Friday, October 31, 2014

Interfax-Ukraine — U.S. Will Train Ukrainian Military, May Supply Weapons


What could possibly go wrong?
In a move no doubt intended to discourage Russian involvement in Ukraine, the U.S. government announced plans to give the Ukrainian military training, technology and weapons, Interfax-Ukraine reports. 
The announcement was made by U.S. Ambassador to Ukraine Geoffrey Pyatt in an interview with the Ukrainska Pravda online newspaper. The diplomat listed two challenges for Ukrainian security forces: eliminating corruption within its structure and developing a coherent response to Russian military activity. Russia annexed the territory of Crimea when political divisions in Ukraine grew into violent disorder earlier this year. 
Pyatt said the U.S. has provided night vision devices, first aid kits, body armor and ready-to-eat military meals to help improve the Ukrainian military’s ability to act in the short term. The United States’ longer-term plans “are aimed primarily at retraining and raising the professionalism of Ukrainian military to create what President Petro Poroshenko said he really wants - an army built in line with NATO standards,” Interfax-Ukraine reports...
truthdig
U.S. Will Train Ukrainian Military, May Supply Weapons
Posted by Alexander Reed Kelly

Ann Pettifor — Central Banking, State Capitalism, and the Future of the Monetary System


Weekend reading

PRIME
Central Banking, State Capitalism, and the Future of the Monetary System
Ann Pettifor, First published on the CFA Institute website

Rob Urie — QE, Debt and the Myth of a Liberal Left

The economic mythology regarding national accounts, bank money and who benefits from monetary policy is designed to sell a program that the economic right fully supports. The myth of a ‘liberal left’ has what George W. Bush dubbed ‘compassionate conservatives’ occupying chairs in national debate to assure that only arguments that serve the status quo are put forward. The economic programs of liberal Presidents Bill Clinton and Barack Obama (and Jimmy Carter) are wholly of this economic right. That they appear as anything else is testament to the power of the mythology.
Counterpunch
QE, Debt and the Myth of a Liberal Left
Rob Urie

Jeff Cox — Wait till you see what Alan Greenspan's been saying


Good for some laughs.

CNBC NetNet
Wait till you see what Alan Greenspan's been saying
Jeff Cox | Finance Editor

Fascism, American-Style


It can't happen here?
“Unbeknownst to most Americans the United States is presently under thirty presidential declared states of emergency. They confer vast powers on the Executive Branch including the ability to financially incapacitate any person or organization in the United States, seize control of the nation’s communications infrastructure, mobilize military forces, expand the permissible size of the military without congressional authorization, and extend tours of duty without consent from service personnel. Declared states of emergency may also activate Presidential Emergency Action Documents and other continuity-of-government procedures which confer powers on the President, such as the unilateral suspension of habeas corpus—that appear fundamentally opposed to the American constitutional order. Although the National Emergencies Act, by its plain language, requires the Congress to vote every six months on whether a declared national emergency should continue, Congress has done only once in the nearly forty year history of the Act.”
— Patrick Thronson, Michigan Journal of Law (2013, Vol 46).
Counterpunch
Fascism, American-Style
John Stanto
The greatest crime of the twenty-first century so far was the U.S. invasion and occupation of Iraq. Broadly conceived by George W. Bush and Dick Cheney immediately after 9/11, it initially lacked a coherent justification . But as Condoleezza Rice noted at the time, the tragedy brought “opportunities.” (People in fear can be persuaded to support things policy-makers long wanted, but couldn’t quite sell to the public.) 
First Bush and Cheney (and Rumsfeld and Wolfowitz and Rice) made the decision to go to war. Then they sat down and carefully invented thereasons for their war. 
On Sept. 11, 2001 Bush asked his counterterrorism advisor Richard A. Clarke, who had warned him in early 2001 about an “immanent al-Qaeda threat” (warnings Clarke alleges Bush “ignored”) to produce a report blaming Iraq for the attacks on the Twin Towers and the Pentagon. 
In his own account Clarke says: “I said, Mr. President. We’ve done this before.” (Meaning, we’ve explored the possibility of ties between Baghdad and al-Qaeda before.) “We have been looking at this. We looked at it with an open mind. There is no connection.” 
But Clarke’s recollection of the event continues:

“He came back at me and said, ’Iraq! Saddam! Find out if there’s a connection.’ And in a very intimidating way. I mean that we should come back with that answer. We wrote a report. It was a serious look. We got together all the FBI experts, all the CIA experts. We wrote the report. We sent the report out to CIA and found FBI and said, ‘Will you sign this report?’ They all cleared the report. And we sent it up to the president and it got bounced by the National Security Advisor or Deputy. It got bounced and sent back saying, ‘Wrong answer. … Do it again.’”
 
Few policy decisions in modern history can rival the evil of that demand that the U.S. intelligence community deliberately contrive a false historical narrative, to justify a war that has destroyed a country and killed half a million people.
Counterpunch
The Gloating of the Neocons
Gary Leupp
Created under the guise of fighting terrorism, 'Sneak and Peek' now being used to spy on drug suspects, immigrants, rights group finds
Common Dreams
Police Using Controversial Patriot Act Authority for 'Everyday' Cases: Civil Liberties Group
Nadia Prupis, staff writer
Former CIA analyst and activist Ray McGovern was arrested as he attempted to attend an event in New York City featuring former CIA director and retired military general, David Petraeus. He was charged with resisting arrest, criminal trespass and disorderly conduct. 
At 92nd Street Y, which describes itself as a “world-class cultural and community center,” Petraeus was to appear with John Nagl, who recently wrote a book, Knife Fights about being an army tank commander in the Gulf War of 1991. Neoconservative commentator Max Boot was to join them as well. 
Activists from World Can’t Wait, the Granny Peace Brigade, Brooklyn for Peace and a chapter of Veterans for Peace called on people to protest. Some tickets, which cost $45 each, were bought so people could attend the event and potentially participate in a question and answer portion of the event. 
World Can’t Wait activist Stephanie Rugoff said a guard stopped McGovern. “Ray, you’re not going in,” the guard said. 
McGovern, who is 74 years-old, told the guards something to the effect that the Bill of Rights gave him the right to go into the event. McGovern had a ticket too. But the guards would not let him pass and soon New York police officers surrounded him. 
Richard Marini, also an activist with World Can’t Wait, approached the entrance to the 92nd Street Y Center and saw McGovern, who is 74-years-old, being apprehended.
According to Marini, his arms were twisted tightly behind his back and he was in immense pain while they were dragging him to the police car. He was squeezed into the back of a patrol car and taken to the 67th Street station.
 
Rugoff heard him screaming. He was shouting about how they were hurting his shoulder. He asked the officers to stop twisting it so they did not aggravate his shoulder and possibly re-injure it. 
“I had a ticket as well,” Marini explained. “They recognized me as well and called me by my name, my first name. They seemed to know who people were.”
Common Dreams
Former CIA Analyst Ray McGovern Arrested While Trying to Attend David Petraeus Event
Kevin Gosztola, FireDogLake
For years, Americans relied on the mainstream U.S. news media for information; some folks were even convinced the MSM was “liberal.” But the current reality is that the major papers have become mouthpieces for the national security state while amassing a sorry record of deception, writes Greg Maybury.
Consortium News
Big Media Has Betrayed the People
Greg Maybury







Mike Whitney — 15 Reasons Why Americans Think We’re Still in a Recession


Charts and references.

