Here is an email I just received from Elizabeth Warren.

Subject:	We build it together
Date:	Wed, 21 Jan 2015 14:39:21 +0000
From:	Elizabeth Warren <info@elizabethwarren.com>
To:	Steven Greenberg

Steven, Nobody got rich on their own. Nobody. Sure, people who built great businesses worked hard. Most successful entrepreneurs worked their tails off. But those businesses need good soil to grow – and that meant they need roads and bridges to get their goods to market, dependable and affordable power grids, access to clean water and safe sewers, up-to-date communications – the kind of basic infrastructure that we build together. Coming out of the Great Depression, we built those roads and bridges and power grids that helped businesses grow right here in America. We plowed money into our future, and as those businesses grew, they created great jobs here at home. But by the 1980s, our country sharply cut back on making those investments in our future, and now we’re getting left behind. Today China spends 9% of its GDP on infrastructure. Europe spends about 5% of its GDP on infrastructure. They are building a future for their businesses – and better jobs for their people. But the United States is investing only 2.4% and looking for more ways to make cuts. Today, the American Society of Civil Engineers says we have about $3.6 trillion worth of deferred maintenance, repairs and upgrading – and every day we’re falling behind. That’s why my colleagues and I are calling on Congress to make improving our infrastructure a top priority this year. Will you join us? Focus for a minute on just one piece of this: highways and mass transit. The American Association of State Highway and Transportation Officials says a highway bill would create 8 million jobs over the next four years. A highway bill could put people to work in good jobs right now and fix crumbling roads and bridges that will support future businesses and future jobs – right here in America. We know how to create the basic building blocks for a strong economy and a strong middle class. We celebrated success, but we always paid ahead, making sure that the basic conditions would be right so the next generation could do even better. We did it before, and we can do it again. Join me in calling on Congress to invest in American infrastructure in 2015. Sign our petition now. Thank you for being a part of this, Elizabeth All content © 2014 Elizabeth for MA, All Rights Reserved PO Box 290568 Boston, MA 02129 Paid for by Elizabeth for MA

I like this sort of campaign better than the one that the Democratic Party and Barack Obama has been waging lately. This is a single issue that I can get behind and support. Barack Obama and the Democratic Party want me to sign a petition saying that I support everything Obama stands for. They don’t give you a chance to even tell them about the parts of Obama’s plan that you cannot support. Therefore, the only vote I can take on their pleas is NO.

Well, I have been watching the State of the Union Address.  Most of the discussion about economics was not bad.  Of course claiming that negotiating a trade agreement that the Congress is not allowed to see, but big corporations are writing for us is NOT a way to benefit middle-class wage earners in our country or any other country.

Raising taxes by eliminating unfair loopholes for the oligarchs is a great idea.  It takes from their grasp the money they are storing up to destabilize our economy.  However, balancing the budget with this money is an extremely bad idea. (See my previous post Replacing the Budget Constraint with an Inflation Constraint.)  Perhaps Bernie Sanders and his new chief economist on the Senate Budget Committee can finally knock some sense into the President’s head and into the heads of all Democratic candidates who might run for President in 2016. (See my previous post Is It Time for MMT To Become Mainstream to Save Us from the Second Global Financial Crisis of the Millennium? which links to the article Bernie Sanders opens a new front in the battle for the future of the Democratic Party.)

When the President got to foreign policy, he talked about using diplomacy as well as military power, but every initiative he wanted Congress to pass was an authorization to use the military.  He talked about opposing Russia in the Ukraine even though that problem was fomented by our giant corporations trying to gain unfair economic advantage.  I don’t see how applying our military might to aid the profits of our oligarchs helps the middle-class in this country or any other country.

Perhaps the President would have gotten around to talking about non-military efforts such as reaching agreements with Iran and easing pressure on the Cuban people.  But my BS limit had been exceeded, and I just had to turn it off.

The unfortunate upshot of this speech is that everything that the President proposed and I support will not make it through Congress.  Everything that the President proposed that I vehemently oppose will sail through the Congress, and be approved by the President.  So maybe calling this so-so was far too high praise to give this speech.

The rest of you can comment, and tell me what, if anything, I missed.

The New York Times, that bastion of journalistic rectitude, has the story Fox News Becomes the Unwilling Star of a French TV Satire.

Fox was abject in its apologies, as was Mr. Emerson. Julie Banderas, a Fox anchor, said that “over the course of this last week, we have made some regrettable errors on air regarding the Muslim population in Europe, particularly with regard to England and France.”

“Now this applies especially to discussions of so-called no-go zones, areas where non-Muslims allegedly are not allowed in and police supposedly won’t go,” Ms. Banderas continued. “To be clear, there is no formal designation of these zones in either country and no credible information to support the assertion that there are specific areas in these countries that exclude individuals based solely on their religion.”

I know it has been cold around here, but I had no idea that Hell had frozen over.

The Washington Post has the story A signal of distaste for dynasties bodes ill for Bush, Clinton.  The story concerned a focus group session in Colorado.

