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Camp pie

Published by Anonymous (not verified) on Wed, 11/12/2019 - 12:47pm in

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This food timeline started as a way to explore the revolution in Australian food that has occurred during the baby-boomers’ lifetime, but has since expanded to include more about the previous decades (and century) as well. Also included are overseas events and trends that had an impact here. The entries are brief, but there are lots of links if you want more information.

Camp Pie probably isn’t uniquely Australian. At least in its tinned version it is recorded in Britain long before being manufactured here. But for many years it was one of our local specialties. These days it's almost impossible to find in Australia.

The post Camp pie appeared first on ME AND MY BIG MOUTH.

The letter

Published by Anonymous (not verified) on Tue, 15/10/2019 - 11:26am in

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This food timeline started as a way to explore the revolution in Australian food that has occurred during the baby-boomers’ lifetime, but has since expanded to include more about the previous decades (and century) as well. Also included are overseas events and trends that had an impact here. The entries are brief, but there are lots of links if you want more information.

“I’m grossly offended by the insinuation I have some personal agenda in interfering with your personal life," So began the letter I found concealed within a book from our apartment building's book exchange. I had to know more.

The post The letter appeared first on ME AND MY BIG MOUTH.

Facing the Great Reckoning Head-On

Published by Anonymous (not verified) on Mon, 16/09/2019 - 8:12am in

I was recently honored by the Electronic Frontier Foundation. Alongside Oakland Privacy and William Gibson, I received a 2019 Barlow/Pioneer Award. I was asked to give a speech. As I reflected on what got me to this place, I realized I needed to reckon with how I have benefited from men whose actions have helped uphold a patriarchal system that has hurt so many people. I needed to face my past in order to find a way to create space to move forward.

This is the speech I gave in accepting the award. I hope sharing it can help others who are struggling to make sense of current events. And those who want to make the tech industry to do better.

— —

I cannot begin to express how honored I am to receive this award. My awe of the Electronic Frontier Foundation dates back to my teenage years. EFF has always inspired me to think deeply about what values should shape the internet. And so I want to talk about values tonight, and what happens when those values are lost, or violated, as we have seen recently in our industry and institutions.

But before I begin, I would like to ask you to join me in a moment of silence out of respect to all of those who have been raped, trafficked, harassed, and abused. For those of you who have been there, take this moment to breathe. For those who haven’t, take a moment to reflect on how the work that you do has enabled the harm of others, even when you never meant to.

<silence>

The story of how I got to be standing here is rife with pain and I need to expose part of my story in order to make visible why we need to have a Great Reckoning in the tech industry. This award may be about me, but it’s also not. It should be about all of the women and other minorities who have been excluded from tech by people who thought they were helping.

The first blog post I ever wrote was about my own sexual assault. It was 1997 and my audience was two people. I didn’t even know what I was doing would be called blogging. Years later, when many more people started reading my blog, I erased many of those early blog posts because I didn’t want strangers to have to respond to those vulnerable posts. I obfuscated my history to make others more comfortable.

I was at the MIT Media Lab from 1999–2002. At the incoming student orientation dinner, an older faculty member sat down next to me. He looked at me and asked if love existed. I raised my eyebrow as he talked about how love was a mirage, but that sex and pleasure were real. That was my introduction to Marvin Minsky and to my new institutional home.

My time at the Media Lab was full of contradictions. I have so many positive memories of people and conversations. I can close my eyes and flash back to laughter and late night conversations. But my time there was also excruciating. I couldn’t afford my rent and did some things that still bother me in order to make it all work. I grew numb to the worst parts of the Demo or Die culture. I witnessed so much harassment, so much bullying that it all started to feel normal. Senior leaders told me that “students need to learn their place” and that “we don’t pay you to read, we don’t pay you to think, we pay you to do.” The final straw for me was when I was pressured to work with the Department of Defense to track terrorists in 2002.