Counterpunch
15 Reasons Why Americans Think We’re Still in a Recession
Mike Whitney

Jörg Bibow — Germany’s Über-Economists Are Rampant Again

The rest of the world is holding its breath as the eurozone continues wobbling along the brink of deflation. In fact, numerous member states are already experiencing what it means to let “it” happen again. With the region stuck in depression since 2008, Euroland authorities are writing fresh world records in failing to improve the well-being of their citizens. The only thing that keeps rising in the eurozone is indebtedness—as the unsurprising consequence and symptom of its collective austerity insanity. 
But that is not how the German authorities, or for that matter German economists, view the world. Blatantly ignoring the dismal facts that their favored medicine has produced, they never tire of calling for more of the same: austerity, austerity, and another extra dose of austerity please. By contrast, anything that might possibly help to turn fortunes around gets rejected out of hand as conflicting with the requirements of stability-oriented policymaking. In Germany, neither facts nor economic theory matter at all, it seems. Policy prescriptions simply have to match the ruling austerity-cum-competitiveness ideology, no matter what.…
Multiplier Effect 

Jeff Cox — Markets are still addicted to money printing


Rational expectations?
Friday's stock surge provides yet another reminder that when it comes to moving the market, there's nothing like a little old-fashioned money printing. 
What waits on the other side—asset bubbles, inflation, the prospects for still greater wealth disparity—remains, of course, an issue for another day. 
The important thing is that the market wants what the market wants…
CNBC NetNet
Markets are still addicted to money printing
Jeff Cox | Finance Editor

Pope Francis: 'Caring for the poor does not make you a communist'


Vatican still lost, no progress here at all.  Link at UK Independent here.
"Today I want to unite my voice with yours and accompany you in your fight," he said to participants at the World Meeting of Popular Movements,
Yeah it all has to be one big dog fight over scraps.... "survival of the fittest" you know.
"Beware of curs..."  (Phil 3:2)

Thursday, October 30, 2014

Ria Novosti — Whitewashing Nazis in Eastern Europe Equate Nazism to Communism: Simon Wiesenthal Center director

Eastern Europeans, who attempt to whitewash Nazi war crimes, try to liken Nazism to communism to create an illusion that the Soviet Union is as responsible for what happened during World War II as the Third Reich, Ephraim Zuroff, director of the Simon Wiesenthal Center, warned in a discussion hosted by Radio VR’s moderator Dmitry Babich.…
The expert dwelled upon the situation in Ukraine with respect to the rehabilitation of Nazism. He underlined that the current Ukrainian government is sending the wrong message to its people. “Just a few days ago, the Ukrainian president [Petro Poroshenko] called members of the Ukrainian Insurgent Army (UPA) heroes. One may remember how [Nazi collaborator Roman] Shukhevich was posthumously honored by Yushchenko’s government. The presidential decree was revoked by the Yanukovich administration, but still this is a problem in Ukraine,” Zuroff said. 
If UPA members are considered heroes and statements to this effect are made by the government, then “this is definitely a wrong message,” the expert insisted. Zuroff also said he was concerned about education in Ukraine. “If the children in Ukraine are taught that Shukhevich is a hero and Stepan Bandera is a hero, that is a huge problem!” he said.
Ria Novosti
Whitewashing Nazis in Eastern Europe Equate Nazism to Communism: Expert

Milton Friedman didn't understand gov't as monopolist

If you've ever played the game of Monopoly you should have total understanding of our monetary system.


Amitai Etzioni — The U.S. Should Not Fear Competing With China

U.S. opposition to the new bank illuminates a much greater issue: Will the U.S. seek to contain every international initiative by China, or will it only counter aggression but welcome China’s non-coercive engagement in regional and world affairs? Some students of international relations expect that China will buy into the existing international order – the one formed and promoted by the United States – at least until China develops much more. Under this reasoning, the United States should therefore welcome China’s increased contributions to various international bodies, something the U.S. has long been seeking. Others, however, point out that the United States is instead increasingly of the view that China is seeking to form its own world order, which is leading the United States to labor to block such initiatives. One can see these blocking moves when China moves to expand its EEZ, boost its investments in Africa and in Latin America, or set up a new Asian development bank. 
These analyses assume that rising powers must either accept the prevailing order as it is, or must set out to form a new order of their own. However, the prevailing world order is not etched in stone; it is continuously modified. There is no a priori reason to assume that rising powers must either buy into the order “as is” or reject it in toto. The world order can be, and most likely will have to be, renegotiated and recast, one hopes in ways that will work for both the new and old powers. An attitude of “my way or the highway” invites conflict; mutually beneficial third ways should be considered.
Someone ask Professor Etzioni what the state policy of uncontested US military superiority is for anyway. His view is both idealistic and practical, and at the same time ridiculous in light of realities. It would involve the US giving of its policy of global hegemony to "make the world safe for democracy."

For instance, Professor Etzioni writes:
What I call, lacking a better term, the “redder red and greener green” option represents such a third way forward. It holds that the United States (and China) should strongly oppose any and all attempts to change the status quo by use of force. This is the red light part: strongly opposing changing borders and resolving territorial disputes by force, whether force is used in the Asia-Pacific region or in the Middle East or elsewhere. In effect, U.S. President Barack Obama followed this approach with regard to the Senkaku/Diaoyu Islands when he stated that the Treaty of Mutual Cooperation and Security between the United States and Japan extends to the islands. Since then, China has done precious little to gain control of them.
Stating "that the Treaty of Mutual Cooperation and Security between the United States and Japan extends to the islands" is a threat to use force. Doh.

He continues:
In short, the rise of a new power calls for characterizing some acts as particularly objectionable, the coercive ones, and seeking to block them, while viewing other new initiatives as fully legitimate and constructive. This dual approach of combining some containment with some new openness in effect means that the world order itself will need to be recast. It will have to be more ready to negotiate changes in the rules as long as rising powers respect the Westphalian norm, that is the sovereignty of nations, and the commitment to work out differences about borders and territorial rights in peaceful ways.
Not respecting the Westphalian norm is exactly what Vladimir Putin accused the US of doing and he warned that this course threatened global chaos.

The Diplomat
The U.S. Should Not Fear Competing With China
Amitai Etzioni | University Professor at The George Washington University

Isaiah J. Poole — New Insight Into A Progressive Populist Path To Victory

Democratic pollster Stan Greenberg is not all doom and gloom about the Democratic Party's chances of keeping control of the Senate. The polls may suggest otherwise, but Greenberg still sees a way for Democrats to have a good outcome Tuesday – and it's through the Democratic Party's base in the "rising American electorate" of single women, millennials and people of color. 
But to get to that path of victory, Democrats will have to pivot much more strongly and convincingly toward a populist economic message that identifies the villains responsible for economic inequality and middle-class decline as well as the policies needed to address those problems.
This election hangs on turning out the base. The Democrats are in the unfortunate position of having to forfeit their base or their donors if they throw red meat to the base. So voter intensity is with the GOP.

Crooks and Liars
New Insight Into A Progressive Populist Path To Victory
Isaiah J. Poole

Alex Kane — Our Warped Idea of Terrorism: It Only Applies to People Who Oppose America and Its Allies


"Terrorism" as more Orwellian double-speak.

AlterNet
Our Warped Idea of Terrorism: It Only Applies to People Who Oppose America and Its Allies
Alex Kane | AlterNet's New York-based World editor, and an assistant editor for Mondoweiss

Andrew G Haldane: Managing global finance as a system

Text of the Maxwell Fry Annual Global Finance Lecture, given by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at Birmingham University, Birmingham, 29 October 2014
Bank of International Settlements
Andrew G Haldane: Managing global finance as a system

Dmitri Trenin — Russia's Great-Power Problem

Emotionally, the centerpiece of Putin’s intervention was the lack of respect in the West for Russia and its interests: a recurrent theme with him for the better half of the decade. Essentially, he told the international audience of scholars and journalists: when Russia called itself the Soviet Union, was arming itself to the teeth with nuclear weapons and had leaders like Nikita Khrushchev, who famously banged his shoe at the UN General Assembly and came close to banging the United States with nuclear-tipped missiles, Moscow was respected, and its interests taken into account—if anything, out of fear. Now that Russia has shed communism, gotten off the backs of a dozen satellites, allowed its own fourteen borderlands to form independent states; embraced capitalism and begun moving toward democracy, its interests are being wholly ignored.

