The Huffington Post
Why Pope Francis Is TimeMagazine's Person of the Year
An MMT site bringing you dogma-free economics without the pleadings of self interest
Pope Francis said in the first peace message of his pontificate that huge salaries and bonuses are symptoms of an economy based on greed and inequality and called again for nations to narrow the wealth gap.
In his message for the Roman Catholic Church's World Day of Peace, marked around the world on Jan. 1, he also called for sharing of wealth and for nations to shrink the gap between rich and poor, more of whom are getting only "crumbs".
"The grave financial and economic crises of the present time ... have pushed man to seek satisfaction, happiness and security in consumption and earnings out of all proportion to the principles of a sound economy," he said.
"The succession of economic crises should lead to a timely rethinking of our models of economic development and to a change in lifestyles," he said.
Francis, who was named Time magazine's Person of the Year on Wednesday, has urged his own Church to be more fair, frugal and less pompous and to be closer to the poor and suffering.
His message will be sent to national leaders, international organisations such as the United Nations, and NGO's.
Titled "Fraternity, the Foundation and Pathway to Peace", the message also attacked injustice, human trafficking, organised crime and the weapons trade as obstacles to peace.The Huffington Post
Pope Francis on Thursday urged governments around the world to show more solidarity and strive for equality following a period of economic crisis, a day after being declared “Person of the Year” by Time magazine.
“The succession of economic crises should lead to a timely rethinking of our models of economic development and to a change in lifestyles,” Francis said in his message for New Year’s Day, which is World Peace Day.
“Effective policies are needed to promote the principle of fraternity, securing for people… access to capital, services, educational resources, healthcare and technology,” he said in a written text which will be read out in Catholic churches on January 1.
Governments have a “duty of solidarity” towards poorer nations and a “duty of social justice” towards their citizens, while individuals should also practice fraternity by “sharing their wealth”, he said.
He also said disarmament accords were not “sufficient to protect humanity from the risk of armed conflict”.
“A conversion of hearts is needed which would permit everyone to recognise in the other a brother or sister,” he said.
Francis called for “a culture of solidarity” and said the biblical story of Cain and Abel showed “the difficult task to which all men and women are called, to live as one, taking care of each other.”
“Rampant individualism, egocentrism and materialistic consumerism, weaken social bonds, fuelling that ‘throw away’ mentality which leads to a contempt for, and the abandonment of, the weakest,” he said.
He also reiterated his critique of financial speculators saying they were often “both predatory and harmful for entire economic and social systems, exposing millions of men and women to poverty”.The Raw Story
The example of the effect on the human mind of the words "spending" and "investing" is reminiscent of an interesting passage in volume 2 of Capital (ch.19, section II.4):heteconomist.comThe labourer sells his commodity -- labor-power -- to the capitalist; the money with which the capitalist buys it is from his point of view money invested for the production of surplus-value, hence money-capital; it is not spent but advanced. (This is the real meaning of "advance" -- theavance of the physiocrats -- no matter where the capitalist gets the money. Every value which the capitalist pays out for the purposes of the productive process is advanced from his point of view, regardless of whether this takes place before or post festum; it is advanced to the process of production itself.) The same takes place here as in every other sale of commodities: The seller gives away a use-value (in this case his labour-power) and receives its value (realises its price) in money; the buyer gives away his money and receives in return the commodity itself -- in this case labour-power.
Abstract: This article addresses the political meaning of President Ronald Reagan's 1981 declaration that "government is the problem." Whereas historically the state had been used by elites to extract as much surplus as possible from producers, with democratization of the franchise, the state became the sole instrument that could limit, or even potentially end, the extraction of workers' surplus. Once control of the state is in principle democratized by the ballot box, the fortunes of the elite depend solely upon controlling ideology. In 1955, Simon Kuznets offered the highly influential conjecture that while rising inequality characterizes early economic development, advanced development promises greater equality. However, rising inequality in most wealthy countries over the past four decades has challenged this hypothesis. What those who embraced Kuznets' conjecture failed to recognize is the dynamics by which the rich, with their far greater command over resources, education, and status, inevitably regain control over ideology and thereby the state. Over the course of history, only the very severe crisis of the 1930s discredited their ideology and led to a sustained period of rising equality. However, by 1980 they had regained ideological ascendancy. This article examines how this struggle over ideology has unfolded in the U.S. since the democratization of the franchise in the late nineteenth century. It concludes with reflections on whether the current crisis holds promise of again de-legitimating the elites' hold on power and ushering in another period of rising equality.
