The Secret of the Seven Sisters
Guest post by MNE reader, Ben Strubel.
“Perhaps the issue that causes the most confusion is the mechanism by which deficit spending now is “paid for” in the future.
Most people assume you “pay for” deficit spending the same way you do in your personal life. For instance when I go to the gas station and fill up my vehicle I always pay by credit card. The bank that issues the credit card effectively loans me money which I then use to pay the owner of the gas station.
So I just deficit spent $60. When the end of the month comes around I always pay off my bill in full so I’ll need to pay back the $60 the bank loaned to me via the credit card. If I go in debt now by $60 I will eventually need to pay it off and I will be using either money I have saved up or taking money from my future income.
With the urgent need for alternative economic systems, a tech social entrepreneur steps up to the challenge.Shareable
Many anti-capitalists proclaim Socialism as the answer. Unfortunately, many people don't understand that in our current economic system and in Socialism, there is onlyone monopolized currency that can be accepted for taxes, which is created out of compound interest debt, and is the root cause of our unsustainable economic system; currently, the private sector has a monopoly on legal tender like the government does with Socialism. So, by instituting Socialism, we might change the "driver" of the "car," but the root problem still exists so constant "repairs" or corporate bailouts are always going to be needed.
Many anti-capitalists also feel a bloody revolution is needed. But let's get real, the U.S. government has too many resources at its disposal; spending more on the military than all other developed nations combined. So that's not an intelligent decision. Many well meaning citizens feel change can be made within Washington. Unfortunately, as history shows that isn't going to happen either. What is there left to do? What if we agreed to play a new game instead? One that doesn't break any laws, is opt-in, and fills in the gaps left by the old game. It wouldn't require a revolution that sheds blood, but the shedding of economic ignorance...Essentially, it requires a revolution of the mind.Little is out of paradigm, but I've read some the book, and he is a good example of what's going on with America's youth. Definitely high aspirations and high energy, willing to experiment in alternatives and aware that the world is digital. In addition, Little is non-white, and that adds another dimension to the story.
Warren Mosler, in his excellent recommendations for bank reform (similar to Bill Mitchell’s proposals and others) focuses on the asset side of banks, and writes:
“The hard lesson of banking history is that the liability side of banking is not the place for market discipline.”
Mosler doesn’t discuss this history or reasoning any further though. Can anyone elaborate on this banking history? And how it shows that disciplining the liability side of banking is not a good idea?
There is no public purpose served by allowing banks to be in the wealth management business
Here is a article I wrote for the Huffington Post in 2010 on how I would regulate banking. Feel free to distribute.Soft Currency Economics
According to IBM, the HCPVT is built from unusually low-cost materials, meaning the per area price of setting it up is significantly lower than comparable solar systems, as is the cost per kilowatt hour....
Just one square meter of receiver area in the HCPVT system can provide 30 to 40 liters of drinkable water per day — about half the needed daily amount for the average person, according to the United Nations. The researchers think a large array of the dishes could produce enough fresh water to sustain a town. On top of that, the system can even provide air conditioning, using an absorption chiller rather than the standard compression chiller...
The long-term vision is to build arrays in areas of southern Europe, Africa, the Arabic Peninsula, South America, Australia, and the southwestern United States — places that are remote, dry, and in need of both affordable sustainable energy and greater supplies of drinking water.Climate Progress
Two UMKC students have provided what I think is the most destructive empirical work to date on the simply awful book and articles by Reinhart and Rogoff that purported to find a magical debt ratio beyond which economic growth plummets to negative territory. They are Matthew Berg and Brian Hartley and their piece is at New Economic Perspectives:Economonitor — Great Leap Forward
Before presenting a quick summary of their findings, let me make two preliminary notes. First they validate what Yeva Nersisyan and I first pointed out three years ago: the crappy empirical research of Reinhart and Rogoff was driven by a small number of outliers, and by confusion of causation and correlation. Yes, some countries–Japan most notably–have high debt ratios and slow growth. R&R aggregated in such a way as to give very high weights to those countries. And those countries had high deficits and thus high accumulated debts because growth was low. Hence, there was never any support for their claim that 90% marks a causal turning point.
