Saturday, April 18, 2015

Kevin M. Kruse — How Corporate America Invented Christian America

The unholy alliance of  capitalism, modern American Libertarianism and Protestant religion. The link is individualism, as British historian R. H. Tawney explored in Religion and the Rise of Capitalism.

It's a struggle for the "soul of the nation" between individual freedom and social justice based on different readings of the Bible from opposing ideological perspectives. The battle still rages.

How Corporate America Invented Christian America
Kevin M. Kruse, professor of history at Princeton and the author, most recently, of One Nation Under God: How Corporate America Invented Christian America, from which this article has been adapted
h/t Yves Smith at Naked Capitalism

Simon Wren-Lewis on democratic helicopter money

Wrong approach. The issue should now be based on knowledge that the fixed rate system is over other than for those countries that either give us their power as currency issuers to a currency union, peg their currency to another currency, use the currency of another country, or borrow in a currency they do not issue. Countries that are currency sovereigns are not constrained operationally in currency issuance, although they may voluntarily restrain currency issuance politically.

"Central bank independence" is voluntary restraint on currency issuance by the currency issuer through the constitutional process of representative democracy that vests the purse strings and money creation in the people's elected representatives, allowing the holders of the purse strings to delegate at least some of its power to unelected technocrats. While this may be instituted democratically, and result is anti-democratic in transferring control at least partially to interested parties and special interests.

So the question is not whether helicopter money can be democratic but whether the democratic process can be restored politically by ending the delegation of democratic control over currency issuance. Governments create the institutions under which they operate and they can therefore change them by reversing the process.

The question of "democratic helicopter money" is easily resolved by transferring currency issuance to the Treasury and folding the payments system into the Treasury. If the people's representatives wish to continue interest rate setting they can do that through a Treasury agency also, under the direction of the executive or the legislative branches.

The present system of a politically independent central bank is anti-democratic and should be terminated as operationally unnecessary as a separate entity.

The people's representatives should appropriate funds as they see fit and the agency they designate should then make the necessary payments, issuing the funding as needed. The primary role of taxation then becomes withdrawing funding as needed to control inflation by keeping effective demand consonant with the capacity of the economy to meet it using functional finance.

The issue really boils down to ending the concept of "sound money" as a relic of the now non-existent gold standard. It's archaic at best, and it was even mostly wrong under a gold standard although there was less policy space under a fixed rate system than now under the present floating rate system.

Let's face it. The financial crisis was a debacle for capitalism and still is. The system essentially collapsed and was only rescued by government action. The problem was and continues to be that government saved the capitalists and let the rest of the people largely fend for themselves. Many drowned and some are still underwater. The system has not recovered and worker's real wages are at levels they were at in the Seventies.

So those who are tempted to object to the "radical" suggestions above need to explain just how the existing institutions served the people whom they are represented as serving in a democracy where interests are not supposed to considered special.

Why were special interests served and not the interests of all. The answer of those serving the special interests is that the interests were special because these interest underpin the system. So it was necessary to use the many as a tool to serve the interests of a few so that the interests of the many would be served "in the long run"? I have a bridge to sell anyone that falls for that line.

The policy space was available and so was knowledge of how to use it. The reality is that that officers of the ship bolted for the life boats and left the women and children behind.

Mainly Macro
Simon Wren-Lewis | Professor of Economics, Oxford University

Merijn Knibbe — The Schauble piece in the New York Times: ignorant and wrong about the economic facts

Schauble, the German finance minister, did it again. In the New York Times: distorting the facts using a mixture of ignorance and misunderstanding to push an ideological agenda.
This is really turning into a personal vendetta between Schäuble and Varoufakis, but with Schäuble speaking for Angela Merkel and Varoufakis for Tsipras.

Real-World Economics Review Blog
The Schauble piece in the New York Times: ignorant and wrong about the economic facts
Merijn Knibbe

Edward Martin And Mateo Pimentel — The Inadequacies of Liberalism: The Centrality of Socio-Economic rights for Marxism and the Catholic Social Justice Tradition

Weekend reading.