After leaving the Lab, I channeled my energy into V-Day, an organization best known for producing “The Vagina Monologues,” but whose daily work is focused on ending violence against women and girls. I found solace in helping build online networks of feminists who were trying to help combat sexual assault and a culture of abuse. To this day, I work on issues like trafficking and combating the distribution of images depicting the commercial sexual abuse of minors on social media.

By 2003, I was in San Francisco, where I started meeting tech luminaries, people I had admired so deeply from afar. One told me that I was “kinda smart for a chick.” Others propositioned me. But some were really kind and supportive. Joi Ito became a dear friend and mentor. He was that guy who made sure I got home OK. He was also that guy who took being called-in seriously, changing his behavior in profound ways when I challenged him to reflect on the cost of his actions. That made me deeply respect him.

I also met John Perry Barlow around the same time. We became good friends and spent lots of time together. Here was another tech luminary who had my back when I needed him to. A few years later, he asked me to forgive a friend of his, a friend whose sexual predation I had witnessed first hand. He told me it was in the past and he wanted everyone to get along. I refused, unable to convey to him just how much his ask hurt me. Our relationship frayed and we only talked a few times in the last few years of his life.

So here we are… I’m receiving this award, named after Barlow less than a week after Joi resigned from an institution that nearly destroyed me after he socialized with and took money from a known pedophile. Let me be clear — this is deeply destabilizing for me. I am here today in-no-small-part because I benefited from the generosity of men who tolerated and, in effect, enabled unethical, immoral, and criminal men. And because of that privilege, I managed to keep moving forward even as the collateral damage of patriarchy stifled the voices of so many others around me. I am angry and sad, horrified and disturbed because I know all too well that this world is not meritocratic. I am also complicit in helping uphold these systems.

What’s happening at the Media Lab right now is emblematic of a broader set of issues plaguing the tech industry and society more generally. Tech prides itself in being better than other sectors. But often it’s not. As an employee of Google in 2004, I watched my male colleagues ogle women coming to the cafeteria in our building from the second floor, making lewd comments. When I first visited TheFacebook in Palo Alto, I was greeted by a hyper-sexualized mural and a knowing look from the admin, one of the only women around. So many small moments seared into my brain, building up to a story of normalized misogyny. Fast forward fifteen years and there are countless stories of executive misconduct and purposeful suppression of the voices of women and sooooo many others whose bodies and experiences exclude them from the powerful elite. These are the toxic logics that have infested the tech industry. And, as an industry obsessed with scale, these are the toxic logics that the tech industry has amplified and normalized. The human costs of these logics continue to grow. Why are we tolerating sexual predators and sexual harassers in our industry? That’s not what inclusion means.

I am here today because I learned how to survive and thrive in a man’s world, to use my tongue wisely, watch my back, and dodge bullets. I am being honored because I figured out how to remove a few bricks in those fortified walls so that others could look in. But this isn’t enough.

I am grateful to EFF for this honor, but there are so many underrepresented and under-acknowledged voices out there trying to be heard who have been silenced. And they need to be here tonight and they need to be at tech’s tables. Around the world, they are asking for those in Silicon Valley to take their moral responsibilities seriously. They are asking everyone in the tech sector to take stock of their own complicity in what is unfolding and actively invite others in.

And so, if my recognition means anything, I need it to be a call to arms. We need to all stand up together and challenge the status quo. The tech industry must start to face The Great Reckoning head-on. My experiences are all-too common for women and other marginalized peoples in tech. And it it also all too common for well-meaning guys to do shitty things that make it worse for those that they believe they’re trying to support.

If change is going to happen, values and ethics need to have a seat in the boardroom. Corporate governance goes beyond protecting the interests of capitalism. Change also means that the ideas and concerns of all people need to be a part of the design phase and the auditing of systems, even if this slows down the process. We need to bring back and reinvigorate the profession of quality assurance so that products are not launched without systematic consideration of the harms that might occur. Call it security or call it safety, but it requires focusing on inclusion. After all, whether we like it or not, the tech industry is now in the business of global governance.