This diagnosis is generally correct, but the analysis needs to go deeper. Putin, a self-avowed student of history and a champion of the Westphalian tradition in international relations, certainly understands that the balance of interests—a phrase he should not have borrowed from Mikhail Gorbachev—rests on the balance of power or equivalent. This, by the way, is well understood in Beijing, where I heard—also last week—that the talk of multipolarity is just talk, for the lack, now or in the foreseeable future, of multiple poles. In reality, the world was moving toward new bipolarity, this time between the United States and China, with all other countries aligning themselves with either of the two poles. Thus, Europe and Japan would side with the United States; and Russia would go to China.
 
The way the Chinese see it, Russia is not an all-round “major power.” It has territory, resources and a sizable nuclear arsenal, for all that is worth today, but it lacks real economic strength. Unless it deals with this massive deficiency, Russia will not be able to play in the global top league. And, given the present circumstances, it will have nowhere to go other than to China. Exit Greater Europe from Lisbon to Vladivostok; enter Greater Asia from Shanghai to St. Petersburg.
The geopolitical and geostrategic question now is whether Russia will align with the West under the US as the pole or with the East under China as the pole. Previous to the Ukraine crisis, Russia was leaning strongly westward. Now the push is toward the East.

The working out of this is crucial to the geopolitics of the 21st century, in which the US and Europe's economic dominance is beginning to be offset by the emerging nations, where development is now strongly outpacing that of the West as the Global South plays catch up with the Global North, leapfrogging on technology. The US is already trying to restrain the growing power of the BRICS alliance by undercutting the proposed BRICS bank as an alternative to Western dominated international organizations, in particular the IMF and World Bank.

The National Interest
Russia's Great-Power Problem
Dmitri Trenin | Director of the Carnegie Moscow Center

Kremlin Economy Boss: Please Don't Cancel Sanctions - They're Helping Russia — Nikolai Petro interviews First Deputy Prime Minister Igor Shuvalov

Igor Shuvalov, the top Kremlin official responsible for the economy: Sanctions force companies to modernize, be more efficient, less complacent. We've been saying this for months: sanctions are helping Russia. Western media is getting this badly wrong.… This is an extract from an interview to Russia Direct, by the American political scientist, Nikolai Petro.
Russia Insider
Nikolai Petro interviews First Deputy Prime Minister Igor Shuvalov

Yves Smith — Germany Turning Sour on the Transatlantic Trade and Investment Partnership

This does not mean the TTIP is dead, but it is a serious blow. And it is important to get the word out in the US, since one of the tricks of negotiators is to create a sense of inevitability to push the various parties into acting. This deal is not near completion and is losing momentum. Alert your Congressman that the Germans and the European Parliament are against the TTIP, and they should oppose it as well.
Naked Capitalism
Yves Smith 

Russia Insider — Stalin is Seriously Popular In Russia



Here's another thing the Western media isn't reporting.

Stalin is seen by huge numbers of Russians as a hero, including many top intellectuals and political leaders. Their reasoning is too complex to go into here. We'll try to address this is a future article. But trust us, it's a very main-stream opinion. Off-hand guess: - maybe half of Russians believe this…
For now - here is a photo we came across of a billboard in Tatarstan, which is in central Russia. It says: 
He destroyed the "Fifth Column". (In Russian political discourse, the "Fifth Column" is a broad term for liberals, people sympathetic to Western ideas, people who consciously or unconsciously undermine the Russian government, traitors. It is a term heard frequently today to describe liberals and people opposed to Putin.) 
Under his leadership we were victorious against Nazi Germany, freed Europe, and rebuilt Russia from complete ruin. 
He protected our culture with the iron curtain. 
Under him, study and sport were respected. 
Under him, there was no corruption. 
Under him, we were the most respected nation and people on the earth. 
He made Russia into a super-power.
Compare with the growing popularity of neo-Nazism in the West and —déjà vu.

Russia Insider
Stalin is Seriously Popular In Russia
RI Staff

Marshall Auerback — The Fed Will End Its Bond Buying Program. Does It Matter?


MMT view of QE and its effectiveness.

Macrobits by Marshall Auerback
The Fed Will End Its Bond Buying Program. Does It Matter?
Marshall Auerback

Wednesday, October 29, 2014

Derek Wall — What Elinor Ostrum taught: democratic control is not only possible, it's normal

The market fundamentalism of Hayek seems to dominate political discourse. Hayek, the liberal free market Austrian economists, argued that state planning would end in failure and only the market could promote economic efficiency. This agenda seems, since Thatcher and Reagan, to have swept the world but it is, of course false. Neo-liberals far from reducing state intervention use the state to support corporations. Privatization is about helping powerful firms and market competition is no longer an issue. A good example is the current transformation of the NHS into a cash cow for Virgin and US health corporations. Neo-liberals promote corporate welfare and monopoly. Elinor Ostrom is powerful ally for all those of us who want to challenge that neo-liberal dogma and create people centred cooperative economics. 
Elinor Ostrom, who sadly died in 2012, was the first and so far only women to win a Nobel Prize, strictly speaking the Swedish bank prize, for economics. She was awarded it for her work on commons, collective resources and collective communal property. If we want a practical alternative (s) to privatisation she helps in a number of ways.…
Open Democracy
What Elinor Ostrum taught: democratic control is not only possible, it's normal
Derek Wall | International Coordinator of the Green Party of England and Wales. He is a political economist, whose last book was ‘The Sustainable Economics of Elinor Ostrom’ Routledge 2014. He is married to the community musician Emily Blyth and is a founder of Green Left, the anti-capitalist network in the Green Party. He is also a columnist with the Morning Star and is completing his new book for Pluto ‘The Economics of anti-capitalism’ which will be published in 2015.

Alexandra Kulikova — What is really going on with Russia's new internet laws


Alexandra Kulikova, an independent ICT and internet policy researcher, provides what seems to be an objective assessment.

Open Democracy
What is really going on with Russia's new internet laws
Alexandra Kulikova

Chris Mayer — Modern Monetary Theory (MMT): How Fiat Money Works


Chiefly about Warren Mosler.

Daily Reckoning
Modern Monetary Theory (MMT): How Fiat Money Works
Chris Mayer | managing editor of the Capital and Crisis and Mayer's Special Situations newsletters

Roberto A. Ferdman — Why the South is the worst place to live in the U.S. — in 10 charts


Charts ranking the states on various criteria.

Rather concerning that the some seem dedicated to making the whole of the US look more like the South.

The Washington Post
Why the South is the worst place to live in the U.S. — in 10 charts
Roberto A. Ferdman

Theme Song For MMT? "We Make Money (Money Don't Make Us)"

   (Commentary posted by Roger Erickson)


Jerry Jeff Walker
Last I'd heard, he'd retired from San Antonio to Costa Rica. (Or was it Belize?)

Anyone know how to contact Jerry Jeff about licensing that jingle?

Or making a dedicated version:
We Make Fiat (Fiat Don't Control Us)


Or commission a new album: Mr. Banksterangles?



Kevin G. Hall — New book slams economists, their theories and their forecasts

Jeff Madrick has a bone to pick with the economics profession, and that’s putting it nicely. Consider the title of his new book: “Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World.”… 
Madrick is a longtime writer on economic matters for Harper’s magazine and a former New York Times columnist. He dropped by McClatchy’s Washington Bureau recently to discuss his book. Here are some of his thoughts, edited into a question and answer format.

