Cross-chamber alliances tend to be rare on Capitol Hill, especially ones aimed at undermining the leadership of the coalition's own party. But Cruz and Lee's work with House Republicans is more evidence of the open civil war underway within the GOP.The Huffington Post
Americans are coming to face the hard reality that they live in a new Gilded Age, with inequality at levels not seen since before the Great Depression. Even worse: Uncle Sam is subsidizing this lopsided economy.
The federal government is, indirectly, the largest low-wage employer in the country. While it has relatively few of the working poor on its payroll, the government hires thousands of private contractors that pay poverty wages to their workers, and hundreds of thousands of dollars to their executives.
A coalition of progressive groups are urging the Obama administration to issue an executive order requiring contractors to pay their workers a living wage — defined as the minimum required to meet one’s basic needs.The Raw Story
The landmark new report from the Intergovernmental Panel on Climate Change (IPCC) is crystal clear: human action is warming the planet and we’re heading for big trouble if carbon emissions are not slashed. As Prof Tim Palmer, at the University of Oxford put it: “The report is further reinforcement that there is an unequivocal risk of dangerous climate change.”
Yet before the ink is even dry critics are trying to obscure this stark message behind a mirage: thesupposed halt in global warming over the last 15 years. This willful idiocy is based on the fact that air temperatures at the Earth’s surface have more or less plateaued since the record hot year in 1998
What critics choose to ignore is that of all the extra heat being trapped by our greenhouse gas emissions – equivalent to four Hiroshima nuclear bombs every second – just 1% ends up warming the air. By choosing to focus on air temperatures critics are ignoring 99% of the problem.The Raw Story
...the message is clear: either you will accept neoliberal dictatorship, or, you will get a military one!the unbalanced evolution of homo sapiens
Wal-Mart Stores Inc. (WMT) is cutting orders it places with suppliers this quarter and next to address rising inventory the company flagged in last month’s earnings report.
Last week, an ordering manager at the company’s Bentonville, Arkansas, headquarters described the pullback in an e-mail to a supplier, who said others got similar messages. “We are looking at reducing inventory for Q3 and Q4,” said the Sept. 17 e-mail, which was reviewed by Bloomberg News.Bloomberg
I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime early in 2014. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.
Today I am writing about Section 25.2.
Chapter 25 Recent Policy Debates
In this Chapter we consider the following policy debates:
▪ 25.1: Ageing, Social Security, and the Intergenerational Debate
▪ 25.2: Twin Deficits and Sustainability Of Budget Deficits
▪ 25.3: Fixed Versus Flexible Exchange Rates: Optimal Currency Areas, the Bancor, or Floating Rates?
▪ 25.4: Economic Growth: Demand or Supply Constrained?
▪ 25.5: Environmental Sustainability and Economic Growth
25.2 The twin deficits hypothesisBill Mitchell – billy blog
“I have found out what economics is; it is the science of confusing stocks with flows”— Michael Kalecki, quoted by Joan Robinson in Shedding DarknessStock-Flow Consistent Economics — A Post-Keynesian Economic Blog
The problem with Quantitative Easing… was illustrated today by Raghuram Rajan, the Reserve Bank of India governor, along these lines....
The people who saved before the crisis, he said, were largely saving for their retirements. After the crisis they find themselves needing to save more, a problem that is compounded if the central bank pushes down real interest rates and reduces their income further.
In other words, low interest rates have a contractionary effect.Money And The Real Economy
Erble Teacher: "Children, today we're gonna solve a word problem together. Master Marriner Eccles, let's start with you. If your farm harvests 2 ears of corn you have 2 ears of corn, right? Now, if you water and weed enough to get 2 more ears of corn, how many ears of corn do you have now?"
Marriner: "4"
Erble Teacher: "Nope. Sorry. We've run out of numerals. You can't have a '4' to use."
Marriner: [Pauses to actually use his 6 year old brain.] "Listen here, teach'. Were you born in a barn? You ain't the boss of me. If I have 4 ears of corn I've got 'em, and no deficit of activity in what you call your brain is gonna convince me otherwise."