“Move fast and break things” is an abomination if your goal is to create a healthy society. Taking short-cuts may be financially profitable in the short-term, but the cost to society is too great to be justified. In a healthy society, we accommodate differently abled people through accessibility standards, not because it’s financially prudent but because it’s the right thing to do. In a healthy society, we make certain that the vulnerable amongst us are not harassed into silence because that is not the value behind free speech. In a healthy society, we strategically design to increase social cohesion because binaries are machine logic not human logic.

The Great Reckoning is in front of us. How we respond to the calls for justice will shape the future of technology and society. We must hold accountable all who perpetuate, amplify, and enable hate, harm, and cruelty. But accountability without transformation is simply spectacle. We owe it to ourselves and to all of those who have been hurt to focus on the root of the problem. We also owe it to them to actively seek to not build certain technologies because the human cost is too great.

My ask of you is to honor me and my story by stepping back and reckoning with your own contributions to the current state of affairs. No one in tech — not you, not me — is an innocent bystander. We have all enabled this current state of affairs in one way or another. Thus, it is our responsibility to take action. How can you personally amplify underrepresented voices? How can you intentionally take time to listen to those who have been injured and understand their perspective? How can you personally stand up to injustice so that structural inequities aren’t further calcified? The goal shouldn’t be to avoid being evil; it should be to actively do good. But it’s not enough to say that we’re going to do good; we need to collectively define — and hold each other to — shared values and standards.

People can change. Institutions can change. But doing so requires all who harmed — and all who benefited from harm — to come forward, admit their mistakes, and actively take steps to change the power dynamics. It requires everyone to hold each other accountable, but also to aim for reconciliation not simply retribution. So as we leave here tonight, let’s stop designing the technologies envisioned in dystopian novels. We need to heed the warnings of artists, not race head-on into their nightmares. Let’s focus on hearing the voices and experiences of those who have been harmed because of the technologies that made this industry so powerful. And let’s collaborate with and design alongside those communities to fix these wrongs, to build just and empowering technologies rather than those that reify the status quo.

Many of us are aghast to learn that a pedophile had this much influence in tech, science, and academia, but so many more people face the personal and professional harm of exclusion, the emotional burden of never-ending subtle misogyny, the exhaustion from dodging daggers, and the nagging feeling that you’re going crazy as you try to get through each day. Let’s change the norms. Please help me.

Thank you.

 

we’re all taught how to justify history as it passes by
and it’s your world that comes crashing down
when the big boys decide to throw their weight around
but he said just roll with it baby make it your career
keep the home fires burning till america is in the clear

i think my body is as restless as my mind
and i’m not gonna roll with it this time
no, i’m not gonna roll with it this time
— Ani Difranco

Agnotology and Epistemological Fragmentation

Published by Anonymous (not verified) on Thu, 18/04/2019 - 7:58am in

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On April 17, 2019, I gave a talk at the Digital Public Library of America conference (DPLAfest). This is the transcript of that talk.

Illustration by Jim Cooke

I love the librarian community. You all are deeply committed to producing, curating, and enabling access to knowledge. Many of you embraced the internet with glee, recognizing the potential to help so many more people access critical information. Many of you also saw the democratic and civic potential of this new technology, not to mention the importance of an informed citizenry in a democratic world. Yet, slowly, and systematically, a virus has spread, using technology to systematically tear at the social fabric of public life.

This shouldn’t be surprising. After all, most of Silicon Valley in the late 90s and early aughts was obsessed with Neal Stephenson’s Snow Crash. How did they not recognize that this book was dystopian?

Slowly, and systematically, a virus has spread, using technology to systematically tear at the social fabric of public life.

Epistemology is the term that describes how we know what we know. Most people who think about knowledge think about the processes of obtaining it. Ignorance is often assumed to be not-yet-knowledgeable. But what if ignorance is strategically manufactured? What if the tools of knowledge production are perverted to enable ignorance? In 1995, Robert Proctor and Iain Boal coined the term “agnotology” to describe the strategic and purposeful production of ignorance. In an edited volume called Agnotology, Proctor and Londa Schiebinger collect essays detailing how agnotology is achieved. Whether we’re talking about the erasure of history or the undoing of scientific knowledge, agnotology is a tool of oppression by the powerful.