Read more here: http://www.mcclatchydc.com/2014/10/29/245048_new-book-slams-economists-their.html?rh=1#storylink=cpy

Read more here: http://www.mcclatchydc.com/2014/10/29/245048_new-book-slams-economists-their.html?rh=1#storylink=cpy
McClatchy DC
New book slams economists, their theories and their forecasts
Kevin G. Hall | McClatchy Washington Bureau


TASS — Most Russians consider US major enemy of Russia — pollster

According to a poll by the All-Russia Public Opinion Research Center, 73% of respondents said the US was Russia’s number one enemy…
…less than one percent named the United States a partner-country, while 73% agreed that America was Russia’s number one enemy. Besides the US, Ukraine (32%), the EU and Germany (10%) are believed to be among Russia’s rivals. Moreover, Italy, France and Japan were considered Russia’s partners by only one percent of the surveyed. 
As a matter of fact, 82% of the respondents supported the idea that the criticism of foreign mass media towards Russia’s President Vladimir Putin could be considered as an attempt to destroy the country and to make it fall apart. Nevertheless, 12% disagreed with the statement, while 6% remained unsure.

Lindsay Abrams — The energy myth that refuses to die: Why renewables are taking over in the developing world

Poor nations are embracing clean energy at twice the pace of rich ones, a new report finds
Not surprising. emerging nations went directly to cellphones, and digital payments, too.

Salon
The energy myth that refuses to die: Why renewables are taking over in the developing world
Lindsay Abrams

Greg Palast — Jim Crow Returns



Election officials in 27 states, most of them Republicans, have launched a program that threatens a massive purge of voters from the rolls. Millions, especially black, Hispanic and Asian-American voters, are at risk. Already, tens of thousands have been removed in at least one battleground state, and the numbers are expected to climb, according to a six-month-long, nationwide investigation by Al Jazeera America.

At the heart of this voter-roll scrub is the Interstate Crosscheck program, which has generated a master list of nearly 7 million names. Officials say that these names represent legions of fraudsters who are not only registered but have actually voted in two or more states in the same election — a felony punishable by 2 to 10 years in prison.

Until now, state elections officials have refused to turn over their Crosscheck lists, some on grounds that these voters are subject to criminal investigation. Now, for the first time, three states — Georgia, Virginia and Washington — have released their lists to Al Jazeera America, providing a total of just over 2 million names.

The Crosscheck list of suspected double voters has been compiled by matching names from roughly 110 million voter records from participating states. Interstate Crosscheck is the pet project of Kansas’ controversial Republican secretary of state, Kris Kobach, known for his crusade against voter fraud.

The three states’ lists are heavily weighted with names such as Jackson, Garcia, Patel and Kim — ones common among minorities, who vote overwhelmingly Democratic. Indeed, fully 1 in 7 African-Americans in those 27 states, plus the state of Washington (which enrolled in Crosscheck but has decided not to utilize the results), are listed as under suspicion of having voted twice. This also applies to 1 in 8 Asian-Americans and 1 in 8 Hispanic voters. White voters too — 1 in 11 — are at risk of having their names scrubbed from the voter rolls, though not as vulnerable as minorities.

If even a fraction of those names are blocked from voting or purged from voter rolls, it could alter the outcome of next week’s electoral battle for control of the U.S. Senate — and perhaps prove decisive in the 2016 presidential vote count.

“It’s Jim Crow all over again,” says the Rev. Joseph Lowery, who cofounded the Southern Christian Leadership Conference with Martin Luther King, Jr. Lowery, now 93, says he recognizes in the list of threatened voters a sophisticated new form of an old and tired tactic. “I think [the Republicans] would use anything they can find. Their desperation is rising.”

Though Kobach declined to be interviewed, Roger Bonds, the chairman of the Republican Party in Georgia’s Fulton County, responds, “This is how we have successfully prevented voter fraud.”

Based on the Crosscheck lists, officials have begun the process of removing names from the rolls — beginning with 41,637 in Virginia alone. Yet the criteria used for matching these double voters are disturbingly inadequate.…

Al Jazeera America
Jim Crow Returns
Greg Palast

Alexey Eremenko — Russia Wants State Control of Root Internet Infrastructure

Russia has mounted an effort in recent weeks to bring the root infrastructure of the Internet under control of state-affiliated bureaucracies, both internationally and at home.
The global push is likely to fizzle out, industry experts said — but at home, the plan has every chance of succeeding.
 
Backers of the Kremlin line say bigger state control of the Internet is mandatory for national security, hinting that the U.S. could disconnect Russia from the Web.
But critics say that Russia, which already censors the Internet, simply wants to expand its means of political censorship.
 
"Russia wants state control of the global network … instead of public control," said Artem Kozlyuk, a freedom of information activist with Rublacklist.net, an independent Internet freedom watchdog. 
The latest wave-generating proposal came from Russian Communications and Mass Media Minister Nikolai Nikiforov, who urged the launch of a reform at the United Nations to give control of the Internet to national governments. 
The move would prevent deliberate disconnections of national segments of the Internet, Nikiforov said earlier this week in South Korea at a session of the International Telecommunications Union, a UN body. 
He identified the United States as a possible threat to other nations' Internet access, according to a transcript on the ministry's website.…
The Moscow Times
Russia Wants State Control of Root Internet Infrastructure
Alexey Eremenko

Alexander Mercouris — Putin Just Made the Most Important Speech of His Career. The West Should Listen More Closely


Putin as a traditional (Burkean) conservative valuing law, order and stability positioned against a liberal US policy of favoring a new world order under its conception of (Lockean) liberalism manifesting as neoliberalism and neoconservatism.
What he really wants are stability, rules, and a global balance of power - traditional conservative ideas. He thinks the rest of the world needs to rein-in out-of-control US global activism.
Russia Insider
Putin Just Made the Most Important Speech of His Career. The West Should Listen More Closely
Alexander Mercouris

See also
The National Interest
Putin's Play at Valdai — A Russian quest for stability?
James W. Carden

Lars P. Syll — Macroeconomic aspirations


More on micro foundations and realism. Microfoundations are supposed to add realism. They don't, because the assumptions of conventional modeling are unrealistic. Representative agent models are hopelessly simplistic and agent based model quickly get intractable unless they are kept very simple, too. Simplicity may be a virtue, but over-simplying in modeling isn't. And complexity is complex. 

The challenge is accounting for the complex as simply ("economically") as possible, while also "saving the appearances," as Aristotle put it. The danger lies in generalizing a special highly stylized case based on assumptions that make the model irrelevant to reality.

The basic challenge of science lies in successfully connecting models with reality. Many models can be devised to account for the same data. The generally accepted criteria are correspondence, consistency, elegance (simplicity, economy) and practicality. Preferring consistency and simplicity to correspondence and practicality doesn't cut it.

Lars P. Syll’s Blog
Macroeconomic aspirations
Lars P. Syll | Professor, Malmo University

Matt O'Brien — The worst possible case for the worst possible idea, the gold standard


Paul Krugman versus Peter Thiel.

The Washington Post — Wonkblog
The worst possible case for the worst possible idea, the gold standard
Matt O'Brien

Bill Mitchell — The case of the financial commentator who turned into a banana

On June 2010, Halligan gave an – Interview – to CNBC about the impact of : “If this policy isn’t inflationary, I’m a banana!” 
During that interview he claimed the combination of “a big budget deficit and the Bank of England’s quantitative easing policy” would cause inflation to get get worse.
He said:
This really is economics 101 … We’re running a budget deficit of 12-13 percent of GDP, if that’s not inflationary I am a banana … 
Inflationary expectations start to spiral once inflation is above a significant level
He also claimed that the bond market would see the higher deficit and eventually stop funding the government. This is a government that issues its own currency.
 
