reading

Sunday, 28 August 2016 - 8:11pm

Published by Matthew Davidson on Sun, 28/08/2016 - 8:11pm in

This week, I have been mostly reading:

  • Ramen is displacing tobacco as most popular US prison currency, study finds — Mazin Sidahmed, in the Guardian Holy cow; the one place where you can find a genuine commodity currency. But how do they buy noodles? With noodles?: Ramen noodles are overtaking tobacco as the most popular currency in US prisons, according a new study released on Monday. A new report by Michael Gibson-Light, a doctoral candidate in the University of Arizona’s school of sociology, found the decline in quality and quantity of food available in prisons due to cost-cutting has made ramen noodles a valuable commodity.
  • Caitlyn Jenner and Our Cognitive Dissonance — Robert Sapolsky in Nautilus: Then there’s spotted hyenas, gender-bending pseudo-hermaphrodites. It’s nearly impossible to determine the sex of a hyena by just looking, as females are big and muscular (due to higher levels than males of some androgenic hormones), have fake scrotal sacs, and enlarged clitorises that can become as erect as the male’s penis. None of which was covered in The Lion King.
  • Ideas for Australia: Welfare reform needs to be about improving well-being, not punishing the poor — Peter Whiteford in the Conversation: The OECD report suggests the job-search requirements in Australia are more onerous than those in the other countries studied. In 2007, a jobseeker in Australia could be required to report between eight and 20 job-search activities each month, compared to four to ten each month in Switzerland, ten in the UK and only two in Japan. The OECD also notes that since 2000 there have been “vast swings” in sanction rates (penalties for non-compliance), with sanctions ranging in this period from 25,000 a year to 300,000.
  • When Bitcoin Grows Up: What is Money? — John Lanchester in the London Review of Books: Yap has no metal. There’s nothing to make into coins. What the Yapese do instead is sail 250 miles to an island called Palau, where there’s a particular kind of limestone not available on their home island. They quarry the limestone, and then shape it into circular wheel-like forms with a hole in the middle, called fei. Some of these fei stones are absolutely huge, fully 12 feet across. Then they sail the fei back to Yap, where they’re used as money. […] It has sometimes happened to the Yapese that their boats are hit by stormy weather on the way back from Palau, and to save their own lives, the men have to chuck the big stones overboard. But when they get back to Palau they report what happened, and everyone accepts it, and the ownership of the stone is assigned to whoever quarried it, and the stone can still be used as a valid form of money because ownership can be exchanged even though the actual stone is five miles down at the bottom of the Pacific.
  • The era of predatory bureaucratization – An interview with David Graeber — Arthur De Grave in OuiShare: Many expected Occupy to take a formal political form. True, it did not happen, but look at where we are 3.5 years later: in most countries where substantial popular movements happened, left parties are now switching to embrace these movements’ sensibilities (Greece, Spain, United States, etc.). Maybe it will take another 3.5 years for them to have an actual impact on policy making, but it seems to me like the natural path of things. […] Right now, the most important thing for anti-authoritarian and horizontal movements is to learn how to enter an alliance with those who are willing to work within the political system without compromising their own integrity.
  • Fix our debt addiction to fix our economy — Michael Hudson: As the “One Percent” of banks puts the “99 Percent” deeper into debt, financialization has become the major cause of increasing inequality of wealth and income. In due course, the amount of debt will exceed the economy’s ability to produce a large enough surplus to pay it back. This makes a financial breakdown inevitable.
  • Krugman discovers the obvious — Alexander X. Douglas: Here it is. There is no operational difference between: (a) the state spending, selling bonds to ‘fund’ its spending, and then buying back the bonds, and (b) the state spending and not issuing the bonds in the first place. This is a point economists outside the mainstream have been making for years […] It’s obvious when you think about it. Suppose I give you $100. Then I ‘borrow’ back the $100. Then I buy back the debt from you, for $100. Or suppose I just give you the $100.
  • Branko Milanovic advocates reinventing apartheid — Chris Bertram at Crooked Timber: Part of what’s going on here is the economist’s perspective on policy, which just focuses on net improvements in well-being or utility, with income serving as a proxy, and which doesn’t, therefore, see human beings as possessed of basic rights which it is impermissible to violate. Rather, all and any rights can be sacrificed on the altar of income improvement, just in case someone is poor and desperate enough to make a deal (who are we, paternalistically, to stop them?). The road to hell is paved with Pareto improvements.
  • You May Hate Donald Trump. But Do You Want Facebook to Rig the Election Against Him? — Trevor Timm at the Guardian at Common Dreams: As Gizmodo reported on Friday, “Last month, some Facebook employees used a company poll to ask [Facebook founder Mark] Zuckerberg whether the company should try ‘to help prevent President Trump in 2017’.” Facebook employees are probably just expressing the fear that millions of Americans have of the Republican demagogue. But while there’s no evidence that the company plans on taking anti-Trump action, the extraordinary ability that the social network has to manipulate millions of people with just a tweak to its algorithm is a serious cause for concern.

Sunday, 14 August 2016 - 4:36pm

Published by Matthew Davidson on Sun, 14/08/2016 - 4:36pm in

This week, I have been mostly writing essays and cursing the Australian higher education system. I also thought this was delightful:

  • Donald Trump is like a biased machine learning algorithm — Cathy "mathbabe" O'Neil: What that translates to is a constant iterative process whereby he experiments with pushing the conversation this way or that, and he sees how the crowd responds. If they like it, he goes there. If they don’t respond, he never goes there again, because he doesn’t want to be boring. If they respond by getting agitated, that’s a lot better than being bored. That’s how he learns.