The two-hour session, moderated by Democratic pollster Peter Hart for the Annenberg Public Policy Center at the University of Pennsylvania, turned upside down much of the conversation about the coming presidential campaign, where Bush and Clinton occupy so much space.
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“Elizabeth Warren, from every part on the compass, had a level of support,” he said. “She’s not invisible. She’s not unknown. She’s not undefined.” And, he added, she has reached them on the issue that so many spoke about, which was their own economic concerns.

“You couldn’t leave this without feeling how hard-pressed these people are and how they’re looking for someone who will be a voice for their cause,” he said. “And Elizabeth Warren has broken through.”

That, he added, was wholly unexpected when the focus group was organized.

It was interesting to read how some of the people came to their understanding of what was going on in the country with regular people.

According to the group Ready for Warren,

Sharing news like this is one of the best and easiest ways to show Senator Warren and the world just how much momentum there is behind the draft Warren movement.

So, I am sharing this with you.  If you want Elizabeth Warren to run for President nearly as much as I do, please share the story with your friends, too.

The Washington Post has the story Elizabeth Warren: It’s time to work on America’s agenda.

But the lobbyists’ agenda is not America’s agenda. Americans are deeply suspicious of trade deals negotiated in secret, with chief executives invited into the room while the workers whose jobs are on the line are locked outside. They have been burned enough times on tax deals that carefully protect the tender fannies of billionaires and big oil and other big political donors, while working families just get hammered. They are appalled by Wall Street banks that got taxpayer bailouts and now whine that the laws are too tough, even as they rake in billions in profits. If cutting deals means helping big corporations, Wall Street banks and the already-powerful, that isn’t a victory for the American people — it’s just another round of the same old rigged game.

Thanks for Ready For Warren for posting this on their Facebook page. They chose to emphasize a different excerpt from what I chose.

Chris Van Hollen, with his puny shift of $1.2 trillion over ten years from the ultra wealthy to the middle-class (and not so much to the poor), is not the big thinker that this newspaper says he is. Elizabeth Warren and Bernie Sanders are the big thinkers. And Bernie Sanders is even ahead of Elizabeth Warren in the thought size department. Did you see who he appointed as Chief Economist for the Minority on the Senate Budget Committee? Her name is Stephanie Kelton, and she is a big thinker. Having the smarts to appoint her as chief economist shows what a big thinker Bernie Sanders is. Appointing her also shows how courageous he is.

See my previous post Democrats, in a stark shift in messaging, to make big tax-break pitch for middle class to understand why I compare her to Chris Van Hollen.

The Washington Post has the story Democrats, in a stark shift in messaging, to make big tax-break pitch for middle class.

The centerpiece of the proposal, set to be unveiled Monday by Rep. Chris Van Hollen (D-Md.), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year.

The windfall — about $1.2 trillion over a decade — would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks.
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All told, the package is about a third of the size of tax cuts enacted under President George W. Bush. It would transfer about 0.6 percent of national income, or gross domestic product, from millionaires and Wall Street traders to about 150 million American workers, with the paycheck bonus alone reaching at least 100 million workers.

I wonder if The Washington Post called it a windfall when President George W. Bush had tax cuts three times larger enacted during his administration.

If you read the story, it says that this proposal is an attempt to go beyond playing around the edges of extending the benefits of a “booming” economy to the middle-class and the poor.  To me, this plan is certainly headed more to the crux of the problem, but it is still playing around the edges. $1.2 trillion over a decade is maybe 10 times too small.  Where is the massive investment in infrastructure, education, research, and fair trade that should amount to $1 trillion in a lot less than ten years?

Though the article may think that:

Enter Van Hollen, 56, the senior Democrat on the House Budget Committee and a former chairman of the party’s campaign arm for House races. Close to Pelosi and the White House, he has emerged as one of the party’s big thinkers on economic policy and political strategy.

I’d call him a medium thinker, or at least not extra small.

To avoid increasing federal budget deficits, Van Hollen proposes

You see, right there, he is repeating the Republican lie.  Bernie Sander’s has chosen a Chief Economist for the Minority on the Senate Budget Committee. Stephanie Kelton will try to educate the politicians about how counter-productive it is to  talk about avoiding increasing federal budget deficits in the current circumstances.  Did you see the emphasis, IN THE CURRENT CIRCUMSTANCES?

IN THE CURRENT CIRCUMSTANCES

Let me repeat that,

It is easy to know what special current circumstances are. The inflation rate is well below the target 2% a year, and it is approaching negative territory. See the previous post Replacing the Budget Constraint with an Inflation Constraint.

New Economic Perspectives has an article that points to an article in Renewal titled Modern money and the escape from austerity by Joe Guinan.  The New Economic Perspectives author L. Randall Wray called the Renewal article:

Here’s one of the best and fairest summaries of MMT that I’ve seen:

Before realizing there was more to the Wray article, I immediately followed the link to the Guinan article.  The article is eye opening in a lot of respects even for me who has been reading about and blogging about MMT for quite some time now.

