acquaintance with the material — all of it.
Critique of Smith, Ricardo, Marx and followers, Keynes and followers, as well as key figures in the neoclassical and Austrian schools, etc., has grown to exponentially, to the degree that no economist can claim to be an expert in economics as a whole, any more than a philosopher can claim command of all the literature, or a historian. There is a reason for specialization.
The criticism of MMT is just beginning however, and the body of literature generated by those considered by other MMT economists to be members of the school is not so large as to be unmanageable, although it is much more than weekend reading. Shooting from the hip doesn't cut it, obviously, but neither does lack of attention to detail in the professional word.
So I think two things need to happen.
First, critics need to educate themselves better and forget about quoting blogs, at least chiefly. I mention some sources below.
Twitter? Forget about it. The level of "debate" there is silly and is resulting in bad blood. The only approach that makes sense is citing professional sources. This brings up the second point.
Secondly, MMT economists should be ready to counter points that have been addressed in the literature by citing the literature. This would save everyone a lot of time and raise the level of the debate. I have yet to see an "objection" that was not previously addressed, usually in depth.
Thirdly, it needs to be recognized that different approaches are based on different assumptions, both substantial and procedural, resulting in different frameworks. These frameworks tend to be ideologically based. This implies that there are also hidden assumptions involved as unstated presumptions. This needs to be clarified so that the debate is on the same page, or the parties agree to disagree over the foundations. Some debates are inconclusive since the parties see reality through different lenses. Moreover, changing glasses would destroy one's intellectual investment.
Bill Mitchell and Randy Wray's introductory text on MMT has been available for some time. Their MMT macro textbook is due for imminent release available for pre-order. Randy's MMT primer has been available for a long time and is no in its second edition. His 1996 MMT book introducing MMT is also germane.
Warren Mosler is acknowledged as the founder of MMT with his Soft Currency Economics. He wrote a popular book on understanding MMT, too, The Seven Deadly Innocent Frauds of Economic Policy. Warren Mosler has also put forward several policy proposals based on MMT principles and his experience in banking, finance, etc. They serves as a practical demonstration.
Eric Tymoigne has written a book on money and banking, The Financial System and the Economy, based on MMT insights and principles.
MMT working papers can be found online at Levy Institute
A critic should at least be familiar with these sources. It's not an overwhelming task. In most fields, failure to do so is regarded as unprofessional and carries reputational risk.
Michael Roberts Blog
MMT 2 – the tricks of circulation
Michael Roberts
Michael Roberts Blog
MMT 2 – the tricks of circulation
Michael Roberts
Venezuela Confirms Coltan Deposits, $100 Billion in Gold Reserves
Uh-oh!
They say it will be used for the benefit of the Venezuelan people, but Trump, Bolton and the rest of the U.S. elite will probably have other ideas.
They say it will be used for the benefit of the Venezuelan people, but Trump, Bolton and the rest of the U.S. elite will probably have other ideas.
The Venezuelan government has confirmed the existence of “significant” coltan deposits south of the Orinoco River, as well as proven gold reserves valued at $100 billion.
Basic Industries and Mining Minister Rodolfo Sanz told a press conference that only seven countries in the world have reserves of coltan – a valuable black mineral that combines niobite and tantalite and is used in cell phones and computer chips – in sufficient quantities for export.
Sanz said that “strategic mineral,” also known as “blue gold,” is an irreplaceable material in products such as cellular phones and electromagnetic instruments for aviation and other hi-tech industries.
“Without coltan, there are no cell phones,” the minister said in illustrating the importance of that mineral.
He also referred to gold resources and said Venezuela has the world’s largest reserves of that precious metal after South Africa. According to the minister, Venezuela’s potential reserves total some 15,500 tons and its certified reserves are valued at some $100 billion.
Separately, Science and Technology Minister Jesse Chacon, who accompanied Sanz at Friday’s press conference, confirmed that important deposits of kaolinite have been found and are being developed with assistance from Russia.
He also said Russia will offer Venezuela the technological assistance it needs for the treatment of recently discovered uranium deposits.
