Preliminary Election Results

The Hill has posted the YouTube video Matt Stoller’s DIRE WARNING: Don’t Let McKinsey Anywhere NEAR Infrastructure Bill.

Author, journalist and research director at The American Economic Liberties Project, Matt Stoller, discusses the Biden administration’s need to distance itself from McKinsey in order to pass the infrastructure bill.

What’s wrong with Pete Buttigieg getting his training from McKinsey? We already saw his big gaffe about “paying for” infrastructure by taxing the users. He forgets, and so do many citizens, that corporations provide their services to customers to make a profit, whereas governments are supposed to provide services to enhance the well being of the people of the country. Even many businesses recognize that providing infrastructure for their workers benefits the company. To promote the use of cost saving infrastructure, there is an advantage for the corporation to subsidize the use of these cost savers by the employees. Investing a little money here can result in bigger savings over there. Even McKinsey should understand this application of the principle applied to corporations.

On the other hand I bet I observed a policy at a company where I worked that must have come from a consultant. The management felt that they were spending too much money on printed forms. They decided that people were hoarding the forms. The solution was to cut back on the number of forms an employee could order. This edict caused the hoarding of blank forms so that they could be Xeroxed when you ran out. Surely the creation of forms by using a copier was far more expensive than having them printed with a printing press. The difference was that the cost of copying them was hidden from the consultants (and managers with MBAs).

Here is Matt Stoller’s article Keep McKinsey Away from Biden’s Infrastructure Push

Geopolitics & Empire has the interview Scott Ritter: US Empire in Decline, Biden Administration is Dangerous, Nuclear Specter Remains.

Former UN Weapons Inspector Scott Ritter discusses US foreign policy, the decline of US empire, and the shift toward a multipolar world. He considers the Biden administration to be one of the most dangerous in modern times as it has gone back to square one (the post-WWII era), demanding American allies and the world subordinate themselves to Washington. He looks at the rise of Iran, the failed Forever Wars in the Middle East which have destroyed the American economy and military, and considers NATO a joke of an organization no longer capable of fighting a war. The U.S is unable to catch up to China’s economic infrastructure investments and the consequences of continued hegemonic behavior and failed diplomacy could translate into escalation of military conflict with Russia or China and ultimately risk the use of nuclear weapons.

I think Scott Ritter is a little naive about our history during the cold war, but he has some very important perspectives to impart about the present and the future.

The Ink has the interview The trillion-dollar woman.

If you want to find out what Modern Money Theory is, better to ask a person who knows. Here is an interview with Stephanie Kelton. (Her book is the one that I feature prominently on my Facebook page.)

MMT is about providing an accurate description of the monetary system that exists today and government finance mechanics. In other words, MMT describes how things work. We’re not on a gold standard anymore, but we haven’t come to terms with what that means.

We still have this idea that the federal government needs our money in order to pay its bills. That is wrong. Could Congress spend too much? Absolutely! But the punishment for overspending is inflation, not insolvency, contrary to what Ron Paul, Ted Cruz, and Lindsey Graham would have us believe.

At its core, MMT is about replacing the (flawed) concept of a government budget constraint with a natural resource (inflation) constraint. It’s not that there aren’t any limits. There are! But they’re not on the financing side (as we have been trained to believe). Our government cannot run “out of money,” as President Obama once falsely claimed. We cannot end up like Greece, and, contra these economists, we were never facing a fiscal crisis.

MMT teaches us to ask not, “How will you pay for it?” but “How will you resource it?” The politics are hard, but coming up with the money for Medicare for All, tuition-free college, or a huge infrastructure package is the easy part. Managing the use of our productive resources, and respecting our ecological constraints, is the defining challenge of our time.

The Alt World has the article Birth of a new geopolitical paradigm by Pepe Escobar.

Capping an extraordinary two weeks that turned 21^st century geopolitics upside down, Iran and China finally signed their 25-year strategic deal this past Saturday in Tehran.

This is a point of view that has been missing from my reading before now. Having seen Pepe Escobar’s interview with Michael Hudson, I have realized he is someone worth paying attention to. See my previous post In Quest of a Multipolar Economic World Order

Michael Hudson has posted the article What Flavour Oligarchy?. It features a video and a transcript.

In this second round of conversation, Professor Michael Hudson and Pepe Escobar discuss the emerging economic world order which they define not so much as a conflict between nations, but a rivalry between two competing models of the economy. The finance capital driven model of the West with a domination of the FIRE sector, versus the mixed economy model represented by China and Russia which seeks to rein in rent seeking, combined with public banking and state funded infrastructure to support market compliant industrial development. In Professor Hudson’s view, this model was advocated by classical economists, from Mill, Ricardo, to Henry George; and is largely responsible for the West’s past successes.

This could be the best two hours you have watched in in a lifetime.

Alanna: So Michael, what about one city that it’s desperate that could be educated, that there is an alternative with clarity about a land value tax system and a public bank. For instance, the city of Baltimore that desperately needs a new economy. Can you give us some hope that we could focus on a city level and begin building a template for how cities and like Sao Paulo where Pepe is born, from the cities that desperately need change? Michael, can you give us some sort of template?
We know the federal government is hopeless for us now for we, the people. Texas is having a vote to form the Republic of Texas, to secede. There are other growing secessionist movements in the United States. Could we imagine that there could be an implosion away from centralized control to a regional and city level. Michael, give us some hope.