Sunday, 7 August 2016 - 8:05pm

Published by Matthew Davidson on Sun, 07/08/2016 - 8:05pm in

This week, I have been mostly reading:

  • Olivier Blanchard Is Worried About Inflation In Japan — Dean Baker, master of the political economy punchline, at CEPR (US): Debt is just one way in which governments obligate their public to future payments. Patent and copyright monopolies commit the public to paying rents that greatly exceed the free market price for the protected products. In the United States these payments are approaching 2.0 percent of GDP ($360 billion a year) for prescription drugs alone. It is remarkable that public finance economists seem to almost completely ignore rents for patents and copyrights when considering the financial burdens of various governments.
  • Young Iraqis Overwhelmingly Consider U.S. Their Enemy, Poll Says — Murtaza Hussain at the Intercept:

    “For years, many have argued that Muslims and Arabs, like other humans, don’t appreciate being bombed or occupied,” says Haroon Moghul, a fellow at the Institute for Social Policy and Understanding. “Finally, we have a study to confirm this suspicion.”
  • What’s so Bad about the Gold Standard? — David Glasner: The gold standard did play a major role in spreading the Depression. But the role was not just major; it was dominant. And the role of the gold standard in the Great Depression was not just to spread it; the role was, as Hawtrey and Cassel warned a decade before it happened, to cause it. The causal mechanism was that in restoring the gold standard, the various central banks linking their currencies to gold would increase their demands for gold reserves so substantially that the value of gold would rise back to its value before World War I, which was about double what it was after the war. […] The Great Depression was caused by a 50% increase in the value of gold that was the direct result of the restoration of the gold standard. […] the problem with gold is, first of all, that it does not guarantee that value of gold will be stable. The problem is exacerbated when central banks hold substantial gold reserves, which means that significant changes in the demand of central banks for gold reserves can have dramatic repercussions on the value of gold. Far from being a guarantee of price stability, the gold standard can be the source of price-level instability, depending on the policies adopted by individual central banks.
  • Did Capitalism Fail? Looking Back Five Years After Lehman — Roman Frydman and Michael Goldberg at INET. As the title suggests, an oldie but a goody: Market instability is thus integral to how capitalist economies allocate their savings. Given this, policymakers should intervene not because they have superior knowledge about asset values (in fact, no one does), but because profit-seeking market participants do not internalize the huge social costs associated with excessive upswings and downswings in prices. It is such excessive fluctuations, not deviations from some fanciful “true” value – whether of assets or of the unemployment rate – that Keynes believed policymakers should seek to mitigate. Unlike their successors, Keynes and Hayek understood that imperfect knowledge and non-routine change mean that policy rules, together with the variables underlying them, gain and lose relevance at times that no one can anticipate.
  • The Market Fairy Will Not Solve the Problems of Uber and Lyft — Ian Welsh nails it: These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills. The model generalises to any low-paid insecure work. You can't afford to say no to even the worst job. I did it for nearly ten years, working harder than I'd ever worked in my life, and am now massively in debt, for the first time in my life.
  • The Zombie Doctrine — George Monbiot delivers some sublime ranting: It’s as if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?
  • Who do faculty “work for?” — Historiann: There’s nothing like stupid from the central administration to bring a faculty together. I told my colleagues that I have a rule when it comes to any technology or software: it works for me, I don’t work for it. End of story.
  • A British Bridge for a Divided Europe — Robert Skidelsky: The eurozone has weakened the nation-states comprising it, without creating a supranational state to replace the powers its members have lost. Legitimacy thus still resides at a level of political authority that has lost those attributes of sovereignty (such as the ability to alter exchange rates) from which legitimacy derives. […] The EU has tried to achieve political union incrementally, because it was impossible to start with it. Indeed, barely hidden in the “European project” was the expectation that successive crises would push political integration forward. This was certainly Jean Monnet’s hope. The alternative – that the crises would have the opposite effect, leading to the breakup of the economic and monetary union – was never seriously confronted.
  • Patently Absurd Logic On Budget Deficits and Debt — Dean Baker at the Huffington Post: As much as folks may love the private sector, it was not going to make up the demand lost when the housing bubble crashed, or at least not any time soon. If we wanted to prevent a long and severe downturn like the Great Depression, it was necessary for the government to run large deficits. These deficits were not impoverishing our kids - they were keeping their parents employed. […] The fact that the deficit hawks can scream endlessly about the horrible interest burden on our children, but don’t even seem to notice the costs being imposed by patent and copyright monopolies, suggests that they are not really concerned about our children’s well-being. Alternatively, they may have a very poor understanding of economics. Either way, their whining does not deserve the public’s attention.
  • Where Hope Goes to Die — Ted Rall:
    HIllary Clinton's campaign sells her as a competent administrator. But she doesn't offer any substantice policy changes that would improve Americans' lives. All she really promises is to try to protect the status quo.

Sunday, 31 July 2016 - 5:49pm

Published by Matthew Davidson on Sun, 31/07/2016 - 5:49pm in

This week, I have been mostly reading:

  • Was the Financial Crisis Anticipated? — Ozlem Akin, José M Marín, and José-Luis Peydró at INET, on their CEPR (UK) working paper: The paper finds that the top executives’ ex-ante sale of their own bank shares predicts worse bank returns during the crisis; interestingly, effects are insignificant for independent directors’ and other officers’ sales of shares. That is, effects are substantially stronger for the insiders with the highest and best level of information, the top five executives. Moreover, the top five executives’ impact is stronger for banks with higher ex-ante exposure to the real estate bubble, where an increase of one standard deviation of insider sales is associated with a 13.33 percentage point drop in stock returns during the crisis period. Our results suggest that insiders understood the heavy risk-taking in their banks; they were not simply over-optimistic, and hence they sold more of their own shares before the crisis.
  • I’m With The Banned — Laurie Penny goes gonzo for Medium: My new Spectator friend is as bewildered as I am by the way Americans take Milo and his ilk seriously, by their willingness to take pride in performative bigotry and call it strength. It works. It sells. It’s the unholy marriage of that soulless debate culture that works so well in Britain, transplanted to a nation with no social safety net and half a billion guns. It works, in part, because of the essentially cult-like nature of U.S. culture and the structured ignorance that accompanies it. America is a nation eaten by its own myth. The entire idea of America is about believing impossible things. Nobody said those things had to be benign.
  • City Talk Pages — xkcd:
    City Talk Pages
  • Dana Milbank Tells Readers He Has an Incredibly Weak Imagination — Dean Baker, CEPR (US): What is perhaps most incredible is Milbank's notion of irresponsible. His sole measure of responsibility is the size of the government budget deficit and debt, which are for all practical purposes meaningless numbers. (If the government puts in place patent protection that requires us to pay an extra $400 billion a year for prescription drugs, this adds zero to the budget deficit or debt and therefore doesn't concern Milbank. However, if it borrowed an extra $400 billion a year to pay for developing new drugs, he would be furious.)
  • Now we’ve voted for Brexit, great British businesses like Southern rail, Byron burger, Lloyds bank and Sports Direct are finally set free — Mark Steel, whose voice you hear in your head as you're reading, in the Independent: [T]he marvellous thing about privatisation is it introduces choice, so if customers trying to get from East Grinstead to London aren’t happy with their rail service, they can choose to use a different rail network, such as the one from Glasgow to Fort William, or the Trans-Siberian Express.
  • Record Lows — Saturday Morning Breakfast Cereal:
  • Embarrassment for Christine Lagarde and IMF as Fund's own watchdog slams its eurozone record — Ben Chu at the Independent: The IEO concluded the IMF had “lost its characteristic agility as a crisis manager” in the way it responded to the economic turmoil in the eurozone, which required unprecedented bailouts for several states shut out of the capital markets and looked like it was going to tear the single currency zone apart. [I don't know. They turned a disaster into an apocalypse in record time. If that's not "characteristic agility" I don't know what is.]
  • Our attitude towards wealth played a crucial role in Brexit. We need a rethink — Stephen hawking in the Guardian: One of the reasons I believed it would be wrong to leave the EU was related to grants. British science needs all the money it can get, and one important source of such funding has for many years been the European commission. Without these grants, much important work would not and could not have happened. […] Money is also important because it is liberating for individuals. I have spoken in the past about my concern that government spending cuts in the UK will diminish support for disabled students, support that helped me during my career. In my case, of course, money has helped not only make my career possible but has also literally kept me alive.
  • How to be a writer — The Oatmeal:
  • “Liberal” Economists Cheered the New Democrats’ Deregulation of Finance — Bill Black at NEP: Bill Clinton and Al Gore were two of the most powerful leaders of the “New Democrats” – a group of Democrats determined to move the party strongly to the right on economics, budget, national security, regulation, and crime. The New Democrats’ policy apparatus was funded overwhelmingly by Wall Street but its ideological support came from economists who were “liberal” on some social issues. The Clintons and Gore delivered for Wall Street by embracing the three “de’s” – deregulation, desupervision, and de facto decriminalization that encouraged and allowed twin bubble to rapidly expand. The “dot com” bubble was the first bubble to burst. The housing bubble burst in late 2006, leading to the financial crises of 2008 and the Great Recession that began in 2007.

Sunday, 24 July 2016 - 1:57pm

Published by Matthew Davidson on Sun, 24/07/2016 - 1:57pm in

This week, I have been mostly… I don't know what I've been doing. Meanwhile, this happened in my sharply curtailed idle reading:

  • Economic Rationality Explains Everything and Nothing — Geoffrey Hodgson, Evonomics: Utility maximization can be useful as a heuristic modelling device. But strictly it does not explain any behavior. It does not identify specific causes. It cannot explain any particular behavior because it is consistent with any observable behavior. Its apparent universal power signals weakness, not strength.
  • Everyone But the Media Saw Trumpism Coming — Ted Rall: “We were largely oblivious to the pain among working-class Americans and thus didn’t appreciate how much his message resonated,” [New York Times journalist Nicholas] Kristof wrote. Most Americans are working-class. In other words, Kristof and his colleagues admit they don’t cover the problems that affect most Americans. Again: why does he still have a job?
  • Is an Aussie debt crisis around the corner? — Leith van Onselen, Macro Business: Admittedly, the real concern is that 40% of all mortgages are interest-only mortgages, which are more vulnerable […] Whether or not Australia is likely to experience some kind of financial crisis within the next three years is a moot point. But having one of the world’s most overvalued housing markets, combined with overly indebted households and an extreme reliance on offshore funding, is hardly a good situation to be in and the opposite of prudence. And…
  • The seven countries most vulnerable to a debt crisis — Steve Keen, Real World Economics Review Blog: They are, in order of likely severity: China, Australia, Sweden, Hong Kong (though it might deserve first billing), Korea, Canada, and Norway. […] Timing precisely when these countries will have their recessions is not possible, because it depends on when the private sector’s willingness to borrow from the banks—and the banking sector’s willingness to lend—stops. This can be delayed by government policy—as it was in Australia in 2008, via a strong government stimulus, the restarting of the housing bubble by a government grant to first home buyers, and the boom in investment and exports set off by China’s own stimulus program. But the day when credit growth stops can’t be put off indefinitely. When it arrives, these countries—many of which appeared to avoid the worst of the crisis in 2008—will join the world’s long list of walking wounded economies.
  • Are We Facing a Global “Lost Decade?" — Steve Keen, for the Private Debt Project [tl;dr: Yes.]: The tragedy is that although there are methods by which we could escape the global private debt trap into which we have fallen we are nonetheless prisoners of an economic orthodoxy that will prevent us from employing them... The main barrier here is simply the ignorance of the supposed experts on economics about the nature of money. While mainstream economists continue to spout naïve arguments about money and banking, the politicians who rely upon them for guidance are unlikely to attempt anything other than the poorly targeted and largely ineffective policies that Japan has persisted with for the last quarter century. A global “Lost Decade” is entirely probable.