Chacon, who said uranium will be used for energy production “because oil will run out,” ruled out the possibility of using that mineral for military purposes.
The minister said the idea is to use the country’s natural resources and not sell them in their raw, unprocessed form, to international clients.
“We have all the right to use our uranium for the benefit of Venezuelans and not sell it at bottom-of-the-barrel prices to the French or Americans,” Chacon said.
The minister did not give a timeframe for the development of Venezuela’s nuclear sector nor an estimate of the size of the country’s available uranium reserves.
Global Research
David Brin - Stop Using Adam Smith and F.A. Hayek to Support Your Political Ideology
The irony of faith in blind markets
Libertarians and conservatives believe in free markets, but in laissez-faire the market is soon captured and manipulated by the few, and then there is no meritocracy anymore, only an oligarchy.
And when an economy is run by a only few people, whether that be in communism or in laissez-faire capitalism, things always start to go wrong, because no one can understand the micro-market better than millions of individuals.
Markets need regulations to keep them free and open.
Lip Service to Wisdom
So, what’s that irony I spoke of, earlier? How does this central principle turn around and bite today’s libertarians and conservatives, proving many of them fools?
Clearly, everything I’ve said, so far, ought to make a libertarian or conservative happy!
So where’s the problem? The problem is that it’s all lip service on the right! Those who most-loudly proclaim Faith In Blind Markets (FIBM) are generally also those proclaiming idolatry of private property as a pure, platonic essence, a tenet to be clutched with religious tenacity, as it was in feudal societies. Obdurate, they refuse to see that they are conflating two very different things.
The Irony of Faith in Blind Markets
But in rejecting one set of knowledge-limited meddlers—100,000 civil servants—libertarians and conservatives seem bent on ignoring market manipulation by 5,000 or so aristocratic golf buddies, who appoint each other to company boards in order to vote each other titanic “compensation packages” while trading insider information and conspiring together to eliminate competition. Lords who are not subject to inherent limits, like each bureaucrat must face, or rules of disclosure or accountability. Lords who (whether it is legal or not) collude and share the same delusions.
So, what’s that irony I spoke of, earlier? How does this central principle turn around and bite today’s libertarians and conservatives, proving many of them fools?
Clearly, everything I’ve said, so far, ought to make a libertarian or conservative happy!
So where’s the problem? The problem is that it’s all lip service on the right! Those who most-loudly proclaim Faith In Blind Markets (FIBM) are generally also those proclaiming idolatry of private property as a pure, platonic essence, a tenet to be clutched with religious tenacity, as it was in feudal societies. Obdurate, they refuse to see that they are conflating two very different things.
The Irony of Faith in Blind Markets
But in rejecting one set of knowledge-limited meddlers—100,000 civil servants—libertarians and conservatives seem bent on ignoring market manipulation by 5,000 or so aristocratic golf buddies, who appoint each other to company boards in order to vote each other titanic “compensation packages” while trading insider information and conspiring together to eliminate competition. Lords who are not subject to inherent limits, like each bureaucrat must face, or rules of disclosure or accountability. Lords who (whether it is legal or not) collude and share the same delusions.
Evonomics.
Dmitry Orlov - Why Must Venezuela Be Destroyed?
Lots of interesting stuff in this article.
As a side comment, a lot of people have been voicing the opinion that Venezuela’s woes are due to socialism. According to them, it’s fine if lots of people are suffering as long as their government is capitalist, but if it is socialist then that’s the wrong kind of suffering and their government deserves to be overthrown even if they all voted for it. For example, the site ZeroHedge, which often publishes useful information and analysis, has been pushing this line of thinking ad nauseam. It is unfortunate that some people imagine that they are being principled and right-thinking whereas they are just being dumb jerks at best and somebody’s useful idiots at worst. The politics of other nations are not for them to decide and they should stop wasting our time with their nonsense.