Erble Teacher: "Watch yer language young fella. And you listen to me. Our great and illustrious Banker's Guild owns this here numerals market, and if we say YOU'RE out of numerals to use in word problems, then you better believe that YOU actually are. Capiche? Now if you want a few more numerals to use in your calculations, we're gonna have to get 'em from somewhere, right? That only stands to reason, ya gotta admit it. Numerals don't just grow on trees. Now line up quick, and sign these here IOUs to take home to your parents. You turn over enough real corn - or eggs & bacon - and our Banker's Guild will go out and procure the really nominal numerals you need to count everything. Until then, you're not allowed to solve any word problems, and that'll impair your learning. You don't want THAT, do you? Why, the Bankers Guild is doing GOD's Work here, and that takes real support."
Marriner: [Momentarily stares in disbelief at what passes for a teacher, but - luckily - has already been imbued with both the capacity for abstract thought AND the will to use it.] "Ok, teach'. I see how it's gonna be. Tell you what. I'm leaving this so-called school right now, 'cuz I've got better things to do with MY time than listen to some fool proclaim that there's a shortage of what are only virtual, representational discourse units, when there are always actual events in the world outside that we ought to and must be busy freely manipulating if we're to survive as a nation.
You ought to be ashamed of yourself! Kids are sent here to learn something that will improve their ability to be good citizens. Instead, you're filling their heads up with absolute nonsense, and not even using your own head.
Here's what I think with my own thought #4, 'cuz I haven't run out of fiat thoughts, or how to use 'em, regardless of what YOU say. Nearly every baby comes into this world with the ability to start babbling, and that nominal babble is free and unlimited as long as they have a stomach full of real nutrients. Some of us eventually learn to SELECTIVELY use that unlimited babble as a valuable communication skill that helps us direct real outcomes that are MORE than the sum of their parts. That's called ongoing and increasing organization, and it requires thinking.
YOU, on the other hand, have gotten yourself stuck in the babble phase, and you've never learned to consistently organize your unlimited and purely nominal babble for much real utility. Being unable to SELECT from your babble, you instead mindlessly fight babble inflation. That won't work. More students means more practice in order to discern what does work from what doesn't. Limiting practice never works.
When my dad & mum hear about your nonsense, they'll run you outta town pronto, and we'll get us a real teacher that has a brain and the honesty to use it right!
Erble Teacher: "Huh? I won't pretend to understand what on earth you're talking about young whippersnapper, but I assure you that it's total nonsense. I'm sure your folks will give you a sound whuppin' and send you right back to finish your schooling. Why, everyone knows that real and nominal are two separate and very real entities, and both have to be acquired from somewhere. 'Got fiat thoughts,' indeed! Humph."
A [monetized] economy (and its incomes and corporate profits) - by definition! - cannot grow without positive credit growth, which in turn leads to growing [currency] deposits.
"You know, I agree that YOU at least have run out of representational units. In fact, it's not just numerals. Your situational awareness deficit has progressed so far that you've also run out of any and all relevant representations of reality. Whatever's coming out of your mouth is null and void of all utility and hence, of any current relevance. Given that your logic account is running deeper into the red with every utterance you make, I hereby initiate a Citizens Arrest, and revoke your fiat "nonsense" account. Please close your mouth and desist from any further logical-debiting. Any further verbal credit issued from your account will be refused, until your logical basis is again accounted for. Yours truly, and Condolences for your present state. US Citizens for Consistent Application of Logic."
Second California county joins push to form state of ‘Jefferson’ (via Raw Story )
Matt Taibbi: Wall Street hedge funds are stealing public workers’ pensions (via Raw Story )So let’s take a look at the minimal Kuhn and then some of the main flavors of Kuhnians. Among Kuhn essentials, I see:
1. There is normal science and then revolutionary science, which causes a paradigm shift to the next normal science.
2. Revolutions, originating in crisis, are required for paradigm shifts
3. Inter-paradigmatic communication is impossible (Kuhn’s “incommensurability”).
4. Theories fully pervade observation; observation language that is free of theoretical influence is impossible (Kuhn vs. Popper)
5. Paradigms dictate - not reflect – the world. Reality is constructed, not observed.
6. The ultimate desideratum of truth is solidarity.
The first three claims are what Kuhn and his defenders see as his core material. But he explicitly and repeatedly states points 4 and 5 in unambiguous terms – and point 5 in terms nearly identical to the postmodern constructivists who preceded him. Point 5 is something Kuhn doesn’t state explicitly but is an unavoidable conclusion from his discussion of points one through three.The Multidisciplinarian
I am re-reading Irving Fisher’s 1935 “100% money” book for a workshop in Hamburg next month. The last time I read the book I thought that fractional reserve banking is a good description of reality. I don’t believe that anymore, but that is not the point I want to make. Re-reading Fisher (1935) I stumbled upon the following sentences, which are written under the title “‘Cash’ which is no cash”Econoblog101
Mr. Binswanger was kind enough to join me and Aaron Task on Yahoo's Daily Ticker today to talk about his philosophy (video here). He argued that CEOs and entrepreneurs should pay employees as little as possible. After all, Mr. Binswanger argues, the employees are just "trading" their labor for the entrepreneur's money. That's the employees' decision, and they don't deserve a penny more than they get.
That's one way of looking at it.
The other way of looking at it is that employees are members of a team. And that, as members of the team, employees should not be paid as little as possible but, instead, share in the value they help create.
That, for what it's worth, is the way I look at it.
And my view of this isn't the product of an armchair philosophy.
It's the product of living and working in the once-vibrant U.S. economy and of running a successful company with ~130 employees.
Most of the full-time employees at our company, Business Insider, have stock options. These allow everyone to share in the success of the company. We don't pay our employees "as little as possible." We pay our employees as much as possible while still achieving our financial goals. As the CEO of the company — and as the entrepreneur who co-founded it and an investor who funded it — I don't hallucinate that all of the company's success is due to me. It is a privilege to lead our team, but it is the hard work of the ~130 talented people on the team that make us successful. And it is the revenue we receive from our readers and clients that sustains the 130 jobs at Business Insider — not me. The overall mission of Business Insider, meanwhile, is not to "make as much money as possible." It is to produce a great product for our readers and clients, produce a compelling return for our investors, and provide excellent jobs for our team.
In short, the goal of our company is to create value for all three of our important constituencies: customers, shareholders, and employees.
The bottom line is that the debt limit is an entirely political, not economic, animal. We require the federal government to go through the motions of selling bonds only because we want to constrain our policy makers....
...don’t say we don’t have the money, because we do. Dump the debt ceiling and focus on the real issues.Forbes
Like the morning sun rise in the east, it never fails. At every foreign policy fork in the road, conservatives faithfully ask, WWRD--What Would Reagan Do? When President Obama urged U.S. strikes against the Assad regime for its use of chemical weapons in Syria, right-wing politicians and pundits laughably looked to The Gipper for guidance. And with this week's meeting of the United Nations General Assembly raising the possibility of a thaw in U.S-Iranian relations, Ronnie's reanimators (for example, here and here) predictably mocked "Obama's tough talk" compared to "Reagan's tough actions."
Unfortunately for his hagiographers, Americans don't have to speculate about what Ronald Reagan would have done about Syria and Iran. We know what he actually did. That is, after his disastrous intervention in the Lebanese civil war resulted in hundreds of U.S. casualties at the hands of Syria and its proxies, President Reagan turned tail and retreated in humiliation. As for the mullahs in Tehran, Ronald Reagan didn't send a message to Iran, but instead a cake, a bible and American weapons....Perrspectives
If we hit the debt ceiling and run out of money, uncertainty will reign supreme, people will go crazy, and markets will tank in ways they would not tank if there were merely a government shutdown. (This claim, it seems to me, is what is really at stake in the controversy-- that the market reactions will be much worse in one case than the other)
Why is that so, you may ask?....
In any case, let's assume that's what people are fearing-- that the debt ceiling crisis will not turn out to be the same thing as a shutdown, and therefore will have far worse consequences.