Swirling all around us are conversations about how social media platforms must get better at content management. Last week, Congress held hearings on the dynamics of white supremacy online and the perception that technology companies engage in anti-conservative bias. Many people who are steeped in history and committed to evidence-based decision-making are experiencing a collective sense of being gaslit—the concept that emerges from a film on domestic violence to explain how someone’s sense of reality can be intentionally destabilized by an abuser. How do you process a black conservative commentator testifying before the House that the Southern strategy never happened and that white nationalism is an invention of the Democrats to “scare black people”? Keep in mind that this commentator was intentionally trolled by the terrorist in Christchurch; she responded to this atrocity with tweets containing “LOL” and “HAHA.” Speaking of Christchurch, let’s talk about Christchurch. We all know the basic narrative. A terrorist espousing white nationalist messages livestreamed himself brutally murdering 50 people worshipping in a New Zealand mosque. The video was framed like a first-person shooter from a video game. Beyond the atrocity itself, what else was happening?

He produced a media spectacle. And he learned how to do it by exploiting the information ecosystem we’re currently in.

This terrorist understood the vulnerabilities of both social media and news media. The message he posted on 8chan announcing his intention included links to his manifesto and other sites, but it did not include a direct link to Facebook; he didn’t want Facebook to know that the traffic came from 8chan. The video included many minutes of him driving around, presumably to build audience but also, quite likely, in an effort to evade any content moderators that might be looking. He titled his manifesto with a well-known white nationalist call sign, knowing that the news media would cover the name of the manifesto, which in turn, would prompt people to search for that concept. And when they did, they’d find a treasure trove of anti-Semitic and white nationalist propaganda. This is the exploitation of what’s called a “data void.” He also trolled numerous people in his manifesto, knowing full well that the media would shine a spotlight on them and create distractions and retractions and more news cycles. He produced a media spectacle. And he learned how to do it by exploiting the information ecosystem we’re currently in. Afterwards, every social platform was inundated with millions and millions of copies and alterations of the video uploaded through a range of fake accounts, either to burn the resources of technology companies, shame them, or test their guardrails for future exploits.

What’s most notable about this terrorist is that he’s explicit in his white nationalist commitments. Most of those who are propagating white supremacist logics are not. Whether we’re talking about the so-called “alt-right” who simply ask questions like “Are jews people?” or the range of people who argue online for racial realism based on long-debunked fabricated science, there’s an increasing number of people who are propagating conspiracy theories or simply asking questions as a way of enabling and magnifying white supremacy. This is agnotology at work.

What’s at stake right now is not simply about hate speech vs. free speech or the role of state-sponsored bots in political activity. It’s much more basic. It’s about purposefully and intentionally seeding doubt to fragment society. To fragment epistemologies. This is a tactic that was well-honed by propagandists. Consider this Russia Today poster.

But what’s most profound is how it’s being done en masse now. Teenagers aren’t only radicalized by extreme sites on the web. It now starts with a simple YouTube query. Perhaps you’re a college student trying to learn a concept like “social justice” that you’ve heard in a classroom. The first result you encounter is from PragerU, a conservative organization that is committed to undoing so-called “leftist” ideas that are taught at universities. You watch the beautifully produced video, which promotes many of the tenets of media literacy. Ask hard questions. Follow the money. The video offers a biased and slightly conspiratorial take on what “social justice” is, suggesting that it’s not real, but instead a manufactured attempt to suppress you. After you watch this, you watch more videos of this kind from people who are professors and other apparent experts. This all makes you think differently about this term in your reading. You ask your professor a question raised by one of the YouTube influencers. She reacts in horror and silences you. The videos all told you to expect this. So now you want to learn more. You go deeper into a world of people who are actively anti-“social justice warriors.” You’re introduced to anti-feminism and racial realism. How far does the rabbit hole go?

One of the best ways to seed agnotology is to make sure that doubtful and conspiratorial content is easier to reach than scientific material.

