Friday, March 27, 2015

Weekend Reading

Covers a lot of historical ground.

Consortium News
Neocons: the Echo of German Fascism
Todd E. Pierce

What Berdyaev, Solovyev, and Ilyin actually said.

Distorting Putin’s Favorite Philosophers
Paul R. Grenier

YoY DTS Top level Comparison thru 19 March...

YoY top-level comparison chart below... ahead of last March by about $21B at this point.

Very supportive on a YoY month basis.  Not quite as bullish a picture on a full YoY basis.

Flows remain robust this month even though  we are operating at the "debt ceiling" and our morons are using their "extraordinary measures" of "borrowing" from the Federal Employees Retirement System (to the satisfaction of their own deranged minds) in order to maintain spending flows.

John T. Harvey — Why We Cannot Afford The Republican Budget

Early this morning, the Senate approved a Republican-authored budget that features deep cuts in spending, no new taxes, and hopes of a balanced budget within the next decade. However, not only could their plan never achieve what they hope, it would be an absolute economic catastrophe. Let’s hope it never sees the light of day. 
The level of ignorance regarding federal government budgeting is horrifying. I don’t just mean among lay people or the general public, but right up the both houses of Congress and the White House-–you know, the people who actually make the decisions. Nor is it limited to one party. While the Republicans have been far more rabid about it, the 
Democrats, too, are anxious to see the day when the budget deficit is not only smaller, but eliminated entirely. Best of all, they say, we might even reach the point of having surpluses that can cut into our massive national debt. While they may prioritize these goals differently, it appears that just about every single politician in Washington shares these sentiments. 
God help us.....
Taking the moron fest to task.

Forbes — Pragmatic Economics
Why We Cannot Afford The Republican Budget
John T. Harvey | Professor of Economics, Texas Christian University

Mark Adomanis — Russian Support For Democracy Just Hit The Lowest Level In More Than 20 Years

The invaluable Levada Center, Russia’s only genuinely independent polling agency, regularly conducts a survey about Russians’ attitudes towards the government, the economy, and the proper relationship between the state and its citizens. The 2015 results were just released, and it makes for rather depressing reading [to Western liberals].
Basically, right across the board, Russians have become substantially more statist and nationalist in their views.....
It should seem obvious, but you need to pay attention to what the Russian public thinks. It might be nice to assume that it wants exactly the same things that we do, but all of the evidence suggests that this isn’t true.
Turns out that most Russians are very conservative rather than liberal. The odds of a liberal regime coming to power are very low.

Russian Support For Democracy Just Hit The Lowest Level In More Than 20 Years
Mark Adomanis, Contributor

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 Understanding the Daily Treasury Statement

Nicolai N. Petro — Russia's Orthodox Soft Power

For many analysts the term Russky mir, or Russian World, epitomizes an expansionist and messianic Russian foreign policy, the perverse intersection of the interests of the Russian state and the Russian Orthodox Church.
Little noted is that the term actually means something quite different for each party. For the state it is a tool for expanding Russia's cultural and political influence, while for the Russian Orthodox Church it is a spiritual concept, a reminder that through the baptism of Rus, God consecrated these people to the task of building a Holy Rus.
The close symphonic relationship between the Orthodox Church and state in Russia thus provides Russian foreign policy with a definable moral framework, one that, given its popularity, is likely to continue to shape the country's policies well into the future.....
It's not possible to understand current events involving Russia, Russians, and Russophones in other countries without understanding the significant of the concept of Russky mir. Otherwise it is just projection. Religious people of the West were praying for the conversion of Russia. Well, they got it and now will have to deal with it.

Carnegie Council for Ethics in International Affairs
Russia's Orthodox Soft Power
Nicolai N. Petro | Professor of Political Science at the University of Rhode Island

Matias Vernengo — On being a 'real Keynesian'

Has "Keynesian" become a relatively meaningless cliche? Yes.

When even Keynes was not a "Keynesian," it's time to move on.


