Thursday, October 27, 2016

Alexander Mercouris — ECONOMY UPGRADE: Russia’s economic management receives multiple endorsements

Russian economy gets thumbs up, rises on most indicators. McCain's "just a gas station" and Obama's "isolated"and "don't make anything" are fantasies.

The Duran
ECONOMY UPGRADE: Russia’s economic management receives multiple endorsements
Alexander Mercouris

Ruslan Ostashko — Did the EU just sign off on Ukraine's last winter?

Pipelines and why they are crucial. Europe has no domestic energy resources.

Fort Russ
Did the EU just sign off on Ukraine's last winter?
Ruslan Ostashko, PolitRussia - translated by J. Arnoldski

Robert Parry — The Modern History of ‘Rigged’ US Elections

Robert Parry provides many example from US history.

And, of course, the candidate selection process is rigged in favor of moneyed interests.

Consortium News
The Modern History of ‘Rigged’ US Elections
Robert Parry

Tyler Cowen — My Second Thoughts About Universal Basic Income

I used to think that it might be a good idea for the federal government to guarantee everyone a universal basic income, to combat income inequality, slow wage growth, advancing automation and fragmented welfare programs. Now I'm more skeptical.
Bloomberg View
My Second Thoughts About Universal Basic Income
Tyler Cowen | Bloomberg View columnist and professor of economics at George Mason University

Chris Dillow — Resisting asymmetric Bayesianism

Turns out that debate is often not rational. Because cognitive bias.

Stumbling and Mumbling
Resisting asymmetric Bayesianism
Chris Dillow | Investors Chronicle

The Fallacy of a ‘Goldilocks’ War Policy

"Splitting the difference" between G. W. Bush and Barack Obama not a good policy approach.

Consortium News
The Fallacy of a ‘Goldilocks’ War Policy
Paul R. Pillar, 28 year veteran CIA analyst

Lars P. Syll — The perils of calling your pet cat a dog …

Applied math is not science. 

Math deals with possible worlds. (Think science fiction, or space fiction, depending on where you are from.)

Science purports to describe the real world of facts and events. This is called "semantic interpretation." (Think maps.)

Lars P. Syll’s Blog
The perils of calling your pet cat a dog …
Lars P. Syll | Professor, Malmo University

UK GDP Beats

Wuh' happened?????

Mike EPIC Rant

Mike made above the fold on Yahoo yesterday and it unleashed a moron shit-storm raining down upon him EPIC righteous rant here in response FTR (FD Rated R):

Wednesday, October 26, 2016

Bill Mitchell — The case against free trade – Part 1

Like many aspects of mainstream economic theory – free trade – is one of the concepts that sounds okay at first but the gloss quickly fades once you understand the basis of the theory and how it derives its seemingly ideal results. In practice, the textbook ‘model’ is never attainable in reality and so what goes for ‘free trade’ is really a stacked deck of cards that has increasingly allowed large financial capital interests to rough ride over workers, consumers and undermine the democratic status of elected governments. Further, even within the mainstream approach the terrain has moved. The old perfectly competitive ‘models’ of free trade, which go back to the Classical economist David Ricardo and were embodied in the so-called Heckscher-Ohlin and were used to disabuse notions of government intervention (protection, tariffs, import duties etc), have been surpassed in the literature. This blog is Part 1 in a two-part (might be three) series on why progressives should oppose moves to ‘free trade’ and instead adopt as a principle the concept of ‘fair trade’, as long as it doesn’t compromise the democratic legitimacy of the elected government. This is a further instalment to the manuscript I am currently finalising with co-author, Italian journalist Thomas Fazi. The book, which will hopefully be out soon, traces the way the Left fell prey to what we call the globalisation myth and formed the view that the state has become powerless (or severely constrained) in the face of the transnational movements of goods and services and capital flows. This segment fits into Part 3 which focuses on ‘what is to be done’.…
Bill Mitchell – billy blog
The case against free trade – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Here is why I am 100% certain that a Balanced Budget Amendment is going to become a reality.

