Monthly Archives: October 2018

Sanders and Varoufakis Announce Alliance to Craft ‘Common Blueprint for an International New Deal’

Common Dreams has the article Sanders and Varoufakis Announce Alliance to Craft ‘Common Blueprint for an International New Deal’.

The pair hopes to promote a “progressive, ecological, feminist, humanist, rational program” for not only Europe, but the entire world.

If the oligarchs can get together to create international trade agreements that benefit them and screw the rest of us, it is about time people woke up to the fact that we need progressive international agreements to protect the 99% of the people in the world.

The rallying cry started by Marx and Engels was “Workers of the World Unite“. The oligarchs certainly understood the power of the rich to unite around the world. It is about time that workers woke up to what is necessary.

The only way we can fight the trade agreements created by the rich to make workers compete for jobs by offering to work for the least amount of money is to unite world-wide to get trade agreements that protect workers from the oligarchs.

I have been waiting for some USA politician to realize that we have to get progressive political leaders from around the world to unite to protect the workers. I am not surprised that Bernie Sanders would be the first one with national standing to promote this idea.

For those who would like to know more about Yanis Varoufakis, start with this search on The Real News Network,

The Public Banking Option

YouTube has the video A Discussion with Michael Hudson, Ellen Brown, & Walt McRee about the public banking option.

Before you swallow this discussion hook, line, and sinker, you might want to look at my dissent below,

On Thursday April 6, 2017 two world-renowned economic thinkers came to Franklin & Marshall College in Lancaster, PA to discuss how a public banking option can affect governmental effectiveness.

This discussion focused on the key differences between government’s unquestioned reliance on private capital markets and how an entirely new, more productive arrangement could be devised.

I’d say there is a fair amount of hogwash in this presentation. If you really understand the relation between Federal Reserve Bank and private banks you can supply enough of your own knowledge to justify some of the words that are being said, but if you don’t, I think you might be bamboozled by what Ellen Brown in particular has to say. I watched about 20 minutes of this, and expected Michael Hudson to correct what Brown said, but he did not. I have read Hudson’s book “Killing the Host”, and the truth is more subtle than they are making out here.

I think a good way to understand private banks is that they get money wholesale and lend it at retail. They get the wholesale money from many places including depositors, investors, and the Federal Reserve Bank. I haven’t been able to find a reference that explains the percentages that the many wholesale suppliers are responsible for. To pretend or give the impression that private banks only have one source of wholesale money is to give you a very distorted picture.

Fractional reserve banking allows banks to lend more money than they have, but if they run into trouble, they have the Federal Reserve Bank to provide them whatever money they need (at a cost of course).

Investopedia has the article Wholesale Money that gives a hint at what I mean by wholesale money. I do not know what Fraction of the wholesale money comes from the Fed at any particular moment in history, but when the system runs short, only the Fed has an infinite supply (in the USA) to fill in whatever is needed. The excerpt from Investopedia talks about a situation in England that has close parallels to what would happen in the USA with the Fed instead of the Bank of England.

A defining moment of the subprime crisis happened in 2007, when Northern Rock, a British bank which had relied on wholesale markets for most of its finance, was no longer able to fund its lending activities and had to ask the Bank of England for emergency funding.

I have now watched the entire video beyond the initial 20 minutes that aggravated me so. There is lots of good information and ideas buried in this manure pile.

I do think that Ellen Brown is close to an idiot in understanding all the issues. Poo-pooing the need to watch out for fraud in a public bank is too naive to believe she could actually believe that. Michael Hudson was correct that their need to be stiff penalties including jail time for cheaters. There will always be cheaters and attempts at corruption. Read William K Black’s book, “The Best Way o Rob a Bank Is To Own One: How Corporate Executives and Politicians Looted the S&L Industry

Her introduction of the idea of using block chain for the Federal Reserve to serve the banking needs of the public is a complete red herring. Block chain is merely a computer security method which has nothing to do with the fundamentals of running a bank. None of the large and small financial institutions that serve the people at the retail level, use block chain to deal with USA money.

How Democratic Establishment Is Squeezing Andrew Gillum

YouTube has the video How Democratic Establishment Is Squeezing Andrew Gillum.

Andrew Gillum ran as a Bernie endorsed-Med4All-Progressive and now is being squeezed by the Party to prop up the enemies of progressives like Debbie Wasserman Schultz.

I have been wondering why I have started to become disappointed with Andrew Gillum and even Alexandria Ocasio-Cortez lately. This explains what is going on. Voting Blue just won’t do.

It’s Official: Injection of Fracking Wastewater Caused Kansas’ Biggest Earthquake

EcoWatch has the article It’s Official: Injection of Fracking Wastewater Caused Kansas’ Biggest Earthquake,

The largest earthquake ever recorded in Kansas—a 4.9 magnitude temblor that struck northeast of Milan on Nov. 12, 2014—has been officially linked to wastewater injection into deep underground wells, according to new research from the U.S. Geological Survey (USGS).

This should be no surprise to “experts”. Back in the late 1960s, I followed this story in the news. Maybe it caught my attention because I was in the Army, although in Frankford Arsenal in Philadelphia, not Rocky Mountain Arsenal in Denver.

Wstword has the article Denver earthquakes 40 years ago were caused by Uncle Sam, not Mother Nature published in Auguast 2011.

