Friday, January 19, 2018

Brad DeLong — Should-Read: Peter Hall: IDEAS AND INTERESTS

Aristotle dealt with this in Nichomachean Ethics, Book One.

Aristotle asserts as evident that every agent acts for an end that the agent perceives as being a good. Aristotle went on to say that agents disagree over what is perceived to be good. Then Aristotle examines various theories based on different conceptions of the meaning of "good."

"Good" means desirable. So this reduces to desire is the chief motivator. But desire is not homogenous. The ancients distinguished between base desires, noble desire, and desire based on wisdom, corresponding to the belly (senses), heart (virtues) and head (wisdom).

Aristotle examines the different theories about this. 

Hedonism, from Greek hedone meaning "pleasure," emphasizes sense gratification. Pursuit of the good in this view involves maximizing pleasure and minimizing pain. This is essentially the view that Jeremy Bentham adopted that became the basis for the economic "calculus of utility." 

Higher than this are views that emphasize the virtues that are the basis of right action and sterling character. Heroism is its superlative. This is called sophrosyne in Greek and it is a form of wisdom

Higher still is the view that the summum bonum, or highest good, is wisdom. Wisdom is dividend into practical wisdom or prudence (phronesis), and theoretical wisdom (sophia). While sophia doesn't figure directly in achieving happiness in life since it is not practically oriented, it is the basis for being human and taking a rational approach to life, since it is based on reasoning. Homo sapiens identifies humanity as characterized by the rational element and its use.

 In the Greek vie, a primary and fundamental question with which aspiring and inquiring human beings face is what is the good for man (human being). This requires identifying and prioritizing various goods from base through noble to intellectual.

A related question is what does it mean to live a good life in a good society, since the ancient Greeks held it self-evident that civilized life is inherently social.

Approaching such questions is based on rational inquiry. Plato and Aristotle agreed that happiness results from a balanced life in which goods are prioritized in relative to the highest good.

The concept of the highest good persisted in the West until the Enlightenment, when tradition gave say to new methods of inquiry, scientific method in particular. Naturalism as a framework for doing science was taken to imply materialism. From a materialistic perspective, happiness seems to derive from maximizing pleasure and minimizing pain individuality. 

Maybe we would be well-advised to revisit the ancients?

Grasping Reality
Should-Read: Peter Hall: IDEAS AND INTERESTS
Brad DeLong | Professor of Economics, UCAL Berkeley

Ramanan — Christine Lagarde On Germany’s Balance Of Payments

Insightful post on international finance. Short.

The Case for Concerted Action
Christine Lagarde On Germany’s Balance Of Payments
V. Ramanan

SchiffGold — Global Debt Growing Three Times Faster than Global Wealth

Moronic. Whoever wrote this doesn't have any understanding of accounting and the credit-debit relationship that underlies accounting. 

All borrowing results in a debt that is a payable and corresponding saving that results in a loan that is a receivable. A debt is account payable and loan is a account receivable.  

A debt obligation is a financial liability and ownership of a loan is a financial asset.

Some credit is used to to fund capital investment, and some credit is used to fund consumption.

As long as revenue is sufficient to service repayment obligations on time, there is no liquidity (cashflow) problem, and insolvency is not an issue.

The relevant question is whether ability to pay is commensurate with obligations undertaken.

Chris Dillow — Outsourcing: a transactions cost approach

Must-read unless you are really up on transaction cost.
As Simon says, companies that win tenders by bidding low have an incentive to cut quality. The question is: is it possible to stop this happening?
It’s here that transactions cost economics enters. This perspective began with Ronald Coase’s famous essay, The Nature of the Firm (pdf). Whether we should do a job in-house or through the market depends upon the comparative costs. And, he said, “there is a cost of using the price mechanism.”
In our context, this cost is the difficulty or even impossibility of writing contracts which ensure good quality provision....
Stumbling and Mumbling
Outsourcing: a transactions cost approach
Chris Dillow | Investors Chronicle

Finian Cunningham - Washington and Allies Go Orwellian on Korea Peace Talks

Finian Cunningham is one of my favourite reporters. I have emailed him a few times and he is very pleasant indeed. It looks like Washington doesn't want peace between North and South Korea.

Just as North and South Korea achieve important peaceful exchanges, Washington and its NATO allies appear to be moving with determination to sabotage the initiative for averting war on the East Asian peninsula.
The Vancouver summit also called for proactive interdiction of international ships suspected of breaching UN sanctions on North Korea. That raises the danger of the US and its allies interfering with Russian and Chinese vessels – which would further escalate tensions.
These reprehensible developments are a reflection of the increasingly Orwellian worldview held by Washington and its partners, whereby “war is presented as peace” and “peace is perceived as war”.
Just this week, North and South Korea held a third round of peace negotiations in as many weeks. Even Western news media hailed “Olympic breakthrough” after the two adversaries agreed to participate in the opening ceremony of the forthcoming winter games next month as a unified nation under a neutral flag.
After two years of no inter-Korean talks and mounting war tensions on the peninsula, surely the quickening pace of peace overtures this month should be welcomed and encouraged. Russia, China and the UN have indeed endorsed the bilateral Korean exchange. Even President Trump said he welcomed it.
Nevertheless, as the Vancouver summit this week shows, the US and its NATO allies appear to be doing everything to torpedo the inter-Korean dialogue. Issuing ultimatums and warning of “military options” seems intended to blow up the delicate dynamic towards confidence and trust.
Strategic Cultures

Strategic Cultures Editorial - Cold War Mentality Belies Fear of Democratic World Order

I liked this as I thought this sounded optimist.