Naked Keynesianism
On being a 'real Keynesian'
Matias Vernengo | Associate Professor of Economics, Bucknell University

JP Hochbaum — T Accounts of monetary operations

Put together by Nathan Cedric Tankus

Heretical Druthers
T Accounts of monetary operations
JP Hochbaum

Ramanan — Respect For Identities

Stock flow consistency versus econometrics.

David Glasner doesn't seem to accept that accounting identities are tautologies that determine what is logically necessary in that system of expression. They are true by definition (rule). That which contradicts a tautology by violating a definition (rule) is logically impossible. 

Tautology and contradiction are formal boundary conditions of expression — unless one is writing nonsense like Lewis Carroll, who happened to be a logician and mathematician in addition to being a very clever writer. He is best known for writing nonsense verse — Alice's Adventures in Wonderland and Through the Looking Glass, which continue to delight children and adults alike.

Mathematics is the language of science, and accounting is the language of business. In so far as economic is a study of production, distribution and consumption, in a modern economy this involves business and is conducted in terms of business rules, institutional arrangements in which double entry bookkeeping and accounting procedure (rules) are foundational.

Does anyone actually question this? How could accounting identities that follow from the institutional arrangements (rules) not be foundational as constraints (boundary conditions)? Otherwise, it's possible to just make stuff up.

Let's be clear. In a modern monetary economy, accounting identities are the starting point of doing economics. Period. Anyone who doesn't get this and hew to it is not playing by the rules, which amounts to talking nonsense.

The Case for Concerted Action
Respect For Identities

A Fatal Malady For Democracy

(Commentary posted by Roger Erickson)

Here, below, is just another in an endless series of examples ... it's a pity that this - and many other books - aren't Open Sourced.

Kill Chain: The Rise of the High-Tech Assassins

It comes down to a direct friction between AdaptiveRight vs CopyRight, and the resulting lag in adaptive rate from such friction.

Whether you're for against remote assassinations - or the expanding pace of other, worldwide MICC (or other business-lobby) operations which you don't even know about ... wouldn't it be better if our electorate was adequately informed BEFORE the next election?
Our biggest hurdle seems to be the slow population-penetration of mission-critical information.
That's a fatal malady for democracy.

If it weren't for Central Planning, by oligarchs ... we wouldn't have no planning at all?

Even an informed electorate isn't adequate, if the information consistently comes too late to drive aggregate adaptive rate. Or, if they don't get enough practice to effectively USE information in time to matter.

Is this all connected to economics? Yup. Always is. We've trained citizens to hopelessly conflate personal vs aggregate entrepreneurialism, and personal capitalism vs aggregate capitalism. Citizens are so confused that they no longer even know what aggregate capital is, or what it's for.

Just pay people enough so that they can consume all they can produce?

Even Marriner Eccles & CH Douglas agreed upon that. It's called optimal social asset allocation, or "putting your money to work." Even the bible includes a semblance of that logic, for better or for worse.

Inequality and the "Church"...

Article at WaPo here.

Makes a correlation between dysfunctional degrading economic outcomes and "church" attendance decline.....

Why so many empty church pews? 
 The 1970s saw declines in employment for less-educated men, divergent incomes for college-educated and less-educated men, and a “breathtaking increase in inequality” — all of which left college-educated families and their communities with more financial resources, and poor and working-class communities with fewer resources.

Many in the "church" see the "church" itself to blame for a lot of this decline.

While perhaps the problem is not with the "church" but rather perhaps secular dysfunctional economic outcomes as the cause and what we may see as a "church" in decline as an effect.

Thursday, March 26, 2015

TASS — China may replace US Caterpillar as partner of Russian locomotive manufacturer

The Russian state corporation Uralvagonzavod (UVZ) may start cooperation with China on its project of development and production of locomotives, CEO Oleg Sienko said in an interview to TASS.
Earlier the corporation planned to implement the project jointly with the US-based Caterpillar, however, the cooperation was frozen due to sanctions introduced by the US against UVZ.

