MORE than 2000 customers at Toormina and Sawtell were left without power after safety equipment detected a fault this afternoon.
Shockingly, thousands more people, revealed not to be customers, also lost access to electricity. These freeloaders, or "electron bludgers", even include a huge number of children stealing electricity from their own family members; a sign of how ingrained the something-for-nothing culture has become.
More outages are planned in order to flush these electricity cheats from their safe havens. Essential Energy regrets the inconvenience to their legitimate customers, but is confident that they will support the measures necessary to maintain the integrity of the utility cartel system, which has done so much to replace boring old public services with a bewildering array of plans and bundles. For more information, just wait for the next pair of Irish backpackers with laminated ID cards to turn up at your door.
I have had the most beastly week, and in rare moments when I've managed to gather up some scraps of dignity and hope, I have been mostly reading:
- Want to Kill Your Economy? Have MBA Programs Churn out Takers Not Makers. — Rana Foroohar, in Evonomics, adapted from part of her book "Makers & Takers: The Rise of Finance and the Fall of American Business":
With very few exceptions, MBA education today is basically an education in finance, not business—a major distinction. So it’s no wonder that business leaders make many of the finance-friendly decisions. MBA programs don’t churn out innovators well prepared to cope with a fast-changing world, or leaders who can stand up to the Street and put the long-term health of their company (not to mention their customers) first; they churn out followers who learn how to run firms by the numbers. Despite the financial crisis of 2008, most top MBA programs in the United States still teach standard “markets know best” efficiency theory and preach that share price is the best representation of a firm’s underlying value, glossing over the fact that the markets tend to brutalize firms for long-term investment and reward them for short-term paybacks to investors.
- Why we need to teach political philosophy in schools — Jonathan Floyd in the Conversation:
What is the spectre haunting Europe today? It’s simple. The thing that truly dogs us, that really drags at our heels, is ignorance. Ignorance of the fundamental ideas at the heart of politics. Ignorance of the key terms of political argument: liberty, equality, power, justice, and so on. Ignorance of the subject matter of political philosophy. […] We are ignorant of our ignorance of it, as well as what that ignorance costs us. It is, to borrow from Donald Rumsfeld, an unknown unknown, when it could be something else: the thing that liberates the minds of our citizens; a weapon of mass deduction.
- How housing bubbles destroy productivity — Leith van Onselen at MacroBusiness:
The Australian Housing and Urban Research Institute (AHURI) has released a new report exploring “the nature and magnitude of the relationship between house prices, household debt and the labour market decisions of Australian households”, which paints a sobering picture for the economy and financial stability. The key conclusion from the report is that “households accumulate debt as house prices increase, leaving them vulnerable to housing and labour market shocks. House price increases also potentially promote or dampen labour supply and labour force productivity”. In other words, Australia’s housing bubble is distorting the economy.
- Advertising — Flea Snobbery:
- These charts show why some experts fear an apartment glut — Clancy Yeates in the Age provides your chart porn for the week:
- How the two major parties shape up on debate around student loan reform — in the Conversation, Andrew Norton (higher education policy's evil incarnate) discovers that students paying the post hoc education tax often pool their resources by sharing their accommodation with others. Like animals. This barbarous custom is unheard of among employees of the Grattan Institute, and means the income-contingent payment threshold must be lowered to make graduates pay for their disgusting habits:
Because HELP debtors often live with other people, their personal income is not always a reliable guide to their living standards. They share expenses and sometimes income with others. Grattan’s analysis found that half the debtors who would be affected by a $42,000 threshold live with a partner.
I'm sorry, but it's just irresponsible publishing an article like this without distributing an accompanying sick bag:
"The HSC taught me how resilient I am, and the impact goal setting can have on opportunity,” school captain Bianca McNeill said.
Jesus Christ, what are we doing to our children? As far as this stakeholder is concerned, this learning opportunity has achieved maximum outreach in terms of impactfullness. The lesson is to never let your child anywhere near a school if you want them to be capable of independant thought rather than just stringing together grammatically correct neoliberal clichés.
This week, I have been mostly reading:
- Time to Kill Security Questions—or Answer Them With Lies — In Wired, Lily Hay Newman asks you to "please reset your mother's maiden name":
The notion of using robust, random passwords has become all but mainstream—by now anyone with an inkling of security sense knows that “password1” and “1234567” aren’t doing them any favors. But even as password security improves, there’s something even more problematic that underlies them: security questions.
- Billionaire: Chinese real estate is 'biggest bubble in history' — Jethro Mullen and Andrew Stevens, CNN Money [I wouldn't normally cite CNN, but it's worth it for the tl;dr. You can't avert a private-sector debt crisis without fiscal policy. Private sector deleveraging without public sector spending is a) unlikely, and b) suicidal.]:
"The problem is the economy hasn't bottomed out," Wang said. "If we remove leverage too fast, the economy may suffer further. So we'll have to wait until the economy is back on the track of rebounding -- that's when we gradually reduce leverage and debts."
- What’s So Bad about the Trade Deficit? — David Glasner reproduces a column he wrote in 1984, because we're still having the same misbegotten arguments:
Just what is so dangerous about receiving more goods from foreigners than we give them back is never actually explained, but it is often suggested that that it causes a loss of American jobs. […] It almost seems tedious to do so, but it apparently still needs to be pointed out that buying less from foreigners means that they will buy less from us for the simple reason that they will have fewer dollars with which to purchase our products. […] Anyone who has ever thought about it has probably wondered why a country that gives up more goods in trade than it gets back is said to have a favorable balance of trade.
- Anti-Intellectualism, Terrorism, and Elections in Contemporary Education: a Discussion with Noam Chomsky — an interview by Dan Falcone and Saul Isaacson in CounterPunch:
I mean even before the Second World War Paris was one of the main centers of intellectual and cultural life. But now Paris is a kind of subsidiary of Germany, their traditional enemy and they can’t come to terms with it. They’ve tried to create one crazy thing after another to try to be exciting, each one more lunatic than the last, and this is one of them. And it’s picked up here in mostly literature departments and some humanities departments. It kind of gives the impression of being serious. Like you use big words and you have complicated sentences and there’s things nobody can understand, so we must be like physicists because I can’t understand them and they can’t understand me.
- Chartalism and Stock-Flow Consistency: A Reply to Nick Rowe — Alexander X. Douglas:
In a world of perfect certainty, there would be no need to accumulate dollars: people would spend all their dollars (or whatever currency) buying what they need today on the spot market and everything they need tomorrow on the forward market. Cue the requisite Keynes quotations about money as the barometer of uncertainty.
- How Perfect Markets Concentrate Wealth and Strangle Growth and Prosperity — Steve Roth:
The dynamics are straightforward here: poorer people spend a larger percentage of their income than richer people. So if less money is transferred to richer people (or more to poorer people), there’s more spending — so producers produce more (incentives matter), there’s more surplus from production, more income, more wealth…rinse and repeat.
- Undercommoning within, against and beyond the university-as-such — the Undercommoning Collective have been reading Paulo Freire:
We recognize that the university as it currently exists is part of an archipelago of social institutions of neoliberal, free-market racial capitalism. It includes the for-profit prison and the non-for-profit agency, the offshore army base and the offshore tax haven, the underfunded public and the elite private school, the migrant-worker staffed shop floor and the Wall Street trading floor, the factory and the factory farm. All are organs for sorting, exalting, exploiting, drilling, controlling and/or wasting what they call “human capital” and that we call our lives.
- OECD joins the rush to fiscal expansion – for now at least — Bill Mitchell:
In the last month or so, we have seen the IMF publish material that is critical of what they call neo-liberalism. They now claim that the sort of policies that the IMF and the OECD have championed for several decades have damaged the well-being of people and societies. They now advocate policy positions that are diametrically opposite their past recommendations (for example, in relation to capital controls). In the most recent OECD Economic Outlook we now read that their is an “urgent need” for fiscal expansion – for large-scale expenditure on public infrastructure and education – despite this organisation advocating the opposite policies at the height of the crisis. It is too early to say whether these ‘swallows’ constitute a break-down of the neo-liberal Groupthink that has dominated these institutions over the last several decades. But for now, we should welcome the change of position, albeit from elements within these institutions. They are now advocating policies that Modern Monetary Theory (MMT) proponents have consistently proposed throughout the crisis.
- Public spaces are going private – and our cities will suffer — Harry Smith in the Conversation:
Part of the explanation for this trend is that local authorities are increasingly using existing public spaces to raise funds, by charging for events or leasing their spaces to companies. In many cases, cash-strapped authorities are suffering from public sector cuts, and trying to improve or maintain their open spaces by entering into deals with private organisations.
- National borders exist to pen poor people into reservations of poverty — Giles Fraser in the Guardian:
We are so hypocritical about borders. We cheer when the Berlin Wall comes down. We condemn the Israelis for their separation barrier and Donald Trump for his ludicrous Mexican fence. But are we really so different? We also police our borders with guns and razor wire as if we had some God-given right to this particular stretch of land. Through the random lottery of life, I have a UK passport. I didn’t work for it or do anything whatsoever to deserve it. In economic terms, I just happened to be born lucky. […] It’s like our own little version of The Hunger Games. And it is so normal to us, we don’t even recognise it as a moral issue.
- Why universal basic income is seizing the agenda — Richard Murphy in iNews:
So why do it? There are many reasons. First, a lot (bit not all) of state benefits would roll over into the basic income and that would simplify the whole benefits system, saving a great deal. Second, work would always pay, but the tax rate when taking work and losing benefits would fall to a much more acceptable level, which would end the poverty trap that still ensnares far too many people in the current system.
- Cutting Australia’s Corporate Income Tax: A Gift to the U.S. Treasury Department — Dean Baker for Crikey:
One of the ironies of proposals to reduce Australia’s tax rate is that the U.S. Treasury would be a major beneficiary. The logic is straightforward, even if seldom advertised by proponents of the tax cut. Under tax treaties, the U.S. credits it multinationals with tax payments to the Australian government on a dollar for basis. This means that if a U.S. multinational has its Australian tax bill cut by $10 million then its U.S. tax bill likely increases by the same amount. The money saved by the company in Australia will go straight to the U.S. Treasury.[Okay, sectoral balances and all that: the money actually goes to the Fed, where it just redeems the liability incurred when the money was issued, and the Fed actually provides new money when Treasury spends. However the irony stands.]
- Adjuncts are unionizing, but that won’t fix what’s wrong in higher education — Lisa Liberty Becker in the Washington Post:
The Service Employees International Union (SEIU), also the force behind the Fight for 15 movement, has mobilized adjuncts in such spots as Washington, Boston and Los Angeles. During this past semester alone, according to the SEIU, adjuncts at 11 schools have ratified or agreed on union contracts. While there have been short-term gains, the deeper we become entrenched in adjunct unions, the more we are locked in an educational structure that shortchanges students by skimping on teaching.
- Six thoughts on teaching — Richard Seymour:
In a way, the teacher’s job isn’t to inform students of what they, ignorant little twits, don’t know. It is to place a different value on not-knowing. It is to enable students to make peace with the fact that not-knowing is the usual state of affairs.
- Conquer Your Day With the Power of Breakfast! — in McSweeney’s Internet Tendency, Curtis Retherford makes me LOL, and a LOL from me does not come cheap, my friend:
Breakfast. Breakfast stands alone. Breakfast is the most important meal of the day. It is the meal that fuels you for everything you encounter, that gets you ready for those important meetings. First thing in the morning, sit down and eat a bunch of eggs, and you will be able to tackle the day with confidence. You’ll be able to lean in to those who stand in your way and whisper softly in their ear, “my stomach is filled with eggs.” Their eyes will widen. They will not have realized that you have come prepared.
- The Great British higher education sell-off — Ehsan Masood, openDemocracy:
Private sector involvement in public services is now so mainstream it is surprising that it has taken so long for the market to meet higher education. But surprised we should be. The idea that we should be allowed to become rich from the education of present and future generations was a step too far even for Margaret Thatcher. Not so, however, for her successors.[…] I challenge any entrepreneur to read the research and HE bill, and not emerge feeling that you have struck oil. If these proposals become law, then, over time, the fee-paying student will become the human equivalent of black gold.
- Let’s Get Fiscal — Bill Emmott (former editor-in-chief of The Economist) at Project Syndicate:
In the inflation-plagued 1970s and 1980s, when investors’ demand for inflation-risk premia pushed up long-term borrowing costs, larger deficits tended to boost long-term interest rates further, while smaller deficits reduced them. It was this experience that caused policymakers after 2010 to assume that reducing government demand would help to boost private investment. […] But times have changed. For starters, we are no longer living in an inflationary era. On the contrary, Japan and some eurozone countries face deflation, while inflation in the UK is essentially zero. Only in America is inflation picking up – and only gently. Moreover, long-term borrowing costs are at historic lows, just as they have been throughout the last five years. Pursuing austerity in this context has resulted in a drag on growth so severe that not even the halving of energy prices over the last 18 months has overcome it.
- ‘Chemophobia’ is irrational, harmful – and hard to break — Corey S Powell:
In reality, ‘natural’ products are usually more chemically complicated than anything we can create in the lab. […] The distinction between natural and synthetic chemicals is not merely ambiguous, it is non-existent. The fact that an ingredient is synthetic does not automatically make it dangerous, and the fact that it is natural doesn’t make it safe. Botulinum, produced by bacteria that grow in honey, is more than 1.3 billion times as toxic as lead and is the reason why infants should never eat honey. A cup of apple seeds contains enough natural cyanide to kill an adult human.
- Herstory, for Real — Ted Rall:
And now a choice of viewing on mjd.id.au:
- Solving Our Unemployment Crisis presentation, April 19, 2016 — Bill Mitchell
- Jeremy Corbyn's speech to Annual Conference 2016 — Labour Party
- Wendy Brown on Education — Institute for New Economic Thinking:
One thing [neoliberalism has] done of course is make education increasingly contoured toward the question of return on investment. That is, very few students of working class, let along poor, or even middle class means, can look at a college edution — as we did in my time, your time — as something that has to do with expanding your capacities as a human being, and your capacities as a citizen. Instead, the question is how much money do you put in for how much you will get out as a potentially higher earner at the other end.
- How Stupid Laws and Benevolent Dictators can Ruin the Decentralized Web, too — Cory Doctorow at the Decentralized Web Summit, 8th June 2016:
We must never, ever, give corporations or the state the legal power to silence people who know true things about the systems we entrust our lives, safety, and privacy to. These are the foundational principles: computers obey their owners; true facts about risks to users are always legal to talk about. And I charge you to be hardliners on these principles, to be called fanatics. If they're not calling you puritan for these principles, you're not pushing hard enough.
This week, I have been mostly reading:
- In which Review causes Relief — Wondermark, by David Malki!:
- The False Promise of Negative Interest Rates — Robert Skidelsky:
Economists are now busy devising new feats of monetary wizardry for when the latest policy fails: taxing cash holdings, or even abolishing cash altogether; or, at the other extreme, showering the population with “helicopter drops” of freshly printed money. The truth, however, is that the only way to ensure that “new money” is put into circulation is to have the government spend it. The government would borrow the money directly from the central bank and use it to build houses, renew transport systems, invest in energy-saving technologies, and so forth. Sadly, any such monetary financing of public deficits is for the moment taboo. It is contrary to European Union regulations – and is opposed by all who regard post-crash governments’ fiscal difficulties as an opportunity to shrink the role of the state.
- Yanis Varoufakis: Australia's negative gearing is 'scandalous' — Gabrielle Jackson commits some nauseating journalisticisms in her interview with "he, with his vibrant purple shirt and erect posture" for the Guardian:
In Australia we have a scandalous system called negative gearing, the purpose of which is to subsidise the rich. […] Australia does not have a debt problem. The idea that Australia is on the verge of becoming a new Greece would be touchingly funny if it were not so catastrophic in its ineptitude. Australia does not have a public debt problem, it has a private debt problem.
- Is David Cameron's Austerity Three Times as Bad as Brexit? — Dean Baker at CEPR (US):
If we can credit the I.M.F. research staff for knowing what they were doing in their 2008 projections, then the U.K.'s austerity policies have cost it an amount of output equal to 16.8 percentage points of 2007 GDP or more than three times the estimated cost of Brexit. This means that if Brexit is an economic disaster then Cameron's austerity has been three times as costly as an economic disaster.
- The Rough Beasts of Ed-Tech — Audrey Watters:
“They’re brine shrimp,” my father explained to me when I begged him to let me order some, destroying the image I had in my head that these were little cartoon mermaids and mermen and mer-families. […] I’ve thought recently that for every silly news story we see that insists some new product is “like Uber but for education” or “like Facebook but for education,” one could easily substitute “like Sea Monkeys but for education.”
- Viet Con — Mr. Fish in Truthdig:
- The Brazilian Coup and Washington’s “Rollback” in Latin America — Mark Weisbrot in the Huffington Post:
It is clear that the executive branch of the U.S. government favors the coup underway in Brazil, even though they have been careful to avoid any explicit endorsement of it. Exhibit A was the meeting between Tom Shannon, the 3rd ranking U.S. State Department official and the one who is almost certainly in charge of handling this situation, with Senator Aloysio Nunes, one of the leaders of the impeachment in the Brazilian Senate, on April 20. By holding this meeting just three days after the Brazilian lower house voted to impeach President Dilma Rousseff, Shannon was sending a signal to governments and diplomats throughout the region and the world that Washington is more than ok with the impeachment. Nunes returned the favor this week by leading an effort (he is chair of the Brazilian Senate Foreign Relations Committee) to suspend Venezuela from Mercosur, the South American trade bloc.
- London’s empty towers mark a very British form of corruption — Simon Jenkins in the Guardian:
Now we know. The glitzy 50-storey tower that looms over London’s Vauxhall and Pimlico is, as the Guardian revealed yesterday, just a stack of bank deposits. Once dubbed Prescott Tower, after the minister who approved it against all advice, it is virtually empty. At night, vulgar lighting more suited to a casino cannot conceal the fact that its interior is dark, owned by absent Russians, Nigerians and Chinese. It makes no more contribution to London than a gold bar in a bank vault, but is far more prominent, a great smudge of tainted wealth on the city’s horizon.
- ECB’s expanded asset purchase programme – more smoke and mirrors — Bill Mitchell:
We now have sufficient data to assess what has been going on under [the ECB's QE] program, and specifically under the public sector purchase programme (PSPP) components (one of three parts to the overall policy initiative). The conclusion is that the scheme has had very little impact on growth and inflation – which is no surprise. However, the pattern of purchases makes it clear that the ECB and the relevant National Central Banks (NCBs) have been engaged in a fiscal operation which has provided extensive debt relief to all Member States other than Greece. This is a demonstration of the European institutions once again engaging in smoke and mirrors (pretending to be operating within the ambit of the Treaties but openly doing the opposite) and behaving belligerently towards one nation (Greece) to ensure it stays subjugated.
- Iceland proves the nation state is alive and well — Bill Mitchell dismisses "grand (delusional) schemes of a Pan Europe Democracy":
The scaremongers who claim that the weaker euro nations would experience massive and ongoing currency plunges are in denial of history. Iceland’s approach to the crisis was less painful and more effective. Greece and other weaker euro nations could have enjoyed similar improvements in their external competitiveness if they had exited the EMU and allowed their currencies to float. Internal devaluation has clearly not been an effective route to increasing international competitiveness despite all the neo-liberal claims to the contrary.
This week, I have been mostly reading:
- Bun — xkcd [I believe I know this lecturer]:
- The household debt bubble won’t grow forever — Laurie MacFarlane at the New Economics Foundation:
In the economy, total income equals total spending: every pound spent somewhere is earned somewhere else. So if one sector of the economy is spending less than it’s earning and saving, the other sectors must collectively be spending more than they’re earning, and accumulating debt or running down savings. After the financial crisis in 2008, households started spend less to pay down debt, so the government spent more and ran large deficits to offset the effects of the crisis. But with the government pursuing further cuts to public spending in order to achieve a budget surplus by 2019-20, the only way that growth can be achieved and consumption maintained is by households running down savings and accumulating debt.[And linked from this, something I must have missed in March:]
- How household debt is becoming the new safety net — Sarah Lyall at the New Economics Foundation:
Credit is being used as a safety net by millions in the UK, according to new polling data released by debt advice charity Stepchange. They estimate that 15% of people - 7.4 million individuals nationally – have turned to debt for essential day-to-day spending, while 6% of people (around 3 million) use this credit safety net on a weekly or monthly basis.
- The empty brain — Robert Epstein in Aeon:
Senses, reflexes and learning mechanisms – this is what we start with, and it is quite a lot, when you think about it. If we lacked any of these capabilities at birth, we would probably have trouble surviving. But here is what we are not born with: information, data, rules, software, knowledge, lexicons, representations, algorithms, programs, models, memories, images, processors, subroutines, encoders, decoders, symbols, or buffers – design elements that allow digital computers to behave somewhat intelligently. Not only are we not born with such things, we also don’t develop them – ever.
- The Political Movement that Dared not Speak its own Name: The Neoliberal Thought Collective Under Erasure — Philip Mirowski in an INET working paper:
The neoliberals believed that the market always knew better than any human being; but humans would never voluntarily capitulate to that truth. People would resist utter abjection to the demands of the market; they would never completely dissolve into undifferentiated ‘human capital’; they would flinch at the idea that the political franchise needed to be restricted rather than broadened; they would be revolted that the condition of being ‘free to choose’ only meant forgetting any political rights and giving up all pretense of being able to take charge of their own course through life. Neoliberal ideals would always be a hard sell; how much easier to avoid all that with simplistic stories that fogged the mind of the masses: government is always bad; everything you need to know is already in Adam Smith; you can be anything you want to be; there is no such thing as class or the dead hand of history; everything can be made better if you just express yourself on some social media platform; there is nothing wrong with you that a little shopping won’t fix.
- WashPost Makes History: First Paper to Call for Prosecution of Its Own Source (After Accepting Pulitzer) — Glenn Greenwald:
In the face of a growing ACLU and Amnesty-led campaign to secure a pardon for Snowden, timed to this weekend’s release of the Oliver Stone biopic “Snowden,” the Post editorial page today not only argued in opposition to a pardon, but explicitly demanded that Snowden — the paper’s own source — stand trial on espionage charges or, as a “second-best solution,” accept “a measure of criminal responsibility for his excesses and the U.S. government offers a measure of leniency.” In doing so, the Washington Post has achieved an ignominious feat in U.S. media history: the first-ever paper to explicitly editorialize for the criminal prosecution of its own source — one on whose back the paper won and eagerly accepted a Pulitzer Prize for Public Service.
- Keynes and the Quantity Theory of Money — Frances Coppola:
Expanding the monetary base with QE while simultaneously reducing government spending and raising taxes to "fix the fiscal finances" is a wash. No, it's worse than that. It transfers money from households who would actually spend that money on goods and services, and businesses who would invest it for future growth, to banks and the rich, who only spend it on assets. The wealth effects from inflated asset prices may at the margin encourage more spending among those foolish enough to borrow (or dis-save) on the strength of unrealised capital gains, while the depressed interest rates that are the inevitable consequence of inflated asset prices may also encourage borrowing by those who would struggle to service debts if interest rates were higher. I am constantly amazed that any policymaker thinks that such unwise behaviour is to be encouraged. Deficit spending would be both safer and more effective than flooding banks with reserves and blowing up asset price bubbles. But we have tied ourselves into a ridiculous straitjacket because of wholly unjustified fear of government debt.
- Keep on truckin’—without drivers — David F. Ruccio:
I was perplexed. I couldn’t figure out what all the fascination was with self-driving cars. Why all the investment in designing cars that could be operated with little or no hands-on attention by a human driver? So, I asked a friend what that was all about, and he quickly responded: it’s really about trucks, not cars. In a country whose system of transporting commodities is insanely organized around highways and trucks (as against, e.g., railroads and trains), and where truck-drivers’ pay is once-again rising […] it makes perfect—profitable—sense to design trucks that can operate without drivers.
- The Labour leadership battle between Jeremy Corbyn and his critics will soon be over – for three minutes — Mark Steel in the Independent:
At last the result of the leadership election will finish this period of Labour’s squabbling. Then a new period of squabbling can begin, three minutes after the result is announced, when a group of 45 MPs issue a statement saying: 'During the last three minutes, it has become increasingly clear that Jeremy Corbyn has lost the support of the party and must step down immediately.'
- For the first time, Saudi Arabia is being attacked by both Sunni and Shia leaders — Robert Fisk in the Independent:
The Saudis step deeper into trouble almost by the week. Swamped in their ridiculous war in Yemen, they are now reeling from an extraordinary statement issued by around two hundred Sunni Muslim clerics who effectively referred to the Wahhabi belief – practiced in Saudi Arabia – as “a dangerous deformation” of Sunni Islam. The prelates included Egypt’s Grand Imam, Ahmed el-Tayeb of al-Azhar, the most important centre of theological study in the Islamic world, who only a year ago attacked “corrupt interpretations” of religious texts and who has now signed up to “a return to the schools of great knowledge” outside Saudi Arabia.
- Making things matters. This is what Britain forgot — Ha-Joon Chang in the Guardian:
Another argument is that we now live in a post-industrial knowledge economy, in which “making things” no longer matters. The proponents of this argument wheel out Switzerland, which has more than twice the per capita income of the UK despite – or rather because of – its reliance on finance and tourism. However Switzerland is actually the most industrialised country in the world, measured by manufacturing output per head. In 2013 that manufacturing output was nearly twice the US’s and nearly three times the UK’s. The discourse of post-industrial knowledge economy fundamentally misunderstands the role of manufacturing in economic prosperity.
This week, I have been mostly reading:
- The German current account surplus requires deficits elsewhere — Edward Harrison at Credit Writedowns Pro:
With the periphery’s downturn came austerity and internal devaluation. And this has meant two adjustments. First, the EU as a whole has moved from a roughly balanced external position to a net creditor position as the German and Dutch export-led model is forced onto the periphery via internal devaluation used to achieve export competitiveness. Second, the Germans and Dutch have been forced to turn elsewhere to maintain their mercantilist trading stance. And they have found willing buyers in Asia and the emerging markets writ large. […] there is no mechanism in the current global currency system to correct these imbalances except through balance of payments crisis and the rise of protectionist populist politicians.
- Monopoly’s New Era — Joe Stiglitz in Project Syndicate:
Today’s markets are characterized by the persistence of high monopoly profits. The implications of this are profound. Many of the assumptions about market economies are based on acceptance of the competitive model, with marginal returns commensurate with social contributions. This view has led to hesitancy about official intervention: If markets are fundamentally efficient and fair, there is little that even the best of governments could do to improve matters. But if markets are based on exploitation, the rationale for laissez-faire disappears. Indeed, in that case, the battle against entrenched power is not only a battle for democracy; it is also a battle for efficiency and shared prosperity.
- ‘Smart’ Dildo Company Sued For Tracking Users’ Habits — Sara Morrison at Vocative chronicles a new low in the Internet of Things:
A few weeks ago, two researchers told the Defcon hacking convention audience that We-Vibe “smart” sex toys send a lot of data about their users back to the company that makes them. According to Courthouse News, one We-Viber took this news hard. A woman known only as “N.P.” filed a class action civil suit in a federal court in Illinois against Standard Innovation, which makes the We Vibe line of sex toys and corresponding app.
- The Free Market Isn’t Really Free — Robert Reich in Literary Hub:
In the United States, those with power and resources rarely directly bribe public officials in order to receive specific and visible favors, such as advantageous government contracts. Instead, they make campaign contributions and occasionally hold out the promise of lucrative jobs at the end of government careers. And the most valuable things they get in exchange are market rules that seem to apply to everyone and appear to be neutral, but that systematically and disproportionately benefit them. To state the matter another way, it is not the unique and perceptible government “intrusions” into the market that have the greatest effect on who wins and who loses; it is the way government organizes the market.
- Trending News — Nick Anderson, Truthdig:
- Isn’t it Time to Stop Calling it “The National Debt”? How about Government-Issued Assets instead? — Steve Roth at Evonomics:
The government has committed itself to issuing bonds for archaic reasons, so it needs to roll over its “debt.” Old bonds mature, the government pays them off and issues new ones to replace them. Unendingly, for decades and centuries. But the stock of government-issued assets just keeps growing — as it should and must in a growing economy. Those government-issued assets are a necessary lubricant for the operation of the private-sector economy. As the economy gets bigger, more of those assets are needed, as a kind of giant “pool” or buffer stock to avoid transactional lockups.
- Robert Samuelson Is Right on GDP — Dean Baker:
The measure of GDP is useful in assessing the health of an economy and society in the same way that weight is a useful measure in assessing a person's health. If a person is five feet and ten inches and weighs 300 pounds, then it is likely they have a problem. On the other hand, they can weigh 160 pounds and still have an inoperable tumor. We would want to know the person's weight to assess their condition, but it will not tell us everything we need to know to evaluate their health. In the same vein, we identify countries with high per capita GDP, but enormous inequality. It is hard to view these as success stories, since most of the population would not be benefiting from the strength of the economy.
- What Can Donald Trump Teach Us About the National Debt? — Dean Baker again:
Another much larger form of commitment is the rents that private individuals and corporations will earn from the patent and copyright monopolies that the government granted them. These rents are the difference between the monopoly price and free market price. In the case of prescription drugs alone, the rents are now in the neighborhood of $380 billion annually, or more than 2.0 percent of GDP. This is effectively the money the government paid the drug companies to do research. Add in the higher price for patents in other areas and copyrights on everything from software to computer games, and we may be talking about more than $1 trillion a year ( at 5.5 percent of GDP). That is a huge burden that we are passing on to our children.
- All of the problems Universal Basic Income can solve that have nothing to do with unemployment — Olivia Goldhill at Quartz:
There’s also some hope that UBI would allow both our employment and leisure time to become more fulfilling. Currently, millions of people are employed in what anthropologist David Graeber calls “bullshit jobs”—work that serves no real purpose, and is simply a way to fill time and provide salaries. One YouGov survey found that 37% of Brits think their jobs are meaningless. But under UBI, Bregman believes we would have the financial freedom to pursue useful and worthwhile work.
- Surviving Climate Change — Ian Welsh:
Make sure you have friends, locally, and that your neighbours know and like you. People who are well-liked by a lot of people are far more likely to survive bad times than those who aren’t. And having really good friends wherever you may have to flee to, if it comes to that, is wise.
- After Distancing Herself From Bill Clinton’s Economic Policies, Hillary Wants Him as Mr. Economic Fix It — Yves Smith, Naked Capitalism:
Needless to say, if Hillary doubts she can get the job done with her Cabinet and if needed, a czar here or there, and needs to bring in Bill too, this is an admission that her vaunted experience is not what it is cracked up to be. Hillary has the classic resume of someone who has failed upward: a series of every-splashier job titles, but with no or negative accomplishments.
- Trumping the critics — David F. Ruccio:
The only real issues from the government creation of money are (1) timing and (2) who benefits. Obviously, creating more money under conditions at or close to full employment has implications that are very different from a situation characterized by less than full employment (as has been the case for the past eight years). If resources are not being fully utilized, more money (helicopter or otherwise) does not lead to hyper-inflation. So, the critics who claim that, under current conditions (with millions of people who are unemployed or underemployed), creating more money is inflationary are simply wrong. As for who benefits, that’s the real controversy—and the issue that is rarely discussed. Creating money to finance purchases of private debt from banks obviously improves bank balance sheets (and the incomes of their owners and the power wielded by the boards of directors) but it doesn’t necessarily stimulate economic growth (if banks are unwilling to lend, because for them it’s not profitable), and it doesn’t help homeowners and others who are drowning in debt.
This week, I have been mostly reading:
- Imagining a New Bretton Woods — Yanis Varoufakis in Project Syndicate:
Above all, the new system would reflect Keynes’s view that global stability is undermined by capitalism’s innate tendency to drive a wedge between surplus and deficit economies. The surpluses and deficits grow larger during the upturn, and the burden of adjustment falls disproportionately on debtors during the downturn, leading to a debt-deflationary process that takes root in the deficit regions before dampening demand everywhere. To counter this tendency, Keynes advocated replacing any system in which “the process of adjustment is compulsory for the debtor and voluntary for the creditor” with one in which the force of adjustment falls symmetrically upon debtors and creditors.
- Yes, the Economy Is Rigged, Contrary to What Some Economists Try to Tell You — Dean Baker summarises the things that have been occupying his mind lately, including:
In Europe and Japan, CEOs are also well-paid, but they tend to get a third or a quarter of what our CEOs earn. This matters not only because of the pay the CEOs get, but also because of its impact on pay structures throughout the economy. It is now common to see top executives of non-profit hospitals, universities, or private charities get salaries of more than $1 million a year. They argue that they would get much more working for a corporation of the same size. And, this money comes out of the pockets of the rest of us.
- Inflation Targeting and Neoliberalism — Gerald Epstein interviewed at TripleCrisis:
I see this as part of a whole neoliberal approach to central banking. That is, the idea that the economy is inherently stable, it will inherently reach full employment and stable economic growth on its own, and so the only thing that the macro policymakers have to worry about is keeping a low inflation rate and everything else will take care of itself. Of course, as we’ve seen, this whole neoliberal approach to macroeconomic policy is badly mistaken. […] This approach, I think, really has contributed to enormous financial instability. Notice that this inflation targeting targets commodity inflation. But what about asset bubbles, that is, asset inflation? There’s no attempt to reduce asset bubbles like we had in subprime or in real estate bubbles in various countries. That is another kind of inflation that could have been targeted.
- Robert Mundell, evil genius of the euro — Greg Palast in the Guardian:
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.
- Facebook Reactions and the Happiness Paradigm — Jenny Davis at the Society Pages:
These emoji express sadness and anger as a little bit silly, not too threatening, not too real. “Like” might not be the appropriate response to the passing of a loved one, but bulbous tears streaming down a banana yellow face feels downright disrespectful. Imagine posting a brow-furrowed Angry emoji in response to a friend’s personal story of sexual assault. It’s the symbolic equivalent of “that rascal!!” and woefully inadequate for anything that provokes real anger.
- Sheffield is on a quest to be the fairest city of them all – here’s how it’s doing — Rowland Atkinson and Alan Walker in the Conversation:
Led by the city council, several large employers have introduced a higher living wage based on calculations by the Living Wage Foundation, and the Sheffield Chamber of Commerce has also encouraged small and medium-sized organisations to do so. Another recommendation, on fair access to credit, resulted in the creation of Sheffield Money, to compete with the unscrupulous and usurious payday lenders. More recently, a fair employer charter was introduced, designed to ensure fair conditions of work as well as pay. Several large public and private organisations have already signed up to the charter, which focuses on promoting fair and flexible employment contracts.
- Eurozone’s So-Called Recovery Masks A Dark Secret: Mercantilism — John Weeks in Social Europe:
In the 18th century governments used direct restrictions on imports and other market interventions in an attempt to achieve permanent trade surpluses. Governments implement the 21st century version of mercantilism with different policy instruments. In the place of direct restrictions on trade we now see real wage reductions, manipulation of business taxes, and currency depreciation through loose monetary policy (so-called quantitative easing and negative interest rates). This “market friendly” version of mercantilism allows the ideologues to maintain the fiction of “free trade” while pursuing the mercantilist goal of persistent trade surpluses. This perverse inversion of rhetoric seeks to justify recovery in Europe based on beggar-thy-neighbour policies.
- Dean Rusk Also Missing, Feared Dead — for the Intercept, Barrett Brown reviews Niall Ferguson's fawning biography of Kissinger from his (Brown's) prison cell. Hilarity ensues:
[…] he noted that Kissinger had been described in disparaging terms by Hunter S. Thompson, who wrote about pretty much every major political figure in disparaging terms, and that he’d been denounced as a practicing Satanist by David Icke, who’s denounced pretty much every major political figure as a practicing Satanist; rather inexplicably, Ferguson himself even provided an incomplete list of over a dozen other prominent men and entire family dynasties against whom Icke has made this exact charge. It’s the first time I can recall having seen someone actually screw up anecdotal evidence […] Having returned from his cherry picking expedition with a basket full of rocks[…]
Had a brilliant idea in the shower this morning. As far as I can determine, the word "critical", in an academic context is either meaningless syntactic sugar ("it can be removed from the language without any effect on what the language can do"), or a sign of kinship with that community of thinkers which has a fierce aversion to ideas (forever working "toward a theory of…", but never arriving), or a totem handed down from charlatan to charlatan which is believed to magically shield them from — ironically — criticism ("If you don't understand/agree with me, it's because you're not thinking critically!"). These are not mutually exclusive categories.
My proposal is this: when asked to do something critically, treat the word as a placeholder for the adjective most likely to incite you to complete the task at hand. For example:
- In place of "critically examine"; "urgently examine"!
- In place of "critically discuss"; "loquaciously discuss"!
- In place of "critically analyse"; "sardonically analyse"!
- In place of "critically demonstrate"; "triumphantly demonstrate"!
- In place of "critically engage"; "playfully engage"!
I hope this has been helpful, and I have not been "too critical" ("too much of a smart-arse").