How can we break the power of the corporate media and get messages like this out? A multi-polar world where we trade to each other to improve our lives and tackle the world's problems, like climate change, diseases, and slowing down the population growth, etc. The wonderful world we could have rather than this, but now the Western elite are starting another war in the Ukraine. These warmongers need to be arrested and put on trail for crimes against humanity.

This past week saw a spate of international security alarms which underlines the danger of the world stumbling into catastrophic war. Those alarms, which were either false or hyped up, stem from a Cold War mentality.
Such a mentality is not only dangerous, it is also unacceptable in today’s world.
First, we saw the US territory of Hawaii being put on full-scale alert over a supposed incoming ballistic missile. The alarm turned out to be false. There was no such incoming missile, but the entire population on the Pacific island were put through 38 minutes of sheer torment.
A day after that incident, Japan’s air-raid system also put a similar false alert.
In both cases, it was assumed that the non-existent missiles had been fired from North Korea.
Meanwhile in Europe, fighter jets from Belgium, the Netherlands and Britain – all members of the US-led NATO alliance – were scrambled to intercept two Russian warplanes. The Russian Ministry of Defense rejected claims that its aircraft were acting “provocatively”, saying that the pair of Russian Tu-160 bombers had at all times been flying in international airspace on a routine exercise.
The latter type of incident appears to be an increasing occurrence. Over the past two months, British navy frigates have made a point of “escorting” Russian warships navigating “near British territorial waters”. Again, as with the air intercept incident this week, the Russian Ministry said that its warships have at all times adhered to international waters.
It is not Russian aircraft or vessels that are being provocative. It is British and other NATO states who are in effect trying to interdict Russia’s legal right to use international airspace and maritime territory.
Britain in particular seems to be hamming up claims of “defending” its territory from non-existing Russian threat. The irony here is that Russia has had to contend in recent years with an increasing number of NATO aircraft and naval vessels entering the Baltic and Black Sea regions. But the Western news media say little about that, while flagging up headlines about alleged Russian “provocations”.
This alarmist situation whether in regard to Asia-Pacific or Europe is deplorable. The volatile atmosphere leads to fear-mongering and runs the risk of false alarms being raised. That, in turn, runs the risk of misunderstandings and the very grave danger of a military response escalating into conflict, or worse.
It is incumbent on all to heed the concern expressed by former US Defense Secretary William Perry, who served in the President Clinton administration. Perry said recently that the world is now at greater risk of a nuclear catastrophe than at any time during the former Cold War.
This fiendish predicament arises from a Cold War mentality maintained by Washington and its NATO allies. That mentality perceives and portrays the world in ideological terms of “us and them”, “free nations and unfree nations”, “allies and enemies”. This antagonistic worldview is essential for Washington upholding ambitions of a “unipolar world” under its “leadership” or, more bluntly, dominance and hegemony.
Such a worldview is essentially about one power and its NATO acolytes trying to exert geopolitical control over others, rather than embracing the reality and more viable arrangement of multilateralism. For unipolar ambition, it is necessary to present the world as an adversarial scenario. Russia, China, Iran, North Korea and other “non-conforming” nations must be cast as “rivals”, “opponents”, “rogue nations”.
That, in turn, leads to international relations becoming fraught with adversarial agendas and belligerence. The relentless Russophobia in Western official discourse based on groundless claims of Russian interference in Western politics is typical of the inevitable hostility.
In short, the US and its NATO subordinates persist in a Cold War mindset in order to fulfill ambitions of unipolar control.
But as Russian Foreign Minister Sergei Lavrov pointed out this week the notion of a unipolar world is negated by the growing reality of a multipolar international order. The rise of China’s economic power is perhaps the clearest testimony.
As long as Washington pursues this unacceptable ambition of dominance, then the world will continue to be frustrated by antagonistic tensions.
International relations must instead be conducted on the basis of equality under the universal protection of law and sovereign rights. And diplomacy must be the currency of relations.
There can be no place for threats, ultimatums and unilateral use of military power. The US-NATO summit in Vancouver this week where a small group of nations assume the prerogative of issuing ultimatums to North Korea to disarm unilaterally, rather than these nations embracing diplomacy to resolve that crisis is typical of an anachronistic Cold War mentality. It is counterproductive, futile and totally unacceptable.
That mentality is putting the world on a dangerous threshold where tensions and alarms are recklessly risking a catastrophe.

The anachronistic Cold War mindset must be decommissioned for a new political paradigm of democratic internationalism.

PCR - The Twitter President

I love this guy, even if he does get it wrong sometimes, like he defends the white working class bigoted male, but hey, these people elected Trump and may have saved us from a nuclear war that Hilary - the warmonger who was always up for for another war - could have caused. No wonder PCR defends them. 
If Trump is real, he will arrest Mueller, Comey, Brennan, Hillary, Obama, the DNC, and break the presstitute media monoplies into a thousand pieces. In my opinion he should also arrest Senators John McCain and Lindsey Graham and a number of US Representatives, all of whom are engaged in a campaign to ovethrow the eleced government of the United States. Abe Lincoln provided the precedent by exiling a US Representative and arresting 300 northern newspaper editors.
If President Trump failes to clear the agenda of those driving the world to nuclear war with Russia (and China), he will be the US President who failed humanity and snufed out life on earth.

