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Financial skeptic

Notes on "neoliberalism enforced" cruise to Frugality Island for 401K Lemmings

News Neoliberalism as a New Form of Corporatism Recommended Links Peak cheap Energy and Oil Price Slump Secular Stagnation under Neoliberalism Rational Fools vs. Efficient Crooks: The efficient m hypothesis Casino Capitalism
Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime Neoliberal Attacks on Social Security Unemployment Inflation vs. Deflation Coming Bond Squeeze Notes on 401K plans Vanguard
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OIL ETNs Peak Cheap Energy and Oil Price Slump Notes on 100-your age investment strategy behavior in rigged markets Chasing a trade The Possibility Of No Mean Reversion Junk Bonds For 401K Investors Tax policies
John Kenneth Galbraith The Roads We Take Economics Bookshelf Who Rules America Financial Quotes Financial Humor Etc

“When the capital development of a country becomes a by-product
of the activities of a casino, the job is likely to be ill-done.”

John Maynard Keynes

"Life is a school of probabilities."

Walter Bagehot

Neoliberal economics (aka casino capitalism) function from one crash to another. Risk is pervasively underpriced under neoliberal system, resulting in bubbles small and large which hit the economy periodically. The problem are not strictly economical or political. They are ideological. Like a country which adopted a certain religion follows a certain path, The USA behaviour after adoption of neoliberalism somewhat correlate with the behaviour of alcoholic who decided to booze himself to death. The difference is that debt is used instead of booze.

Hypertrophied role of financial sector under neoliberalism introduces strong positive feedback look into the economic system making the whole system unstable. Any attempts to put some sand into the wheels in the form of increasing transaction costs or jailing some overzealous bankers or hedge fund managers are blocked by political power of financial oligarchy, which is the actual ruling class under neoliberalism for ordinary investor (who are dragged into stock market by his/her 401K) this in for a very bumpy ride. I managed to observe just two two financial crashed under liberalism (in 2000 and 2008) out of probably four (Savings and loan crisis was probably the first neoliberal crisis). The next crash is given, taking into account that hypertrophied role of financial sector did not changes neither after dot-com crisis of 200-2002 not after 2008 crisis (it is unclear when and if it ended; in any case it was long getting the name of "Great Recession").

Timing of the next crisis is anybody's guess but it might well be closer then we assume. As Mark Twain aptly observed: "A thing long expected takes the form of the unexpected when at last it comes" ;-):

This morning that meant a stream of thoughts triggered by Paul Krugman’s most recent op-ed, particularly this:

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

As most 401K investors are brainwashing into being "over bullish", this page is strongly bearish in "perma-bear" fashion in order to serve as an antidote to "Barrons" style cheerleading. Funny, but this page is accessed mostly during periods of economic uncertainty. At least this was the case during the last two financial crisis(2000 and 2008). No so much during good times: the number of visits drops to below 1K a month.

Still I hope it plays a small but important role: to warn about excessive risk taking by 401K investors in neoliberal economic system. It designed to serve as a warning sign and inject a skeptical note into MSM coverage. There are not many such sites, so a warning about danger of taking excessive risk in 401K accounts under neoliberalism has definite value. The following cartoon from 2008 illustrated this point nicely

As far as I know lot of 401K investors are 100% or almost 100% invested at stocks. Including many of my friends. I came across a very relevant to this situation joke which nicely illustrated the ideas of this page:

Seven habits that help produce the anything-but-efficient markets that rule the world by Paul Krugman in Fortune.

1. Think short term.
2. Be greedy.
3. Believe in the greater fool
4. Run with the herd.
5. Overgeneralize
6. Be trendy
7. Play with other people's money

I would like to stress again that it is very difficult to "guess" when the next wave of crisis stikes us: "A thing long expected takes the form of the unexpected when at last it comes".

But mispricing of risk in 401K accounts is systemic for "overbullish" 401 investors, who expect that they will be able to jusp of the train in time, before the crash. Usually such expectations are false. And to sell in the market that can lose 10% in one day is not easy psychologically. I remember my feelings in 2001-2002 and again 2008-2009. That's why many people who planned to "jump" stay put and can temporarily lose 30 to 50% of value of their 401k account in a very short period of time (and if you think that S&P500 can't return to 1000, think again; its all depends on FED). At this point some freak out and sell their holdings making paper losses permanent.

Even for those who weathered the storm and held to their stock holdings, it is important to understand that paper losses were eliminated mostly by Fed money printing. As such risks remains as at one point FED might find itself out of ammunition. The fact that S&P500 recovered very nicely it does not diminish the risk of such behavior. There is no guarantee that the third crisis will behave like previous two.

Next crash will have a new key determinant: the attitude toward the US government (and here I mean the current government of Barack Obama) and Wall Street after 2008 is the lack of trust. That means that you need to hope for the best but prepare for the worst. Injection on so much money into financial system was a novel experiment which is not ended yet. So how it will end is anybody's guess. We are now in uncharted waters. I think when Putin called Bernanke a hooligan, he meant exactly this. Since Bernanke was printing money out of thin air to buy financial paper, his action were tantamount to shoplifting. In some way this probably is more similar to running meth labs inside Fed building. The system was injected with narcotics. Everybody felt better, but the mechanism behind it was not healthy.

The complexity of modern financial system is tremendous and how all those new financial instruments will behave under a new stress is unknown. At the same time in the Internet age we, the great unwashed masses, can't be keep in complete obscurity like in good old time. Many now know ( or at least suspect ) that the neoliberal "show must goes on" after 2008 is actually going strongly at their expense. And while open rebellion is impossible, that results in lack of trust which represents a problem for financial oligarchy which rules the country. The poor working slobs are told be grateful for Walmart's low (poverty-subsidized) prices. Middle class is told that their declining standard of living is a natural result of their lack of competitiveness in the market place. Classic "bread and circuses" policy still works but for how long it will continue to work it is unclear.

But nothing is really new under the sun. To more and more people it is now clear that today the US is trying to stave off the inevitable decline by resorting to all kinds of financial manipulations like previous empires; yesterday, it was the British Empire and if you go further back, you get the USSR, Hapsburg empire, Imperial Russia, Spanish empire, Venetian empire, Byzantium and Roman empire. The current "Secretary of Imperial Wars" (aka Secretary of Defense) Ashton Baldwin Carter is pretty open about this:

“We already see countries in the region trying to carve up these markets…forging many separate trade agreements in recent years, some based on pressure and special arrangements…. Agreements that…..leave us on the sidelines. That risks America’s access to these growing markets. We must all decide if we are going to let that happen. If we’re going to help boost our exports and our economy…and cement our influence and leadership in the fastest-growing region in the world; or if, instead, we’re going to take ourselves out of the game.”

For the US elite it might be a time to rethink its neocon stance due to which the US is exposing ourselves to the enmity of the rising economic powers, and blowing serious cash to maintain it hegemony via maintaining huge military budget, financing wars and color revolutions in distant countries. In a way the US foreign policy became a financial racket, and racket can't last forever because it incite strong opposition from other countries.

Neoliberalism (aka casino capitalism) as a social system entered the state of decline after 2008. Like communism before it stopped to be attractive to people. But unlike communism it proved to have greater staying power, surviving in zombie state as finanfial institutions preserved political power and in some cases even enhanced it. It is unclear how long it will say in this state. Much depends on the availability of "cheap oil" on which neoliberal globalization is based.

But the plausible hypothesis is that this social system like socialism in xUSSR space before entered down slope and might well be on its way to the cliff. Attempts to neo-colonize other states by the West became less successful and more costly (Compare Ukraine, Libya and Iraq with previous instances of color revolutions). Some became close to XIX century colonial conquests with a lot of bloodshed (from half million to over a million of Iraqis, by different estimates, died ). As always this is mainly the blood of locals, which is cheap.

Libya and Ukraine are two recent examples. Both countries are now destroyed (which might be the plan). In Ukraine population is thrown in object poverty with income of less that $5 a day for the majority of population. And there is no other way to expand markets but to try to "neo-colonize" new countries by putting them into ominous level of debt while exporting goods to the population on credit. That is not a long term strategy as Greece, Bulgaria, and now Spain and Portugal had shown. With shrinking markets stability of capitalism in general and neoliberalism in particular might decrease.

Several researchers points to increased importance Central banks now play in maintaining of the stability of the banking system. That's already a reversal of neoliberal dogma about free (read "unregulated") markets. Actually the tale about "free markets", as far as the USA is concerned, actually was from the very beginning mainly the product designed for export (read about Washington consensus).

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[Jan 24, 2017] One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings

Notable quotes:
"... People can perceive that her ideology is founded on a conception of human beings striving relentlessly to become human capital (as her opening campaign commercial so overtly depicted), which means that those who fail to come within the purview of neoliberalism should be rigorously ostracized, punished, and excluded. ..."
"... As the market becomes an abstraction, so does democracy, but the real playing field is somewhere else, in the realm of actual economic exchange-which is not, however, the market. We may say that all exchange takes place on the neoliberal surface. ..."
Jan 24, 2017 | economistsview.typepad.com
libezkova -> jonny bakho... January 23, 2017 at 04:55 PM , 2017 at 04:55 PM
You are wrong. Your definition of neoliberalism is formally right and we can argue along those lines that Hillary is a neoliberal too (Her track record as a senator suggests exactly that), it is way too narrow.

"One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings." (see below)

"Another way to say it is that the state has become the market, the market has become the state, and therefore both have ceased to exist in the form we have classically understood them."

"In the current election campaign, Hillary Clinton has been the most perfect embodiment of neoliberalism among all the candidates, she is almost its all-time ideal avatar, and I believe this explains, even if not articulated this way, the widespread discomfort among the populace toward her ascendancy. People can perceive that her ideology is founded on a conception of human beings striving relentlessly to become human capital (as her opening campaign commercial so overtly depicted), which means that those who fail to come within the purview of neoliberalism should be rigorously ostracized, punished, and excluded.

This is the dark side of neoliberalism's ideological arm (a multiculturalism founded on human beings as capital), which is why this project has become increasingly associated with suppression of free speech and intolerance of those who refuse to go along with the kind of identity politics neoliberalism promotes.

And this explains why the 1990s saw the simultaneous and absolutely parallel rise, under the Clintons, of both neoliberal globalization and various regimes of neoliberal disciplining, such as the shaming and exclusion of former welfare recipients (every able-bodied person should be able to find work, therefore under TANF welfare was converted to a performance management system designed to enroll everyone in the workforce, even if it meant below-subsistence wages or the loss of parental responsibilities, all of it couched in the jargon of marketplace incentives)."

In this sense Hillary Clinton is 100% dyed-in-the-wool neoliberal and neocon ("neoliberal with the gun"). She promotes so called "neoliberal rationality" a perverted "market-based" rationality typical for neoliberalism:

See

http://economistsview.typepad.com/economistsview/2017/01/links-for-01-23-17.html#comment-6a00d83451b33869e201bb09706856970d

== quote ==
When Hillary Clinton frequently retorts-in response to demands for reregulation of finance, for instance-that we have to abide by "the rule of law," this reflects a particular understanding of the law, the law as embodying the sense of the market, the law after it has undergone a revolution of reinterpretation in purely economic terms.

In this revolution of the law persons have no status compared to corporations, nation-states are on their way out, and everything in turn dissolves before the abstraction called the market.

One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings. Democracy becomes reinterpreted as the market, and politics succumbs to neoliberal economic theory, so we are speaking of the end of democratic politics as we have known it for two and a half centuries.

As the market becomes an abstraction, so does democracy, but the real playing field is somewhere else, in the realm of actual economic exchange-which is not, however, the market. We may say that all exchange takes place on the neoliberal surface.

Neoliberalism is often described-and this creates a lot of confusion-as "market fundamentalism," and while this may be true for neoliberal's self-promotion and self-presentation, i.e., the market as the ultimate and only myth, as were the gods of the past, I would argue that in neoliberalism there is no such thing as the market as we have understood it from previous ideologies.

The neoliberal state-actually, to utter the word state seems insufficient here, I would claim that a new entity is being created, which is not the state as we have known it, but an existence that incorporates potentially all the states in the world and is something that exceeds their sum-is all-powerful, it seeks to leave no space for individual self-conception in the way that classical liberalism, and even communism and fascism to some degree, were willing to allow.

There are competing understandings of neoliberal globalization, when it comes to the question of whether the state is strong or weak compared to the primary agent of globalization, i.e., the corporation, but I am taking this logic further, I am suggesting that the issue is not how strong the state is in the service of neoliberalism, but whether there is anything left over beyond the new definition of the state. Another way to say it is that the state has become the market, the market has become the state, and therefore both have ceased to exist in the form we have classically understood them.

Of course the word hasn't gotten around to the people yet, hence all the confusion about whether Hillary Clinton is more neoliberal than Barack Obama, or whether Donald Trump will be less neoliberal than Hillary Clinton.

The project of neoliberalism-i.e., the redefinition of the state, the institutions of society, and the self-has come so far along that neoliberalism is almost beyond the need of individual entities to make or break its case. Its penetration has gone too deep, and none of the democratic figureheads that come forward can fundamentally question its efficacy.

[Jan 23, 2017] re F@ck Work naked capitalism

Jan 23, 2017 | www.nakedcapitalism.com
By Scott Ferguson, Assistant Professor, University of South Florida. He is also a Research Scholar at the Binzagr Institute for Sustainable Prosperity. His current research and pedagogy focus on Modern Monetary Theory and critiques of neoliberalism, aesthetic theory; the history of digital animation and visual effects; and essayistic writing across media platforms. Originally published at Arcade

James Livingston has responded to my critique of his Aeon essay, " Fuck Work ." His response was published in the Spanish magazine Contexto y Accion . One can find an English translation here . What follows is my reply:

... ... ...

This brings me to Modern Monetary Theory (MMT). Far from an "obscure intellectual trend," MMT is a prominent heterodox school of political economy that emerged from post-Keynesian economics and has lately influenced the economic platforms of Bernie Sanders , Jeremy Corbyn , and Spain's United Left . For MMT, money is not a private token that states amass and hemorrhage. Rather, it is a boundless government instrument that can easily serve the needs of the entire community. International monetary agreements such the Eurozone's Maastricht Treaty may impose artificial limits on fiscal spending, but these are, MMT argues, political constraints. They are not economically inevitable and can immediately be dissolved. In truth, every sovereign polity can afford to take care of its people; most governments simply choose not to provide for everyone and feign that their hands are tied.

To be sure, Liberalism has debated the "designation and distribution of rival goods," as Livingston explains. In doing so, however, it has overlooked how macroeconomic governance conditions the production of these goods in the first place. MMT, by contrast, stresses money's creative role in enabling productive activity and places government's limitless spending powers at the heart of this process.

In lieu of Liberal "redistribution" via taxation, MMT calls for a politics of " predistribution ." Redistributive politics mitigate wealth disparity by purportedly transferring money from rich to poor. This is a false and deeply metaphysical gesture, however, since it mistakes the monetary relation for a finite resource instead of embracing government's actual spending capacities. MMT's predistributive politics, meanwhile, insist that government can never run out of money and that meaningful transformation requires intervening directly in the institutions and laws that structure economic activity. MMT does not imply a crude determinism in which government immediately commands production and distribution. Rather, it politicizes fiscal spending and the banking system, which together underwrite the supposedly autonomous civil society that Livingston celebrates.

MMT maintains, moreover, that because UBI is not sufficiently productive, it is a passive and ultimately inflationary means to remedy our social and environmental problems. It thus recommends a proactive and politicized commitment to public employment through a voluntary Job Guarantee . Federally funded yet operated by local governments and nonprofits , such a system would fund communal and ecological projects that the private sector refuses to pursue. It would stabilize prices by maintaining aggregate purchasing power and productive activity during market downturns. What is more, by eliminating forced unemployment, it would eradicate systemic poverty, increase labor's bargaining power, and improve everyone's working conditions. In this way, a Job Guarantee would function as a form of targeted universalism : In improving the lives of particular groups, such a program would transform the whole of economic life from the bottom up.

Unlike the Job Guarantee, UBI carries no obligation to create or maintain public infrastructures. It relinquishes capital-intensive projects to the private sector. It banks on the hope that meager increases in purchasing power will solve the systemic crises associated with un- and underemployment.

Let us, then, abandon UBI's "end of work" hysteria and confront the problem of social provisioning head on. There is no escape from our broken reality. We do better to seize present power structures and transform collective participation, rather than to reduce politics to cartoonish oppositions between liberty and tyranny, leisure and toil. Technology is marvelous. It is no substitute, however, for governance. And while civil society may be a site of creativity and struggle, it has limited spending abilities and will always require external support.

It is essential, therefore, to construct an adequate welfare system. On this matter, Livingston and I agree. But Livingston's retreat from governance strikes me as both juvenile and self-sabotaging. Such thinking distracts the left from advancing an effective political program and building the robust public sector we need.

Carlos , January 23, 2017 at 2:31 am

I really need to be kicked out of the house, to go someplace and do something I don't really want to do for 8 hours a day.

I've already got too much time to fritter away. I'm fairly certain, giving me more time and money to make my own choices would not make the world a better place.

Dogstar , January 23, 2017 at 7:44 am

Hmm. No "sarc" tag Really?? More free time and money wouldn't be a benefit to you and your surroundings? That's hard to believe. To each their own I guess.

MtnLife , January 23, 2017 at 8:39 am

I can see it both ways. Most people see that as sarcasm but I have more than a few friends whose jobs are probably the only thing keeping them out of jail. Idle hands being the devil's plaything and all. For instance, the last thing you want to give a recovering addict is a lot of free time and money.

Jonathan Holland Becnel , January 23, 2017 at 11:51 am

As a recovering addict, I must vehemently disagree with ur statement.

I would love to have as much money and free time on my hands to work on the fun hobbies that keep me sober like Political Activism, Blogging, Film, etc.

Marco , January 23, 2017 at 1:22 pm

Many MANY folks take drugs and alcohol specially BECAUSE of their jobs

JohnnyGL , January 23, 2017 at 10:46 am

At no point in the "Job Guarantee" discussion did anyone advocate forcing you to go to work. However, if you decide to get ambitious and want a paid activity to do that helps make society a better place to live, wouldn't it be nice to know that there'd be work available for you to do?

Right now, that's not so easy to do without lots of effort searching for available jobs and going through a cumbersome and dispiriting application process that's designed to make you prove how much you REALLY, REALLY want the job.

For me, the real silver bullet is the moral/political argument of a Job Guarantee vs. Basic Income. Job Guarantee gives people a sense of pride and accomplishment and those employed and their loved ones will vigorously defend it against those who would attack them as 'moochers'. Also, defenders can point to the completed projects as added ammunition.

Basic income recipients have no such moral/political defense.

jrs , January 23, 2017 at 1:04 pm

The guaranteed jobs could be for a 20 or 30 hour week. I fear they won't be as most job guarantee advocates seem to be Calvinists who believe only work gets you into heaven though.

skippy , January 23, 2017 at 1:50 pm

Totally flippant and backhanded comment jrs, might help to substantiate your perspective with more than emotive slurs.

disheveled . Gezz Calvinists – ????? – how about thousands of years of Anthro or Psychology vs insinuations about AET or Neoclassical

jrs , January 23, 2017 at 1:01 pm

Don't forget commute another 2 hours because you can't afford anything close by!

Ruben , January 23, 2017 at 3:27 am

OMG, where to begin:

"MMT, by contrast, stresses money's creative role in enabling productive activity and places government's limitless spending powers at the heart of this process."

" [money] is a boundless government instrument "

Limitless spending power is identical to infinite spending powers. If this is a central tenet of MMT, the whole conceptual construct can easily be disproved by reductio ad absurdum.

"And while civil society may be a site of creativity and struggle, it has limited spending abilities and will always require external support."

Sure, the support of Nature, but I guess the author is referring to Big Brother, the all-knowing and benevolent government, source and creator of all money, indispensable provider of jobs, jobs, jobs.

Before there was nothing, then came the Government and the Government said: let there be money.

Hard to take it seriously.

Furzy , January 23, 2017 at 4:19 am

I would like to see you do that via "reductio ad absurdum" because I find you absolutely clueless regarding MMT's propositions. Maybe you just like to spout off?

tony , January 23, 2017 at 6:06 am

It's a common 'argument' by people defending status quo. They claim something is ridiculous and easily disproven and then leave it at that. They avoid making argument that are specific enought to be countered, because thay know they don't actually have a leg to stand on.

fresno dan , January 23, 2017 at 8:37 am

Furzy
January 23, 2017 at 4:19 am

http://www.pragcap.com/modern-monetary-theory-mmt-critique/

skippy , January 23, 2017 at 4:55 am

So where are your – laws – from Ruben . ??????

UserFriendly , January 23, 2017 at 6:57 am

Limitless may not have been the best word. Of course the government can print money till the cows come home; but MMT recommends stopping when you approach the real resource constraint.

skippy , January 23, 2017 at 7:39 am

Taxes to mop up . but that's theft in some ideological camps .

disheveled must have printing presses down in the basement .

Ruben , January 23, 2017 at 7:58 am

Sloppy language does not help so thank you. So the next question is how do constraints (natural or other) affect spending power under MMT, is it asymptotic, is there an optimum, discontinuities?

The other major issue is that although spending power is controlled by legislatures it must be recognized that wealth creation starts with the work of people and physical capital, not by the good graces of gov't. MMT makes it sound as if money exists just because gov't wills it to exist, which is true in the sense of printing pieces of paper but not in the sense of actual economic production and wealth creation. Taxes are not the manner in which gov't removes money but it really is the cost of gov't sitting on top of the economic production by people together with physical capital.

Jamie , January 23, 2017 at 9:55 am

Help me understand your last sentence. So, if I'm a farmer, the time I spend digging the field is economic production, but the time I spend sitting at my desk planing what to plant and deciding which stump to remove next and how best to do it, and the time I spend making deals with the bank etc, these are all unproductive hours that make no contribution to my economic production?

susan the other , January 23, 2017 at 1:48 pm

Yes, Jamie. And as you point out, Ferguson is giving us a better definition of "productive". He is not saying productivity produces profits – he is saying productive work fixes things and makes them better. But some people never get past that road bump called "productivity."

JohnnyGL , January 23, 2017 at 11:16 am

"MMT makes it sound as if money exists just because gov't wills it to exist "

No, this is inaccurate, MMT says that the government must SPEND money into existence, not just issue a legal fiat. Collecting taxes in the currency creates a need for the currency. This is historically accurate and can be traced from British colonial history. They imposed taxes on the colonies in pound sterling, that compelled the colonies to find something to export to Britain in order to generate the foreign exchange to pay the taxes.

The debate is over how to get the currency in people's hands. Should the govt just cut checks and let citizens spend as they see fit? Or should the government directly employ resources to improve society where the private sector isn't interested?

Regarding user Jamie's point, I hope I can add to it by saying that someone is going to do the planning, whether it's the public sector or the private sector, planning must be done. When government does the planning, then it's decided democratically (at least in theory). If the government doesn't do the planning, then the private sector is left to do it on its own. This gets chaotic if the private sector doesn't coordinate, or can get parasitic if the private sector colludes against public interest.

Jamie , January 23, 2017 at 10:05 am

I don't think there's anything wrong with calling money a "boundless government instrument". The problem here comes from confounding a potentially infinite resource (money) with the inherently limited application of that resource. Sovereign money really is limitless, what one can do with it is not. The distinction needs to be clarified and emphasized, not glossed over.

Jim Haygood , January 23, 2017 at 12:11 pm

" money is a boundless government instrument "

Restated: " Trees grow to the sky and beyond. "

During expansions, the economy is always operating at the real resource constraint. Attempts to goose it with MMT can only destabilize it.

Mel , January 23, 2017 at 12:46 pm

"Limitless" is a pretty good word for some arguments. Look what you get with "limited": every year congress up and says, "Hey dudes, dudettes, we know you expected some governing from us, but we've decided not to do that, because we've decided that the money we've spent has taken us past the Debt Limit. So we're gonna stop now." They're jerking you around. The rules of fiat money that they're using don't work that way. In fact, Richard Nixon took the U.S. into a full fiat money system so he could keep governing without having to worry about running out of money to do it with.

PKMKII , January 23, 2017 at 9:18 am

International monetary agreements such the Eurozone's Maastricht Treaty may impose artificial limits on fiscal spending, but these are, MMT argues, political constraints. They are not economically inevitable and can immediately be dissolved.

So no, not limitless. Rather, the limitations are political ones, not economic. As long as the sovereignty of the currency is not in threat, the money supply can be increased.

vlade , January 23, 2017 at 5:28 am

The author is making some assumptions, and then goes and takes them apart. It's possilble (I didn't read the article he refers to), that the assumptions he responds to directly are made by the article, but that doesn't make them universal assumptions about UBI.

UBI is not a single exact prescription – and in the same way, JG is not a single exact prescription. The devil, in both cases, is in details. In fact, there is not reason why JG and UBI should be mutually exclusive as a number of people are trying to tell us.

and if we talk about governance – well, the super-strong governance that JG requires to function properly is my reason why I'd prefer a strong UBI to most JG.

Now and then we get a failed UBI example study – I'm not going to look at that. But the socialist regimes of late 20th century are a prime example of failed JG. Unlike most visitor or writers here, I had the "privilege" to experience them first hand, and thanks but no thanks. Under the socialist regimes you had to have a job (IIRC, the consitutions stated you had "duty" to work). But that become an instrument of control. What job you could have was pretty tightly controlled. Or, even worse, you could be refused any job, which pretty much automatically sent you to prison as "not working parasite".

I don't expect that most people who support JG have anything even remotely similar in mind, but the governance problems still stay. That is, who decides what jobs should be created? Who decides who should get what job, especially if not all jobs are equal (and I don't mean just equal pay)? Can you be firedt from your JG job if you go there just to collect your salary? (The joke in the socialist block was "the government pretends to pay us, we pretend to work"). Etc. etc.

All of the above would have to be decided by people, and if we should know something, then we should know that any system run by people will be, sooner or later, corrupted. The more complex it is, the easier it is to corrupt it.

Which is why I support (meaningfull, meaning you can actually live on it, not just barely survive) Basic Income over JG. The question for me is more whether we can actually afford a meaningful one, because getting a "bare survival one" does more damage than good.

PKMKII , January 23, 2017 at 9:27 am

That's why any JG would have to be filtered through local governments or, more ideally, non-profit community organizations, and not a centralized government. New York City's Summer Youth Employment Program offers a good model for this. Block grants of money are delivered to a wide range of community organizations, thus ensuring no one group has a monopoly, and then individual businesses, other community groups, schools, non-profits, etc., apply to the community organizations for an "employee" who works for them, but the payment actually comes from the block grant. The government serves as the deliverer of funds, and provides regulatory oversight to make sure no abuses are taking place, but does not pick and choose the jobs/employers themselves.

Praedor , January 23, 2017 at 5:42 am

I don't see it as either/or. Provide a UBI and a job guarantee. The job would pay over and above the UBI bit, if for some reason, you don't want to work or cannot, you still have your Universal BASIC Income as the floor through which you cannot fall.

Private employers will have to offer better conditions and pay to convince people getting UBI to work for them. They wouldn't be able to mistreat workers because they could simply bolt because they will not fall into poverty if they quit. The dirtbags needing workers won't be able to overpay themselves at the expense of workers because they feel completely free to leave if you are a self worshipping douche.

Dblwmy , January 23, 2017 at 11:03 am

It seems that over time the "floor through which you cannot fall" becomes just that, the floor, as the effect of a UBI becomes the universal value, well floor.

jerry , January 23, 2017 at 11:12 am

Was going to be my response as well, why such absolute yes or no thinking? The benefit of the UBI is that is recognizes that we have been increasing productivity for oh the last couple millenia for a REASON! To have more leisure time! Giving everyone the opportunity to work more and slave away isn't much of a consolation. We basically have a jobs guarantee/floor right now, its called McDonalds, and no one wants it.

Labor needs a TON of leverage, to get us back to a reasonable Scandinavian/Aussie standard of living. Much more time off, much better benefits, higher wages in general. UBI provides this, it says screw you employers unless you are willing to offer reasonable conditions we are going to stay home.

Anti-Schmoo , January 23, 2017 at 6:02 am

Why the Job Guarantee versus Universal Basic Income is not about work, BUT ABOUT GOVERNANCE!
Yep, agree 100%.
We live in a capitalist society which is dependent on a (wage) slave population.
UBI? Are you mad?
I for one am mad, give me UBI!
Time to end the insanity of U.S. capitalism

Mrs Smith , January 23, 2017 at 6:08 am

I'm curious to know if either of these systems work if there is no guarantee of "free" access to healthcare through single-payer or a national insurance? I'm only marginally informed about UBI or MMT, and haven't found adequate information regarding either as to how healthcare is addressed. It seems clear that neither could work in the US, specifically for the reason that any UBI would have to be high enough to pay insane insurance premiums, and cover catastrophic illnesses without pushing someone into bankruptcy.

Can anyone clarify, or point me in the direction of useful information on this?

financial matters , January 23, 2017 at 6:35 am

I think they're basically separate issues although MMT provides a way of thinking that federal single payer is possible.

MMT is basically anti-austerity and in favor of 'smart' deficits ie not deficits for no reason but deficits that can improve the economy and the overall social structure such as single payer, affordable education, job guarantee program.

Stephanie Kelton has commented that MMT has no real problem with a UBI if it is done in conjunction with a good job guarantee program. She is well aware of the dangers of a UBI if it eliminates most other social programs.

I think that a job guarantee at a living wage would provide a much better standard for private employment than a UBI which could just work as a supplement allowing private industry to pay lower wages. As a supplement to a job guarantee a UBI could help address issues such as payment for reproductive type work.

UserFriendly , January 23, 2017 at 7:02 am

There are different flavors of UBI, most don't mention healthcare at all. Milton Friedman's UBI flavor prefers that it replace all government spending on social welfare to reduce the government's overall burden. MMT says there is no sense in not having single payer.

Stephanie , January 23, 2017 at 7:06 am

My thought on the last thread of this nature is that if UBI were ever enacted in the U.S., healthcare access would become restricted to those with jobs (and the self-employeed with enough spare income to pay for it). You don't have to be healthy to collect a subsistence payment from to the government.

HotFlash , January 23, 2017 at 11:18 am

Here in Canada we have universal healthcare, as well as a basic income guarantee for low income families with children and seniors. There is a movement to extend that as well, details of one plan here .

In theory, I think it could be possible for the JG to build and staff hospitals and clinics on a non-profit basis or at least price-controlled basis, if so directed (*huge* question, of course - by what agency? govt? local councils?). Ditto housing, schools, infrastructure, all kinds of socially useful and pleasant stuff. However, the way the US tends to do things, I would expect instead that a BIG or a JG would, as others have pointed out, simply enable employers to pay less, and furthermore, subsidize the consumption of overpriced goods and services. IOW, a repeat of the ACA, just a pump to get more $$ to the top.

The problem is not the money, but that the Americans govern themselves so poorly. No idea what the cure could be for that.

Praedor , January 23, 2017 at 12:28 pm

Fixing worker pay is actually VERY easy. It's purely a political issue. You tie corporate taxes to worker compensation. More specifically, you set the maximum compensation for CEOs at NO MORE than (say) 50x average worker pay in their corporation (INCLUDING temps AND off-shored workers IN US DOLLARS no passing the buck to Temp Agencies or claiming that $10/day in hellhole country x is equivalent to $50k in the US. NO, it is $10/day or $3650/yr, period). At 50x, corporate taxation is at the minimum (say something like 17%). The corporation is free to pay their top exec more than 50x but doing so will increase the corporate tax to 25%. You could make it step-wise: 51-60x average worker pay = 25% corporate tax, 61-80x = 33% corporate tax, etc.

It is time to recognize that CEO pay is NOT natural or earned at stratospheric levels. THE best economic times in the US were between the 50s to early 70s when top tax rates were much higher AND the average CEO took home maybe 30x their average worker pay. We CAN go back to something like that with policy. Also, REQUIRE that labor have reps on the Board of Directors, change the rules of incorporation so it is NOT mainly focused on "maximizing profit or shareholder value". It must include returning a social good to the local communities within which corporations reside. Profits and maximizing shareholder value must be last (after also minimizing social/environmental harm). Violate the rules and you lose your corporate charter.

There is no right to be a corporation. Incorporation is a privilege that is extended by government. The Founders barred any corporate interference in politics, and if a corporation broke the law, it lost its charter and the corporate officers were directly held responsible for THEIR actions. Corporations don't do anything, people in charge of corporations make the decisions and carry out the actions so NO MORE LLCs. If you kill people due to lax environmental protections or worker safety, etc, then the corporate officers are DIRECTLY and personally responsible for it. THEY made it happen, not some ethereal "corporation".

BeliTsari , January 23, 2017 at 6:32 am

Durned hippys imagine an IRON boot stamping on a once human face – forever. OK, now everybody back to the BIG house. Massa wanna reed yew sum Bible verses. We're going to be slaves to the machines, ya big silly!

PlutoniumKun , January 23, 2017 at 7:09 am

I'm sceptical whether a guaranteed job policy would actually work in reality. There are plenty of historical precedents – for example, during the Irish potato famine because of an ideological resistence to providing direct aid, there were many 'make work' schemes. You can still see the results all along the west coast of Ireland – little harbours that nobody has ever used, massive drainage schemes for tiny amounts of land, roads to nowhere. It certainly helped many families survive, but it also meant that those incapacitated by starvation died as they couldn't work. It was no panacea.

There are numerous practical issues with make work schemes. Do you create a sort of 2-layer public service – with one level permanent jobs, the other a variety of 'temporary' jobs according to need? And if so, how do you deal with issues like:

1. The person on a make work scheme who doesn't bother turning up till 11 am and goes home at 2.

2. Regional imbalances where propering region 1 is desperately short of workers while neighbouring region 2 has thousands of surplus people sweeping streets and planting trees.