Sunday, 17 July 2016 - 5:18pm

Published by Matthew Davidson on Sun, 17/07/2016 - 5:18pm in

This week, I have been mostly reading:

  • Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy — Jordan Weissmann at Slate: Yields on government bonds from all around the world have been plunging thanks to anxious investors buying them for their safety. (Bond yields fall as prices rise.) And in many instances, the returns have cratered below zero. As Quartz reports Thursday, “around a third of all developed-country government debt—or more than $7 trillion, in terms of market value—is now trading at negative yields,” meaning that buyers are willing to pay more for these bonds than they will eventually get back if they hold them to maturity. […] The most mind-blowing example of this trend is Switzerland. Last week, yields on all of its government bonds, out to 50 years, turned negative. [A major qualification: Government bonds aren't loans. Governments with their own currency never need to borrow money in order to spend. Bonds are a mechanism to drain reserves held at central banks, in order to hit interest rate targets. The pessimism is real, though.]
  • Corbyn: the summer of hierarchical things — Paul Mason in Medium: By September, if Corbyn wins he’ll be in a position to go into the Labour conference exerting control: over the NEC, where a left slate looks likely to win; and over policy via conference, where the delegates will for the first time reflect the changed membership. After that, in any election called by the incoming Tory prime minister Theresa May, Corbyn’s supporters would be able to stage “trigger ballots” to de-select the MPs most hostile to Corbyn, leaving the leadership, the HQ, the policy and the parliamentary group aligned to the left.
  • Donald Trump Understands the Nexus Between Trade and Immigration — a corker by Marshall Auerback in Naked Capitalism: Historically, immigration law has concerned itself with many considerations, the most of which is the displacement of US workers. By contrast, advocates of free trade ignore this consideration, or blithely suggest that the resultant unemployment in a displaced sector (e.g., the automobile industry), is a “negative externality”, which is generally offset by the resultant gains in competitive efficiency, and lower cost goods. Cheap imports, then, outweigh the displacement of workers. But we do not extend this logic to immigration, or we would move straight to a policy of open borders.
  • The murky world of industrial relations in the higher ed sector — Joanne Finkelstein in On Line Opinion: The quality of universities' delivery to students is adversely influenced by the casual, less engaged and experienced academic. It is particularly evident in newer institutions which have been aggressive in developing new programs of study supposedly in response to market demands. […] in the higher education sector, such a culture has ensured a declining quality in teaching especially in the newer and regional universities – those institutions designed specifically to widen participation and increase social equity.
  • Modern Money: The Basics — Geoff Coventry provides a really nice, concise summary I wish I'd written: Money is a wonderful human invention – perhaps one of our greatest. Most nations have a monetary system designed to provide for private commercial needs, but also, simultaneously, to enable governments to access sufficient resources to create safe, just and ever-improving societies.
  • Bernie Sanders’ connections with two UMKC economists run deep — Mark Davis at the Kansas City Star does a charming local news profile of Stephanie Kelton and Bill Black: Kelton and Black are part of a team of economic advisers, including former labor secretary Robert Reich and James Galbraith at the University of Texas in Austin, who help the Sanders campaign develop policies. Randall Wray, a fellow UMKC economics professor, credits Sanders for embracing thinkers from outside the economic mainstream. “The mainstream is a complete disaster and a complete disaster for our country,” Wray said. [We can assume they won't be advising Clinton.]
  • Note To Economists: Saving Doesn’t Create Savings — Steve Roth in Evonomics;another wonderfully concise explanation I wish I'd written: When you spend money — transferring it to someone else in return for newly-produced goods and services — does it affect our collective monetary savings? In strict accounting terms, obviously not. Your money just moves from your account to someone else’s account; it doesn’t disappear. Your bank has less deposits; the recipient’s bank has more deposits. Aggregate monetary savings is unchanged by that accounting event. […] In three simple words: spending causes saving. Real, collective accumulation of real, long-lived stuff. Monetary saving — not-spending part of your income this year — doesn’t, collectively, create either real or monetary savings.
  • How Democrats Created Liberalism of the Rich — Thomas Frank, Naked Capitalism via TomDispatch: Boston is the headquarters for two industries that are steadily bankrupting middle America: big learning and big medicine, both of them imposing costs that everyone else is basically required to pay and which increase at a far more rapid pace than wages or inflation. A thousand dollars a pill, 30 grand a semester: the debts that are gradually choking the life out of people where you live are what has made this city so very rich. […] Professional-class liberals aren’t really alarmed by oversized rewards for society’s winners. On the contrary, this seems natural to them — because they are society’s winners. The liberalism of professionals just does not extend to matters of inequality; this is the area where soft hearts abruptly turn hard.
  • Letter from US Senator Al Franken to Niantic, Inc., owners of Pokemon GO: Recent reports, as well as Pokemon GO s own privacy policy, suggest that Niantic can collect a broad swath of personal information from its players. From a user's general profile information to their precise location data and device identifiers, Niantic has access to a significant amount of information, unless users - many of whom are children - opt-out of this collection. Pokemon GO'S privacy policy states that all of this information can then be shared with The Pokemon Company and "third party service providers", details for which are not provided, and farther indicates that Pokemon GO may share de-identified or aggregated data with other third parties for a non-exhaustive list of purposes. Finally, Pokemon GO s privacy policy specifically states that any information collected - including a child's - "is considered to be a business asset" and will thus be disclosed or transferred to a third party in the event that Niantic is party to a merger, acquisition, or other business transaction.
  • Privatisation! Free trade! Shares for all! The great con that ruined Britain — Peter Hitchens in the Daily Mail! (via Richard Murphy): I am so sorry now that I fell for the great Thatcher-Reagan promise. […] I thought – this now seems especially funny – that private British Telecom would be automatically better than crabby old Post Office Telephones. I think anyone who has ever tried to contact BT when things go wrong would now happily go back to the days of nationalisation. Soviet-style slowness was bad, but surely better than total indifference.
  • Is Competition the Cause of the Productivity Slowdown? — Dean Baker, CEPR: My alternative explanation is that a weak labor market and low wages explain much of the slowdown in productivity. The argument is straightforward. When Walmart can hire people at very low wages, they are happy to pay people to stand around and do almost nothing. That is why many retailers now have greeters or sales people standing in aisles who contribute little to productivity.

