Religious right puts GOP at odds with public opinion   Recently updated !

The Rachel Maddow show has the video Religious right puts GOP at odds with public opinion.

Rachel Maddow shows how conservative politics can often put Republican politicians at odds with public opinion while trying to satisfy the religious right. Tom Lobianco of the Indianapolis Star Tribune joins to discuss Indiana’s new discrimination law.

Rachel Maddow sure can go on and on without ever seemingly getting to the point. As much of this as you can bear to watch, she does make a point. I don’t want to spoil her punchline by commenting further in the open.

Warning: This discloses Rachel Maddow's punchline

Senator Elizabeth Warren pushes Democrats to compete on issues   Recently updated !

The Rachel Maddow show had a great interview with Elizabeth Warren, Senator Elizabeth Warren pushes Democrats to compete on issues.

Senator Elizabeth Warren talks with Rachel Maddow about the differences between Democrats and Republicans on popular issues like student loans and the minimum wage, and why she thinks emphasizing those distinctions is key to Democratic political success.

Besides what is summarized above by MSNBC, Warren also made important comments about the powers of a Senator besides just creating legislation. She also described what she says Democrats can do to demonstrate their faith in the democratic process.


When Will the White House and OMB Ever Learn About Sector Financial Balances?   Recently updated !

New Economic Perspectives has the article When Will the White House and OMB Ever Learn About Sector Financial Balances? by Joe Firestone.

The Sector Financial Balances (SFB) model is an accounting identity, and these are always true by definition alone. The SFB model says:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0.
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However, the “accidental deficits” produced will not be big enough, nor targeted well enough to prevent continuing stagnation. In my next post, I’ll look at the Congressional (CPC) budget and see if the CPC has yet learned the lesson that projections that don’t take sectoral financial balances into account project private sector results that are far from consistent with what is necessary for a robust and just economy.

For those of you who don’t cotton to equations, I have prepared a picture for a blog post I will be publishing one of these days. [For a deeper discussion with even more pictures, see my previous post Diagrams and Dollars: Modern Money Illustrated (Part 1 & 2)]

Three Pots

Each  arrow in the above picture represents a flow from one pot to another. A flow into a pot is positive for that pot, and a flow out of a pot is negative for that pot.  If all four arrows at the mouth of any pot sum to a negative number, then you have a deficit for that pot. If greater than zero,  the pot has a surplus.  What is a deficit for a pair of arrows at one end of the pair is a surplus at the other end of that pair.

What Joe Firestone called an “accounting identity”, I explained in the following words:

There is no other flow of money. None rains in from the sky. None falls on the floor.

What the zero on the right hand side of Joe’s equation, (Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0), is the equivalent of what I said above.  The zero accounts for all the other flows.  There aren’t any.

If you can think of a flow of money that is not in one of these sectors, please do enlighten us.  I’d be willing to bet that whatever you come up with is actually in one of the above mentioned sectors (pots).

Oh, and the point is what?  The Republican budgets, the White House OMB budgets, and even Democratic budgets are based on the premise that the equation is not true, or the fact that these three pots are not the only ones.  If you cannot believe what is obvious to me and to Joe Firestone, and the whole world of Modern Money Theorists, then I challenge you to come up with some other explanation.


Interview With L. Randall Wray on Modern Money Theory   Recently updated !

New Economic Perspectives has the article Entrevista a Randall Wray.

The full interview with NEP’s Randy Wray by EKO de Público TV in Spain. This is the complete interview. Questions from the interviewer are in spanish. Randy’s responses are subtitled in spanish.

If you don’t understand Spanish, you won’t understand the questions, but the answers are very understandable. Even if you know Modern Money Theory as much as I do (and that is not saying how much I do), you can learn a lot more from hearing this interview.

I have to imagine that the interviewer is asking very intelligent questions based on the responses the questions elicit. I cannot imagine any interviewer in the USA being able to ask these sorts of questions, let alone actually asking them.

It does help to know that the current account balance means the foreign trade balance. This is the amount a country earns from foreign trade minus how much it spends in foreign trade. In this country we talk about our trade deficit, because our current account balance is negative. Being negative means that we earn less from foreign countries than we spend with them. (We buy more from them than they buy from us.)


Monsanto Lobbyist Says You Can Drink “A Whole Quart” of Roundup but Does This When Offered Some!   Recently updated !

Nation of Change has the article Monsanto Lobbyist Says You Can Drink “A Whole Quart” of Roundup but Does This When Offered Some!

The video they show is on YouTube.