Thursday, January 18, 2018

Moon of Alabama — Syria - Tillerson Announces Occupation Goals - Erdogan Makes Empty Threats

I have yet to read one analyst who believes that the U.S. administration can achieve any of the wishes it announced. It is a hapless policy of "doing something" which will fail when resistance on the ground will ramp up and the political costs of the occupation will become apparent. The YPK Kurds in the north-east, who agreed to their occupation, will be the ones who will have to to bear the wrath. All other parties involved in Syria will hold them responsible.
Moon of Alabama
Syria - Tillerson Announces Occupation Goals - Erdogan Makes Empty Threats

Israel Rafalovich — Israel: On the Way to a Theocratic State

Liberal democracy, or theocratic apartheid state?
Until today the state of Israel has not decided whether it is a theocracy for Jews or a democratic sovereign state. The ultra-orthodox appear to be on the road to winning this fundamental battle of principles. Ultra-orthodox radicals are increasingly occupying key positions, thereby imposing their stamp on the secular majority. Israeli’s secular democrats are growing increasingly worried that Israel’s future may resemble Saudi Arabia and Iran more than Europe.
Israeli Jews increasingly interpret the identity of the state in religious terms, asserting the priority of Jewish over democratic values. Israel’s shift toward orthodoxy is not merely a religious one. Since the vast majority of Orthodox Jews are also against any agreement with the Palestinians, the chances of reaching a peace deal diminish with each passing day. Nor is time on the side of those who want a democratic Israel.
Israel defines itself as a “Jewish and democratic state.” However, because Israel has never created a system of checks and balances between these two sources of authority, they are closer than ever to a terrible clash.
Israel: On the Way to a Theocratic State
Israel Rafalovich, journalist and analyst based in Brussels, Belgium who covers European and international relations

Lenta — US Embassy caught funding Russian opposition

The Russian Foreign Ministry has accused the US Embassy in Moscow of concealing the transfer of money to opposition groups, to destabilize the political situation in Russia. This was stated by the Department of Information and Press of the Foreign Ministry.
"We urge the United States to stop this practice, return to decent behavior, renew responsible and orderly inter-state communication. We demand that the US authorities finally begin to follow their own national legislation and international obligations," it was reported.
Fort Russ
US Embassy caught funding Russian opposition
Lenta - translated by Inessa Sinchougova

See also

Backtracking on Russian information warfare
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

TF Metals Report — The New Cold War in 2018 -- A Discussion With Professor Stephen F. Cohen

Partial transcript and link to podcast.
A few days ago, we had the opportunity to visit with Professor Stephen F. Cohen. As regular readers know, we've been featuring his weekly podcasts with John Batchelor for the past four years so it was a real honor to speak with him directly regarding The New Cold War.
As mentioned at the beginning of this podcast, we are all indebted to John and Steve for their regular, weekly discussions. Their podcasts offer the only fair and balanced coverage of The New Cold War that you will find anywhere in the western media. Rather than a simple regurgitation of the War Party line, John and Steve consider the conflict from the historical perspective of each side. Thus, in listening to them over the past four years, I almost feel as if I have participated in a graduate-level Russian Studies class.
To be certain that this discussion is as widely-heard as possible, I've taken the additional step of transcribing portions of the audio. We begin with Professor Cohen providing some historical background regarding Ukraine, Russia and the run-up of this New Cold War.
TF Metals Report
The New Cold War in 2018 -- A Discussion With Professor Stephen F. Cohen
Turd Ferguson

Alexander Dugin — Globalisation and its Enemies

This is a longish and heavily intellectual analysis in the dialectical mode. However, it is a significant strand in thinking about geopolitics and geostrategy from a long term historical perspective and from a particular point of view.

Worth a look if you are into this sort of thing and think Dugin has something to say.

It's not necessary to agree with people to make them worth reading. A lot of people that one may not agree with exert an influence.

Dugin's influence over Putin is greatly exaggerated and even he says that it is nonexistent since his views and Putin's are quite different, Dugin being a Russian nationalist and Putin being a centrist in governing that personally leans liberal.

Globalisation and its Enemies
Main factors in the development of global processes: results and prognoses
Alexander Dugin

Ukraine heating up.

Fort RussWar is looking imminent.

Thomas Piketty's — 2018, the year of Europe

Piketty's view on what the EU needs to do in order to seize the opportunity that is presented by the withdrawal of US leadership under the Trump administration that is creating a vacuum.

Thomas Piketty's Blog at Le Monde
2018, the year of Europe
Thomas Piketty | Professor at EHESS and at the Paris School of Economics

Robert Skidelsky — How [Conventional] Economics Survived the Economic Crisis

How did conventional economics survive the crisis? Handwaving.

Criticism of Paul Krugman and New Keynesian economics, which is based on "rational behavior and market equilibrium as a baseline" (Krugman).

Skidelsky concludes, "Macroeconomics still needs to come up with a big new idea." 

I would rephrase that as "a new big idea." Theories are based on a "big idea" that constitutes the architecture of the framework. Rationality and equilibrium isn't it.