"The Chinese [companies] may come instead of Caterpillar, we’re studying this issue. We even have joint framework agreements singed," Sienko said....
China may replace US Caterpillar as partner of Russian locomotive manufacturer

TASS launches news service on Russian economy in English

James Petras — Latin America and the Anglo-American Booby-Left

James Petras goes after Noam Chomsky and the "Anglo-American Booby-Left" for misreading trends in Latin America, which he sees slipping back into neoliberalism.

The Official James Petras website
Latin America and the Anglo-American Booby-Left
James Petras | Bartle Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia

Glenn Greenwald — Court Accepts DOJ’s ‘State Secrets’ Claim to Protect Shadowy Neocons: a New Low

Because national security.

The Intercept
Glenn Greenwald

Tony Cartalucci — US-Saudi Blitz in Yemen: Naked Aggression, Absolute Desperation

Proxy war with Iran in Yemen.

"You can't tell the players without a scorecard." It's getting more and more complicated.

New Eastern Outlook
US-Saudi Blitz in Yemen: Naked Aggression, Absolute Desperation
Tony Cartalucci

The Moscow Times — Ruble Panic Recedes as Russians Start Selling Dollars

Russians sold more foreign currency than they bought in January for the first time in two years, the Central Bank said Wednesday, in a sign that last year's panic over the ruble has subsided.
The Russian currency went into meltdown in December as a months-long devaluation prompted by Western sanctions and oil price falls turned into a rout. Massive demand for dollars and euros among Russians exacerbated the ruble's plunge, which peaked on Dec. 17, when the ruble fell 20 percent against the U.S. dollar within a few hours of trading.

But the rout appears to have run its course for now, with demand for foreign cash falling sharply in January, according to data published by the Central Bank.
The Moscow Times
Ruble Panic Recedes as Russians Start Selling Dollars

Ruble strengthening in excess of that assumed in the 2015 budget would lead to both lower revenue and lower spending, meaning that the net impact on the budget will be neutral, First Deputy Finance Minister Tatyana Nesterenko said.

“The ruble exchange rate and the price of oil [assumed in the budget] are forecasts calculated as the annual average. Right now we are very close to those average annual figures. To speak of the possibility of a shift in the trends assumed in the forecast, then it is important to say that the ruble exchange rate affects revenue and spending,” Nesterenko told journalists on Wednesday when asked about the apparent stabilization of the ruble at a stronger level than that assumed in the budget (61.5 rubles/$1).

Very much budget spending depends on the ruble exchange rate, including external debt servicing and international obligations, she said.

“This could be a balanced effect for revenue and spending. We have fairly large foreign currency liabilities. Accordingly, they will also be recalculated,” Nesterenko said.

“If the trends change, if forecast estimates change, the first thing that will be done is to go to parliament and introduce amendments,” she said.

Johnson's Russia List
Effect of ruble strengthening nearly neutral for Russian budget – Nesterenko

This is pretty inconclusive but the current data is not too bad.
Johnson's Russia List
Russia’s economy in 2015 – more resilient than expected
Mark Adomanis in Philadelphia | Business New Europe

The best recent economic analysis remains Jon Hellevig — Russia Economic New Brief

Podcast: I fixed the broken link with Ellen Brown interview. Works now.

I had a broken link in the Ellen Brown interview podcast that I posted earlier.

You can go to that post and listen now.

Podcast: Interview with Ellen Brown.

Interfax — Moscow: NATO plans deployment of aircraft carrying nuclear weapons near Russian borders

More bad news. Cold War 2 hotting up.
"The strategy emphasizes the U.S. ambition to begin forming a new global economic order. A special role in this order should be played by the Trans-Pacific Partnership and the Transatlantic Trade Investment Partnership, which will help the U.S. get central positions in free trade zones encompassing two-thirds of the world's economy," the document says.
The armed forces are regarded as the foundation of U.S. national security and "military superiority is considered the main factor in U.S. world leadership," the Russian Security Council said.
The document retains the determination "to use military force unilaterally at any spot in the world and preserve military presence abroad," it said.
Russia to take into account threats resulting from new U.S. security strategy

Zero Hedge
Putin Security Council Slams Obama Attempts At "New World Order"