As a side comment, a lot of people have been voicing the opinion that Venezuela’s woes are due to socialism. According to them, it’s fine if lots of people are suffering as long as their government is capitalist, but if it is socialist then that’s the wrong kind of suffering and their government deserves to be overthrown even if they all voted for it. For example, the site ZeroHedge, which often publishes useful information and analysis, has been pushing this line of thinking ad nauseam. It is unfortunate that some people imagine that they are being principled and right-thinking whereas they are just being dumb jerks at best and somebody’s useful idiots at worst. The politics of other nations are not for them to decide and they should stop wasting our time with their nonsense.
Why the unseemly haste to blow up Venezuela? The explanation is a simple one: it has to do with oil. “It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela.” said John Bolton on Fox News. You see, Venezuelan oil cannot be produced profitably without high oil prices—so high that many oil consumers would go bankrupt—but it can certainly be produced in much higher quantities at a huge financial loss.
Huge financial losses certainly wouldn’t stop American oil companies who have so far generated a $300 billion loss through fracking—financed by looting retirement savings, saddling future generations with onerous debt and other nefarious schemes. Also keep in mind that the single largest oil consumer in the world is the US Dept. of Defense, and if it has to pay a little more for oil in order to go on blowing up countries—so it will. Or, rather, you will. It’s all the same to them. The US is already well beyond broke, but its leaders will do anything to keep the party going for just a while longer.
Here’s the real problem: the fracking bonanza is ending. Most of the sweet spots have already been tapped; newer wells are depleting faster and producing less while costing more; the next waves of fracking, were they to happen, would squander $500 billion, then $1 trillion, then $2 trillion… The drilling rate is already slowing, and started slowing even while oil prices were still high. Meanwhile, peak conventional (non-fracked) oil happened back in 2005-6, only a few countries haven’t peaked yet, Russia has announced that it will start reducing production in just a couple years and Saudi Arabia doesn’t have any spare capacity left.
A rather large oil shortage is coming, and it will rather specifically affect the US, which burns 20% of the world’s oil (with just 5% of the world’s population). Once fracking crashes, the US will go from having to import 2.5 million barrels per day to importing at least 10—and that oil won’t exist. Previously, the US was able to solve this problem by blowing up countries and stealing their oil: the destruction of Iraq and Libya made American oil companies whole for a while and kept the financial house of cards from collapsing. But the effort to blow up Syria has failed, and the attempt to blow up Venezuela is likely to fail too because, keep in mind, Venezuela has between 7 and 9 million Chavistas imbued with the Bolivarian revolutionary spirit, a large and well-armed military and is generally a very tough neighborhood.
Huge financial losses certainly wouldn’t stop American oil companies who have so far generated a $300 billion loss through fracking—financed by looting retirement savings, saddling future generations with onerous debt and other nefarious schemes. Also keep in mind that the single largest oil consumer in the world is the US Dept. of Defense, and if it has to pay a little more for oil in order to go on blowing up countries—so it will. Or, rather, you will. It’s all the same to them. The US is already well beyond broke, but its leaders will do anything to keep the party going for just a while longer.
Here’s the real problem: the fracking bonanza is ending. Most of the sweet spots have already been tapped; newer wells are depleting faster and producing less while costing more; the next waves of fracking, were they to happen, would squander $500 billion, then $1 trillion, then $2 trillion… The drilling rate is already slowing, and started slowing even while oil prices were still high. Meanwhile, peak conventional (non-fracked) oil happened back in 2005-6, only a few countries haven’t peaked yet, Russia has announced that it will start reducing production in just a couple years and Saudi Arabia doesn’t have any spare capacity left.
A rather large oil shortage is coming, and it will rather specifically affect the US, which burns 20% of the world’s oil (with just 5% of the world’s population). Once fracking crashes, the US will go from having to import 2.5 million barrels per day to importing at least 10—and that oil won’t exist. Previously, the US was able to solve this problem by blowing up countries and stealing their oil: the destruction of Iraq and Libya made American oil companies whole for a while and kept the financial house of cards from collapsing. But the effort to blow up Syria has failed, and the attempt to blow up Venezuela is likely to fail too because, keep in mind, Venezuela has between 7 and 9 million Chavistas imbued with the Bolivarian revolutionary spirit, a large and well-armed military and is generally a very tough neighborhood.
