Joe Biden’s rationale for his own presidency was that he could bring oligarchs and working people together and hammer out a compromise that worked for both. The apparent death of his legislative agenda proves what a laughable fantasy that was....Jacobin
Just before the holidays I wrote an article for Newsweek arguing that the official basis for Federal Reserve policy was at risk of coming unwound due to the present uptick in inflation. My basic argument was that the Fed and other central banks act as if they have some ‘objective’ criteria for setting interest rates while in the real world they are constantly worrying about upsetting financial markets. This leads them to the Catch-22 position today: should they raise rates to fight inflation and risk a market crach? Or should they sit on their hands, allow markets to march ever higher and risk being blamed for inflation?Macrocosm
The framework for understanding monetary policy in this way is laid out in an essay I published last year in the scientific journal Inference Review, entitled Monetary Faith. In it I argue that there is no solid relationship between the central bank interest rate and any real macroeconomic variable — say, savings or investment. Rather the central bank interest rate is watched, not by CEOs and entrepeneurs, but by financial markets participants — who, frankly, have turned the central bank interest rate into a cultic object of worship in the past 30 or so years.
So, back to the natural rate of interest. Firstly, I should say: I know that the Fed and other central banks do not set the rate of interest in line with estimates of the natural rate — the so-called ‘r*’. That said, the theoretical framework behind the r* is supposed to guide central bank policy. It is worth looking at what is going on with the r* today....
Oilprice
- Russia’s Deputy PM and top OPEC+ negotiator Alexander Novak explains in a recent interview why the group decided not to heed the U.S. call for more production
- Novak: Oil production companies must plan their investments ahead of time in order to secure production growth
- Novak, like many observers, downplayed the effect of the SPR release….
As MMT shows the cost of credit is incorporated into the cost of all goods and services. The higher the interest rate, the higher the price....New Wayland
How surprising is it, really, that those tasked with formulating policy miraculously come up with [climate] policies that barely touch themselves at all while falling most heavily on those who have practically no ability to effect the change notionally intended? And talk about undemocratic!…It's the super-consumers. And they are not about to change their lifestyle.
While Peter Radford doesn't mention MMT, his argument can read as a justification of MMT against the mainstream and a take down of mainstream propaganda based on conventional economics. Worth reading.
The Radford Free PressI've cycled all my life, but other than my mates teaching me how to get it the hang of it, I've had no other training. When you you first cycle it's natural to just push down on the pedals, but years later I read about cadence and spinning. With this technique you go into a lower gear and pedal faster. Spinners tend to pull on the upstroke too, using their clipless padals, because as you are botted into the padal, you are able to pull up. All I can say is that I hated spinning and pulling on the up stroke, as it was just hard work and wore me out. Maybe I needed to get used to it, but I just gave up in the end.
Eventually, I found three great articles on this topic which supported my point of view, and all said spinning and up pulling was nonsense. It's a minority view, though, but, from my experience, they are right, anyway, each to their own. Maybe my body is just more suited to mashing, or that I've done it for so long that it now suits me more, because my body may have adapted perfectly to it. So, why change anything, especially as I've never had an injury from cycling, like sore ligaments, or too muscle building up in one place, which can knock the knee cap out of place moving it to one side, which can happen to people when they do a lot of cycling.
Many cyclists work hard to perfect their padal stroke, sometimes even sitting a boring stationary training bike to improve their technique, but is it all nonsense? I just go and cycle for the fun of it.
The Cycling Myth That Won’t Die: Pedaling Circles
Here’s a cycling myth that just won’t die; if you want to be a great cyclist you need to perfect your spinning technique and pedal perfect circles. It seems every year we get bombarded with articles explaining the benefits of pedaling in circles. They all say the a stop mashing the pedals and start working on all parts of the pedal stroke. Usually, these articles include a call to try out some goofy one legged-pedaling drills or worse a pitch for some silly piece of equipment.
So, surely professional cyclists must pedal in perfectly round circles, right? Nope. Not at all. The reality is that the best cyclists out there absolutely mash on the pedals. Pedaling circles is a myth, and one that can do real harm to you.
https://gearandgrit.com/the-cycling-myth-that-wont-die-pedaling-circles/
Is High Cadence Cycling Actually Slowing You Down?