But note that no UMKC-affiliated faculty member (and probably no student) has ever said something as silly as “no deficit can be bad”. I do not even know what that could mean. Deficits can be bad. Very bad. Very very bad. A sovereign country that issues its own currency cannot be forced into involuntary default so long as it floats its currency. That is certainly a true statement–accepted by anyone who knows anything about sovereign currencies. Whether it is talmudic I have no idea. If you’ve got the magic porridge pot, you can provide the porridge.
Can too much porridge be bad? You betcha–just read the damned story. Inflation? Yes. Currency depreciation? Probably. Leave too few resources for the private purpose? No doubt. Create a nation of couch potatoes? You’ve got it. Bury everything under a thick layer of suffocating porridge? Read the story.
Where do people like Epstein get this stuff? I have no idea.
If you have studied economics at the university level in the last 35 years, it is likely you were introduced to the concept of "asymmetrical information" and George Akerlof's famous 1970 article on markets for "lemons" (American slang for an automobile of terrible quality). The Nobel committee that awards the prize in economics singled out that article for special praise in deciding to make him a Nobel Laureate in 2001. The article discusses the implications of asymmetrical information in a number of contexts, but at least two of the contexts involved what criminologists call "control fraud" and a third involves the risk of fraud by borrowers.
Most of the examples Akerlof discussed involved fraud. The frauds he analyzes concern deceit about the quality of goods being sold or the borrowers' ability or willingness to repay a loan.
I have noted in many articles that the clan of economists has a primitive tribal taboo against saying the mystic "f" word out loud or even putting it in print, so Akerlof's article does not contain the word "fraud." His language, however, makes it clear that he is discussing fraud and how it can create what we now call a "Gresham's dynamic" in which bad ethics drives good ethics out of the market.
The theme of my article is to alert the reader to other variants of anti-purchaser control fraud in which the deception about the quality of the goods sold (or rented) affects safety, not simply the appropriate price of the bad quality goods. I use as my example the recent deaths of nearly 400, and over 1,000 injured, Bangladeshis when the building they were working in collapsed. I show that the same case is also an example of anti-employee control fraud.
The nature of the survivors' injuries is often horrific.The Huffington Post
Paul Krugman today in his The Conscience of a Liberal blog in the New York Times discussed whyMonetarism Falls Short mentions Modern Monetary Theory (MMT) as a school of economic thought along with the Keynesian and Austrian schools.
Brad Delong’s use of points made in Warren Mosler’s Soft Currency Economics (the book that started defining Modern Monetary Theory) to win an argument with Krugman was probably pivotal.Soft Currency Economics
The bottom line is that if we put our minds to it we can overcome normal inertia and abnormally powerful vested interests that oppose necessary change. Our population is likely to start declining in a few decades, slowly but surely, and the fertility rate of 1.8% or less would allow global population to fall back more or less gracefully by 2200 to a probably sustainable level of 4 billion, particularly if we sensibly encourage its decline. Important progress in alternatives is certain. Other scientific progress, especially in computing power will also help. Whether we can move fast enough on these fronts and at the same time reduce the output of greenhouse gases to avoid going off the cliff is simply not knowable for certain, but every minute saved and improvement made, betters our odds. Let the race begin.GMO Quarterly Newsletter
From what I’ve read, most of the pushback against revisionism focuses on just how bad Bush’s policies were, from the disaster in Iraq to the way he destroyed FEMA, from the way he squandered a budget surplus to the way he drove up Medicare’s costs. And all of that is fair.Here is another one from a post where he was bashing the intolerable (and hence frequent CNBC guest) Ken Langone :
Now, I don’t know if Langone is really as dumb as he sounds [Ed: ???]; my guess is, probably not — the attempt to sound like a regular guy, while actually sounding like an actor in a 1950s B-movie, is a giveaway. Still, maybe this is an occasion to restate what is really going on in the economy, and why I advocate the things I do.
