Spotlight on Poverty and Opportunity has the article Census Data Show We’re Finally Back to Pre-Recession Poverty Levels. Trump’s Budget Risks Erasing Those Gains.

If Trump and Ryan were serious about cutting poverty and fighting for communities left behind, they’d embrace the policies that brought about declines in poverty and rising incomes in 2015 and 2016—like raising the minimum wage. State and local minimum wage increases were likely a major driver of the declines in poverty and rising incomes we saw over the past two years—and, tellingly, in states that had enacted minimum wage increases, low-wage workers saw faster wage growth in 2015 than workers in states whose minimum wages remained flat. They’d close the book on repealing the ACA and slashing Medicaid, programs that together have brought the nation’s uninsurance rate to historic lows. And they’d abandon their proposals to slash nutrition assistance and other programs that help families afford the basics, which cut poverty nearly in half in recent years while also boosting mobility in the long-term.

But instead, they seem hell-bent on snatching any gains working families have seen in recent years and funneling them upward so millionaires and billionaires can buy a second yacht.

Recent reporting of the census data by the corporate media only mentioned the gains. They completely neglected any information about an objective assessment of where we are compared to where we ought to be.

I think I have finally come to understand the key omission in Modern Monetary Theory (MMT). Close to the beginning of MMT Primer there is the chapter THE BASICS OF MACRO ACCOUNTING.

It is a fundamental principle of accounting that for every financial asset there is an equal and offsetting financial liability.

They using this accounting fact to justify later claims that banks making loans does not create net money. In this country, only the federal government is allowed to create money.

Accounting is essentially a static balance of assets and liabilities. An economy is not static, however.

When you get a loan from the bank, you make a promise to pay the money back later. However, you get the money to spend now. Your spending now stimulates the economy now, whereas the promise to pay back later will only have economic consequences later. The idea of spending now and paying later is promoted by business exactly because they know that you will be enticed to spend more money now if you don’t have to pay for it now.

During WWII, war bonds were not sold to finance the war. There was no need for the government to take back the money it had already created to finance the war, when it could just have created more money to finance the war. What the war bonds were for was to control inflation. With all of the country’s productive capacity going to the war effort, people immediately spending what they earned would have caused competition between too much money chasing too few goods. The government had to find a way to let you earn your income now, but get you to wait to spend it. So you gave the government back your money with the promise that they would return it to you later and add some interest to make it worth your while.

The point of this discussion is that the difference in time between when you get money and when you spend it or pay it back has a huge economic consequence.

The recognition of this difference may be implicit in some of the discussion of Modern Money Theory, but it ought to be more explicit. I’d hate to have our political leaders making economic decisions for our country solely based on the accounting balance idea only to figure out later that there is a time component that they needed to considered.

Michael Hudson’s book Killing the Host: How Financial Parasites and Debt Destroy the Global Economy, made me see the key difference between Fed money and private bank money. Essentially, it is all about the interest charges. MMT says that, but the significance didn’t quite strike me until I read the book.

My previous blog post Venezuela Has Officially Stopped Accepting Dollars For Oil Payments has been a wake-up call to me.

When we use our money as an economic weapon to punish countries that don’t do what we want, there is a very serious delayed cost. When we impose sanctions on enough countries, they will eventually band together to free themselves from the power of our money.

One of the articles linked to in my previous post (Libya: another neocon war) identified Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran as our explicit targets. Add Venezuela, Russia, and China to the list. With this set of countries, there is enough economic power to start to put up some serious resistance to the place of the USA dollar as an international reserve currency.

Apparently we view the kind of threat posed to our dollar as significant.

Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar.
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The initiative was viewed negatively by the US and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind;

If you remember, Gaddafi was assassinated at our behest. This kind of retribution only makes it more important for countries to rid themselves of our power over them.

As a nation that is sovereign in its own money and has debts denominated almost exclusively in our own money, the ability to buy whatever we want internationally with our money is a major keystone to our power. If we lose that, we will rapidly decline as the major power in the world.

Real News has the story Venezuela Has Officially Stopped Accepting Dollars For Oil Payments.

And today, as The Wall Street Journal reports, in an effort to circumvent U.S. sanctions, Venezuela is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy said.

This is the kind of behavior that has led to assassinations by the USA. As the article says:

Cue the calls for a Venezuelan invasion in 3…2..1…!

Do a Google search of gaddafi petrodollar. Two article pop right up – Gaddafi’s Threat To The US Petro Dollar And Why He Had To Die and Libya: another neocon war.

Here is an excerpt from the second article which comes from The Guardian.

Kenneth Schortgen Jr, writing on Examiner.com, noted that ‘[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.’

NPR has the interview Sen. Merkley Picks ‘Medicare For All’ Over Affordable Care Act.

The interviewer keeps suggesting compromise. However, there is no compromise possible. Either we get single-payer or we don’t. 1 is a hard number to compromise.

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.

The Consumer Financial Protection Bureau has this helpful article Identity theft protection following the Equifax data breach.

I post it here for reference purposes. I presume that the CFPB is a source we can trust.

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?

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.

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.