3. What effect will this have on business and artistic innovation? Countries with strong welfare systems such as Sweden also tend to have a very high number of start ups because people can quit their jobs and devote themselves to a couple of years to develop that business idea they always had, or to start a band, or try to make a name as a painter.

4. How do you manage the transition from 'make-work' to permanent jobs when the economy is on the up, but people decide they prefer working in their local area sweeping the street?

I can see just as many practical problems with a job guarantee as with universal income. Neither solution is perfect – in reality, some sort of mix would be the only way I think it could be done effectively.

Torsten , January 23, 2017 at 7:33 am

Yes. Not either/or but both/and.

To provide some context for passers-by, this seemingly too-heated debate is occurring in the context of the upcoming Podemos policy meeting in Spain, Feb 10-12.. Podemos seems to have been unaware of MMT, and has subscribed to sovereign-economy-as-household policies. Ferguson, along with elements of the modern left, has been trying to win Podemos over to MMT-based policies like a Jobs Guarantee rather than the Basic Income scheme they have heretofore adopted rather uncritically.

(Of course Spain is far from "sovereign", but that's another matter :-(

aj , January 23, 2017 at 7:48 am

1) Fire them
2) Prospering region 1 isn't "short on workers" they just all have private jobs.
3) What a good argument to also have single payer healthcare and some sort of BIG as well as the JG
4) private companies must offer a better compensation package. One of the benefits of the JG is that it essentially sets the minimum wage.

Murph , January 23, 2017 at 9:08 am

Yeah, those are pretty good answers right off the bat. (Obviously I guess for #1 they can reapply in six months or something.)

Plutonium- I feel like true progress is trading shitty problems for less shitty ones. I can't see any of the major proponents like Kelton, Wray or Mitchell ever suggesting that the JG won't come with it's own new sets of challenges. On the overly optimistic side though: you could look at that as just necessitating more meaningful JG jobs addressing those issues.

aj , January 23, 2017 at 11:17 am

I was writing that on my phone this morning. Didn't have time to go into great detail. Still, I wanted to point out that just because there will be additional complexities with a JG, doesn't mean there aren't reasonable answers.

PlutoniumKun , January 23, 2017 at 10:42 am

1. If you fire them its not a jobs guarantee. Many people have psychological/social issues which make them unsuitable for regular hours jobs. If you don't have a universal basic income, and you don't have an absolute jobs guarantee, then you condemn them and their families to poverty.

2. The area is 'short on workers' if it is relying on a surplus public employee base for doing things like keeping the streets clean and helping out in old folks homes. It is implicit in the use of government as a source of jobs of last resort that if there is no spare labour, then you will have nobody to do all the non-basic works and you will have no justification for additional infrastructure spend.

3. You miss the point. A basic income allows people time and freedom to be creative if they choose. When the Conservatives in the early 1990's in the UK restricted social welfare to under 25's, Noel Gallagher of Oasis predicted that it would destroy working class rock n roll, and leave the future only to music made by rich kids. He was proven right, which is why we have to listen to Coldplay every time we switch on the radio.

4. This ignores the reality that jobs are never spread evenly across regions. One of the biggest problems in the US labour market is that the unemployed often just can't afford to move to where the jobs are available. A guaranteed job scheme organised on local govenment basis doesn't address this, if anything it can exacerbate the problem. And the simplest and easiest way to have a minimum wage is to have a minimum wage.

aj , January 23, 2017 at 11:39 am

1) Kelton always talks about a JG being for people "willing and able to work." If you are not willing I don't really have much sympathy for you. If you are not able due to psychological factors or disability, then we can talk about how you get on welfare or the BIG/UBI. The JG can't work in a vacuum. It can't be the only social program.

2) Seems unrealistic. You are just searching to find something wrong. If there is zero public employment, that means private employment is meeting all labor demands.

3) I have no idea what you are going on about. I'm in a band. I also have a full-time job. I go see local music acts all the time. There are a few that play music and don't work because they have rich parents, but that's the minority. Most artists I know manage to make art despite working full time. I give zero shits what corporate rock is these days. If you don't like what's on the radio turn it off. There are thousands of bands you've never heard of. Go find them.

4) Again, you are just searching for What-If reasons to crap on the JG. You try to keep the jobs local. Or you figure out free transportation. There are these large vehicles called busses which can transport many people at once.

Yes these are all valid logistical problems to solve, but you present them like there are no possible solutions. I can come up with several in less than 5 minutes.

oho , January 23, 2017 at 8:04 am

For a more practical first step--how about getting rid of/slashing regressive and non-federal income tax deductible sales taxes? shifting that tax burden to where income growth has been.

Democratic Party-run states/cities are the biggest offenders when it comes to high sales taxes.

universal basic income in the West + de facto open borders won't work. just making a reasonable hypothesis.

Dita , January 23, 2017 at 8:06 am

Make-work will set you free?

voteforno6 , January 23, 2017 at 8:32 am

There might be a psychological benefit to a jobs guarantee vs. UBI. There are a lot of people that would much rather "earn" their income rather than directly receiving it.

BeliTsari , January 23, 2017 at 8:46 am

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( ) ephedrine, pseudoephedrine, fast car

Norb , January 23, 2017 at 9:15 am

A JG would begin to rebuild the trust and cooperation needed to have a society based on justice instead of might makes right. Human life is based on obligations- we are all responsible to one another for the social system to work. The problem is always about how to deal with cheaters and shirkers. This problem is best solved by peer pressure and shaming- along with a properly functioning legal system.

I get a kick out of the "make work" argument against a JG. With planned obsolescence as the foundation of our economic system, it's just a more sophisticated way of digging holes and filling them in again. Bring on robotic automation, and the capitalist utopia is reached. Soul crushing, pointless labor can be sidelined and replaced with an unthinking and unfeeling machine in order to generate profits. The one problem is people have no money to buy the cheep products. To solve that dilemma, use the sovereign governments power to provide spending credits in the form of a UBI. Capitalism is saved from is own contradictions- the can is kicked farther down the road.

The obligations we have to one another must be defined before any system organization can take place. Right now, the elite are trying to have their cake and eat it too.

jerry , January 23, 2017 at 11:23 am

Well said!

Jamie , January 23, 2017 at 9:25 am

I agree with those who see a need for both programs. I think the critique of UBI here is a good one, that raises many valid points. But I have trouble with a portion of it. For instance:

by eliminating forced unemployment, it would eradicate systemic poverty

treats 'poverty' as an absolute when it is a relative. No matter what programs are in place, there will always be a bottom tier in our hierarchical society and those who constitute it will always be 'impoverished' compared to those in higher tiers. This is the nature of the beast. Which is why I prefer to talk about subsistence level income and degrees above subsistence. The cost of living may not be absolutely fixed over time, but it seems to me to be more meaningful and stable than the term 'poverty'. On the other hand, in a rent seeking economy, giving people an income will not lift them out of poverty because rents will simply be adjusted to meet the rise in resources. So UBI without rent control is meaningless.

Another point is that swapping forced unemployment for forced employment seems to me to avoid some core issues surrounding how society provides for all its members. Proponents of the JG are always careful to stress that no one is forced to work under the JG. They say things like, "jobs for everyone who wants one". But this fails to address the element of coercion that underlies the system. If one has no means to provide for oneself (i.e. we are no longer a frontier with boundless land that anyone can have for cheap upon which they may strike out and choose the amount of labor they contribute to procure the quality of life they prefer-if ever was such the case), then jobs for "everyone who wants one" is simply disingenuous. There is a critical "needs" versus "wants" discussion that doesn't generally come up when discussing JG. It's in there, of course, but it is postponed until the idea is accepted to the point where setting an actual wage becomes an issue. But even then, the wage set will bear on the needs versus wants of the employed, but leaves out those foolish enough to not "want" a job. Whereas, in discussing UBI, that discussion is front and center (since even before accepting the proposal people will ask, how much?, and proper reasons must be given to support a particular amount-which again brings us to discussing subsistence and degrees above it-the discussion of subsistence or better is "baked in" to the discussion about UBI in a way that it is not when discussing the JG).

PKMKII , January 23, 2017 at 9:44 am

While UBI interests me as a possible route to a non-"means of production"-based economy, the problem I see with it is that it could easily reduce the populace to living to consume. Given enough funds to provide for the basics of living, but not enough to make any gains within society, or affect change. It's growth for growth's sake, not as to serve society. Something is needed to make sure people aren't just provided for, but have the ability to shape the direction of their society and communities.

Teacup , January 23, 2017 at 9:48 am

Where I work @3/4 of the staff already receives social security and yet it is not enough seems to me human satisfaction is boundless and providing a relative minimum paper floor for everyone is just. Yet the way our market is set up, this paper floor would be gobbled back up by the rentier class anyway. So unless there is a miraculous change in our economic rent capture policies, we are screwed

So yes, just describe to people precisely what it is – a 'paper' floor not something that has firm footing yet acknowledges inequities inherent in our current currency distribution methods. And of course couple this with a jobs guarantee. I have met way too many people in my life that 'fall through the cracks' .

Portia , January 23, 2017 at 10:24 am

why is no one bemoaning the rabid over-consumption of the complainers who suck up much more than they will ever need, hoarding and complaining about people who do not have enough? the real problem is rampant out of control parasites

Teacup , January 23, 2017 at 12:04 pm

Must be a capital gains 'earner' . and a professional projectionist

Portia , January 23, 2017 at 12:19 pm

both ends see the other as a parasite

Ignacio , January 23, 2017 at 11:21 am

But Ferguson should also adknowledge that Livingston has some points.

Why on earth we politically put limits to, for instance, public earning-spending while do not put any limit to the net amount that one person can earn, spend and own?

Upward redistribution is what occurs in the neoliberal framework. UBI is distribution. Bear in mind that even in the best employment conditions, not everybody can earn a salary. 100% employment is unrealistic.

LT , January 23, 2017 at 11:58 am

The people marketing UBI and MMT have hundreds of years of attempted social engineereing to overcome. I referring to the " why people want what they want and why do they believe what they believe." Why?

The only suggestion I have is that, since everybody has a different relationship to the concept of work, the populations involved need to be smaller. Not necessarily fewer people, but more regions or nation states that are actually allowed to try their ideas without being attacked by any existing "empire" or "wanna be empire" via sanctions or militarily.
It is going to take many differerent regions, operating a variety of economic systems (not the globalized private banking extraction method pushed down every one's throat whether they like it or not) that people can gravitate in and out of freely.
People would have the choice to settle in the region that has rules and regulations that work most for their lives and belief systems (which can change over time).

Looking at it from the perspective that there can be only one system that 300 million plus people (like the USA) or the world must be under is the MAIN problem of social engineering. There needs to be space carved out for these many experiments.

schultzzz , January 23, 2017 at 12:05 pm

First, congratulations to everyone who managed to read this all the way through. IMO both this (and the guy he's responding to), seem like someone making fun of academic writing. Perhaps with the aid of a program that spits out random long words.

FWIW, when I lived in Japan, they had a HUGE, construction-based make-work program there, and it was the worst of both worlds: hard physical labor which even the laborers knew served no purpose, PLUS constant street obstruction/noise for the people in the neighborhoods of these make-work projects. Not to mention entire beautiful mountains literally concreted over in the name of 'jawbs'.

Different thought: I'm not sold on UBI either, but wouldn't it mess up the prostitution/sex trafficking game, almost as a side effect? Has anyone heard UBI fans promote it on that basis?

Ben , January 23, 2017 at 12:31 pm

The sound and fury of disagreement is drowning out what both authors agree on: guaranteed material standards of living and reduced working time. If that's the true goal, we should say so explicitly and hammer out the details of the best way to attain it.

MIB , January 23, 2017 at 1:12 pm

Interesting read society has become so corrupt at every level from personal up through municipal, regional and federal governments that it cant even identify the problem, let alone a solution

all forms of government and their corresponding programs will fail until that government is free from the monetary influences of individuals / corporations and military establishments, whether it be from donations to a political establishment or kick backs to politicians and legislators or government spending directed to buddies and cohorts

I don't pretend to understand the arguments at the level to which they are written, but at the basic level of true governance it must but open and honest, this would allow the economy to function and be evaluated, and then at that point we could offer up some ideas on how to enhance areas as needed or scale back areas that were out of control or not adding value to society as a whole

We stand at a place that has hundreds of years of built in corruption into the model, capable so far of funneling money to the top regardless of the program implemented by the left or the right sides of society

first step is to remove all corruption and influence from governance at every level until then all the toils toward improvement are pointless as no person has witnessed a "free market " in a couple hundred years, all economic policy has been slanted by influence and corruption

we can not fix it until we actually observe it working, and it will never work until it is free of bias / influence

no idea how we get there . our justice system is the first step in repairing any society

[Jan 23, 2017] When there is no viable alternative to neoliberalism, nationalism is the only game in town for the opposition forces

Notable quotes:
"... Trump may be a Nationalist, but he is also an anti-regulatory elite with no regard for business ethics or accountability to the community. He is also for "greedy take all" and against fair distribution of profits in the economy. ..."
"... The key point here is that as long as there is no viable alternative to neoliberalism, nationalism is the only game in town for the opposition forces. That's why trade union members now abandoned neoliberal (aka Clintonized ) Democratic Party. ..."
"... Traditionally, Neoliberalism espouses privatization, fiscal austerity, deregulation, free trade and reduction in government spending. ..."
"... One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings. Democracy becomes reinterpreted as the market, and politics succumbs to neoliberal economic theory, so we are speaking of the end of democratic politics as we have known it for two and a half centuries. ..."
"... As the market becomes an abstraction, so does democracy, but the real playing field is somewhere else, in the realm of actual economic exchange-which is not, however, the market. We may say that all exchange takes place on the neoliberal surface. ..."
"... Neoliberalism is often described-and this creates a lot of confusion-as "market fundamentalism," and while this may be true for neoliberal's self-promotion and self-presentation, i.e., the market as the ultimate and only myth, as were the gods of the past, I would argue that in neoliberalism there is no such thing as the market as we have understood it from previous ideologies. ..."
"... it seeks to leave no space for individual self-conception in the way that classical liberalism, and even communism and fascism to some degree, were willing to allow. ..."
"... I am suggesting that the issue is not how strong the state is in the service of neoliberalism, but whether there is anything left over beyond the new definition of the state. Another way to say it is that the state has become the market, the market has become the state, and therefore both have ceased to exist in the form we have classically understood them. ..."
Jan 23, 2017 | economistsview.typepad.com
reason , January 23, 2017 at 01:03 AM

Worth reading - perhaps controversial but unfortunately there is an element of truth in what he writes.

https://www.theguardian.com/commentisfree/2017/jan/22/trumps-nationalism-response-not-globalization

RC AKA Darryl, Ron -> reason , January 23, 2017 at 04:05 AM

I will go with worth reading. I don't think that is controversial at all and there is way more than an element of truth in it. But knowing is one thing and organizing politically in a manner sufficient to bring about change is entirely another.
jonny bakho -> reason, January 23, 2017 at 05:30 AM
They are correct. We need an alternative to Nationalism and Trump.

They are not correct about mysterious elites controlling things.

The elites pursued anti-regulatory policies that allowed them to reap short term profits without regard for stability or sustainability. It is not government control but lack of regulation that allowed BIgF to run wild and unaccountable.

Trump may be a Nationalist, but he is also an anti-regulatory elite with no regard for business ethics or accountability to the community. He is also for "greedy take all" and against fair distribution of profits in the economy.

The plant closures are headlined and promote the mistaken belief that globalization is the prime cause of job loss. These large closures are only 1/10th of the job losses and dislocations due to automation and transformation from manufacturing to service economies. Wealthy elites are allowed to greedily hoard all the profits from automation and not enough is being invested in the service economy. Austerity is not a policy to control the masses, it is a policy to protect the wealth accumulated by elites from fair distribution.

Trump is not going to bring manufacturing plants back to American rural backwaters. Those left behind must build their own service economy or relocate to a sustainable region that is making the transition.

libezkova -> jonny bakho, January 23, 2017 at 09:40 AM
Jonny,

The key point here is that as long as there is no viable alternative to neoliberalism, nationalism is the only game in town for the opposition forces. That's why trade union members now abandoned neoliberal (aka Clintonized ) Democratic Party.

All Western societies now, not only the USA, experience nationalist movements Renaissance. And that's probably why Hillary lost as she represented "kick the can down the road" neoliberal globalization agenda.

An important point also is that nationalism itself is not monolithic. There are at least two different types of nationalism in the West now:

As for your statement

"Trump may be a Nationalist, but he is also an anti-regulatory elite with no regard for business ethics or accountability to the community. He is also for "greedy take all" and against fair distribution of profits in the economy."

This might be true, but might be not. It is not clear what Trump actually represents. Let's give him the benefit of doubt and wait 100 days before jumping to conclusions.

jonny bakho -> libezkova, January 23, 2017 at 11:38 AM
Stop spreading Fake News.

Traditionally, Neoliberalism espouses privatization, fiscal austerity, deregulation, free trade and reduction in government spending.

What exactly did Clinton want to privatize? What budget did she propose slashing? Did she want to deregulate banks or environmental regulations?
She supported some trade liberalization, but also imposing sanctions. What government spending did she want to reduce?

Fact: She supported the opposite of most of these policies.

Donald Trump promised to pursue all of these Neoliberal policies. The GOP and their propaganda megaphone is very good at tarring the opposition as supporting the very policies they are enacting. They made Al Gore into a liar, John Kerry into a coward with a purple band aid and Hillary into a Wall Street shill. None of this is true. But Trump and his GOP are doing all the things you accuse Democrats of doing.

ilsm -> jonny bakho , January 23, 2017 at 04:24 PM
Neither Reagan nor Thatcher could meet your narrow ideal neolib

Clinton is more neocon, in thrall of Wall St and War Street. Follower of Kagan wife since Bill did Bosnia.

Of course Clintons have no convictions. Neocon neolib mix them and you get the Wall St progressives. Pick and choose labels and definitions.

libezkova -> jonny bakho January 23, 2017 at 04:55 PM
You are wrong. Your definition of neoliberalism is formally right and we can argue along those lines that Hillary is a neoliberal too (Her track record as a senator suggests exactly that), it is way too narrow. There is more to it:

"One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings." (see below)

"Another way to say it is that the state has become the market, the market has become the state, and therefore both have ceased to exist in the form we have classically understood them."

"In the current election campaign, Hillary Clinton has been the most perfect embodiment of neoliberalism among all the candidates, she is almost its all-time ideal avatar, and I believe this explains, even if not articulated this way, the widespread discomfort among the populace toward her ascendancy. People can perceive that her ideology is founded on a conception of human beings striving relentlessly to become human capital (as her opening campaign commercial so overtly depicted), which means that those who fail to come within the purview of neoliberalism should be rigorously ostracized, punished, and excluded.

This is the dark side of neoliberalism's ideological arm (a multiculturalism founded on human beings as capital), which is why this project has become increasingly associated with suppression of free speech and intolerance of those who refuse to go along with the kind of identity politics neoliberalism promotes.

And this explains why the 1990s saw the simultaneous and absolutely parallel rise, under the Clintons, of both neoliberal globalization and various regimes of neoliberal disciplining, such as the shaming and exclusion of former welfare recipients (every able-bodied person should be able to find work, therefore under TANF welfare was converted to a performance management system designed to enroll everyone in the workforce, even if it meant below-subsistence wages or the loss of parental responsibilities, all of it couched in the jargon of marketplace incentives)."

In this sense Hillary Clinton is 100% dyed-in-the-wool neoliberal and neocon ("neoliberal with the gun"). She promotes so called "neoliberal rationality" a perverted "market-based" rationality typical for neoliberalism:

See http://economistsview.typepad.com/economistsview/2017/01/links-for-01-23-17.html#comment-6a00d83451b33869e201bb09706856970d

== quote ==
When Hillary Clinton frequently retorts-in response to demands for reregulation of finance, for instance-that we have to abide by "the rule of law," this reflects a particular understanding of the law, the law as embodying the sense of the market, the law after it has undergone a revolution of reinterpretation in purely economic terms.

In this revolution of the law persons have no status compared to corporations, nation-states are on their way out, and everything in turn dissolves before the abstraction called the market.

One way to sum up neoliberalism is to say that everything-everything-is to be made over in the image of the market, including the state, civil society, and of course human beings. Democracy becomes reinterpreted as the market, and politics succumbs to neoliberal economic theory, so we are speaking of the end of democratic politics as we have known it for two and a half centuries.

As the market becomes an abstraction, so does democracy, but the real playing field is somewhere else, in the realm of actual economic exchange-which is not, however, the market. We may say that all exchange takes place on the neoliberal surface.

Neoliberalism is often described-and this creates a lot of confusion-as "market fundamentalism," and while this may be true for neoliberal's self-promotion and self-presentation, i.e., the market as the ultimate and only myth, as were the gods of the past, I would argue that in neoliberalism there is no such thing as the market as we have understood it from previous ideologies.

The neoliberal state-actually, to utter the word state seems insufficient here, I would claim that a new entity is being created, which is not the state as we have known it, but an existence that incorporates potentially all the states in the world and is something that exceeds their sum-is all-powerful, it seeks to leave no space for individual self-conception in the way that classical liberalism, and even communism and fascism to some degree, were willing to allow.

There are competing understandings of neoliberal globalization, when it comes to the question of whether the state is strong or weak compared to the primary agent of globalization, i.e., the corporation, but I am taking this logic further, I am suggesting that the issue is not how strong the state is in the service of neoliberalism, but whether there is anything left over beyond the new definition of the state. Another way to say it is that the state has become the market, the market has become the state, and therefore both have ceased to exist in the form we have classically understood them.

Of course the word hasn't gotten around to the people yet, hence all the confusion about whether Hillary Clinton is more neoliberal than Barack Obama, or whether Donald Trump will be less neoliberal than Hillary Clinton.

The project of neoliberalism-i.e., the redefinition of the state, the institutions of society, and the self-has come so far along that neoliberalism is almost beyond the need of individual entities to make or break its case. Its penetration has gone too deep, and none of the democratic figureheads that come forward can fundamentally question its efficacy.

[Jan 23, 2017] Students who took notes on laptops performed worse on conceptual questions than students who took notes longhand.

Jan 23, 2017 | www.nakedcapitalism.com
L , January 23, 2017 at 2:29 pm

"Other findings show that pen and paper have an edge over the keyboard. Research by Princeton University and the University of California at Los Angeles, published in 2014, showed that the pen is indeed mightier than the keyboard. In three studies, researchers found that students who took notes on laptops performed worse on conceptual questions than students who took notes longhand. Those who took written notes had a better understanding of the material and remembered more of it because they had to mentally process information rather than type it verbatim" [BBC]. Wait. Computers make you stupid?

Not surprising. The basic upshot is that computers encourage distraction and even when that is controlled for they encourage people to type down what they hear (i.e. transcribing) and not to encode, or distill it down to the important concepts. This latter is important because it means you are listening at a deeper level and thinking about what you are getting and are thus more likely to recall and use the knowledge later.

[Jan 23, 2017] In debt and afraid: dealing with debt collectors

Notable quotes:
"... The CFPB says debt collection is a multi-billion dollar industry affecting 70 million consumers. People are most often contacted about medical and credit card debt. And more consumers complain to the CFPB about debt collection than any other financial product or service. ..."
"... Debt collectors can contact you by phone, letter, email or text message, as long as they follow the rules and disclose that they are debt collectors. It's against the law for a debt collector to pretend to be someone else to harass, threaten or deceive you. ..."
"... Collectors cannot lie to collect a debt, by falsely representing themselves or the amount you owe. And other than trying to obtain information about you, such as a telephone number or whereabouts, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney. ..."
"... Also when you pay them off keep the document marked paid in full or zero balance or whatever else the send you on file including your financial proof (canceled check, money order, credit card receipt) keep it until you die! ..."
"... Debt industry buys billions of dollars of dead debt. 90% does end up as default judgement because scared debtors do not have the money to hire a attorney or do not know what to do. The other 10% of debtors who hire attorneys are off the hook. ..."
"... Consumer debts are self inflicted foolishness, medical debts aren't, but just goes to show the Empire is ran by business interests who refuse to allow any type of universal medical and have installed a system that allows them profits for illness and death ..."
Jan 23, 2017 | finance.yahoo.com
Sarah Skidmore Sell, AP Personal Finance Writer

It's a scary place to be - in debt and afraid.

A new Consumer Financial Protection Bureau report found that more than one in four consumers felt threatened when contacted by debt collectors. The first-ever national survey of consumer experiences with debt collectors found consumers often faced calls that came too often, at odd hours and contained warnings of jail time and other threats. Some were contacted for debts they didn't owe. And many said when they asked the collector to stop contacting them, the request was ignored.

CFPB Director Rich Cordray said the report casts a "troubling light" on the industry, and that the bureau is working to stop abuses. But what are your rights when facing off with a debt collector?

A few things to know:

YOU ARE NOT ALONE

The CFPB says debt collection is a multi-billion dollar industry affecting 70 million consumers. People are most often contacted about medical and credit card debt. And more consumers complain to the CFPB about debt collection than any other financial product or service.

The Federal Trade Commission, which enforces the Fair Debt Collection Practices Act, also said debt collectors generate more complaints to its offices than any other industry. While many debt collectors are careful to comply with consumer protection laws, some engage in illegal practices.

YOU ARE PROTECTED

The Fair Debt Collection Practices Act provides protection for those being pursued for personal debts, such as money owed on a credit card account, an auto loan or a mortgage. It doesn't cover debts incurred to run a business.

YOU HAVE RIGHTS

Debt collectors can contact you by phone, letter, email or text message, as long as they follow the rules and disclose that they are debt collectors. It's against the law for a debt collector to pretend to be someone else to harass, threaten or deceive you.

They may not contact you at inconvenient times or places, such as early in the morning or late at night. And they may not contact you at work if they're told not to.

Debt collectors may not harass, oppress, or abuse you, according to the FTC. That includes threats of violence or using obscene language. Federal law also limits the number of calls a debt collector can place.

Collectors cannot lie to collect a debt, by falsely representing themselves or the amount you owe. And other than trying to obtain information about you, such as a telephone number or whereabouts, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

YOU CAN TAKE ACTION

Report any problems you have with a debt collector to your state Attorney General's office, the Federal Trade Commission and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that vary from federal law, so contact your attorney general's office for help.

Gary G

They are debt collectors the lowest form of bottom feeding #$%$ on the planet.step one, NEVER tell them any personal information whatsoever.step two, get a phone number and case number so you can call them back.step three call them from a phone that can record the conversation (theres an app for that)step three, call them when you are really ready to talk to them Inform them the call is being recorded. let them know clearly what forms of contact are and are not acceptable.step four, get the pertinent information about the debt including the debtor any account numbers and any settlement offers they have. Still NEVER give away any personal information. once you have all the information you need end the call, if at any time during the call you feel you are being harassed or intimidated inform them it is not acceptable (remember you are recording the conversation) and terminate the call. call back later.Now you are in control and can make informed decisions.If at some point you want/need to work out a settlement NEVER finalize anything on the phone, GET IT IN WRITING. NEVER, agree to give them your credit card or banking information under any circumstances!!!once you make an arrangement keep the printed document with the arrangement on file for the rest of your life.

Also when you pay them off keep the document marked paid in full or zero balance or whatever else the send you on file including your financial proof (canceled check, money order, credit card receipt) keep it until you die!

steven

Based on personal experience, the worst debt collectors are of the medical variety. Two years of a fatal ovarian cancer case overwhelmed not only my finances, but jeopardized my mental health as well. The only thing that kept me going was the necessity of showing up for work, and the support of coworkers and (may I say this?) my managers as well.

Mark

Consumer Financial Protection Bureau will be gutted under the GOP agenda. So the next time some cable company, Wall Street bank, or some other huge corporation screws you over, you'll have no recourse and you'll be on your own.

pfk

I find tgheses stories and the ads on TV (If you owe $1000 to IRS..., If you have more than $5,00 credit card debt, Reduce $50,00 debt to $5000..., etc) to e morally contemptible. If you cannot afford something do not buy it; if you have a job, pay your IRS taxes, etc. I'm tired paying extra for everything I buy or do for these people who spend and expect someone else (me) to pay.

a

hogwash! To scare off a junk debt buyer attorney all you need to do is make one call to your attorney. Many of you collectors "start fake lawsuits" to coerce debtors to pay. With no filing numbers, court stamps, etc... Once the debtor's attorney files a 'notice of appearance' and asks for a real lawsuit/trial, what happens? The creditor never files the lawsuit. Why? Because the junk debt buyer has to PROVE IT. The JDB creditor has no original contract signed to prove the debt exists, no chain of assignment/invoice to show they have standing to sue (own the debt) nor the account statements to verify what is owed. They are hoping at best for default judgements.

Debt industry buys billions of dollars of dead debt. 90% does end up as default judgement because scared debtors do not have the money to hire a attorney or do not know what to do. The other 10% of debtors who hire attorneys are off the hook. You see Junk Debt Buyers buy debt with no contract signed by debtors, have no invoice they even own this particular debt in detail and no account statements to verify correct amount owed.

So debtors, beware, pay the few hundred dollars to your attorney to ask for a lawsuit and notice of appearance and see how fast that debt collector disappears. 99% of junk debt buyers/creditors buy unwarranted debt and CAN NOT PROVE IT IN COURT. There is a disclaimer on the debt stating there is no contract, invoice that it is sold nor account statements offered.

Just sue these junk debt buyers and they go away. If they sell the debt to another JDB again sue again and they drop the debt again. Resold debt has even less chance of winning in court because even less proof is available every time it is sold.

But DO NOT AVOID the fake lawsuit. If you do the creditor gets the default judgement and will garnish wages, lien your house, and will win. Now if the original creditor files the lawsuit you will most likely lose and owe (they have all the proof in their records). So in this case make a settlement offer of lump sum repay or payments you can afford.

Call me scum or whatever but I have used this strategy and it works. After a few decades of paying usurious interest rates I have some cash finally coming back; and no need to file bankruptcy. After 7 years it drops off your credit report and credit score goes way up. Make it anywhere to 4-7 years (depending on your state law timeframe) and the statute of limitations kicks in and money not legally owed any longer. Just do not make any payments on it to renew statute of limitations. No problems! Hell I gambled the money away anyway, how was I suppose to get it back -Ha, Ha. Joke was on the JDB in my case!

Gregory

Very poor article. Take it from some one who was being threatened for some one else's debt. A certified letter to the debt collector explaining you do not owe the debt means that once they receive the letter they can no longer contact you.

Violation of that law carries a 10,000 dollar fine. If the amount is in dispute the same tactic works, except they can contact you with the proof of what you owe. A lot times this involves too much work and they do not pursue it. So if they do not pursue it once the Statute of Limitations is over the debt can no longer be collected.

The limit varies by State Law and amount. Finally be aware that uncollected debts are often sold and the new "owner" of the debt may try to collect on it. Again a certified letter stops them as you have proof of notification that the debt is not owed. I hope this helps the victims out there.

Chub

Buying debt has become a large industry that attracts a lot of crooks. Companies buy debt for as little as a dime on the dollar! The original lender benefits because they are getting a little something out of a debt that they have no hope of collecting. The buyer of the debt benefits because the potential profit is very

Many of the people buying debt aren't your traditional debt collection agency. They are many times just an individual with a cell phone who could bend the rules because they can change their name and location as easy as you can report their activity. Many times you are just dealing with thugs with cellphones. If you owe them, don't be afraid to offer a lesser amount because they had bought the debt so cheap that they may still make a pretty good profit.

Chief_blamestormer

Realize that some debtors never borrowed a dime. It could be the result of a civil judgement. If you think all civil judgements are fair, then have a look at the cases in your local courthouse, or serve a couple rounds of jury duty.

W, 19 hours ago

Industry? There's nothing industrious about. Bill collectors are mostly thugs who can't get real jobs so they have to leverage their values off other people's misery. Consumer debts are self inflicted foolishness, medical debts aren't, but just goes to show the Empire is ran by business interests who refuse to allow any type of universal medical and have installed a system that allows them profits for illness and death , which is similar to a developing country, not a developed superpower.

[Jan 23, 2017] January 23, 2017 at 2:58 pm

Jan 23, 2017 | www.nakedcapitalism.com

It's quite remarkable that the Fear & Greed Index is at a dead neutral 49, with the S&P hovering barely half a percent below its Jan 6th record high. This is called "lack of perspective."

For the past six weeks since Dec 7th, the S&P has flatlined within a tight 2 percent band. Typically such a compressed range precedes a sharp breakout. Two-month chart showing the flatline:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=spx&insttype=&freq=1&show=&time=5

Although a breakout could be in either direction, the rising volume of snarls and growls from bears signals about a two-in-three probability of breaking out to the upside.

Jim Haygood , January 23, 2017 at 4:43 pm

Today the Nasdaq 100 index of tech glamour stocks (Apple, Microsoft, Amazon, Facebook, the GOOG) reached a fresh record high, eclipsing its previous record of last Friday.

A market that's hitting new highs day after day is telling you something.

MyLessThanPrimeBeef , January 23, 2017 at 4:52 pm

It says there is a lot of money on the sidelines?

As for Nov, 2016, $50 trillion cash (I just googled it).

Jim Haygood , January 23, 2017 at 4:56 pm

That's one aspect. But neutral consensus opinion when a market's near a record implies that full euphoria (or "full retard," if you're bearish) hasn't been reached yet.

MyLessThanPrimeBeef , January 23, 2017 at 5:13 pm

Some claim there is another 5% to go on the upside.

Yet, when a curve is parabolic, a small deviation on the x-axis, delta-x, can mean a huge delta-y (both ways, up or down).

[Jan 23, 2017] The US government was a big fracking cheerleader and helped to create shale oil bubble in the USA and associated smaller junk bond bubble.

Jan 23, 2017 | economistsview.typepad.com
B.T. : , January 23, 2017 at 08:44 AM
More fracking

=

Lower emissions

US C02 emissions are down 7% since 2005 thanks to natural gas from fracking displacing coal in electricity generation.

Yet backwards placing like Europe and NY ban fracking.

And don't get me started on nukes (zero emissions).

