Monthly Archives: September 2017


CERN scientists simplify space-time in 3 short videos

TedEd has the article with videos CERN scientists simplify space-time in 3 short videos.

Space is where things happen. Time is when things happen. And sometimes, in order to really look at the universe, you need to take those two concepts and mash them together. Space-time is a pretty confounding subject to wrap one’s head around, though, so we asked CERN scientists (and all-around super nerds) Andrew Pontzen and Tom Whyntie to break it down for us. Below, the full three-part series, complete with black holes, space-time diagrams and a load of wibbly-wobbly timey-wimey stuff.

You’ll have to click on the link to the article above to see the videos that they mention as being below.

Do these videos clear things up, or does it boggle your mind even more? Depending how you answer this question says something about you, but I don’t know what.


Hy Minsky, Low Finance: Modern Money, Civil Rights, and Consumer Debt

New Economic Perspectives has the article Hy Minsky, Low Finance: Modern Money, Civil Rights, and Consumer Debt. It is hard to know what you are going to get from this article by just looking at the title. I’ll start by quoting a conclusion stated in the article.

We have an economy that eats people’s fundamental rights for breakfast.

Now, I will back up to a couple of paragraphs that I think supply some of the justification for this conclusion. MMTers are proponents of Modern Money Theory which just explains how our monetary system works.

Consumer finance, in general, is becoming increasingly complex and moving faster and faster, meaning it’s becoming harder for people to see the forest through the trees. Today, in the current environment of federal deregulation, the American Bankers Association is trying to get banks back into balloon-payment payday loan. Subprime mortgages are coming back, auto finance is a total racket, healthcare woes will churn medical debt until we fix that system, and student debt is just going to get more abusive under Betsy. Additionally, there’s a debt crisis for living expenses in many major cities. I’ve encountered mattress debt, sewing machine debt, and puppy dog debt. Then, on top of all this, and this is for other folks on the panels, people are taking out loans so they can pay their debts to courts, municipalities, prisons, and other entities other folks on the panel will talk about.
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So what do we about all this? MMTers already have the answer: we spend money for public purpose on things that actually make people’s lives better as whole people. We can’t just throw money at people. (I mean this in the context of lending, obviously, but if you’ll indulge me a minute, I’m also talking about some approaches to Basic Income here. If you’re just receiving a check, but you don’t have any increased, structural power over other aspects of your life, the money is just going to go down the drain. Forget income, people are in debt up to their eyeballs, and they’re being plundered. The way things are going now, if we get UBI without transforming the underlying structure of the economy, people are going to get their UBI money on prepaid Chase debit cards loaded with fees, their financial data is still going to surveilled by anyone who can check a consumer reporting system, and they’re going to lose their checks on the back-end to abusive, fraudulent debt collectors.)


Yet Another Major Russia Story Falls Apart. Is Skepticism Permissible Yet?

The Intercept has the article Yet Another Major Russia Story Falls Apart. Is Skepticism Permissible Yet? by Glen Greenwald.

Last Friday, most major media outlets touted a major story about Russian attempts to hack into U.S. voting systems, based exclusively on claims made by the Department of Homeland Security.

I just scanned the article on The Intercept. Would The Department of Homeland Security consider tha as an attack. How are we supposed to use the internet without scanning files and web sites?

Does the Department of Homeland Security have the slightest understanding of how the internet works? They probably think it is a bunch of vacuum tubes that suck information out of computers. I don’t know what they think happens to computers that are subjected to such vacuuming.

Here is a line printed at the bottom of this blog page.

This page has been read 5,074,590 times from 164,666 internet addresses.

I wrote the software that tracks the information and prints out that line. Does The Departmenf of Homeland Security think they have to tell me which IP addresses are scanning my blog?

Here is a summary report from some security software that watches over my web site. This is just a list of the top IP addresses that did suspicious enough activities to be blocked by the security software. Notice, that it can figure out in what countries the IP addresses are located.