The following graph (courtesy of the BBC) shows the evolution of the Consumer Price Index and the Retail Price Index in the UK since 2000.
Britain is now heading towards very low inflation.
Bill Mitchell – billy blog
The case of the financial commentator who turned into a banana
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Brian Romanchuk — For Fiscal Policy, The Future Is Now

The problem with modern analysis of fiscal policy is that it has fallen into the trap of following a certain conventional wisdom: it has to be very forward looking, in fact it is meant to have an analysis horizon longer than the expected lifetime of the Universe (depending upon the cosmological model). Upon reflection, I think the correct philosophy was the one expressed by the famed American Football coach George Allen: The Future Is Now.…
Bond Economics
For Fiscal Policy, The Future Is Now
Brian Romanchuk

Tuesday, October 28, 2014

Wolf Richter — New Home Prices Plunge the Worst EVER (in One Ugly Chart)


Wolf Street
New Home Prices Plunge the Worst EVER (in One Ugly Chart)
Wolf Richter

See also
Zero Hedge
This Has Never Happened Before Without A Massive Bubble Bursting

Wolf Richter — Beyond the Sanctions, Russia Wins Currency War


Is Russia laughing up its sleeve? Reminiscent of Br'er Rabbit pleading with Br'er Fox not to throw him in the briar patch.
So the Central Bank of Russia has been selling $20 billion of its stash of foreign currency and buying rubles to mop them up and relieve some pressure. But rather than trying to stop or reverse the ruble’s decline, the Central Bank appears to be managingthe decline. A sudden crash of the ruble could have chaotic consequences, while an orderly decline in the middle of a currency war may well be just what it wants.
Wolf Street
Beyond the Sanctions, Russia Wins Currency War
Wolf Richter

Dr. Housing Bubble — Rental rates are outpacing wage growth: What are the implications of rising rents when wages are simply not keeping up?


Dr. Housing Bubble Blog
Rental rates are outpacing wage growth: What are the implications of rising rents when wages are simply not keeping up?
drhousingbubble

Shane Ferro — Peter Thiel: There Was Virtue In The Gold Standard


Huh? Theil has been hanging with Glenn Beck too much?

Derek Thompson — Homeownership in America Has Collapsed—Don't Blame Millennials


Atlantic Business
Homeownership in America Has Collapsed—Don't Blame Millennials
Derek Thompson
In 2012, Jordan Weissmann and I observed that young people were turning away from homes and cars, the twin engines of the economy.

TASS — Hungary to withdraw from EU in case of interference in internal affairs — parliament speaker

Hungary’s parliament speaker on Tuesday threatened Brussels that the country would withdraw from the European Union if it interferes into the country’s internal affairs.
Member of Hungary’s Fidesz conservative party, Laszlo Kover, said, “The EU attempts to dictate Hungary what to do will lead to the country’s withdrawal from the Union slowly and carefully.”
 
An initiative by the Fidesz ruling party to impose a tax on the Internet was a motive for such strong statements. Thousands of people took to streets for protest actions on Sunday, October 26 that led to disorders. At the moment European Commissioner for the Digital Agenda Neelie Kroes urged people to take part in protest actions. 
“If Brussels believes that the countries can be dictated the rules of conduct, this reminds us of the USSR actions in 1956,” Hungary’s MTI news agency quoted the parliament speaker as saying.
TASS
Hungary to withdraw from EU in case of interference in internal affairs — lawmaker

Vegasjessie — Blackwater's Erik Prince Blames The Left For Occupation 'Failures'

The former head of Blackwater and author of "Civilian Warriors" asserts that his company's much maligned contractors are the scapegoats in Iraq and Afghanistan.
Crooks and Liars
Blackwater's Erik Prince Blames The Left For Occupation 'Failures'
Vegasjessie

Robert Parry — How the Washington Press Turned Bad

There was a time when the Washington press corps prided itself on holding the powerful accountable – Pentagon Papers, Watergate, Vietnam War – but those days are long gone, replaced by a malleable media that puts its cozy relations with insiders ahead of the public interest, writes Robert Parry.… 
Many of the fond recollections surely are selective, but there was some truth to Bradlee’s “front page” approach to inspiring a staff to push the envelope in pursuit of difficult stories – at least during the Watergate scandal when he backed Bob Woodward and Carl Bernstein in the face of White House hostility. How different that was from Bradlee’s later years and the work of his successors at the Washington Post!…
What Happened to the Press?
How this transformation of Washington journalism occurred – from the more aggressive press corps of the 1970s into the patsy press corps of the 1980s and beyond – is an important lost chapter of modern American history.
 
Much of this change emerged from the political wreckage that followed the Vietnam War, the Pentagon Papers, the Watergate scandal and the exposure of CIA abuses in the 1970s. The American power structure, particularly the Right, struck back, labeling the U.S. news media as “liberal” and questioning the patriotism of individual journalists and editors. 
But it didn’t require much arm-twisting to get the mainstream news media to bend into line and fall on its knees. Many of the news executives that I worked under shared the view of the power structure that the Vietnam protests were disloyal, that the U.S. government needed to hit back against humiliations like the Iran-hostage crisis, and that the rebellious public needed to be brought back into line behind more traditional values… 
Fitting a Pattern
In other words, the vicious destruction of Gary Webb following his revival of the Contra-cocaine scandal in 1996 – when he examined the impact of one Contra-cocaine pipeline into the crack trade in Los Angeles – was not out of the ordinary. It was part of the pattern of subservience to the national security apparatus, especially under Republicans and right-wingers but extending to Democratic hardliners, too.…
So, perhaps it should come as no surprise that this thoroughly corrupted Washington press corps would lash out again at Gary Webb as his reputation has the belated chance for a posthumous rehabilitation. 
But how far the vaunted Washington press corps has sunk is illustrated by the fact that it has been left to a Hollywood movie – of all things – to set the record straight.
Neocons.

Consortium News
How the Washington Press Turned Bad
Robert Parry

Pepe Escobar — And the loser in Brazil is - neoliberalism

Brazil's complexities boggle the mind. It starts with arguably the key, multi-layered message a divided country sent to winner Dilma Rousseff. We are part of a growing middle class. We are proud to be part of an increasingly less unequal nation. But we want social services to keep improving. We want more investment in education. We want inflation under control (at the moment, it's not). We support a very serious anti-corruption drive (here's where Dilma's Brazil meets Xi Jinping's China). And we want to keep improving on the economic success of the past decade.

Rousseff seems to get the message. The question is how she will be able to deliver - in a continental-sized nation suffering from appalling education standards, with Brazilian manufacturing largely uncompetitive in global markets, and with corruption run amok.
Asia Times Online
And the loser in Brazil is - neoliberalism
Pepe Escobar

Greg Palast — Palast's Biggest Exposé Ever — 3.5 Million Voters Threatened with Purge

A six-month-long nationwide investigation by Al Jazeera America has discovered that voting officials in 27 states, almost all of them Republicans, have launched what is threatening to become a massive purge of black, Hispanic and Asian-American voters. Already, tens of thousands have been removed from voter rolls in battleground states, and the numbers are set to climb. 
The full story will be released on Wednesday morning, October 29, on America.AlJazeera.com.
And watch the two-part exposé on "America Tonight" on Al Jazeera America
this Wednesday & Thursday - 9pm ET.
Greg Palast
Palast's Biggest Exposé Ever — 3.5 Million Voters Threatened with Purge

Derek Thompson — It's Coming: $65 Oil

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower that we hoped, and (2) global oil production is improving faster than we expected.
The Atlantic
It's Coming: $65 Oil
Derek Thompson

Ambrose Evans-Pritchard — Riksbank cuts rates to zero and mulls currency war to fight deflation

Sweden’s Riksbank has torn up the rulebook of global central banking, cutting interest rates to zero even though the economy is in the grip of a credit boom.

The extraordinary step is intended to stave off deflation but it comes at a time when the Swedish economy is growing at almost 2pc and property prices are rising briskly. The bank has abandoned earlier efforts to curb asset bubbles by “leaning against the wind”.