Chris G -> B.T.... , January 23, 2017 at 09:27 AM
Setting aside ground water contamination issues associated with fracking, barring a major reduction in per capita energy use even if (when) you replace coal with natural gas the CO2 emission rate is still a problem. Switching to non-fossil fuel sources needs to be on the to-do list.
B.T. -> Chris G ... , January 23, 2017 at 09:44 AM
EPA said fracking isn't having "widespread, systematic impacts on drinking water."

Even with non-fossil fuel sources, C02 emissions rate will still be a problem. You still need to build the wind turbines and transport them to locations, you can't get do that until the transportation sector reduces emissions.

Chris G -> B.T.... , January 23, 2017 at 09:47 AM
I'm not so sanguine re long-term ground water contamination. Agreed re other points though.
libezkova -> B.T.... , January 23, 2017 at 01:28 PM
The US government was a big fracking cheerleader and helped to create "shale oil bubble" in the USA and associated smaller "junk bond" bubble.
libezkova -> B.T.... , January 23, 2017 at 01:35 PM
B.T.

My impression is that the current price of natural gas in the USA is unsustainable. It is a kind of "subprime gas".

A side effect (externality if you wish) of fracking is junk bonds bubble. At one point anybody with a lease can get a loan to drill. Not that different from subprime, just much smaller. Many people are not aware about it.

-->

[Jan 23, 2017] A key aspect of energy quality is usability, which is the degree to which the supply of power matches the real-time demand. Intermittent and invariable baseload power sources

Jan 23, 2017 | economistsview.typepad.com
libezkova -> point... January 23, 2017 at 05:05 PM , 2017 at 05:05 PM
ERoEI is an important concept here, that is usually ignored by solar enthusiasts. One problem with wind and solar is the EroEI is low:

https://en.wikipedia.org/wiki/Energy_returned_on_energy_invested

== quote ==

In physics, energy economics, and ecological energetics, energy returned on energy invested (EROEI or ERoEI); or energy return on investment (EROI), is the ratio of the amount of usable energy (the exergy) delivered from a particular energy resource to the amount of exergy used to obtain that energy resource.[1][2] It is a distinct measure from energy efficiency as it does not measure the primary energy inputs to the system, only usable energy.

A fuel or energy must have an EROEI ratio of at least 3:1 to be considered viable as a prominent fuel or energy source.[3][4]

EROEI = (Energy Delivered)/(Energy Required to Deliver that Energy)


When the EROEI of a resource is less than or equal to one, that energy source becomes a net "energy sink", and can no longer be used as a source of energy, but depending on the system might be useful for energy storage (for example a battery). A related measure Energy Store On Energy Invested (ESOEI) is used to analyze storage systems.[6][7]

libezkova -> libezkova... , January 23, 2017 at 05:11 PM
A useful comment from

https://www.scientificamerican.com/article/eroi-behind-numbers-energy-return-investment/

== quote ==
3. Cliff Claven May 18, 2013

This article does a good job of introducing a very complex subject, but a bad job of actually comparing alternatives. As the author lays out, there are EROIs, FERs, EERs and other measures of energy balance that all have different boundaries and tell a different story. One cannot cherry-pick one source's EROI to compare with another's EER. It is long past time, but the physics community is finally getting involved.

There is an excellent paper just published that goes the furthest yet in developing a rigorous, apples-to-apples comparison of electrical power generations alternatives (Weißbach et al. "Energy Intensities, EROIs (energy Returned on Invested), and Energy Payback Times of Electricity Generating Power Plants." Energy 52 (April 1, 2013): 210–221. doi:10.1016/j.energy.2013.01.029).

The key they have found is to normalize not just across power quantity, but also quality.

A key aspect of quality is "usability," which is the degree to which the supply of power matches the real-time demand. Intermittent and invariable baseload power sources must be adjusted for the amount of buffering necessary to match their output to the real world of variable demand.

The study authors did this by requiring each source to have the overcapacity and storage necessary to be compatible with a large international European grid scenario, and they used pumped-hydro power storage parameters since it is today's most cost-effective option for storage and buffering. The study is behind a paywall but the results have been posted online and are being updated as newer data is reviewed ( https://docs.google.com/spreadsheet/ccc?key=0Aux2QwQckeWEdE9UbHNKR3l6THItNi1RTUdxa1RrdUE#gid=0). In their analysis, they found that a minimum EROI of 7:1 was necessary for economic viability. With that in mind, here are their results:

  1. PV solar 2.3:1
  2. Biomass Boiler: 3.5:1
  3. Onshore Wind: 3.9:1
  4. CSP Solar : 9.6:1
  5. Natural Gas: 28:1
  6. Coal: 30:1
  7. Run-of-River Hydro: 35:1
  8. PWR Nuclear: 75:1

[Jan 23, 2017] P rivate car fleet eclectic might be OK outside of northern states (where you can freeze in the electrical car in winter) and might be even preferred solution for southern states if (and only if) the Federal government provides a couple of hundred billion for the grid upgrade. Thats much less that was spend on Iraq and Afghanistan wars. So I think this is doable.

Jan 23, 2017 | economistsview.typepad.com
jonny bakho -> pgl...

Maybe they don't read Scientific American or Bloomberg?
He is certainly not a Commie nor is his newspaper.

https://www.bloomberg.com/news/articles/2015-11-02/by-the-numbers-china-s-clean-energy-investments-show-big-strides

Here is SciAm
https://www.scientificamerican.com/article/why-china-is-dominating-the-solar-industry/

Between 2008 and 2013, China's fledgling solar-electric panel industry dropped world prices by 80 percent, a stunning achievement in a fiercely competitive high-tech market. China had leapfrogged from nursing a tiny, rural-oriented solar program in the 1990s to become the globe's leader in what may soon be the world's largest renewable energy source.

The future is renewable electric. Dirty BigOil is the past.
BigAuto knows it is true. Everyone is working on electric autos.

Reply Monday, January 23, 2017 at 07:43 AM pgl -> jonny bakho... , January 23, 2017 at 08:01 AM
Nice sources. Thanks again for a real discussion.
libezkova -> jonny bakho... , -1

"The future is renewable electric. Dirty BigOil is the past.

BigAuto knows it is true. Everyone is working on electric autos."

This is not IT, and you are wrong. For private car fleet eclectic might be OK outside of northern states (where you can freeze in the electrical car in winter) and might be even preferred solution for southern states if (and only if) the Federal government provides a couple of hundred billion for the grid upgrade. That's much less that was spend on Iraq and Afghanistan wars. So I think this is doable.

The key problem is that the current grid is unable of delivering the necessary among of electricity at night (where most of eclectic car should be charged) if the density of electrical cars become sizable, let's say one out of ten.

At this moment you need not only expand "renewable" energy capacity (wind and solar, preferably wind) but also to build a lot of "buffer" gas fired generating stations to balance wind and solar energy stream and accommodate "bad days" (no wind, no sun) as well as high voltage East-West lines to take advantage of solar output dependence on the time zone.

To charge 24KW Leaf battery you need 24/8=3 KW/h socket in your house. At 110v that's 27 ampere. Something like an eclectic stove up all the night or additional three 1 KW air conditioners. That's a lot ...

-->

[Jan 23, 2017] what is the current share of solar in the US electricity balance?

Jan 23, 2017 | economistsview.typepad.com
sanjait -> pgl... , January 23, 2017 at 10:41 AM
Take a big picture view.

Solar capacity is growing exponentially in this country. Prices for installed capacity have collapsed at a Moore's Law-like rate. Employment in the sector is large and expanding. It employs more people than the coal industry.

Tom says solar entrepreneurship has always "ended badly", but I think he is looking at the wrong metrics. Over enthusiastic investors have lost a bunch on solar, but the benefit to the American people is great.

Similarly, if we just focus on comparatives with China we can also find bad things, like how they are installing more capacity and net exporters of panels. But again those are not great metrics. Panel manufacturing is now so inexpensive that its commodified and there is little profit in it. Smile curve stuff. And their advantage in installed capacity and capacity growth is a huge net positive for the world's climate. We should try to catch up, not because we need to beat them, but rather because we all need to get clean.

Tom aka Rusty -> sanjait... , January 23, 2017 at 10:44 AM
Please note I did not say it had to end badly in the future.
sanjait -> Tom aka Rusty... , January 23, 2017 at 12:48 PM
You said it had always ended badly in the past, but in the past we've seen collapsing prices and rising employment and capacity, which in a big picture view is a huge success already.

Like I said ... it depends on the metrics one looks at.

libezkova -> sanjait... , January 23, 2017 at 02:13 PM
I like your enthusiasm ;-)

Do you know what is the current share of solar in the US electricity balance?

http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3

== quote ==
In 2015, the United States generated about 4 trillion kilowatthours of electricity.1 About 67% of the electricity generated was from fossil fuels (coal, natural gas, and petroleum).

Major energy sources and percent share of total U.S. electricity generation in 2015:1
• Coal = 33%
• Natural gas = 33%
• Nuclear = 20%
• Hydropower = 6%
• Other renewables = 7% • Biomass = 1.6%
• Geothermal = 0.4%
• Solar = 0.6%
• Wind = 4.7%

• Petroleum = 1%
• Other gases = <1%

-->

[Jan 23, 2017] Oil depletion might take care of the climate change

Jan 23, 2017 | economistsview.typepad.com
libezkova : January 23, 2017 at 01:26 PM , 2017 at 01:26 PM
It might well be that "human induced climate change" enthusiasts are barking to the wrong tree.

Oil depletion might take care of the "climate change" (as well as "excessive" humans) even without Trump or and other politician. This is probably a matter of a decade or two.

The key here is proactive switching the use private car fleet to more economical models and without draconian measures such as $4 per gallon gas or $1K per cubic centimeter of engine volume tax the process is very slow.

Obama administration was pretty inactive in this area, despite all rhetoric.

There is no justification of using full size SUV or light truck for communizing to work unless you agree to pay extra for this privilege.

-->

[Jan 23, 2017] We need an alternative to Trumps nationalism. It isnt the status quo

Notable quotes:
"... The era of neoliberalism ended in the autumn of 2008 with the bonfire of financialisation's illusions. The fetishisation of unfettered markets that Margaret Thatcher and Ronald Reagan brought to the fore in the late 1970s had been the necessary ideological cover for the unleashing of financiers to enable the capital flows essential to a new phase of globalisation in which the United States deficits provided the aggregate demand for the world's factories (whose profits flowed back to Wall Street closing the loop nicely). ..."
"... when the bottom fell out of this increasingly unstable feedback loop, neoliberalism's illusions burned down and the west's working class ended up too expensive and too indebted to be of interest to a panicking global establishment. ..."
"... Thatcher's and Reagan's neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks. ..."
"... Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that "my only limits are the ones I set myself", or when the troika forced the Greek or Irish governments to write letters "requesting" predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system. ..."
"... It was against this insurgency of a cornered establishment that had given up on persuasion that Donald Trump and his European allies rose up with their own populist insurgency. They proved that it is possible to go against the establishment and win. Alas, theirs will be a pyrrhic victory which will, eventually, harm those whom they inspired. The answer to neoliberalism's Waterloo cannot be the retreat to a barricaded nation-state and the pitting of "our" people against "others" fenced off by tall walls and electrified fences. ..."
"... This is all about globalisation, specifically wage deflation for the working classes from competing with emerging markets and freedom of movement, and also from offshoring of working class jobs to emerging markets. ..."
"... Until there is a viable alternative economic philosophy, nationalism is the future, whether we like it or not. ..."
"... Enough is enough. Globalisation is now only working for the rich and powerful. The model is simple - globalisation lowers the cost for consumers of everything, because the lowest cost geography produces everything (China, India etc), which is great until nobody has a job any more, so nobody can afford anything. ..."
"... The challenge is not to stick with the status quo, it's to find an alternative to nationalism that works for everyone. ..."
"... Fine words, but we're along way from that right now. What's happening in Europe, and across the Atlantic, is really only just getting started. Our elites may well be suffering from a crisis of legitimacy, and yet they are still very much in control. ..."
"... Neoliberalism is based on the acceptance that the rich elite are deserving of their wealth and privileges. The elite have used their mouthpieces, such as tabloids and think tanks, to ram this home; but the banking crisis of 2008 helped disabuse people of this myth that justifies rampant inequality in the US and the UK in particular. ..."
"... Trump and Brexit are expressions of the paradigm shift that is underway; but up till now, rather ironically, a billionaire and a rich former stockbroker have been the voice of protest, because it is they who have the money, connections and vanity to ensure they are heard. ..."
"... These classes of "globalization losers," particularly in the United States, have had little political voice or influence, and perhaps this is why the backlash against globalization has been so muted. They have had little voice because the rich have come to control the political process. The rich, as can be seen by looking at the income gains of the global top 5 percent in Figure 1, have benefited immensely from globalization and they have keen interest in its continuation. But while their use of political power has enabled the continuation of globalization, it has also hollowed out national democracies and moved many countries closer to becoming plutocracies. Thus, the choice would seem either plutocracy and globalization – or populism and a halt to globalization. ..."
"... Some of the gains of the top 5 percent could go toward alleviating the anger of the lower- and middle-class rich world's "losers." ..."
"... the history of the last quarter century during which the top classes in the rich world have continually piled up larger and larger gains, all the while socially and mentally separating themselves from fellow citizens, does not bode well for that alternative ..."
"... Social Neoliberals (mass immigration, family breakdown, individualism etc) combine with economic Neoliberals (profit maximisation, global capital movements etc) to get their way. ..."
"... I'm fairly sure that in time it will be shown that thier is a cabal of think-tanks and supranationalists who have perverted everything to thier own benefit. How and why does a Labour Peer get free accomodation on Baron Rothschilds' estate? How and why does the royal bank Coutts get bailed out by the taxpayer with no strings attached? ..."
Jan 23, 2017 | www.theguardian.com
The answer to neoliberalism's Waterloo cannot be a retreat to barricaded nation-states and the pitting of 'our' people against 'others' fenced off by high walls

A clash of two insurgencies is now shaping the west. Progressives on both sides of the Atlantic are on the sidelines, unable to comprehend what they are observing. Donald Trump's inauguration marks its pinnacle.

  1. One of the two insurgencies shaping our world today has been analysed ad nauseum. Donald Trump, Nigel Farage, Marine Le Pen and the broad Nationalist International that they are loosely connected to have received much attention, as has their success at impressing upon the multitudes that nation-states, borders, citizens and communities matter.
  2. However, the other insurgency that caused the rise of this Nationalist International has remained in the shadows: an insurrection by the global establishment's technocracy whose purpose is to retain control at all cost. Project Fear in the UK, the troika in continental Europe and the unholy alliance of Wall Street, Silicon Valley and the surveillance apparatus in the United States are its manifestations.

The era of neoliberalism ended in the autumn of 2008 with the bonfire of financialisation's illusions. The fetishisation of unfettered markets that Margaret Thatcher and Ronald Reagan brought to the fore in the late 1970s had been the necessary ideological cover for the unleashing of financiers to enable the capital flows essential to a new phase of globalisation in which the United States deficits provided the aggregate demand for the world's factories (whose profits flowed back to Wall Street closing the loop nicely).

Meanwhile, billions of people in the "third" world were pulled out of poverty while hundreds of millions of western workers were slowly sidelined, pushed into more precarious jobs, and forced to financialise themselves either through their pension funds or their homes. And when the bottom fell out of this increasingly unstable feedback loop, neoliberalism's illusions burned down and the west's working class ended up too expensive and too indebted to be of interest to a panicking global establishment.

Thatcher's and Reagan's neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks.

After the events of 2008 something remarkable happened. For the first time in modern times the establishment no longer cared to persuade the masses that its way was socially optimal. Overwhelmed by the collapsing financial pyramids, the inexorable buildup of unsustainable debt, a eurozone in an advanced state of disintegration and a China increasingly relying on an impossible credit boom, the establishment's functionaries set aside the aspiration to persuade or to represent. Instead, they concentrated on clamping down.

In the UK, more than a million benefit applicants faced punitive sanctions. In the Eurozone, the troika ruthlessly sought to reduce the pensions of the poorest of the poor. In the United States, both parties promised drastic cuts to social security spending. During our deflationary times none of these policies helped stabilise capitalism at a national or at a global level. So, why were they pursued?

Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that "my only limits are the ones I set myself", or when the troika forced the Greek or Irish governments to write letters "requesting" predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system.

It was against this insurgency of a cornered establishment that had given up on persuasion that Donald Trump and his European allies rose up with their own populist insurgency. They proved that it is possible to go against the establishment and win. Alas, theirs will be a pyrrhic victory which will, eventually, harm those whom they inspired. The answer to neoliberalism's Waterloo cannot be the retreat to a barricaded nation-state and the pitting of "our" people against "others" fenced off by tall walls and electrified fences.

The answer can only be a Progressive Internationalism that works in practice on both sides of the Atlantic. To bring it about we need more than fine principles unblemished by power. We need to aim for power on the basis of a pragmatic narrative imparting hope throughout Europe and America for jobs paying living wages to anyone who wants them, for social housing, for health and education.

Only a third insurgency promoting a New Deal that works equally for Americans and Europeans can restore to a billion people living in the west sovereignty over their lives and communities.


bag0shite

This is all about globalisation, specifically wage deflation for the working classes from competing with emerging markets and freedom of movement, and also from offshoring of working class jobs to emerging markets.

Liberalism has created so much wealth for the west and has dramatically reduced inequality over the last century, however it is no longer working for those on lower incomes in the west.

Until there is a viable alternative economic philosophy, nationalism is the future, whether we like it or not.

chantaspell -> bag0shite 1d ago

nationalism is the future, whether we like it or not.

No it's not. Because what we've got, although flawed, is far superior to Nationalism's false promises. Nationalism will, or perhaps already has, peaked.

bag0shite -> chantaspell

... go and tell that to all the families who don't have a job because their roles were offshored to Eastern Europe or China. Got and tell that to truck drivers who earn a pittance because there is essentially an infinite supply of Poles willing to do it for peanuts.

Enough is enough. Globalisation is now only working for the rich and powerful. The model is simple - globalisation lowers the cost for consumers of everything, because the lowest cost geography produces everything (China, India etc), which is great until nobody has a job any more, so nobody can afford anything.

The challenge is not to stick with the status quo, it's to find an alternative to nationalism that works for everyone.

MMGALIAS -> bag0shite 1d ago

This is all about globalisation, specifically wage deflation for the working classes from competing with emerging markets and freedom of movement, and also from offshoring of working class jobs to emerging markets.

The working classes have voted against their own interests in the last 3 decades, now we are all supposed to feel sorry for them when the neoliberal policies they have voted for have come back to bite them?

Northman1

"The answer can only be a Progressive Internationalism that works in practice on both sides of the Atlantic. To bring it about we need more than fine principles unblemished by power. We need to aim for power on the basis of a pragmatic narrative imparting hope throughout Europe and America for jobs paying living wages to anyone who wants them, for social housing, for health and education.

Only a third insurgency promoting a New Deal that works equally for Americans and Europeans can restore to a billion people living in the West sovereignty over their lives and communities".

These are fine aspirations. You precede them by saying that we cannot:

"...retreat to a barricaded nation-state and the pitting of 'our' people against 'others' fenced off by tall walls and electrified fences".

This presumably refers to physical barriers to prevent illegal immigration and tariff barriers to prevent free trade.

Tell me though how you can achieve the aspirations you set out whilst allowing millions of people from the third world to flood into Europe at an enormous economic and social cost and also trading freely with countries that don't trade fairly (e.g. China with its currency manipulation, government subsidies, product dumping and lack of environmental/ safety/ worker protection regulations)

greenwichite -> Northman1

He's brilliant on the problem...lame on the solution.

And wrong.

The answer is to only trade freely with countries that play by the same environmental, currency and labour-rights rules as we do.

Otherwise, we are just allowing ourselves to be undercuts by cheats.

That's not "barricading" oneself anywhere...it's basic common sense, which has unfortunately eluded our leaders for decades. In Thatcher's case, I think she was quite happy for mercantilist, protectionist Asian powers to destroy our industry, for her own party-political purposes.

MMGALIAS -> Northman1

and also trading freely with countries that don't trade fairly (e.g. China with its currency manipulation, government subsidies, product dumping and lack of environmental/ safety/ worker protection regulations)

The West doesn't trade freely either, just ask the African farmers who are tariffed into poverty by the EU.

Tiresius -> legalizefreedom

I agree. It's a well argued piece and I agree with the conclusion that neither the neo liberal free trade consensus , nor its reaction , will provide an answer to the worsening economic condition of the blue collar west. I also am convinced that in the longer term the only real answer is a return to the principles of social democracy and equity of opportunity.

This will however be a long march. Neo liberalism has been in the ascendant for over 30 years , it has brought some significant benefits to a few in the west , and many elsewhere , and of course a lot of Chinese billionaires , a large number of western voters have lost or are losing faith in a system that has failed to deliver rising living standards for them , incurred high levels of debt and reduced social mobility.

It is a failure of the narrative of the centre left that those people are persuaded by increasing protectionism rather than social democracy. So now we will see where the reaction to free trade liberalism takes us , it has to run its course before the prescriptions of social democracy can be reformulated , hopefully with more inspiring leaders than at present.

Andrew Skidmore

'Only a third insurgency promoting a New Deal that works equally for Americans and Europeans can restore to a billion people living in the West sovereignty over their lives and communities.'

Fine words, but we're along way from that right now. What's happening in Europe, and across the Atlantic, is really only just getting started. Our elites may well be suffering from a crisis of legitimacy, and yet they are still very much in control.

From the Trump administration Whitehouse website:

'The Trump Administration will be a law and order administration. President Trump will honor our men and women in uniform and will support their mission of protecting the public. The dangerous anti-police atmosphere in America is wrong. The Trump Administration will end it.'

Hmmmmmm....?

thetowncrier -> Andrew Skidmore

As ever, a master of subtlety. I expect the American Stasi to come into being by the end of next week, with a brand new special 'badge' to go with their black shirts.

2bveryFrank

Neoliberalism is based on the acceptance that the rich elite are deserving of their wealth and privileges. The elite have used their mouthpieces, such as tabloids and think tanks, to ram this home; but the banking crisis of 2008 helped disabuse people of this myth that justifies rampant inequality in the US and the UK in particular.

Trump and Brexit are expressions of the paradigm shift that is underway; but up till now, rather ironically, a billionaire and a rich former stockbroker have been the voice of protest, because it is they who have the money, connections and vanity to ensure they are heard.

They, however, are very unlikely to deliver and then true and genuine voices of the people will emerge - voices that will target the root causes of discontent rather than convenient, nationalistic scapegoats such as immigration.

ReasonableSoul -> 2bveryFrank

"and then true and genuine voices of the people will emerge - voices that will target the root causes of discontent rather than convenient, nationalistic scapegoats such as immigration."

So working class people who struggle to compete for the low wage jobs and strained welfare services that are taken by migrants are not allowed to protest immigration policy?

Recent mass migrations (of the last 30 years) are unprecedented.

In Europe, whole towns have been transformed, particularly culturally.

Imposing huge demographic changes on a people is a form of authoritarian social engineering.


SeenItAlready

This is covered by a report in YaleGlobal (and a similar one in the Harvard Business Review) from 2014 which adds a few stats showing how middle-class salaries in the 'Western World' were the only ones to stagnate in the period 1998 to 2008 (and obviously drop post 2008, but that isn't covered):
http://yaleglobal.yale.edu/content/tale-two-middle-classes

This is the last section of that report:

The populists warn disgruntled voters that economic trends observed during the past three decades are just the first wave of cheap labor from Asia pitted in direct competition with workers in the rich world, and more waves are on the way from poorer lands in Asia and Africa. The stagnation of middle-class incomes in the West may last another five decades or more.

This calls into question either the sustainability of democracy under such conditions or the sustainability of globalization.

If globalization is derailed, the middle classes of the West may be relieved from the immediate pressure of cheaper Asian competition. But the longer-term costs to themselves and their countries, let alone to the poor in Asia and Africa, will be high. Thus, the interests and the political power of the middle classes in the rich world put them in a direct conflict with the interests of the worldwide poor.

These classes of "globalization losers," particularly in the United States, have had little political voice or influence, and perhaps this is why the backlash against globalization has been so muted. They have had little voice because the rich have come to control the political process. The rich, as can be seen by looking at the income gains of the global top 5 percent in Figure 1, have benefited immensely from globalization and they have keen interest in its continuation. But while their use of political power has enabled the continuation of globalization, it has also hollowed out national democracies and moved many countries closer to becoming plutocracies. Thus, the choice would seem either plutocracy and globalization – or populism and a halt to globalization.

Another solution, one that involves neither populism nor plutocracy, would require enormous effort at the understanding of one's own longer-term self-interest. It would imply more substantial redistribution policies in the rich world. Some of the gains of the top 5 percent could go toward alleviating the anger of the lower- and middle-class rich world's "losers." These need not nor should be mere transfers of money from one group to another.

Instead, money should come in the form of investments in public education, local infrastructure, housing and preventive health care. But the history of the last quarter century during which the top classes in the rich world have continually piled up larger and larger gains, all the while socially and mentally separating themselves from fellow citizens, does not bode well for that alternative

Personally I see the whole US election here... written a couple of years before it happened:


moranet -> Rusty Woods

Just as in the 1920s early 30s, when centrist governments attempting mild redistributive banking reforms -MacDonald, Herriot, Van Zeeland, Azaña- came up against a "Wall of Money" when the financial markets reacted, and were overthrown in favour of orthodox liberal governments (the 'technocratic insugency' described by Prof. Varoufakis). And when public opinion inevitably lost its patience, propelling harder nosed reformers close to power... that's when political and financial elites discovered rule by executive decree and the adjournment of parliaments.

So we know very well what happens next in Europe, when liberal capitalism and liberal-democracy find themselves on opposing teams.

anewdawn

There are two sorts of nationalism in my view. There is the nasty, evil, Nazi style that promotes the insane social darwinism, and superiority, but a hypocritical imperialism towards other states and countries.

There is another type of nationalism that good decent people who really care about democracy would approve of however. It is the sort that seeks to protect the poor and the middle classes by stopping global corporations from off shoring their jobs to sweatshops in countries that have lower human rights records for the purpose of cheap labour and more profit. There is the sort of nationalism that promotes local democracy as opposed to tying countries up to TTIP and TPP which undermines the governments and laws of individual countries. There is a type of nationalism that seeks to protect their neighbors by insisting on fair trade and good treatment of workers in other countries.

If you listen to Trumps speech, he seems to be the second type when he promises to bring back jobs to the rust belt, but only time will tell if he really is of the first type - it will surface soon in his attitude to invasions of the middle east and control of the global corporations.

ID0118186 -> anewdawn

But those same middle classes are part of the problem, they want their consumer goods, their iPods and iPhones and iPads, but they don't want to pay the real cost of them if they were made by well-paid and well-trained skilled workers in their own country.

You have to address the whole issue: you can't have cheap prices and protectionism, unless you let wages fall to near the same level that they are in developing countries - also unpopular.

So if you want nationalism as you describe it, be willing to pay 50 to 100% more for many goods and services; or buy a lot less, which kills your economy anyway.

epidavros -> anewdawn

And then there is also the phoney internationalism of the EU - which is really a turbo charged nationalism of what will soon be 27 countries bent on protectionism, technocratic rule and a firmly closed mindset with a firmly debunked ideology.

toadalone -> anewdawn

I like your description of the two nationalisms. I think Varoufakis' point is that that kind of nationalism can't survive on its own, as an island in a globalised world: nationalists of that kind have to work together with their neighbouring counterparts to make their respective benign nationalisms function. It's a very difficult proposal to bring to fruition, even though I think it's right.

As for Trump: I think that seasoning campaign speeches with a flavour of benign nationalism is, sadly, little more than a well-established PR technique. I don't believe what Trump says for an instant (partly because he constantly breaks the fourth wall by saying the complete opposite a few days later).

Other leaders who deploy this flavour of nationalism are more complicated. Viktor Orbán, for instance. It's very difficult to tell, with him, how much of his protectionist-nationalist rhetoric is genuine (but impossible to implement, given Hungary's membership of the EU), and how much of it is just more of the same dangle-shiny-things-in-front-of-the-voters-while-doing-what-you-want. And as with Trump, Orbán's "benign" nationalism comes as just one flavour in a dish also heavily flavoured with demented backward-looking authoritarian nationalism, with Kulturkampf and all the other trimmings.

The weird thing about Trump is how he turns these contradictions into a kind of conscious performance art. It's possible to view Orbán as someone who's cracking up a bit under the pressure of believing six impossible things before breakfast. Trump is more healthy (from the Trump's own point of view, of course, not from ours). He's embraced the crazy completely, and revels in it. While probably reserving some quiet time for himself, in which he can privately drop the mask, or rather the 500 different masks.

QuayBoredWarrior -> ReubenK1

Perhaps you should read this bit again:

The answer can only be a Progressive Internationalism that works in practice on both sides of the Atlantic. To bring it about we need more than fine principles unblemished by power. We need to aim for power on the basis of a pragmatic narrative imparting hope throughout Europe and America for jobs paying living wages to anyone who wants them, for social housing, for health and education.

Only a third insurgency promoting a New Deal that works equally for Americans and Europeans can restore to a billion people living in the West sovereignty over their lives and communities.

If you need to know what the New Deal involved, I suggest you Google it or buy a book about it. If there is a library still open near you, you might able to borrow a book for free.

I think what is suggested is a new New Deal, an interventionist strategy to replace the laissez-faire, the-market-knows-best approaches of the 80s/90s/00s. The details of which will need to be hammered out as we progress. BTW, the New Deal was a haphazard and piecemeal programme that was often based on hope over accepted wisdom. The aim was stabilisation and an end to the mass impoverishment of American workers. If we have this aim, I'm sure we can work out what needs to be done. It won't only be professors who come up with suggestions but all those who coalesce behind these aims.

The first thing necessary is to loosen the grip of those who bang on about deficit reduction above all else. This counter-productive approach needs to be crushed. It works for no one and it doesn't work for the future. The services being destroyed will have to be built up again and the deficit-above-all-else proselytisers have no strategy for this at all. It's as if their true aim is to see them destroyed forever.

SeenItAlready

Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that "my only limits are the ones I set myself", or when the troika forced the Greek or Irish governments to write letters "requesting" predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system.

Not only that...

They also came out with the wheeze of getting the poor to fight amongst themselves

I'm convinced that is what is behind the explosion in Identity Politics we have seen over the last few years - where different groups are encouraged to dislike each other on gender, gender-orientation and and racial lines. Of course social class is kept well out of any of these discussions... in spite of it being the source of most of the real repression

SeenItAlready -> SeenItAlready

different groups are encouraged to dislike each other on gender, gender-orientation and and racial lines. Of course social class is kept well out of any of these discussions... in spite of it being the source of most of the real repression

Likewise immigration where the immigrants themselves are made an issue of and blamed or defended... of course in reality salary dumping and job losses have nothing to do with them

The wealthy class who encouraged the immigration of cheap labour, who did not provide any protection for workers impacted by it and who then effectively sacked local workers in favour of cheaper labour have again pulled-off a very neat trick by shifting the terms of the debate to the innocent immigrants who were simply following opportunity and invitations. Likewise the immigrants feel that they are being persecuted by the locals...

And so the rich sit back and rub their hands with glee... poor immigrants and poor locals fighting, poor men and poor women fighting, poor whites and poor non-whites fighting. No chance of the pitchforks arriving for quite a while, if ever...

FreddySteadyGO -> SeenItAlready

And so the rich sit back and rub their hands with glee... poor immigrants and poor locals fighting, poor men and poor women fighting, poor whites and poor non-whites fighting. No chance of the pitchforks arriving for quite a while, if ever...

Absolutely, its all far too convenient.

Social Neoliberals (mass immigration, family breakdown, individualism etc) combine with economic Neoliberals (profit maximisation, global capital movements etc) to get their way.

I'm fairly sure that in time it will be shown that thier is a cabal of think-tanks and supranationalists who have perverted everything to thier own benefit. How and why does a Labour Peer get free accomodation on Baron Rothschilds' estate? How and why does the royal bank Coutts get bailed out by the taxpayer with no strings attached?

SeenItAlready -> FreddySteadyGO

My reply to you got totally deleted, it seems that saying to much about this subject is not acceptable to these people, which I guess is no surprise considering...

I said in my removed message that I didn't think there was any 'conspiracy' and that it was the normal divide-and-conquer behaviour which people in power have applied since time immemorial to those they would wish to control

Now I've changed my mind...

mysterycalculator

Could it be that Francis Fukuyama got it wrong with his historicist vision of liberal democracy as the final stage in a Hegelian dialectic? Should he have gone with Marx's interpretation of Hegel's dialectic instead, arguing that political freedom without economic freedom is not enough? If so, then the argument for a redistributive social justice has to be the way forward. Though as Karl Popper was keen to point out, Hegal and historicist visions are bunk. Though interestingly Popper had much more time for Marx. A redistributive social justice within the checks and balances of a liberal democratic internationalist social order - that might be a way forward!

Sven Ringling

As long as this problem is seen as a left vs right, we won't address it. Trump's ideas are in many cases very left. He wants to subsidise jobs through tarifs/trade wars/ anything that reduces imports and therefore benefits job creation in their large market with a large trade deficit in the short run.
Corbyn wants to subsidise the poorer part of the population directly or through public services taking the money directly from businesses and the rich - though he is not disinclined to isolationism either.

Both recipies work in the short run, both are likely to backfire in the long run the way they are currently pushed.

It was Labour's big mistake to think UKIP is on the right and therefore a risk for the Tories only.

And this Greek clown considered left is not far from that American clown. Clowny-ness is actually their mist defining feature.

ReasonableSoul

Maintaining funcional borders is not a "retreat to a barricaded nation-state and the pitting of 'our' people against 'others' fenced off by tall walls and electrified fences."

Even liberal Sweden became so overwhelmed by the endless stream of migrants/refugees arriving that it had to shut the border.