Project Syndicate
How [Conventional] Economics Survived the Economic CrisisRobert Skidelsky | Professor Emeritus of Political Economy at Warwick University, fellow of the British Academy in history and economics, member of the British House of Lords, and author of a three-volume biography of John Maynard Keynes

Tony Wikrent — The decline and fall of neoliberalism in the Democratic Party

Useful commentary and links.

Dean Baker — Apple Transfers $252 Billion in Citigroup Account from Irish Subsidiary to Parent Company

Dean Baker explains how international capital flow (capital flight and repatriation) is just a matter of switching account balances. There is no "cross-border" transfer of funds in "bringing back" dollars earned abroad.
This is what bringing money back to the United States means. Under the old tax law companies often attributed legal control of profits to foreign subsidiaries, so that they could defer paying taxes on this money. However the money was often actually held in the United States, since Apple could tell the subsidiary to keep the money wherever it wanted.
For this reason the economic significance of bringing the money back to the United States is almost zero. The legal change of ownership is leading to the collection of taxes, but this is in lieu of the considerably larger tax liability that Apple faced under the old law.
It would have been helpful if these points were made more clearly in this NYT piece. It does usefully point out that we don't know the extent to which the expansion plans announced by Apple would have occurred even without the tax cut.
Beat the Press
Apple Transfers $252 Billion in Citigroup Account from Irish Subsidiary to Parent Company
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Barry Eichengreen — The US is not ready for the next recession. Here's why.

Out of paradigm with MMT but useful as an analysis of how the elite is likely to act when faced with the next recession based on core beliefs with respect to contractions. Could get ugly under this scenario.

World Economic Forum
The US is not ready for the next recession. Here's why
Barry Eichengreen | Professor of Economics and Political Science, University of California, Berkeley

David F. Ruccio — Utopia—without classes

Good analysis of utopian versus utopianism. Short and important.

The difference is that between ideal and real. 

If the core assumptions are unrealistic and infeasible, then the consequent conceptual model will be "utopian" in the pejorative sense, and the project unachievable — "pie in the sky." If there is a disconnect between the ideal and the real, then it's utopianism.

If the assumptions are realistic and feasible, then the conceptual model will be "utopian" in the positive sense, and the project is achievable if implemented correctly.

If there is a disconnect between the ideal and the real, then it's utopianism.

Professor Ruccio explores how neoclassical economics and Marxian economics stack up in this regard.

Occasional Links & Commentary
Utopia—without classes
David F. Ruccio | Professor of Economics, University of Notre Dame

Chris Dillow — On Capitalist Hegemony

Asymmetrical power.

State capture by elites arises from asymmetrical power in societies rather than asymmetrical power being created by the state. "Might makes right." There are many factors involved in might other than physical force, but in the end, physical force is the ultimate enforcer. But in a cultured society, that is generally kept in the background and under liberalism, the elite has learned to be clever instead of brutal. But when push comes to shove....

Capitalism, like feudalism, is an economic system based on rent extraction. Asymmetrical power is the basis for rent extraction.

A wise man (one of my mentors) often said that to understand the world, study power.

Stumbling and Mumbling
Chris Dillow | Investors Chronicle

Alex Christoforou — De-dollarization and the rise of Bitcoin. Is there a connection between the two?

Is Bitcoin a Reaction to US Dollar Hegemony?
Like Mike has been saying for some time.

The Duran
De-dollarization and the rise of Bitcoin. Is there a connection between the two?
Alex Christoforou

Blockchain technology and the birth of the so-called cryptocurrencies finds deep roots in three contributing factors: the advance of technology: the manipulation of global economic and financial rules; and the persistent attempt to weaken the national economies of countries that geopolitically challenge the US power system. In this first article I address these issues from a financial point of view, in the next analysis I intend to dive into the geopolitical aspects and broader the perspective on how Russia, China and other nations are taking advantage of a decentralized financial system.
Strategic Culture Foundation
Is Bitcoin a Reaction to US Dollar Hegemony?Federico Pieraccini

See also

The iron fist of the US.
As the launch of new ‘petro’ cryptocurrency draws near, a US government agency declared that this newcomer to the digital financial market may represent a violation of sanctions imposed against Venezuela, its issuer.
Sputnik International
US Treasury Warns About Sanction Risks of Owning New Venezuelan Cryptocurrency

Trump looking at big fines against hacker China

More potential $billions repatriation from fining the premier USD zombie nation:

This interview will never be shown on TV again

What the Tories didn't want to hear.

The truth about Thersa May's government failure former met police officer Peter Kirkham told the truth liberals don't want to hear.
For the last decade the rise of these problems have not gone away and, cutting police numbers will not help the problem, what is needed is a long term solution to help, Ms May and her penny pinching government are not the ones who will provide more police and resources.

Wednesday, January 17, 2018

Deficit Watch: January 16th

Oh boy I can't wait to see how big the deficit is this month so far with all the tax cuts...

Lets see here in the Cash Basis DTS thru January 16th:

Total Withdrawals 636B - 440B Treasury Redemptions = 196B net withdrawals


Total Withdrawals 666B - 463B Treasury Issues = 203B net deposits

196B - 203B  equals..... wait for it .... -7B   ..... ie a SURPLUS!?!?!?

Say it aint so!!!!

Man-o-man.... How is the deficit going to ever get to $1.5T this year as EVERYBODY has been saying?

Hmmmmm...  withdrawals better get going and pronto...

Apple to pay $38B repatriation tax

USDs coming out of Apple offshore savings.  And the deficit is going to skyrocket to over $1.5T how ????