The Riksbank cut the deposit rate to -0.75pc in what looks like a preparatory move to drive down the krona. Governor Stefan Ingves said the bank has a toolkit of extreme measures in reserve, including use of the exchange rate. The comment is the first hint that Sweden may follow Switzerland and the Czech Republic in imposing a currency floor through unlimited purchases of foreign bonds.
Telegraph
Riksbank cuts rates to zero and mulls currency war to fight deflation
Ambrose Evans-Pritchard

Murtaza Hussain — The U.S. Government Is Suddenly Way, Way More Interested In Tracking Snail Mail


Just so you feel more safe and secure with your government on watch. We gotta protect our freedoms they hate, you know.
A report published yesterday by The New York Times showed an unexplained sixfold increase in the number of approved government requests to spy on the snail mail correspondence of American citizens in recent years.
Roughly 50,000 requests to spy on Postal Service metadata — the names, return addresses, and postmark locations on the outside of envelopes sent to a particular location or individual — were granted by the United States Postal Service in 2013 alone, The New York Times points out today. That’s up from an average of just 8,000 requests per year between 2001 and 2012. This increase happened with essentially no explanation as to why it was necessary, or with any added mechanisms to protect such a program from abuse….
The Intercept
The U.S. Government Is Suddenly Way, Way More Interested In Tracking Snail Mail
Murtaza Hussain

Michael Stephens—New Book: Economic Development and Financial Instability, Selected Essays of Jan Kregel

The first collection of essays by Jan Kregel, focusing on the role of finance in development and growth, has just been made available through Anthem (edited by Rainer Kattel).
Multiplier Effect
New Book: Economic Development and Financial Instability, Selected Essays
Michael Stephens

Michael Perelman — The Anarchy of Globalization

Part of the problem is that the nature of globalization is generally framed according two conflicting ideological perspectives. On the one hand, the anti‑globalization side emphasizes the effects of self‑interested intentionality, in which major powers want to extend their access to markets or resources. The opposing story of globalization emphasizes a complete absence of intentionality in which people merely respond to presumably efficient, impersonal market forces in a way that supposedly allows the invisible hand to spread shared prosperity throughout the globe.
Counterpunch
The Anarchy of Globalization
Michael Perelman | Professor of Economics at California State University, Chico

RJ Eskow — Dems Who Support Stupid Conservative Ideas on Cutting Social Security Get Called Out—By Republicans

And when things get ugly for Democrats in the next election, they'll undoubtedly be asking themselves once again: Who could have seen it coming?
"Triangulation." Brainchild of Dick Morris, and sold to Bill Clinton.

AlterNet
Dems Who Support Stupid Conservative Ideas on Cutting Social Security Get Called Out—By Republicans
ECONOMY
Richard (RJ) Eskow | Campaign for America's Future

Also
Crooks & Liars
Whoever Wins, Democrats Should Learn This Lesson: Be Democrats
Dave Johnson

William K. Black — The New York Times Claims Democratic Leaders in Latin America are “Military Dictators”


Another blistering attack on the NYT propaganda machine.
Your federal tax dollars go to support this effort, which was explicitly designed to outsource the CIA’s eternal campaign against democratically elected leaders that the CIA did not believe were sufficiently hard right wingers.
Bill knows better, of course, but uses it tactically for effect. Some may question that strategy as self-defeating in the larger context.

New Economic Perspectives
The New York Times Claims Democratic Leaders in Latin America are “Military Dictators”
William K. Black | Associate Professor of Economics and Law, UMKC

Monday, October 27, 2014

Emmanuel Saez and Gabriel Zucman — Exploding wealth inequality in the United States

Wealth inequality in the US has followed a U-shaped evolution over the last century – there was a substantial democratisation of wealth from the Great Depression to the late 1970s, followed by a sharp rise in wealth inequality. This column discusses new evidence on the concentration of wealth in the US. Growing wealth disparity is fuelled by increases in both income and saving rate inequalities between the haves and the have nots.… 
How can we explain the growing disparity in American wealth? The answer is that the combination of higher income inequality alongside a growing disparity in the ability to save for most Americans is fuelling the explosion in wealth inequality. For the bottom 90% of families, real wage gains (after factoring in inflation) were very limited over the past three decades, but for their counterparts in the top 1% real wages grew fast. In addition, the saving rate of middle-class and lower-class families collapsed over the same period while it remained substantial at the top. Today, the top 1% families save about 35% of their income, while the bottom 90% families save about zero (Saez and Zucman 2014).
If income inequality stays high and if the saving rate of the bottom 90% of families remains low then wealth disparity will keep increasing. Ten or 20 years from now, all the gains in wealth democratisation achieved during the New Deal and the post-war decades could be lost. While the rich would be extremely rich, ordinary families would own next to nothing, with debts almost as high as their assets.…
What should be done to avoid this dystopian future? We need policies that reduce the concentration of wealth, prevent the transformation of self-made wealth into inherited fortunes, and encourage savings among the middle class.…
Vox.eu
Exploding wealth inequality in the United States
Emmanuel Saez, Professor of Economics and Director of the Center for Equitable Growth, University of California Berkeley, and Gabriel Zucman, Assistant professor of economics, London School of Economics

Stuart Leavenworth — How Britain failed to ensure democracy in a China-ruled Hong Kong

Paradoxically, Great Britain never introduced democracy to Hong Kong; the governor was appointed by London and there were no elections.…
McClatchy
How Britain failed to ensure democracy in a China-ruled Hong Kong
Stuart Leavenworth | McClatchy Foreign Staff

Read more here: http://www.mcclatchydc.com/2014/10/27/244820/how-thatcher-failed-to-ensure.html#storylink=cpy



Read more here: http://www.mcclatchydc.com/2014/10/27/244820/how-thatcher-failed-to-ensure.html#storylink=cpy

Ravi Kanth Devarakonda — Put People Not ‘Empire of Capital’ at Heart of Development

President Rafael Correa Delgado of Ecuador does not mince words when it comes to development. ”Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour,” he told a crowded auditorium at the 15th Raul Prebitsch Lecture.
Inter Press Service
Put People Not ‘Empire of Capital’ at Heart of Development
Ravi Kanth Devarakonda

Chris Mayer — Why a Central Bank Can Never Run Out of Money


Nice post on MMT giving Randy Wray's operational description of the monetary system.

Daily Reckoning
Why a Central Bank Can Never Run Out of Money
Chris Mayer | managing editor of the Capital and Crisis and Mayer's Special Situations newsletters

J. D. Alt — Halfway There

If you graph this wildlife population loss, it looks uncannily similar to the graph-line of “Nature” in the HANDY Model: a point is reached where, suddenly, after a steady rise, or a gradual equilibrium, the graph-line of “Nature’s” population changes direction and begins to plummet. What is startling about the HANDY Model is that when this happens, the human populations of “Elites” and “Commoners” continue to rise, crossing the falling graph-line of “Nature.” This is called “overshoot”—the point where the human population begins consuming “Nature’s” resources faster than “Nature” can replenish them. The human population, after some period of “overshoot,” begins (of necessity) to collapse as well. The population of “Commoners” collapses first because the “Elites” are able, for a period of time, to thrive on their “Wealth.” In some iterations of the model, “Nature” recovers after the “Elite” population finally base-lines; in other iterations “Nature” fails to recover at all—the world becomes simply a wasteland, like one of those planets we keep investigating to see if it ever supported life.

The reality is that if there would be an apocalyptic  collapse of "civilization," it wouldn't be the elites that would survive, but the remaining indigenous peoples and those living in the "informal economy." And maybe some preppers, but it's probably more likely that they would kill each other off in the search for remaining resources as their stocks ran low.