Sunday, 10 July 2016 - 4:07pm

Published by Matthew Davidson on Sun, 10/07/2016 - 4:07pm in

This week, I have been mostly reading:

  • Psychologists Throw Open The “File Drawer” — Neuroskeptic: Now, a group of Belgian psychology researchers have decided to make a stand. In a bold move against publication bias, they’ve thrown open their own file drawer. In the new paper, Anthony Lane and colleagues from the Université catholique de Louvain say that they’ve realized that over the years, “our publication portfolio has become less and less representative of our actual findings”. Therefore, they “decided to get these [unpublished] studies out of our drawer and encourage other laboratories to do the same.”
  • Insanity — xkcd:
    Insanity
  • Reform School — Malcolm Harris at The New Inquiry reviews Schools on Trial, by Nikhil Goyal: In 1837, Horace Mann, the founder of American compulsory education, established the Massachusetts Board of Education, the first such agency and one which would become the model for the nation. But Mann didn’t want a more intellectually engaged population—literacy in the state already stood at 99 percent. Social control was a serious concern for Western elites after a series of failed revolutions, and Mann was very impressed by the system he saw on a visit to Prussia. He returned with a plan for public education. “Compulsory schooling evangelists,” Goyal writes, “which included many industrialists and financiers, in fact, wanted to ‘dumb down’ the American population to create docile followers, not potentially troublesome freethinkers who questioned authority.”
  • Trade Treaty Propaganda Goes Into High Gear — Dean Baker, CEPR: As far as the protectionism in the TPP, the deal is quite explicitly about increasing the length and strength of patent and copyright protection. Yes, that is "protection" as in "protectionism." Patent and copyright protection do serve a purpose in providing an incentive for innovation and creative work, but all forms of protection serve a purpose. The question that serious people ask is whether there is a better way to serve the purpose.
  • 'I Love My Label': Resisting the Pre-Packaged Sound in Ed-Tech — Audrey Watters: As someone who works outside of academia, without an institutional affiliation, I can’t begin to tell you how frustrating it is to be unable to access journal articles. I always get so irked when I hear technology evangelists proclaim “You can learn anything you want on the Internet.” No, you can’t. Huge swaths of knowledge, art, science remain inaccessible; and it’s a loss for scholarship, which need not and does not only happen among those with access to a university research library or with log-in credentials to its online portal. That inaccessibility is a reflection of institutional culture, industry culture, corporate culture, copyright (that is, intellectual property laws), capitalism, and code. That is, when we talk about the future of something like “education technology” or even when we talk about the future of research and scholarship or teaching and learning, we must grapple with issues that are technological, sociological, and above all, ideological.
  • The elites hate Momentum and the Corbynites - and I’ll tell you why — David Graeber, providing "opinion" for The Guardian, as opposed to whatever the hell you'd call the utter tripe they normally publish about Corbyn: I’ve spent much of the past two decades working in movements aimed at creating new forms of bottom-up democracy, from the Global Justice Movement to Occupy Wall Street. It was our strong conviction that real, direct democracy, could never be created inside the structures of government. One had to open up a space outside. The Corbynistas are trying to prove us wrong. Will they be successful? I have absolutely no idea. But I cannot help find it a fascinating historical experiment. […] insofar as politics is a game of personalities, of scandals, foibles and acts of “leadership”, political journalists are not just the referees – in a real sense they are the field on which the game is played. Democratisation would turn them into reporters once again, in much the same way as it would turn politicians into representatives. In either case, it would mark a dramatic decline in personal power and influence. It would mark an equally dramatic rise in power for unions, constituent councils, and local activists – the very people who have rallied to Corbyn’s support.
  • The Duncan Smith resignation: fundamentally shifting the economic debate — Neil Schofield: 'I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.' In other words, for the first time a key player in the post-2010 Conservative project has said, almost explicitly, that austerity is a political, not an economic choice. […] In other words, Duncan Smith’s resignation letter – and the events surrounding it – powerfully endorse the fundamental tenet of Jeremy Corbyn’s and John McDonnell’s economic programme: that austerity is a choice, not an economic necessity. It wholly destroys the intellectual underpinning of McDonnell’s opponents in the Parliamentary Labour Party.
  • Peak Indifference — Cory Doctorow in Locus Online: At a certain point, indifference to tobacco’s dangers peaked – long before actual tobacco use peaked. Peak indifference marks a turning point. […] That’s why it’s time for privacy activists to start thinking of new tac­tics. We are past peak indifference to online surveillance: that means that there will never be a moment after today in which fewer people are alarmed by the costs of sur­veillance.