YouTube is the primary search engine for people under 25. It’s where high school and college students go to do research. Digital Public Library of America works with many phenomenal partners who are all working to curate and make available their archives. Yet, how much of that work is available on YouTube? Most of DPLA’s partners want their content on their site. They want to be a destination site that people visit. Much of this is visual and textual, but are there explainers made about this content that are on YouTube? How many scientific articles have video explainers associated with them?

Herein lies the problem. One of the best ways to seed agnotology is to make sure that doubtful and conspiratorial content is easier to reach than scientific material. And then to make sure that what scientific information is available, is undermined. One tactic is to exploit “data voids.” These are areas within a search ecosystem where there’s no relevant data; those who want to manipulate media purposefully exploit these. Breaking news is one example of this. Another is to co-opt a term that was left behind, like social justice. But let me offer you another. Some terms are strategically created to achieve epistemological fragmentation. In the 1990s, Frank Luntz was the king of doing this with terms like partial-birth abortion, climate change, and death tax. Every week, he coordinated congressional staffers and told them to focus on the term of the week and push it through the news media. All to create a drumbeat.

Illustration by Jim Cooke Today’s drumbeat happens online. The goal is no longer just to go straight to the news media. It’s to first create a world of content and then to push the term through to the news media at the right time so that people search for that term and receive specific content. Terms like caravan, incel, crisis actor. By exploiting the data void, or the lack of viable information, media manipulators can help fragment knowledge and seed doubt.

Media manipulators are also very good at messing with structure. Yes, they optimize search engines, just like marketers. But they also look to create networks that are hard to undo. YouTube has great scientific videos about the value of vaccination, but countless anti-vaxxers have systematically trained YouTube to make sure that people who watch the Center for Disease Control and Prevention’s videos also watch videos asking questions about vaccinations or videos of parents who are talking emotionally about what they believe to be the result of vaccination. They comment on both of these videos, they watch them together, they link them together. This is the structural manipulation of media. Journalists often get caught up in telling “both sides,” but the creation of sides is a political project.

The creation of sides is a political project.

And this is where you come in. You all believe in knowledge. You believe in making sure the public is informed. You understand that knowledge emerges out of contestation, debate, scientific pursuit, and new knowledge replacing old knowledge. Scholars are obsessed with nuance. Producers of knowledge are often obsessed with credit and ownership. All of this is being exploited to undo knowledge today. You will not achieve an informed public simply by making sure that high quality content is publicly available and presuming that credibility is enough while you wait for people to come find it. You have to understand the networked nature of the information war we’re in, actively be there when people are looking, and blanket the information ecosystem with the information people need to make informed decisions.

Thank you!

NSW VOTES: MAKE THIS THE CLIMATE ELECTION

Published by Anonymous (not verified) on Tue, 19/03/2019 - 1:39pm in

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This Saturday 23 March, it's time for NSW to choose: do we want to dig up our state, burn more coal and gas polluting our air, water, land and climate? Or do we want to power our state with clean energy, and protect forests and farmland, for a future with clean air, clean water and a safe climate? 
 
After eight years of Liberal-National government in NSW, they still have no real climate plan. On their watch, carbon pollution has increased, land clearing has increased, new coal mines are being planned.  We deserve better! 

We've put together scorecards rating the candidates for the electorates of Coffs Harbour and Oxley (the small ballot paper) on five key climate policy areas - see below. 

If you'd like advice on how to vote in the upper house (big ballot paper), check out this info from the Forest and Climate Alliance.
Picture The electorate of Coffs Harbour runs from Red Rock in the north, to Sawtell and Bonville in the south, and west to the Orara Valley.  It's been a safe National party seat, but now, with long-term MP Andrew Fraser resigning, we have an opportunity to vote in a new candidate who will work for climate action! Be sure to vote and vote wisely - your preferences will matter!  

Picture .The NSW electorate of Oxley, stretches from Repton, Bellingen, Dorrigo, to include all of Nambucca Shire, Kempsey Shire and down to the western Hastings valley. 