Despite yesterday’s earthquake that hit the Trinidad region, “Colorado is considered a region of minor earthquake activity,” according to the U.S. Geological Survey. But forty years ago, a series of quakes rocked the Denver area — quakes caused not by Mother Nature, but by Uncle Sam.

How? The Army was dumping dangerous chemicals into a deep injection well out at the Rocky Mountain Arsenal.

I wonder if modern day “experts” are too young to remember this or have not been taught about this in their engineering schools.

A Giant Pile of Money

The Intercept has a three part series beginning with A Giant Pile of Money: How Wall Street Drove Public Pensions Into Crisis and Pocketed Billions in Fees.

Public pensions across the country now squander tens of billions of dollars each year on risky, often poor-performing alternative investments — money public pensions can ill afford to waste.

If you think that privatizing Social Security is a good idea, you’d better have a plan to protect the unsophisticated individual investor from these vulture capitalists who can dupe and corrupt people chosen to oversee public pension funds. Turns out that Franco Modigliani and Arun Muralidhar had such a plan, but it was nothing like what the Republicans propose. Also, just search this blog for either Franco Modigliani or Arun Muralidhar.

How Private Equity Bankrupted Seven Major Grocery Chains for Fun and Profit

Naked Capitalism has the article How Private Equity Bankrupted Seven Major Grocery Chains for Fun and Profit.

…the seven large grocery chains that filed for bankruptcy since 2015 all were victims of private equity firms overloading them with debt, which in turn kept them from investing in updating stores and their product lines. No similar publicly traded grocery chain suffered a similar fate during this period. And as the authors and others like your humble blogger have pointed out, private equity firms extract so much in fees relative to their meager equity investments in the funds they manage that they profit even when they drive the companies they bought into a ditch.

If you do not understand this, then you are not qualified to discuss capitalism and socialism. The behavior of these private equity firms is why I call them vulture capitalists. Now that people like this are in control of our government, they are doing the same to our country.

The size of the federal deficit is not the problem as much as how the deficit is being created and what we spend our money on. With the willful refusal to collect high taxes from the predatory income of the vultures and the spending so much on armaments instead of investing in the productive capacity of our economy, the end of the USA empire is a foregone conclusion. If it weren’t for the suffering of the innocent victims, the demise of our empire could be considered a blessing for the rest of the world.

Democratic Consulting Firm Teams Up With Hospital Industry to Battle Nurses Union

The Intercept has the article Democratic Consulting Firm Teams Up With Hospital Industry to Battle Nurses Union.

For Pinkham, the nurse staffing debate has been laced with sexism. “If there were 23,000 men saying, ‘Hey, look, this is unsafe,’ do you think they would make you wait over 20 years to fix it?” she asked. “They treat us like we’re just these nice girls, trying to do a nice thing, but that we don’t know what we’re talking about and can’t handle numbers.”

I found this quote to be quite ironic. Just moments before coming across this article, I had been reading a Facebook thread about the issue of Question #1.

A female nurse posted the comment:

As bedside nurses (as we claim to be) how can we possible understand what it takes to run a hospital.

Once I read a very good explanation of why things work at all given the Peter Principle. I have not been able to find any reference to that article, but The Chicago Tribune article Why Things Go Wrong: The Peter Principle... comes the closest.

“All useful work is done by those who have not yet reached their level of incompetence.”
Peter`s Sexist Principle: Most hierarchies were established by men who monopolized the upper levels, thus depriving women of their rightful share of opportunities to achieve their own levels of incompetence.

In the article I remember reading, the author mentioned female teachers having been forced into teaching jobs by the sexism of their era. Restricting them to being teachers was a way of preventing them rising from their level of incompetence. Non-commissioned officers in the military were another group of people who were prevented from rising to their level of incompetence. I think secretaries were also mentioned as a class of people that were not allowed to rise to their level of incompetence.

It seems like nurses also fall into the class of people who have not been allowed to rise to their level of incompetence. More surprising to me was that a woman could actually think that she would be incapable of rising above her level. (She didn’t actually say that, so maybe I am over interpreting to make it a good story.)

The point of that article that I am remembering is that is that organizations worked because of the secretaries, non-commissioned officers, and teachers that were responsible for running organizations competently. Without the sexism that kept women in their positions of competency, how would the world survive?

But How Will We Pay for It? Making Public Money Work for Us

YouTube has the video “But How Will We Pay for It? Making Public Money Work for Us” – Oct. 15, 2018.

Our nation’s finances are a blistering topic. Democrats blame Republicans for “blowing up the deficit” with tax cuts, while Republicans insist that programs such as Social Security and Medicare are the real drivers of our fiscal mess. As politicians fight over who’s at fault, an important debate is getting lost in the fog.

Professor Kelton casts a different light on these fiscal feuds and the budget deficit, arguing that both sides are missing the bigger picture when it comes to paying for our future.

The best lecture you could possibly hear this or any other year.

Dr. Stephanie Kelton explains everything that I could possibly want people to understand about the economy. and the roles of the private sector and the government sector in that economy.

In the comments on my Facebook post on this lecture, we can quibble about the details and the meanings of what she said, I am sure there will be lots of disbelief, but I think I can handle all the questions.