So, in order:
1. The economy isn’t like an individual family that earns a certain amount and spends some other amount, with no relationship between the two. My spending is your income and your spending is my income. If we both slash spending, both of our incomes fall.
2. We are now in a situation in which many people have cut spending, either because they chose to or because their creditors forced them to, while relatively few people are willing to spend more. The result is depressed incomes and a depressed economy, with millions of willing workers unable to find jobs.
3. Things aren’t always this way, but when they are, the government is not in competition with the private sector. Government purchases don’t use resources that would otherwise be producing private goods, they put unemployed resources to work. Government borrowing doesn’t crowd out private borrowing, it puts idle funds to work. As a result, now is a time when the government should be spending more, not less. If we ignore this insight and cut government spending instead, the economy will shrink and unemployment will rise. In fact, even private spending will shrink, because of falling incomes.
4. This view of our problems has made correct predictions over the past four years, while alternative views have gotten it all wrong. Budget deficits haven’t led to soaring interest rates (and the Fed’s “money-printing” hasn’t led to inflation); austerity policies have greatly deepened economic slumps almost everywhere they have been tried.
5. Yes, the government must pay its bills in the long run. But spending cuts and/or tax increases should wait until the economy is no longer depressed, and the private sector is willing to spend enough to produce full employment.This last one where he writes in his Point 5: "Yes, the government must pay its bills in the long run.." is reeeeeaaally bad.
The first Midwest screening of Silver Circle will be hosted on the Northside of Chicago at Chicago Filmmakers on April 28th with TWO showtimes (5pm & 7pm)
About Silver Circle:
It's 2019. The dollar is dead. [Ed: LOL!!]
The Federal Reserve brutally clings to the power it has gathered for more than a hundred years.
Zoe Taylor stands in their way, with a cunning plan, a scrappy group of Rebels [Ed: No doubt...], an insider's help, and a competing currency made of pure silver. [Ed: Don't eat it you will turn silver!!!!!]
Do she and the Rebels have what it takes to destroy the tyrannical Fed?
This event is directly following the C2E2 event happening at the McCormick Center all weekend. THE premiere comic book convention of Chicago! Tickets are $10 and are ON SALE NOW! You can purchase tickets for the 5pm show here:
http://scchicago5pm.brownpapertickets.com/ 7pm show here: http://scchicago7pm.brownpapertickets.com/
Buy one for a friend and support our End the Fed film as it makes its way in to the Windy City!
Let us know if you'd like to reserve a group of seats in advance and we can make a special raffle or giveaway for your group!Not to be out done, or perhaps just ripping them off, looks like the metal-lovers have come up with their own fictitious female hero-character "Zoe Taylor" in a similar fashion to the Randian character "John Galt" in the Ayn Rand novels and movies.
If you had to date the Great Recession, you might say it started in September 2008 when Lehman Brothers vaporized over a weekend and a massive mortgage-based Ponzi scheme began to go down. By 2008, however, the majority of American workers had already endured a 40-year decline in wages, security, and hope -- a Long Recession of their own.The Huffington Post
Climateer linked to a post by Phil Pearlman here which pondered the merits of Google launching its own currency.
The logic is basically that Google, being an experimental tech company is in a better position to launch a private currency than a bunch of anonymous coders.
But the piece misses a fundamental point. Google already has a currency in issuance. That currency is Google equity.
When you swap national currency for an investment in a particular corporate stock you are effectively swapping an investment in the general wealth of the country, which is taxable by the state, for concentrated exposure to a particular corporate (i.e one very small segment of that economy). You are doing that because you think that stock will outperform the general performance of the country.
That corporate then ends up holding your dollars like central banks of foreign countries hold foreign reserves. The corporate — just like foreign central banks — can choose to invest those reserves in dollar denominated securities and basically receive dollar interest (aka Paypal) in which case its currency is effectively pegged to the dollar, or it can spend (invest) those reserves on tools, infrastructure, know-how and resources that allow it to deliver ever more value/output/return to holders of its equity....