Bride prices in China shooting up

And guaranteed the prices are in USDs...

David Pilling — 5 ways GDP gets it totally wrong as a measure of our success

GDP's inventor Simon Kuznets was adamant that his measure had nothing to do with wellbeing. But too often we confuse the two. For seven decades, gross domestic product has been the global elite’s go-to number. Fast growth, as measured by GDP, has been considered a mark of success in its own right, rather than as a means to an end, no matter how the fruits of that growth are invested or shared. If something has to be sacrificed to get GDP growth moving, whether it be clean air, public services, or equality of opportunity, then so be it....
GDP is not a measure of “wealth” at all. It is a measure of income. It is a backward-looking “flow” measure that tells you the value of goods and services produced in a given period in the past. It tells you nothing about whether you can produce the same amount again next year. For that, you need a balance sheet - a measure of wealth. Companies have balance sheets as well as income statements. Nations don’t.…
Yes. GDP is an ingenious measure. It tells us something. It should definitely not be scrapped - it is still far too valuable a policy tool for that. And GDP growth can provide the wherewithal for the other things we want in life: health, education, security, opportunity, goods.
But we need to pay more attention to other measures to complete the picture, some of which already exist and some of which we may have to invent. Measures of wealth, equality, leisure, wellbeing and net domestic product, adjusted for negatives like pollution, are places to start.
Good post on GDP versus welfare. Worth reading in full.

World Economic Forum
5 ways GDP gets it totally wrong as a measure of our success
David Pilling | Africa Editor, The Financial Times

Dean Baker — Why Should the United States Be Concerned If China Stops "Manipulating" Its Currency?

The way China kept down the value of its currency was buy buying up government bonds with the dollars it acquired instead of just selling them in the open market. If China now decides to sell these bonds, it should mean that its currency will rise, thereby reducing the U.S. trade deficit. It's hard to see what the problem is here.
Well, one (pseudo) problem I can see here is that many in the US will freak out because the yuan is getting stronger than the dollar. 

If the strength of the yuan is under that of the dollar, China is manipulating its currency. If the yuan is stronger than the dollar, then the search will be on to blame someone for weakening the dollar.

It's an argument that can't be won. Damned if you do and damned if you don't.

Beat the Press
Why Should the United States Be Concerned If China Stops "Manipulating" Its Currency?
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Jason Smith — What to theorize when your theory's rejected

I was part of an epic Twitter thread yesterday, initially drawn in to a conversation about whether the word "mainstream" (vs "heterodox") was used in natural sciences (to which I said: not really, but the concept exists). There was one sub-thread that asked a question that is really more a history of science question (I am not a historian of science, so this is my own distillation of others' work as well a couple of my undergrad research papers).
Useful relative to philosophy of science and history of science, as well as foundations of economics. Philosophy of science makes use of the history of science.

It is also relevant to the orthodox and heterodox debate in economics.

Information Transfer Economics
What to theorize when your theory's rejected
Jason Smith

House conservatives say there are enough Republican opponents to reject GOP leaders' plan to prevent government shutdown.

Maybe time to consider euthanizing all the libertarians?  They are never going to change...

Tuesday, January 16, 2018

Tyler Prochazka — Professor argues for job guarantee over basic income

Universal Basic Income (UBI) is gaining more traction in mainstream discourse, but the academic debate has been heating up for years. One scholar with a sympathetic but critical eye towards basic income still believes it is not the best priority for activists.
Philip Harvey, a professor of law at Rutgers, wrote that a job guarantee could eliminate poverty for a fraction of the cost of UBI — $1.5 trillion less.
Harvey argued in 2006 that the focus on UBI may be crowding out more realistic policies that could achieve the same ends.
“[Basic Income Guarantee] advocates who argue that a society should provide its members the largest sustainable BIG it can afford – whether or not that guarantee would be large enough to eliminate poverty – are on shaky moral ground if the opportunity cost of providing such a BIG would be the exhaustion of society’s redistributive capacity without eliminating poverty when other foregone social welfare strategies could have been funded at far less cost that would have succeeded in achieving that goal.”
When I interviewed Harvey this month, he said his views have largely stayed the same and he still sees a fundamental difference between the advocates of UBI and job guarantee.
“The most important driver of that difference is the inherent attractiveness of the UBI idea. It really is an idea that captures the imagination and admiration of all kinds of interested parties with different kinds of agendas. The job guarantee idea, on the other hand, attracts people who are more into the weeds of policy analysis.”....
Professor argues for job guarantee over basic income
Tyler Prochazka

Paul Sagar — The real Adam Smith

Setting the record straight.

The real Adam Smith
Paul Sagar | lecturer in political theory in the Department of Political Economy, King’s College London

George Monbiot - The PFI bosses fleeced us all. Now watch them walk away

When contracts fail, the legal priority is still to pay firms like Carillion. Money is officially more valuable than life

The corporations want their cut and have their cronies in government. The market is fine for cans of beans, cars, computers, Hi -Fi, etc, where the price can be evaluated easily and seen whether they are fair, but when it comes to government services even the government can get ripped off. But do governments care when they are the agents of the corporations? The revolving door where government ministers go on to get good jobs working for the corporations. 