  • A world war has begun. Break the silence. — John Pilger: In 2009, President Obama stood before an adoring crowd in the centre of Prague, in the heart of Europe. He pledged himself to make "the world free from nuclear weapons". People cheered and some cried. A torrent of platitudes flowed from the media. Obama was subsequently awarded the Nobel Peace Prize. It was all fake. He was lying. The Obama administration has built more nuclear weapons, more nuclear warheads, more nuclear delivery systems, more nuclear factories. Nuclear warhead spending alone rose higher under Obama than under any American president.
  • Budget accounting tricks — Simon Wren-Lewis: One of the problems with fixed date deficit (or in this case surplus) targets is that they encourage playing around with the public finances to hit the target. Generally, but not always, this involves making a saving today by shifting costs into the future. Privatisation is an obvious example. It may be justified if the net present value of the sale is positive, or if privatisation really improves efficiency, but all to [sic] often it is a device to meet a short term target. Although a New Keynesian (Wren-Lewis will when pressed admit he subscribes to the superstition of "sound finance"), he makes a good point here. i.e. that, just as in the popular bugaboo where public deficits can be run up by unscrupulous pollies who "buy votes", those same unscrupulous pollies are more likely in the current neoliberal environment to buy a reputation as good economic managers by using fire sales of public assets (usually a bad thing) to hide deficits (rarely a bad thing).
  • Get ready for a recession by 2017 — Steve Keen in the Australian: Whichever party is in opposition at the time will blame the incumbent, but in reality this recession has been set up by the sidestep both parties have used to avoid downturns for the past quarter century: whenever a crisis has loomed, they’ve avoided recession by encouraging the private sector to borrow and spend. […] Australia’s most famous recession sidestep was during the GFC, when it was one of only two countries in the OECD to avoid experiencing two consecutive quarters of negative GDP growth (the other country was South Korea). Since then, the private sectors of the advanced countries have collectively de-levered, reducing their debt levels from about 170 to 160 per cent of GDP. Australia, in stark contrast, has levered up.
  • Tony Blair's spin unspun: how his claims compare with the Chilcot report — Andy McSmith, The Independent: Mr Blair has claimed that he was promising the Americans his support as a way of influencing Washington’s decision making and getting them to seek United Nations approval before acting. Taking questions from journalists, he asserted that his support was not “unconditional”. But the opening words of that July note [to Bush] – “I will be with you, whatever” – do sound unconditional.
  • I read the Chilcot report as I travelled across Syria this week and saw for myself what Blair's actions caused — Robert Fisk, The Independent: When Blair can say, as he did the moment the Chilcot report was published, that it should “lay to rest allegations [sic] of bad faith, lies and deceit” – without a revolution in the streets against his bad faith, lies and deceit – then you can be sure that his successors will have no hesitation in swindling the public again and again. After all, what’s the difference between Iraqi WMDs that don’t exist, 45-minute warnings that are falsities, 70,000 non-existent Syrian “moderates” and a fictitious NHS windfall of millions if Britain left the European Union?
  • To Save The Economy, We Have To Break Its One Sacred Rule — Jason Hickel, Co.Exist: As soon as we start focusing on GDP growth, we’re not only promoting the things that GDP measures, we’re promoting the indefinite increase of those things. And that’s exactly what we started to do in the 1960s. GDP was adopted during the Cold War for the sake of adjudicating the grand pissing match between the West and the USSR. Suddenly, politicians on both sides became feverish about promoting GDP growth. GDP growth became a sacred rule. And we remain in thrall to it today.
  • Mocked and forgotten: who will speak for the American white working class? — Chris Arnade in The Guardian: America, and particularly the white working class, is dealing with a drug epidemic that is killing more people each year at a startling rate. Just in the past decade deaths from drugs has doubled. The National Review sees it as another sign of the flawed character of the poor. This is a common and moralistic trope those battling an addiction have long dealt with – that it is all the fault of their weakness. The reality is often far more complex. Addiction thrives in societies undergoing stress.
  • Stopping Deflation? Dead Easy. So Why Isn’t It Being Done? — Ian Welsh: If you let fixed costs have inflation above income increases, then everything else is going to have to suffer deflation, because it is discretionary. Gotta eat and have a warm place to sleep, first.
  • The Tory leadership election is a sort of X Factor for choosing the antichrist — Frankie Boyle in the otherwise disgraceful, paper of choice for the discerning New Labour war criminal, The Guardian: [The Parliamentary Labour Party] say they need a leader who knows how to oppose, albeit primarily their own party membership. The idea is that Corbyn is unelectable, and it’s just one of life’s sad ironies that none of the people who believe this will be able to beat him in an election. […] One of the PLP’s main worries will be that Labour’s vote will crumble to Ukip under Corbyn, who won’t produce enough racist mugs and mouse mats to reassure everybody. And, to be fair, it must be galling to a party that invaded Iraq, rendered Libyans to be tortured by Gaddafi and detained asylum seekers with Dickensian cruelty to lose voters on the race issue.