I contribute to Real Money at the

The other day I wrote an article about how the national debt is not really a debt at all, but just part of the assets of the non-government. You know, basic MMT stuff.

I even included a link to a table from the Daily Treasury Statement that showed how the Federal Government redeemed (paid back) $94 Trillion last year. I did this to try to show how all the fear-mongering by Pete Peterson and Fix the Debt, etc was a total manipulation.

Well, after that article went up I got f'ckin bombarded with emails. These are just a few. Read them. Once you read them you will see that the public is sooo f'ckin ignorant on this stuff that I am sure, without a doubt, a balanced budget amendment to the Constitution will happen.

What a crock of SHIT!  This is just more lies published by the toadies of the 600 billionaires who are NOT paying their share of taxes, and who ARE systematically looting the assets of the United States.
You are TRULY STUPID! You must be liberal because your math skills suck. Many foreign governments and investors own treasuries; we pay interest on them that will soon take up over half our budget; and yes the money gets paid back. Man you are DUMB! Go peddle you BS elsewhere. WOW!

You missed it on this article.The statement says 94.2 trillion was paid off but it also says there is 95.6 trillion of new debt.  You have to look at the net to figure out what is going on.  We basically went into debt by another 1.4 trillion.  It is the way accountants handle things.  Apparently the debt is being refinanced over and over again.  If you re-financed the million you owe on your private island, the books would say 1 million paid and 1 million new debt.  If you re-financed it again for 1.2 million, the books would now say 2 million paid and 2.2 million new debt.
This article is trash and is a fucking lie.  There is debt and there is interest.  You are a true joke and I'm not sure how this article got past your editor.  If you'd like to debate your philosophy, let's do it.  Oh, and the Revolutionary War was not fought over a TAX, it was fought over who controls currency.  idiot.
Hi Mike,I read your article on the illusion of the National Debt. Then I went to the websites you said were shams, Fix the Debt, and read their prophecies of doom. Then I went to Wikipedia. That led me to this link: the gov seems to be telling me that current medicare and social security spending are unsustainable, and the debt is a big problem. I'm trying to get fair and balanced information, and your column "it doesn't exist" seems to be as extreme to one side as Fix The Debt is to the other...I always thought spending more than you make is a BAD thing. What's the deal?Thank you.
Dear Mr Norman - I am writing to you with interest in your answering 2 questions.1) If, as you assert, there is nothing to worry about with the national debt, is it an equal assertion that the line item that covers debt service in the federal budget is also of equal meaninglessness?I assume these debt payments are real and without a national debt these debt payments would either not need to be paid or the money could be spent in other ways.  Please clarify if you will.2) If the debt is meaningless, could then the Fed simply apply an easement to this number to wipe it out?  Why would this not be a good idea?Thank you.Dave KSeattle WA
Could not disagree more with your article.  There is debt and it IS owed to the people/other nations.  Garbage article.
Mike, I just looked over your article and the screen shot of the Treasury page you talk about. I also looked at the line about Net Change to Public Debt and saw it was only about $1.4B as a result of the $94 trillion redemption. I presume almost all of that amount went to interest on the debt, and the amount of debt was only reduced by $1.4 trillion. 
Just read your article "There is no Debt", and it made sense to me, except I wonder, "Then why is the spending power of the government limited?  Why can't we do more things?"  You see, I work for the Navy, and see all sorts of budgetary constraints, lack of resources to do the most basic things, etc.  While in an accounting sense there is no debt, there is a problem with something, perhaps with something other than debt but is conflated with the national debt, that is limiting us.  Indeed, why do we pay taxes?  Can we stop paying, if there is no debt?  Not trying to pick a fight, but some more explanation and clarification will help.  Thanks!
Foolish article. The money is owed to foreign countries. You think we are idiots ?
You, are an idiot
The $94 trillion you mention is from accounting of mostly non-marketable securities. These are securities that are made up of payments and reciepts for Social Security, Pensions, etc. within the government. It is not the total that matters it is the difference. You are misleading your readers with your article.Debt matters, it matters because we are spending today's money by paying with future tax dollars.
And if we believe that bull crap story that you liberals would have us believe, then you've got a bridge to sell us, cheap, right???? What about the trillions of dollars we've borrowed from China? ----they're just going to write that off, Right?That's like saying we don't have any debt on our houses or cars because we make payments on them How gullible do you think the American people are? We're  not all as stupid as your liberal bunch of sheep are, who just bury their heads in the sand and believe all your crap like this
Then why collect taxes?  If there is no debt.