Excerpt - 

Again the “inefficient” state mops up the disasters caused by “efficient” private companies. Just as the army had to step in when G4S failed to provide security for the London 2012 Olympics, and the Treasury had to rescue the banks, the collapse of Carillion means that the fire service must stand by to deliver school meals.

Two hospitals, both urgently needed, that Carillion was supposed to be constructing, the Midland Metropolitan and the Royal Liverpool, are left in half-built limbo, awaiting state intervention. Another 450 contracts between Carillion and the state must be untangled, resolved and perhaps rescued by the government.

When you examine the claims made for the efficiency of the private sector, you soon discover that they boil down to the transfer of risk. Value for money hangs on the idea that companies shoulder risks the state would otherwise carry. But in cases like this, even when the company takes the first hit, the risk ultimately returns to the government. In these situations, the very notion of risk transfer is questionable.

The government claimed that the private sector, being more efficient, would provide services more cheaply than the private sector. PFI projects, Blair and Brown promised, would go ahead only if they proved to be cheaper than the “public sector comparator”.

But at the same time, the government told public bodies that state money was not an option: if they wanted new facilities, they would have to use the private finance initiative. In the words of the then health secretary, Alan Milburn: “It’s PFI or bust”. So, if you wanted a new hospital or bridge or classroomor army barracks, you had to demonstrate that PFI offered the best value for money. Otherwise, there would be no project. Public bodies immediately discovered a way to make the numbers add up: risk transfer.

The costing of risk is notoriously subjective. Because it involves the passage of a fiendishly complex contract through an unknowable future, you can make a case for almost any value. A study published in the British Medical Journal revealed that, before the risk was costed, every hospital scheme it investigated would have been built much more cheaply with public funds. But once the notional financial risks had been added, building them through PFI came out cheaper in every case, although sometimes by less than 0.1%.

Not only was this exercise (as some prominent civil servants warned) bogus, but the entire concept is negated by the fact that if collapse occurs, the risk ripples through the private sector and into the public. Companies like Carillion might not be too big to fail, but the services they deliver are. You cannot, in a nominal democracy, suddenly close a public hospital, let a bridge collapse, or fail to deliver school meals.

UKRAINE ON FIRE: The Real Story. Full Documentary by Oliver Stone (Original English version)


The Real News: How the US Helped Set 'Ukraine on Fire'

Aaron Maté interviews the film's director who says that the Neoconservatives and George Soros, who both use NGO's, are the biggest meddlers in other country's elections around the world. Interview starts at 3:28.

Basant Kumar Mohanty — Job scheme swells farm yields

JG at work.
In 2015, [neoliberal] Prime Minister Narendra Modi had described the programme as a "testimony to the failures of previous governments".
The Telegraph (India)
Job scheme swells farm yields
Basant Kumar Mohanty

Zero Hedge — China Downgrades US Credit Rating From A- To BBB+, Warns US Insolvency Would "Detonate Next Crisis"

In its latest reminder that China is a (for now) happy holder of some $1.2 trillion in US Treasurys, Chinese credit rating agency Dagong downgraded US sovereign ratings from A- to BBB+ overnight, citing "deficiencies in US political ecology" and tax cuts that "directly reduce the federal government's sources of debt repayment" weakening the base of the government's debt repayment.
Oh, and just to make sure the message is heard loud and clear, the ratings, which are now level with those of Peru, Colombia and Turkmenistan on the Beijing-based agency’s scale of creditworthiness, have also been put on a negative outlook....
The Chinese are sounding as nutty as the Americans.

Zero Hedge
China Downgrades US Credit Rating From A- To BBB+, Warns US Insolvency Would "Detonate Next Crisis"
Tyler Durden

Paul Grenier — Russia, America, and the Courage to Converse

Despite its claims to “open-ness,” liberalism in its late modern Western form becomes self-contained to the point of closure. Allied with such power constructs as the “liberal world order,” globalization (a word that came into common usage only after the fall of the Soviet Union) tends towards the homogenization of political space and the radical constriction of pluralism.
Notice a trend toward closure? It's affected conventional economics in addition to politics. Plurism, the hallmark of liberalism, is over — dead and buried.

The American Conservative
Russia, America, and the Courage to Converse
Paul Grenier, founder of the Simone Weil Center for Political Philosophy

Mike Whitney — Trump’s Sinister Plan to Kill the Iranian “Nukes” Deal

Taken together, the Trump strategy is clever two-pronged approach that shrinks capital investment in the country (thereby strangling the economy) while increasing the incitements that are intended to cause the government to overreact and (possibly) scuttle the agreement. Trump’s goal is to trick Iran into terminating the deal because it would be too costly for the US to end its commitment unilaterally.… 
The Unz Review
Trump’s Sinister Plan to Kill the Iranian “Nukes” Deal
Mike Whitney

Newsday Editorial Board — First shots in war on Medicaid, Medicare, Social Security

Poverty is not a scam. Neither is old age or infirmity or serious illness. But making poverty and the need for help look like a scam is a common political strategy, and it’s one President Donald Trump’s administration sought to rekindle last week when it allowed states to impose work requirements on Medicaid recipients in “test” programs.
Such a change, based on fiction about who the 70 million Medicaid recipients are and how almost $550 billion in state and federal Medicaid funding is spent each year, won’t save any taxpayer dollars. Nor is it intended to. What it does is spawn news stories that reinforce a message Republicans have promoted since President Ronald Reagan: The GOP brings down mostly minority “welfare queens” riding high on government largesse in their Cadillacs...
Conservative policy rationale is to make it more painful to be poor by punishing poverty in order to incentivize those in poverty to be more "productive." Basic stimulus-response Pavlovian-Skinnerian behavioral psychology.