New Economic Perspectives
Halfway ThereJ. D. Alt

Peter Radford — Stagnation

The downscaling is said to fit with the empirical evidence, and in particular with the trends that seem to have set in since around 1980. 
In other words, a sputtering economic performance over the past few decades is seen as proof that we now live in more constrained times, where limited growth puts a cap on our latitude in dealing with economic issues. People drawing this conclusion almost inevitably then jump into discussions of how this reduced latitude implies a more austere role for government, and – naturally – that everyday folks just will have to manage on less. 
I have a slightly different perspective. 
The onset of the downward shift coincides quite neatly with another great beginning. That of an era of economic policy focused on supply side initiatives, giveaways to the rich, and of corporate welfare. Is it simply a strange coincidence that the entire post-Reagan era is exactly that we are now describing as one of lower growth? Or is it that the right of center free market policies that have dominated policy making throughout the west since the early 1980′s, are to blame?
The Radford Free Press
Stagnation
Peter Radford

Merijn Knibbe — Links, the Levy Institute was right edition

Dimitri Papadimitriou, Edward Chilcote and Genarro Zezza, Eric Tymoigne, L. Randall Wray and Dimitri Papadimitriou, Frederic Lee

Real-World Economics Review Blog
Links, the Levy Institute was right edition
Merijn Knibbe

Dirk Ehnts — Paul Krugman and monetary theory

Since monetary theory is complicated stuff, I would like to see the debate on endogenous renewed. It is a, perhaps the, decisive issue for the Western world in the 21st century.
econoblog 101
Paul Krugman and monetary theory
Dirk Ehnts | Berlin School for Economics and Law

Marshall Auerback — Hillary Clinton Is Right – And Will Be Crucified For It

The experience of the Second World War showed governments that full employment could be maintained with appropriate use of budget deficits. The employment growth following the Great Depression really only accelerated with the onset of the War. 
All the orthodox neoclassical remedies that had been tried during the 1930s largely failed. These are the same policies that are being proposed by neo-liberal economists now. We have short memories. But Hillary Clinton is right. This can’t be done by the private sector in the absence of sufficient demand for its products/services. 
The post WWII period was marked by governments maintaining levels of demand sufficient to ensure enough jobs were created to meet the demands of the labour force, given labour productivity growth. 
Governments used a range of fiscal and monetary measures to stabilise the economy in the face of fluctuations in private sector spending. We need to be honest enough to remember our history to eliminate the scourge of unemployment. It’s doubtful that Hillary would go this far, but she is being more truthful than she might realise.
Macrobits by Marshall Auerback
Hillary Clinton Is Right – And Will Be Crucified For It
Marshall Auerback

Bill Mitchell on good and bad deficits in Eurozone battle lines being drawn again with Germany on the other side


Bill Mitchell on good and bad deficits. You might want to Evernote this.
Regular readers will know I don’t automatically use the term deterioration to describe an increasing fiscal deficit. I differentiate between good and bad. 
The national government has a choice – maintain full employment by ensuring there is no overall spending gap which means that the necessary deficit is defined by this political goal. It will be whatever is required to ensure there is enough spending in the economy to generate sufficient jobs to satisfy the preferences of the workers for work. 
However, it is also possible that the political goals may be to maintain some slack in the economy (persistent unemployment and underemployment) which means that the government deficit will be somewhat smaller and perhaps even, for a time, a budget surplus will be possible. 
But the second option would introduce fiscal drag (deflationary forces) into the economy which will ultimately cause firms to reduce production and income and drive the budget outcome towards increasing deficits. 
Ultimately, the spending gap is closed by the automatic stabilisers because falling national income ensures that the leakages (saving, taxation and imports) equal the injections (investment, government spending and exports) so that the sectoral balances hold (being accounting constructs). 
But at that point, the economy will support lower employment levels and rising unemployment. The budget will also be in deficit – but in this situation, the deficits will be what I call “bad” deficits. Deficits driven by a declining economy and rising unemployment. 
So fiscal sustainability requires that the government fills the spending gap with ‘good’ deficits at levels of economic activity consistent with full employment. 
Fiscal sustainability cannot be defined independently of full employment. Once the link between full employment and the conduct of fiscal policy is abandoned, we are effectively admitting that we do not want government to take responsibility of full employment (and the equity advantages that accompany that end). 
You might like this blog from the past – A voice from the past – budget deficits are neither good nor bad. 
In that context, the deficits in France and Italy are at present ‘bad’ because they are being sustained by the deliberately created recessed states and entrenched mass unemployment.
Bill Mitchell – billy blog
Eurozone battle lines being drawn again with Germany on the other side
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Bill Mitchell on "Innocent Hypocrites": Those Blithely Unaware That Hypocrisy Has No Limits In Ideology-Land.

   (Commentary posted by Roger Erickson)
The Best Way To Succeed In Life Is To Consistently Act On ALL The Advice We Give To Other Populations ... So We'd Soon Stop Preaching To Them So Much (and vice versa)


"It all goes to show ... what a sorry, failed enterprise the Eurozone actually is."

There are 53 mentions of Germany and 52 mentions of "Commission" in this post, most having to do with ongoing hypocrisy, within the entire EU Parliament and all of it's Commissions.

Structural reforms, anyone? Top down?



Sunday, October 26, 2014

Bloomberg News — Rousseff Re-Elected on Call to Save Brazil’s Social Gains

Brazil’s President Dilma Rousseff won re-election and stretched her Workers’ Party’s rule to a record 16 years by convincing voters her opponent threatened social gains she pledged to expand in her second term. 
Rousseff, who has maintained record-low unemployment even as the economy posted the slowest growth under any Brazilian president in more than two decades, had 52 percent of the vote with 99.98 percent of ballots counted by the electoral court in Brasilia. Senator Aecio Neves, a former governor of Minas Gerais state, had 48 percent. The result was the closest presidential election since the return of democracy in 1985.
Bloomberg News
Rousseff Re-Elected on Call to Save Brazil’s Social Gains
Mario Sergio Lima and Anna Edgerton

Lars P. Syll — Keynes’s fundamental insight


The difficulty lies, not in the new ideas, but in the escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.
— John Maynard Keynes
This is not the whole story about this however. There is also the iron law of institutions
"The people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution "fail" while they remain in power within the institution than for the institution to "succeed" if that requires them to lose power within the institution." (attributed to Jonathan Schwartz)
People are not only captured by ideas, but they capture institutions that then amplify these ideas institutionally and even culturally. Never underestimate organizational power for both good and ill.

Lars P. Syll’s Blog
Keynes’s fundamental insight
Lars P. Syll | Professor, Malmo University

Allen McDuffee — 25 Banks Failed Europe's Stress Test, Need to Raise $31 Billion

The European Central Bank (ECB) said Sunday that 25 of Europe's biggest banks have flunked the Eurozone's first year-long financial-health exam that aimed to measure their ability to weather another economic crisis. Ultimately, the 25 banks fell short of minimum levels of capital by a total of more than $31 billion. 
The assessment was only slightly worse than what was predicted of the 130 banks surveyed, and the ECB said that 12 of the 25 that failed had already made up for their shortfalls during the months the ECB was conducting its review, leaving the remaining 13 with two weeks to come up with a plan to increase their capital buffers. 
No top-teir banks failed the so-called stress tests and the failures were concentrated among Italian banks, with nine failures, and Cypriot and Greek banks, with three each.
Atlantic Business
25 Banks Failed Europe's Stress Test, Need to Raise $31 Billion
Allen McDuffee

Also
Business Insider
There Is One Huge Thing Missing From The ECB's Stress Tests
Myles Udlan

Andrew O'Hehir — From Gary Webb to James Risen: The Struggle for the Soul of Journalism

In thinking about the cases of Gary Webb and James Risen, two famous investigative reporters aggressively persecuted for their explosive revelations (in very different situations, and with different results), we are drawn into the thorny question of journalism and its so-called professional ethics. How well do the supposed codes of journalism work, and whom do they serve and protect? Is the primary role of journalism as a social institution to discover the truth as best it can and raise the level of public discourse, or to preserve its own power and prestige and privilege? I don’t claim to know the answers with any certainty. If anything, the stories of Webb and Risen suggest that those questions yield different answers in different contexts.
AlterNet
From Gary Webb to James Risen: The Struggle for the Soul of Journalism
Andrew O'Hehir | Salon

Mark Ames — The biggest CIA-drug money scandal you never read


The story of Nicholas Deak of Deak-Perera.

