Sunday, 11 September 2016 - 7:49pm

Published by Matthew Davidson on Sun, 11/09/2016 - 7:49pm in

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[…]