But this strategy also has a darker side in creating social divisions that can be exploited politically. The GOP sees "the poor" as a major Democratic constituency that Democrats shower with largesse when in power in order to curry favor to get votes and energize the base. The GOP sees that as a strategic opportunity to attack by creating scapegoats.

Democrats under Bill Clinton realized that the GOP base was really the moneyed class that provides the bribes contributions and so, attacking the rich is self-defeating. Clinton took GOP adviser Dick Morris advice to "triangulate" and attack the poor to please the donor-base. Robert Rueben had already suggested that the Democrats cozy up to Wall Street, since that is where the big money is.

So, now the proles and precariat are left out in the cold with the prospect of a colder season coming.
The new job requirements for Medicaid might not be legal and likely will be challenged in court. Either way, the rules won’t save much even if they do take effect. Since only 70 million Americans get Medicaid and 255 million don’t, the proposals might not cause much uproar. But be warned: As a statement of intent and a first shot across the bow, they should.
House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell have been clear about wanting huge across-the-board cuts in Medicaid and Medicare. The cuts have been included in budget proposals they have introduced, and in their efforts to repeal the Affordable Care Act. Ryan has said cuts to those programs, along with restructuring Social Security to save money, are his primary legislative objectives, although he concedes they probably won’t happen in 2018....
First shots in war on Medicaid, Medicare, Social Security
The Editorial Board

Raphaël Hadas-Lebel — Can Fake News Be Outlawed?

Liberalism reveals its illiberal underbelly as "liberal democracies' seek to control the narrative by limiting freedom of expression and press freedom in the attempt to limit freedom of thought, which is of the essence of totalitarianism.

This push is being led by the US and France, the birthplaces of the revolutions that brought liberalism onto the world stage, and Britain as well, the birthday of liberal philosophy led by John Locke.

Ironic betrayal. This is likely not malicious but rather the result of modern leaders lack of commitment to liberalism and their ideological blind-sidedness. Their ideology is based on dominance, which means prioritizing control over everything else.

Sad to watch a promising tradition being strangled. It's only been a couple of hundred years.

Ironically, when some Western leaders boasted about the success of Western liberalism to some Chinese leaders, one of the Chinese leaders replied that it's only been a couple of hundred years, hardly enough to confirm an experiment. The West is just a blip on the screen of civilizations historically.

Project Syndicate
Can Fake News Be Outlawed?
Raphaël Hadas-Lebel, author of Hundred and One Words about the French Democracy, an honorary member of the Conseil d’Etat, and a former professor at Sciences Po

See also

Technocrats take charge of "protecting the public" from "fake news." Sounds similar to protecting a country by destroying it.
In an effort to “balance” freedom of expression with other needs, the European Union on Monday launched its "High-Level Expert Group” to tackle fake news.
Washington Examiner — Opinion

See also

Spreading liberalism and democracy is not always practical developmentally. It's like saving starving heathens souls before providing them bread.

Liberal Democracy in Africa Can Wait 
Simplice A. Asongu | Lead Economist in the research department of the African Governance and Development Institute


Review of Why Liberalism Failed. By Patrick J. Deneen. Yale University Press, 2018.

Mises Wire
Deneen on Liberalism
David Gordon is Senior Fellow at the Mises Institute, and editor of The Mises Review

The House of Representatives voted Thursday to disregard the constitutional rights of Americans and extend the powers of intelligence agencies.
Orange County, California and the Register are about as conservative as it gets in the US.

The leadership of both parties supported the bill and the vote was bipartisan in ganging up against the civil rights and constitutional liberties of the American people.

The Orange County Register — Opinion
The House voted to disregard the Fourth Amendment
The Editorial Board

Cohn: Congress will 'hopefully' pass bank reg overhaul within months

This reform is on the back burner for now.  Cohn is now thinking by end of first quarter '18:

Cohn said on Bloomberg News that the Senate bill to roll back the Dodd-Frank Act would "hopefully" see floor time in January and pass the House “in the first quarter of this year.”

The draft legislation has included some stability increasing capital exemptions for non-risk assets.

Buffett on tax reform

This was from last week.

Warren Buffett believes the corporate tax reform bill is very bullish for stockholders. The tax overhaul, which President Donald Trump signed into law last month, lowers the corporate tax rate to 21 percent from 35 percent. 
"The tax act is a huge factor in valuation," he said on CNBC's "Squawk Box" on Wednesday. 
"You had this major change in the silent stock holder in American business who has been content with 35 percent ... and now instead of getting 35 percent interest in the earnings they get a 21 percent and that makes the remaining stock more valuable." 
The billionaire chairman and CEO of Berkshire Hathaway also explained the magnitude of the tax cut is not reflected in the stock market yet. "I think 21 percent was not baked in. That's a huge reduction," he added.

Implies about a 20% increase in value of taxable earnings to shareholders.

Monday, January 15, 2018

Zero Hedge — Putin Plot? Democrats Ridiculed For Claiming Moscow Behind Chelsea Manning's Senate Run

Have these people lost their minds?

Who would ever vote for them? 