In most of the world, the last thirty years has come to be known as the age of neoliberalism—one dominated by a revival of the long-since-abandoned nineteenth-century creed that held that free markets and human freedom in general were ultimately the same thing. Neoliberalism has always been wracked by a central paradox. It declares that economic imperatives are to take priority over all others. Politics itself is just a matter of creating the conditions for growing the economy by allowing the magic of the marketplace to do its work. All other hopes and dreams—of equality, of security—are to be sacrificed for the primary goal of economic productivity. But global economic performance over the last thirty years has been decidedly mediocre. With one or two spectacular exceptions (notably China, which significantly ignored most neoliberal prescriptions), growth rates have been far below what they were in the days of the old-fashioned, state-directed, welfare-state-oriented capitalism of the fifties, sixties, and even seventies. By its own standards, then, the project was already a colossal failure even before the 2008 collapse.
If, on the other hand, we stop taking world leaders at their word and instead think of neoliberalism as a political project, it suddenly looks spectacularly effective. The politicians, CEOs, trade bureaucrats, and so forth who regularly meet at summits like Davos or the G20 may have done a miserable job in creating a world capitalist economy that meets the needs of a majority of the world’s inhabitants (let alone produces hope, happiness, security, or meaning), but they have succeeded magnificently in convincing the world that capitalism—and not just capitalism, but exactly the financialized, semifeudal capitalism we happen to have right now—is the only viable economic system. If you think about it, this is a remarkable accomplishment.
How did they pull it off? The preemptive attitude toward social movements is clearly a part of it; under no conditions can alternatives, or anyone proposing alternatives, be seen to experience success. This helps explain the almost unimaginable investment in “security systems” of one sort or another: the fact that the United States, which lacks any major rival, spends more on its military and intelligence than it did during the Cold War, along with the almost dazzling accumulation of private security agencies, intelligence agencies, militarized police, guards, and mercenaries. Then there are the propaganda organs, including a massive media industry that did not even exist before the sixties, celebrating police. Mostly these systems do not so much attack dissidents directly as contribute to a pervasive climate of fear, jingoistic conformity, life insecurity, and simple despair that makes any thought of changing the world seem an idle fantasy. Yet these security systems are also extremely expensive. Some economists estimate that a quarter of the American population is now engaged in “guard labor” of one sort or another—defending property, supervising work, or otherwise keeping their fellow Americans in line. Economically, most of this disciplinary apparatus is pure deadweight.
In fact, most of the economic innovations of the last thirty years make more sense politically than economically.....
It does often seem that, whenever there is a choice between one option that makes capitalism seem the only possible economic system, and another that would actually make capitalism a more viable economic system, neoliberalism means always choosing the former. The combined result is a relentless campaign against the human imagination. Or, to be more precise: imagination, desire, individual creativity, all those things that were to be liberated in the last great world revolution, were to be contained strictly in the domain of consumerism, or perhaps in the virtual realities of the Internet. In all other realms they were to be strictly banished. We are talking about the murdering of dreams, the imposition of an apparatus of hopelessness, designed to squelch any sense of an alternative future. Yet as a result of putting virtually all their efforts in one political basket, we are left in the bizarre situation of watching the capitalist system crumbling before our very eyes, at just the moment everyone had finally concluded no other system would be possible.The Baffler
All over the United States we are witnessing unprecedented shortages of ammunition, physical gold and physical silver. Recent events have helped fuel a "buying frenzy" that threatens to spiral out of control. Gun shops all over the nation are reporting that they have never seen it this bad, and in many cases any ammo that they are able to get is being sold even before it hits the shelves. The ammo shortage has already become so severe that police departments all over America are saying that they are being told that it is going to take six months to a year to get their orders. In fact, many police departments have begun to trade and barter with one another to get the ammo that they need. Meanwhile, the takedown of paper gold and paper silver has unleashed an avalanche of "panic buying" of physical gold and physical silver all over the planet. In the United States, some dealers are charging premiums of more than 25 percent over the spot price for gold and silver and they are getting it. People are paying these prices even though they are being told that delivery will not happen for a month or two in many cases. Some dealers are feverishly taking as many orders as they can, and they are just hoping that they will be able to get the physical gold and silver to eventually fill those orders. Personally, I have never seen anything like this. If things are this tight now, what is going to happen when the next major financial crisis strikes and people really begin to panic?The Economic Collapse