Hi Mike,I just read your article on national debt and why it doesn't matter.  Its so contrary to what I hear and read constantly I had to write in with a few questions.  Yes, the government paid out $94T in your example,but it also took in $95T in the same period.  So in essence they're capability to pay depends on confidence in the system.  The fed can print money,but if this is abused doesn't it devalue currency?  If everyone had a money printer in their house,what would happen to the value of goods and the purchasing power of the dollar?  The value of currency depends on its scarcity to some extent.  Japan is proof that the limits can be stretched,but I find it hard to believe that the markets capacity for money printing is infinite.    History is riddled with examples of bubbles and economic collapse.  How are the laws of economic gravity different today?
Isn't that the same thinking the Greek government / economists were telling their people who dared to "fret" about their country's :debt"?
Thoughtful argument, Mike but you miss the point.  Number 1. Dollars spent by government are not as productive as dollars coming from the private sector. And Two.  The debt is a measure of government intrusion.  Example.  The government fined (I say shook down( banks for $250 Billion since 2009. Most of that money wen to the regulators.  Banks are levered 10 to one so that would mean $2.5 Trillion came out of the economy.  And that is just one example.  Costs of compliance from regulators is trillions more and mostly they are too attacks of personal property rights.  Half our economy is now public and public employees.  And the whole cycle leads to Corporatism.
There are Issues and Redemption's and you completely ignore the fact that they took in more than they paid out. Your article is flawed.
i don't get your logic.  the government issued 1.4 trillion than it redeemed (last line of table). to me thats increasing the debt subject to interest of 14 billion assuming a 1% rate.  if the government used the money for social programs, it gets no payback but still has the debt.  if the government used the money to create jobs, it gets a payback thru payroll taxes to service the debt.  ???
You are a dangerous man, a monumental asshole. You were paid to write this, which makes you an immoral and unethical asshole. In fact you are $20Trillion assholes wrapped up in one big asshole. You should be ashamed.
The Merriam-Webster definition of debt is "an amount of money that you owe to a person, bank, company, etc."  Investopedia tells us that "When an investor purchases a T-Bill, the U.S. government writes an IOU."  When I go to the bank to get money from them that I don't have, the only way I can get it is to borrow it from them.  They issue me a loan of some kind.  I sign papers (a form of note promising them I will pay back the money) that indicate an IOU status for the money I now have, and they do not have.Are we playing with words here?  Enron famously played the game you described:  "There is the proof, right in front of our noses, that the debt is meaningless. It's just a bunch of bookkeeping entries. Keystrokes."  Where is Enron today?You stated, "If you go to the last statement of the fiscal year . . .you will see the government redeemed (paid back) $94.2 trillion in one year!" First, if it isn't a debt, why did you   use the phrase in parentheses, "paid back"?  Second, where did the government get $94.2 trillion to pay anything back?  They didn't get it from taxpayers, and they certainly didn't get it from where it was just "lying around somewhere&quot
Mike, you really need to read "The Debt Virus" as well as understand the manner in which Government borrows money and pays interest on that borrowing and how it inflates the money supply.  Even if the inflation is "checkbook" money, it still has an effect on prices and growth.
Mike,I am curious after reading your article "The National Debt: why Fret......", what happens to the paper treasuries if on January 1, 2017 all oil trade settlements were changed to Euro's instead of Dollars ?My point, because of Oil Trades must all be settled in US Dollars there is an unbalanced Demand for US Treasuries that allows our Govt via the FED to always borrow or continuously refinance said debt from the last 240 yrs.There is no basis to pay the debt, it just gets rolled over and diluted.Am I wrong here
what can happen if you pretend the debt doesn't matter.
Actually, it's you who is misinforming.  You are correct in that the US redeemed and reissued 90trillion dollars.  Who cares?  If debt didn't matter, why not run a trillion $ deficit?  Why not $5T or $10T?  Let's build those roads, pay for everyones college bills and give all people a basic benefit.  At some point, the interest on that debt over takes the budget.  Now - we could say that doesn't matter because we can issue all the $ we want to take care of this interest.  We only need to look at other countries who have done this to see how that worked out for them.  STOP
Mike, if the government can spend more than it takes in and incur no debt, then why tax us in the first place? Why not just spend to their heart's content? The answer is, there is a national debt and I think you need to go back to Economics 101. Our country is about the learn how devastating this irresponsible spending has been. I eagerly await your correct to your silly article. Good luck.
Mr. Norman, debt isn't an asset, it's the opposite...a liability.  Take a basic accounting class.  You are so clueless I don't know where to start with your ridiculous article on "no national debt".  How did anyone print your article?