Paying for public services, in a monetary sovereign state

EraBlog.com has the article Paying for public services, in a monetary sovereign state.

Every time our national Government spends, it creates some of its money for the purpose. I know commercial banks create a great deal of deposits for themselves, and a great deal of what is normally defined to be ‘the money supply’ by lending to their customers, but they can only do this because they have access to Government money, in the form of their reserves at the RBA. There are two ways for this money to be created. One is the Government spending this money (permanently) into existence, and the other is the RBA lending this money (temporarily) into existence.

This is a very good explanation which should be easy to accept if you don’t think really deeply about this.

Having thought a little more deeply about MMT (Modern Money Theory), I have some minor quibbles with some of the wording. The post does eventually get to mention that the Fed buys a lot of bonds. This explanation mitigates some of my quibbles about previous statements.

One of the things I have come to quibble with about MMT explanations is that MMT uses accounting balances in sectors to come to certain conclusions that are overstated. What is overblown is To say that fractional reserve banking in the private sector does not produce high powered money because for every dollar given out as a loan the books also carry a counterbalancing accounting entry of the borrowers promise to repay the loan. In a static accounting sense this balance is certainly true. However, the static accounting balance does seem to blind MMT to the dynamic impact of giving out spending money immediately and the counter balancing transaction is to repay that money later, sometimes much later.

That lent money has tremendous economic impact in the time between the giving out of the money and when it has to be paid back. The article’s statement that government bonds that pay interest are the equivalent of deposits at the Fed is one of those instance where the article ignores the time shift factor. To get cash for a bond that has not matured, the owner has to get someone to buy that bond back. If the Fed buys it, then the bond was no more than similar to a reserve account at the Fed. If someone in the private sector has to put up the money to buy the bond, then it has a different economic impact (the amount of money available to be spent in the private sector) than if the Fed buys it.


Robert Reich destroys Right Wing economist attempt to sell GOP tax cuts (VIDEO)

Egberto Willies has the post Robert Reich destroys Right Wing economist attempt to sell GOP tax cuts (VIDEO).

“You are wrong about one thing that’s very very fundamental,” Reich said. “It is the middle-income and poor people who actually through their spending create jobs. Businesses are not going to invest in new jobs unless there are people who are purchasing. That’s one of the problems we’ve had over the last 25 years. This recovery has been as sluggish as it was because the middle class and the poor don’t have the money.”

As I like to say, “What part of not enough freakin’ customers do you not understand?”


America denies Puerto Rico request for waiver to bring vital fuel and supplies to island

The Independent has the story America denies Puerto Rico request for waiver to bring vital fuel and supplies to island.

The Trump administration on Tuesday denied a request to waive shipping restrictions to help get fuel and supplies to storm-ravaged Puerto Rico, saying it would do nothing to address the island’s main impediment to shipping, damaged ports.

Naomi Klein has written a book to describe the type of thing Trump is doing. The book is titles The Shock Doctrine: The Rise of Disaster Capitalism.

I have written a number of posts about this book as far back as 2008 – The Shock Doctrine in 2010, The Shock Doctrine in 2008, Trump’s Shock Doctrine in 2017, Harvey Didn’t Come Out of the Blue. Now is the Time to Talk About Climate Change in 2017. You can search this site for Naomi Klein to find more posts.


Bernie Sanders Reacts & CRUSHES Trump’s New Tax Reform plans

YouTube has the video Bernie Sanders Reacts & CRUSHES Trump’s New Tax Reform plans 9/27/2017.


Bernie has an excellent message here.

Personally, I posit that tax cuts for the wealthy actually harm the economy. The tax cuts do not create more jobs for American workers, they actually cut jobs for American workers. American workers with money to spend is the foundation of consumer demand that drives the need to hire people to fulfill that demand. If we shift even more money from the workers to the ultra-rich, there will be even less consumer demand, and less need for workers to produce goods and services.