WILL FORCING YOURSELF TO SPIN FASTER MAKE YOU RIDE BETTER? HERE’S WHAT THE LATEST RESEARCH HAS TO SAY.
https://www.bicycling.com/news/a26305270/high-cadence-cycling-not-increase-speed/
Neil Wilson explains how the economy can work for the benefit of the people; how it can be the servant of society rather than its master. Originally published on Neil’s New Wayland blog on 16 May 2017.Oldie but goodie resurrected by Gower today.
In the last few years in the U.S. and especially since the publication of Stephanie Kelton’s book, The Deficit Myth (Kelton, 2020) in Europe, the so-called Modern Monetary Theory (MMT) has been gaining prominence in the media and the public. This paper exposes the main proposals of MMT in the light of their doctrinal sources, also confronting them with economic facts and with other currents of economic thought. The first part deals with the approach to money and monetary policy developed by MMT, the second part with its recommendations regarding fiscal policy and aggregate demand management, the third part with the structural policies it advocates, the fourth part with the international aspects of MMT. The fifth part concludes. Overall, it appears that MMT is based on an outdated approach to economics and that the meaning of MMT is a more that of a political manifesto than of a genuine economic theory.…Download the paper here.
Workers are crushed under low wages and long hours, while the waste created wrecks the planet.
It's natural for us to want more and more, but there must be a better way?
Can - I Want More (and more, and more, and more)
Priced out of the housing market, Catrina Davies lives in a Cornish shack — and couldn’t be happier.
Her father's business went bankrupt in her 90s. She's a music teacher, but could not afford to rent a home. She wrote a book about her experience. It looks nice, but it's freezing in winter.
My blog is on holiday until Monday, January 3, 2022. The baffling quiz at the coming weekend will still appear. While the local beach is enticing I am actually in personal lockdown while I finish some outstanding (and late) writing commitments....Bill Mitchell – billy blog
Jimmy Dore's, Caitlin Jonestone', Max Blumenthal, and others, arguments against mandates is that vaccines don't slow transmission of Covid, so why force a 'medical procedure' on someone. They say people have rights, my body, my choice.
A number of points:
Scan the Internet and you will see that vaccines do slow transmission of the virus.
No one is forcing any vaccines on anyone, and if people don't want to get a vaccine they can find another job.
The people who say that mandates are authoritarian, fail to consider that the rest of us have rights too, and that we don't want the unvaccinated near our children, our old folk, the vulnerable, or even ourselves at this present time. This is a fair right, especially when we believe that the unvaccinated can spread Covid.
So, those that refuse to get a vaccine get it wrong on all counts and fail to understand that other people with different POV have rights too.
What is important to realise, de Gier says, is that the full effect of vaccines on reducing transmission is even higher than 63 per cent, because most vaccinated people don’t become infected in the first place.
De Gier and her team used data from the Netherlands’ contact tracing system to work out the so-called secondary attack rate – the proportion of contacts infected by positive cases. They then worked out how much this was reduced by vaccination, adjusting for factors such as age.
De Gier says they cannot calculate the full reduction in transmission due to vaccination, because they don’t know exactly how much vaccination reduces the risk of infection. But even assuming vaccination only halves the risk of infection, this would still imply that vaccines reduce transmission by more than 80 per cent overall.
Others have worked out the full effect. Earlier this year, Ottavia Prunas at Yale University applied two different models to data from Israel, where the Pfizer vaccine was used. Her team’s conclusion was that the overall vaccine effectiveness against transmission was 89 per cent.
Don’t tell me: “out of money!”? “deficit too high!”? morons…
EXCLUSIVE: The White House dismissed a bold plan to ramp up rapid testing ahead of the holidays. https://t.co/jHuBl8Pz74
— VANITY FAIR (@VanityFair) December 23, 2021
3D printed houses are rising around the world. They're cheaper, smarter, better for the environment and promise to help tackle homelessness.
I think these are probably accurate observations by Corn here but these type of mere observations didn’t work then (yo, they killed him…) and they are not going to work now:
Happy Birthday. pic.twitter.com/nJfnoUPV3J
— David Corn (@DavidCornDC) December 25, 2021
Paul on mere observations quoting from the prophet to Israel Isaiah:
"Ideally the holy spirit speaks through Isaiah the prophet, to your fathers, saying, 'Go to this people and say, "In ….observing, you will be observing, and may by no means be perceiving," Acts 28
Mere observation didn’t work, does not work, will not ever work…
Uh oh Trump warning against danger in crypto and advocating for simple USD use:
DONALD TRUMP’s Opinion on Cryptocurrency
— Abdullah Alyami (@_Abdullah911) December 23, 2021
Crypto is very dangerous, It could be an explosion some day that we’ve never seen before.