The Inadequacies of Liberalism – The Centrality of Socio-Economic rights for Marxism and the Catholic Social Justice Tradition
Edward Martin And Mateo Pimentel
Edward Martin is Professor of Public Policy and Administration, Graduate Center for Public Policy and Administration at California State University, Long Beach, and co-author of Savage State: Welfare Capitalism and Inequality.
Mateo Pimentel lives on the Mexican-US border. You can follow him on Twitter @mateo_pimentel, or read more at

Internet Quote

Somewhat true probably:

I would say that our knowledge of our government's fiscal authority does not make us "authoritarians" of the form Orwell is positing here.

There is a difference between a person who can perceive and understand authority vs. a person who is a modern "authoritarian" in Orwell's context here.

I will not pretend to understand what is going on within the scrambled-eggs-for-brains libertarian side of humanity.

NYC Real Estate

In consonance with some of the things Mike has been reporting on from his position on the ground there.

Earnings Forecast for S&P

This is probably realistic in view of Mike's forecast of a significant increase in US Treasury net withdrawals for the current FY.

Here is where we stand YoY through mid-April in that regard:

Pepe Escobar — Russia, China, Iran: In sync

It’s easy to remember how Iran was relentlessly derided as “isolated” by the exceptionalist crowd only a few months ago. Yet the fact is it was never isolated – but painstakingly building blocks towards Eurasian integration.
European firms are of course itching to unleash an avalanche of investment in the Iranian market post-sanctions, and most of all the energy giants badly yearn to lessen EU’s dependency on Gazprom. But they’ll be facing formidable competition, as it was up to Moscow and Beijing to identify, a long time ago, which way the wind was blowing; the inevitable (re)emergence of Iran as a key Eurasian power.
Russia, China, Iran: In sync
Pepe Escobar

Timothy B. Lee — The Trans-Pacific Partnership is great for elites. Is it good for anyone else?

No. Otherwise the negotiations would not be secret.

The Trans-Pacific Partnership is great for elites. Is it good for anyone else?
Timothy B. Lee

telesur — US Threatens to Cut Aid to El Salvador for Backing Venezuela

The United States is threatening the small Central American country of El Salvador with financial repercussions for having supported Venezuela's campaign seeking the repeal of sanctions against the country.
US Threatens to Cut Aid to El Salvador for Backing Venezuela
La Prensa Grafica-La Pagina

Tanya Kerssen and Eric Holt-Giménez — World Bank’s Long War on Peasants

It is difficult to overstate the degree to which the IMF and World Bank’s neoliberal economic policies contribute to extreme vulnerability for farmers and peasants.
telesur | OpEd
World Bank’s Long War on Peasants
Tanya Kerssen and Eric Holt-Giménez, Food First

Lee Brown — Hugo Chavez Helped Overturn Neoliberalism in Latin America

Puncturing the myths about neoliberalism (Pinochet) and Bolivarianism (Chavez).

Hugo Chavez Helped Overturn Neoliberalism in Latin America
Lee Brown

Friday, April 17, 2015

RT — Uprooted & evicted: World Bank-funded projects force millions off their land

World Bank ventures in less developed countries are hurting the people the organization has sworn to protect, with almost four million people across the globe left homeless, forcefully evicted and relocated as a result of World Bank-funded projects.
A probe by the International Consortium of Investigative Journalists (ICIJ), which examined World Bank's records in 14 countries, discovered that some 3.4 million of the “most vulnerable people” were forced off their land in the last decade.
The World Bank “has regularly failed to live up to its own policies for protecting people harmed by projects it finances,” ICIJ states as one of its key findings.…
Uprooted & evicted: World Bank-funded projects force millions off their land

Salon — Paul Krugman takes the gloves off: Radical ideologues tanked economies, ignored reality

Paul Krugman takes the gloves off in Friday’s New York Times, bashing economists who insist on believing in phony austerity models and offering a full-throated defense of old-fashioned Keynesian economics, even if it’s not a fashionable or trendy “new idea.”

“It’s hard to argue against new ideas in general,” Krugman writes. “In recent years, however, innovative economic ideas, far from helping to provide a solution, have been part of the problem. We would have been far better off if we had stuck to that old-time macroeconomics, which is looking better than ever.” 

