Friday, October 28, 2016

Tim Wallace — US economy picks up speed as exports surge

NX is kicking in as a sector.

The Telegraph
US economy picks up speed as exports surge
Tim Wallace

Gavin Kennedy — A New Myth Is Born

Appeal to Adam Smith is almost always an argument from authority, a logical fallacy. Moreover, the citation of this authority is usually wrong. It's actually a reference to Paul Samuelson rather than Smith.

Adam Smith's Lost Legacy
Gavin Kennedy | Professor Emeritus, Heriot Watt University

Matias Vernengo — History of Central Banks tutorial

Of interest to people interested in central banking, money & banking, finance, and economic history.

Naked Keynesianism
History of Central Banks tutorial
Matias Vernengo | Associate Professor of Economics, Bucknell University

Thursday, October 27, 2016

Alexander Mercouris — ‘Syria, Iraq are Turkey’s responsibility,’ exclaims Erdogan, demands Mosul, parts of Asia, Balkans and Middle East

Then sultan speaks.
Referring to the National Covenant – a 1920 declaration by the last Ottoman parliament, which was used by the newly formed Turkish Republic as the basis of its initial negotiating position at the conference of Lausanne, which eventually established Turkey’s present borders – he claimed that according to “certain historians” it had included within Turkey’s borders:
“Cyprus, Aleppo (in Syria), Mosul, Arbil and Kirkuk (in Iraq), Batum (in Georgia), Kardzhali, Varna (in Bulgaria), and Thessaloniki and the Aegean islands (in Greece).”
The Duran’s Alex Christoforou wrote earlier on the claims made by Erdogan about Turkey’s right to certain Greek islands. He also used historic, linguistic and religious ties to claim for Turkey a gigantic zone of influence for itself
“Turkey is not only Turkey. Not only for 79 million citizens, but Turkey bears also responsibility towards our hundreds of millions of brothers in the geographical area to whom we are connected through our historical and cultural ties.
It is a duty, but also a right of Turkey to be interested in Iraq, Syria, Libya, Crimea, Karabakh, Bosnia, and other sister areas (NB: this is a reference to Azerbaijan and former Soviet Central Asia – AM). The moment you give up this, it will be the time when we lose our independence and our future”.
Hey, why stop there? 

The Duran
‘Syria, Iraq are Turkey’s responsibility,’ exclaims Erdogan, demands Mosul, parts of Asia, Balkans and Middle East
Alexander Mercouris

Charles Koch Institute — Poll: Over half of Americans believe the military should be used less overseas during next administration

Only 14 percent of registered voters in the United States believe the country’s foreign policy has made them safer since 2001, according to a poll of 1,000 Americansreleased today by the Charles Koch Institute and the Center for the National Interest. More than half believe that both the U.S. and the rest of the world are less safe today as a result of the nation’s foreign policy choices over the last 15 years.
Likewise, only 25 percent of American voters feel the next president should expand the use of military abroad, while over half feel that the next administration should use the military less than it has been used since 2001.
Neoconservatism and liberal interventionism going out of favor?

Charles Koch Institute
Over half of Americans believe the military should be used less overseas during next administration


The National Interest
A New Poll Shows America's Reluctance for New Foreign AdventuresDaniel DePetris, fellow at Defense Priorities

The Clumsy Case for U.S. Intervention in Syria
John Allen Gay | executive director of the John Quincy Adams Society, a national network of student groups centered on a vision of foreign policy restraint, and a former managing editor of the National Interest

Zero Hedge — Putin Warns “US Has Pushed Russia Back Into Nuclear Arms Race

It's official. Game on.
Having unveiled the first images of its new nuclear missile capable of reaching US soil, Russian President Vladimir Putin is warning today that Washington’s actions are “pushing Russian into a nuclear arms race,” forcing Russia “to develop its nuclear attack systems.”
This will be Obama's legacy. You know, the guy that got the Nobel Peace Prize at the time of his election.

Zero Hedge
Putin Warns “US Has Pushed Russia Back Into Nuclear Arms Race
Tyler Durden

If the worst happens, the world won't have to be concerned with carbon-based global warming anymore.
A nuclear war between Russia and the United States, even after the arsenal reductions planned under New START, could produce a nuclear winter. Hence, an attack by either side could be suicidal, resulting in self- assured destruction. Even a ÒsmallÓ nuclear war between India and Pakistan, with each country detonating 50 Hiroshima-size atom bombsÑonly about 0.03 percent of the global nuclear arsenalÕs explosive powerÑas air bursts in urban areas, could produce so much smoke that temperatures would fall below those of the Little Ice Age of the fourteenth to nineteenth centuries, shortening the growing season around the world and threaten- ing the global food supply. Furthermore, there would be massive ozone depletion, allowing more ultraviolet radiation to reach EarthÕs surface. Recent studies predict that agricultural production in parts of the United States and China would decline by about 20 percent for four years, and by 10 percent for a decade. The environmental threat posed by even a small number of nuclear weapons must be considered in nuclear policy deliberations. Military planners now treat the environmental effects as collateral damage, and treaties currently consider only the number of weapons needed to assure destruction of opposing forces. Instead, treaties must call for further reductions in weapons so that the collateral effects do not threaten the continued survival of the bulk of humanity. Proliferation cannot be treated as a regional problem. A regional conflict has the potential to cause mass starvation worldwide through environmental effects.
Bulletin of Atomic Scientists
Self-assured destruction: The climate impacts of nuclear war
Alan Robock and Owen Brian Toon

Joseph Borelli — Picking longtime fixer as chief of staff proves Clinton hasn't changed

John Podesta.

The Hill
Picking longtime fixer as chief of staff proves Clinton hasn't changed
Joseph Borelli, contributor

The Clintons’ ongoing donor mess: A new Clinton Foundation memo reveals more ethical problems
Simon Malloy

Zero Hedge
Leaked Memo Exposes Shady Dealings Between Clinton Foundation Donors And Bill's "For-Profit" Activities
Tyler Durden

That would be Tony Podesta, brother of John.
In 1988, John and Tony Podesta formed the Podesta Group and have used their bigwig party-insider status to lobby and influence government policies — while, at various times, simultaneously holding positions of power — which has created a number of glaring conflicts of interest.

According to the March 2016 filing made in accordance with the Foreign Agents Registration Act of 1938, Tony Podesta is an active foreign agent of the Saudi government with the “Center for Studies and Media Affairs at the Saudi Royal Court,” and acts as an officer of the Saudi Arabia account.
Free Thought Project
Brother of Clinton’s Campaign Chair is an Active Foreign Agent on the Saudi Arabian Payroll
Claire Bernish

Sarah Lazare — Clear Evidence Emerges of Outrageous Militarized Police Collaboration with Oil Companies at Standing Rock Against Protectors

Famous last words. "It can't happen here."

Clear Evidence Emerges of Outrageous Militarized Police Collaboration with Oil Companies at Standing Rock Against Protectors
Sarah Lazare

Sputnik — Assange Says Hillary Clinton Behind Ecuador’s UK Embassy Ban on Internet

The duel heats up.

Assange Says Hillary Clinton Behind Ecuador’s UK Embassy Ban on Internet

If Hillary wins, she had better take the House and Senate. It's almost a forgone conclusion she will be impeached just like Bill.

The Washington Post
House Republicans are already preparing for ‘years’ of investigations of Clinton
Dave Weigel

Chicago Tribune
Cruz suggests leaving Supreme Court seat vacant if Clinton is elected
Associated Press

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