ID614534 1d ago

2

3

Why does every debate about the nation state have to be economic? Peoples of the world are often tied to their places of birth by language religion and culture. Not every song has to be sung in an American accent and we don't all want to replace Nan's pie recipe with a Big Mac and fries.

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epidavros 1d ago

6

7

Fine words, but the problem is that there is no progressive internationalism and there are no real progressives. The response to the EU referendum widely seen to have been a call to end unmanaged migration and undue interference of those very supra national, unaccountable elite bodies you mention has been to call for the UK to be punished, to pay the price, to be treated entirely differently from trade partners like Canada and dealt with as a pariah. Not progressive. Not international. And very much the problem, not the cure.

The huge irony here is that with all this talk of populism and barricading behind borders the UK and USA are seeking to tear theirs down, while the EU is erecting ideological barricades to protect its elite and their project.

One thing is for sure - the solution is not the status quo. Either in the USA or the EU.

[Jan 23, 2017] Give Trump a Chance

From amazon review of his book In the Jaws of the Dragon "Anyone who has read "The World is Flat" should also read "In The Jaws Of The Dragon" to understand both sides of the issues involved in offshoring. Eamon Fingleton clearly defines the differences between the economic systems in play in China and Japan and the United States and how those differences have damaged the United States economy. The naive position taken by both the Republicans and the Democrats that offshoring is good for America is shown to be wrong because of a fundamental lack of knowledge about who we are dealing with. Every member of Congress and the executive branch should read this book before ratifying any more trade agreements. The old saying of the marketplace applies: Take advantage of me once, shame on you. Take advantage of me twice, shame on me."
Notable quotes:
"... Similar miscommunication probably helps explain the European media's unreflective scorn for Donald Trump. Most European commentators have little or no access to the story. They have allowed their views to be shaped largely by the American press. ..."
"... That's a big mistake. Contrary to their carefully burnished self-image of impartiality and reliability, American journalists are not averse to consciously peddling outright lies. This applies even in the case of the biggest issues of the day, as witness, for instance, the American press's almost unanimous validation of George Bush's transparently mendacious case for the Iraq war in 2003. ..."
"... Most of the more damning charges against Trump are either without foundation or at least are viciously unfair distortions. Take, for instance, suggestions in the run-up to the election that he is anti-Semitic. In some accounts it was even suggested he was a closet neo-Nazi. Yet for anyone remotely familiar with the Trump story, this always rang false. After all he had thrived for decades in New York's overwhelmingly Jewish real estate industry. Then there was the fact that his daughter Ivanka, to whom he is evidently devoted, had converted to Judaism. ..."
"... In appointing Jared Kushner his chief adviser, he has chosen an orthodox Jew (Kushner is Ivanka's husband). Then there is David Friedman, Trump's choice for ambassador to Israel. Friedman is an outspoken partisan of the Israeli right and he is among other things an apologist for the Netanyahu administration's highly controversial settlement of the West Bank. ..."
"... As is often the case with Trumpian controversies, the facts are a lot more complicated than the press makes out. ..."
"... So far, so normal for the 2016 election campaign. But it turned out that Kovaleski was no ordinary Trump-hating journalist. He suffers from arthrogryposis, a malady in which the joints are malformed. For Trump's critics, this was manna from heaven. Instead of merely accusing the New York real estate magnate of exaggerating a minor, if troubling, sideshow in U.S.-Arab relations, they could now arraign him on the vastly more damaging charge of mocking someone's disability. ..."
"... In any case in responding directly to the charge of mocking Kovaleski's disability, Trump offered a convincing denial. "I would never do that," he said. "Number one, I have a good heart; number two, I'm a smart person." ..."
"... other much discussed Trumpian controversies such as his disparaging remarks about Mexicans and Muslims. In the case of both Mexican and Muslims, an effort to cut back immigration is a central pillar of Trump's program and his remarks, though offensive, were clearly intended to garner votes from fed-up middle Americans. ..."
"... In reality, as the Catholics 4 Trump website has documented, the media have suppressed vital evidence in the Kovaleski affair. ..."
Jan 23, 2017 | www.unz.com
Battlefield communications in World War I sometimes left something to be desired. Hence a famous British anecdote of a garbled word-of-mouth message. As transmitted, the message ran, "Send reinforcements, we are going to advance." Superior officers at the other end, however, were puzzled to be told: "Send three and four-pence [three shillings and four-pence], we are going to a dance!"

Similar miscommunication probably helps explain the European media's unreflective scorn for Donald Trump. Most European commentators have little or no access to the story. They have allowed their views to be shaped largely by the American press.

That's a big mistake. Contrary to their carefully burnished self-image of impartiality and reliability, American journalists are not averse to consciously peddling outright lies. This applies even in the case of the biggest issues of the day, as witness, for instance, the American press's almost unanimous validation of George Bush's transparently mendacious case for the Iraq war in 2003.

Most of the more damning charges against Trump are either without foundation or at least are viciously unfair distortions. Take, for instance, suggestions in the run-up to the election that he is anti-Semitic. In some accounts it was even suggested he was a closet neo-Nazi. Yet for anyone remotely familiar with the Trump story, this always rang false. After all he had thrived for decades in New York's overwhelmingly Jewish real estate industry. Then there was the fact that his daughter Ivanka, to whom he is evidently devoted, had converted to Judaism.

Now as Trump embarks on office, his true attitudes are becoming obvious – and they hardly lean towards neo-Nazism.

In appointing Jared Kushner his chief adviser, he has chosen an orthodox Jew (Kushner is Ivanka's husband). Then there is David Friedman, Trump's choice for ambassador to Israel. Friedman is an outspoken partisan of the Israeli right and he is among other things an apologist for the Netanyahu administration's highly controversial settlement of the West Bank. Trump even wants to move the American embassy in Israel from Tel Aviv to Jerusalem. This position is a favourite of the most ardently pro-Israel section of the American Jewish community but is otherwise disavowed as insensitive to Palestinians by most American policy analysts.

Many other examples could be cited of how the press has distorted the truth. It is interesting to revisit in particular the allegation that Trump mocked a disabled man's disability. It is an allegation which has received particular prominence in the press in Europe. But is Trump really such a heartless ogre? Hardly.

As is often the case with Trumpian controversies, the facts are a lot more complicated than the press makes out. The disabled-man episode began when, in defending an erstwhile widely ridiculed contention that Arabs in New Jersey had publicly celebrated the Twin Towers attacks, Trump unearthed a 2001 newspaper account broadly backed him up. But the report's author, Serge Kovaleski, demurred. Trump's talk of "thousands" of Arabs, he wrote, was an exaggeration.

Trump fired back. Flailing his arms wildly in an impersonation of an embarrassed, backtracking reporter, he implied that Kovaleski had succumbed to political correctness.

So far, so normal for the 2016 election campaign. But it turned out that Kovaleski was no ordinary Trump-hating journalist. He suffers from arthrogryposis, a malady in which the joints are malformed. For Trump's critics, this was manna from heaven. Instead of merely accusing the New York real estate magnate of exaggerating a minor, if troubling, sideshow in U.S.-Arab relations, they could now arraign him on the vastly more damaging charge of mocking someone's disability.

Trump's plea that he hadn't known that Kovaleski was handicapped was undermined when it emerged that in the 1980s the two had not only met but Kovaleski had even interviewed Trump in Trump Tower. That is an experience I know something about. I, like Kovaleski, once interviewed Trump in Trump Tower. The occasion was an article I wrote for Forbes magazine in 1982. If Trump saw my by-line today, would he remember that occasion 35 years ago? Probably not. The truth is that Trump, who has been a celebrity since his early twenties, has been interviewed by thousands of journalists over the years. A journalist would have to be seriously conceited – or be driven by a hidden agenda – to assume that a VIP as busy as Trump would remember an occasion half a lifetime ago.

In any case in responding directly to the charge of mocking Kovaleski's disability, Trump offered a convincing denial. "I would never do that," he said. "Number one, I have a good heart; number two, I'm a smart person." Setting aside point one (although to the press's chagrin, many of Trump's acquaintances have testified that a streak of considerable private generosity underlies his tough-guy exterior), it is hard to see how anyone can question point two. In effect Trump is saying he had a strong self-interest in not offending the disabled lobby let alone their millions of sympathisers.

After all it was not as if there were votes in dissing the disabled. This stands in marked contrast to other much discussed Trumpian controversies such as his disparaging remarks about Mexicans and Muslims. In the case of both Mexican and Muslims, an effort to cut back immigration is a central pillar of Trump's program and his remarks, though offensive, were clearly intended to garner votes from fed-up middle Americans.

In reality, as the Catholics 4 Trump website has documented, the media have suppressed vital evidence in the Kovaleski affair.

For a start Trump's frenetic performance bore no resemblance to arthrogryposis. Far from frantically flailing their arms, arthrogryposis victims are uncommonly motionlessness. This is because relevant bones are fused together. As Catholics 4 Trump pointed out, the media should have been expected to have been chomping at the bit to interview Kovaleski and thus clinch the point about how ruthlessly Trump had ridiculed a disabled man's disability.

The website added: "If the media had a legitimate story, that is exactly what they would have done and we all know it. But the media couldn't put Kovaleski in front of a camera or they'd have no story."

Catholics 4 Trump added that, in the same speech in which Trump did his Kovaleski impression, he offered an almost identical performance to illustrate the embarrassment of a U.S. general with whom he had clashed. In particular Trump had the general wildly flailing his arms. It goes without saying that this general does not suffer from arthogryposis or any other disability. The common thread in each case was merely an embarrassed, backtracking person. To say the least, commentators in Europe who have portrayed Trump as having mocked Kovaleski's disability stand accused of superficial, slanted reporting.

All this is not to suggest that Trump does not come to the presidency unencumbered with baggage. He is exceptionally crude – at least he is in his latter-day reality TV manifestation (the Trump I remember from my interview in 1982 was a model of restraint by comparison and in particular never used any expletives). Moreover the latter-day Trump habit of picking Twitter fights with those who criticize him tends merely to confirm a widespread belief that he is petty and thin-skinned.

Many of his pronouncements moreover have been disturbing and his abrasive manner will clearly prove on balance a liability in the White House. That said, the press has never worked harder or more dishonestly to destroy a modern American leader.

Let's give him the benefit of the doubt, therefore, as he sets out to make America great again. The truth is that American decline has gone much further than almost anyone outside American industry understands. Trump's task is a daunting one.

Eamonn Fingleton is an expert on America's trade problems and is the author of In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity (Houghton Mifflin, Boston). A version of this article appeared in the Dublin Ireland Sunday Business Post.

America's fate looks dicey in the showdown with the Chinese juggernaut, warns this vigorous jeremiad. Fingleton (In Praise of Hard Industries) argues that China's "East Asian" development model of aggressive mercantilism and a state-directed economy "effortlessly outperforms" America's fecklessly individualistic capitalism

[Jan 22, 2017] Neoliberalism may have been in part so successful because it appeals to (and tries to explain many things in terms of) a narrative of competition (and assignment of reward and acknowedlgement) by merit

Neoliberals seem very concerned not to have a label. I posit this is because the founders of the malign ideology didn't want their victims be able to reliably identify them. The deliberately and misleadingly promote the view of the economy as an isolated scientific subject, like the interior of a test tube, and treat politics and policy as a sort of exterior force, that can be isolated from the world of the chemist and pushed off-to-one side. Neoclassic economists consistently and deliberately blinds itself to politics and the dynamics of power, despite the deep entanglement of politics with everything economic. "I look at politics and the economy and see one thing, not two things, and I am astonished at the extent to which economists focus on the part they like to play with intellectually, while deliberately looking away from what is probably the more important part. "
Notable quotes:
"... when left-wing people say that economists are defenders and supporters of the current order of things, they have a point: ignoring power relationships and their impact on the world supports the continued existence of those relationships. ..."
"... Neoliberalism may have been in part so successful because it appeals to (and tries to explain many things in terms of) a narrative of competition (and assignment of reward and acknowedlgement) by merit. ..."
"... Most people, esp. when young (still largely sheltered) or (still) successful, probably have an exaggerated assessment of their own merit (absolute and relative) - often actively instilled and encouraged by an "enabling" environment. ..."
"... It promises a lake Wobegon of sorts where everybody (even though not all!) are above average, and it is finally recognized. ..."
Jan 22, 2017 | economistsview.typepad.com

William Meyer, Saturday, January 21, 2017 at 12:49 PM

What Wren-Lewis misses, I think, is that something I've noticed in my roughly a decade of reading economic blogs on the Internet. Economists have blinkers on. They want to view the economy as an isolated scientific subject, like the interior of a test tube, and treat politics and policy as a sort of exterior force, that can be isolated from the world of the chemist and pushed off-to-one side. It seems fairly clear to me that the two elements--politics and the economy--are obviously continuously co-mingled, and have all sorts of feedback loops running between them.

The discipline really consistently and deliberately blinds itself to politics and the dynamics of power, despite the deep entanglement of politics with everything economic. Wren-Lewis admits that macroeconomists "missed" the impacts of very high financial sector leverage, but finds that now that economists have noticed it, and suggested remedies, that the power of bank lobby prevents those remedies from being enacted. But shouldn't the political power of the finance lobby been a part of economic analysis of the world along with the dangers of the financial sector's use of extreme leverage? Does he think the two phenomena are unrelated?

Shouldn't economics pay more attention to the ongoing attempts of various groups to orient government policy in their favor, just like they pay attention to the trade deficit and GDP numbers?

I look at politics and the economy and see one thing, not two things, and I am astonished at the extent to which economists focus on the part they like to play with intellectually, while deliberately looking away from what is probably the more important part. Its like economists obsessively focus on the part that can be studied via numbers (money) and don't' want to think about the part that is harder to look quantify (political policy). And there is a political issue there, which Mr. Wren-Lewis, keeps ignoring in his defense of "mainstream economics."

The neoclassical economics tendency of not looking at power relationships makes power imbalances and their great influence on economics seem like "givens" or "natural endowments", which is clearly an intellectual sin of omission.

Many people, even within the halls of mainstream economics, note economists are "uncomfortable" with distributional issues.

Whether they like the implication or not, economists need to acknowledge that this discomfort has a profoundly conservative intellectual bias, in the sense that it make the status quo arrangement of society seem "natural" and "normal", when it is obviously humanly constructed and not in any sense "natural." So when left-wing people say that economists are defenders and supporters of the current order of things, they have a point: ignoring power relationships and their impact on the world supports the continued existence of those relationships.

Mr. Wren-Lewis seems like a nice guy, but he needs to take that simple home truth in. I'm not sure why he seems to struggle so with acknowledging it.

KPl, January 21, 2017 at 11:37 PM

"...but failing to ignore their successes,..."

Oh you mean the success of being able to raise asset prices without the growth in wages, make education costly and unaffordable without student loans, not chargeable under bankruptcy, spruce up employment figures by not counting the people who have stopped look for jobs because they cannot find one, make people debt serfs, make savers miserable by keeping interest rates at zero and making them take risks that they may not want to take though it is picking pennies in front of a steamroller, keeping wages stagnant for decades and thus impoverishing people.

The list of successes is endless and you should be glad we are NOT talking about them. Because if we do, the clan called economists might well be torched.

cm -> cm... , January 22, 2017 at 08:40 AM
Neoliberalism may have been in part so successful because it appeals to (and tries to explain many things in terms of) a narrative of competition (and assignment of reward and acknowedlgement) by merit.

Most people, esp. when young (still largely sheltered) or (still) successful, probably have an exaggerated assessment of their own merit (absolute and relative) - often actively instilled and encouraged by an "enabling" environment.

A large part is probably the idea that "markets" are "objective" or at least "impartial" in bringing out and rewarding merit - also technology and "data driven" technocratic management, which are attributed "objectivity". All in the explicitly stated or implied service of impartially recognizing merit and its lack.

It promises a lake Wobegon of sorts where everybody (even though not all!) are above average, and it is finally recognized.

libezkova : , January 22, 2017 at 07:11 PM
"Neoliberalism may have been in part so successful because it appeals to (and tries to explain many things in terms of) a narrative of competition (and assignment of reward and acknowedlgement) by merit."

A very important observation. Thank you !

[Jan 22, 2017] why many non-experts believe academic economists' pretensions to science and accuracy is BS.

Notable quotes:
"... Starting with three classic papers in the same 1982 issue of the Journal of Economic Theory, a large literature in economics has dealt with the implications for rational behavior of interacting with parties who, with small likelihood, may not be rational." ..."
"... It's why many non-experts believe academic economists' pretensions to science and accuracy is BS. ..."
Jan 22, 2017 | economistsview.typepad.com
Peter K, January 22, 2017 at 11:46 AM
http://rajivsethi.blogspot.com/2016/12/thomas-schelling-methodological.html

Sethi on Shelling:

"Similarly, in bargaining situations, "the sophisticated negotiator may find it difficult to seem as obstinate as a truly obstinate man." And when faced with a threat, it may be profitable to be known to possess "genuine ignorance, obstinacy or simple disbelief, since it may be more convincing to the prospective threatener."

Starting with three classic papers in the same 1982 issue of the Journal of Economic Theory, a large literature in economics has dealt with the implications for rational behavior of interacting with parties who, with small likelihood, may not be rational."

It's why many non-experts believe academic economists' pretensions to science and accuracy is BS.

Like Simon Wren-Lewis's blog-post the other day defending mainstream economics.

It's like they come up with the political answer they want and then rationalize it via math and rhetoric in a way that would make Kellyanne Conway proud.

[Jan 22, 2017] Economist's View Attacking Economics is a Diversionary Tactic

Simon Wren-Lewis does not understand (or more correctly does not want to understand) that there is no economics, only political economy and that neoclassical economics are stooges and propagandists of the Grand neoliberal Party, which pay them handsomely for role they are playing. Hiding ideology under the smoke screen of economics is not new, but under neoliberalism it is became status quo.
Notable quotes:
"... I have had a sense that during the 1970s conservative economists, "Chicago School" economists, become distinctly influential both in the field of economics and for policy makers. ] ..."
"... Economists have blinkers on. They want to view the economy as an isolated scientific subject, like the interior of a test tube, and treat politics and policy as a sort of exterior force, that can be isolated from the world of the chemist and pushed off-to-one side. ..."
"... It seems fairly clear to me that the two elements--politics and the economy--are obviously continuously co-mingled, and have all sorts of feedback loops running between them. The discipline really consistently and deliberately blinds itself to politics and the dynamics of power, despite the deep entanglement of politcs with everything economic. ..."
"... Wren-Lewis admits that macroeconomists "missed" the impacts of very high financial sector leverage, but finds that now that economists have noticed it, and suggested remedies, that the power of bank lobby prevents those remedies from being enacted. But shouldn't the political power of the finance lobby been a part of economic analysis of the world along with the dangers of the financial sector's use of extreme leverage? Does he think the two phenomena are unrelated? Shouldn't economics pay more attention to the ongoing attempts of various groups to orient government policy in their favor, just like they pay attention to the trade deficit and GDP numbers? ..."
"... I look at politics and the economy and see one thing, not two things, and I am astonished at the extent to which economists focus on the part they like to play with intellectually, while deliberately looking away from what is probably the more important part. Its like economists obsessively focus on the part that can be studied via numbers (money) and dont' want to think about the part that is harder to look quantify (political policy). And there is a political issue there, which Mr. Wren-Lewis, keeps ignoring in his defense of "mainstream economics." ..."
"... The neoclassical economics tendency of not looking at power relationships makes power imbalances and their great influence on economics seem like "givens" or "natural endowments", which is clearly an intellectual sin of omission. Many people, even within the halls of mainstream economics, note economists are "uncomfortable" with distributional issues. ..."
"... I don't see it as attacking economics as science tied to nature, as much as attacking economists who pick one "natural law" and apply it generally far outside the limits for which it applies, ignoring all the other laws that constrain it. ..."
"... "...but failing to ignore their successes,..." ..."
"... Oh you mean the success of being able to raise asset prices without the growth in wages, make education costly and unaffordable without student loans, not chargeable under bankruptcy, spruce up employment figures by not counting the people who have stopped look for jobs because they cannot find one, make people debt serfs, make savers miserable by keeping interest rates at zero and making them take risks that they may not want to take though it is picking pennies in front of a steamroller, keeping wages stagnant for decades and thus impoverishing people. The list of successes is endless and you should be glad we are NOT talking about them. Because if we do, the clan called economists might well be torched. ..."
Jan 22, 2017 | economistsview.typepad.com
Attacking Economics is a Diversionary Tactic Simon Wren-Lewis :
... ... ..

7. So given all this, why do some continue to attack economists? On the left there are heterodox economists who want nothing less than revolution, the overthrow of mainstream economics. It is the same revolution that their counterparts were saying was about to happen in the early 1970s when I learnt my first economics. They want people to believe that the bowdlerised version of economics used by neoliberals to support their ideology is in fact mainstream economics.

8. The right on the other hand is uncomfortable when evidence based economics conflicts with their politics. Their response is to attack economists. This is not a new phenomenon, as I showed in connection with the famous letter from 364 economists. With austerity they cherry picked the minority of economists who supported it, and then implemented a policy that even some of them would have disagreed with. (Rogoff did not support the cuts in public investment in 2010/11 which did most of the damage to the UK economy.) The media did the rest of the job for them by hardly ever talking about the majority of economists who did not support austerity.

... ... ...

anne -> anne... , January 21, 2017 at 12:39 PM
So given all this, why do some continue to attack economists? On the left there are heterodox economists who want nothing less than revolution, the overthrow of mainstream economics. It is the same revolution that their counterparts were saying was about to happen in the early 1970s when I learnt my first economics. They want people to believe that the bowdlerised version of economics used by neoliberals to support their ideology is in fact mainstream economics.

-- Simon Wren-Lewis

[ This is an important criticism that as such can surely be further explained and analyzed at length.

The reference to the work of "heterodox economists" in the 1970s is completely unknown to me and I would be interested in knowing more. After all, I have had a sense that during the 1970s conservative economists, "Chicago School" economists, become distinctly influential both in the field of economics and for policy makers. ]

anne -> anne... , January 21, 2017 at 02:28 PM
On the left there are heterodox economists who want nothing less than revolution, the overthrow of mainstream economics....

[ Since my understanding of heterodox economics is that it ranges from cultural to ecological perspectives to various degrees of institutional planning, I do not understand what revolution Simon Wren-Lewis has in mind. Also, again I do not understand what heterodox economics was in the 1970s. ]

pgl -> anne... , January 21, 2017 at 03:21 PM
"heterodox economists" is sort of like "neoliberal". We are talking what political types call a Big Tent. Alas the hyper political types here cast this tent over everyone they might disagree with. Which is sort of Simon's point.
William Meyer : , January 21, 2017 at 12:49 PM
What Wren-Lewis misses, I think, is that something I've noticed in my roughly a decade of reading economic blogs on the Internet. Economists have blinkers on. They want to view the economy as an isolated scientific subject, like the interior of a test tube, and treat politics and policy as a sort of exterior force, that can be isolated from the world of the chemist and pushed off-to-one side.

It seems fairly clear to me that the two elements--politics and the economy--are obviously continuously co-mingled, and have all sorts of feedback loops running between them. The discipline really consistently and deliberately blinds itself to politics and the dynamics of power, despite the deep entanglement of politcs with everything economic.

Wren-Lewis admits that macroeconomists "missed" the impacts of very high financial sector leverage, but finds that now that economists have noticed it, and suggested remedies, that the power of bank lobby prevents those remedies from being enacted. But shouldn't the political power of the finance lobby been a part of economic analysis of the world along with the dangers of the financial sector's use of extreme leverage? Does he think the two phenomena are unrelated? Shouldn't economics pay more attention to the ongoing attempts of various groups to orient government policy in their favor, just like they pay attention to the trade deficit and GDP numbers?

I look at politics and the economy and see one thing, not two things, and I am astonished at the extent to which economists focus on the part they like to play with intellectually, while deliberately looking away from what is probably the more important part. Its like economists obsessively focus on the part that can be studied via numbers (money) and dont' want to think about the part that is harder to look quantify (political policy). And there is a political issue there, which Mr. Wren-Lewis, keeps ignoring in his defense of "mainstream economics."

The neoclassical economics tendency of not looking at power relationships makes power imbalances and their great influence on economics seem like "givens" or "natural endowments", which is clearly an intellectual sin of omission. Many people, even within the halls of mainstream economics, note economists are "uncomfortable" with distributional issues.

Whether they like the implication or not, economists need to acknowledge that this discomfort has a profoundly conservative intellectual bias, in the sense that it make the status quo arrangement of society seem "natural" and "normal", when it is obviously humanly constructed and not in any sense "natural."

So when left-wing people say that economists are defenders and supporters of the current order of things, they have a point: ignoring power relationships and their impact on the world supports the contined existence of those relationships. Mr. Wren-Lewis seems like a nice guy, but he needs to take that simple home truth in. I'm not sure why he seems to struggle so with acknowledging it.

anne -> William Meyer... , January 21, 2017 at 01:04 PM
Really fine criticism.

The sense that the study of economics is a political-economic study appears as a rejection of what is supposed to be technocratic, supposed to be the study of the mechanics of capitalism in a pure frame as though capitalist mechanics were not continually defined. The mechanics of pure capitalism dictates a technocratic politics:

http://delong.typepad.com/sdj/2012/08/should-erskine-bowles-be-treasury-secretary-i-say-no.html

August 10, 2012

My judgment isn't a left-wing judgment: it is a technocratic-political judgment. I speak as a card-carrying neoliberal long-run budget-balancer....

-- Brad DeLong

pgl -> William Meyer... , January 21, 2017 at 03:23 PM
The point being we cannot ignore the politics? Simon gets the politics but he still tries to get the analysis straight. I find this to be a very important thing to do but then the hyper political types call getting the analysis right lying. Or something like that.
William Meyer -> pgl... , January 21, 2017 at 05:26 PM
No, you pretty much seem to be missing my point completely. It's not about getting the economics right and the politics right as two separate exercises, it's about taking seriously the interactions between the two. Who knows, maybe if someone had modelled the positive feedback loops between lobbying expenditures, industry-friendly public policy, and industry profits for, say, the financial industry, someone might have correctly predicted the financial crisis of 2008, and perhaps even predicted that it would also be almost impossible for the government to take the necessary action to correct the problem politically, and that this would result in a sluggish economy post-crisis. Whereas, keeping these issues separate as we currently do makes it pretty much a sure bet that no one will have a very good insight into how the real world will unfold in the future.
anne -> William Meyer... , January 21, 2017 at 05:33 PM
https://www.nytimes.com/2017/01/20/business/dealbook/george-osborne-britain-blackrock-adviser.html

January 19, 2017

Former Top British Official to Join BlackRock as an Adviser
By CHAD BRAY

The move by George Osborne, the former chancellor of the Exchequer, is the latest example of British politicians taking financial jobs.

anne -> William Meyer... , January 21, 2017 at 05:36 PM
https://www.nytimes.com/2017/01/20/business/dealbook/george-osborne-britain-blackrock-adviser.html

January 19, 2017

Former Top British Official to Join BlackRock as an Adviser
By CHAD BRAY

Other recent moves from Westminster, where Britain's government is based, to the City, as the historical London financial district is known, include:

William Hague, the former British foreign minister, who this week announced that he was joining Citigroup as a senior adviser.

Alistair Darling, a former member of Parliament and the chancellor before Mr. Osborne, joined Morgan Stanley's board of directors last year.

Gordon Brown, the former British prime minister, joined a global advisory board at Pimco last year. The advisory board's members include Ben Bernanke, the former Federal Reserve chairman.

Tony Blair, the British prime minister before Mr. Brown, joined JPMorgan Chase as a part-time senior adviser in 2008.

Gibbon1 -> pgl... , January 21, 2017 at 06:21 PM
You think what's needed is a perfect plan. You are so wrong because you lack life experience. Tip for the neoliberal pgl from the world of business, engineering, war and politics.

A bad plan executed well beats a good plan executed badly.

pgl -> Gibbon1... , January 22, 2017 at 03:01 AM
A perfect plan? Sorry dude but this is a complete misrepresentation of what we "neoliberals" are saying.
BenIsNotYoda : , January 21, 2017 at 12:58 PM
You want to know why economists are being attacked. The Yellen Fed is rapidly digressing into a political entity. The Fed is allegedly independent of politics, but Janet Yellen's latest statements leave no doubt that she is more of a political operative than an economist.

Three months ago, on October 14 2016, Yellen stated the following:

Yellen Cites Benefits to Running Economy Hot for Some Time

Federal Reserve Chairwoman Janet Yellen offered an argument for running the U.S. economy hot for a period to ensure moribund growth doesn't become an entrenched feature of the business landscape. That would mean letting unemployment fall lower and spurring faster growth to boost consumer spending and business investment.

Source: Wall Street Journal

Compare this language to Yellen's statement from last week.

Federal Reserve Chair Janet Yellen backed a strategy for gradually raising interest rates, arguing that the central bank wasn't behind the curve in containing inflation pressures but nevertheless can't afford to allow the economy to run too hot. Still, she saw dangers in permitting the economy to overheat and inflation expectations to get out of control. "Allowing the economy to run markedly and persistently 'hot' would be risky and unwise," she said.

Source: Bloomberg.

So three months ago, running the economy "hot" was a good idea. But today, it's a massive risk that we cannot afford to take.

What changed in those three months?

Core inflation rose 0.1%. And the US closed 2016 with a sub-2% growth rate for the year. Neither of those would qualify as remotely "hot."

The main change? The GOP took the House, Senate, and White House.

Bear in mind, Yellen's statement came a mere 24 hours after then President-elect Donald Trump commented that the US Dollar was "too strong."

So we have a Fed chair performing a 180% on running a "hot" economy within three months and openly defying the new administration's views on the US Dollar at a time when the data doesn't support any of her claims.

Yellen may be seeing something everyone else is not, but it is difficult to see this as anything other than political hackery.

TrumpisaJew -> BenIsNotYoda... , January 21, 2017 at 02:09 PM
Uh dude, CPI is running at 2.1% yry and will rise further when the 2016 oil "mirage" is removed unless we can get another price collapse. Inflation was firming right under your noise.

The economy from a monetary pov is indeed running hot. This is what you do not understand. The structural issues deal with the plutocratic tyranny that began under Reagan and the zionist Trump cabal want to take to another level. Jack London called it the Iron Heel.

BenIsNotYoda -> TrumpisaJew... , January 21, 2017 at 02:40 PM
First of all, core CPI (which according to the Fed is a better measure) has been above 2% level since Nov 2015. So CPI inflation around 2% level is NOT NEW NEWS. If rates should rise because of inflation, then why did she not raise them a lot before? Answer - because Obama was in office. The plan was to get HRC into office and run a high pressure economy with low unemployment and high inflation. That all changed when the GOP won. Those are the facts. Yellen is nothing but a disgusting political operative.

Your handle is offensive. But hey, this is a free country. Or was, till the liberal left decided that the first amendment only applies if you agree with them.

TrumpisaJew -> BenIsNotYoda... , January 21, 2017 at 02:51 PM
liberal left? maybe if you would stop being a fixated little shit and understand how bad "hot" monetary expansions are, you would grow a pair.

The Friedman era is over.

mulp -> BenIsNotYoda... , January 21, 2017 at 03:02 PM
Yet again, bad economics are behind most Fed related policy proclamations justifying and criticizing Fed policy.

Do don't think even Milton Friedman would accept any of it, unless he let politics blind him to what was clear to him in the 50s and 60s.

In the 50s and 60s, he would be debating the cratering velocity, it's causes, and remedies. He would not be blindly calling for increasing or decreasing the growth in money supply.

Scott summer is calling blindly for higher growth in money supply by blindly advocating "NGDP targeting" while ignoring the exporting of "capital" and importing of labor, and ignoring the falling velocity of money.

The two are likely closely tied, in that money created that flows out of the US as "capital" where is pays no workers in the US, thus never adding to US GDP, means the Fed can't boost NGDP.

The reality is the Fed can have no significant impact on the economy by any normal policy moves. Changing the interest rates by purchase and repo trades to US Treasuries at 4% would not impact the economy because of the new market interest rates, but the reaction of interest payers will impact the economy. Everyone assumes higher interest payments will mean less paid to workers, because the way to cut the burden of interest payments is to cut revenue so interest becomes a higher share of revenue. In reality, what is cut is buying goods with future wages and working hard to repay borrowed labor costs. Keynes notes that the individual self interest reaction is both collectively and individually harmful.

The high level of debt from consumption in a growing economy is extremely harmful, yet Fed policy has been promoting job killing debt funded consumption by doing less of what Scott Summer advocates it should do to create jobs.

BenIsNotYoda -> mulp... , January 21, 2017 at 03:12 PM
I am not debating policy. Just pointing out how Yellen has changed her colors as soon as her beloved HRC lost.
pgl -> BenIsNotYoda... , January 21, 2017 at 03:18 PM
She would claim we are now at full employment. But as you may well know - I think we are far from full employment.
BenIsNotYoda -> pgl... , January 21, 2017 at 03:31 PM
You and I are in full agreement that we are NOT at full employment.
BenIsNotYoda -> BenIsNotYoda... , January 21, 2017 at 03:32 PM
and I am incensed that Yellen would think of raising rates quicker just because Trump won.
pgl -> BenIsNotYoda... , January 21, 2017 at 03:36 PM
Fair enough. I think we are in agreement that monetary policy should be based on the state of the economy and not politics even if we have a genuine disagreement about the state of the economy. But at least you and I are having a principled discussion. Something others here should emulate.
anne : , January 21, 2017 at 01:57 PM
https://en.wikipedia.org/wiki/Heterodox_economics

Heterodox economics refers to methodologies or schools of economic thought that are considered outside of "mainstream economics", often represented by expositors as contrasting with or going beyond neoclassical economics. "Heterodox economics" is an umbrella term used to cover various approaches, schools, or traditions. These include socialist, Marxian, institutional, evolutionary, Georgist, Austrian, feminist, social, post-Keynesian (not to be confused with New Keynesian), and ecological economics among others.

Mainstream economics may be called orthodox or conventional economics by its critics. Alternatively, mainstream economics deals with the "rationality–individualism–equilibrium nexus" and heterodox economics is more "radical" in dealing with the "institutions–history–social structure nexus". Many mainstream economists dismiss heterodox economics as "fringe" and "irrelevant", with little or no influence on the vast majority of academic economists in the English-speaking world.

mulp -> anne... , January 21, 2017 at 02:14 PM
Heterodox is in the eye of the beholder.

It seems mainstream to argue that a high tax rate and costly regulations kill jobs, and that cutting taxes and regulations will create jobs because rewarding higher profits from reducing labor costs far below prices, and eliminating all the labor costs to comply with regulations will create jobs, because lower labor costs mean more workers being paid higher wages.

But can someone explain the mainstream economic theory of reducing labor costs resulting in more workers getting paid more??? Looks like voodoo to me.

anne -> mulp... , January 21, 2017 at 03:00 PM
But can someone explain the mainstream economic theory of reducing labor costs resulting in more workers getting paid more???

[ This is precisely what technological progress has allowed since the beginning of the industrial revolution. ]

Gibbon1 -> anne... , January 21, 2017 at 10:43 PM
Last 40 years though proves that increase in productivity != high wages.
mulp : , January 21, 2017 at 02:08 PM
Echoing Simon, and rehashing my criticisms:

I don't see it as attacking economics as science tied to nature, as much as attacking economists who pick one "natural law" and apply it generally far outside the limits for which it applies, ignoring all the other laws that constrain it.

For example demand price theory and elasticity is sound natural law. It's like Boyles Law of gases. Boyles law applies over a range of pressures and temperature for which the gas remains a gas. It has limits, the point the "gas" becomes liquid or solid.

The idea that lower prices will create jobs applies only for a limited range of prices and quantities, but once outside those bound, lower prices MUST KILL JOBS.

The Laffer curve is an elasticity curve that covers the entire range of tax rates. A carbon tax works by moving up the curve to the point zero tax revenue is generated. The higher the tax, the cheaper it is to pay workers to build substitutes that do not burn fossil fuels, and instead of paying taxes, you pay the cheaper payroll of more workers.

Likewise, a high tax rate on economic aka monopoly profits, and on rents, the cheaper paying workers to build tax dodging depreciating capital becomes, which in the long run increases the capital stock, the product quantity, and thus prices are driven to cost eliminating economic profit and economic rents.

The point of high tax rates, tax rates of 50% and up, is not to raise revenue but to cause paying workers for substitutes.

On the other hand, government is a product, the general welfare, so, to increase the quantity of general welfare, tax rates need to be high enough to pay workers. The cost of general welfare is certainly much less than 50% of the economy in the long run, so tax rates are at all points in the lower part of the Laffer curve so lowering rates will reduce the quantity of general welfare that can be produced. And the general welfare is always from paying workers.

So, economists across the board are pretty universally wrong about tax rates and about prices levels, and the impact of raising and lowering them.

At the micro level, the theory is clear. At the micro level, the principle of zero sum is held as a natural law constraint.

Moving to macro does not eliminate any of the natural laws of micro, but instead moves economics from the micro theory of the two body problem, two bodies of mass rotating about each other, to macro theory of the n-body problem of sun, planets, solar systems, galaxies all rotating around each other. At this level, many natural laws come into play, like general relativity in its many forms including imputing mass to energy, going far beyond Newtonian physics, yet not discarding it.

Macro economists have either blindly and wishfully forgotten or ignored fundamental micro laws, or intentionally eliminated them from the macro proclamations to deceive.


When Bernie Sanders argues a carbon tax can pay for vast welfare state benefits, is he intentionally lying, or has he been deceived by self deceiving economists who wishfully seek a free lunch economic system where money comes from nothing?

When Milton Friedman argued in 1970 lower tax rates would generate the same tax revenue and create more jobs and output, was he intentionally lying, or self deceiving himself?

Milton Friedman in arguing against high tax rates made a point of all the jobs and wage income that resulted from the high tax rates, jobs and income he considered wasteful spending promoted by the tax policy. He even noted that the high wage income increased demand for goods and services, consumption he considered wasteful.

So, as the father of the macro economic policy of tax (rate) cuts, how can it be a policy to boost gdp and jobs to cut taxes as Friedman argued?

Trump seems to latch onto simplified macro economic half baked policy ideas an run with them to the max. The economists who crafted the policy statements he has extracted his proclamations from are horrified by what he is doing with their policy proclamations. Proclamations that are half baked and thus violate natural law.

Take the economists at Econlog from which Trump gets a lot of his economics. They are horrified. Yet their economic "theory" clearly does not work. Trade theory in particular. The micro theory of trade exchanges labor for labor, ie, your labor makes goods traded for goods I make with my labor. But trade today swaps labor for capital, so jobs are moved from one nation to another in exchange for reducing the wealth of the other.

Saudi Arabia is the simplest example. It sells it's natural capital and then imports labor goods at prices lower than Saudi workers can hope to produce them, thus killing jobs in Saudi Arabia. The crisis in Saudi Arabia is a lack of opportunity for the Saudi people who are multiplying as if it were still an undeveloped nation with high mortality rate.

Since Reagan, the US has become more like Saudi Arabia, selling off capital to buy cheap goods from less developed economies where labor is relatively cheaper and sending back capital, killing jobs in the process and eliminating economic opportunity to Trump voters.

Milton Friedman argued that this was a good policy because we as a nation were better off from China effectively gifting us cheap goods and that on the whole, the US is better off from jobs lost in the US. He hinted at using the consumer surplus of cheap imports to pay welfare to those who lost jobs, but those advocating job killing trade imbalance also condemn welfare payments, blaming those who lost jobs as being at fault.

So, Trump is going back to micro economics and promising to make sure trade is going to create jobs in the US. But he also grabs onto and clings to the cheap price concept that requires killing jobs. Trump is going to ensure energy is cheap, which means he will never ban oil imports or put a $50 a barrel tariff on oil imports.

What policy could Trump do to create jobs quickly? A $50 a barrel tariff on imported oil, say phase it in over a year, $20 starting April 1, $30 July 1, $40 Oct 1, $50 Jan 1 2018. This time, ExxonMobil will not have high profits from $4 gasoline and heating oil because they will be paying 25,000 more direct workers to drill baby frack, plus ten times as many supporting jobs, as they build assets they can rapidly depreciate or expense to wipe out taxable profits. At the same time, incumbents drillers will return to high gear. If Trump rebates a tariff on exported refined oil products, it would delay NAFTA sanctions as oil products consumed in Mexico and Canada will be cheaper but exports will not be reduced much. On the global market, the results will be devastating with oil prices crashing. Putin would likely target Trump for going to war on the Russian people and economy.

Bernie would likely attack Trump for his policy hiking the price of heating oil to the working poor of Vermont. But you can't pay more American workers without higher energy prices. Vermont's working poor will end up with better pay if energy efficiency investments are made in Vermont because neither Chinese nor Saudi workers can eliminate the need for oil to keep housing warm in Vermont.

And the $50 a barrel tariff on imported oil will generate no revenue for government to spend by 2020 if oil product exports get tariff rebates.

anne : , January 21, 2017 at 02:19 PM
https://mainly macro.blogspot.com/2017/01/attacking-economics-is-diversionary.html

January 21, 2017

Attacking economics is a diversionary tactic

The financial crisis in the UK was the result of losses by banks on overseas assets, originating from the collapse in the US subprime market. It was not a result of excessive borrowing by UK consumers, firms or our government. As the Bank's Ben Broadbent points out, "Thanks to the international exposure of its banks the UK has been, in some sense, a "net importer" of the financial crisis." This overseas lending caused a crisis because banks were far too highly levered, and so could not absorb these losses and had to be bailed out by the government.

This is why UK macroeconomists failed to pick up the impending crisis. They did routinely monitor personal, corporate and government borrowing, but not the amount of bank leverage. Macroeconomists generally acknowledge that they were at fault in ignoring the crucial role that financial sector leverage can play in influencing the macroeconomy. There has been a huge increase in the amount of research on these finance-macro linkages since the crisis.

But supposing economists had ensured that they knew about the increase in bank leverage and had collectively warned of the dangers of excessive risk taking that this represented. Would it have made any difference? There are good reasons for thinking it would not.

The main evidence for this is what has happened after the crisis. Admati and Hellweg have written persuasively that we need a huge increase in bank capital requirements to bring the 'too big to fail' problem to an end and avoid a future banking crisis, and the work of David Miles in the UK has a similar message. I have not come across an academic economist who seriously dissents from this analysis, but it has no impact on policy at all. The power of the banking lobby is just too strong....

KPl : , January 21, 2017 at 11:37 PM
"...but failing to ignore their successes,..."

Oh you mean the success of being able to raise asset prices without the growth in wages, make education costly and unaffordable without student loans, not chargeable under bankruptcy, spruce up employment figures by not counting the people who have stopped look for jobs because they cannot find one, make people debt serfs, make savers miserable by keeping interest rates at zero and making them take risks that they may not want to take though it is picking pennies in front of a steamroller, keeping wages stagnant for decades and thus impoverishing people. The list of successes is endless and you should be glad we are NOT talking about them. Because if we do, the clan called economists might well be torched.

DeDude : , January 22, 2017 at 06:51 AM
If you attack the idea of facts, knowledge and expertise, then it becomes a lot easier to manipulate people and society.

[Jan 22, 2017] Is Global Equality the Enemy of National Equality

Notable quotes:
"... You can't get something from nothing but, believe it or not, the money is there, somewhere to make $10 jobs into $20. Bottom 45% of earners take 10% of overall income; down from 20% since 1980 (roughly -- worst be from 1973 but nobody seems to use that); top 1% take 20%; double the 10% from 1980. ..."
"... Top 1% share doubled -- of 50% larger pie! ..."
"... One of many remedies: majority run politics wont hesitate to transfer a lot of that lately added 10% from the 1% back to the 54% who now take 70% -- who can transfer it on down to the 45% by paying higher retail prices -- with Eisenhower level income tax. In any case per capita income grows more than 10% over one decade to cover 55%-to-45% income shifting. ..."
"... Not to mention other ways -- multiple efficiencies -- to get multiple-10%'s back: squeezing out financialization; sniffing out things like for-profit edus (unions providing the personnel quantity necessary to keep up with society's many schemers; snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary volume of lobbying and political financing; less (mostly gone) poverty = mostly gone crime and its criminal justice expenses. ..."
"... IOW, labor unions = a normal country. ..."
Jan 22, 2017 | economistsview.typepad.com
Denis Drew : January 22, 2017 at 02:01 PM
Simple, adequate if not perfect -- but adequate -- answer -- in any rate the only answer by now -- to losing manufacturing jobs to outsourcing or automation:

Doubling of per capita income since 1968 -- when fed min wage was $11 -- means the labor market will support; means the ultimate consumer will pony up for a high enough price: to allow most jobs (e.g., stacking shelves at WalMart) to pay $20 (jobs that now pay $10).

THE MONEY IS THERE SOMEWHERE

You can't get something from nothing but, believe it or not, the money is there, somewhere to make $10 jobs into $20. Bottom 45% of earners take 10% of overall income; down from 20% since 1980 (roughly -- worst be from 1973 but nobody seems to use that); top 1% take 20%; double the 10% from 1980.

Top 1% share doubled -- of 50% larger pie!

One of many remedies: majority run politics wont hesitate to transfer a lot of that lately added 10% from the 1% back to the 54% who now take 70% -- who can transfer it on down to the 45% by paying higher retail prices -- with Eisenhower level income tax. In any case per capita income grows more than 10% over one decade to cover 55%-to-45% income shifting.

Not to mention other ways -- multiple efficiencies -- to get multiple-10%'s back: squeezing out financialization; sniffing out things like for-profit edus (unions providing the personnel quantity necessary to keep up with society's many schemers; snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary volume of lobbying and political financing; less (mostly gone) poverty = mostly gone crime and its criminal justice expenses.

IOW, labor unions = a normal country.

ALSO HEALTH CARE IS GROWING BY LEAPS AND BOUNDS AND CAN TAKE UP MANUFACTURING'S SLACK.

Males need to be less afraid of formerly "feminine" rolls like nurse. Was in urgent-care walk in last week -- nurses or something like: one, big guy with dagger into skull tattoo on one forearm, "RESPECT" on other. Other looked very male too. Health care conveniently for labor market spread evenly everywhere -- hopefully to be covered by gov (next Dem Congress).

HERE'S HOW TO UNION-UP

America should feel perfectly free to rebuild labor union density one state at a time -- making union busting a felony. Republicans will have no place to hide.

Suppose the 1935 Congress passed the NLRA(a) intending to leave any criminal sanctions for obstructing union organizing to the states. Might have been because NLRB(b) conducted union elections take place local by local (not nationwide) and Congress could have opined states would deal more efficiently with home conditions -- or whatever. What extra words might Congress have needed to add to today's actual bill? Actually, today's identical NLRA wording would have sufficed perfectly.

Suppose, again, that under the RLA (Railroad Labor Act -- covers railroads and airlines, FedEx) -- wherein elections are conducted nationally -- that Congress desired to forbid states criminalizing the firing of organizers -- how could Congress have worded such a preemption (assuming it was constitutionally valid)? Shouldn't matter to us. Congress did not!

Note well: it is not mostly the organizer's job loss to be punished; it is much more the interference with all employees' bargaining power -- working them for less.

For more musings on what and how else to dump the Trump boys by banging loudly and everywhere on the labor union drum, see here (work permanently in progress): http://ontodayspage.blogspot.com/2016/12/wet-backs-and-narrow-backs-irish.html

Ann; you know often I do 4,000-5,000 spam mails -- mostly journalists, state legislators, unions -- if I get one or two click-backs of something of my own that's good.

This one I only sent out maybe 2,000 -- concentrated mostly on Illinois, Wisconsin and Minnesota -- and this week got an unheard of 80 click-backs on this link (hopefully some looked at the blog too).

So, maybe something's stirring. So try to relax -- all in fun. :-) Planning to blanket every state -- may take couple of months.

anne -> Denis Drew ... , January 22, 2017 at 02:15 PM
I will always support your work, even if I complain.
anne -> Denis Drew ... , January 22, 2017 at 02:17 PM
http://ontodayspage.blogspot.com/2016/12/wet-backs-and-narrow-backs-irish.html

December 16, 2016

Wet backs and narrow backs (Irish immigrants' native born kiddies)
By Denis Drew

[Jan 22, 2017] All oil producers will eventually need $75-$80 per barrel to maintain the current level of production, to say nothing to expand it.

Notable quotes:
"... Saudi Arabia's oil minister Khalid Al-Falih says it may not be necessary to extend the deal reached by the group and some non-member nations to cut oil supply by around 1.8 million barrels a day beyond its initial six months, and that doing so could create a shortage. That seems a very quick and painless solution to an oversupply problem that has bedeviled the oil market for the past two years, brought several producers to the brink of collapse and tipped others over it. ..."
"... Saudi oil usage has dropped as natural gas replaces around a third of what it uses for power generation ..."
"... But that changed last year. The start-up of the Wasit gas plant allowed the kingdom to slash the use of crude in power generation by as much as a third -- freeing that oil up for export. In addition, the kingdom cut fuel subsidies, pushing down oil consumption by 2 percent year-on-year in the first eleven months of 2016. That's the first dip since at least 2003, when JODI records begin. ..."
"... In other words oil producers can not afford more then a decade or so with the current oil prices. That means the price in 2026 should be closer to $100 then to $50 per barrel. ..."
"... Also existing wells decline at the rate that can vary from 2% to 16% per year (shale oil) unless you use infill drilling and other measures to stem the decline. The latter requires money or access to junk bond market (business model for the USA shale oil producers). ..."
Jan 22, 2017 | economistsview.typepad.com
im1dc : January 22, 2017 at 10:44 AM , 2017 at 10:44 AM
This is intriguing breaking Crude Oil information and news we need to be aware of

https://www.bloomberg.com/gadfly/articles/2017-01-22/why-saudi-arabia-may-walk-away-from-opec-deal-by-june

"Why Saudi Arabia May Unravel OPEC's Big Deal"

By *Julian Lee...Jan 22, 2017...3:00 AM EST

"OPEC's big drama may well be just a one-act light opera.

Saudi Arabia's oil minister Khalid Al-Falih says it may not be necessary to extend the deal reached by the group and some non-member nations to cut oil supply by around 1.8 million barrels a day beyond its initial six months, and that doing so could create a shortage. That seems a very quick and painless solution to an oversupply problem that has bedeviled the oil market for the past two years, brought several producers to the brink of collapse and tipped others over it.

It took a lot for the Saudis to agree to this deal in November, but the rationale seemed at least to make sense. Brimming supply had created financial difficulties for the kingdom, and also complicated the forthcoming IPO of a small part of Saudi Aramco.

Saudi Crude Exports

Crude oil exports hit a 13-year high in November, as OPEC met to agree output cuts

Graphic

The latest numbers from the Joint Organisations Data Initiative offer a different, and compelling, narrative. It turns out that, as the deal was being thrashed out, Saudi Arabia was enjoying a 35-year high in total oil exports.

One big factor was a huge drop in the amount of oil the country needs to burn to generate electricity. The punishing Saudi summers boost demand for electricity -- mostly to run air-conditioners -- to a level that previously required vast amounts of oil-fired generating capacity to be brought into use. The direct burning of crude oil in power stations would roughly double to about 900,000 barrels a day at the height of the season.

Burning Crude

Saudi oil usage has dropped as natural gas replaces around a third of what it uses for power generation

Graphic

But that changed last year. The start-up of the Wasit gas plant allowed the kingdom to slash the use of crude in power generation by as much as a third -- freeing that oil up for export. In addition, the kingdom cut fuel subsidies, pushing down oil consumption by 2 percent year-on-year in the first eleven months of 2016. That's the first dip since at least 2003, when JODI records begin.

This left Saudi Arabia with an embarrassment of riches as the OPEC negotiations were underway last year. Unless it cut output, it would start flooding the market during the first half of 2017. The stars were aligned for it to solve the problem by persuading others to share the burden in a way that has not been seen since the financial crisis of 2008, while at the same time restoring its credentials as a team player within OPEC.
Demand Contraction

We really don't know, and never will, what the true Saudi motivation for agreeing to production cuts was or is. But this new read on the Saudis' motivations for agreeing to the deal has the benefit of explaining why Al-Falih is looking for a six-month time line and why the kingdom has been prepared to make such a deep cut in its production. Its surplus will have disappeared by that time, at which point it can start to boost production again in order to get exports back to the level it wants to maintain.

Such a move could easily be the catalyst for the whole deal to fall apart by June. And there's no way the global backlog of inventory will be dealt with at that time. This seems a situation designed to antagonize the rest of the group and create a raft of bad feeling.

If maintaining exports is more important to Saudi Arabia than balancing the market, then so is a willingness to back out on a hard-won deal that took the kingdom and its partners a lot of political capital to achieve."

'This column does not necessarily reflect the opinion of Bloomberg LP and its owners'

*Julian Lee is an oil strategist for Bloomberg First Word. Previously he worked as a senior analyst at the Centre for Global Energy Studies

libezkova -> im1dc... , January 22, 2017 at 02:04 PM
"*Julian Lee is an oil strategist for Bloomberg First Word. Previously he worked as a senior analyst at the Centre for Global Energy Studies"

That tells you a lot. Bloomberg playing oil short for the last two and half years and probably will continue to do so.

For Us shale oil "break even" price is over $55. For oil sands this "price red line" is probably higher -- $65 per barrel or more.

One cent lower gas prices for a year mean one billion saved for the USA economy. So this "oil stimulus" for the last two and half years of Obama presidency was simply enormous. And in this sense playing Iran card was probably the most brilliant move Obama ever made. That's probably why economy looks slightly better right now and we are not in the recession. So all Yellen noises about 2017 rate hikes are what they are -- politically inspired noise.

In 2017 "oil stimulus" will decline. EIA average for WTI are $43.33 for 2016 and $52.50 for 2017 (forecast), the rise of around 20%. That's around 200 billion taken from the US economy. Oil closed Friday 53.18, so EIA forecast for 2017 might be too conservative.

The key problem with "low oil price forever" hypothesis this is that there are very few places where you can get oil out of the ground for less then $55 per barrel and get a reasonable profit (or balance state budget for oil states).

And BTW Saudis needs around $75-80 per barrel to balance the budget. Probably more (close to $100 per barrel) with Yemen war. Their own oil consumption also continue to grow.

They can sell oil below this price point only as long as they have foreign currency reserves and can accumulate debt. If they tighten the belts they can probably survive on $55-$65 per barrel. But no more military adventures and huge purchases of arms from the USA. Parasitic Saudi nobility appetites also need to be curbed.

And KSA case is pretty much what we can expect in the future: all oil producers will eventually need $75-$80 per barrel to maintain the current level of production, to say nothing to expand it.

And the world consumption still grow annually by 1-1.5 Mb/d (million barrels per day) and this pace will probably continue for the next decade.

In other words oil producers can not afford more then a decade or so with the current oil prices. That means the price in 2026 should be closer to $100 then to $50 per barrel.

Also existing wells decline at the rate that can vary from 2% to 16% per year (shale oil) unless you use infill drilling and other measures to stem the decline. The latter requires money or access to junk bond market (business model for the USA shale oil producers).

Exploration requires money too and all of this stopped in 2015 with the negative effects probably three-four years down the road.

It is also not unconceivable that we are close to so called "Seneca Cliff" when all those stop gap measures will stop working simultaneously and we enter the phase of a steep decline.

[Jan 22, 2017] It's urgent Democrats stop squabbling and recognize seven basic truths:

Jan 22, 2017 | economistsview.typepad.com
libezkova : January 22, 2017 at 10:12 AM , 2017 at 10:12 AM
Robert Reich:

http://www.alternet.org/news-amp-politics/reich-7-hard-truths-democrats-future-bleak-without-radical-reforms

It's urgent Democrats stop squabbling and recognize seven basic truths:

1. The Party is on life support. Democrats are in the minority in both the House and Senate, with no end in sight. Since the start of the Obama Administration they've lost 1,034 state and federal seats. They hold only governorships, and face 32 state legislatures fully under GOP control. No one speaks for the party as a whole. The Party's top leaders are aging, and the back bench is thin.

The future is bleak unless the Party radically reforms itself. If Republicans do well in the 2018 midterms, they'll control Congress and the Supreme Court for years. If they continue to hold most statehouses, they could entrench themselves for a generation.

2. We are now in a populist era. The strongest and most powerful force in American politics is a rejection of the status quo, a repudiation of politics as usual, and a deep and profound distrust of elites, including the current power structure of America.

That force propelled Donald Trump into the White House. He represents the authoritarian side of populism. Bernie Sanders's primary campaign represented the progressive side.

The question hovering over America's future is which form of populism will ultimately prevail. At some point, hopefully, Trump voters will discover they've been hoodwinked. Even in its purist form, authoritarian populism doesn't work because it destroys democracy. Democrats must offer the alternative.

3. The economy is not working for most Americans. The economic data show lower unemployment and higher wages than eight years ago, but the typical family is still poorer today than it was in 2000, adjusted for inflation; median weekly earning are no higher than in 2000; a large number of working-age people-mostly men-have dropped out of the labor force altogether; and job insecurity is endemic.

Inequality is wider and its consequences more savage in America than in any other advanced nation.

4. The Party's moneyed establishment-big donors, major lobbyists, retired members of Congress who have become bundlers and lobbyists-are part of the problem. Even though many consider themselves "liberal" and don't recoil from an active government, their preferred remedies spare corporations and the wealthiest from making any sacrifices.

The moneyed interests in the Party allowed the deregulation of Wall Street and then encouraged the bailout of the Street. They're barely concerned about the growth of tax havens, inside trading, increasing market power in major industries (pharmaceuticals, telecom, airlines, private health insurers, food processors, finance, even high tech), and widening inequality.

Meanwhile, they've allowed labor unions to shrink to near irrelevance. Unionized workers used to be the ground troops of the Democratic Party. In the 1950s, more than a third of all private-sector workers were unionized; today, fewer than 7 percent are.

5. It's not enough for Democrats to be "against Trump," and defend the status quo. Democrats have to fight like hell against regressive policies Trump wants to put in place, but Democrats also need to fight for a bold vision of what the nation must achieve-like expanding Social Security, and financing the expansion by raising the cap on income subject to Social Security taxes; Medicare for all; and world-class free public education for all.

And Democrats must diligently seek to establish countervailing power-stronger trade unions, community banks, more incentives for employee ownership and small businesses, and electoral reforms that get big money out of politics and expand the right to vote.

6. The life of the Party-its enthusiasm, passion, youth, principles, and ideals-was elicited by Bernie Sanders's campaign. This isn't to denigrate what Hillary Clinton accomplished-she did, after all, win the popular vote in the presidential election by almost 3 million people. It's only to recognize what all of us witnessed: the huge outpouring of excitement that Bernie's campaign inspired, especially from the young. This is the future of the Democratic Party.

7. The Party must change from being a giant fundraising machine to a movement.It needs to unite the poor, working class, and middle class, black and white-who haven't had a raise in 30 years, and who feel angry, powerless, and disenfranchised.

ilsm -> libezkova... , January 22, 2017 at 11:02 AM
1. the party is run by crooks

2. the party is f the bankers

3. our bankers are doing very well

4. our bankers are the party

5. we don't have anything that sells except for our bankers

6. DNC crooks are the life of the party

7. party needs more GLBT and abortion issues to get the plundered to buy in

Peter K. -> libezkova... , January 22, 2017 at 11:29 AM
Some uncomfortable truths from Reich.

"6. The life of the Party-its enthusiasm, passion, youth, principles, and ideals-was elicited by Bernie Sanders's campaign."

point -> libezkova... , January 22, 2017 at 11:44 AM
Cruising all my lefty bookmarked sites, this is the only one (Reich's bog) that comes even close to saying the Democratic Party is risking permanent irrelevance unless sufficient grass roots anger topples the leadership wholesale and rebuilds from the bottom.
Peter K. -> point... , January 22, 2017 at 11:50 AM
That's what happened to the Republican party. Trump toppled the establishment by tapping into people's anger about the "carnage." Now we'll see what he actually does. I don't think think even he knows what he'll do.

Meanwhile establishment Democrats deny that there is any carnage.

Brexit and Trump only happened b/c of a weird uptick in racism and sexism. B/c of social media.

LOLWUT?

[Jan 22, 2017] Disruption of neoliberal status quo and sending Hillary and some other neocon warmongers packing is already an imporatn Trump achievement, not matter how successful he might be in domestic economic policy

Notable quotes:
"... Trump's success of failure will be measured by one thing: number of factory jobs added or lost, series MANEMP at the St. Louis FRED website.* If he doesn't create at least about 100,000 a year, he's in trouble. ..."
"... Disruption of neoliberal status quo and sending Hillary and some other neocon warmongers packing is already an achievement, not matter how you slice it. ..."
"... And a hissy fit that some factions of CIA demonstrated just before inauguration (it should not be considered as a monolithic organization; more like feudal kingdom of competing and often hostile to each other and to Pentagon and FBI factions ) was a reaction to this setback to neoconservatives in Washington. ..."
"... If Trump does what he promised in foreign policy: to end the wars for the expansion of neoliberal empire and to end of Cold War II with Russia it will be a huge achievement, even if the US economics not recover from Obama's secular stagnation (oil prices probably will go higher this year, representing an important headwind) . ..."
"... While we are writing those posts nuclear forces of both the USA and Russia are on high alert, and if something happen (and proliferation of computers make this more rather then less likely), the leaders of both countries have less then 20 minutes to decide about launching a full scale nuclear war. Actually Russia now has less time because of forward movement of NATO forces. ..."
Jan 22, 2017 | economistsview.typepad.com
New Deal democrat -> Fred C. Dobbs...January 22, 2017 at 07:10 AM
Trump's success of failure will be measured by one thing: number of factory jobs added or lost, series MANEMP at the St. Louis FRED website.* If he doesn't create at least about 100,000 a year, he's in trouble.

*assuming the data continues to be reported if it goes south on him, or he doesn't insist that the method of measuring change. Something that is a real fear.

Slightly OT, there is one well-known wonky government data site I am watching. I think there are better than 50/50 odds it disappears within the next two weeks.

libezkova -> New Deal democrat... , January 22, 2017 at 09:04 AM
Disruption of neoliberal status quo and sending Hillary and some other neocon warmongers packing is already an achievement, not matter how you slice it.

And a hissy fit that some factions of CIA demonstrated just before inauguration (it should not be considered as a monolithic organization; more like feudal kingdom of competing and often hostile to each other and to Pentagon and FBI factions ) was a reaction to this setback to neoconservatives in Washington.

If Trump does what he promised in foreign policy: to end the wars for the expansion of neoliberal empire and to end of Cold War II with Russia it will be a huge achievement, even if the US economics not recover from Obama's secular stagnation (oil prices probably will go higher this year, representing an important headwind) .

No further escalation in geopolitical conflicts represents an important tailwind and might help.

While we are writing those posts nuclear forces of both the USA and Russia are on high alert, and if something happen (and proliferation of computers make this more rather then less likely), the leaders of both countries have less then 20 minutes to decide about launching a full scale nuclear war. Actually Russia now has less time because of forward movement of NATO forces.

Professor Stephen Cohen thinks that this is worse then Cuban Missile Crisis and he is an expert in this area.

[Jan 22, 2017] Bernie Sanders just said on CBS that he is ready to work with Trump on lowering drug price, infrastrcture projects and better trade deals

Jan 22, 2017 | economistsview.typepad.com
BenIsNotYoda : , January 22, 2017 at 07:59 AM
Bernie Sanders just said on CBS that he is ready to work with Trump on
1) lowering drug prices by purchasing drugs from abroad and Medicare negotiate prices
2) infrastructure projects
3) better trade deals

Lets see if entrenched interests in the GOP and Democrat party let them work together. My guess is NOT.
What that would accomplish is lay bare the corruption that is part of both parties.

Peter K. -> BenIsNotYoda... , January 22, 2017 at 08:31 AM
Let's see if Trump actually wants to do any of those things Sanders wants. In other words will he "reach across the aisle."

Let's see if Republicans in Congress cooperate.

I think it's unlikely although not impossible (as Krugman etc do)

Trump thinks of himself as a reality TV star. He likes the drama. But he seems to have no interest in the details of policy. He found the border tax his advisers were floating as too complicated.

[Jan 22, 2017] The policy of imperialism threatens to change the temper of our people, and to put us into a permanent attitude of arrogance, testiness, and defiance towards other nations

Notable quotes:
"... Alarmed by the spread of anti-imperialist ideas, Lodge invited his closest friend, Governor Theodore Roosevelt of New York, to join him in Boston to launch a counterattack. On Oct. 31, 1899, both spoke to the Republican Club of Massachusetts at the cavernous Music Hall on Winter Street. "We have got to put down the insurrection!" Roosevelt cried. "If we are men, we can't do otherwise!" Lodge portrayed anti-imperialists as not only defeatist, but complicit in the killing of American soldiers. ..."
"... Tides ran in favor of the expansionist idea. Prominent anti-imperialists lost elections. War in the Philippines slowly reached its bloody end. Americans began focusing on other problems. The United States had leaped from continental empire to overseas empire. ..."
"... That war - which is actually a war against war - has never ended. The debate over American intervention abroad, which began at Faneuil Hall in 1898, is still raging. It will shape the new administration in Washington and, through it, the world. ..."
Jan 22, 2017 | economistsview.typepad.com
Fred C. Dobbs :

How (When?) Boston fought the empire
http://www.bostonglobe.com/ideas/2017/01/22/how-boston-fought-empire/mWNyIXXDIdogeh9guKDnzN/story.html?event=event25
via @BostonGlobe - Stephen Kinzer - January 22, 2017

Where better to launch a patriotic uprising than Faneuil Hall in Boston? It is a lodestone of American liberty, a cathedral for freedom fighters. That is why a handful of eminent Bostonians chose it as the place to begin a new rebellion on the sunny afternoon of June 15, 1898.

Like all Americans, they had been dizzied by the astonishing events of recent weeks. Their country had suddenly burst beyond its natural borders. American troops had landed in Cuba. American warships had bombarded Puerto Rico. An American expeditionary force was steaming toward the distant Philippine Islands. Hawaii seemed about to fall to American power. President William McKinley had called for 200,000 volunteers to fight in foreign wars. Fervor for the new idea of overseas expansion gripped the United States.

This prospect thrilled some Americans. It horrified others. Their debate gripped the nation. The country's best-known political and intellectual leaders took sides. In the history of US foreign policy, this is truly the mother of all debates.

When we argue over whether we should depose a government in Iraq or Syria or Libya, whether we should wage war in Afghanistan, whether we should encourage the bombing of Yemen, or whether we should seek to bend Russia to our will, we are arguing the same question that was at the center of this original debate. Every argument about foreign intervention that we make today - on both sides - was first made in the period around 1898. Today's debates are amazingly precise repetitions of that first one. The central question is the same: Should the United States project power into faraway lands? Yes, to guarantee our prosperity, save innocent lives, liberate the oppressed, and confront danger before it reaches our shores! No, intervention brings suffering and creates enemies!

Boston was the epicenter of that original debate. Bostonians played such a large role in the national debate that one California newspaper called anti-imperialists "the kicking Bostonese." Several hundred of them turned out for the Faneuil Hall meeting. One speaker, the Rev. Charles Ames, a theologian and Unitarian pastor, warned that the moment the United States seized a foreign land, it would "sacrifice the principles on which the Republic was founded."

The policy of imperialism threatens to change the temper of our people, and to put us into a permanent attitude of arrogance, testiness, and defiance towards other nations. ... Once we enter the field of international conflict as a great military and naval power, we shall be one more bully among bullies. We shall only add one more to the list of oppressors of mankind.

At the end of that afternoon, one of the meeting's organizers came to the podium and read a resolution. "Resolved, that the mission of the United States is to help the world by an example of successful self-government, and that to abandon the principles and the policy under which we have prospered, and embrace the doctrine and practices now called imperial, is to enter the path which, with other great republics, has ended in the downfall of free institutions," it declared. "Resolved, that our first duty is to cure the evils in our own country." The resolution was adopted by acclamation.

At the very moment these words were shaking Faneuil Hall, debate on the same question - overseas expansion - was reaching a climax in Congress. It is a marvelous coincidence: The first anti-imperialist rally in American history was held on the same day that Congress voted, also for the first time, on whether the United States should take an overseas colony. The colony in question was Hawaii, but all understood that the real question was immensely greater. It was nothing less than the future of the Republic: whether or not the United States should become a global military power and seek to shape the fate of faraway lands.

On that day, as expected, the House of Representatives voted to annex Hawaii. Yet the great debate had only begun. Working from offices in Boston, anti-imperialists spent the summer and fall of 1898 writing letters to potential sympathizers across the country.

Their work came to fruition on Nov. 18, when an eager crowd packed a law office on Milk Street to witness the founding of the Anti-Imperialist League. George Boutwell, who had been a passionate abolitionist as well as a congressman, US senator, and governor of Massachusetts, was chosen by acclimation as the league's first president. In his mind, every abolitionist was a natural anti-imperialist, since anyone who opposed keeping human beings as slaves must also oppose ruling other peoples against their will.

At the end of 1898, American negotiators forced the defeated Spanish to sign the Treaty of Paris, in which they surrendered Cuba, Puerto Rico, Guam, and the Philippines. On Jan. 4, 1899, President McKinley submitted the treaty for Senate ratification. That set off a monthlong debate over what one senator called "the greatest question that has ever been presented to the American people." The dominant figure on each side was a brilliantly articulate Republican senator from Massachusetts.

George Frisbie Hoar of Worcester led the anti-imperialist charge. The United States, he insisted, must not "rush madly upon this new career," lest it become "a cheap-jack country raking after the cart for the leavings of European tyranny." He ended his speech in a crescendo: "The poor Malay, the poor African, the downtrodden workman of Europe will exclaim, as he reads this new doctrine: 'Good God! Is there not one place left on earth where, in right of my manhood, I can stand up and be a man?' "

Hoar's sharpest opponent was Henry Cabot Lodge of Beacon Hill and Nahant. Lodge told the Senate that since many foreign peoples were unequipped to govern themselves wisely, they should submit to American guidance and trust "the American people, who have never failed in any great duty or feared to face any responsibility, to deal with them in that spirit of justice, humanity, and liberty which has made us all that we are today or can ever hope to be."

From their bustling office on Kilby Street, leaders of the Anti-Imperialist League fed information to friendly senators and heavily lobbied the handful who remained undecided. The league also published a stream of pamphlets, called Liberty Tracts, aimed at bringing its arguments to a larger audience. Often their titles were questions. "Which shall it be, nation or empire?" asked one. Another: "Is it right for this country to kill the natives of a foreign land because they wish to govern themselves?"

On Feb. 6, 1899, despite these intense efforts, senators ratified the Treaty of Paris - by just one vote more than the required two-thirds majority. Armed rebellion broke out immediately in the Philippines. Tens of thousands of American troops were sent to suppress it. President McKinley faced a difficult task: explain to a divided nation why taking foreign lands was no betrayal of the American idea. He decided to deliver a speech in Boston, home of the Anti-Imperialist League and thus the heart of enemy territory. To assure himself a friendly audience, however, he chose as his platform the Home Market Club, one of the country's most potent agglomerations of corporate power.

A crowd led by Mayor Josiah Quincy cheered as McKinley emerged from South Station around midday on Feb. 15, 1899. The next night, nearly two thousand guests packed Mechanics Hall for the largest banquet ever staged in the United States. In his speech, McKinley asserted that the essential goodness of the American people is the supreme and sole necessary justification of whatever the United States chooses to do in the world. This goodness, he acknowledged, might not be clear to the "misguided Filipino," but soon the islands would prosper under the rule "not of their American masters, but of their American emancipators."

"Did we need their consent to perform a great act for humanity?" he asked. "We had it in every aspiration of their minds, in every hope of their hearts."

These words disgusted the philosopher William James. In an anguished letter to Boston newspapers, he called McKinley's speech a "shamefully evasive" attempt to obscure the central truth of the age: "We are cold-bloodedly, wantonly, and abominably destroying the soul of a people who never did us an atom of harm in their lives. It is bald, brutal piracy."

Alarmed by the spread of anti-imperialist ideas, Lodge invited his closest friend, Governor Theodore Roosevelt of New York, to join him in Boston to launch a counterattack. On Oct. 31, 1899, both spoke to the Republican Club of Massachusetts at the cavernous Music Hall on Winter Street. "We have got to put down the insurrection!" Roosevelt cried. "If we are men, we can't do otherwise!" Lodge portrayed anti-imperialists as not only defeatist, but complicit in the killing of American soldiers.

"I vote with the army that wears the uniform and carries the flag of my country," he said. "When the enemy has yielded and the war is over, we can discuss other matters!"

Tides ran in favor of the expansionist idea. Prominent anti-imperialists lost elections. War in the Philippines slowly reached its bloody end. Americans began focusing on other problems. The United States had leaped from continental empire to overseas empire.

"Well, we are defeated for the time," admitted the Cambridge anti-imperialist Charles Eliot Norton. "But the war is not ended, and we are enlisted for the war."

That war - which is actually a war against war - has never ended. The debate over American intervention abroad, which began at Faneuil Hall in 1898, is still raging. It will shape the new administration in Washington and, through it, the world.

ilsm -> Fred C. Dobbs... , January 22, 2017 at 07:23 AM
Few want Manifest Destiny to stop short of an American world.
anne -> Fred C. Dobbs... , -1
Splendid essay.

[Jan 22, 2017] The rise of Trump and Isis have more in common than you might think

Notable quotes:
"... In Europe and the US it was right wing nationalist populism which opposes free trade, mass immigration and military intervention abroad. ..."
"... Trump instinctively understood that he must keep pressing these three buttons, the importance of which Hillary Clinton and most of the Republican Party leaders, taking their cue from their donors rather than potential voters, never appreciated. ..."
"... The vehicle for protest and opposition to the status quo in the Middle East and North Africa is, by way of contrast, almost entirely religious and is only seldom nationalist, the most important example being the Kurds. ..."
"... Secular nationalism was in any case something of a middle class creed in the Arab world, limited in its capacity to provide the glue to hold societies together in the face of crisis. ..."
"... It was always absurdly simple-minded to blame all the troubles of Iraq, Syria and Libya on Saddam Hussein, Bashar al-Assad and Muammar Gaddafi, authoritarian leaders whose regimes were more the symptom than the cause of division. ..."
"... Political divisions in the US are probably greater now than at any time since the American Civil War 150 years ago. Repeated calls for unity in both countries betray a deepening disunity and alarm as people sense that they are moving in the dark and old norms and landmarks are no longer visible and may no longer exist. ..."
"... Criticism of Trump in the media has lost all regard for truth and falsehood with the publication of patently concocted reports of his antics in Russia ..."
"... But the rise of Isis, the mass influx of Syrian refugees heading for Central Europe and the terror attacks in Paris and Brussels showed that the crises in the Middle East could not be contained. They helped give a powerful impulse to the anti-immigrant authoritarian nationalist right and made them real contenders for power. ..."
"... One of the first real tests for Trump will be how far he succeeds in closing down these wars, something that is now at last becoming feasible. ..."
Jan 22, 2017 | www.unz.com

In the US, Europe and the Middle East there were many who saw themselves as the losers from globalisation, but the ideological vehicle for protest differed markedly from region to region. In Europe and the US it was right wing nationalist populism which opposes free trade, mass immigration and military intervention abroad. The latter theme is much more resonant in the US than in Europe because of Iraq and Afghanistan. Trump instinctively understood that he must keep pressing these three buttons, the importance of which Hillary Clinton and most of the Republican Party leaders, taking their cue from their donors rather than potential voters, never appreciated.

The vehicle for protest and opposition to the status quo in the Middle East and North Africa is, by way of contrast, almost entirely religious and is only seldom nationalist, the most important example being the Kurds. This is a big change from 50 years ago when revolutionaries in the region were usually nationalists or socialists, but both beliefs were discredited by corrupt and authoritarian nationalist dictators and by the collapse of the Soviet Union in 1991.

Secular nationalism was in any case something of a middle class creed in the Arab world, limited in its capacity to provide the glue to hold societies together in the face of crisis. When Isis forces were advancing on Baghdad after taking Mosul in June 2014, it was a fatwa from the Iraqi Shia religious leader Ali al-Sistani that rallied the resistance. No non-religious Iraqi leader could have successfully appealed to hundreds of thousands of people to volunteer to fight to the death against Isis. The Middle East differs also from Europe and the US because states are more fragile than they look and once destroyed prove impossible to recreate. This was a lesson that the foreign policy establishments in Washington, London and Paris failed to take on board after the invasion of Iraq in 2003, though the disastrous outcome of successful or attempted regime change has been bloodily demonstrated again and again. It was always absurdly simple-minded to blame all the troubles of Iraq, Syria and Libya on Saddam Hussein, Bashar al-Assad and Muammar Gaddafi, authoritarian leaders whose regimes were more the symptom than the cause of division.

But it is not only in the Middle East that divisions are deepening. Whatever happens in Britain because of the Brexit vote or in the US because of the election of Trump as president, both countries will be more divided and therefore weaker than before. Political divisions in the US are probably greater now than at any time since the American Civil War 150 years ago. Repeated calls for unity in both countries betray a deepening disunity and alarm as people sense that they are moving in the dark and old norms and landmarks are no longer visible and may no longer exist.

The mainline mass media is finding it difficult to make sense of a new world order which may or may not be emerging. Journalists are generally more rooted in the established order of things than they pretend and are shocked by radical change. Only two big newspapers – the Florida Times-Union and the Las Vegas Review-Journal endorsed Trump before the election and few of the American commentariat expected him to win, though this has not dented their confidence in their own judgement. Criticism of Trump in the media has lost all regard for truth and falsehood with the publication of patently concocted reports of his antics in Russia, but there is also genuine uncertainty about whether he will be a real force for change, be it good or ill.

Crises in different parts of the world are beginning to cross-infect and exacerbate each other. Prior to 2014 European leaders, whatever their humanitarian protestations, did not care much what happened in Iraq and Syria. But the rise of Isis, the mass influx of Syrian refugees heading for Central Europe and the terror attacks in Paris and Brussels showed that the crises in the Middle East could not be contained. They helped give a powerful impulse to the anti-immigrant authoritarian nationalist right and made them real contenders for power.

The Middle East is always a source of instability in the world and never more so than over the last six years. But winners and losers are emerging in Syria where Assad is succeeding with Russian and Iranian help, while in Iraq the Baghdad government backed by US airpower is slowly fighting its way into Mosul. Isis probably has more fight in it than its many enemies want to believe, but is surely on the road to ultimate defeat. One of the first real tests for Trump will be how far he succeeds in closing down these wars, something that is now at last becoming feasible.

[Jan 22, 2017] Jack Ma said the poor plight of American economy was due to the costly wars waged by Washington and has nothing to do with trade ties with Beijing

Notable quotes:
"... Jack Ma said the poor plight of American economy was due to the costly wars waged by Washington and has nothing to do with trade ties with Beijing. The US adopted a strategy to control intellectual property rights and select brands three decades ago, leaving lower-level works to the rest of the world.... Microsoft and IBM have created hundreds of millions in profits through globalisation. ..."
Jan 22, 2017 | economistsview.typepad.com
jonny bakho -> ilsm... , January 22, 2017 at 09:41 AM
FWIW from Jack Ma Aliba founder:

Jack Ma said the poor plight of American economy was due to the costly wars waged by Washington and has nothing to do with trade ties with Beijing. The US adopted a strategy to control intellectual property rights and select brands three decades ago, leaving lower-level works to the rest of the world.... Microsoft and IBM have created hundreds of millions in profits through globalisation.

This large sum could have been invested in infrastructure and employment, but was instead put towards 13 wars, he said. The US simply failed to allot the funds reasonably." , Ma said his meeting with Trump was much more productive than expected the discussions mainly focused on .... American enterprises selling in Asia through Alibaba's platform, which will provide about one million jobs for Americans in various ways.

http://www.livemint.com/Politics/JrmTPAOTPEFwXT2xGujjQN/Blame-costly-wars-not-China-for-poor-state-of-US-economy.html

ilsm -> jonny bakho... , January 22, 2017 at 10:34 AM
What have we got for $4.6T since 2001? Security from Taliban!

I agree, wars* are opportunity lost and should only be entered in to when society is in harm's way.

US since Pearl Harbor has used the fake excuse+ that any attack on Osan or Estonia is a threat to its existence.

+Unwarranted influence was paid at huge expense to the US at large.

*Eternal vigilance and preparedness for wars is hugely profitable and wasteful to those not profiting.

anne -> jonny bakho... , January 22, 2017 at 12:01 PM
http://watson.brown.edu/costsofwar/files/cow/imce/papers/2016/Costs%20of%20War%20through%202016%20FINAL%20final%20v2.pdf

September, 2016

US Budgetary Costs of Wars through 2016: $4.79 Trillion and Counting
Summary of Costs of the US Wars in Iraq, Syria, Afghanistan and Pakistan and Homeland Security

By Neta C. Crawford

Summary

Wars cost money before, during and after they occur - as governments prepare for, wage, and recover from them by replacing equipment, caring for the wounded and repairing the infrastructure destroyed in the fighting. Although it is rare to have a precise accounting of the costs of war - especially of long wars - one can get a sense of the rough scale of the costs by surveying the major categories of spending.

As of August 2016, the US has already appropriated, spent, or taken on obligations to spend more than $3.6 trillion in current dollars on the wars in Iraq, Afghanistan, Pakistan and Syria and on Homeland Security (2001 through fiscal year 2016). To this total should be added the approximately $65 billion in dedicated war spending the Department of Defense and State Department have requested for the next fiscal year, 2017, along with an additional nearly $32 billion requested for the Department of Homeland Security in 2017, and estimated spending on veterans in future years. When those are included, the total US budgetary cost of the wars reaches $4.79 trillion....

[Jan 22, 2017] Can a new geopolitical alliance arise consisting of Russia, the new ottoman and the US.

Notable quotes:
"... "But after all it is the leaders of a country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or fascist dictorship, or a parliament or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peace makers for lack of patriotism and exposing the country to danger. It works the same in any country." ..."
"... Moscow-Ankara-Washington axis........ How about a Beijing-Moscow-Berlin axis, what have the Turks got to offer? ..."
"... Clinton was to solve global warming with nuclear winter. Sheesh! read Obama's neocon anthem aka the speech he gave in Stockholm where he conned the Nobel committee. ..."
"... Putin's 'interventions' are minimalist and defensive, the Clinton neocons would push NATO up to Smolensk with feckless disregard for any entity in the way of US empire. ..."
"... Neoliberal is starting wars because the empire sees "unjust peace" as excuse to engage with shock and awe despite the dbody count. ..."
"... Veteran Intelligence Professionals for Sanity has questions the whole "Putin did it" narrative, demanding evidence: "we strongly suspect that the evidence your intelligence chiefs have of a joint Russian-hacking-WikiLeaks-publishing operation is no better than the "intelligence" evidence in 2002-2003 – expressed then with comparable flat-fact "certitude" – of the existence of weapons of mass destruction in Iraq." ..."
Jan 22, 2017 | economistsview.typepad.com
ilsm -> Fred C. Dobbs... , January 21, 2017 at 07:28 AM
Not in touch with Tunis.

The rest of spring time for jihadis are known bollux: Libya, Egypt*, Syria, Iraq, Afghanistan...... Lebanon outside spring time for jihadis it is under Shiite wraps not so bollux.

*CIA and generals jailed the jihadis to keep Camp David bribes coming.

JF -> Ben Groves... , January 21, 2017 at 08:21 AM
I am terribly worried that a move of the US embassy to Jerusalem is part if a set of provocations leading to US military interventions to eliminate the threats as this group defines them to be (radical islamists). This would immediately make the US and Russian oil industries more valuable as the middle east becomes enflamed.

A new axis arises: Russia, the new ottoman and the US.

I just cant help thinking that this is the plan, you will be measured on your patriotism and allegiances here. Dismaying.

EMichael -> JF... , January 21, 2017 at 08:29 AM
I know you and I both hope you are wrong.

But it does go hand in hand with this "America First" schtick.

"But after all it is the leaders of a country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or fascist dictorship, or a parliament or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peace makers for lack of patriotism and exposing the country to danger. It works the same in any country."

― Hermann Göring

im1dc -> JF... , January 21, 2017 at 08:41 AM
I don't think you are wrong.
Peter K. -> JF... , January 21, 2017 at 09:32 AM
"I am terribly worried that a move of the US embassy to Jerusalem is part if a set of provocations leading to US military interventions to eliminate..."

You could be right, but most of Trump's campaign talk was isolationist, if contradictory. The Iraq adventurism was a disaster, etc.

He doesn't like diplomacy, like the Iran deal, so there could be more brinkmanship which is dangerous. But a war would be very unpopular. Again he may not care since war could be used as a distraction.

Authoritarian allies like the Arab dictatorships are happy in that a Trump administration won't criticize them about human rights violations or freedom of the press. Russia and China will be happy about that as well.

Trump is basically a real-estate developer/tax fraud etc. I don't see war as a foregone conclusion.

JF -> Peter K.... , January 21, 2017 at 10:25 AM
He used the word 'to protect' in his inaugural. That is definitely not isolationism especially after declaring that he will eliminate radical Islam from the earth (close to a direct quote, I'm pretty sure).

And isn't he the one who said during the campaign that we ought to just sieze the oilfields?

So just provoke a few things, a few will do, then announce the alliance wuth russia to settle this in the region, once and for all, so we are protected.

Who indeed will step up and say no, they will not do this type of thing?

ilsm -> JF... , January 21, 2017 at 11:53 AM
Moscow-Ankara-Washington axis........ How about a Beijing-Moscow-Berlin axis, what have the Turks got to offer?

US dumb* to ignore and be left out!

*neocon PNAC bat$#1^ crazy

ilsm -> JohnH... , January 21, 2017 at 04:19 AM
Clinton was to solve global warming with nuclear winter. Sheesh! read Obama's neocon anthem aka the speech he gave in Stockholm where he conned the Nobel committee.

Putin's 'interventions' are minimalist and defensive, the Clinton neocons would push NATO up to Smolensk with feckless disregard for any entity in the way of US empire.

Neoliberal is starting wars because the empire sees "unjust peace" as excuse to engage with shock and awe despite the dbody count.

Clinton would be mobilizing to crush Russia using the exploded the image of a few suffering Balts to tilt with nuclear winter.

JohnH -> JohnH... , January 21, 2017 at 07:06 AM
Veteran Intelligence Professionals for Sanity has questions the whole "Putin did it" narrative, demanding evidence: "we strongly suspect that the evidence your intelligence chiefs have of a joint Russian-hacking-WikiLeaks-publishing operation is no better than the "intelligence" evidence in 2002-2003 – expressed then with comparable flat-fact "certitude" – of the existence of weapons of mass destruction in Iraq."
http://www.truthdig.com/report/page2/another_demand_for_russian_hacking_20170119

But this JohnH-come-lately drinks whatever Kool-Aid the establishment gives him...

JohnH -> JohnH... , January 21, 2017 at 07:16 AM
Obama starts to walk back his claim that 'Putin did it:' https://consortiumnews.com/2017/01/20/obama-admits-gap-in-russian-hack-case/
ilsm -> JohnH... , January 21, 2017 at 07:29 AM
Con artist, the super party hack*.

*low techie

im1dc -> JohnH... , January 21, 2017 at 08:45 AM
When ilsm agrees with you then you are wrong.

Russia did hack to influence the election. Whether they were decisive or not no one can say.

More likely imo Comey's violation of the Hatch Act 6 days before the Election knocking Hillary's Poll lead from 12 to 5 cost her the election.

Comey will pay for his treachery.

Accept and move on.

JohnH -> im1dc... , January 21, 2017 at 09:59 AM
"Does the Russian government hack, as many other governments do? Of course. Did it hack the emails of the Democratic National Committee? Almost certainly, though it was likely not alone in doing so. In the Internet age, hacking is the bread and butter of intelligence agencies. If Russian intelligence did not do so, this would constitute gross misfeasance, especially since the DNC was such easy pickings and the possibility of gaining important insights into the U.S. government was so high. But that is not the question.
It was WikiLeaks that published the very damaging information, for example, on the DNC's dirty tricks that marginalized Sen. Bernie Sanders and ensured that Secretary of State Hillary Clinton would win the Democratic nomination. What remains to be demonstrated is that it was "the Russians" who gave those emails to WikiLeaks. And that is what the U.S. intelligence community doesn't know."
https://consortiumnews.com/2017/01/20/obama-admits-gap-in-russian-hack-case/

Democrats want to blame Russia for their ineptitude and their lousy candidate.

Democrats want to blame Russia for exposing the DNC's rigging of the primaries...by blaming Russia for rigging the general elections [abject hypocrisy.]

Neither Democrats nor the intelligence services know who gave the documents to WikiLeaks or, if they do, they don't want you to know who it was.

ilsm -> im1dc... , January 21, 2017 at 12:11 PM
im1dc,

You don't have to agree, we have diverse experiences.

when did Podesta and Wasserman Schultz, those crooks, become "the election". Even if it was the Russians!!!

As to Comey: let the new AG do his or her duty on the crimes of a cabinet officer, with a jury and judge.

My training and experience suggest Clinton will do time.

I am reminded of Job38-41: "Who is this that obscures my plans with words without knowledge?....."

Chatham House Rule -> libezkova... , January 21, 2017 at 09:39 AM

reject all war. We are all extremely fortunate that Hillary Clinton will not be taking office this weekend. Had Hillary been elected we would be facing a crisis over Syria. Hillary wants to overthrow the
"

Her victims are our cousins. Each of us emanates from the same living cell. Within Minkowski-time-space we remain connected as one animal. No!

We cannot open up our American hospitality to suspected terrorists. What we can do is open up our homeland to foreigners who are moving over to make space for her victims. Ceu

When South Africa takes in Syrians, we can take in an equal number of South Africans or other foreigners who are demonstrating their love for our cousins, our cousins now victimized by our own Mama-War-Bucks. Tell me something!

Was the HRC-email-server moved to her private home so that SWH, Slick Willie himself could control the World? Hey!

Americans

are not
blind
!

El Chapo Guapo -> Chatham House Rule... , January 21, 2017 at 11:04 AM

https://en.wikipedia.org/wiki/Four-dimensional_space#/media/File:8-cell-simple.gif

[Jan 22, 2017] As Trump takes office, Mass. manufacturers talk globalization

Notable quotes:
"... The strongest advocates for bringing offshore manufacturing back to the United States acknowledge automation's effect on the workforce but say it doesn't negate the need for more domestic factories. Harry Mosser, founder of the Reshoring Institute, which encourages companies to bring manufacturing operations back to the United States, said that even a highly automated factory is better for workers than no factory at all. ..."
"... These days it is more about planned/welcomed obsolescence - the product basically works, but some critical parts may be low grade, making it break after a while so you have to buy something new. This also affects "brands that used to be good". ..."
"... The internet also has played a role - online stores could underbid brick and mortar, then the latter had to cheapen and cut their offerings, driving more customers to the internet, etc. ..."
Jan 21, 2017 | economistsview.typepad.com
Fred C. Dobbs : January 21, 2017 at 05:04 AM

As Trump takes office, Mass. manufacturers talk globalization
http://www.bostonglobe.com/business/2017/01/20/trump-takes-office-mass-manufacturers-talk-globalization/M3KFU50bFaKQfcr83SeowN/story.html?event=event25
via @BostonGlobe - Adam Vaccaro - January 20, 2017

SOUTHBRIDGE - A mainstay of Massachusetts manufacturing since the late 1800s, the Hyde Group tool company made a big leap overseas in 2010, when it outsourced production of its mass market putty knives and wallpaper blades to China.

"At heart, we're manufacturers. It was the hardest thing for us to do, us in a fourth-generation family," said Bob Clemence, vice president of sales at Hyde Group, and great-grandson of the man who bought the company in the 1890s. "In order for us to stay in business and still employ people, we had to move our low-end business off-shore. It really was like a stab in the heart."

But the cost advantage of China has been steadily shrinking; it's now 40 percent cheaper to make the tools there than in Southbridge. And if that continues to fall, then Hyde might be able to help President Donald Trump fulfill a central campaign promise: bringing manufacturing back to the United States.

"Forty percent [savings] is a huge number to overcome," Clemence said. "We've determined that if it's 20 percent or less, we're going to do it domestically."

As Trump cajoles American companies into returning production to US soil, experiences like Hyde's illustrate the complex, multifaceted decisions manufacturers face as they choose where to build their products.

The president has talked of using lower taxes, fewer regulations, and higher tariffs to bring about a renaissance of American manufacturing. But for factory owners, it's not simply about cheaper labor. The costs of energy and raw materials, the emergence of global competitors, and the location and demands of suppliers and customers all weigh on these decisions, a myriad of cross currents that will make it difficult to fix the factory economy with just a few bold prescriptions.

"It's going to be not an easy job," said Enrico Moretti, professor of economics at the University of California, Berkeley, who predicted that even if factories stay in the United States, production will be increasingly automated. "I'm not sure there is one explicit policy, a magic switch, that executive power in Washington can switch to retain jobs in the US."

In the eyes of factory owners, singling them out won't necessarily solve the problem. Some say they were forced to move production overseas by their customers. At Hyde, it was the retail stores that carry its tools demanding lower prices.

"It doesn't matter what they say about made in the USA, it's all about price," Clemence said. "They've taken some basic items and said there are commodity products and said, 'We only buy them by price.' "

In Norwood, the Manufacturing Resource Group opened a second factory just across the US border in Mexico in 2011 because customers demanded cheaper versions of its cable assemblies, wire harnesses, and other electric components.

"The decision to open in Mexico wasn't ours," MRG president Joe Prior said. "We were told that, 'You need to have a low-cost option, or we're not going to be able to do business with you.' "

The Norwood and Mexico factories nearly mirror one another, each employing about 70 people, with mostly the same equipment and capabilities. The Norwood factory still accounts for most of its business, as MRG's local customers are willing to pay more for quicker shipping and customer service. But other customers simply want a cheaper product - wages at the Mexico factory are a quarter the cost of Norwood, while health care costs about 90 percent lower.

Prior said if Trump does impose a high tariff on imported products, as he has threatened, then that cost would probably be shouldered by customers of the Mexican factory.

"If there is a tax, it just has to be passed on to our customers and they'd have to make a decision about whether it makes sense for them anymore," he said.

Since many US companies sell to customers around the world, a high tariff might bring some production back home - but at a cost. For Eastern Acoustic Works, that might mean losing international customers for its sound equipment.

The Whitinsville company is closing its factory here, laying off 27 workers and outsourcing most production of speaker systems and subwoofers to a contract manufacturer in China. There were just too many competitors around the world making similar equipment for Eastern Acoustic to justify charging higher prices for its US-made products, general manager TJ Smith said. Eastern Acoustic will instead concentrate on new sales, marketing, and R&D initiatives, creating white-collar jobs that will help it grow.

"Running a factory takes a lot of focus and energy," Smith said. "We have to ask ourselves, what are we good at? What do we want to call our competencies?"

Smith said Eastern Acoustic might be forced to bring production back to the United States if the Trump tariff goes into effect. However, that move might also prompt the company to drop its international clients - Asia accounts for 30 percent of Eastern Acoustic's sales - because the US-made products wouldn't be competitive in overseas markets.

"It would split my business up too much, so I couldn't support" an overseas factory, Smith said. "For our scale, I would lean toward [choosing] the domestic market at this point because that's what I know and I'm closer to it."

But the higher tariffs might help Eastern Acoustic in another way - by raising prices on products its European competitors are selling to US customers. "So that might increase my near-term opportunity domestically," Smith said.

Raw materials, such as steel or energy, is another area Trump would have to address. Foreign steel, especially, is so much cheaper that it is very difficult for manufacturers not to use. But Trump's promise to promote more domestic oil and gas production could be a major boon to factories.

For example, US companies are benefiting from very cheap domestic natural gas; that's especially important in processing industries that use a lot of chemicals in their production. ...

Fred C. Dobbs -> Fred C. Dobbs... , January 21, 2017 at 05:08 AM
Trump wants to fight the effects of trade, but what about automation?
http://www.bostonglobe.com/business/2017/01/20/trump-wants-fight-effects-trade-but-what-about-automation/qYt2WjQo4VAXWRWCYkfNeK/story.html?event=event25
via @BostonGlobe - Adam Vaccaro - January 21, 2017

President Donald Trump has spoken often about trade's effect on US manufacturing employment but has said comparatively little about another economic force that has caused factories to shed jobs: high-tech machines and automation.

At the Hyde Group's Southbridge factory, the amount of work that 100 employees do now would have required 180 workers more than a decade ago, said Bob Clemence, the company's vice president of sales.

While the number of blue-collar assembly-line jobs at US factories has been dropping in huge numbers for decades, Enrico Moretti, a professor at the University of California, Berkeley, said the number of engineers working in factories has about doubled. Future manufacturing jobs will probably require engineering skills and training, Moretti said.

At Hyde, the typical factory worker might operate two or three computerized machines at a time, and the work generally requires an associate's degree or some college education, Clemence said. That's a far cry from 20 years ago, when the factory used to host night classes to help employees earn high school degrees.

"We could still do the GED," Clemence said. "But I need someone coming in the door that already has that degree information. I don't need somebody that is only running a fork truck."

In his presidential farewell address Jan. 10, President Obama highlighted the effects of technology on the workforce, noting "the relentless pace of automation that makes a lot of good middle-class jobs obsolete." He also called for ensuring higher-level education, as well as stronger labor unions, to blunt the effect.

Even if future manufacturing employees are trained to handle robots and high-tech machines, the math is simple enough: Machines and robots require fewer workers on factory floors. When the appliance maker Carrier, a division of United Technologies Corp., agreed to keep in Indiana about 800 jobs it had planned to send to Mexico, it marked an early public relations win for Trump. Within days, however, United Technologies' chief executive said new investments in the Indiana factory would probably result in automation and eventual job losses.

The strongest advocates for bringing offshore manufacturing back to the United States acknowledge automation's effect on the workforce but say it doesn't negate the need for more domestic factories. Harry Mosser, founder of the Reshoring Institute, which encourages companies to bring manufacturing operations back to the United States, said that even a highly automated factory is better for workers than no factory at all.

"If you bring back any manufacturing, you bring back some employment," he said.

run75441 -> Fred C. Dobbs... , January 21, 2017 at 07:53 AM
Just a random question:

"At Hyde, the typical factory worker might operate two or three computerized machines at a time, and the work generally requires an associate's degree or some college education,"

What are "computerized machines," Fred? and why only two or three?

Fred C. Dobbs -> run75441... , January 21, 2017 at 08:34 AM
In my personal experience (as an IT guy) observing electronic techs in computer manufacturing (some decades ago) monitoring several 'computerized' testing machines at once. (Made for interesting challenges trying to measure productivity.)

Why only two or three? When an 'event' happens, prompt operator response is usually called for.

run75441 -> Fred C. Dobbs... , January 21, 2017 at 06:13 PM
Fred:

No, a cnc cell will typically have 4 or 5 cnc machines. You just need labor to feed, stack and turn one off if there is an issue. One will do. Injection molding can be 2 to 4 presses. This is why Labor should have been paid more as they are replacing 3 and 4 people.

We already have this environment and plants are not crawling with engineers. They are needs for programming only and even then an operator might be able to do it.

im1dc -> Fred C. Dobbs... , January 21, 2017 at 08:52 AM
Outsourcing to China means Quality will suffer, if not immediately then eventually.

US Made goods are generally better made, higher grade, and of more consistent quality.

The opposite happens in China even if initially Chinese goods are of equal quality.

Fred C. Dobbs -> im1dc... , January 21, 2017 at 09:18 AM
Haven't had problems with various
hi-tech items (all from China?)
purchased in recent years.
cm -> Fred C. Dobbs... , January 21, 2017 at 03:26 PM
"We could still do the GED," Clemence said. "But I need someone coming in the door that already has that degree information. I don't need somebody that is only running a fork truck."

Translation: "We will not pay for upgrading the skills of fresh hires as long as we still have older workers in their 50's+ with existing skills *who are not leaving*."

And that aspect is hinted at right above - 20+ years ago, when today's 50+ were 20/30-ish, they paid for their education, and those people are still in the accessible labor pool.

But they *will* age out, and then they hand wringing and wailing about skill shortages will intensify (and you better believe companies will *then* arrange the skill upgrades).

Chris G -> Fred C. Dobbs... , January 21, 2017 at 05:47 AM
> In the eyes of factory owners, singling them out won't necessarily solve the problem. Some say they were forced to move production overseas by their customers. At Hyde, it was the retail stores that carry its tools demanding lower prices. "It doesn't matter what they say about made in the USA, it's all about price," Clemence said. "They've taken some basic items and said there are commodity products and said, 'We only buy them by price.' "

Yup. Consumers matter. So long as we care more about getting the lowest price than whether the workers who made the widget were getting a fair deal the problem will persist.

cm -> Chris G ... , January 21, 2017 at 03:36 PM
It was said elsewhere in the article that "customers" actually meant retail chains.

With many products, including food, the origin of the product or its ingredients is not properly disclosed. "Made for", "distributed by", "packed in", "packaging printed in", are not actionable.

Then with advances in manufacturing and material sciences, it has become harder to judge the expected quality and workmanship of a product by its external appearance - most look well finished and spiffy, parts are fitting well, etc.

About 20+ years that wasn't the case, and it was much easier to tell that something is cheap junk (when looking good on the outside it may still be junk inside, but at least there was a way of identifying the lowest category).