French television station Canal+ recently sat down with Dr. Patrick Moore for an upcoming documentary. Dr Moore, who claims to be an ecological expert and is currently the frontman for Ecosense Environmental, stated to the interviewer that Monsanto’s weed killer Roundup was not responsible for skyrocketing cancer rates in Argentina.

Note that I have put this post in the category of Greenberg’s Law of Idle Threats.

Greenberg’s Law of Idle Threats

Never make a threat you don’t intend to carry out. If you have any doubts about your ability to carry out the threat, do not make it.

Corollary:

If you never test the opposition about whether they make idle threats, then you enable them to ignore this law.


The Fifth Reading of Exodus

According to the WikiPedia article Bo (parsha).

This article is about Judaism’s weekly Torah portion on the parashah of “Bo”
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Fifth reading — Exodus 12:21–28

In the short fifth reading (עליה, aliyah), Moses instructed the elders of Israel to kill their Passover lambs, paint their doorways with the lamb’s blood, and remain inside their houses until the morning. For God would smite the Egyptians, but when God saw the blood on the lintel, God would pass over the house and not allow “the Destroyer” to come into that house. The Israelites were to observe the Passover service for all time, and when their children would ask what the service means, they were to say that it commemorated the time when God passed over the Israelites’ houses when God smote the Egyptians. ‘ And the people bowed the head and worshipped. And the Israelites did as God commanded Moses and Aaron. The fifth reading (עליה, aliyah) and a closed portion (סתומה, setumah) end here.

As a reader of modern history and current events, I got to thinking of how one might interpret this passage. I leave it up to you to do your own thinking on this subject.


A Conversation with President Obama and The Wire Creator David Simon   Recently updated !

The Whitehouse has posted the video A Conversation with President Obama and The Wire Creator David Simon on YouTube.

President Barack Obama and David Simon, the creator of HBO’s The Wire, sat down to talk honestly about the challenges law enforcement face and the consequences communities bear from the war on drugs.

Thanks to Earl Faneuf for posting this on Facebook. I liked the video when I saw it, but didn’t see the need to post it on my blog until just now.

One of the comments on YouTube does a good job of explaining why I finally realized it was worth posting on my blog.

Scott Jackson

Great conversation. I like the connections made between economics, humanity, law enforcement, sentencing, recidivism, justice, policy, education, and employment. This is a wide-ranging discussion in such a short time.

Sharon and I were having such a conversation when I decided to show her this video that Earl had posted.

When I watch President Obama in videos like this, I wonder how he can be so wise on many things, but so off track on some others. A few off track areas are his promoting the awful TPP “trade” agreement, failure to prosecute the criminals on Wall Street, and his failure to understand that the value of reducing the deficit is pure myth.


Want to better understand why we have a federal deficit?   Recently updated !

Friends of Bernie Sanders has posted on Facebook Want to better understand why we have a federal deficit?.

Here is the image they use.

Want to better understand why we have a federal deficit?

Here is my too complex comment:

Please shift the measurement to something important like the unemployment rate, the labor participation rate, and the level of inflation. Adjust the secondary things like deficits and level of taxation to produce good results in the primary things, and we will all be better off.

While these statistics are true and part of the cause of the size of the deficit, it is of course more complicated than this. We may simplify at our peril.

For any situation involving something as complex as the economy, we might be able to determine a proper size for the deficit. We might also be able to determine a proper role of corporate income tax. With a higher level of corporate taxes coming in, we might or might not have a lower deficit as the proper amount for the state of the economy. A lot depends on what companies are doing with the money they are not paying in taxes and a lot depends on what the deficit is being spent on.

When you sell the idea that the deficit is the primary measure of anything significant about the economy instead of how the economy is performing for all the people, then you are likely to be selling a one size fits all solution that probably does not fit all situations.


Wall Street isn’t happy with you, Steven 1   Recently updated !

I got an email from Elizabeth Warren.  What she describes here seems to me to be a clear case of bribery.  It is an offer of payment for a quid pro quo.  I think even the Supreme Court still recognizes this as bribery.  Where is our Department of Justice?

Subject: Wall Street isn’t happy with you, Steven
Date: Fri, 27 Mar 2015 18:01:23 +0000
From: Elizabeth Warren <info@elizabethwarren.com>
To: Steven Greenberg

Elizabeth Warren for Massachusetts

Steven,

In 2008, the financial sector collapsed and nearly brought down our whole economy. What were the ingredients behind that crash? Recklessness on Wall Street and a willingness in Washington to play along with whatever the big banks wanted.