...while Keynesian ideas and Keynesian economists became dominant for short periods, for the most part political elites remained firmly conventional and remained wedded to sound finance ideas.Naked Keynesianism
Tesla. Uber. Netflix. Most economies would kill to have a set of innovators such as these. And yet at every turn, these companies are running headlong into regulation (or lack thereof) that seems designed to benefit incumbents. The reason? The devastating impact of money in politics and how it discourages disruptive innovation among new businesses. Click through this explainer to learn more about legal bribery and U.S. competitiveness:Harvard Business Review — HBR Blog Network
This post was prompted by Tim Wortsall, of all peoples, post on whether progressive taxation makes sense a MMT world. In a sense he was right, and perhaps Randall Wray in response was not, the principles of taxation radically change in an MMT world as the overiding princple is how taxation can create inducements to restore full employment not how taxation can fairly fund public spending.Decisions, Decisions, Decisions
I regard consciousness as fundamental. I regard matter as derivative from consciousness. We cannot get behind consciousness. Everything that we talk about, everything that we regard as existing, postulates consciousness. • As quoted in The Observer (25 January 1931)
"As a man who has devoted his whole life to the most clear headed science, to the study of matter, I can tell you as a result of my research about atoms this much: There is no matter as such. All matter originates and exists only by virtue of a force which brings the particle of an atom to vibration and holds this most minute solar system of the atom together. We must assume behind this force the existence of a conscious and intelligent mind. This mind is the matrix of all matter." • Das Wesen der Materie [The Nature of Matter], speech at Florence, Italy (1944) (from Archiv zur Geschichte der Max-Planck-Gesellschaft, Abt. Va, Rep. 11 Planck, Nr. 1797)
"Science cannot solve the ultimate mystery of nature. And that is because, in the last analysis, we ourselves are part of nature and therefore part of the mystery that we are trying to solve." • Where is Science Going? (1932)From Wikiquote.
If you asked economists looking at the data if student loans could be having a macroeconomic effect, especially through a financial burden on those that have them, they'd say that the actual percent of monthly income paying student loans hasn't changed all that much since the 1990s. They may be making larger lifetime payments, since they'll carry the debts longer, but that's a choice they are making, which could reflect positive or negative developments. Certaintly there's no short-term strain. So there aren't any economic consequences worth mentioning when it comes to student loans.
I always thought this approach had problems....Truthout | News Analysis
I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text during 2013 (to be ready in draft form for second semester teaching). Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.
This material was going to be in Chapter 12 on unemployment and inflation but I suspect we will put it into a separate Chapter given its centrality to understanding key aspects of the approach by Modern Monetary Theory (MMT) to price stability.
Chapter 13 – Buffer Stocks and Price Stability
13.1 IntroductionBill Mitchell – billy blog
A cultural war has erupted between Israel's rising political star and his ultra-Orthodox rivals. Newly minted Finance Minister Yair Lapid, hugely popular for opposing the long-standing preferential treatment enjoyed by the religious minority, is moving swiftly to slash state handouts to large families, compel lifelong seminary students to work and join the army, and remove funding for schools that don't teach math, science and English.
The religious - labeled "parasites" [Ed: WOW. Sieg heil! ] by one Lapid emissary this week - are crying foul. But they appear helpless, at least in the short run, to stop Lapid from pressing his agenda.
For most of the last three decades, the country's small ultra-Orthodox minority sat in governing coalitions, securing vast budgets for religious schools and automatic exemptions from mandatory military service for tens of thousands of young men in full-time religious studies.