Information Clearing House
ABC News Venezuela 1989 - Mafia
They say Nicolas Maduro's government mismanaged the economy and has corrupt politicians, but look at what Hugo Chavez and Nicolas Maduro were up against? They managed to bring corruption and crime down, and improve the economy, but no credit is given for that.
It's very difficult for good to win against evil, as evil will murder, torture, bribe, kidnap, kidnap family members, double cross, cheat, and lie, etc. Good people are very brave to take on evil. It's amazing that the Venezuelan military has not been corrupted yet, although Washington has tried.
Italian Mafia activity was very big in Venezuela, before Chavez took over in 1998
It's very difficult for good to win against evil, as evil will murder, torture, bribe, kidnap, kidnap family members, double cross, cheat, and lie, etc. Good people are very brave to take on evil. It's amazing that the Venezuelan military has not been corrupted yet, although Washington has tried.
Italian Mafia activity was very big in Venezuela, before Chavez took over in 1998
From Aangirfan
1. Venezuela's economic problems did not start with the election of Chavez in 1998.
2. In Venezuela, from 1983 to 1998, real income fell by 14%.
In 1998, before Chavez took over, 68% of Venezuelans lived below the poverty line.
In 1998, before Chavez took over, the inflation rate was 35.8%.
3. In 1998, before Chavez took over, Venezuela was extremely corrupt.
4. After Chavez was elected president the economy strengthened considerably for three years.
The inflation rate fell to 12.5% in 2001.
The poverty rate was successfully lowered to 39%.
5. What did cause the first downturn of Venezuela’s economy was a CIA coup in 2002 and a violent shutdown, by enemies of Chavez, of the country's oil industry.
(The Venezuelan coup d'état attempt of 2002 was a failed coup d'état on 11 April 2002 that saw President Hugo Chávez ousted from office for 47 hours before being restored to power.)
6. Venezuela bounced back and in 2005, the Venezuelan economy grew by 9.4%, the highest in Latin America.
In 2011, equality in Venezuela was better than in the US and only behind Canada in the Western Hemisphere.
The Chavéz government managed to put into place policies that aided the poor and, at the same time, strengthened the economy.
7. A factor in Venezuela’s 'economic crash' is the apparently intentional meddling of oil prices by Saudi Arabia and its allies that apparently aimed at hurting Iran, Venezuela and Russia.
8. Economic sanctions, organised by the USA, can cripple any economy.
The imposition of economic sanctions can decrease a country's per capita GDP growth rate by 25 to 30 percentage points on average with effects lasting for at least 10 years.
9. In 1993, sanctions on Serbia made more than half the population of the country poor, unemployed, or displaced as refugees.
In Iraq, the economic sanctions led to a decrease in GDP from $38 billion in 1989 to $10.8 billion in 1996.
Iraq experienced a shift from relative affluence to massive poverty.
In 2006, the first economic sanctions against Venezuela were put in place by the USA.
The Trump Administration greatly escalated the economic pressures.
Florida Maquis - DC HAS A *HUGE PROBLEM NOW(!)STUNNING MILITARY DEFEAT INEVITABLE(!)VENEZUELA WILL BE FREE(!)
Florida Maquis says the U.S. would have bitten off more than it can chew by starting a war with Venezuela as the Venezuelan's will fight to the end. But Col. Lawrence Wilkerson says the U.S. elite love protected wars because they are externally profitable to them - plus they may get the oil as well.
Florida Maquis says the FARC in Columbia will back Maduro and Brazil is unpredictable and may have is own plans for Venezuela.
Florida Maquis says the FARC in Columbia will back Maduro and Brazil is unpredictable and may have is own plans for Venezuela.
Saturday, February 2, 2019
NBC — Russia's propaganda machine discovers 2020 Democratic candidate Tulsi GabbardExperts who track websites and social media linked to Russia have seen stirrings of a possible campaign of support for Hawaii Democrat Tulsi Gabbard.