If that is so, the President's correct strategy is fourfold.
(1) announce that you will not bargain over the debt ceiling under any circumstances.(2) make preparations if you can't pay all your bills but don't tell anyone about your contingency plans;(3) emphasize the difference between a debt ceiling crisis and an "orderly government shutdown;" and(4) emphasize how terrible a debt ceiling crisis will be and how unprepared the country is for it. That is especially so even if you have made preparations.
Which, it seems, is exactly what the Obama Administration is doing.
My colleague Benjamin Radcliff, author of the Political Economy of Human Happiness, argues happier people live in countries with strong social safety nets and labor unions.
The relationship could not be stronger or clearer: However much it may pain conservatives to hear it, the “nanny state,” as they disparagingly call it, works. Across the Western world, the quality of human life increases as the size of the state increases. It turns out that having a “nanny” makes life better for people. This is borne out by the U.N. 2013 “World Happiness Report,” which found Denmark, Norway, Switzerland, the Netherlands and Sweden the top five happiest nations.
Conservatives may be equally troubled to learn that labor unions have a similar effect. Not only are workers who belong to unions happier, but the overall rate of happiness for everyone — members and nonmembers — increases dramatically as the percentage of workers who belong to unions grows, reflecting the louder political voice that organization gives to ordinary citizens.
Take it a step further and we can conclude that people will be able to have richer and more rewarding lives when the social surplus is used to support the welfare of the majority of the population and when workers have a democratic say in how that surplus is produced.
Davydd Greenwood, an anthropologist at Cornell, puts it this way:
What is being done now is to collapse education into vocational training, teaching into a fee-for-service form of employment, and research only as a profit generator. The faculty are being put on term contracts and administration is now a career with big salaries and great distance from the places where value is actually being produced. The overall result is the consolidation of a two class system: elite education for economic and political elites and vocational education for the masses.There are better ways. Mondragon is one of them.
Here’s a statement that I don’t think will be too contentious, across the ideological spectrum:
"The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle." ...
But, in the lingo of economics, consider the “social welfare function” embedded in this story. The claim is emphatically not that this system maximizes some measure of aggregate utility that could be decomposed to a sum of individual welfares. On the contrary, it celebrates as necessary large costs in individual welfare for the sake of impersonal characteristics of the aggregate: “prosperity”, or “strength”. It is an entirely collectivist justification for policies that are deeplyharmful at an individual level, if you take seriously at all the idea of diminishing marginal utility. The individualist approach to maximizing welfare would be to redistribute. If we (contentiously but commonly) assume people share comparable utility functions, aggregate utility is maximized by taking from the rich and giving to the poor. At least in a methodological sense, it is socialists who are the individualists, attending to the sum of individual welfares, while unsympathetic capitalists rely upon collectivism to justify their good fortune and the policy apparatus that magnifies and sustains it.As SRW observes, there is a divergence on the right between Libertarians and conservatives on this matter. Libertarians deny any collective influence, whereas the most important factor for conservatives is the strength of the nation, especially relative to other nations. Conservatism pretends to be liberal, being based on individualism, but it is inherently Tory, holding that political and economic strength arises from rule by the best for the good of the nation, and not necessarily the people. What's good for America is not necessarily good for all or even most Americans.
More Americans have moved to Mexico in recent years than vice versa, according to government data cited in a New York Times feature by Damien Cave published over the weekend.
The data shouldn’t come as a surprise. The Pew Hispanic Trends Project estimated last year that the flow of migrants from Mexico peaked in 2007 at about 12.6 million and then began to decline slightly. A report issued by Pew on Monday noted that the population of undocumented immigrants from Mexico similarly declined from a 2007 peak of 6.9 million, to about 6 million today.
Not so for Americans, many of whom look to Mexico as a cheap place to retire or a hospitable location to start a new business. According to the Times:
Americans now make up more than three-quarters of Mexico’s roughly one million documented foreigners, up from around two-thirds in 2000, leading to a historic milestone: more Americans have been added to the population of Mexico over the past few years than Mexicans have been added to the population of the United States, according to government data in both nations.The Huffington Post