Krugman writes that right-wing European politicians especially buried their heads in the sand, seeking justification from economics for the horrible political and ideological agendas they wished to impose. The exciting new research all proved grounded in phony assumptions. The old-school Keynesians were right. The ideologues refused to listen.
He singles out one in particular, Wolfgang Schäuble, the German finance minister….
Paul Krugman takes the gloves off: Radical ideologues tanked economies, ignored reality

Simon Maloy — Ted Cruz’s frightening gun fanaticism: When a presidential contender encourages armed insurrection

As incredible as it sounds, there’s an argument going on right now between two Republican senators (and, potentially, two Republican candidates for the presidency) over whether the American citizenry should be ready to fight a war against the federal government. The two senators in question are Ted Cruz and Lindsey Graham, and they can’t seem to agree whether the Second Amendment serves as bulwark against government “tyranny.”

It all started with a fundraising email Cruz sent making the case that “The 2nd Amendment to the Constitution isn’t for just protecting hunting rights, and it’s not only to safeguard your right to target practice. It is a Constitutional right to protect your children, your family, your home, our lives, and to serve as the ultimate check against governmental tyranny — for the protection of liberty.” TPM’s Sahil Kapur asked Graham what he thought of his Texan colleague’s view of the Second Amendment, and the South Carolina senator was not impressed. He even invoked the Civil War, which should make Cruz’s people plenty upset. “Well, we tried that once in South Carolina,” Graham said. “I wouldn’t go down that road again.”
This view of gun rights that casts personal firearm ownership as a check on the abuses of government doesn’t make a great deal of practical sense, and it betrays a lack of faith in our democratic institutions. But it’s become increasingly popular among high-level Republican officials who quite literally scare up votes by telling voters they’re right to keep their Glocks cocked just in case the feds come for them. Iowa’s new Republican senator Joni Ernst famously remarked that she supports the right to carry firearms to defend against “the government, should they decide that my rights are no longer important.”

The obvious question raised by statements like those from Cruz and Ernst is: when does the shooting start? What is the minimum threshold for government “tyranny” that justifies an armed response from the citizenry? In 2014, Nevada rancher Cliven Bundy was ready to start a shooting war with the feds to defend his illegal grazing practices, and he garnered the support of top-level Republican officials (they only abandoned him after he started wondering aloud whether black people would be better off as slaves).
It’s an important question because Republicans and conservatives – Ted Cruz included – tend to throw around terms like “tyranny” sort of haphazardly when criticizing policies and politicians they disagree with.…
Off the deep end. Feel like your living in a world gone mad?

Ted Cruz’s frightening gun fanaticism: When a presidential contender encourages armed insurrection
Simon Maloy

The New York Times “basically rewrites whatever the Kiev authorities say” — Patrick L. Smith interviews Stephen Cohen

There's an alternative story of Russian relations we're not hearing. Historian Stephen Cohen tells it here.
The second piece of this conversation will run next week.
What’s happened in Ukraine clearly has plunged us not only into a new or renewed—let historians decide that—Cold War, but one that is probably going to be more dangerous than the preceding one for two or three reasons. The epicenter is not in Berlin this time but in Ukraine, on Russia’s borders, within its own civilization: That’s dangerous. Over the 40-year history of the old Cold War, rules of behavior and recognition of red lines, in addition to the red hotline, were worked out. Now there are no rules. We see this every day—no rules on either side.
The rest of the interview elaborates on the dangerous situation that the American leadership is stumbling into.

The New York Times “basically rewrites whatever the Kiev authorities say”: Stephen F. Cohen on the U.S./Russia/Ukraine history the media won’t tell you.
Patrick L. Smith interviews Stephen Cohen, professor emeritus of Russian studies, history, and politics at New York University and Princeton University

Here we go with the wheels coming off:

Russia Insider
Israel May Send Arms to Ukraine If Russia Delivers S-300 to Iran

Patrick J. Buchanan
A US-Russia War over Ukraine?

The chief of the General Staff of the Russian Armed Forces [General Valery Gerasimov] has warned the European countries planning to host the US-led NATO missile systems that Moscow considers the installations "priority targets," as the systems possess offensive capabilities.…
Meanwhile, Russian Defense Minister Sergei Shoigu said Washington has crossed all lines by attempting to drag Ukraine into its league as part of its wider plan to expand NATO and alienate Russia's neighbors.
"NATO countries are actively pursuing an expansion of their geopolitical space, building up the military capabilities in Eastern Europe and closing in on Russia's border. The focus of their drills in the alliance's eastern front and Arctic region indicates their anti-Russian nature," he said.
Shoigu also accused NATO of increasing the potential for war in Eastern Europe by practicing "the use of American tactical nuclear weapons deployed in several European countries."
This is the Russian military talking, not Putin.