House Republicans "capitulated" in agreeing to the two-year budget deal reached last night and left the country to deal with an unsustainable fiscal situation until the peak of the presidential primaries in 2015, when nothing will get done, former federal budget director David Stockman told CNBC on Wednesday.
"First, let's be clear—it's a joke and betrayal," Stockman, who served under President Ronald Reagan, said on "Squawk on the Street." "It's the final surrender of the House Republican leadership to Beltway politics and kicking the can and ignoring the budget monster that's hurtling down the road."
Inside the secretive campaign by state legislators to pass conservative amendments in 34 states and rewrite the Constitution.Slate
Victoria McGrane and Jon Hilsenrath penned a piece about a new tool for controlling short term interest rates. I do not think it is new;it is just a wrinkle on a tool very common when I worked at the Open Market Desk. In those days we called these transactions “matched sales”. I commented on the article at the comments section of the WSJ. Here are my comments:
There is nothing novel about this as in days of yore we called this a matched sale. In those days the Open Market Desk (when necessary) would sell a very short dated T bill from its portfolio and simultaneously agree to repurchase it the next day. The dealer community got T bill collateral and the Open market Desk got “funding”. The desk also paid interest on that overnight funding and that level of interest was an important indicator of Fed policy to market participants.
The entire process is Money and Banking 101. When the Fed takes money from the street there is less money sloshing through the system as the Fed in the parlance of the day had “drained” reserves from the system. That drain would place upward pressure on the funds rate and other short rates. So this transaction was quite regular and familiar for many years through the 70s 80s and 90s….
Paul Krugman has a new post that explains why the debate over money- vs. bond-financing of government deficits is really much ado about nothing. In it, he essentially echoes longstanding MMT-core principles, as we will show below.
John Carney wrote a piece where, with 20-20 hindsight, he points out all the people who got the QE-inflation/rising rate forecast wrong.
What he doesn't point out is who got it right. Us.
It used to be comforting to think that the saying “one rule for the rich, another for the poor” was just that: a saying. We could all pretend that America was a land of equal laws, even though we all knew deep down that rich folk can always get away with stuff we can’t.
Now, in these years of crisis, we are exposed to the ugly truth far too frequently. Big business and rich people have one set of laws. The rest of us another. In their laws a contract is inviolate. To break it you have to have extreme extenuating circumstances and/or a well paid lawyer. In our laws a contract is a suggestion. To break it you have to be a creditor who has friends amongst the elite and/or a well paid lawyer.Real-World Economics Review Blog
The disastrous flaws in mainstream economics, and how economies can serve our total wellbeing
The Levy Institute’s Jan Kregel and L. Randall Wray took part in a workshop at the UK House of Commons, November 25th, on “Financial Governance for Innovation and Social Inclusion,” organized by Mariana Mazzucato (SPRU) and Leonardo Burlamaqui (Ford Foundation) and hosted by Shadow Minister for the Cabinet Office, MP Chi Onwurah. Kregel and Wray’s presentations follow:
Here is a list of 3 recent activities, two of which have videos for your viewing pleasure.Economonitor — Great Leap Forward
Whoever reads modern neoclassical models will notice that “It is one of the commonplaces of the received economic theory that work is irksome.” As Thorstein Veblen wrote 115 years ago. This idea is even one of the cornerstones of DSGE-models. But is work really always irksome? Below, the rest of the Veblen article which boils down to the idea that disliking all work is in fact, in modern terminology, characteristic of a state of clinical psychological depression: “Man’s life is activity.”And as man is a social animal, at least part of that activity had to be oriented at longer term goals in the interest of the group and man has evolved to like such activities: work. But if that’s part of our true nature, why does our society give so many people the idea that work is irksome?Real-World Economics Review Blog