F. William Engdahl — China and Russia Firm Ties With High Speed Rail Link

Deal signed. Eurasian development on.
Russia’s Deputy Prime Minister Arkady Dvorkovich announced at a Krasnoyarsk Economic Forum on February 27 that agreement has been finalized between the two countries on a proposal made by Chinese Prime Minister Li Keqiang during his October 2014 visit to Moscow to construct a 7,000 km and $242 billion high-speed rail corridor going from Beijing across Kazakhstan and Russia to Moscow. The project will include a high-speed Moscow to Kazar in Russia’s Autonomous Tatarstan.

First appeared:
New Eastern Outlook
China and Russia Firm Ties With High Speed Rail Link
F. William Engdahl

Ivan Nechepurenko — Wagner Opera Scandal Reflects Deep Divide in Russian Society

Sign of the times  — liberals and conservatives conflict in Russia over tradition and traditional values.

The Moscow Times

Walter Frick — Welfare Makes America More Entrepreneurial

Research shows that when governments provide citizens with economic security, they embolden them to take more risks.
Opposite the popular view on the right that animals only hunt when they are hungry and the hungrier they are he harder they hunt, so starving the poor will motivate them to get off their duffs right quick.

The Atlantic — Business
Welfare Makes America More Entrepreneurial
Walter Frick
ht Mark them at Economist's View

John Helmer — The Yeltsin Tax Returns To Russian Politics – Wage Arrears Rise, Putin Support Declines

According to the Helmer theory of Russian political economy, first propounded in 2002, people who haven’t been paid spend their time blaming the Kremlin for their pain. When arrears rise, the president’s approval rating falls.....
Dances with Bears
John Helmer

Podcast: My interview with Ellen Brown, author of Web of Debt and Public Bank Solution

Ellen Brown, author of Web of Debt and Public Bank Solution.

John Cochrane — A New Structure for U. S. Federal Debt

A New Structure for U. S. Federal Debt
A new paper by that title, here. 
I propose a new structure for U. S. Federal debt. All debt should be perpetual, paying coupons forever with no principal payment. The debt should be composed of the following:  
  • Fixed-value, floating-rate debt: Short-term debt has a fixed value of $1.00, and pays a floating rate. It is electronically transferable, and sold in arbitrary denominations. Such debt looks to an investor like a money-market fund, or reserves at the Fed.
  • Nominal perpetuities: This debt pays a coupon of $1 per bond, forever.
  • Indexed perpetuities: This debt pays a coupon of $1 times the current consumer price index (CPI).
  • Tax free: Debt should be sold in a version that is free of all income, estate, capital gains, and other taxes. Ideally, all debt should be tax free.
  • Variable coupon: Some if not all long-term debt should allow the government to vary the coupon rate without triggering legal default.
  • Swaps: The Treasury should manage the maturity structure of the debt, and the interest rate and inflation exposure of the Federal budget, by transacting in simple swaps among these securities. 
Of these, I think the first is the most important. Think of it as Treasury Electronic Money, or reserves for all. Why?....
The Grumpy Economist
A New Structure for U. S. Federal Debt
John Cochrane | professor at the University of Chicago Booth School of Business, a Senior Fellow of the Hoover Institution, and an adjunct scholar of the Cato Institute

Coming from the University of Chicago Booth School of Business, a Senior Fellow of the Hoover Institution, and an adjunct scholar of the Cato Institute, one would expect a proposal for tax-free rent to subsidize the financially ailing rentiers.

Ilyana Kuziemko et al — What Do Americans Think Should Be Done About Inequality?

A new online survey of some 10,000 Americans’ reaction to growing income inequal- ity offers novel insight into public perceptions of inequality and what—if anything— should be done about it. The survey first presents some respondents with information about the extent of inequality—for example, by displaying how much more income a respondent would earn if increases in economic growth since 1980 had been more evenly distributed—and then assesses their attitudes toward inequality and policies aimed at ameliorating gaps between rich and poor, compared to other respondents who did not see the information. The survey shows that while respondents who view information about inequality are more likely to believe that inequality is a serious problem, they show no more appetite for many government interventions to reduce inequality— with the notable exceptions of increasing the estate tax and the minimum wage....