Tapping into widespread resentment over these expensive perks, Lapid made a strong showing in January elections. His new Yesh Atid, or There is a Future, party finished second in the voting, turning him into the newest star of Israeli politics and propelling him to a senior position in the governing coalition.
The religious parties, meanwhile, were pushed into the opposition. Lapid, facing a yawning deficit, has moved quickly to drastically slash budgets favoring the ultra-Orthodox. "I say, let there be war," Lapid said in a speech Wednesday.
According to a draft of planned reforms viewed by The Associated Press, the Finance Ministry has proposed cutting in half government subsidies to religious schools that do not teach a core curriculum including math, science and English, and boosting funding for schools that do. It also seeks to allow subsidies for child day care only if both parents work - an effort to entice ultra-Orthodox men who study religious texts full time to join the job market.
A parliamentary committee headed by Yesh Atid Cabinet Minister Yaakov Peri also proposes cutting 30 percent of funding to ultra-Orthodox religious seminaries and introducing legislation to end most military draft exemptions, Israeli media reported this week.Looks like now Israel is caught up in this deranged austerity ideology and moron laborer/warrior class representatives within the Israeli government, perhaps acting under some sort of covetousness or jealous resentment, are threatening the means of subsistence of the religious intelligentsia there.
Protesters hurl bottles at police in latest demonstrations triggered by anger at country's economic crisis.Al Jazeera
Surveys show university students taught at home perform better than peers from conventional schools.Al Jazeera
Major advanced economies need to balance supporting activity and grappling with old risks from structural weaknesses that weigh on growth. A slow but fairly steady private sector led recovery is in the making in the U.S., while recovery remains elusive in the euro area and Japan.
- While sentiment has improved, the top priority for the U.S. is to raise the debt ceiling in a timely manner and agree on a credible medium-term fiscal roadmap to bring down debt.
- In the euro area, monetary policy should remain accommodative and fiscal consolidation be properly paced. The foundations of monetary union should be made more secure. National authorities should fix frayed banking systems and rebuild competitiveness as required. Japan needs to balance upfront stimulus with more ambitious plans to bring down debt and structural reforms to put growth on a permanently higher plane.
- In its advice and analysis, the Fund will seek the right balance between supporting growth (including through monetary easing) and removing the millstone of high private and public debt.
Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.
You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."
That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps....Rolling Stone
Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.
If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret. You can stare right at it, anytime you want....
The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It's not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever's in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing – and it's only just coming into view.
What was your favorite TED talk this year? I found both Amanda Palmer's and Nilofer'sspectacular. Yet, this year, TED made me wonder about Great Ideas, and our relationship with them. And I began to ask myself: even if we enjoy a great TED talk, should the rise of "TED thinking" concern us just a tiny bit?
Let me be very clear: I use that phrase not to refer to the extravaganza that is TED, and though I use TED as an example, this post isn't really just about TED — but let the phrase "TED thinking" serve as a shorthand for the way we've come to think about ideas and how we share them, whether it's through an 18-minute talk, an 800-word blog post, or the latest business "best-seller." Hence, this post isn't really about TED (so please don't leave me raging comments saying "But my favorite TED talk!!!"). "TED thinking" is just a symptom: and the underlying syndrome is our broken relationship with Great Ideas. Herewith, my tiny argument:
TED thinking assumes complex social problems are essentially engineering challenges, and that short nuggets of Technology, Edutainment, and Design can fix everything, fast and cheap. TED thinking's got a hard determinism to it; a kind of technological hyperrationalism. It ignores institutions and society almost completely. We've come to look at these quick, easy "solutions" as the very point of "ideas worth spreading."
But this seems to me to miss the point and power of ideas entirely. Einstein's great equation is not a "solution"; it is a theory — whose explanations unravel only greater mysteries and questions. It offers no immediate easy, quick "application" in the "real world," but challenges us to reimagine what the "real world" is; it is a Great Idea because it offers us something bigger, more lasting, and more vital than a painless, disposable "solution."
