YouTube has the video #03: How the government finances its deficits.

Just like the private sector, the government “prints” money to finance deficit spending. And, the government’s deficit is your surplus. Default? Impossible.

In this video he mentions his web site www.cowboyeconomist.com.

YouTube has the video #02: How the private sector finances its deficits.

Many people worry about government deficit spending and the debt. They shouldn’t, or at least not for the reasons they think. Rather than jumping straight to that, I thought I’d first point out that this is not the exclusive domain of the public sector. The private sector, too, creates its own money

YouTube has the video How to tell if someone is a socialist!

The word “socialist” is being used a lot lately with very little concept of the definition. I’m here to clear that up.

This is the definition I have been trying to promote on this blog. Maybe it is easier to stomach from a good old cowboy from Texas. I just don’t have the accent to prove I lived in Texas for four years, and married a woman from Texas. We both escaped. I knew some people like this guy when I was in Texas, but not a lot of them. Some of those people I knew were not as open and brazen about it as I was.

YouTube has the video #06: How the American People (could not possibly have) Financed World War Two!.

We hear about the glorious job the American people did in financing World War Two. Only thing is, that story isn’t quite right. They did something that was glorious, all right, but it was not financing the war–it was holding inflation in check.

Maybe hearing this from a good old cowboy will make it more palatable.

The Atlantic has the article The Stock-Buyback Swindle.

To ward off hostile takeovers, boards started firing CEOs who didn’t deliver near-term stock-price gains. The rolling of a few big heads—including General Motors’ Robert Stempel in 1992 and IBM’s John Akers in 1993—drove home the point to CEOs: They had better start thinking about shareholder value.

If their conversion to the enemy faith was at first grudging, CEOs soon found a reason to love it. One of the main tenets of shareholder value is that managers’ interests should be aligned with shareholders’ interests. To accomplish this goal, boards began granting CEOs large blocks of company stock and stock options.

The shift in compensation was intended to encourage CEOs to maximize returns for shareholders. In practice, something else happened. The rise of stock incentives coincided with a loosening of SEC rules governing stock buybacks. Three times before (in 1967, ’70, and ’73), the agency had considered such a rule change, and each time it had deemed the dangers of insider “market manipulation” too great. It relented just before CEOs began acquiring ever greater portfolios of their own corporate stock, making such manipulation that much more tantalizing.

Excellent article that explains how rules changes are just reinforcing this pernicious trend. These changes to rules make it impossible for a CEO not to use stock buy backs if she or he wants to keep her or his job.

If you are interested to learn how your money and wealth are being stolen, reading this article will go a long way in furthering your educationi.

Naked Capitalism has the article Incentivizing an Ethical Economics.

Ethical economics, in which welfare is reconceptualised as a growth promoter, is not only important to restore our economic health. It is also fundamental to a genuine democracy – one in which everyone shares in economic success because they acquire the skills and support to do so. It may sound too good to be true, but the good news is that we’ve already achieved this mix twice in Britain’s history, each time with remarkably positive economic outcomes.

Also skimmed and set aside for future reading.

Naked Capitalism has the post Michael Hudson: U.S. Economic Warfare and Likely Foreign Defenses.

The American promise is that the victory of neoliberalism is the End of History, offering prosperity to the entire world. But beneath the rhetoric of free choice and free markets is the reality of corruption, subversion, coercion, debt peonage and neofeudalism. The reality is the creation and subsidy of polarized economies bifurcated between a privileged rentier class and its clients, their debtors and renters. America is to be permitted to monopolize trade in oil and food grains, and high-technology rent-yielding monopolies, living off its dependent customers. Unlike medieval serfdom, people subject to this End of History scenario can choose to live wherever they want. But wherever they live, they must take on a lifetime of debt to obtain access to a home of their own, and rely on U.S.-sponsored control of their basic needs, money and credit by adhering to U.S. financial planning of their economies. This dystopian scenario confirms Rosa Luxemburg’s recognition that the ultimate choice facing nations in today’s world is between socialism and barbarism.

I have skimmed the article, but I’ll have to go back and read it more carefully.

RT has the episode Orange coin good, orange man bad (E1412).

Bitcoin is gold.

It’s fun to watch Max Keiser going nuts over bitcoin.

Several hundred years ago you could have said “tulip bulbs are gold”. For a while it seemed to be true. Even saying “gold is gold” is hardly more meaningful. People have been searching for thousands of years for something that is a “store of value”. As Richard Wolff has said, many people have theories of value including Karl Marx, but nobody can connect a theory of value with a theory of prices.

This is not to say that some of the things that Max Keiser is predicting won’t actually happen. Where I think he is wrong is in thinking that Bitcoin isn’t subject to all the same problems. Bitcoin is only a store of value as long as enough people think it is a store of value. I have no way of knowing how long that will be, and neither does Max Keiser.

I wonder if people like Max Keiser are thinking that bitcoin is different because there is a theoretical limit on the number of bitcoins that can ever be found. When the idea of fractional reserve banking meets bitcoin and the world of financial derivatives meets the world of bitcoin, the idea that bitcoin is a stable store of value will go up in smoke with all the other things that were thought to be stable stores of value.

Labor Theory of Value — Richard Wolff.

The Conversation has the article Neoliberalism has tricked us into believing a fairytale about where money comes from.

There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation. It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have heard about the need for austerity and a lack of certain cash-generating trees – there is no “natural” level of public expenditure. The size and reach of the public sector is a matter of political choice.
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The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks – why can’t it create money to save the people?

For people who misunderstand money, or think they don’t understand money, here it is in a relatively short form. If you don’t know if you misunderstand money, read this, and compare it to what you think.

Market Watch has the article The eviction crisis is starting to look a lot like the subprime mortgage crisis.

“Now, a new study shows that not all evictions are created equal. Scholars at Georgia State University, in conjunction with a ProPublica journalist, examined “serial” eviction filings, or those done repeatedly by a landlord against a tenant. By comparing serial evictions to ordinary ones, the researchers found patterns of landlord behavior and intentions, some of which are reminiscent of the worst of the housing crisis a decade ago.

This might be a warning about the source of the next crash. The housing shortage is pushing up rents and prices, but doesn’t seem to be spurring increased construction. What are the chances that real estate will be the cause of two crashes in a row? If we didn’t fix the problem that caused the last crisis, there is no reason why we shouldn’t expect a rerun.

Compare this to what happened in the 1930s. There were many laws and changes in regulations that were meant to prevent a repeat. Those changes were successful until they atarted being repealed in the 1980s.