Importantly, our results also suggest that this aversion to government intervention is due to a deep level of distrust in government. In a sense, respondents who have learned the role of government in creating the current level of inequality seem to be telling us they do not trust that government is also the entity to address the problem.
This last finding is, to our knowledge, the first direct evidence of the causal effects of trust in government on redistributive policy preferences. Our findings highlight the potential role of mistrust in government in limiting enthusiasm among the general public to certain kinds of government policy programs—such as the Supplemental Nutrition Assistance Program and the Earned Income Tax Credit—designed to help close the wealth and income gap.

Research into the connection between mistrust of government and policy prefer- ences is only just beginning. For instance, economists Paola Sapienza at Northwestern University’s Kellogg School of Management and Luigi Zingales at the University of Chicago’s Booth School of Business find that Americans support higher auto fuel stan- dards over a carbon tax-3and-rebate program because they do not trust the government to in fact rebate the tax. Given that by most measures, Americans trust in government is at record lows, future work on its consequences would be welcome.... 
What Do Americans Think Should Be Done About Inequality?
Ilyana Kuziemko, Michael Norton, Emmanuel Saez, and Stefanie Stantcheva
ht Brad DeLong
Ilyana Kuziemko is an economics professor at Princeton University, Michael Norton is a professor of business administration and marketing at Harvard Business School, Emmanuel Saez is an economics professor at the University of California-Berkeley, and Stefanie Stantcheva is an economist at Harvard University

Canada now imposes cuts in face of 50% off crude oil

Result of management via the NIA framework:  Once (X-M) drops, then they are compelled to reduce G and xfers, so (G-T) remains as low as possible, even though xfers are not in G.  The hit to xfers then results in a drop in C.

Even in what we might term the "social welfare states" like Canada here and those in Europe, that social welfare is still predicated upon high exports that result in NIA numbers that allow for an acceptable (G-T) result.

If the exports go away or are significantly reduced, then we soon see fiscal cuts and resultant social unrest.

Wednesday, March 25, 2015

Jonathan Schlefer — Not even Paul Krugman is a real Keynesian

Wicksell argued that if interest rates rise above some “natural rate,” they weaken investment demand and growth, while if they fall below it, they spur excessive demand and inflation. But markets inherently correct imbalances, restoring optimal equilibrium. 
Keynes disagreed. “The economic system . . . seems capable of remaining in a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse,” he wrote. “The evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence.”....
But isn’t Keynes now mainstream? No, say Foley and Taylor. The mainstream still sees economies as inherently moving to an optimal equilibrium, as Wicksell did. It still says demand causes short-run fluctuations, but only supply factors, such as the capital stock and technology, can affect long-run growth. ....
The Boston Globe
Not even Paul Krugman is a real Keynesian
Jonathan Schlefer, researcher at the Harvard Business School
ht Matias Vernengo at Naked Keynesianism

Cameron Murray — Economics: Blah blah blah


Fresh Economic Thinking
Economics: Blah blah blah
Cameron Murray

Graham Phillips — Busting Ukraine Fakes (#1) – How Ukraine’s Media Works (Fakes)

First in a series from an on-the-ground Western journalist reporting on the conflict in eastern Ukraine.

The Truth Speaker
Busting Ukraine Fakes (#1) – How Ukraine’s Media Works (Fakes)
Graham Phillips, British journalist with Russia Today

Alexrpt — The US House of Representatives openly calls for regime change in Moscow

As taken from the US House Resolution:
"Whereas the United States and its allies need a long-term strategy to expose and challenge Vladimir Putin’s corruption and repression at home and his aggression abroad;"
Let that sink in for a second. The United States Congress has put, in writing, their goal to formulate a “long term strategy” to challenge the democratically elected President of Russia, Vladimir Putin.
Like this is something new for the US? I'm surprised that anyone is surprised.