On 2 January 1879 the United States returned to the gold standard. Specie payments had been quietly suspended in 1861 to meet the costs of the Civil War, with Congress authorising the issuance of $450 million in ‘greenbacks’ – legal tender treasury notes – that greatly increased commercial liquidity and triggered an economic boom. But with wartime exigencies over, banking interests demanded a return to financial propriety and redeemable hard money. ‘Though the Civil War had been fought with fifty-cent dollars’, historian Lawrence Goodwyn explained, ‘the cost would be paid in one-hundred-cent dollars. The nation’s taxpayers would pay the difference to the banking community holding the bonds’ (Goodwyn, 1978, 11). What followed was one of the most extraordinary and creative episodes in the history of popular democratic understanding of money.

You need to read his description of the history of what happened at that time to get an appreciation of how wrong is your current understanding of how money works.  If you think that MMT goes against every notion you have about how money works, then this history tells you that what you think you know cannot possibly explain what happened in 1879 and the following years.  MMT explains it quite well.  So rather than thinking that MMT has no historical precedent, you will learn that historical precedent explains exactly what is wrong with today’s orthodox theory.

As further proof  of what is wrong with the orthodox theory that the public is told, is the following excerpt from the article:

That there was an alternative can be glimpsed in the operations of central bankers. Even as public budgets were being slashed, central banks were pumping staggering sums of new money – hundreds of billions in the UK alone – into the financial system to repair the balance sheets of commercial banks through bailouts and quantitative easing (QE). These central bank operations are not new, but their scale is unprecedented – central bank balance sheets are now three times their pre-crisis levels (Streeck, 2014, 39) – and not a penny had to be ‘paid for’ through taxes or borrowing. ‘It’s not tax money’, former Federal Reserve Chairman Ben Bernanke explained in a TV interview: ‘The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed’ (Pettifor, 2014, 24). Free money, in other words, was made available to those who caused the crisis in the first place, but not to the vast majority who continue to suffer its consequences. The only reason governments have been able to get away with this is because of public ignorance, fostered by politicians of all stripes, of the basics of banking and money creation. ‘It is well enough that the people of the nation do not understand our banking and monetary system’, Henry Ford once said, ‘for, if they did, I believe there would be a revolution before tomorrow morning’ (Greider, 1987, 55).

The aforementioned New Economic Perspectives article is uselessly named Odds and Sods: Some Good Reads For a Cold Winter Friday.  It has lots of good stuff in it besides the link to the Renewal article, but it is badly enough named that I almost didn’t bother to read it.

Common Dreams has the article I Will Grieve. I Will Laugh. But I Am Not Charlie by Josh Healey. This article beautifully puts into words why I have felt some unease about the Euro/American support for Charlie Hebdo magazine.

This excerpt about Molly Ivins captures the way I think about satire.

As the late great Molly Ivins said, “Satire is traditionally the weapon of the powerless against the powerful. I only aim at the powerful. When satire is aimed at the powerless, it is not only cruel — it’s vulgar.”

This is a good description of the kind of satire I like and the kind that I can easily live without. For instance, this is why I preferred David Letterman instead of Jay Leno.

Josh Healey had a pithy summary point of his own.

 I love free speech as much as anyone, but I can separate the right of people to have free speech with my support for their actual speech. When the ACLU supported the right of neo-Nazis to march through the suburban shtetl of Skokie, IL, they didn’t go around saying #IAmHitler.

I don’t really know why Josh Healey’s explanation should come as a surprise to anyone.  There can’t be very many people who are unfamiliar with the following quote:

I disapprove of what you say, but I will defend to the death your right to say it.

See two Wikipedia articles for the source of the quote, Evelyn Beatrice Hall and Voltaire.  Hint: If you believe Wikipedia on this subject, the phrase was not coined by Voltaire.

Thanks to Chris Spear for commenting on this article on a Facebook post. His comment is what brought this article to my attention.

Chicago Magazine has the article These Chicagoans Are Pushing Elizabeth Warren to Run for President.

Just how worried Hillary is about Warren was evident in the awkward pronouncement she made at a 2014 midterm campaign event that also featured Elizabeth Warren: “Don’t let anybody tell you that it’s corporations and businesses that create jobs.” Hillary quickly had to walk that back, in the process appearing to lack Warren’s most prominent quality: the courage of her convictions.

I saw a video of Clinton’s awkward pronouncement. Awkward doesn’t nearly convey how bad Clinton would be if she tried to convey Elizabeth Warren’s message.  This is exactly why I doubt that Hillary Clinton would be an effective substitute for Elizabeth Warren.  If Clinton were to become the nominee, she would have to up her game considerably before I would work for her election or even vote for her.

Naked Capitalism has the article How the Shale Oil Revolution Has Affected US Oil and Gasoline Prices. This article provides some very useful information about the oil business that I didn’t know about.  You may be similarly enlightened if you were in the same state of ignorance that I was.  Below, I have attempted to choose an excerpt that will hint at some of the information you might not have known.

The US shale oil boom was preceded by a persistent and growing shortage of light sweet crude oil in world markets. US refiners responded to this trend by expanding their capacity to process heavy crudes that remained in abundant supply, becoming the world leader in this field. They were therefore taken by surprise when the US market was inundated with shale crude oil from the centre of the country after 2010.

I don’t know how to take advantage of the knowledge I have gained from the article, but having it has certainly got to be better than not having it.