Coffs Coast Climate Action Group is not aligned with any political party; we do not endorse any candidates; we do tell anyone how to vote.  We seek to engage with everyone, across the political spectrum, to work towards stronger climate policies.

The above scorecards aim to give a general indication of candidates positions on key climate policy areas, based on their comments at our Climate Candidates Forum on 5 March 2019 (Coffs Harbour) and 11 March (Oxley), as well as other information provided by the candidates or their parties websites. 

Sun = good policies, ahead of the pack!
Peeky sun/cloud = some positive policies, but not strong enough
Thundercloud = boo! bad policies or no commitments.

If you'd like more info on candidates policies, we recommend contacting them yourself.  They need to hear from their community that climate action matters!

The Eighth Way to Think Like a 21st-Century Economist

Published by Anonymous (not verified) on Sat, 23/02/2019 - 2:16am in

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The teams at Rethinking Economics and Doughnut Economics have launched a contest for entries, asking “What’s the 8th Way to Think Like a 21st Century Economist?” It builds on Kate Raworth’s seven ways, here.

Here’s my entry:

8. Widespread prosperity both causes and is greater prosperity: From false tradeoffs to collective well-being.

“Okun’s Tradeoff” — the idea that inequality is necessary for economic prosperity and growth — is baked into 20th-century economic thinking. It probably carries some significant truth in a generally egalitarian economy. But in the 21st century, with wealth and income concentrations beyond even what we saw in the 1920s, with that era’s disastrous denouement, it just doesn’t hold water.

Today’s extreme concentrations cause us all, collectively — especially our children — to have less. (Excepting those few who are lucky enough to extract, hoard, and benefit from multigenerational dynastic wealth along the way.)

Broadly dispersed wealth and income offer up opportunity, prosperity, economic security, well-being, and a springboard for success to hundreds of millions, billions of people and families. And it uses less of our earth’s limited resources in distorted production markets delivering low-value, absurdly priced luxury goods and services demanded by those with astronomical wealth and income. With the same amount of wealth, broadly dispersed — and the increased spending that broader prosperity delivers (spending on higher-value goods) — we can enjoy a vastly better life for ourselves. And we can deliver likewise to those who come after us.

At least today, the equality-vs-growth tradeoff is wrong by 180 degrees. The choice is not a difficult one. In fact it’s not even a choice we have to make. Widespread prosperity both causes and is greater prosperity.

Related posts:

  1. Taxes: Equity versus Efficiency? Not so Much
  2. Want to Spread the Power? Spread the Wealth.
  3. Inequality is Necessary for Growth, Right?
  4. Bill Gates Agrees with Me on Piketty
  5. Are Low-Taxing States More Prosperous? No. QTC.

Safe Assets, Collateral, and Portfolio Preferences

Published by Anonymous (not verified) on Wed, 30/01/2019 - 4:30am in

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Matthew Klein and Mayank Seksaria had an interesting Twitter conversation yesterday in response to a Stephanie Kelton tweet. Read it here.

Here’s my understanding of the financial mechanisms they’re talking about.

Government deficit spending deposits fixed-price securities (“money,” checking and money-market holdings) ab nihilo onto private sector balance sheets. These are perfectly “safe assets” in the sense that you always know what they’re worth relative to the unit of account (The Dollar). A $1 checking-account balance is always worth one dollar — if the holding account contains less than the FDIC-insured maximum. But for big finance players with big cash balances, they’re not as safe as…

Treasury bills/bonds. And since Treasury is required to “sop up,” re-absorb, burn those newly-created cash balances by swapping them for bonds (“borrowing”): deficit spending + bond issuance, consolidated, effectively deposits new Treasuries, ab nihilo, onto private-sector balance sheets.

Now to the portfolio effects, which are driven by the market’s portfolio preferences (a broader and IMO more aptly descriptive term than “liquidity preferences”).

If deficit spending delivers cash onto private-sector balance sheets, the market is overweight cash. (Assuming portfolio preferences are unchanged.) It can’t get rid of cash because cash is (by its very definition) fixed-price. There’s a fixed stock, unaffected by capital gains and losses. (Yes, net bank lending changes this stock, but very slowly.)