Experts who track websites and social media linked to Russia have seen stirrings of a possible campaign of support for Hawaii Democrat Tulsi Gabbard.Here we go with the swiftboating or Tulsi. Are Americans this stupid?
Mark Ames comments.
NBC News
Robert Windrem and Ben Popken
Also
Wait for the birther "argument."
Tulsi Gabbard’s birthplace could create political fodder in national campaign
See also
We hardly knew ye.
Sherrod Brown: Medicare for all not 'practical'
Nathaniel Wiexel
Sputnik — Rostec Launches Sales of Russia's Cryptophone Immune to Hacking, Wiretapping
Sales of a mobile phone with crypto-protection technology Kruiz-K, which is immune to hacking and wiretapping, have started in Russia, the press service of Russian state corporation Rostec told Sputnik on Sunday, specifying that the price of the device amounted to around 85,000 rubles ($1,298)….Sputnik International
Rostec Launches Sales of Russia's Cryptophone Immune to Hacking, Wiretapping
Sean Corrigan — MMT: The Court Astrologer’s Dream
Another nutty one, for the record. You get the drift from the title — ranting and raving.
True Sinews
MMT: The Court Astrologer’s Dream
Sean Corrigan, Cantillon Consulting
Richard Murphy — Why the left and Labour really do need to adopt the core ideas of modern monetary theory
Richard Murphy takes Jonathan Portes (and Simon Wren-Lewis) to task for betraying Labor and the left, while misrepresenting MMT.
The issues that MMT addresses in terms of political economy are social, political and economic, as well as cultural and institutional. A lot of different expertise needs to be brought to bear in addition to theoretical economists. Academic economists don't own this debate. Neither do financial professionals. While both these areas of expertise are required, they are not the only necessary ones. Given the broad context, many inputs are relevant in addition.
One of these areas is the so-called Green New Deal. The issues involved are fundamentally economic but they are also fundamentally social as an existential threat and fundamentally political in that a political solution is required. Moreover, it's a huge engineering problem, since the energy system is involved. It's also a global challenge that in which all will have to cooperate.
Any viable solution will require changing institutional arrangements, e.g., legal requirements, and it will also require a cultural shift that involves mass education, since the low-hanging fruit is conservation in an environment where consumption is promoted. It is a huge undertaking, which is a big reason that it is a hot potato that few are brave enough to pick up — not to mention, smart enough.
What MMT has to offer in particular is the knowledge that the only constraint on currency sovereigns addressing issue of public purpose is availability of real resources. The financial constraint is inflation and inflation is a consequence of resource scarcity relative to demand. Governments can address this by controlling demand through taxation or increasing availability of real resources through public investment.
This being a finite world there are physical limits. Knowledge is potentially unlimited, however, limited only the ability to tap potential. Ignorance limits potential, and willful ignorance and dissimulation are culpable.
Richard Murphy broaches these issues skillfully. Good job — although I don't agree with everything he says, notably, about the job guarantee.
Tax Research (UK)
Why the left and Labour really do need to adopt the core ideas of modern monetary theory
Tax Research (UK)
Why the left and Labour really do need to adopt the core ideas of modern monetary theory
See also
* Demand is the term that economists use to describe the ability and willingness of buyers to purchase a product or service. …
This general idea of demand is often called notional demand, which is composed of both latent demand and effective demand.
Even if a buyer needs or would be willing to purchase a particular product or service, he cannot do so if he lacks the necessary funds or if he does not know about that product or service. This portion of market demand is called latent demand.
Effective demand is a representation of the actual amount of goods or services that buyers are purchasing in a given market. Effective demand is the difference between notional demand and latent demand. Effective demand is a reflection of the extent to which buyers' income, perceptions and needs combine to result in an actual purchase rather than a mere desire to purchase.
— Ronald Kimmons, What Is the Difference Between Demand and Effective Demand?
Brian Romanchuk — Why Are MMT Critiques Generally Terrible?