Michael Hudson: I can’t give you hope. I am all in favor of public banking and I’m on Ellen Brown’s board of directors for her group. However, supposing you had a public bank in Baltimore and the public bank said, we want to provide credit for Baltimore people to be able to afford homes. They would still have to out create enough credit and enough debt to outbid what commercial banks are lending other people that want to buy houses there. So, you can’t have an Island of efficiency and public banking in a system that basically is still financialized. The problem is systemic.

The Institute for New Economic Thinking has the article The Full Case Against Ultra Low and Negative Interest Rates.

There are several reasons why unprecedentedly low interest rates will probably not stimulate demand and may even threaten financial stability

We don’t pay enough attention to the lesson Keynes taught. When demand is insufficient, pumping money into the system is not effective. The paradox of saving is no paradox at all. We know why it happens, and we should have learned by now that fiscal policy is the only way out. If the private sector can’t put people back to work, the government has to do it.

I just realized how to resolve the Quantum Entanglement Paradox that stumped Albert Einstein and every physicist since then.

WikiPedia has an article about Quantum entanglement.

Quantum entanglement is a physical phenomenon that occurs when a pair or group of particles is generated, interact, or share spatial proximity in a way such that the quantum state of each particle of the pair or group cannot be described independently of the state of the others, including when the particles are separated by a large distance. The topic of quantum entanglement is at the heart of the disparity between classical and quantum physics: entanglement is a primary feature of quantum mechanics lacking in classical mechanics.

You have to know about what WikiPedia has to say about Wave Function Collapse

In quantum mechanics, wave function collapse occurs when a wave function—initially in a superposition of several eigenstates—reduces to a single eigenstate due to interaction with the external world. This interaction is called an “observation”.

Of course there is much more, but I have to stop excerpting at some point

WikiPedia has another article that discusses the EPR Paradox.

The Einstein–Podolsky–Rosen paradox (EPR paradox) is a thought experiment proposed by physicists Albert Einstein, Boris Podolsky and Nathan Rosen (EPR), with which they argued that the description of physical reality provided by quantum mechanics was incomplete
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They invoked a principle, later known as the “EPR criterion of reality”, positing that, “If, without in any way disturbing a system, we can predict with certainty (i.e., with probability equal to unity) the value of a physical quantity, then there exists an element of reality corresponding to that quantity”. From this, they inferred that the second particle must have a definite value of position and of momentum prior to either being measured. This contradicted the view associated with Niels Bohr and Werner Heisenberg, according to which a quantum particle does not have a definite value of a property like momentum until the measurement takes place.

Now that I am putting this article together, I see that Albert Einstein did recognize the solution to the paradox. If you have to give up the idea that nothing can exceed the speed of light, or the idea the quantum property does not have a definite value until it is measured, I’d prefer to give up the second one. Although, perhaps it is true that the act of entanglement is the very thing that gives each entangled particle a definite value. The experimenters may not know what this definite value is until they measure it, but perhaps the entangled particles have their definite value before the particles are separated by large distances. So neither particle has to have a waveform collapse at the time of observation to give it a value and give the opposite value to the other particle that is now far away. I find it hard to imagine how to do an experiment to see if it has a value before you do the experiment to see what value it has.

That is, if the entanglement experiment and the separation wasn’t enough proof, I don’t know what else you would need. Why imagine the answer is in the impossible, when it could very well be in the possible. You just have to change your opinion of what is possible when confronted by experimental evidence.

The Instutute for New Economic Thinking has the article The Standard Economic Paradigm is Based on Bad Modeling.

Mainstream macroeconomics finds itself in a deeply unsatisfactory state, unable to make correct predictions and incapable of providing meaningful longer-term analyses and advice. It clearly needs a major rethink.

I like this article because it uses words like reflexivity and multi-equilibrium. It does not seem to acknowledge that John Maynard Keynes work had multi-equilibrium in it, perhaps its greatest contribution.

My other quibble is that this article regurgitates one fundamental misunderstanding of the private financial system, Private banks do not create money. What they do create is promises of money. This all works well as long as not too many people want the real thing at the same time. This is what happened in the crash of 2008/2009. Too many people suddenly woke up to the fact that the private financial sector could not make good on all that it had promised. If the private financial system could have actually created money, there would not have been this reason for the collapse.

To prevent a complete financial crash without any recovery the Federal Reserve Bank of the USA and other countries’ central banks had to create money and pump it into the private financial sectors around the world..

The Institute for New Economic Thinking has the post and video The Long-Overdue Revolution in Economic Thinking.

University of Texas economist James K. Galbraith engages in a wide-ranging discussion of the many ways in which conventional economics has failed us, ranging from how to manage the post-pandemic economy to the problems of inequality and climate change.

I haven’t been hearing much from James K. Galbraith lately. I am glad to find this interview. He puts so much perspective to what is happening to economies around the world.