So to adjust their portfolios, market players bid up variable-priced assets: mainly bonds, equities, and titles to real estate. Voila, cap gains: there are more total assets, and portfolio preferences are achieved.

But wait: deficit spending + bond issuance, consolidated, doesn’t make the market overweight cash. It’s overweight bonds. Portfolio balancing is more complicated here, because bonds have variable prices (though they’re less variable than equities).

The market could just sell bonds, driving down their prices and reducing total assets, to achieve its portfolio preference — less bonds, same amount of cash and equities. Or it could sell less bonds but also bid up equities to hit its portfolio prefs; the first reduces total assets, while the second increases that measure. (As they say, further research is needed.)

But none of this, in my opinion, has a whole lot to do with the value of “safe assets” as “collateral” (except when asset prices are diving and all correlations go to one). That seems peripheral and secondary to me, a hamster-wheel of financial shenanigans, sound and fury signifying…

Another takeaway from this: Government deficit spending & bond issuance delivers new assets (Treasuries) onto private-sector balance sheets. But no new liabilities. So it creates more net worth.

But the portfolio balancing that ensues generally also drives up equity (and real-estate) prices, yielding a deficit-spending multiplier effect on wealth by driving cap gains that wouldn’t happen otherwise. One dollar of deficit spending/bond issuance results in more than one dollar in new private-sector wealth, assets, net worth.

That’s how I see it…

Related posts:

  1. The Market Doesn’t Think the Fed Will Ever Sell Those Bonds Back
  2. Actually, Only Banks Print Money
  3. MMT and the Wealth of Nations, Revisited
  4. The Giant Logical Hole in Monetarist Thinking: So-Called “Spending”
  5. Why Unwinding QE Won’t Matter

Why the “Money Supply” Is Conceptually Incoherent

Published by Anonymous (not verified) on Sat, 29/12/2018 - 6:04am in

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Economists’/monetarists’ use of the term Money “Supply” reveals multiple levels of deep confusion.

1. Supply implies a flow. But they’re clearly referring to a “stock” of money: what’s tallied in monetary aggregates.

2. Even if you’re think of a stock of money: Supply is not a quantity, an amount, a numeric measure. It’s a psychological/behavioral concept — willingness to produce and sell — commonly depicted in a curve representing that willingness at different price points. (All economics is behavioral economics.)

But “supply” is necessary to validate the incoherent ideas of the “price of” and “demand for” money — a set of financial instruments like checking deposits whose price never changes (relative to the Unit of Account). That price can’t change — by definition, by construction, and by institutional fiat.

Likewise, the aggregate stock or so-called “supply” of fixed-price instruments, money, changes only very slowly via bank net new lending. (That change in lending is determined by myriad economic behaviors and effects.)

If so-called demand for money can’t change the (P)rice of money (it can’t), or the collective (Q)uantity of money outstanding (it can but not much and very slowly), what exactly are we talking about here in our imagined supply-and-demand diagram toy thought-experiment?

Related posts:

  1. Lending, Velocity, and Aggregate Demand
  2. Specifying “Demand”: Nick Rowe Meets Steve Keen on His Own Ground
  3. What’s “Scarce” These Days? Borrowers, Spenders, and (Hence) Profitable Investments
  4. Actually, Only Banks Print Money
  5. “Supply” and “Demand” for Financial Assets

Actually, Only Banks Print Money

Published by Anonymous (not verified) on Thu, 13/12/2018 - 5:34am in

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I’m thinking this headline will raise some eyebrows in the MMT community. But it’s not really so radical. It’s just using the word money very carefully, as defined here.

Starting with the big picture: 

You can compare the magnitude of these asset-creation mechanisms here. (Hint: cap gains rule.)

The key concept: “money” here just means a particular type of financial instrument, balance-sheet asset: one whose price is institutionally pegged to the unit of account (The Dollar, eg). The price of a dollar bill or a checking/money-market one-dollar balance is always…one dollar. This class of instruments is what’s tallied up in monetary aggregates.