There's much, much, more.

Pepe Escobar — Russia Calls the War Party's Bluff

Cold War 2.0 has reached unprecedented hysterical levels. And yet a hot war is not about to break out – before or after the November 8 US presidential election.
From the Clinton (cash) machine – supported by a neocon/neoliberalcon think tank/media complex – to the British establishment and its corporate media mouthpieces, the Anglo-American, self-appointed “leaders of the free world” are racking up demonization of Russia and “Putinism” to pure incandescence.
And yet a hot war is not about to break out – before or after the November 8 US presidential election. So many layers of fear and loathing in fact veil no more than a bluff…
Sputnik International
Russia Calls the War Party's Bluff
Pepe Escobar

Claire Bernish — WikiLeaks List Exposes At Least 65 Corporate ‘Presstitutes’ Who Colluded to Hide Clinton’s Crimes

Revelations from the Wikileaks release of John Podesta's emails yet again prove mainstream, corporate media serves as Hillary Clinton's personal cheerleading squad — and is devoid of any iteration of journalistic integrity.

Thanks to Wikileaks and the Intercept, in fact, we now have a list of no less than 65 mainstream "reporters" whose campaign coverage constitutes propaganda for the Clinton campaign — and no wonder, considering the obscenely lopsided drivel presented by their outlets.

As (actual) journalists Glenn Greenwald and Lee Fang reported on October 9, the Intercept exclusively received documents obtained by the source known as Guccifer 2.0 evidencing Clinton campaign tactics to court journalists portraying the former secretary of state in a positive light.

"As these internal documents demonstrate," the Intercept reported, "a central component of the Clinton campaign strategy is ensuring that journalists they believe are favorable to Clinton are tasked to report the stories the campaign wants circulated. 
Exchanging integrity for access. Pretty similar to exchanging contributions for access.

Melvin A. Goodman — Learning from the Cold War to prevent war with Russia today

Backgrounder in conjuring up enemies and manufacturing consent to fight them.
Summary: Clinton has stocked her foreign policy team with advisors belligerent and reckless, eager for conflict with Russia. The military-industrial complex’s propaganda mills work to arouse fear and hatred of Russia, as they did during the Cold War. Let’s learn from that history before we starting risk a terrible war. We were told mostly false stories about the Soviet Union. How accurate are those about Russia? {This updates my post from Oct 2009.}
Fabius Maximus
Learning from the Cold War to prevent war with Russia today
Melvin A. Goodman | senior fellow at the Center for International Policy and adjunct professor of government at Johns Hopkins University. He spent 42 years with the CIA, the National War College, and the U.S. Army. His latest book is Failure of Intelligence: The Decline and Fall of the CIA.