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.

Sunday, 26 June 2016 - 5:20pm

Published by Matthew Davidson on Sun, 26/06/2016 - 5:20pm in

This week, I have been mostly reading:

  • How Bernie Gives Hope for the Future — Ian Welsh provides a nuanced and pursuasive variant on the "nothing left to lose" argument for social change, to which I've never subscribed, but hey, you take your hope where you can get it: This is not the 2000s or 90s. This is not the age of compromise. The fruits of neoliberalism, neoconservatism, and oligarchy are being reaped; the youngsters have now grown up and never known a good economy. Many barely remember a time when the US wasn’t at war. […] The Democrats are the conservative party right now. They are about the status quo: Keep neo-liberaling, keep bombing and invading brown people’s countries, keep shoveling money to the rich. […] But Bernie lost in a genuinely hopeful way, showing that a socialist is now viable in the US and that young people are massively against the status quo.
  • On decriminalizing the sex trade — Chris Dillow: Here, though, is the thing. I – and I, strongly suspect, Mr Corbyn too – favour legalization of the sex industry in the context of other policies that empower women to reject exploitation. For me, these include full employment policies to give them other career possibilities; a mass housebuilding programme to reduce rents; and – of course - a basic income to improve their outside options.
  • What Will Many Bernie Sanders Voters Do After July? — Ralph Nader in Common Dreams: Here we go again. Every four years, the Democratic leaders define the Democratic candidate by how bad the Republicans are. This is designed to panic and mute their followers. Every four years, both parties become more corporatist. Sanders’ voters want to define the Democratic Party by how good it can be for the people. […] Where does this leave the Sanders people who see Hillary as experienced in waging wars, qualified as an entrenched pol, and realistic to suit the plutocracy’s tastes, and not really getting much of anything progressive done (alluding to the ways she has described herself)?
  • The trouble with getting the BBC to be less popular — David Mitchell, who—damn him—is still occasionally funny, in the Guardian: A report, commissioned by the Department for Culture, Media and Sport and published last week, argues that “greater distinctiveness” in the BBC’s output will allow its commercial rivals to make an extra £115m a year. […] Unfortunately the distinctiveness of a Hitchcock movie, a Lowry painting or a Cole Porter lyric doesn’t seem to be the sort the report is getting at, because that’s a kind people really like. That would be entirely counterproductive to its stated aims. By “distinctiveness”, the report means that the BBC should deliberately target smaller and more niche audiences, in order to allow the commercial sector to take the bigger ones. Its distinctive flavour would be less like chicken liver and more like calves’ brains. Because that would be fairer on the market place.
  • Paul Samuelson on Deficit Myths — L. Randall Wray at New Economic Perspectives: […] the need to balance the budget over some time period determined by the movements of celestial objects, or over the course of a business cycle is a myth, an old-fashioned religion. But that superstition is seen as necessary because if everyone realizes that government is not actually constrained by the necessity of balanced budgets, then it might spend “out of control”, taking too large a percent of the nation’s resources. Samuelson sees merit in that view. It is difficult not to agree with him. But what if the religious belief in budget balance makes it impossible to spend on the necessary scale to achieve the public purpose? […] We don’t need myths. We need more democracy, more understanding, and more transparency. We do need to constrain our leaders—but not through dysfunctional superstitions.
  • The Fed shouldn’t accept the “new normal” without a fight — Josh Bivens at the Economic Policy Institute: [A] key contributor to productivity growth is technological advance. This technological advance does not fall from the sky, rather it is the product of directed investment (R&D) and trial and error (workers learning by doing). When the pace of R&D investment is slow and output growth is slow enough to provide fewer opportunities for learning by doing, it is not shocking that technological advancement may slow. Further, there is ample evidence that firms boost labor-saving investments (which boost productivity) when labor costs are rising rapidly. Rapid labor cost growth has not been a feature of the recovery from the Great Recession. Between 2007 and 2014, real hourly pay for the median worker, for example, has slightly declined (see Table 1 here), and the share of corporate sector income accruing to capital owners rather than to employees reached historic highs. This labor market slack and weak wage growth has provided very little spur to boost productivity in the search for higher profits.
  • How negative-gearing changes can bring life back to eerily quiet suburbs — Kim Dovey in The Conversation: It is impossible to say how much this production of empty architecture is a function of negative gearing since it also goes hand-in-hand with neoliberal markets and high disparities of wealth. However, the curbing of negative gearing will have a significant impact in getting empty housing onto the market. This in turn could go some way to reversing this cycle of emptiness – bringing life to the shops, offices, streets, parks and public transport.
  • It's Time to Rid the DNC of DINOs, Starting With the Chair — by a gestalt creature called The Daily Take Team, from The Thom Hartmann Program: Jim Fouts, a three-term Independent mayor of Warren, Michigan, attended Sunday's Democratic debate, just like he had attended the Republican debate on Thursday. […] He told BuzzFeed News that he was seated behind Wasserman Schultz, and that he was praising Bernie's performance and talking about how this debate proved that more debates were a good idea for the Democrats. Then, during an early commercial break, Fouts and his assistant were taken out of their seats and the sergeant at arms told him, "The people that run this want you ejected, they don't want you here." Fouts was allowed to watch the rest of the debate from his seat, but he had to be careful about even clapping too loud or at the wrong time, for fear of getting ejected. […] Debbie Wasserman Schultz isn't the only Democrat-In-Name-Only (DINO) in the Democratic leadership. But as the DNC Chair, she is the highest-ranking DINO in the party. Tim Canova will take her seat in Congress, but Clinton is sure to give her a plum job elsewhere, for services rendered during the primaries.
  • On the results of the UK referendum — DiEM25: OUT won because the EU establishment have made it impossible, through their anti-democratic reign (not to mention the asphyxiation of weaker countries like Greece), for the people of Britain to imagine a democratic EU.
  • The American Fascist — Robert Reich: As did the early twentieth-century fascists, Trump is focusing his campaign on the angers of white working people who have been losing economic ground for years, and who are easy prey for demagogues seeking to build their own power by scapegoating others. […] As the Washington Post’s Jeff Guo has pointed out, Trump performs best in places where middle-aged whites are dying the fastest.
  • Whither Europe? The Modest Camp vs the Federalist Austerians — Yanis Varoufakis and James Galbraith: Soon after the Great Crisis of the Eurozone struck, Europe decided to treat it piecemeal – as though each affected country had committed separate and unrelated policy errors. The governing institutions of Europe denied that the difficulties of Greece, Ireland, Spain, Portugal and Italy could be part of a single disaster, spanning at once the realms of banking, public debt and investment.
  • Negative Gearing. It's turning us into a nation of landlords and serfs — Peter Martin: The great Australian dream meant owning your own home. "Getting ahead" means getting ahead of someone else. It's how Treasurer Scott Morrison sees the Australian dream. […] It's certainly what negative gearing is about. "The vast bulk of Australians who use negative gearing are just trying to get ahead and trying to get their family in a better position," Morrison says. But negative gearing only gets them ahead if prices climb. The more that people negatively gear in order to get ahead, the more prices climb. The further they climb, the harder houses become to buy. And the harder they become to buy, the more the Australian dream recedes.
  • Whittingdale is wrong: it is advertisers who are destroying the digital economy — Alexander Hanff in openDemocracy: Publishers feel like they have no control over the type of ads being forced on them by adtech companies and advertising agencies. This is a situation that needs to change – publishers should control all of the content they publish – including ads; and traditionally that was always the case. […] Advertisers and brands need to understand that their route to the audience is via the publishers whose content they are poisoning through invasive technologies and an ever increasing greed for more and more data. They need to purify the water before they can persuade us to start drinking it again – they need to stop tracking and profiling us, they need to better police their networks and platforms to eliminate malvertising and they need to yield control of the experience back to the publishers who own the audience. [Needless to say, we should object to being considered "owned" by publishers as well.]

