Japan Is Writing Off Nearly Half Its National Debt—Without Creating Inflation. We Could, Too.

Truthdig has the article Japan Is Writing Off Nearly Half Its National Debt—Without Creating Inflation. We Could, Too.

But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply.

I sure hope that the BOJ asks itself why Quantitative easing does not inflate the circulating money supply under the current circumstances. Whenever you see an economic pronouncement about what any particular policy causes, you must automatically add the implied qualification “under the current circumstances.” Then you must look into and understand the current circumstances that make this true. That will allow you to monitor those circumstances so that you can tell when those circumstances change.

The answer is not fully explained in the article.

In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

My understanding is that reserve accounts can be used to meet government regulations so that banks can increase their lending into the consumer market. The reason why banks are not doing that now is that there is no huge increase in demand for consumer lending.

When there is increasing consumer demand for loans, then they will come into the market. Currency in circulation will increase. The government better have a plan on what to do if the money in circulation increases to such a point that inflation exceeds the government’s target. Such a plan could include tax increases and it could include reductions in government spending.

It would be ruinous to public confidence in government, for the government to appear helpless in the face of increasing inflation. It would be catastrophic if government took actions that made the inflation worse.


Bernie Sanders: Why We Need Medicare for All

The New York Times has the opinion piece Bernie Sanders: Why We Need Medicare for All.

On Wednesday I will introduce the Medicare for All Act in the Senate with 15 co-sponsors and support from dozens of grass-roots organizations. Under this legislation, every family in America would receive comprehensive coverage, and middle-class families would save thousands of dollars a year by eliminating their private insurance costs as we move to a publicly funded program.

The Huffington Post has the article Medicare For All: The Next Step In The New Deal.

Roosevelt and his fellow architects of Social Security thought universal, government-sponsored health insurance was right around the corner.

In other words, universal healthcare was part of Roosevelt’s vision when he started Social Security.

Why have the Clintons spent their careers trying to undo The New Deal? Why do voters ignore this obvious record of the Clintons when they judge their “contributions” to the progress of our country and the world?


Bill Black: Is Politico or Third Way More Divorced from Reality?

Naked Capitalism republished the article Bill Black: Is Politico or Third Way More Divorced from Reality?.

President Obama did not simply fail to prosecute the Wall Street CEOs who led the largest frauds. His Justice Department failed to prosecute even the not-so-elite mortgage banker CEOs and SVPs who led the making of millions of fraudulent mortgage loans. Even worse, to the extent Obama and his DOJ officials said anything about elite bank fraud they virtually always spoke to downplay it and to express their fear that prosecuting fraudulent bankers could harm the world. Obama’s unprincipled failure to restore the rule of law to Wall Street was terrible policy and terrible politics.
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George Akerlof received the Nobel Prize in Economics in large part for his 1970 article on markets for “lemons” that introduced and named this perverse dynamic to economists.

[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.

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That suggests that Hillary Clinton and the DNC have done a poor job of supporting each program and explaining how valuable each is in creating jobs.

Much of the focus of the article is how the Democrats’ non-prosecution of white collar crime has only fostered the feelings of racism and xenophobia in much of the voting public, The last sentence I quoted above shows how Hillary Clinton could have changed the political environment, but she actually encouraged it to be what she decried.

The article also focuses on how much of our economic and political problems derive from actual executive criminal behavior that the political elites allow to happen. Not only does it ruin the economy, but it gives the average voter the wrong impression of who is damaging the country. None of this is by accident from our political elites.


Hillary Clinton’s book has a clear message: don’t blame me

The Guardian has the article Hillary Clinton’s book has a clear message: don’t blame me.

No real blame ever settles anywhere near Clinton’s person. And while she wrestles gamely with the larger historical question of why the party of the people has withered as inequality grows, she never offers a satisfying answer. Instead, most of the blame is directed outward, at familiar suspects like James Comey, the Russians and the media.
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he seems to have been almost totally unprepared for the outburst of populist anger that characterized 2016, an outburst that came under half a dozen different guises: trade, outsourcing, immigration, opiates, deindustrialization, and the recent spectacle of Wall Street criminals getting bailed out. It wasn’t the issues that mattered so much as the outrage, and Donald Trump put himself in front of it. Clinton couldn’t.
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But by and large, Clinton’s efforts to understand populism always get short-circuited, probably because taking it seriously might lead one to conclude that working people have a legitimate beef with her and the Democratic party.