Asia Times — German central bank to add RMB to currency reserves

Germany looks to the future. Uncle Sam won't be pleased.
HSBC chief executive Stuart Gulliver, speaking at the same conference in Hong Kong, said that the Belt and Road Initiative (BRI) will increase the usage of RMB even further.
China’s central bank announced new measures earlier this month to encourage cross-border yuan transactions in support of BRI projects.
Asia Times
German central bank to add RMB to currency reserves: Follows ECB’s move to include China’s currency last year

Jeff Desjardins — How the Economic Machine Works, According to Ray Dalio

Three Major Forces
Dalio says this model has guided Bridgewater for over 30 years, and that there are three major forces that shape the economy:
1. Productivity Growth
Productivity growth, which is measured as a percentage of GDP, grows over time as knowledge, technology, and innovations help to raise our productivity and living standards.
2. Short-Term Debt Cycle
Usually lasting 5-8 years, the short-term debt cycle is a repeating pattern that occurs as credit expands and contracts.

3. Long-Term Debt Cycle
Usually lasting 75-100 years, the long-term debt cycle usually ends in a period of extreme deleveraging, where global debt is unsustainable and asset prices fall....
Visual Capitalist
Video: How the Economic Machine Works, According to Ray Dalio
Jeff Desjardins

Edward Harrison — Some thoughts on this global economic recovery amidst longer-term economic uncertainty

Beneath the rosy picture of the upturning global economy.
I would like to be optimistic that this upturn will be followed by a shallow recession and then continued economic growth. After all, banks have been recapitalized and companies are flush with cash. But on the household side of things, it’s a different story. What I see is rising economic and social anxiety and a broken social compact in advanced nations. This is feeding political populism, even as the economy enters its best phase of growth in a decade. When the economy turns down, the social, political and economic environment will be even more precarious. And the populism will be more extreme.
Think Donald Trump is bad?

Credit Writedowns
Some thoughts on this global economic recovery amidst longer-term economic uncertainty
Edward Harrison

Dmitriy Sudakov — One third of Russian currency assets are in the US – what if Washington freezes them?

Short and significant.

Russia Feed.
One third of Russian currency assets are in the US – what if Washington freezes them?
Dmitriy Sudakov

Tony Cartalucci — Sanctions, Subversion, and Color Revolutions: US Meddling in Cambodian Elections

The US argues that US intervention in foreign elections to "promote democracy" is completely legitimate because "human rights.'

Liberal interventionism good, all other interventionism bad. Liberal internationalism good, socialist internationalism bad.

Hypocrisy based on double standards?

Actually, it not about dominance of Western liberal values, but really about Western neoliberal economic dominance as the basis of transnational corporate totalitarianism supplanting democracy.

Sanctions, Subversion, and Color Revolutions: US Meddling in Cambodian Elections
Tony Cartalucci

Paul Robinson — Moscow conference

While this is an important post worth reading in full, I think Professor Robinson misses the point in speculation about the outcome of the ideological conflict between the US and Russia. 

His account is based on political philosophy. It ignores both the economics and the geostrategy of the US based on economics, which is where the rubber meets the road. Principles are only necessary for rationalization of otherwise aggressive behavior aimed at dominance. Political dominance is only necessary to the degree that is is required for economic dominance.

Thus, the conflict is not between Western liberalism and Russian traditionalism. Rather, Western liberalism has morphed into neoliberalism as a political theory that prioritizes economic liberalism (privatization, deregulation, transnational corporatism) over social and political liberalism. 

Neoliberal globalization's goal is subjection of the world to neoliberalism, which amounts to control by Western capital and the elite network that controls it.

The US has erected it as a zero-sum game. There is no obvious solution to this other than war. 

The same applies to China. The US elite cannot compromise with China in the long run when the only solution in a zero-sum game is winner takes all. This is especially the case when not only two civilizations intersect but two economic systems conflict.

To secure its ultimate victory, the US has to partition Russia and China to ensure they can never again rise as great powers to challenge the US as the rule-giver. That is what empire is. 

It's difficult to see this happening without war, but the US will try all other means for regime change possible, since the outcome of an all-out war between or among great powers is uncertain.

Moscow conference
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

Bill Mitchell — Renationalisation – when self-promoted genius becomes plain lame

There are times when so-called progressives outdo themselves with their (usually self-styled) ‘genius solutions’ to the ravages of neoliberalism. They come up with elaborate ‘solutions’ that people on the Left get feverishly excited about yet fail to see how obviously ridiculous these strategies are when all the options are allowed. They, in fact, step further into the mirky neoliberal world by trying to be progressive because they fail to see what the basic issue is. One recent example of this was the proposal by Britain’s Big Innovation Centre to divert the private sector into doing good for society in general. Apparently, the British government could resume control of the failing (privatised) essential services without laying out a single penny. This would apparently allow them to avoid running foul of Treasury borrowing limits yet satisfy the overwhelming desire by the British public for a restoration of quality services. It is clear that the British public are sick to death of the privatised services and are ready for a large revival of public sector activity. In that environment, why would the government, with such a powerful mandate and plenty of political cover, maintain the economic myths that were advanced to justify the (unjustifiable) sell-offs of public enterprises? Once we cut through these economic myths, it becomes apparent how lame these ‘solutions’, which perpetuate profit-seeking, corporate ownership of the essential services in Britain, really are....
Bill Mitchell – billy blog
Renationalisation – when self-promoted genius becomes plain lame
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia