Sunday, 18 June 2017 - 4:38pm

Published by Matthew Davidson on Sun, 18/06/2017 - 4:38pm in

This week, I have been mostly reading:

  • The New Democrats’ Addiction to Austerity Will Not Die — Bill Black in New Economic Perspectives with the "If you read only one article about the madness of austerity this year…" article: Michael Meeropol, an economist whose work I respect greatly, has rightly chastised me for failing to explain that fiscal austerity produces enormous winners, not just losers, and that this fact helps explain why the economic malpractice of austerity is so common. Austerity is a policy that aids the wealthy and harms the non-wealthy. One of the greatest triumphs of the wealthy is to get vast numbers of the non-wealthy to fail to understand this point. The New Democrats’ passionate support for austerity reflects the interests of its primary donors – Wall Street elites. Austerity produces higher unemployment rates. It can cause deflation. It leads to cuts in public employment and funding for social programs. High unemployment allows CEOs to force lower wages and creates a political climate in which CEOs are able to get legislation and rule changes embracing “labor flexibility.” That phrase is a euphemism for making it easier for firms to fire workers without. CEOs use high unemployment to induce an international race to the bottom on worker protections and wages under the pretext that doing so is essential for U.S. firms to maintain “global competitiveness.” Deflation is a superb situation for (net) creditors. They get repaid in a currency that is gaining value. Deflation reduces interest rates, so the market value of existing long-term fixed rate debt instruments (bonds) can increase substantially.
  • Getting Money out of Politics — Alexander Douglas at Medium: When politicians talk money and numbers, they conjure up an enchanting ballet of bloodless abstractions. Money is an abstraction — a ledger, an accounting record, a “set of positions on an abstract ratio scale”, as one article puts it. But however the abstractions might dance about on their unearthly stage, here in the concrete world if there are resources then those resources can be put to use for a public purpose. No abstract object can rush in to interrupt the work. To think otherwise is to literally worship money
  • The Land Belongs to God — Michael Hudson and his startling erudition: Now when they ran up debts in Sumer and Babylonia, and even in in Judea in Jesus’ time, they didn’t borrow money from money lenders. People owed debts because they were in arrears: They couldn’t pay the fees owed to the palace. We might call them taxes, but they actually were fees for public services. And for beer, for instance. The palace would supply beer and you would run up a tab over the year, to be paid at harvest time on the threshing floor. You also would pay for the boatmen, if you needed to get your harvest delivered by boat. You would pay for draught cattle if you needed them. You’d pay for water. Cornelia Wunsch did one study and found that 75% of the debts, even in neo-Babylonian times around the 5th or 4th century BC, were arrears. Sometimes the harvest failed. And when the harvest failed, obviously they couldn’t pay their fees and other debts. Hammurabi canceled debts four or five times during his reign. He did this because either the harvest failed or there was a war and people couldn’t pay.
  • The Public’s Viewpoint: Regulations are Protections — George Lakoff: Minority President Trump has said that he intends to get rid of 75% of government regulations. What is a “regulation”? The term “regulation” is framed from the viewpoint of corporations and other businesses. From their viewpoint, “regulations” are limitations on their freedom to do whatever they want no matter who it harms. But from the public’s viewpoint, a regulation is a protection against harm done by unscrupulous corporations seeking to maximize profit at the cost of harm to the public. Imagine our minority President saying out loud that he intends to get rid of 75% of public protections. Imagine the press reporting that. Imagine the NY Times, or even the USA Today headline: Trump to Eliminate 75% of Public Protections. Imagine the media listing, day after day, the protections to be eliminated and the harms to be faced by the public.
  • Somebody’s Watching. Now What? — James T Stone Ph.D. [sic] in Psychology Today: The Audience Effect: People tend to perform differently in front of an audience than when alone. Specifically, they tend to perform better in front of an audience when the task is simple or has been mastered, and worse when the task is complex or new.
  • Does Saving Cause Lending Cause Investment? (No.) — Steve Roth at Evonomics: Put aside that the basic bookkeeping of this idea — that personal saving creates “savings” that “fund” lending and investment — doesn’t make any sense. (It’s an error of composition; you have more savings if you save, but the economy doesn’t.) Let’s look at history: when households save more, is there more lending and (business) investment — either immediately or a few quarters/years down the road? Mostly: no.
  • Explainer: what is modern monetary theory? — Steven Hail in the Conversation: By the 1980s, most people saw Keynes as an advocate of budget deficits only during periods of high unemployment. Lerner, as early as 1943, in a paper entitled Functional Finance and the Federal Debt, had argued that Keynesian economics involved running whatever government deficit was necessary to maintain full employment, and that deficits should be seen as the norm. Keynes, in a letter to fellow economist James Meade written in April 1943, said of Lerner, “His argument is impeccable. But heaven help anyone who tries to put it across”.
  • Make housing affordable and cut road congestion all at once? Here’s a way — Martin Payne in the Conversation: Two of the most pressing problems for Australian cities are housing affordability and traffic congestion. But there is an approach to both problems that could lead to significant improvements at low cost and relatively quickly. It involves developing transit-oriented centres in conjunction with inclusionary zoning. This form of development gives priority to housing affordability and low car use. It does so by requiring a certain proportion of permanently affordable housing and dwellings without car parking, but with strong access to local facilities. Travel is mainly by walking and public transport.
  • Debt bubble returns millions to days of 2008 crash — Shane Hickey in the Guardian: Charities and financial advisers are calling on the government to use the Queen’s speech to address the “bubble” of unmanageable debt that households are rapidly accumulating. Unsecured consumer credit – including credit cards, car loans and payday loans – is this year expected to hit levels not seen since the 2008 financial crash. There has been concern in the Bank of England that consumer spending is being underpinned by debt, amid comparisons to the run-up to the financial crash.
  • Block adverts, delete Flash, kill Java: ASD — Stilgherrian at ZDNet: Most of the ASD's top recommendations continue to focus on basic network hygiene, and most of that can be achieved by the IT department simply doing its job properly. But cybersecurity vendors want to sell fancy and expensive techniques, some of which do very little to improve security. The ASD's recommendation that every organisation install ad blockers will also be controversial, given that it declares as hostile a key part of online business models. But... Given all the warnings about cyber threats and cyber war, we do want a secure internet, don't we? Well this is how you do it.