The trouble with Hillary is that she can only trust to experts to tell her what is wrong and how to fix it. She has no personal sense of either of these topics. If you pick the wrong experts, you get the wrong answers. Only a correct, innate sense of the situation can inform you of which experts to listen to and which experts to shun.

“I feel your pain, but there is not much we can do in the current political environment.” is not an inspiring message. If you haven’t got an inspiring message, you shouldn’t run for President.


Clinton Democrats Hate the Left – RAI with Thomas Frank (4/6)   Recently updated !

The Real News Network has the episode Clinton Democrats Hate the Left – RAI with Thomas Frank (4/6).

Paul Jay: The unions had more clout. There was a mass movement. Frankly, whatever the Soviet Union actually was, there actually was an alternative system, at least in people’s minds. There’s a lot of things going on in the world that made this dynamic between the professional class, the elites, and the system different back then as now. But it is what it is now, which is a Clinton-esque party now.

I picked this quote because that is exactly what I thought about the balancing force that the Soviet Union provided. It forced the capitalist system to put on a human face. Without that balancing force capitalism was able to deteriorate to its current situation. I don’t believe that any one “ism” is able to provide everything that a society needs. There has to be a balance of forces to get the best for a society.


When the socialistic tendencies take the ascendancy as they probably will some day, if I am still around, I will be arguing for more capitalism to balance the system. Right now, I am on the side of needing more socialism to balance raw capitalism (well at least the perverted version of capitalism we have right now.)


Should Philly screw over its schoolkids to make world’s 2nd richest man even richer?

The Philadelphia Inquirer has the article Should Philly screw over its schoolkids to make world’s 2nd richest man even richer?

Having said all that, I’m not against Philadelphia wooing Amazon — but on our terms. Go for the one thing that might still appeal to a gazillionaire like Bezos who has everything: His legacy and his desire to be a remembered as a great American. Philadelphia offers Amazon many of the things it wants in a headquarters but also a unique opportunity to use the tech company’s wealth and remarkable know-how for a philanthropic crusade to re-invent the city where America was founded. That would mean a partnership between the city and Amazon toward actually making the schools better — through both money and donated expertise — rather than sucking them dry, and working together on real affordable-housing solutions.

Such races to the bottom to compete for companies to locate should be legislated out of existence. It can only be done at the national level. The Constitution only allows the Federal Government to regulate interstate commerce. I wonder if the Supreme Court could be convinced that the competition among states and localities for national businesses is an attempt to illegally regulate interstate commerce.


Liberal Elite Doesn’t Care Much About Inequality

The Real News Network has the video Liberal Elite Doesn’t Care Much About Inequality – RAI with Thomas Frank. RAI is the acronym for Reality Asserts Itself – a style of interview that The Real News Network often does with prominent people.

Bill Clinton accomplished a Republican agenda and Obama allowed the Tea Party to steal the economic populist moment, says Thomas Frank on Reality Asserts Itself with Paul Jay; Frank is the author of “What’s the Matter with Kansas” and “Listen, Liberal”

I learned my economics before Milton Friedman took over that world, so I was inoculated from much of the crap that the Clintons did.


Trump is making Americans see the U.S. the way the rest of the world already did

The Washington Post has the article Trump is making Americans see the U.S. the way the rest of the world already did.

Trump has looked out of place as a world leader because he is a television personality, not a politician. He is also the crudest manifestation of some very American traits: recklessness, nationalism, contempt for history, an inability (if not utter disinclination) to inhabit a foreigner’s experience. Never before has it been so clear that Americans’ identities — their confidence and happiness — are tied to the supposedly exalted status of their nation, and of the man or woman who leads it. Trump may contradict everything many of us believe about ourselves, but the first question we might ask is whether what we believe is true.

I was trying to figure out why I am not surprised by anything that is in this article. The article talked about how our educational system has changed since 1990.

This may be particularly true of those Americans who came of age in the 1990s as the United States triumphed over the Soviets, its status as a benevolent superpower somehow confirmed. The ugliness of the Cold War was largely forgotten.

Since I grew up during the cold war, and was educated way before 1990, this explains some of the reasons I was aware of some of the history in the article (but not all of it). The other thing I can attribute my awareness to is a college roommate that I had in 1961. He used to tell me about our country’s foreign interference. It was most annoying to hear what he had to say because it contradicted what I thought knew. However, his source of knowledge was hard to argue against, although argue I did.

By 1969, I was aware enough to want to see the movie Z  about what was happening in Greece.

Following the murder of a prominent leftist, an investigator tries to uncover the truth while government officials attempt to cover up their roles.