The Daily Kos has the article Here’s an ad about R–skins that its makers don’t have the money to show during Sunday’s Superbowl where I first saw this ad.

I thought that this ad really explains why the use of the term by a sports team in no way honors Native Americans. The owner of the team claims he is honoring Native Americans by using the term in the name of his football team. If a people does not use the term themselves, then you are not honoring them by using it. The people you are “honoring” are the only ones that get to decide if you are “honoring” them. If they say you aren’t, then you aren’t.

The Real News Network as the second part of the interview Finance is Super Rational about Profits, Irrational about Global Economy – Flassbeck (2/3).  I commented on the first part of the interview in my previous post Krugman is Wrong About the Market and Hot Money – Flassbeck (1/3).

Honestly, I had not seen this part before I made my comments on the last part.  This part starts off answering the question I posed and in almost exactly the way I surmised it would.

JAY: So I’m going to just pick up where we left off in part one. If you haven’t watched part one, I suggest you do so.

So, Heiner, you have proposed a model which I think we should get into about what a more rational exchange rate global system of currency exchange would look like. So talk a bit about it. But I’m going to very quickly kind of get to the question–there is a sort of rationality to what’s going on. In other words, if you’re sitting on great big pools of money and you’re making killings off all this volatility, I mean, you are being rational in a sense, aren’t you?

FLASSBECK: Absolutely. From a microeconomic point of view, these people are rational. They are super rational. And they’re making a lot of money, as I said. So that’s absolutely clear.

But we have to ask the question whether it’s rational from a macroeconomic point of view, from a global point of view, and there it’s definitely not, because what happens is–and I said it in the first part–what we have is money carried from low interest rate countries to high interest rate countries. But that implies at the same time, because interest rates are low, because the inflation rate is low in Switzerland and Japan and the euro area, in the United States, that implies that money is carried from low-inflation countries to high-inflation countries. Turkey, the inflation rate is not super high, but it’s 7 percent. In Argentina we all know it’s much higher. In Brazil it’s a bit higher.

And this means, this implies absolutely clearly and obviously that the currency, as long as the hot money flows into the high-inflation country, the currency of the high-inflation country is appreciated. This is exactly the opposite of what we expect from a functioning market.

I am hoping the third part will have more details on the proposed solution.

The Real News Network has a 3 part series that begins with the interview titled  Krugman is Wrong About the Market and Hot Money – Flassbeck (1/3) .

For most of the interview it is hard to see what was wrong with the quotes of Krugman cited in the beginning.  As they kept talking, I kept thinking, “Isn’t this what Krugman said?”  Toward the end, you finally get to hear the complaint about Krugman.

FLASSBECK: Yeah, that’s one thing, that’s one factor that’s very important. But, as I said before, it’s not only the U.S. We have zero interest rates in Japan. When the U.S. still had higher interest rate, the hedge funds went through Japan, borrowed money in Japan, and carried it to Brazil and other countries. So it’s always–there’s always a low interest rate country. Or it was done through Switzerland. So it’s not important how it is done.

But the crucial thing in here–I fully disagree with Paul Krugman. Paul Krugman said, you had capital controls in the ’50s and the ’60s under the Bretton Woods system. That’s true, but that’s not the whole truth. The much more important thing is that we didn’t have flexible exchange rates. We have flexible exchange rates, and these flexible exchange rates, with these huge flows of money, of hot money, are going in the wrong direction, they’re going definitely the wrong direction, because countries with a rather high inflation rate, like Turkey or Brazil, get an appreciation of their currencies, and everybody knows that’s absolutely untenable. Every good economic textbook will tell you that the country with the high inflation needs a depreciation. But the flexible exchange rate, the markets, the markets are doing exactly the wrong thing. And Krugman also is shying away from saying this very clearly. And this is the problem.

We had attempts in 2011 in the G20 to talk about a new monetary system, but everybody is shying away from touching this hot issue. This is the hot issue. The markets get the prices wrong. And this has to be addressed head-on. And that means you need intervention, international intervention into the market to avoid the misalignment in the first round, the misalignment driven by the market.

You’ll have to listen to the interview or read the transcript to see the parts that I have left out.  The interviewee does hint at some solutions that will be discussed in the other parts of the interview.

I haven’t seen the other two episodes yet to see if this question is answered.

How can the markets be wrong?  The people who are driving the market in the direction it is going are making huge profits.  So the market is right, and it is always right in the short term.  Well, right insofar as what individuals are capable of doing when they all make decisions that are rational for themselves individually.  What the individuals in the market and the market as a whole are incapable of doing is making decisions that are right holistically  for the society including the factors that are outside the market.  The society includes the individuals in the market, but, as I have said, the holistic actins are not actions that individuals can take.

The Real News Network has the interview State Cuts to Public Funding of Higher Education Responsible For Increases In Tuition Costs.

DESVARIEUX: But it hasn’t always been that way, right? Let’s take a look at one of the graphs from your report. We see that students didn’t always shoulder such a large share of the costs of public higher education. For example, in 1987, students paid close to 20 percent of their tuition, and in 2012 it’s inching closer to 50 percent. How has it changed in the last 25 years? Who’s funding public universities?

LEACHMAN: Yeah, well, that’s exactly right. What’s happened is that the states’ share, state and local funding, has gone down, and tuition has risen to sort of risen to fill that gap. So if you look over the last 25 years, per student revenue from state and local government, it fell by about $2,600 after you adjust for inflation–that’s per student–$2,600. Over the same period, tuition increased by $2,600. So, in other words, the entire increase in tuition at public colleges and universities over the last 25 years has gone to make up for the state and local funding cuts.

I have always assumed that the tuition rise at colleges was related to the cutting of government funding.  I think this is the first report I have seen that backs up my intuition about the cause of the problem.

The unwillingness to invest in this country’s future seems to have been passed down to us from the most wealthy.  The 1% loves the free ride of being able to gather a huge fortune as long as somebody else pays for the society that makes it all possible. They don’t seem to notice that if they take it all, there is nobody else left to pay for what they refuse to pay for.

When I say the sickness has been passed down to the rest of us, I don’t mean the people who are scrambling for the crumbs left by the 1% could be expected to make up for what the 1% take out of society.  I mean that the 99% ought to vote for a government that stops giving the 1% a free ride.  Somehow the 1% has convinced enough of the 99% to think that ending the free ride for the 1% would be bad for the 99%.  The 99% have been convinced that they need to act “responsibly” in spite of the fact that the 1% won’t.  The 99% just do not have the resources to make up for the failures of the 1%.