Sunday, 19 June 2016 - 9:29pm

Published by Matthew Davidson on Sun, 19/06/2016 - 9:29pm in

This week, I have been mostly reading:

  • Saturday Morning Breakfast Cereal (via Timothy Taylor):
  • The rise of Donald Trump — Dean Baker, Real World Economics Review Blog: Whatever the final outcome of the presidential race, Trump has exposed a sense of extreme anger among large segments of the population. These people are unhappy about economic policies that have undermined their financial security. Their anger may be misdirected towards immigrants or other countries, but it is not about to go away unless the policies change.
  • Larry Fink and His BlackRock Team Poised to Take Over Hillary Clinton’s Treasury Department — David Dayen at The Intercept: BlackRock is far from a household name, but it is the largest asset management firm in the world, controlling $4.6 trillion in investor funds — about a trillion dollars more than the annual federal budget, and five times the assets of Goldman Sachs. And Larry Fink, BlackRock’s CEO, has assembled a veritable shadow government full of former Treasury Department officials at his company. […] And his priorities appear to be so in sync with Clinton’s that it’s not entirely clear who shares whose agenda. Clinton, for her part, has refused to rule out a treasury secretary drawn from Wall Street.
  • Joe Wilson to Hillary Clinton in 2010: Baghdad “Has Been Bled to Death” — Zaid Jilani in The Intercept: My trip to Baghdad (September 6-11) has left me slack jawed. I have struggled to find the correct historical analogy to describe a vibrant, historically important Middle Eastern city being slowly bled to death. Berlin and Dresden in World War II were devastated but they and their populations were not subjected to seven years of occupation that included ethnic cleansing, segregation of people by religious identity, and untold violence perpetrated upon them by both military and private security services. […] The service people don’t see themselves there to bring peace, light, joy or even democracy to Iraq. They are there to kill the “camel jockeys.”
  • Why Trump? — George Lakoff: Language that fits [a conservative or progressive] worldview activates that worldview, strengthening it, while turning off the other worldview and weakening it. The more Trump’s views are discussed in the media, the more they are activated and the stronger they get, both in the minds of hardcore conservatives and in the minds of moderate progressives. This is true even if you are attacking Trump’s views. The reason is that negating a frame activates that frame, as I pointed out in the book Don’t Think of an Elephant! It doesn’t matter if you are promoting Trump or attacking Trump, you are helping Trump.
  • The Federal Reserve and the Global Fracture — Antti J. Ronkainen interviews Michael Hudson: The aim of lowering interest rates was to provide banks with cheap credit. The pretense was that banks might lend to help the economy get going again. But the Fed’s idea was simply to re-inflate the Bubble Economy. It aimed at restoring the value of the mortgages that banks had in their loan portfolios. The hope was that easy credit would spur new mortgage lending to bid housing prices back up – as if this would help the economy rather than simply raising the price of home ownership. […] Banks did make money, but not by lending into the “real” production and consumption economy. They mainly engaged in arbitrage and speculation, and lending to hedge funds and companies to buy their own stocks yielding higher dividend returns than the low interest rates that were available.
  • RICHARD KOO: The 'struggle between markets and central banks has only just begun' — David Scutt of Business Insider Australia points us towards this illustration of how trying to increase the amount of broad money by issuing base money is "pushing on a string":
    Nomura Koo
  • The Unemployment Rate Isn’t Used to Keep Unemployment Low (With Graph) — Ian Welsh: So, the unemployment rate from late 70s and on, has been used to determine if wages should cause inflation, and to then raise interest rates to make sure they don’t. Not incidentally, the result is also to crush wages, because, essentially, wages that improve are nothing more than wages that increase faster than non-wage inflation. The unemployment rate not only doesn’t measure how good the economy feels for ordinary people, it was actually used, with purposeful action, to crush wages.
  • There's more than one way to kill negative gearing — Peter Martin: Before John Howard halved the headline rate of capital gains tax at the turn of the century, negative gearing was relatively unattractive. Landlords as a group made money. In 1999-2000 they made a combined $219 million. Ever since then they've lost money. In 2012-13 they lost a net $5.4 billion... Capital gains matter because they are the mechanism negative gearers use to make money. The profits they make from eventually selling their properties are meant to exceed their annual losses from rent. A cut-rate capital gains tax makes those profits more likely. Investors can write off their annual losses at the full tax rate and pay tax on their eventual profits at only half the rate.
  • Exit Planning — Thomas Geoghegan in The Baffler: Toe-to-toe, it’s the elderly and not the robots who are taking jobs from the young. […] The more we shrink the welfare state—I mean cut back on private pensions, Social Security, and Medicare so that older Americans must stay in the workforce—the harder it is for a young person to land a job. D.C. think tanks love to tell the elderly that we’re really in fine shape and that it is our duty to keep on working. To an audience of older college grads, like me, they say, “Hang on to those college-type jobs.” At the same time, they push more young people into college. Isn’t this a contradiction? It seems that the one hand does not know what the other hand is doing. That’s the problem with neoliberalism.

Pages