The deluge of bad Modern Monetary Theory (MMT) critiques continues. Although it is possible that there are some diamonds in the rough, all the articles I read were downright stinkers. They were so bad that I refuse to dignify their existence by even citing them. However, as someone in the MMT camp, I just want to give a few pointers for my readers as to why those critiques stink.
There certainly are legitimate critiques of MMT, but they are hard to find. Even academics end up citing poor critiques written by non-MMTers; nobody can be apparently bothered to read the MMT academic literature. Which is a rather troubling commentary on the diseased state of modern academia (speaking as a hardline old school ex-academic). In this article, I just cover the ludicrous arguments; I will let the reader try to find some reasonable ones elsewhere. I am in the middle of developing an investment accelerator model within my Python SFC model framework, and I do not want to waste my time beating up on clowns....Bond Economics
Why Are MMT Critiques Generally Terrible?
Brian Romanchuk
Will boycotting Israel become illegal?
'They hate us because American people had freedom', said Bush, but soon you might be allowed to boycott Israel.
The US Senate has advanced a bill that would criminalize boycotting Israeli productThe US Senate has advanced a bill that would criminalize boycotting Israeli products, known as the BDS movement. Israeli human rights activist and author Miko Peled discusses the series of anti-BDS bills introduced within the past few years and why he thinks Americans should have the right to boycott Israel.
The US Senate has advanced a bill that would criminalize boycotting Israeli productThe US Senate has advanced a bill that would criminalize boycotting Israeli products, known as the BDS movement. Israeli human rights activist and author Miko Peled discusses the series of anti-BDS bills introduced within the past few years and why he thinks Americans should have the right to boycott Israel.
Whitney Webb — Newsguard Turns to EU to Push Controversial Ratings System on Tech Companies, Smears MintPress as “Secretly Supported” by Russia
Censorship watch. Narrative control in full swing. Again, "Putler did it." Haven't these people heard of the story of the boy that called wolf? Or have they forgotten it? It is one of Aesop's fables, after all.
Newsguard Turns to EU to Push Controversial Ratings System on Tech Companies, Smears MintPress as “Secretly Supported” by Russia
Whitney Webb
Not only narrative control.
But "be afraid of Huawei."
Bloomberg
Major DNA Testing Company [Family Tree] Sharing Genetic Data With the FBI
Kristen V Brown
Newsguard co-CEO Steven Brill in Brussels on Tuesday claimed that news sites that have recently criticized Newsguard’s motives — MintPress among them — are “secretly supported” by the Russian government, a claim for which he provided no evidence....MintPress News
Newsguard Turns to EU to Push Controversial Ratings System on Tech Companies, Smears MintPress as “Secretly Supported” by Russia
Whitney Webb
Not only narrative control.
But "be afraid of Huawei."
Bloomberg
Major DNA Testing Company [Family Tree] Sharing Genetic Data With the FBI
Kristen V Brown
Vanessa Beeley — Civilians in Police Crosshairs as France Adopts Totalitarian Tactics to Squash Yellow Vests
The insanity of Macron supporting the “uprising” in Venezuela while sanctioning vicious reprisals against his own people at home is glaringly obvious to all but Macron and his backers....MintPress News
Civilians in Police Crosshairs as France Adopts Totalitarian Tactics to Squash Yellow Vests
Vanessa Beeley
Alexander Douglas — The Big Modern Monetary Theory Debate
I used to think I agreed with MMT by and large. But when I write things on what I think is wrong with macroeconomic theory, MMTists seem to disagree with me. I think I’m more comfortable with the high levels of abstraction and conceptual shorthand rampant in economic models, even if they’re literally untrue. My problem is with the logical puzzles that emerge even taking the shorthand as read. But never mind; here I’ll just say what I think about the policy debate.
The debate that most interests me is over what Portes and Simon Wren-Lewis have called ‘The Consensus Assignment’. Portes describes it thus in the article linked:Medium
The Big Modern Monetary Theory Debate
Alexander Douglas | Lecturer in Philosophy, University of St. Andrews
Brian Maher — The Next Great Monetary Experiment
"Weimar." Brian Maher shoots from the hip and the shot goes wild. He obviously knows zero about MMT other than what he has read "on the internets" and what is being said in the media. Another straw man argument if it can be called an argument at all. It is an ideological screed.