Russia Insider
NATO Warned: Russia Considers Missile Facilities in Eastern Europe to be "Priority Targets"

Documents from the Clinton administration confirm the slavishly pro-Western policies of the post-Soviet criminal oligarchy
Enemy Within: Declassified U.S. Documents Show Russian Oligarchs Supported NATO Expansion

This is the most worrisome. Weaponizing space.

Russia & India Re;sort
Russia preparing for “Star Wars”
Alexander Korolkov

Bill McBride — Goldman Sachs: "An Update on Student Loans: A Bigger Headwind but Still Not a Deal Breaker"

Translation: If student loan debt becomes too much of a drag, it's no biggie since almost all of it is held by the feds who can just eat it without imploding the economy.

Calculated Risk

Matthew Martin — The irrefutability of neo-fisherism

Not irrefutable if the direction of causality can be demonstrated in a compelling way. Instrumentalism (versus realism) does not differentiate direction of causality ontologically; it only establishes invariance of variables. 

Realists hold that without understanding causality ontologically, it isn't possible to know which variables are independent and which are dependent, since if they correlate, they can just be reversed. No problem is there is no difference, but it could be a big problem if there is a difference that the assumptions make it difficult or impossible to detect. So it is necessary to employ methodological assumptions that enable ontological differentiation in addition to formal analysis.

From the MMT vantage of changes in accounting balances, increasing interest rates adds to non-government net financial assets by increasing interest payments on government securities, which is potentially inflationary at full employment at the time the central bank uses monetary policy to address inflation. Here is a a causal argument for neo-fisherism. It has been advanced by Warren Mosler, for instance.

The counterargument is that raising interest rates not only increases interest payments on government securities but also increases the cost of capital, reducing borrowing for investment. The housing market is a major source of investment driving economies and investment in housing is sensitive to mortgage rates because it influences how much PITI a purchaser can afford to pay monthly.

So the result is something of a wash and how much of a wash depends on the actual context. 

Separating Hyperplanes

The U.S. is the biggest debtor nation in the world. Said all the quacks ...

Varoufakis again with his empty threats. This guy is getting really tiring. Will somebody please just give him a job at Goldman already?

Varoufakis again with this fake threats. The Troika must be laughing their asses off. He's added 12 years onto their lives.

First it's, "No more austerity and privatizations."
Then, "Oh, we've got to make cuts and privatize the Port of Piraeus."

Followed by, "We won't be able to make the bond payment so we need a deal."
Then, "Okay, here's the money. We'll just take it from pensions."

Now it's, "Don't push us or, we'll default."
"Oops, we were only kidding?"


Give me Josephine Witt any day.

The only thing in this world that gives orders is balls!

Trans Pacific Partnership put on Fast Track and supported by Obama

The Trans Pacific Partnership is an anti-democracy trade deal that has been negotiated completely in secret and Congress has now put in on the "fast track" meaning that it could become law very soon.

The deal gives foreign corporations the ability to avoid our domestic laws and regulations with respect to labor, the environment, taxation, patents, industrial policy, etc.

This is diktat by the global corporatocracy that subverts our democracy, our sovereign status.

Why the fuck do we vote? For this??

(Why the fuck do we vote, anyway?)

Call your Congressional representative and tell them you stand against this terrible deal that will lead to more outsourcing, more wage destruction, more pollution, more exploitation.

Central planning at its finest. This is why we have surging income inequality under Obama. For all his phony concern for workers and the Middle Class, he is nothing more than a puppet of the corporate elite.

Eric Lonergan — Bond bubbles, MMT, and the limits to fiscal policy


sample of one
Bond bubbles, MMT, and the limits to fiscal policy
Eric Lonergan
ht/ Brad DeLong

Frances Coppola — Colds, strokes and Brad Delong

Economic and policy malpractice. Who do we sue for damages?

Having said that, Brad's last comment is spot on:
The key questions of macroeconomic political economy then are not the questions of the construction of nonlinear multiple-equilibrium models that Frances Coppola wants us to study. They are, instead, the questions of why ideological and rent-seeking capture were so complete that North Atlantic governments have not deployed their fiscal and credit policy tools properly since 2008.
This is only half right. It's treating a preventable condition after the fact. Why did governments adopt ideologies that enabled not only rent capture but also state capture in the first place. 