Years have passed since the crisis and the bailout, but the big banks still swagger around town. And when Citigroup and the others don’t quite get their way or Washington doesn’t feel quite cozy enough, they quickly move to loud, public threats. Their latest move is a stunner. According to Reuters:

Big Wall Street banks are so upset with U.S. Democratic Senator Elizabeth Warren’s call for them to be broken up that some have discussed withholding campaign donations to Senate Democrats in symbolic protest, sources familiar with the discussions said.

Citigroup has decided to withhold donations for now to the Democratic Senatorial Campaign Committee over concerns that Senate Democrats could give Warren and lawmakers who share her views more power, sources inside the bank told Reuters.

JPMorgan representatives have met Democratic Party officials to emphasize the connection between its annual contribution and the need for a friendlier attitude toward the banks, a source familiar with JPMorgan’s donations said.

That’s right, the biggest banks on Wall Street have made it clear that they expect a return on their investment in Washington. Forget making the markets safer (where they can still make plenty of money) and forget the $700 billion taxpayer bailout that saved them and forget the need to build a strong economy for all Americans. Forget it all. The big banks want a Washington that works only for them and that puts their interests first – and they would like to get a little public fanny-kissing for their money too.

Well forget it. They can threaten or bully or say whatever they want, but we aren’t going to change our game plan. We do, however, need to respond.

According to this breaking news, our 2016 Democratic Senate candidates could lose at least $30,000 because of this decision. Can you help us raise $30,000 to match Wall Street’s money right now – and keep fighting for a Democratic Senate that will work for people instead of big banks?

Now let’s be clear: $30,000 is a drop in the bucket to JPMorgan and Citigroup. Heck, JPMorgan CEO Jamie Dimon makes more than $30,000 in just a few hours.

The big banks have thrown around money for years, spending more than a $1 million a day to hold off Dodd-Frank and the consumer agency. But they are moving out of the shadows. They have reached a new level of brazenness, demanding that Senate Democrats grovel before them.

That kind of swagger is a warning shot. They want a showy way to tell Democrats across the country to be scared of speaking out, to be timid about standing up, and to stay away from fighting for what’s right.

Ok, they have taken their shot, but it will not work.

I’m not going to stop talking about the unprecedented grasp that Citigroup has on our government’s economic policymaking apparatus. I’m not going to stop talking about the settlement agreements that JPMorgan makes with our Justice Department that are so weak, the bank celebrates by giving their executives a raise. And I’m not going to pretend the work of financial reform is done, when the so-called “too big to fail” banks are even bigger now than they were in 2008.

The big banks have issued a threat, and it’s up to us to fight back. It’s up to us to fight back against a financial system that allows those who broke our economy to emerge from a crisis in record-setting shape while ordinary Americans continue to struggle. It’s up to us to fight back against a regulatory system that is so besieged by lobbyists – and their friends in Congress - that our regulators forget who they’re working for.

Let’s send the biggest banks on Wall Street our own message: We’re going to keep fighting, and your swagger and your threats won’t stop us. Help us match their $30,000 right now.

Thank you for being a part of this,

Elizabeth

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The New York Times Covers the TPP: A Commentary   Recently updated !

New Economic Perspectives has the article The New York Times Covers the TPP: A Commentary by Joe Firestone.

Wikileaks did us all another service yesterday by releasing the “Trans-Pacific Partnership Agreement (TPP): Investment Chapter Consolidated Text,” and collaborating with the New York Times to get the word out. Jonathan Weisman wrote the story for the New York Times. Apart from providing a very high level and very selective summary of what the chapter says, the article contains talking points used by proponents and opponents of the TPP. I think a close commentary on the article and associated issues would be useful.

My recent post ISDS is a bad deal for America – Part ot TPP “Trade” deal about what Elizabeth Warren said about this. If this wasn’t enough to scare the daylights out of you, then this article in New Economic Perspectives ought to do the trick.

I see a similarity in how this is being justified and fears about it allayed, to what happened in the recent real estate/mortgage/financial derivatives melt down.  I commented on this similarity at New Economic Perspectives.

This is similar to the justification for selling derivative packages of mortgages as being safe.  The proponents did a study of the entire history of mortgages that were created by the normal rules of prudence by banks in the past.  They determined that the rate of default would have to be so far outside of normal, that the likelihood of the derivatives’ failure would be extremely small.  Then as banks started selling these derivatives based on the principles of prudent mortgage origination, the whole reason banks used principles of prudence went out the window.  What was being sold were packages of mortgages based on no history at all for that type of mortgage.  Any ratings on these securities that depended on completely unrelated history was as phoney as a $3 bill.

I hope I have been able to convey to you the similarity and the danger it poses.  It is clear in my mind that the same results will ensue (economic devastation), but I can never tell if others see the inevitability of the same results.