Candidate for the worst "analysis" of MMT yet. Not worth bothering with. I am posting it for the record.
BTW, "market analyst" John Mauldin dismissed MMT as "insane." I didn't post it for the record since there was no accompanying analysis or argument at all — just a back of the hand dismissal.
Daily Reckoning
The Next Great Monetary Experiment
Brian Maher
The Methane 'Time Bomb': How big a concern?
I thought this was going to be depressing, but to my delight it wasn't.
I glanced at a video the other day which said it's too late, methane is rising from the polar caps and runaway thermal warming probably can't be stopped - but don't panic, because we still here a chance. I wrote underneath the video that if we green the arid parts of the world by grazing livestock on it properly, it will soak up all the excess carbon we produce.
It's beautiful here in London right now, with a splendid sunset. Let's hope we don't mess it up.
Anyway, with so much bad news about with the elites wanting perpetual war, this video cheered my up.
I glanced at a video the other day which said it's too late, methane is rising from the polar caps and runaway thermal warming probably can't be stopped - but don't panic, because we still here a chance. I wrote underneath the video that if we green the arid parts of the world by grazing livestock on it properly, it will soak up all the excess carbon we produce.
It's beautiful here in London right now, with a splendid sunset. Let's hope we don't mess it up.
Anyway, with so much bad news about with the elites wanting perpetual war, this video cheered my up.
Video proves Davos billionaires clueless
Many Americans talk about making America great again, but when it really was great, it had a tax take off over 70% for the very wealthy.
Is the US Meddling in Venezuela? Max Blumenthal Asks US Congress Members.
Amidst Russiagate fever, the Grayzone's Max Blumenthal heads to Capitol Hill to ask members of Congress if they think the US is meddling in Venezuela's political system. The Trump administration had recently recognized the president of the country's National Assembly as interim president of the nation and intensified sanctions on the country.
Friday, February 1, 2019
Pepe Escobar — Venezuela: Let"s Cut to the Chase
No wonder Caracas is supported by China, Russia and Iran. They are the real hardcore troika – not psycho-killer John Bolton’s cartoonish “troika of tyranny” – fighting against the Trump administration’s energy dominance strategy, which consists essentially in aiming at the total lock down of oil trading in petrodollars, forever....
In the end, this is all about economic war....Strategic Culture Foundation
Venezuela: Let"s Cut to the Chase
Pepe Escobar
TDSL - Chris Hedges on how corporations turned into private governments that subjugate U.S. workers.
Libertarians are for the bosses party, where the few can subjugate the many. Libertarians say no one is forcing you to work for someone, and so you're free to move on, but what is most bosses are the same because the market gives them too much power. 'If you don't like it go somewhere else', the bosses say, knowing they have you over a barrel.
So, start your own business, they say, but two out of three businesses fail, and how would most people raise the money? Remortgage your house, but not many people would be mad enough to take that risk unless they were on a dead cert?
'Therefore, suffer", say the libertarians, 'because you haven't tried hard enough. It's a meritocracy ', they add.
But hey, I've got a better idea, let's just throw the bosses out of power, or vote for a government that will. Then we can create a society that benefits the majority of people, one that even many of the rich would like. We pool risk and share resources because this benefits all of us in the long run and helps us to become more prosperous.
Safer streets, happier people, a better educated workforce which helps society to become more prosperous. Less crime, more people in work on good wages because of their better education - but better wages and more people in work which means lower taxes on everyone
We then tell the libertarians that our society is a club, which everybody benefits from, which has a membership fee. We don't force the fee on them and they are free to leave if they want, and they can go wherever they wish, we won't stop them, but if they want to stay they will have to pay their fair share of the community running costs as we won't accept free riders. Fairs fair!