A key tenet of MMT, loosely stated, is that government deficit spending creates money. And that’s true; it delivers assets ab nihilo onto private-sector balance sheets, and those new assets are checking deposits — “money” as defined here.

But. Government, the US Treasury, is constrained by an archaic rule: it has to “borrow” to cover any spending deficits. So Treasury issues bonds and swaps them for that newly-created checking-account money, reabsorbing and disappearing that money from private sector balance sheets.

If you consolidate Treasury’s deficit spending and bond issuance into one accounting event, Treasury is issuing new bonds onto private-sector balance sheets. It’s not printing “money,” not increasing the aggregate “money stock” of fixed-price instruments.

This was something of an Aha for me: If you look at the three mechanisms of asset-creation in the table above, only one increases the monetary aggregates that include demand deposits (M1, M2, M3, and MZM): bank (net new) lending.

Arguably there might be one more row added to the bottom of this table: so-called “money printing” by the Fed. But as with Treasury bond issuance, that doesn’t actually create new assets. The Fed just issues new “reserves” — bank money that banks exchange among themselves — and swaps them for bonds, just changing TheBanks’ portfolio mix. That leaves private-sector assets and net worth unchanged, and only increases one monetary aggregate measure: the “monetary base” (MB). 

I’ll leave it to my gentle readers to consider what economic effects that reserves-for-bonds swap might have. 

Related posts:

  1. Safe Assets, Collateral, and Portfolio Preferences
  2. The Market Doesn’t Think the Fed Will Ever Sell Those Bonds Back
  3. MMT and the Wealth of Nations, Revisited
  4. The Giant Logical Hole in Monetarist Thinking: So-Called “Spending”
  5. Currency is Equity, Equity is Currency

Fake News from the CBO? Some Very Dicey Numbers in the New Income Inequality Report

Published by Anonymous (not verified) on Thu, 22/11/2018 - 2:15am in

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It didn’t take long to realize that something was very wrong.

The Congressional Budget Office just released its new report on The Distribution of Household Income, updated to cover 1979–2015. One thing in particular looked very dicey right off (source xlsx):

Household Capital Gains (per household, average)
2007: $8,800
2008: $4,400
2009: $2,200

Wait a minute. Households didn’t incur capital losses in any of those years? Like…trillions of dollars in losses, as real-estate and equity prices dove for the zero lower bound? Red flag, something’s wrong here. (And yes: the CBO does include cap gains in this household “income” measure. Below.)

The report gives zero explanation anywhere I can find of how cap gains are measured/estimated/calculated. But for certain, the CBO’s measure is wildly lower, and wildly less volatile, than other (well-documented) measures:

These other two measures move much more closely together. The CBO measure is the huge outlier. And besides being unexplained, it’s just obviously wrong on its face. It’s missing 60–75% of recent decades’ household capital gains.

Since the top 20% of households own 85% of U.S. wealth, cap gains go overwhelmingly to them. So this cap-gains under-estimate makes invisible a huge part of their income (increases) over decades — whether you’re talking before taxes and transfers, or after. #GotInequality?

State and Local Taxes

Next up: smaller but still pretty huge: when calculating its “after-tax/after-transfer” household income numbers, the CBO ignores state and local taxes — $1.8T last year. If that measure incorporated those taxes, income would be about 15% lower over recent decades.

State and local taxes are regressive: lower-income households pay a higher tax rate (in some states, wildly higher). So with a complete measure you’d see lower after-tax incomes especially among those with…lower incomes.

The CBO measure does of course include federal taxes (which are progressive, especially in lower tiers), and it does include transfers from the states. It seems very odd to exclude taxes paid to the states.

 

 

Related posts:

  1. Taxes: Equity versus Efficiency? Not so Much
  2. Warren Buffett: Estate Tax Good
  3. Are Progressive States More or Less Prosperous? Not Really
  4. Are Low-Taxing States More Prosperous? No. QTC.
  5. Another Comprehensive Approach: The Fair Share Tax Reform Proposal

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