PandoDaily
The biggest CIA-drug money scandal you never read
Mark Ames

The World's Top Incomes Database


The World's Top Incomes Database
Facundo Alvaredo, Tony Atkinson, Thomas Piketty and Emmanuel Saez
h/t Jan Milch

masaccio — The Economic Blind Spot Among Progressives

The fact is that progressives of all stripes have deliberately chosen to work inside the framework of US capitalism. They are only willing to put forward baby steps towards reform. There is no coherent defense against the efforts of the filthy rich to impose their will on every government and non-government organization in support of their drive to protect their existing wealth, and open the gates to exploitation of their wealth to create more wealth. For a particularly ugly demonstration, take a look at this discussion and the links it contains by the PBS ombudsman explaining the relationship between David Koch and the Boston and New York PBS channels. Nothing to see here, folks; David Koch is just fine with PBS. I’m sure it’s just a coincidence that NPR has now dismantled its environmental desk.
Firedoglake
The Economic Blind Spot Among Progressives
masaccio

Christian Cantrell — The future is disappearing: How humanity is falling short of its grand technological promise


The obstacle is not technological innovation but economics and in particular, "affordability," which reduces the problem to the human factor. Humanity is just not capable of seizing available opportunity. Another way of looking at it is as an organizational problem. We have the resources for Utopia, but are unable to organize to use them.

Salon
The future is disappearing: How humanity is falling short of its grand technological promise
Christian Cantrell

Yves Smith — The Unattainable Illusion of Meritocracy


The reason that meritocracy is an unattainable illusion is that it is based on an illusory view of human nature and society — methodological individualism grounded in ontological individualism. The reality is, however, that human beings are not atoms, on one hand, and human society is no longer in the state of nature where the rule of law does not apply.

Homo economicus is an illusion; the reality is homo socialis. Homo socialis is embedded in community. In ancient times, banishment as a punishment was tantamount to a death sentence. Human communities are cultural and institutional artifacts, and modern societies function under the rule of law.

As a result, "a self-made man" is an oxymoron in an interdependent world. Merit and just deserts are of limited significance in the overall picture of human life in community in that the context is much more complex and interdependent than these concepts ordinarily imply, and any theory of human action based on methodological individualism is simplistic.

Naked Capitalism
The Unattainable Illusion of Meritocracy
Yves Smith

Russia Insider — German Editor Turned CIA Whistleblower is #1 on Amazon in Germany

The book of that German editor we told you about two weeks ago, who is exposing CIA and German Secret Service programs to manipulate German media to follow directives from Washington, is #1 on Amazon's bestseller list in Germany.… 
The funny thing is, if you google his name, and look for news, there is absolutely nothing about his book in the German mainstream media.

Matt Bruenig — Gentrification

I don’t write about gentrification, but I read about it often. Most of what I read about gentrification is less lucid than I’d prefer, generally because it is vague, myopic, or needlessly narrative. This has started to bug me, and so I figured I’d try my own hand at writing about the topic. 
As far as I can tell, gentrification is not a sui generis problem. Rather, it is just a particular instance of a broader phenomenon that can be summed up as follows:

When (1) a rich person and a poor person (2) vie for (3) the same resources, the rich person gets them and the poor person does not.
 
The numbers in the above statement demarcate what I take to be the three significant elements of gentrification. Nearly all gentrification analysis focuses on one or more of these three elements. Potential mechanisms for preventing gentrification can be grouped into these three buckets as well.
Matt Bruenig
Gentrification

Very simply, gentrification results from scarcity of desirable real estate, usually location of land. Then those that can afford rising prices and the resulting higher taxes force out those that can't. There was a mass exodus of the arts community from San Francisco in the Eighties, for example, with many moving to cheaper spot in Northern California above the Bay Area. Similarly with Greenwich Village in Manhattan, as artists moved to lofts in SoHo, which later became gentrified itself, and the art community moved on to TiBeCa, and then Williamsburg, with many just quitting the City altogether. In fact, a lot Americans who would have been residents of bohemian communities in the US are now becoming ex-pats, similar to the "the Lost Generation" of the Twenties. And now, many of those areas are becoming gentrified, too.

This presages things to come in the rest of the country as cheap space shrinks with population growth. First it was the arts communities and now it is former "slums" that are being recaptured as the land values increase. As a result the poor are increasingly joining the artists as always "moving on."

See also
New Geography
RIP, NYC'S MIDDLE CLASS: WHY FAMILIES ARE BEING PUSHED AWAY FROM THE CITY
Joel Kotkin

Diane Coyle — Walter Lipmann, public economist

A new biography, Walter Lippmann: Public Economist by Craufurd Goodwin, is a very interesting portrait of someone not all that well known now. I ended it appreciating that Lippmann was a more important figure in early 20th century America than I’d realised, perhaps a Martin Wolf of his day. The mixture of intellectual rigour and status with an ability and urge to communicate with the wider public is relatively rare, and important in modern democracies, with all their political and economic complexities. Lippmann was probably the first ‘public economist’.… 
Throughout the decades, however, in an era when the old order was dying, Lippmann challenged the attractive certainties of the extremes, observing that ‘free’ markets had never existed, and that collectivism relied on censorship, spying and terror. This search for a way to manage the modern economy, and deliver to voters in democracies the economic well-being or assurance they demanded, while safeguarding liberty, remained his theme throughout, above all in The Good Society. 
Lippmann sounded (in The Method of Freedom) rather like a modern behavioural economist: “The classical economists over-estimated the enlightenment which is based on self-interest and the fortitude based on self-reliance. … Imitation, the herd instinct, the contagion of numbers, fashions, moods, rather than enlightened self-interest, have tended to govern the economy.” And elsewhere, he emphasised the importance of institutions, regretting the fact that economists had not combined their powerful analysis with a ‘humanly satisfactory’ social philosophy.…
The Enlightened Economist
Walter Lipmann, public economist
Diane Coyle

Chris Dillow — Russell Brand & our political culture

Pointing to the ugliness of this plant, however, should not distract us from the fact that our biggest problem is our anti-intellectual political climate.
 This coming out of Britain, which is hyper-intellectual compared with the US.

I am not sure that this is a good criticism of Brand and the position he stands for though, which is basically the position Occupy Wall Street took in refusing to make specific demands.

What this position states is that ordinary people are not supposed to figure out the details of governance, but they are not so dumb as not to notice when things are a mess. This position is most effectively stated in the streets. Getting into the street sends a strong message to those who are supposed to be smart enough to figure it out, which is why they occupy the positions they do, that they are doing an unacceptable job and that job is in jeopardy.

This argument was made among various activist groups in which I participated during the anti-war demonstrations in the Sixties and Seventies. There was no agreement on solutions but unanimity on the need for taking action against an intolerable situation.

This is actually a good strategy and tactic as a fulcrum. Of course, there has to be a debate about alternatives, but the beginning of a revolt against unacceptable conditions and behavior is not the time to be having it. Focus instead on what most people revolting agree on, which is what is unacceptable. Then let a hundred flowers bloom. Some of those flowers are going to come from TPTB interested in not getting shown the door. But that won't happen unless they think that there is a good chance that they will be turned out, and they understand the consequences of righteous anger a lot better than reasoned argument.

But at some point, solutions have to be found, agreed upon, and implemented. This is the outcome not so much of planning, however, but of action. Events in motion evoke practical solutions, and the necessity of time forces compromise where previously different parties stood on principle.

Stumbling and Mumbling
Russell Brand & our political culture
Chris Dillow | Investors Chronicle

Dean Baker — In Case You Wondered Why CEOs in the United States Make So Much Money

Gretchen Morgenson has a good piece explaining one way in which CEOs and other top management rig the deck. Her column today talks about a Delaware court ruling that allows companies to write by-laws that make shareholders pay the company's legal cost if they lose a case filed against the company.
Those institutional arrangements again.

Beat the Press
In Case You Wondered Why CEOs in the United States Make So Much Money
Dean Baker | co-director of the Center for Economic and Policy Research in Washington, D.C

Ellen Brown — Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans


Warren Mosler quoted.

Web of Debt
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans
Ellen Brown | founder of the Public Banking Institute