Currency should be the Dollar 💵
Mr. President 🇺🇸 pic.twitter.com/VEhwyLEu2x
Meanwhile Bannon shilling a new “FJBcoin” to MAGA audiences:
Steve Bannon is spending the holidays pushing another grift. This time, it’s the “FJB coin…it’s going to be a currency for the deplorables. We’re building a community. We’re building a community you can be a part of.” pic.twitter.com/ZgpW2Go9lg
— The Republican Accountability Project (@AccountableGOP) December 23, 2021
Could be trouble brewing in MAGA paradise… 🤔
MMT’s Fatal Flaw #1 – Measuring InflationI suspect quite a few people view it this way.
The first flaw is in the measurement of inflation. In the article mentioned above, we state:
“Inflation is impossible to calculate. Inflation is impossible to calculate. No, that is not a typo. For emphasis, let us put it another way. Inflation is impossible to calculate.
The point that inflation is impossible to calculate cannot be overstated.”…
MMT’s Fatal Flaw #2 – Political Willpower
The second and more vexing problem with inflation is politicians’ willpower and vested interests. Should we expect elected officials to reduce spending and raise taxes when inflation is problematic? One needs only to consider the current environment when answering the question....
Inflation is MMT’s fatal flaw. Inflation is the fly in MMT’s ointment.
The current high inflation episode exposes MMT’s fatal flaw. Despite the flaw, we suspect the push for MMT will continue, and the rules around inflation will change, allowing for more inflation. Without stringent inflation guidelines [contradiction: he says inflation cannot be measured] and willpower, MMT is nothing more than a printing press for the government....
Historically, MMT-like schemes have always resulted in default. We do not doubt that the adaption of MMT leads us on that same path.
The Eurozone continues to stumble on, held together by the vast bond-buying program of the ECB, which has saved several Member States from insolvency over the last several years. While all the talk at present has been about what to do about the punitive and unworkable fiscal rules in a post-pandemic (when will that be?) period, when the emergency waivers of the Excessive Deficit Mechanism procedures are withdrawn, the reality is that under the current architecture, the only thing that keeps the currency union intact is the ECB acting outside of the legal structures set down by the treaties. Yes, I know full well that the elites have massaged the public into believing that there is no breach of the no bailout clauses, but the reality is different. The ECB is (indirectly) funding Member State fiscal deficits through its massive asset purchasing programs, the two relevant ones being the PSPP and the PEPP. And ever since they introduced the Securities Market Program (SMP) in May 2010 they have been providing funding to Member States to allow them to run fiscal deficits while maintaining low bond yields. With the Pandemic Emergency Purchase Programme (PEPP) scheduled to end in March 2022, the fears are growing that Italy will be the first Member State to succumb to the bond markets – the yields on debt will rise because the investors appreciate the credit risk and will know they cannot offload as much debt onto the ECB in the secondary markets. The fact that these fears are becoming more widespread should tell you that the role of the ECB is exactly what I say it is rather than the ‘maintaining order in investment markets’ spin that the ECB runs as the smokescreen....Bill Mitchell – billy blog
Abstract: According to Modern Monetary Theory (MMT), the only constraint on public spending for a currency issuing authority like the United States government is inflation. This paper develops an alternative understanding and analysis of economic inflation through the lens of MMT in the aftermath of the Covid-19 public health crisis and consequential economic shutdown and reopening. It argues that conventional explanations of inflation remain ideologically constricted to an outdated social theory and conceptual framing. As such, public policy responses to contemporary price increases are limited in scope and incapable of neither effectively stabilizing prices nor avoiding the worsening of social inequities and harm. The paper will first develop MMT’s insights about inflationary pressures as a theory of qualitatively determined resource use, costs, and political coordination, as opposed to a collapse in the value of money from excessive public spending. An analysis of price pressures throughout 2021 is then provided by examining supply chains, industry specific shocks, and market power. Lastly, inflation is explored in the context of an ongoing planetary climate and environmental crisis with deep implications about the future of sustainability, economic development, and price stability.I said this some time ago. The concept of inflation is not useful for at least two reasons. First, it is not good science. Secondly, the term carries both emotion and ideological charge. It should be retired.
Larry Summers has struck again with yet another missive agonising about inflation risks. What is somewhat interesting about this latest piece is that parts of it could have been written by myself. Unfortunately for Summers, that is not exactly complimentary for his world view, for reasons that I will explain.