In another Sanders sponsored video, there is the empirical evidence that Corporate Tax Cuts Don’t Create Jobs. His video doesn’t try to give an explanation as to why this is. My explanation above is nothing more than Keynesian economics.


IT’S HERE: All the details of Trump’s massive tax plan

Business Insider has the article IT’S HERE: All the details of Trump’s massive tax plan. Here is an excerpt from the article with a few liberties taken by me to adjust the content to be more truthful.

“Too many in our country are shut out of the dynamism of the US economy, which has led to the justifiable feeling that the system is rigged against hardworking Americans,” the nine-page plan reads. “With significant and meaningful tax changes, we will create a system that accentuates the rigging. If you think the rich have been draining money out of the economy before, just wait to see what they will be able to get away with after we make things worse.”

The rich already take too much money out of the economy. They rake in the money, but as John Maynard Keynes explains, there are no real assets worth investing in due to lack of consumer wealth to demand more product. Instead, the wealthy put money into things like elevating stock prices which companies use to buy other companies or sock it away for future use. They buy other companies to eliminate competition. They strip the assets from these companies, and then shut them down. This does not create jobs.

We need to keep this money out of the hands of the idle rich, or take it back from them in taxes, and put the money to use in the economy by investing in our future and putting the money in the hands of people who would spend it to restore consumer demand.


Tax Cuts to Increase the Malaise in the Economy

Senator Bernie Sanders has posted his thoughts on the tax cut proposal.

At a time of massive wealth and income inequality, President Trump’s tax plan is morally repugnant and bad economic policy.


His post refers to the NBC story GOP Plan Cuts Corporate, Individual Taxes and Repeals the Estate Tax.

Normally, raising taxes is not thought of as a way to stimulate the economy. However, in the current circumstances, taxing away some of the money from the rich who do not use that money to stimulate the economy, and putting it to better use in stimulating the economy would actually be a net benefit to reviving the economy. I am not saying this is the only way, or necessarily the best way, but the argument is a good counter-weight to Trump’s belief that tax cuts will stimulate the economy. Tax-cuts under the current circumstances will only put the economy into a deeper sleep.


Jared Bernstein Shows the Costs of Not Understanding Sovereign Currencies

Naked Capitalism has the article Jared Bernstein Shows the Costs of Not Understanding Sovereign Currencies.

The Republican and New Democrat deficit strategy is to force Democrats to make an endless series of “Sophie’s choices.” Choose which excellent program to kill in order to save (temporarily) another from the chopping block because we supposedly cannot afford to provide both. Then repeat the process. The Republicans and New Democrats constantly, and falsely, claim that the federal government cannot afford to provide medical care availability that is routinely provided in most of Europe and Canada. It is a pure myth that the United States cannot afford to provide the safety net of Social Security, Medicare, and Medicaid.

I certainly believe the MMT (Modern Money Theory) explanation of how the monetary system works, but I have come to realize that there are a couple of important factors that MMT proponents ignore. My issues do not invalidate the gist of the above article, but I feel it necessary to get the MMT experts to address my issues. Doing so can only increase the credibility of MMT.

One factor is the belief that the money created in the private sector by lending is somehow always a less important economic force than money created by the sovereign power. The accounting balance of assets and liabilities (money lent and obligation to repay) is a static balancing. The economy is dynamic, however. Money lent can be spent immediately. The obligation to repay is in the future. In the time span between when the money is lent and when it must be repaid, there is a lot of economic activity going on. The effects of this cannot be ignored.

The other factor is mark-to-market valuation of assets. I’ll defer discussion of that to a later comment.

There is plenty of evidence in economic history, both recent and not so recent, to demonstrate the importance of the two factors mentioned above.

I would love to see a discussion of both factors by the MMT theorists.

Keynesian explanations of why monetary policy is not the only factor driving the economy still apply after all these years. After all, these too are just explanations of how things work whether you choose to act on that knowledge or not.