These days it is more about planned/welcomed obsolescence - the product basically works, but some critical parts may be low grade, making it break after a while so you have to buy something new. This also affects "brands that used to be good".

Then one can only go by price, as that's a difference that can still be discerned. And obviously there is a feedback dynamic - stores observe what sells, and slowly remove variety and "mid range" products.

The internet also has played a role - online stores could underbid brick and mortar, then the latter had to cheapen and cut their offerings, driving more customers to the internet, etc.

[Jan 21, 2017] The DeVos Democrats

Jan 21, 2017 | www.jacobinmag.com
As many of her critics have pointed out, DeVos is a case study in the nefarious ways that big money shapes education policy in the United States. But she takes such criticism in stride. In 1997 she wrote: "I have decided . . . to stop taking offense at the suggestion that we are buying influence. Now I simply concede the point. They are right. We do expect some things in return."

In short, DeVos is arguably the nation's most powerful proponent of school privatization - and now, even after bumbling her way through her confirmation hearing, she's set to take the reins of the Department of Education.

American public schools have some very serious problems. Spend time in the crumbling public schools on the south side of Chicago and then venture over to the plush public schools in the leafy Chicago suburbs, and you'll experience alternative universes. Schools all over the greater Chicagoland are filled with committed and professional teachers, some quite excellent. But the students who attend the city schools arrive at school with stark disadvantages, unlike their better-off suburban peers. Discrepancies in school funding only exacerbate such class deficits.

Most of the problems with the public schools, in other words, are outgrowths of a deeply unequal society. Yet the solution to this problem - the redistribution of wealth - is inimical to the interests of billionaires like DeVos. The fact that she will soon be in charge of the nation's schools is a sick joke. Make no mistake: DeVos is a serious threat to public education and should be treated accordingly.

Unfortunately, many Democrats have long supported the same so-called education reform measures that DeVos backs. Often wrapping these measures in civil rights language, Democratic education reformers have provided cover for some of the worst types of reforms, including promoting the spread of charter schools - the preferred liberal mechanism for fulfilling the "choice" agenda. (Charter schools operate with public money, but without much public oversight, and are therefore often vehicles for pet pedagogical projects of billionaire educational philanthropists like Bill Gates and Mark Zuckerberg.)

DeVos will not have to completely reverse the Department of Education's course in order to fulfill her agenda. Obama's "Race to the Top" policy - the brainchild of former Secretary of Education Arne Duncan, past CEO of Chicago Public Schools - allocates scarce federal resources to those states most aggressively implementing education reform measures, particularly around charter schools.

Perhaps the most effective advocate of school choice is New Jersey senator Cory Booker, who many Democrats are touting as the party's savior in the post-Obama era. Liberals swooned when Booker opposed his Senate colleague Jeff Sessions, the right-wing racist Trump tapped to be the next attorney general. But however laudable, Booker's actions didn't take much in the way of courage.

Booker's funders - hedge-fund managers and pharmaceutical barons - don't care about such theatrics. They're more concerned that he vote Big Pharma's way and keep up his role as a leading member of Democrats for Education Reform, a pro-privatization group. They want to make sure he continues attacking teachers' unions, the strongest bulwark against privatization.

Their aim is to undercut public schools and foster union-free charter schools, freeing the rich from having to pay teachers as unionized public servants with pensions.

So in the fight against Trump and DeVos, we can't give Booker and his anti-union ilk a pass. As enablers of DeVos's privatization agenda, they too must be delegitimized.

Public education depends on it. The beautiful school where I send my children depends on it.

[Jan 21, 2017] Obama invigorated the worst of the corporate education reform movement

Notable quotes:
"... three decades the national conversation about education has been held hostage by the anxiety-inducing metaphors that always accompany the neoliberal dismantling of public services. ..."
"... President Obama and his advisers have done little to resist this state of affairs, carrying out low-intensity warfare on teachers' unions and perpetuating harmful myths that the American school system is "life-saving" (because we live in a meritocracy), that it is "in crisis" (because test scores are falling behind globally), and that it can only be saved by the free-market fixes (competition, standards, accountability, and choice) originally advocated by conservative think-tanks like the Heritage Foundation and billionaire philanthropists. ..."
"... Of all the education initiatives with names that sound like spaceships (America 2000, Goals 2000) or battle cries (No Child Left Behind), Race to the Top, the Obama administration's signature contribution to the genre, may be the most successful assault yet in the sustained effort to destroy the democratic project of public schooling. ..."
Jan 21, 2017 | www.jacobinmag.com

In some languages, the words for "teach" and "learn" are the same, suggesting a view of education as a cooperative activity, rather than as something that is done to students. Not in English, and certainly not in the United States, where for three decades the national conversation about education has been held hostage by the anxiety-inducing metaphors that always accompany the neoliberal dismantling of public services.

President Obama and his advisers have done little to resist this state of affairs, carrying out low-intensity warfare on teachers' unions and perpetuating harmful myths that the American school system is "life-saving" (because we live in a meritocracy), that it is "in crisis" (because test scores are falling behind globally), and that it can only be saved by the free-market fixes (competition, standards, accountability, and choice) originally advocated by conservative think-tanks like the Heritage Foundation and billionaire philanthropists.

Of all the education initiatives with names that sound like spaceships (America 2000, Goals 2000) or battle cries (No Child Left Behind), Race to the Top, the Obama administration's signature contribution to the genre, may be the most successful assault yet in the sustained effort to destroy the democratic project of public schooling. In 2009, more than $4 billion of public funds were set aside for K-12 education as part of TARP, representing a moment of enormous possibility for the president. The money could have been used to equalize funding among schools ( which is exceptionally inequitable in America ) or to incentivize states to make changes that we know improve educational outcomes for poor children and children of color, like reducing class sizes and promoting socioeconomic and racial integration .

Instead, the Obama administration chose to use a series of competitive grants to push the adoption of the Common Core standards, the linking of teacher evaluations to student test scores, and the expansion of charter schools. These measures were deemed "innovative," even in the face of growing evidence that charter test scores are no better than those of traditional public schools and that charters are more stratified by race, class, special education status, and possibly language, than public schools.

Today, forty-two of fifty states are members of the Common Core Standards Initiative and nearly half tie teacher evaluations to test scores, an enormous transformation in policy. Yet test scores on the NAEP (known as "America's report card") have fallen for the first time, and Race to the Top has failed to deliver even by its own paltry and unimaginative measures. Meanwhile, the real crisis facing children - a disgraceful level of poverty - has gone unnamed by anyone but Bernie Sanders, let alone addressed.

It was nice that Obama called out the widening wealth gap during his farewell address, but the ultimate legacy of his administration has been the deepening of that inequality through the advancement of the agenda of the Broad, Walton Family, and Gates Foundations over the demands of the American people for free, high-quality, and equitably funded schools (a counsel for the education department even once mistakenly referred to the Obama administration as "the Gates administration").

Privatization efforts under Trump will be worse. Clearly, no one is going to give us control of our schools. We're going to have to take it. In 2016, the Black Lives Matter movement and the NAACP called for a moratorium on charter schools - it's a start.

–Megan Erickson

[Jan 21, 2017] The Travesty Is We Have 23.5 Million Americans Aged 25-To-54 Outside The Labor Force

Notable quotes:
"... we have, in addition to 7.5 million officially unemployed (a number that is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million Americans aged 25-to-54 who reside outside the confines of the labor force. And at a time when job openings are at record highs. ..."
"... Even the most ardent ''supply-sider" would admit that labor input is key to the outlook and this should really be at the top of the agenda - closing the widening and unprecedented gap between job openings and new hiring. There simply is no replacement for excellent education achievement with respect to maximizing labor productivity. ..."
"... So about all those job openings? Do they all pay a living wage ? ..."
"... So about all those job openings? They are FAKE job openings. They basically want to hire someone with $100K/year worth of experience & qualifications for $30K/year. And then when no one applies, the companies whine that they need H1B visa to fill the void. ..."
"... It boggles my mind, the kind of bullshit experienced by an acquaintance who is a Waitress, on top of all the shitty employers and scummy customers, she has to pay taxes on Estimated Tips, by a Percentage of Transactions regardless of whether she actually Received a Tip. ..."
"... The government assumes a tip exists at 8% and the waitress must pay on the assumption or the business owner gets pissed off because he/she will catch shit from the IRS at Tax time. Black people only tip on the 29th of February if it is a full moon, a trick they learned from the cheap Canadian bastards who got the idea from the Asians who also, mostly, do not tip. An establishment owner selling Beer/ Wine/ Liquor is responsible for the customers action after leaving the establishment, if they get in a wreck / DUI, ..."
"... That is just the Bar / Restaurant biz. Mc Donalds and the Fast food scam clan are often getting 50% of an employees wages paid through special programs for hiring recently released Felons, drug rehab grads and recent immigrants to name a few, so you already paid for half that burger and fries before you ordered it and Mc Donald is doing quite nicely, thank you. I could go on into the Construction and Manufacturing realms but life is short. ..."
Jan 21, 2017 | www.zerohedge.com
Some observations on recent negative trends in productivity, employment mismatch, and labor training and education from the increasingly more bearish David Rosenberg, who notes that the Trump's proposed policies may end up helping growth on the margins, but fail to focus on what is really important, making tens of millions of US workers competitive and qualified for today's jobs market.

From Breakast with Rosie, via Gluskin Sheff

I don't think we have a productivity problem - in fact, the demise of productivity is vastly overstated and that is because the Bureau of Labor Statistics (BLS) is likely vastly overstating labor input, and I'm talking here about how hours worked are estimated.

But the real travesty, and what I think deserves top priority (but I don't see it), is that we have, in addition to 7.5 million officially unemployed (a number that is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million Americans aged 25-to-54 who reside outside the confines of the labor force. And at a time when job openings are at record highs.

The problem is that unqualified applicants for these openings also are at a record high . The number of jobs available that are not being filled because the skill set is absent is at an unprecedented level - and this was an overriding theme in the latest edition of the Fed's Beige Book.

The question is what is in the policy playbook to redress this situation?

What we need is a policy playbook that makes education, apprenticeship and training a major priority - the one plank that I had hoped would be yanked out of Bernie Sanders' platform.

While deregulation and simplifying the tax code obviously are constructive segments of the Trump plan, they are not the most important obstacles in the way of growth. Neither is globalization.

Even the most ardent ''supply-sider" would admit that labor input is key to the outlook and this should really be at the top of the agenda - closing the widening and unprecedented gap between job openings and new hiring. There simply is no replacement for excellent education achievement with respect to maximizing labor productivity.

I see scant attention being paid to this file - su rely this is more important than U.S. involvement in Brexit or trying to play a role in breaking up the European Union, don't you think?

johngaltfla -> FredFlintstone •Jan 21, 2017 4:44 PM

This figure is what terrifies Yellen and Obama. Steve Mnuchin and Trump have both called the formula Obama changed to estimate the unemployment/employment rates pretty much total bullshit.

Once the figures are revised back to 2006 we will probably find a steady 9%+ REAL unemployment rate since 2007, and that tarnishes Janet's bullspray from her mouth and Obama's precious and fading fast legacy.

Wulfkind -> FredFlintstone •Jan 21, 2017 4:53 PM

So about all those job openings? Do they all pay a living wage ? That is to say...can they pay a person enough money to cover all normal living expenses ( not including debt you didn't need to obtain but including debt like a mortgage or rent )....with enough left over to save ? Also....will those jobs be linked to inflation so over time your once living wage does not stagnate and drop below inflation so that you are actually taking a pay cut every year from then on out ? My suspicion is no. These fools only count the number of job postings without looking into the quality of said jobs. And if they are shit jobs they'll just go to wetbacks anyway and thus not help real Americans. Thus....the high number of people not in the labor force.

rbg81 -> Wulfkind •Jan 21, 2017 5:24 PM

So about all those job openings? They are FAKE job openings. They basically want to hire someone with $100K/year worth of experience & qualifications for $30K/year. And then when no one applies, the companies whine that they need H1B visa to fill the void.

Or undocumented who will work 14 hour days for minimum wage (or less) and not complain.

therover -> rejected •Jan 21, 2017 5:13 PM

So glad I am on the same side of the fence as you. I keep telling people when they ask where my 17 year old son is going to school or what his SAT scores none of their business and fuck that path of higher education bullshit where you spend 100K+ on some degree that will probably get you no where. That 100K+ that I have saved up is going to build him a woodshop filled with tools so he can hone his creative skills in wood working or lead to a path toward carpentry, or it's going to buy him a van filled with plumbing equipment so he can work with his uncle as a plumber. As part of that path, going to community college for some business courses and striving to getting first a 2 year associates that if needed, can matriculate to a 4 year degree in business ( for his OWN BUSINESS). Not spending tons of cash right out of the gate on a 4 year school. Shit..I know that scenario... been there done that. Plus every parent knows their child (at least the should) and my guy takes his time with stuff so I know that first year or so at that 50K plus a year school will be wasted. Bottom line is he will be getting something other than a worthless degree when he ends up flipping pancakes at an IHOP or waiting on tables at an Applebees. Not to say they are meaningless/dead end jobs...they are if you spent 100K+ on a degree and STILL HAVE THAT JOB.

Peak Finance •Jan 21, 2017 4:51 PM

I simply don't believe this:

The problem is that unqualified applicants for these openings also are at a record high. The number of jobs available that are not being filled because the skill set is absent is at an unprecedented level

I think this is a lie to justify the continuation of immigration and the hateful damaging H1B program. I remember their bullshit lies from the early 00's , posting want adds for people with "10 years of Java Experience" when Java had come out like 2 year prior, and other impossible requests, and then being unable to fill those jobs were allowed to ship in people from overseas.

Falling Down -> Peak Finance •Jan 21, 2017 5:00 PM

Correct. The only real shortages are in certain skilled trades, in certain metros.

Giant Meteor -> Peak Finance •Jan 21, 2017 6:14 PM

Indeed. Labor arbitrage.

besnook •Jan 21, 2017 4:58 PM

i know several people from my parents generation who got jobs in major corporations upon high school graduation who were hired by the companies for their aptitude and trained into the skill the comapny needed. a couple were trianed engineers and another a chemist besides pipe fitter, ironworker and mechanic.

companies don't do that anymore because stockholders won't let them do it. there are some privately held companies who still do it.

Giant Meteor -> besnook •Jan 21, 2017 5:27 PM

Companies don't do that anymore because that would step on the toes of the Educational Industrial Complex gravy train. Professional courtesy is all. Loyalty and human potential is no longer factored in ... Lets not even get started on the government jerbs ....

Twee Surgeon -> Giant Meteor •Jan 21, 2017 6:42 PM

A major problem too, is getting past the Human Resources Department in a larger company in the Productive industries (Machine,Construction,Refinery, etc.) First you meet the ancient grey goddess with the chains on her eyeglasses and she will direct you to the Interviewer who will be Jennifer Eye-candy, Kanisha Token-Black or Juan De Bilingualo, who all have a diploma from a college but know nothing about the industry at hand, you are more likely to get hired on the Excellence of your new Nike tennis shoes than anything related to the Skills required for the position. If you can get past the women in Human Resources and talk to the guy that actually runs the shop and look each other in the eye and talk about 'Making Stuff', then you might have the job. That is how that works.

QQQBall -> besnook •Jan 21, 2017 7:26 PM

besnook. Exactly. not just engineers, but service reps, sales people, etc., that then were promoted up thru the ranks of the same company. My lady retired from AT&T as a project manager at like 54 yo.

She was hired after taking a test that only 4 peeps in the room passed. worked her way up - they had reciprocal/mutually beneficial investments in each other. She is smart and had a degree from UC here in Kali. Now, no loyalty either way in most cases.

Twee Surgeon -> DrData02 •Jan 21, 2017 6:21 PM

Exactly, people are finding other ways to get by. I'm not sure how many ZH'ers have experienced the modern non-corporate job market. Unless you have a .gov job you are pretty much The next disposable android who can be worked to death and replaced when the bearings are shot or an inconvenience arrives. Employers don't want to Hire because it's too expensive due to various regulations, taxations and obligations to the City, State, County and Federal government, all of which are Constantly Expanding and must pay for the ever increasing pay-roll size and the unfunded liabilities and the pension plan and the grant for the new skate board park etc, and so on, forever and ever.

It boggles my mind, the kind of bullshit experienced by an acquaintance who is a Waitress, on top of all the shitty employers and scummy customers, she has to pay taxes on Estimated Tips, by a Percentage of Transactions regardless of whether she actually Received a Tip.

The government assumes a tip exists at 8% and the waitress must pay on the assumption or the business owner gets pissed off because he/she will catch shit from the IRS at Tax time. Black people only tip on the 29th of February if it is a full moon, a trick they learned from the cheap Canadian bastards who got the idea from the Asians who also, mostly, do not tip. An establishment owner selling Beer/ Wine/ Liquor is responsible for the customers action after leaving the establishment, if they get in a wreck / DUI,

Whatever, and that was all from Ronald Ray-guns era, the Small Business and Independence messiah. (The Dramm shop Act, I think, Google has that hidden though.)

That is just the Bar / Restaurant biz. Mc Donalds and the Fast food scam clan are often getting 50% of an employees wages paid through special programs for hiring recently released Felons, drug rehab grads and recent immigrants to name a few, so you already paid for half that burger and fries before you ordered it and Mc Donald is doing quite nicely, thank you. I could go on into the Construction and Manufacturing realms but life is short.

The Problem with the USA is the Government, I'm not holding my breath for Trump to make a change, I remember the song and Dance when Ronny won the White house. Nothing fucking changed for most people. It just began the Road to Barry Obama and here we are.

Donewithit22 •Jan 21, 2017 5:35 PM

This is only a problem when people start to realize the systems that we have in place are by nature a ponzi scheme. I partner and I dropped out of the workforce 2011ish. We realized by the time we paid for health care, which was now mandated, city tax, state tax, fed tax, s/s tax etc....what was the point of going to work.....

We both have degree and are in our mid 30's.

we sold everything we had bought land and have build a homestead doing most things ourselves. we do odd jobs for extra cash and we live better , less stress then we used too. we are going on vacation to Peru in about 3 weeks for 15 days and we often do a few days here or there just to see the US. We love not being in the labor pool and we are both sorry we didnt do this sooner.

thisguyoverhere •Jan 21, 2017 5:38 PM

In the skilled trades there are many former welders, ironworkers, boilermakers and fitters, over 60 years old, working as consultants. These men (and some women) command high rates, the respect of their union halls or fellow tradesman because of their body of knowledge and experience. Much of that knowledge will not be passed on, will be lost because these experienced 'field engineers' (the real thing, no bull$hit diploma) are sick of the politics and seeing the honest labor of skilled workers being siphoned off while some spoiled brat takes a sallary in 'the office'. I have a degree. I learned more usefull skills in 6 months than 4 years of school. We have a structural problem within our framework of 'educating' the next generation. The result, many today have the cultivated tastes, but no capital to purchase the lifestyle.

Son of Captain Nemo •Jan 21, 2017 5:55 PM

"The problem is that unqualified applicants for these openings also are at a record high. The number of jobs available that are not being filled because the skill set is absent is at an unprecedented level - and this was an overriding theme in the latest edition of the Fed's Beige Book." Because U.S. corporations would rather spend the time and expense seeking the lowest labor rate to do the job than retraining an existing workforce that has been dormant or obsolete because of lack of work or "No work" at all... This includes bending the rules for H1B and related visas... Even if we have a war on terror and a Department of Homeland Security we've been waging since 2002 which places "very high standards" on what moves in and out of the Country since 9/11! Go figure!!!

Duc888 •Jan 21, 2017 8:03 PM

Speaking specifically of those aged 16 to say......30 Largely unemployable. Lord knows I've tried to employ a dozen or so in the last few years.

  1. Won't put down the gdamned smart phone.
  2. Don't want to get their hands dirty.
  3. Apparently they've spent so much time pushing buttons on a game controller while growing up they skipped what young guys have done while growing up in the last 75+ years, you know, taking shit apart, putting shit back together, screwing it up, modifying shit, putting it back together a second time and generally learning how shit works.
  4. Complete and total lack of knowledge of the use of common hand tools and rudimentary pneumatic powered tools.
  5. Absolutely no attention span.
  6. Absolutely no common sense.
  7. See know value in actually learning any skills involved in a trade, they want / need instant gratification.
  8. Absolutely no critical thinking skills, (If I do this...the likely outcome will be A._______ B._________ or C.________

They have no training in creating some type of mental flow chart in their head to have at least some basic predictive skills.} 9. They have more excuses for missing work than any ten guys I knew while growing up. 10. most do not have access to reliable transportation to get to the work site / job. Seems like the feminization has worked wonderfully.

[Jan 21, 2017] 7 Best Monthly Dividend Stocks for 2017

Notable quotes:
"... Realty Income is not a bond. It's obviously a stock. But in terms of stability and safety, it's about as close to a bond as you can realistically get in the stock market. The REIT owns a portfolio of high-traffic retail properties that are mostly recession proof, and importantly, internet proof. ..."
Jan 21, 2017 | www.kiplinger.com
Jan 19, 2017, 2:30 PM

The second half of 2016 was not kind to income investors. As bond yields rose, the prices of virtually everything paying an income stream got slammed. Some of my favorite dividend stocks, REITs and closed-end funds fell by 20% or more ... at a time when the broader stock market was rallying.

That's frustrating, to say the least. But if you're investing for retirement, short-term price moves really don't matter all that much. Earning a regular stream of income is far more critical.

But even here, your dividend stocks are generally misaligned with your actual cash needs. Most dividend stocks pay quarterly, and most bonds pay semi-annually. Yet your regular expenses -- everything from your mortgage to the mobile phone bill -- tend to be monthly.

This is where monthly dividend stocks come in handy. Monthly dividend stocks align your income with your expenses, making it a lot easier to plan out your life. And after the general bloodletting we've had among defensive, dividend-paying names over the past few months, some of my favorite monthly dividend stocks are finally reasonably priced again. Most were prohibitively expensive as recently as late summer.

Some would dismiss a monthly payout as a gimmick designed to impress mom and pop investors, but I would disagree completely. To me, a monthly dividend is a sign of a management team that takes its investors seriously and makes a real effort to do what is best for them.

This is an eclectic list, covering everything from traditional brick-and-mortar REITs to leveraged closed-end bond funds. But all have one thing in common: They pay a reliable monthly dividend.

You can't have a list of monthly dividend stocks without "the Monthly Dividend Company" itself, conservative retail REIT Realty Income Corp. Realty Income has paid its dividend like clockwork for 556 consecutive months and counting. Importantly, it's raised that dividend for 76 consecutive quarters and has shown no indication of slowing down. Since 1994, the company has raised its dividend at a 4.6% annual clip.

Realty Income is not a bond. It's obviously a stock. But in terms of stability and safety, it's about as close to a bond as you can realistically get in the stock market. The REIT owns a portfolio of high-traffic retail properties that are mostly recession proof, and importantly, internet proof.

With Amazon.com, Inc. ( AMZN ) and its peers quickly making physical stores irrelevant, you have to worry about the long-term viability of a lot of properties. But a typical Realty Income property would be your local pharmacy or convenience store, the sorts of properties that e-commerce won't replace any time soon. And its base of over 4,700 properties is spread across 247 tenants in 49 states and Puerto Rico, with its largest tenant accounting for just 7.3% of total rent.

At current prices, Realty Income yields about 4.4%, which is nearly 2% higher than the yield on the 10-year Treasury. But unlike that Treasury coupon, which will never rise, Realty Income's dividend will likely continue to rise every year.

SEE ALSO FROM KIPLINGER: 8 Best 'YARP' Stocks for Dividend Investors LTC Properties Inc.

Another fantastic REIT in our list of monthly dividend stocks is health and senior living specialist LTC Properties Inc.

Lest there be any confusion as to what LTC does, take a look at its ticker symbol. "LTC" stands for "long-term care." That's a pretty good description of the REIT's portfolio, which allocates 49.5% of its weighting to skilled nursing properties with another 45.5% in assisted living facilities. All in all, LTC has over 200 properties spanning 30 states.

Health and senior living might seem like boring niche markets, but LTC is actually a growth dynamo due to the aging of the baby boomers. Over 10,000 boomers turn 65 every single day , and as this generation ages, they will continue to need more and more healthcare. So suffice it to say that demographic trends are on LTC's side.

At current price, LTC sports a dividend yield of 4.9%. That's not mouthwateringly high, though it certainly isn't bad. And LTC also has a good history of raising its dividend, having boosted its payout every year since 2010. Over the past five years, LTC has raised its dividend at 6% annual clip.

LTC isn't wildly exciting. If fact, I'd argue it's downright boring. But for a consistent income producer, that's just fine. LTC is a consistent monthly dividend stock backed by strong demographic trends.

SEE ALSO FROM INVESTORPLACE: The 10 Best Stocks to Buy for 2017 STAG Industrial

Up next is a small-cap REIT that I've held for several years now, STAG Industrial Inc.. STAG is a young REIT, having gone public only in 2011, and like LTC, it operates in something of a niche market. "STAG" stands for "single tenant acquisition group," and the REIT focuses on standalone, single-tenant properties in the light industrial space. A warehouse or manufacturing facility would be a typical property for STAG.

STAG has grown like a weed since its 2011 IPO, expanding its portfolio 344% to 300 properties in 37 states. And the beauty of its gritty industrial portfolio is that it doesn't require a lot in terms of maintenance and expenses. There are generally no customers that need to be impressed.

Let's talk dividends. At current prices, STAG yields just shy of 6%, making it a high-yielder these days. And over the past three years, STAG has grown that dividend at a 9% annual clip. That's exceptionally high for a boring portfolio of gritty industrial properties.

My recommendation is to buy STAG, instruct your broker to reinvest the dividends, and then just let it ride. Five years from now, you'll likely have a much larger share count ... and a much fatter monthly dividend.

SEE ALSO FROM KIPLINGER: 8 Stocks to Benefit from Rising Interest Rates EPR Properties

I'll add one last REIT to our list of monthly dividend stocks, EPR Properties. It must be a "monthly dividend stock thing," but like LTC and STAG, EPR is also an acronym, standing for "Entertainment Properties."

EPR's background is in non-traditional assets, and today the REIT owns an eclectic portfolio that includes movie theaters, golf driving ranges, ski parks, water parks and private schools, among other things. But this quirkiness is what makes EPR attractive.

To start, it requires specialized knowledge to invest in these sorts of properties profitably, and few real estate professionals have it. That gives EPR an advantage and allows it to grab higher yields than it might on a more traditional portfolio. But the non-conformity of the portfolio also tends to be somewhat off-putting to a lot of money managers accustomed to analyzing apartment or office REITs. That tends to depress the price, allowing for us to grab EPR shares at a more attractive price.

Today, EPR yields 5.5% in dividends. And over the past five years, the company has raised its dividend at a 7% clip. That's not too shabby.

Apart from its attractive yield, EPR is interesting as a portfolio diversifier. The prices of ski parks or movie theaters are not tightly correlated to those of, say, office buildings. So in addition to a great income stream, you also get some real diversification.

SEE ALSO FROM INVESTORPLACE: 7 Big Tech Stocks to Buy for Dow 20,000 Main Street Capital

Enough REITs, let's move on to a different asset class that often includes monthly dividend stocks: business development companies (BDCs). BDCs make debt and equity investments in smaller, up-and-coming companies. Their niche tends to be middle-market companies that are too big to be served by a bank, but too small to access the stock and bond markets. You can think of them as publicly traded private equity companies.

BDCs are actually pretty similar to REITs in that both are special business structures created by Congress with tax advantages. BDCs, like REITs, are not required to pay corporate income taxes so long as they pay out the bulk of their earnings as dividends. As a result, both tend to pay above-market yields, and both tend to be very attractive to retired investors.

So, with that said, let's take a look at Main Street Capital Corporation, which is based in Houston, Texas. MAIN makes both equity and debt investments in the companies it finances, and most of its investments are in the fast-growing sunbelt region of the country.

At current prices, MAIN pays about 6%. But that does not include MAIN's semi-annual special dividends, which are tied to profitability. Adding in the past two special dividends gets the total annual yield to 7.5%.

So, you can think of MAIN as a monthly dividend stock with an extra bonus every six months to incentivize you to continue holding. But given that the regular monthly dividend has grown at a healthy 7.7% clip over the past five years, I'd say we already had reason enough!

*Cumulative total including semi-annual special dividend.

SEE ALSO FROM KIPLINGER: Great Stocks to Get Dividends Every Month Prospect Capital

[Jan 21, 2017] Yellen has changed her colors overnight. Her ugly partisan side is showing

Notable quotes:
"... I do not share your view of Yellen at all. She has changed her colors overnight. Her ugly partisan side is showing. There are less painful ways to stop Trump's policies that she does not agree with than sacrificing the working class. ..."
"... Clear indication that she will revert to a Taylor rule type approach so she can justify raising rates fast to kill the Trump economy. ..."
Jan 21, 2017 | economistsview.typepad.com
Peter K. : January 20, 2017 at 04:28 AM

Hopefully Yellen won't raise interest rates as high as Volcker did in the early 1980s when he was fighting inflation.

There are better less painful ways to fight inflation but the prog neolibs don't want to explore those options. Take it out on the working class with high unemployment.

BenIsNotYoda -> Peter K.... January 20, 2017 at 04:46 AM

I do not share your view of Yellen at all. She has changed her colors overnight. Her ugly partisan side is showing. There are less painful ways to stop Trump's policies that she does not agree with than sacrificing the working class.
BenIsNotYoda -> BenIsNotYoda... , -1
Yellen said last night - "I believe in systematic approach to monetary policy."

Clear indication that she will revert to a Taylor rule type approach so she can justify raising rates fast to kill the Trump economy.

[Jan 21, 2017] The other benefit of Kimball's plan - from a prog neolib viewpoint - is that it would weaken Social Security.

Notable quotes:
"... Wasn't there a recent discussion about how 401(k)s are a sham? ..."
"... Hillary should have campaigned on this policy of diverting savings to Wall Street in order to help exports. This would have gotten more voters to the polls.... Call it a private Wall St. tax on savers. ..."
"... from Miles Kimball the supply-sider ..."
"... how would Brad Setser think about an 8 percent tax on Chinese consumers that the Communist sovereign wealth fund could invest abroad for their retirement? That would boost Wall Street some more. ..."
Jan 21, 2017 | economistsview.typepad.com
Peter K. : , January 20, 2017 at 04:26 AM
"As I explained in my May 14, 2015 column "How Increasing Retirement Saving Could Give America More Balanced Trade":

I talked to Madrian and David Laibson, the incoming chair of Harvard's Economics Department (who has worked with her on studying the effects of automatic enrollment) on the sidelines of a Consumer Financial Protection Bureau research conference last week. Using back-of-the-envelope calculations based on the effects estimated in this research, they agreed that requiring all firms to automatically enroll all employees in a 401(k) with a default contribution rate of 8% could increase the national saving rate on the order of 2 or 3 percent of GDP."

Wasn't there a recent discussion about how 401(k)s are a sham?

Progressive neoliberals....

Hillary should have campaigned on this policy of diverting savings to Wall Street in order to help exports. This would have gotten more voters to the polls.... Call it a private Wall St. tax on savers.

Peter K. -> Peter K.... , January 20, 2017 at 04:26 AM
from Miles Kimball the supply-sider
Peter K. -> Peter K.... , January 20, 2017 at 04:41 AM
how would Brad Setser think about an 8 percent tax on Chinese consumers that the Communist sovereign wealth fund could invest abroad for their retirement? That would boost Wall Street some more.
Peter K. -> Peter K.... , -1
The other benefit of Kimball's plan - from a prog neolib viewpoint - is that it would weaken Social Security.

[Jan 21, 2017] If we look at the numbers for involuntary part-time workers, it dropped from 6.8 million in December of 2014 to 5.6 million in December of 2016.

Jan 21, 2017 | economistsview.typepad.com
anne : January 20, 2017 at 07:53 AM , 2017 at 07:53 AM
http://cepr.net/blogs/beat-the-press/people-are-choosing-to-work-part-time-why-is-that-so-hard-for-economic-reporters-to-understand

January 20, 2017

People are Choosing to Work Part-Time, Why Is that So Hard for Economic Reporters to Understand?

It is really amazing how major news outlets can't seem to find reporters who understand the most basic things about the economy. I guess this is evidence of the skills shortage.

Bloomberg takes the hit today in a piece * discussing areas where the economy is likely to make progress in a Trump administration and areas where it is not. In a middle "muddle through" category, we find "Full-Time Work Is Likely to Stay Elusive for Part-Timers." The story is:

"Trump has highlighted the number of part-time workers in the U.S. economy, saying 'far too many people' are working in positions for which they are overqualified and underpaid. While the proportion of full-time workers in the labor force remains below its pre-recession high, it's made up most of the ground lost during the downturn. But it hasn't budged much in the last two years, even as the job market has gotten tighter. Some economists point to the gig economy as the driving force (pun intended) behind part-timers. Others see a broader shift in the labor market that's left many workers stuck with shorter hours, lower wages and weaker benefits."

Okay, wrong, wrong, and wrong. In its monthly employment survey (the Current Population Survey - CPS), the Bureau of Labor Statistics asks people whether they are working more or less than 35 hours a week. If they are working less than 35 hours they are classified as part-time. The survey then asks the people who are working part-time why they are working part-time. It divides these workers into two categories, people who work part-time for economic reasons (i.e. they could not find full-time jobs) and people who work part-time for non-economic reasons. In other words the second group has chosen to work part-time.

If we look at the numbers for involuntary part-time workers, it dropped from 6.8 million in December of 2014 to 5.6 million in December of 2016. That is a drop of 1.2 million, or almost 18 percent. That would not seem to fit the description of not budging much. Of course Bloomberg may have been adding in the number of people who chose to work part, which grew by 1.4 million over this two year period, leaving little net change in total part-time employment.