See also

The Doctrine of Armed Exceptionalism
William Hurting

Simon Wren-Lewis — Being honest about ideological influence in economics

Good one!
Yet I suspect there is a reluctance among the majority of economists to admit that some among them may not be following the scientific method but may instead be making choices on ideological grounds. This is the essence of Romer’s critique, first in his own area of growth economics and then for business cycle analysis. Denying or marginalising the problem simply invites critics to apply to the whole profession a criticism that only applies to a minority.
The problem is that this minority is a powerful one and the economics profession is not run democratically but by established and entrenched elites, whether they be "freshwater" or "saltwater."

Mainly Macro
Being honest about ideological influence in economics
Simon Wren-Lewis | Professor of Economics, Oxford University

Lars P. Syll — What it takes to make economics a real science

Robert Gordon quote that sums it up by attacking George Stigler's claim that rigor supersedes relevance in economics. This would make economics a branch of mathematics and logic rather than a science that describes the world of facts and events that has a history. 

Under Stigler's view, which is the dominant view in conventional economics, economics is not a "real" science like other sciences but that rather a bogus one that only looks like a science. 

Conventional economics is better categorized as applied mathematics instead of science, and conventional economists approach it as such. They should just call it by it right name and let others do economic science without criticizing them for prioritizing relevance over rigor.

Lars P. Syll’s Blog
What it takes to make economics a real science
Lars P. Syll | Professor, Malmo University

Tuesday, October 25, 2016

Pepe Escobar — «America Has Lost» in the Philippines

The Asian pivot isn't working so well.

Strategic Culture Foundation
«America Has Lost» in the Philippines
Pepe Escobar

Dilbert Now Down for Trump

Because bullying.

Bill Black — Debt Derangement Syndrome: Saving Our Grandkids from Wall Street

Pete Person again with "The Grandchild Guilt Gambit (G3)."

New Economic Perspectives
Debt Derangement Syndrome: Saving Our Grandkids from Wall Street
William K. Black | Associate Professor of Economics and Law, UMKC

Bill Mitchell — The Eurozone ‘house of cards’ to collapse – doomed from the start

There was an interesting interview published in the financial market journal Central Banking this week with Otmar Issing, who was the ECBs first chief economist and a former European Central Bank executive board member. He predicted that as a result of the political corruption of the monetary union ideal, “the house of cards will collapse.” He was referring to the claim that the ECB has become captured by politicians and technocrats in the IMF and the European Commission such that it is now violating essential central banking principles, in addition, to Treaty obligations that were designed to safeguard the financial stability of the system. I have some agreement with his overall view that a federal solution to the Eurozone ills is not viable. But I do not agree that the ills of the Eurozone stem from recent political decisions – to pressure the ECB to engage in QE or other interventions. The reality is that the flawed design of the Eurozone, which reflected the ideological hold of neo-liberalism on the integration discussions in the 1980s and beyond, meant that the only effective fiscal capacity in the currency union was held by the ECB. If the ECB had not started buying up government bonds in May 2010, the monetary union would have collapsed about then. The whole problem is that neo-liberalism brought these Member States together into a monetary architecture that was doomed from the start…
Bill Mitchell – billy blog
The Eurozone ‘house of cards’ to collapse – doomed from the start
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Dean Baker — Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer

Download an ebook of Rigged free, or purchase a printed copy.

Dean Baker
Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer

James Petras — Washington’s ‘Pivot to Asia’: A Debacle Unfolding

The real story unfolding is the Philippines. The US overreached.

Petras mentions but doesn't emphasize that something similar is happening in Thailand.

Asian countries realize that the economic future lies with China rather than the US, which is chiefly an Atlantic power allied with Europe, and doesn't have non-white peoples interests at heart. They are getting tired of being used as pawns in the global game, and now face the possibility of getting shut out of China while being treated as US colonies.

James Petras Website
Washington’s ‘Pivot to Asia’: A Debacle Unfolding
James Petras | Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia

Sputnik — China Surpasses US in Total Foreign Investment

For the first time in history, China has surpassed the United States in total foreign investment. Moreover, Chinese companies' interests have expanded beyond energy and other natural resources. Analysts explain that this may be an indication that the country's economy is shifting from export-oriented growth to a focus on domestic demand.…
Sputnik International
Drooping Eagle, Soaring Dragon? China Surpasses US in Total Foreign Investment

The gov't PAID BACK $94 TRILLION. Last year!