Yet in the eyes of TED thinking, it is of limited, perhaps little, value....The Harvard Business Review — HBR Blog Network
“The private sector is efficient and dynamic; public sector is costly and slow. The more we can get the private sector to run things the better.”NEF — New Economics Foundation
This is why I continue to think that the ones who are really to blame are the politicians. The economic studies provided cover for their set of policy actions.
Anyway, there's no matching Prof. Krugman's performance these last few months. Not only has his forecasts been right on, but his retrospective look at why things unfolded the way they did has been downright flawless.Fictional Reserve Barking
Perhaps the ability of capitalism to provide full employment requires freakish historical circumstances of a sort we saw only in the 50s and 60s. And perhaps it is only wishful thinking by both rightists and social democrats that stops them seeing this.Stumbling and Mumbling
As Bill Dudley, the president of the New York Federal Reserve Bank, put it recently, using the delicate language of central bankers, “The impediments to an orderly cross-border resolution still need to be fully identified and dismantled. This is necessary to eliminate the so-called ‘too big to fail’ problem.”
Translation: Orderly resolution of global megabanks is an illusion. As long as we allow cross-border banks at or close to their current scale, our political leaders will be unable to tolerate their failure. And, because these large financial institutions are by any meaningful definition “too big to fail,” they can borrow more cheaply than would otherwise be the case. Worse, they have both motive and opportunity to grow even larger.
This form of government support amounts to a large implicit subsidy for big banks. It is a bizarre form of subsidy, to be sure, but that does not make it any less damaging to the public interest. On the contrary, because implicit government support for “too big to fail” banks rises with the amount of risk that they assume, this support may be among the most dangerous subsidies that the world has ever seen. After all, more debt (relative to equity) means a higher payoff when things go well. And, when things go badly, it becomes the taxpayers’ problem (or the problem of some foreign government and their taxpayers).Project Syndicate
When we talk about "full employment" of 4 percent (or even 6 percent) these days, do we mean the same thing we used to back when?
The answer is no. The government has changed the way it measures unemployment and as a result, some Americans who used to be counted as officially unemployed no longer are -- because they haven't looked for work recently enough. That's why I devised our monthly U-7 statistic, which includes everyone who says they want to be working full-time, but aren't. Compared to the official unemployment number of 7.6 percent, U-7 is running at 16 percent.
There's another significant difference between official unemployment today, compared to that statistic years ago. As we explained in a story back in 2003, many more Americans are now on either disability or in prison than in previous years. Were they out on the street looking for work, today's official unemployment number, as well as our "Solman Scale" U-7, would be several percentage points higher than they are.PBS NewsHour — Business Desk
The rise of the economist as engineer is, economists and historians say, an essential characteristic of the development of economics in the postwar period. In 2006, Greg Mankiw wrote a much commented paper in which he argued that one brand of macroeconomics (neokeynesian) is akin to engineering, by which he meant “solve practical problem,” and “help policmakers devise better policies to cope with the BC [budget constraint].” Another brand is rather done by (new classical) scientists, he explained, and is about “propos(ing) and test(ing) elegant theories.” He traced the first tradition to Keynes, its theoretical reformulation by Hicks and Modigliani, to the large-scale applied macromodels of Klein, Eckstein and Ando-Modigliani, and to the neo-keynesians. The second stream of course reflects the Lucas-Sragent-Wallace-Kydland-Prescott family tree.That's either BS or pretty bad engineering. While I am not an engineering, I know enough about engineering method to know that none of these MIT economists remotely resemble engineers other than as members of the MIT community. That's not enough. For one thing, engineers get that there is feedback.
One element missing from dicussions of MIT-style policy making is how they handled values. Using sophisticated techniques doesn't shelter from the need to work with some ends/evaluation and decision criteria. And the nature, relevance and implementability of such criteria, whether Pareto optimality, surplus analysis, social welfare functions, social choice functions were hotly debated in the forties and fifties.Welfare economics was then looking for new foundations, if not disagregating, and Samuelson was a major player in these transformations. MIT policy-making style is therefore related to the applied tradition there, in particular the postwar development in development economics and public economics.INET — History of Economics Playground