Sunday, 3 July 2016 - 4:49pm

Published by Matthew Davidson on Sun, 03/07/2016 - 4:49pm in

This week, I have been mostly not reading, with some exceptions:

  • Ignored for Years, a Radical Economic Theory Is Gaining Converts — Michelle Jamrisko in Bloomberg, no less: “There’s an acknowledgment, even in the investor community, that monetary policy is kind of running out of ammo,” said Thomas Costerg, economist at Standard Chartered Bank in New York. “The focus is now shifting to fiscal policy.” That’s where it should have been all along, according to Modern Money Theory. The 20-something-year-old doctrine, on the fringes of economic thought, is getting a hearing with an unconventional take on government spending in nations with their own currency.
  • How I Stopped Worrying and Learned to Love the Drone — Ted Rall: The Penagon said it would never deploy Predator or Reaper drones in the United States. Now USA Today reveals that they do, and have for years. But noit to worry: now the Pentagon says they won't be used to kill Americans the way they're used in Somalia, Yemen and Pakistan.
  • E.J Dionne Is Far Too Generous, “Moderate Progressives” Were Promoting Inequality — Dean Baker, CEPR: It's also worth noting that Clinton's cult of deficit reduction and balanced budgets contributed to the victory of austerity politics following the downturn. Many Clintonites absurdly argued that the prosperity of the late 1990s was due to the fact that Clinton balanced the budget and subsequently ran surpluses. Of course the reality was the exact opposite. (The unexpected boom, due to a stock bubble, lead to the surpluses.) Nonetheless, the power of this Clinton myth made it more difficult for progressives to push the case for stimulus following the collapse of the housing bubble.
  • The Era of Free Trade Might Be Over. That’s a Good Thing — Jared Bernstein: So we should welcome the end of the era of F.T.A.s, which had long devolved into handshakes between corporate and investor interests on both sides of the border, allowing little voice for working people. With such noise behind us, we might be ready to foster the next generation of advanced production and help our exporters fight back against currency manipulators. That would be more productive than fighting tooth and nail over the next big trade deal. Plus additional remarks on his blog, "where real estate is dirt cheap".
  • The New Truth About Free Trade — Robert Reich notices the US has spent decades negotiating the export of monopolies and the import of monopoly rents: Big American corporations no longer make many products in the United States for export abroad. Most of what they sell abroad they make abroad. The biggest things they “export” are ideas, designs, franchises, brands, engineering solutions, instructions, and software, coming from a relatively small group of managers, designers, and researchers in the U.S. The Apple iPhone is assembled in China from components made in Japan, Singapore, and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.
  • Both sides now. — Jonathan Rees: Yes, MOOCs can’t do what professors do, but what happens if what you do gets redefined so that they can? You know that education is not the same as content transmission, but unless you stay engaged with all the two-bit hucksters who think it is they will win the battle of public opinion and your tenured sinecure will dry up when your students all enroll at some barely acceptable online clown college.
  • Global Inequality: Branko Milanovic Takes on the World — Dean Baker in HuffPo: It is more than a bit absurd that many intellectual types are running around worried that the robots will take all the jobs (when they aren’t worried about the demographic crisis creating a shortage of workers) when the “problem” can be easily solved by reducing work hours. But this issue actually segues nicely into my more fundamental criticism of [Milanovic's] book. While it does not outright say this anywhere, many readers will likely believe that the harm to the middle class and working class in rich countries was a necessary price for the gains in the developing world. This is a huge leap which certainly does not follow from standard economic theory. […] There is also the question of intellectual property rights, which Milanovic frustratingly treats as a fact of nature. Again, one of the great absurdities of debates on inequality is that we have people wringing their hands over how we can reverse the upward redistribution of income, while we constantly write new laws and trade agreements that make patent and copyright protection longer and stronger. Instead of deliberately designing policies that promote upward redistribution, we could instead look to alternative mechanisms to finance innovation and creative work.