Mariana Mazzucato — An Entrepreneurial Society Needs an Entrepreneurial State

Innovation-led growth can square a circle that is challenging modern capitalism: how to generate sustained and sustainable economic growth, built on high-value, well-paying jobs. This is at the core of entrepreneurial societies, and it is a good objective. The problem is how to get there. Although many countries have set the goal, few have achieved it.
The reason for this elusiveness lies in widespread misunderstandings about how innovation-led growth has been achieved in the past. These misunderstandings have allowed the wrong narratives to drive policy making, with individual entrepreneurs and companies as the central characters of the story. Left unchallenged, this narrative leads to counterproductive policy making and a distribution of rewards from growth that doesn’t reflect the actual distribution of risks.
An entrepreneurial society needs an entrepreneurial state, one that through visionary and strategic public investments, distributed across the innovation chain, can create animal spiritsin private businesses. Entrepreneurs then see growth opportunities, and business investment follows.
Harvard Business Review
An Entrepreneurial Society Needs an Entrepreneurial State
Mariana Mazzucato | R.M. Phillips Professor in the Economics of Innovation at SPRU University of Sussex, UK

Paul McCulley — The deficit is too small, not too big

Paul McCulley packs a lot of MMT-friendly information in a small space.

The Hill
The deficit is too small, not too big
Paul McCulley, The Hill contributor and senior fellow in Financial Macroeconomics and Adjunct Professor of Law at Cornell Law School

CNBC — Building the city of the future — at a $41 trillion price tag

Cities around the world could spend as much as $41 trillion on smart tech over the next 20 years.
"But, but, where will the money come from?"

That's going to take a whole lot of electricity, too.

Building the city of the future — at a $41 trillion price tag
Aneri Pattani, special to

Bill Mitchell — Rising inequality and underconsumptionRising inequality and underconsumption

John Atkinson Hobson was an English economist in the second-half of the C19th and worked well into the C20th, dying at the age of 81 in 1940. I have been reflecting on his work in the context of wage and other labour market developments in recent years. Hobson, individually and with co-authors, provided some excellent insights into how rising income inequality, mass unemployment and increased poverty destabilises the economic system through its impacts on consumption spending. He argued that government should engender what he called a ‘high-wage economy’ which would provide the best basis for prosperity. He was writing as an antagonist to the trends of the day, which considered wage suppression to be good for business and society. In this blog, we consider some of those issues. This is a further instalment to the manuscript I am currently finalising with co-author, Italian journalist Thomas Fazi. The book, which will hopefully be out soon, traces the way the Left fell prey to what we call the globalisation myth and formed the view that the state has become powerless (or severely constrained) in the face of the transnational movements of goods and services and capital flows. This segment fits into Part 3 which focuses on ‘what is to be done’.
Bill Mitchell – billy blog
Rising inequality and underconsumption
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

CNBC — Fmr CIA official: Biggest threat facing our nation right now is an election-night hack

"Just about anybody with decent computer literacy could pull something off like that," said [Carmen] Medina [former CIA deputy director of intelligence] who has 32 years in the intelligence field. She added: "The attacks last week could very well have been disaffected gamers."
Well, now, that's reassuring. It's not just "the Russians" we have to be concerned about.

Fmr CIA official: Biggest threat facing our nation right now is an election-night hack
Barbara Booth

US Energy Production Increasing

They have the price of their own products in their costs.
First, the relationship between well costs (finding and development costs plus operating costs) and the producer’s breakeven price (price necessary to achieve a zero rate of return) is essentially linear. That means if costs drop by 50%––as they have––then the producer’s breakeven price drops by 50%, all other things being equal. So if a producer’s rate of return was $80/bbl two years ago, now it would probably be closer to $40/Bbl.
So therefore non-cartel sector  production should keep steadily increasing until it displaces all cartel sector imports.