The Democratic Socialist Libertarian
So, start your own business, they say, but two out of three businesses fail, and how would most people raise the money? Remortgage your house, but not many people would be mad enough to take that risk unless they were on a dead cert?
'Therefore, suffer", say the libertarians, 'because you haven't tried hard enough. It's a meritocracy ', they add.
But hey, I've got a better idea, let's just throw the bosses out of power, or vote for a government that will. Then we can create a society that benefits the majority of people, one that even many of the rich would like. We pool risk and share resources because this benefits all of us in the long run and helps us to become more prosperous.
Safer streets, happier people, a better educated workforce which helps society to become more prosperous. Less crime, more people in work on good wages because of their better education - but better wages and more people in work which means lower taxes on everyone
We then tell the libertarians that our society is a club, which everybody benefits from, which has a membership fee. We don't force the fee on them and they are free to leave if they want, and they can go wherever they wish, we won't stop them, but if they want to stay they will have to pay their fair share of the community running costs as we won't accept free riders. Fairs fair!
The Democratic Socialist Libertarian
Jimmy Dore - Bernie's Disappointing Venezuela Tweet
Bernie disappoints again. He says that the Maduro Government has violently crackdowned on Venezuelan civil society, dissolved the National Assembly, and was elected in what was said to be fraudulent election.
But Bernie says nothing about the French police violent crackdown against the Yellow Vests, where 150 people have had serious head injuries from rubber bullets. The French police are supposed to kneel on the floor and fire the bullets at the ground to disperse crowds, but instead they fire the weapons at head height.
But Bernie says nothing about the French police violent crackdown against the Yellow Vests, where 150 people have had serious head injuries from rubber bullets. The French police are supposed to kneel on the floor and fire the bullets at the ground to disperse crowds, but instead they fire the weapons at head height.
Stephanie Kelton — The Wealthy Are Victims of Their Own Propaganda–To escape higher taxes, they must embrace deficits.
Grow the pie within public investment for public purpose rather than shrinking it through austerity or dividing the size of the pieces it differently through redistribution. Having your cake and eating it too.
I would add that it is still necessary to address economic rent and its social and political effects. The reason this is so hard to do is that America is a plutocracy. The institutions are rigged.
The Wealthy Are Victims of Their Own Propaganda–To escape higher taxes, they must embrace deficits.
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
Prof. Wolff on "The Basics Economics of Immigration"
Richard Wolff takes a balanced look at immigration. Don't blame the liberals for it. It's a subsidy for the rich.
Rob Paul - Bolton: We're Taking Venezuela's Oil
I can't get my head around Ron Paul as he should be a socialist. He's very emphatic. A friend of his died a little while back when he needn't have because he didn't have sufficient medical insurance, but Ron Paul wouldn't change his mind about private healthcare.
John Bolton says the U.S is going to save the Venezuelan people but the U.S. isn't going to pay for it, so they will seize the oil fields. He says Americans and the Venezuelan people will do well out of it, but Ron Paul hopes they won't fall for that one.
Yesterday, Trump's National Security Advisor John Bolton made the US position clear in a FoxNews interview: Washington will overthrow the Venezuelan government and take its oil for the benefit of US companies. This is "regime change" on steroids!
John Bolton says the U.S is going to save the Venezuelan people but the U.S. isn't going to pay for it, so they will seize the oil fields. He says Americans and the Venezuelan people will do well out of it, but Ron Paul hopes they won't fall for that one.
Yesterday, Trump's National Security Advisor John Bolton made the US position clear in a FoxNews interview: Washington will overthrow the Venezuelan government and take its oil for the benefit of US companies. This is "regime change" on steroids!
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism Trump’s Brilliant Strategy to Dismember U.S. Dollar Hegemony
The end of America’s unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial institutions.
This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense that we might adhere to international norms, let alone laws or treaties.
The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together – the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into the Eurasian orbit, the “Heartland” nightmare of Halford Mackinder a century ago.
The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world’s largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet....
Trump’s Brilliant Strategy to Dismember U.S. Dollar Hegemony
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
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