Of course there is a world of difference between a situation where people need full-time jobs, but work part-time, because that is the only work they can find and a situation in which people work part-time because they don't want to spend 40 hours a week on the job. Most of us would probably consider it a good thing if people who wanted to spend time with their kids, or did not want to full time for some other reason, had the option to work part-time. This is what in fact has been happening and it has been going on for three years, not two.

Come on Bloomberg folks -- did you ever hear of the Affordable Care Act (a.k.a. "Obamacare")? As a result of Obamacare workers are no longer dependent on employers for health care insurance. This means that many people have opted to work part rather than full time. This has opened up full time jobs ** for people who need them, even though it has left total part-time employment little changed.

In total, the number of people involuntarily working part-time has fallen by 2.2 million since the ACA has been in effect, while the number choosing to work part-time has risen by 2.4 million. The sharpest increase in voluntary part-time employment has been among young mothers *** and older workers **** just below Medicare age.

It is really incredible that this shift from involuntary part-time to voluntary part-time is not more widely known. It is a very important outcome from the ACA.

* https://www.bloomberg.com/graphics/2017-how-well-know-if-trump-is-making-america-great-again/

** http://cepr.net/blogs/cepr-blog/obamacare-and-part-time-work-part-2-involuntary-part-time-employment

*** http://cepr.net/blogs/cepr-blog/the-affordable-care-act-still-family-friendly

**** http://cepr.net/blogs/cepr-blog/obamacare-is-good-for-older-workers-too

-- Dean Baker

libezkova -> anne... , January 20, 2017 at 10:34 AM
My impression here is that in this particular issue Dean Baker is out of touch with reality.

Question: how many people in this 1.2 million drop because they retired at 62 forced to take a half of their SS pension, or left workforce?

Also, can you consider Wal-Mart or Shop Right cashier working 36 hours for $7.5 an hour and without any benefits (as he/she can't afford them) fully employed.

Single mothers are probably the most important category to analyze here.

sanjait -> anne... , January 20, 2017 at 01:33 PM
This is an example of how the libertarian and Republican conceptions of liberty and freedom are so off the mark.

When people can afford to work part time instead of full time to do things like raise children, attain higher education or start companies, that is freedom. When the inaccessibility of health insurance forces them to work full time when they would otherwise prefer not, that is not enhanced freedom.

[Jan 21, 2017] I seriously question the assumption of FOREX adjustments perfectly offsetting policy changes such that the balance of trade remains unchanged

Notable quotes:
"... I seriously question the assumption of FOREX adjustments perfectly offsetting policy changes such that the balance of trade remains unchanged. It seems like an article of faith that things work this way, based on logic, intelligence, and economic analysis based on various models of how the world works. ..."
"... Do economists have solid models that accurately predict the movement of FOREX rates in the first place? I mean, all else being equal, and given no policy changes at all, can economists accurately forecast the exchange rates between, say, Canada and the US over the next 10 years? And, if so, why do these economists have to work for a living? Shouldn't they be enormously wealthy people by now if they possess this level of predictive capabilities? ..."
"... My personal thinking on the matter is to take a more humble approach. Given some solid reasons to believe the proposed border adjustment tax will increase the value of the dollar, but lacking a way to accurately predict FOREX, I would guess that exchange rates would adjust to cancel out only half the policy change. I'll assume trade flows adjust a bit and FOREX rates adjust a bit. And since it is just a guess, I'd be quite cautious in drawing any strong conclusions. ..."
Jan 21, 2017 | economistsview.typepad.com

pgl, Friday, January 20, 2017 at 01:37 AM

Team Trump needs to listen to Miles Kimball:

"border adjustability. In the eurozone, where there is a fixed exchange rate of 1 between the member countries, relying more heavily on a value-added tax-for which international rules allow taxing imports while exempting exports from the tax-and less on other taxes, is understood as a way to get the same effect as devaluing to an exchange rate that makes foreign goods more expensive to people in a country and domestic goods cheaper to foreigners. But in a floating exchange rate setup as the US has, most of the effects of border adjustment can be canceled out by an explicit appreciation in the dollar that cancels out the implicit devaluation from the tax shift. And indeed, such an appreciation of the dollar is exactly what one should expect."

The architect of this Destination Based Cash Flow Tax with "Border Adjustments" (is that like sprinkles on top) is Alan Auerbach and even he admits this. Miles moves onto something else I have been saying:

"A way to push down the value of the dollar and stimulate net exports for a much longer time is to increase saving rates in the US As greater saving pushed down US rates of return, some of that extra saving would wind up in foreign assets, putting extra US dollars in the hands of folks abroad, so they would have US dollars to buy US goods. This effect can be enhanced if the regulations for automatic enrollment are favorable to a substantial portion (say 30%) of the default investment option being in foreign assets. Note that an increase in US saving would tend to push down the natural interest rate, and so needs to be accompanied by the elimination of the zero lower bound in order to avoid making it hard for monetary policy to respond to recessions."

OK – it might not be so easy to lower the natural rate now but back in 1981, real interest rates soared as the Reagan tax cuts lowered national savings. This led to a massive dollar appreciation and a large drop in net exports.

Ed Brown -> pgl... , January 20, 2017 at 07:31 AM
I seriously question the assumption of FOREX adjustments perfectly offsetting policy changes such that the balance of trade remains unchanged. It seems like an article of faith that things work this way, based on logic, intelligence, and economic analysis based on various models of how the world works.

But while this view seems to be held by intelligent people with far more economic education that I will ever have, I am wondering if there is any empirical evidence that supports this reasoning? I am sceptical.

Do economists have solid models that accurately predict the movement of FOREX rates in the first place? I mean, all else being equal, and given no policy changes at all, can economists accurately forecast the exchange rates between, say, Canada and the US over the next 10 years? And, if so, why do these economists have to work for a living? Shouldn't they be enormously wealthy people by now if they possess this level of predictive capabilities?

My personal thinking on the matter is to take a more humble approach. Given some solid reasons to believe the proposed border adjustment tax will increase the value of the dollar, but lacking a way to accurately predict FOREX, I would guess that exchange rates would adjust to cancel out only half the policy change. I'll assume trade flows adjust a bit and FOREX rates adjust a bit. And since it is just a guess, I'd be quite cautious in drawing any strong conclusions.

I welcome comments that would help educate me on this subject. Best wishes to all.

Peter K. -> Ed Brown... , January 20, 2017 at 07:46 AM
As I understand it Peter Dorman agrees with you here:

http://econospeak.blogspot.com/2016/12/paul-krugman-on-protectionism-and-trade.html

As does economics superstar Dean Baker.

PGL replied to Dorman twice, but Dorman ignored him.

JohnH -> Peter K.... , January 20, 2017 at 08:17 AM
I love PK's summary: ".... trade deficits are always a temporary phenomenon, to be followed eventually by surpluses, and vice versa."

After 30 years of trade deficits, I wonder about PK's definition of temporary...

Oh well, in the long run, we're all dead...and the trade deficit will swing to a surplus...

Ed Brown -> JohnH... , January 20, 2017 at 08:28 AM
:-)
Old Opossum's Practical Cat -> Ed Brown... , January 20, 2017 at 08:39 AM
As The Clock Ticks Down

Stand by your data
"
~~Country & Western Song~

Before the opportunity-window slams shut, harvest your data from the market! You need to record a baseline from the last moments of the O'Bummer World. Sure!

You will wish him back, but that is beside the point. We are scientists not wishers.

I wish you
well
!

Ed Brown -> Peter K.... , January 20, 2017 at 08:26 AM
Hello. Thank you for this link. I found this comment by Peter Dornman to be interesting: "And also, yes, any theory that implies a known relationship between macro variables and forex rates is *very* counter-empirical."

If his comment is correct, it makes me wonder about the reliability of Miles Kimball's analysis.

There are certain types of problems we just can't reliably analyze, as they are too complicated, or the underlying physics is subject to extreme sensitivity to accuracy of the inputs (chaos theory, basically). For instance, our ability to make meaningful forecasts of the weather is limited to a few days. Maybe FOREX predictions are like that? If so, we should be cautious about making any strong statements about FOREX adjustments precisely offsetting policy changes.

I mean, doesn't it seem like hubris when you can't predict what a variable will do given no changes to current conditions, but you decide that you can predict *precisely* what it will do if we make changes to current conditions?

JohnH -> Ed Brown... , January 20, 2017 at 07:54 AM
"Do economists have solid models that accurately predict the movement of FOREX rates in the first place?"

Meese-Rogoff showed that exchange rates are disconnected from fundamentals. It's called the 'foreign exchange puzzle.'

Yet pgl keeps insisting on an 'if x then y' approach to most problems. His key variable is interest rates, which are at the root of most every change in pglian universe.

I'm actually surprised that he departs from his rate-centric universe to suggest that Trump might be responsible for something like the fall of the peso, though he stridently rejects the idea that Trump's bully pulpit might shame American companies into keeping more jobs at home.

JohnH -> JohnH... , January 20, 2017 at 07:58 AM
Meese-Rogoff found that f-x rates are a random walk.

[Jan 21, 2017] Disillusioned in Davos

Jan 21, 2017 | economistsview.typepad.com
Larry Summers:
Disillusioned in Davos : Edmund Burke famously cautioned that "the only thing necessary for the triumph of evil is for good men to do nothing." I have been reminded of Burke's words as I have observed the behavior of US business leaders in Davos over the last few days. They know better but in their public rhetoric they have embraced and enabled our new President and his policies.

I understand and sympathize with the pressures they feel. ... Businesses who get on the wrong side of the new President have lost billions of dollars of value in sixty seconds because of a tweet. ...

Yet I am disturbed by (i) the spectacle of financiers who three months ago were telling anyone who would listen that they would never do business with a Trump company rushing to praise the new Administration (ii) the unwillingness of business leaders who rightly take pride in their corporate efforts to promote women and minorities to say anything about Presidentially sanctioned intolerance (iii) the failure of the leaders of global companies to say a critical word about US efforts to encourage the breakup of European unity and more generally to step away from underwriting an open global system (iv) the reluctance of business leaders who have a huge stake in the current global order to criticize provocative rhetoric with regard to China, Mexico or the Middle East (v) the willingness of too many to praise Trump nominees who advocate blatant protection merely because they have a business background.

I have my differences with the new Administration's economic policies and suspect the recent market rally and run of economic statistics is a sugar high. Reasonable people who I respect differ and time will tell. My objection is not to disagreements over economic policy. It is to enabling if not encouraging immoral and reckless policies in other spheres that ultimately bear on our prosperity. Burke was right. It is a lesson of human experience whether the issue is playground bullying, Enron or Europe in the 1930s that the worst outcomes occur when good people find reasons to accommodate themselves to what they know is wrong. That is what I think happened much too often in Davos this week.

JohnH -> Peter K.... , January 20, 2017 at 03:24 PM
Larry Summers lecturing us about bullies! Precious!

"Larry Summers Is An Unrepentant Bully"
http://www.huffingtonpost.com/peter-s-goodman/larry-summers-bully-fed_b_3653387.html

Like so much of the tit-for-tat between Democrats and Republicans, what's OK for to do is NOT OK for you to do!!!

anne : , January 20, 2017 at 12:24 PM
https://books.google.com/books?id=SFNADAAAQBAJ&pg=PT951&lpg=PT951&dq=%22No+man,+who+is+not+inflamed+by+vainglory+into+enthusiasm%22&source=bl&ots=ufx9GiMtls&sig=jJgSGfaCuCQFzBa9KiNBKCoaYgQ&hl=en&sa=X&ved=0ahUKEwjE7YCOxtHRAhWjLMAKHVmSDFAQ6AEIHDAB#v=onepage&q=%22No%20man%2C%20who%20is%20not%20inflamed%20by%20vainglory%20into%20enthusiasm%22&f=false

1770

Thoughts on the Cause of the Present Discontents

No man, who is not inflamed by vainglory into enthusiasm, can flatter himself that his single, unsupported, desultory, unsystematic endeavours are of power to defeat the subtle designs and united Cabals of ambitious citizens. When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle.

-- Edmund Burke

anne -> anne... , -1
Edmund Burke famously cautioned that "the only thing necessary for the triumph of evil is for good men to do nothing."

-- Lawrence Summers

[ Edmund Burke never cautioned this. ]

anne -> Chris G ... , January 20, 2017 at 06:42 PM
Notice the fear of association or community of Milton Friedman:

http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html

September 13, 1970

The Social Responsibility of Business is to Increase its Profits
By Milton Friedman - New York Times

When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are–or would be if they or anyone else took them seriously–preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades....

Gibbon1 -> anne... , January 20, 2017 at 07:37 PM
When I used to read Delong's blog before Delong went off on Sanders because Delong thought that Hillary Clinton would give Delongs son a job...

There was economics student that penned a response where he mentioned that the economics profession generally dislikes models with negative externalities. But truly loath models that incorporate positive externalities.

A positive externality is where some action on your part benefits you _and_ benefits some third party.

One can assume Milton Friedman and his followers find that concept revolting indeed.

anne -> anne... , January 20, 2017 at 12:52 PM
While I was not in Davos, I read about the proceedings and meeting in the Western European and Chinese press and was impressed by the community emphasis placed on social justice. Possibly there was considerable individual resistance to the public theme, and Lawrence Summers would readily sense such resistance, but the public theme from the speech by Xi Jinping on was encouraging and portrayed in Western Europe and China as encouraging.
kthomas -> anne... , January 20, 2017 at 02:19 PM
The headline of his post is somewhat misleading. He was not really talking about Davos.
Chris G -> kthomas... , January 20, 2017 at 05:53 PM
Let me rephrase: Name me some Fortune 500 companies who consider potential societal impacts of their actions and, as a result, sometimes make decisions which don't maximize their profits but are the "right" thing to do for the community/their workers/the environment/etc.? What Fortune 500 companies are motivated by things beyond maximizing profits for shareholders?

My point is that corporate leaders who are charged to act to maximize profits will always be cowards when it comes to moral and ethical issues. If their job is to maximize profits. If they don't want to lose their job then that's what they'll do - act to maximize profits. Where would Summers get the idea that they would act any differently? Do the people he's referring to have a track record of choosing the moral high ground over profits? If they do then I could understand surprise and disappointment that they're folding. But they've never had to face that choice before let alone chosen moral high ground over money, have they?

anne -> Chris G ... , January 20, 2017 at 05:55 PM
My point is that corporate leaders who are charged to act to maximize profits will always be cowards when it comes to moral and ethical issues. If their job is to maximize profits. If they don't want to lose their job then that's what they'll do - act to maximize profits. Where would Summers get the idea that they would act any differently? Do the people he's referring to have a track record of choosing the moral high ground over profits? ...

[ Properly argued, sadly. ]

Winslow R. : , January 20, 2017 at 02:02 PM
I recall Summers/Romer with both houses and Obama blowing their chances to do something for the middle/working class.

Summers/Delong said if the stimulus was too small we could always get another later, yet that chance to do something never came and he did nothing.....

I'd like Larry to ponder whether it was he who did nothing.

[Jan 21, 2017] The Devious Ways That Neoliberal Economists Hurt America

Jan 21, 2017 | economistsview.typepad.com
anne :
im1dc -> anne... , January 20, 2017 at 10:11 AM
"The Ways That Pop Economics Hurt America"

should properly read

'The Ways That Economists Hurt America'

libezkova -> im1dc... , January 20, 2017 at 10:36 AM
Even more properly

"The Devious Ways That Neoliberal Economists Hurt America"

im1dc -> libezkova... , January 20, 2017 at 11:17 AM
Milton Friedman is a Neoliberal Economist?
pgl -> im1dc... , January 20, 2017 at 11:29 AM
On monetary economics - he is closer to Krugman than to Phil Gramm. But some people here hate Friedman as much as they hate Krugman and they have decided "neoliberal" is the ultimate put down. Even though they have no working definition of "neoliberal".
RC AKA Darryl, Ron -> pgl... , January 20, 2017 at 02:25 PM
neoliberal = low taxes + small government + MNC favorable trade deals + financial deregulation
RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , January 20, 2017 at 02:26 PM
neoliberal = Reagan/Thatcher policy
ilsm -> RC AKA Darryl, Ron... , January 20, 2017 at 04:46 PM
Wm Clinton/Rubin were Reagan not so lite. Except Bill did not borrow for the war machine.

My observation having been there: Reagan weapons were all busts which laid the ground work for $100B into the F-35 and we got nothing.

[Jan 21, 2017] US neocons try to enforce the continuation of neocon foriegh policy with Trump administration

Notable quotes:
"... Running up the flag in Estonia is a Kagan Clinton affair. ..."
"... No Putin is not the Tsar incarnate nor is the US inheriting England and France 1856 protection of Turks in the Balkans. ..."
"... Making a neocon moral point and tripping with WW III over Estonia is neocon war mongering insane. ..."
Jan 21, 2017 | economistsview.typepad.com
ilsm -> im1dc... , January 20, 2017 at 04:41 PM
After the new AG does what should have been done with HRC.

Then Trump can fire the CIA for the muck up in the middle east.

And pull the Mech brigade out of the Balts.

ilsm -> pgl... , January 20, 2017 at 04:43 PM
you are transferring the neocon enterprise on Trump.

Running up the flag in Estonia is a Kagan Clinton affair.

No Putin is not the Tsar incarnate nor is the US inheriting England and France 1856 protection of Turks in the Balkans.

ilsm -> sanjait... , January 20, 2017 at 03:16 PM
Making a neocon moral point and tripping with WW III over Estonia is neocon war mongering insane.

Who are Balts?

Why would US put a brigade of to defend Estonia? What is the strategic significance of Estonia?

There are as few people in Estonia as in New Hampshire and a large number are Russian speaking.

[Jan 21, 2017] The billionaire Warren Buffett to Trump: "I feel that way no matter who is president, the CEO -- which I am -- should have the ability to pick people that help you run a place."

Jan 21, 2017 | economistsview.typepad.com
Peter K. : January 20, 2017 at 11:50 AM

Billionaires have to stick together.

https://www.bloomberg.com/news/articles/2017-01-20/buffett-says-he-supports-trump-s-cabinet-picks-overwhelmingly?bcomANews=true

Buffett Supports Trump on Cabinet Picks 'Overwhelmingly'

by Amanda L Gordon and Noah Buhayar

January 19, 2017, 8:19 PM EST January 20, 2017, 10:12 AM EST

Warren Buffett said he "overwhelmingly" supports President-elect Donald Trump's choices for cabinet positions as the incoming commander-in-chief's selections face confirmation hearings in the U.S. Senate.

"I feel that way no matter who is president," the billionaire Berkshire Hathaway Inc. chairman and chief executive officer said Thursday in New York at the premiere of a documentary about his life. "The CEO -- which I am -- should have the ability to pick people that help you run a place."

"If they fail, then it's your fault and you got to get somebody new," Buffett said. "Maybe you change cabinet members or something."

Buffett, 86, backed Hillary Clinton in the presidential election, stumping for her in Omaha, Nebraska, and headlining fundraisers. The billionaire frequently clashed with Trump and scolded him for not releasing income-tax returns, as major party presidential candidates have done for roughly four decades.

Trump's cabinet picks include Treasury Secretary nominee Steven Mnuchin, a former Goldman Sachs Group Inc. banker; former Exxon Mobil Corp. CEO Rex Tillerson as secretary of state; and retired Marine Corps General James Mattis as Defense secretary.

Since the election, Buffett has struck a more conciliatory tone toward Trump and called for unity. In an interview with CNN in November, he said that people could disagree with the president-elect, but ultimately he "deserves everybody's respect."

Trump's Popularity

That message hasn't resonated. Trump's popularity is the worst for an incoming president in at least four decades, with just 40 percent of Americans saying they have a favorable impression of him, according to a Washington Post-ABC poll published Tuesday. Buffett said on Thursday that the low approval ratings won't matter much.

"It's what you go out with that counts -- 20, 50 years later what people feel you've achieved," Buffett said.

The president-elect has continued his pugnacious style during the transition, picking fights on Twitter with news outlets, automakers, defense contractors, intelligence agencies, Hollywood actress Meryl Streep and civil rights hero-turned-U.S. Congressman John Lewis.

...

JohnH -> Peter K.... , January 20, 2017 at 12:05 PM
Class warfare at its finest...
sanjait -> Peter K.... , January 20, 2017 at 12:54 PM
I wondered how you'd synthesize a way to disagree with Krugman on this one, given how seemingly commonsense and obvious are Krugman's points.

Here's the answer it seems: talk about something else.

John M -> sanjait... , January 20, 2017 at 01:14 PM
The Bush team went further than that, actively sabotaging FBI field agents' investigations of possible upcoming attacks.

Need it be stated that 9/11 did wonders for the Bush Administration?

John M -> pgl... , January 20, 2017 at 01:35 PM
Wonders for the Bush Administration:

* It solved the problem of Democrats beginning to get a spine and going after the Felonious Five (or at least the three with major conflict of interest).

* It bumped Bush's approval rating from 40% to 80%.

* It greatly lowered opposition to Bush's anti-civil-liberties policies, such as creating "1st Amendment Zones".

* It made passage of the Patriot Act possible.

* People were able to smear opposition to the Bush team policies as treasonous.

* It rendered torture, aggressive war, and barbaric imprisonment without due process of law respectable.

Bush Administration sabotaged investigation:

Remember Coleen Rowley who claimed that an FBI superior back in DC rewrote her request for a warrant, to make it less likely that it would be approved? There was also the FBI agent in Arizona who wanted to investigate certain pilot students, but was prohibited.

pgl -> sanjait... , January 20, 2017 at 01:20 PM
Remember the DeLenda Plan? Once we knew the USS Cole was Al Qaeda, it should have been executed. As in the spring of 2001. Alas, it was deferred to after 9/11. Most incompetent crew ever and the Twin Towers fell down taking 3000 people with because of their utter incompetence.
ilsm -> sanjait... , January 20, 2017 at 03:09 PM
Obama presided over 8 more years of Bushco organized murder and good profits for the war mongers.

[Jan 21, 2017] Non-interventionism and as such it is the opposing theory to neoconservatism, especially its Allbright-Kagan-Nuland troika flavor, which actually does not deviate much from so called liberal interventionists (Vishy left) such as Hillary-Samantha Power-Susan Rice troika

Notable quotes:
"... Trump may end their expert preparedness for unending war. ..."
"... Neolib/neocon conartists call their truthful detractors unready or ignorant of unpatriotic or Russian tools. Sore losers. Does not make war mongers right! ..."
Jan 21, 2017 | economistsview.typepad.com
ilsm -> Fred C. Dobbs... January 20, 2017 at 03:34 PM
What sense does it make to tilt with thermonuclear war over a half million Balts' whim?

Outside of the war mongering corporatists who take huge plunder off the US taxpayer.

How about an end to the one worlders?

Fred C. Dobbs said in reply to ilsm... January 20, 2017 at 04:04 PM

Can you come up with a theory of neoisolationism?
libezkova -> Fred C. Dobbs... , January 20, 2017 at 09:44 PM
Let me try. First of all, it is properly called non-interventionism and as such it is the opposing theory to neoconservatism, especially its Allbright-Kagan-Nuland troika flavor, which actually does not deviate much from so called liberal interventionists (Vishy left) such as Hillary-Samantha Power-Susan Rice troika.

It would be nice to put them on trial, because all of then fall under Nuremberg statute for war crimes. But this is a pipe dream in the current USA political climate with it unhinged militarism and jingoism.

Here is something that more or less resembles the definition

http://www.theamericanconservative.com/articles/noninterventionism-a-primer/

== quote ==

Americans have grown understandably weary of foreign entanglements over the last 12 years of open-ended warfare, and they are now more receptive to a noninterventionist message than they have been in decades. According to a recent Pew survey, 52 percent of Americans now prefer that the U.S. "mind its own business in international affairs," which represents the most support for a restrained and modest foreign policy in the last 50 years. That presents a challenge and an opportunity for noninterventionists to articulate a coherent and positive case for what a foreign policy of peace and prudence would mean in practice. As useful and necessary as critiquing dangerous ideas may be, noninterventionism will remain a marginal, dissenting position in policymaking unless its advocates explain in detail how their alternative foreign policy would be conducted.

A noninterventionist foreign policy would first of all require a moratorium on new foreign entanglements and commitments for the foreseeable future. A careful reevaluation of where the U.S. has vital interests at stake would follow. There are relatively few places where the U.S. has truly vital concerns that directly affect our security and prosperity, and the ambition and scale of our foreign policy should reflect that.

A noninterventionist U.S. would conduct itself like a normal country without pretensions to global "leadership" or the temptation of a proselytizing mission. This is a foreign policy more in line with what the American people will accept and less likely to provoke violent resentment from overseas, and it is therefore more sustainable and affordable over the long term.

When a conflict or dispute erupts somewhere, unless it directly threatens the security of America or our treaty allies, the assumption should be that it is not the business of the U.S. government to take a leading role in resolving it.

If a government requests aid in the event of a natural disaster or humanitarian crisis (e.g., famine, disease), as Haiti did following its devastating earthquake in 2010, the U.S. can and should lend assistance - but as a general rule the U.S. should not seek to interfere in other nations' domestic circumstances.

libezkova -> libezkova... , January 20, 2017 at 09:48 PM
Note the female chickenhawks are the most bloodthirsty, overdoing even such chauvinists as McCain.

That actually has its analogy in animal kingdom were female predators are more vicious killers then male, hunting the prey even if they do not feel the hunger (noted especially for lions)

point : , January 20, 2017 at 03:25 PM
Cross-posted from links earlier:

"So there you have it: ... completely unprepared to govern."

Paul means to imply the Obama boys and girls were better prepared? Judging by how well they did, maneuvering us into Larry's secular stagnation, for instance, some may be forgiven to think perhaps that kind of expertise we could do without.

Lost in all the discourse is that this government of ours was designed to be operated by amateurs.

ilsm -> point... , January 20, 2017 at 03:35 PM
Trump may end their expert preparedness for unending war.
ilsm -> point... , January 20, 2017 at 03:39 PM
Neolib/neocon conartists call their truthful detractors unready or ignorant of unpatriotic or Russian tools. Sore losers. Does not make war mongers right!

[Jan 20, 2017] What is Economism and why it is so damaging

Notable quotes:
"... For example, the basic Econ 101 theory of supply and demand is fine for some products, but it doesn't work very well for labor markets. It is incapable of simultaneously explaining both the small effect of minimum wage increases and the small impact of low-skilled immigration. Some more complicated, advanced theory is called for. ..."
"... But no matter how much evidence piles up, people keep talking about "the labor supply curve" and "the labor demand curve" as if these are real objects, and to analyze policies -- for example, overtime rules -- using the same old framework. ..."
"... An idea that we believe in despite all evidence to the contrary isn't a scientific theory -- it's an infectious meme. ..."
"... Academic economists are unsure about how to respond to the abuse of simplistic econ theories for political ends. On one hand, it gives them enormous prestige. The popularity of simplistic econ ideas has made economists the toast of America's intellectual classes. ..."
"... It has sustained enormous demand for the undergraduate econ major, which serves, in the words of writer Michael Lewis, as a "standardized test of general intelligence" for future businesspeople. But as Kwak points out, the simple theories promulgated by politicians and on the Wall Street Journal editorial page often bear little resemblance to the sophisticated theories used by real economists. ..."
"... And when things go wrong -- when the financial system crashes, or millions of workers displaced by Chinese imports fail to find new careers -- it's academic economists who often get blamed, not the blasé and misleading popularizers. ..."
Jan 20, 2017 | economistsview.typepad.com

Peter K. : January 20, 2017 at 04:35 AM

Noah Smith: The Ways That Pop Economics Hurt America - Noah Smith

"So I wonder if economism was really as unrealistic and useless as Kwak seems to imply. Did countries that resisted economism -- Japan, for example, or France [Germany?] -- do better for their poor and middle classes than the U.S.? Wages have stagnated in those countries, and inequality has increased, even as those countries remain poorer than the U.S. Did the U.S.'s problems really all come from economism, or did forces such as globalization and technological change play a part? Cross-country comparisons suggest that the deregulation and tax cuts of the 1980s and 1990s, although ultimately excessive, probably increased economic output somewhat."

Ugh what an awful display of pop economism. Globalization and technology are "impersonal forces." No mention of the rise of inequality or the SecStags. No mention of monetary policy fail in Europe. The biggest lies of economism are the lies of omission.

libezkova -> Peter K.... , -1
Thank you !

Looks like this concept of "Economism" introduced by James Kwak in his book Economism is very important conceptual tool for understanding the tremendous effectiveness of neoliberal propaganda.

I think it is proper to view Economism as a flavor of Lysenkoism. As such it is not very effective in acquiring the dominant position and suppressing of dissent, but it also can be very damaging.

https://www.bloomberg.com/view/articles/2017-01-19/the-ways-that-pop-economics-hurt-america

== quote ==

...When competitive free markets and rational well-informed actors are the baseline assumption, the burden of proof shifts unfairly onto anyone proposing a government policy. For far too many years, free-marketers have gotten away with winning debates by just sitting back and saying "Oh yeah? Show me the market failure!" That deck-stacking has long forced public intellectuals on the left have to work twice as hard as those safely ensconced in think tanks on the free-market right, and given the latter a louder voice in public life than their ideas warrant.

It's also true that simple theories, especially those we learn in our formative years, can maintain an almost unshakeable grip on our thinking.

For example, the basic Econ 101 theory of supply and demand is fine for some products, but it doesn't work very well for labor markets. It is incapable of simultaneously explaining both the small effect of minimum wage increases and the small impact of low-skilled immigration. Some more complicated, advanced theory is called for.

But no matter how much evidence piles up, people keep talking about "the labor supply curve" and "the labor demand curve" as if these are real objects, and to analyze policies -- for example, overtime rules -- using the same old framework.

An idea that we believe in despite all evidence to the contrary isn't a scientific theory -- it's an infectious meme.

Academic economists are unsure about how to respond to the abuse of simplistic econ theories for political ends. On one hand, it gives them enormous prestige. The popularity of simplistic econ ideas has made economists the toast of America's intellectual classes.

It has sustained enormous demand for the undergraduate econ major, which serves, in the words of writer Michael Lewis, as a "standardized test of general intelligence" for future businesspeople. But as Kwak points out, the simple theories promulgated by politicians and on the Wall Street Journal editorial page often bear little resemblance to the sophisticated theories used by real economists.

And when things go wrong -- when the financial system crashes, or millions of workers displaced by Chinese imports fail to find new careers -- it's academic economists who often get blamed, not the blasé and misleading popularizers.

... ... ...

Russia and China have given up communism not because they stopped having working classes, but because it became obvious that their communist systems were keeping them in poverty. And Americans are now starting to question economism because of declining median income, spiraling inequality and a huge financial and economic crisis.

[Jan 20, 2017] The architect of supply-side economics is now a professor at Columbia University, former University of Chicago economist Robert Mundell is an academic charlatan

Notable quotes:
"... For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan ..."
"... The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do. ..."
Jan 20, 2017 | economistsview.typepad.com
RC AKA Darryl, Ron :

Thanks to New Deal democrat, who made me curious about yesterday's "comment section in re Summers' piece." Then thanks to Ron Waller for his comment which closed with: (Good read: "Robert Mundell, evil genius of the euro".)

https://www.theguardian.com/commentisfree/2012/jun/26/robert-mundell-evil-genius-euro

Robert Mundell, evil genius of the euro

Greg Palast

For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.

That progenitor is former University of Chicago economist Robert Mundell. The architect of "supply-side economics" is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell's research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency.

Mundell, then, was more concerned with his bathroom arrangements. Professor Mundell, who has both a Nobel Prize and an ancient villa in Tuscany, told me, incensed:

"They won't even let me have a toilet. They've got rules that tell me I can't have a toilet in this room! Can you imagine?"

As it happens, I can't. But I don't have an Italian villa, so I can't imagine the frustrations of bylaws governing commode placement.

But Mundell, a can-do Canadian-American, intended to do something about it: come up with a weapon that would blow away government rules and labor regulations. (He really hated the union plumbers who charged a bundle to move his throne.)

"It's very hard to fire workers in Europe," he complained. His answer: the euro.

The euro would really do its work when crises hit, Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

"It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."

He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as "optimum currency area". This was a rule devised by Bob Mundell.

That doesn't bother Mundell. For him, the euro wasn't about turning Europe into a powerful, unified economic unit. It was about Reagan and Thatcher.

"Ronald Reagan would not have been elected president without Mundell's influence," once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, "voodoo economics": the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher.

Mundell explained to me that, in fact, the euro is of a piece with Reaganomics:

"Monetary discipline forces fiscal discipline on the politicians as well."

And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.

Thus, we see that (unelected) Prime Minister Mario Monti is demanding labor law "reform" in Italy to make it easier for employers like Mundell to fire those Tuscan plumbers. Mario Draghi, the (unelected) head of the European Central Bank, is calling for "structural reforms" – a euphemism for worker-crushing schemes. They cite the nebulous theory that this "internal devaluation" of each nation will make them all more competitive.

Monti and Draghi cannot credibly explain how, if every country in the Continent cheapens its workforce, any can gain a competitive advantage.
But they don't have to explain their policies; they just have to let the markets go to work on each nation's bonds. Hence, currency union is class war by other means.

The crisis in Europe and the flames of Greece have produced the warming glow of what the supply-siders' philosopher-king Joseph Schumpeter called "creative destruction". Schumpeter acolyte and free-market apologist Thomas Friedman flew to Athens to visit the "impromptu shrine" of the burnt-out bank where three people died after it was fire-bombed by anarchist protesters, and used the occasion to deliver a homily on globalization and Greek "irresponsibility".

The flames, the mass unemployment, the fire-sale of national assets, would bring about what Friedman called a "regeneration" of Greece and, ultimately, the entire eurozone. So that Mundell and those others with villas can put their toilets wherever they damn well want to.

Far from failing, the euro, which was Mundell's baby, has succeeded probably beyond its progenitor's wildest dreams.

[Needless to say, I am not a fan of Robert Mundell's.]

Reply Friday, January 20, 2017 at 07:07 AM Peter K. -> RC AKA Darryl, Ron... ,