The answer is simple. It is the result of a failure of representative democracy to prevent the development of oligarchic "democracy." This is a form of plutonomy similar in many ways to feudal aristocracies. It is based on institutional arrangements dictated by special interests, namely, the vying factions of a ruling elite who carve up the spoils among themselves based on their ability to gain and wield power.

Coppola Comment
Colds, strokes and Brad Delong
Frances Coppola

Inflation is about to pick up. This time it's real.

We saw a small uptick in the CPI for March this morning, but the real issue here and the one not reported (you will only get it here), is that we are going to experience the first significant increase in government spending this year in six years.

My projections, based on all the data on Federal spending (from the DTS) so far this fiscal year, and the rate of spending, is that we will hit $4.38 trillion. That would be a $200 billion increase from the prior year.

Here is a graph with the projection for this year.

The only other increase in spending that we saw was in 2013 and that was only $20 billion over 2012. So this year's increase is serious.

Government spending is different from central bank monetary operations. The former adds to net financial  assets ("printing money"), while the latter is only an asset swap. That's why all the "inflationista's" got it wrong these past years. It was because they believed monetary operations were money printing. It's not.

Therefore, based on this development here is my outlook...

  • The top is in for the dollar. It's going down.
  • Bonds are headed lower. Rates will go up and YES, the Fed will raise rates this year, possibly even in June.
  • Stocks will continue to climb for a while until rates get high enough to siphon away investment (and we're still a long way from that).
  • Gold will rally.
  • Commodities and oil have bottomed.

P.S. Some may claim that they predicted, all along, that the euro would rally, but that would be false.

Zero Hedge — Meet The Woman Who Attacked Mario Draghi: In Her Own Words

Pictures, too.

Zero Hedge
Meet The Woman Who Attacked Mario Draghi: In Her Own Words

TASS — Russia, China to deepen military cooperation — China defense minister

Good-neighbourly relations between Russia and China contribute to stability in the region and the whole world, the countries intend to further deepen cooperation between their military departments, Defense Minister of China Chang Wanquan told journalists on Thursday at the 4th Moscow International Conference on Security.
According to him, Russia and China are strategic partners, and the relationship between the states and their armed forces is developing at a high level. "This meets the interests of not only our countries, it is also beneficial for peace and stability in the region and the world in general," he said.
Russia, China to deepen military cooperation — China defense minister

Sputnik — EU Can Afford Anti-Russia Sanctions If Economy is Strong - German Minister

Maintaining the EU economic sanctions against Russia will depend on the overall economic strength of the Union, German Finance Minister Wolfgang Schaeuble said at a Brookings Institution conference in Washington, DC on Thursday.
Schaeuble of all people — the guy that is driving the EZ into the ground. Just keep pouring that austerity on.

ROFLMAO. The level of stupid is astounding.

EU Can Afford Anti-Russia Sanctions If Economy is Strong - German Minister

Thursday, April 16, 2015

Sputnik — Intensity of US Propaganda ‘Very Dangerous’ - John Pilger

John Pilger, the award-winning journalist and film-maker, talks to Sputnik about US foreign policy, the propaganda wars and the US Congress lawmakers.

Intensity of US Propaganda ‘Very Dangerous’ - John Pilger

Sputnik — Not-So-Free Lunch: Texas Woman Faces $2000 Fine for Feeding Homeless

This is really damning internationally. Especially with the cop smiling about it.

Not-So-Free Lunch: Texas Woman Faces $2000 Fine for Feeding Homeless

Here's the story at Zero Hedge
San Antonio Woman Fined $2000 For Feeding The Homeless

Sputnik — Russia’s Multipolar Concept Runs Counter to US Hegemonic Ambition

Unlike the Unites States, Russia is interested in building a multipolar world based on balanced relations and mutual respect, analysts told Sputnik on Thursday.
They commented on Russian President Vladimir Putin's remark about Washington claiming exclusivity as the sole center of power and seeking "vassals," rather than allies. The Russian leader was speaking during his annual Q&A session on Thursday.
China and India's view, too, being mature civilizations and former empires themselves. This also includes Iran (former Persian empire) and Turkey (former Ottoman empire). They view the US as the new kid on the block and still wet behind the ears. They learned to share power and the US hasn't yet.

Russia’s Multipolar Concept Runs Counter to US Hegemonic Ambition