SteveG


Kalecki, Minsky, and “Old Keynesianism” Vs. “New Keynesianism” on the Effect of Monetary Policy   Recently updated !

Naked Capitalism has a reprint of the article Kalecki, Minsky, and “Old Keynesianism” Vs. “New Keynesianism” on the Effect of Monetary Policy. The original (with better typography) is from the Institute For New Economic Thinking.

In a post co-authored with Anna Stansbury, Larry Summers repudiates economic orthodoxy in regard to whether interest rate cuts suffice to restore full employment and looks at a more “original” Keynesianism to find adequate responses to secular stagnation. Tracy Mott walks us through answers many careful readers of Kalecki, Keynes, Steindl, and Minsky knew all along.

In the original publication of this article, there was a criticism for lack of any reference to Modern Monetary Theory (called by one of they key authors of that theory as Modern Money Theory). As a reader of Modern Money Theory, I find the criticism is misplaced. My question to the authoer of the criticism was:

Can you give me examples of writings on MMT that reference the insufficiency of demand as a hindrance to the effectiveness of monetary policy? I think this article adds the emphasis that is missing from most MMT writings.

I learned “Old Keynesianism” when I took an economics course back in the early 1960s. I avoided the taint of “New Keynesianism” in all of what I read since I took that initial course. As the article says, Larry Summers is now revealing what I knew all along. Also, some of the authors of Modern Money Theory were heavily influenced by studying under Minsky. Talk of Minsky is going back to original sources for much of MMT.


Global Capitalism: The US-China Trade Wars: Causes, Prospects, Risks [September 2019]

Democracy At Work has produced the video Global Capitalism: The US-China Trade Wars: Causes, Prospects, Risks [September 2019].


Professor Richard Wolff explains the economic and political factors that are driving the economies of the world. Believe it all or not, he gives you more than enough to think about for the next two months until his next lecture along these lines.

If you like his style of humor, it is also entertaining to watch. I probably ought to warn your that he and I have an odd sense of humor.

I should also point out that understanding Modern Money Theory is not the forte of Professor Wolff. Although he uses the wrong reasoning about the money aspects of the balance of trade between the USA and China, I can’t really fault the conclusions he comes to. Maybe it is my engineering training, but I one time got marked down in an exam because I came up with the right answer using the wrong methods.


Medicare For Some is a Destructive Option   Recently updated !

We need to expose the fatal flaws in Medicare For Some option as opposed to Medicare For All. The Center on Budget and Policy Priorities has a 2009 article that touches on what is wrong with Biden’s proposal.

It also is essential for an exchange to limit the extent to which healthy and sick people separate into different insurance plans. Such separation —known as “adverse selection” — can cause plans that attract less-healthy enrollees to become increasingly unaffordable over time.

Joe Biden’s plan to have Medicare only as an option violates this need to prevent adverse selection. With Biden’s plan Medicare would be the insurer of only the sickest people. This would guarantee that Medicare would be more costly than private systems that only insured the healthy. This would set up the scenario where rabid capitalists could claim that government programs don’t work, and everything should be privatized. This is no accidental byproduct of Biden’s plan. This is exactly the neoliberal intention of the Obama/Biden/Clinton wing of the Democratic Party.

In the Sep 12, 2019 Democratic Primary Debates, the question was put to Bernie Sanders on why his plan did not allow for people to keep their private insurance plans. He missed a golden opportunity to explain adverse selection. It is not that Biden’s Medicare option is not as good as Sander’s Medicare For All plan. The problem is that Biden’s Medicare option plan is a plan to kill Medicare entirely.

In the debate, Biden went out of his way to describe the free choice in his system. You could choose to keep your private insurance, and at the very moment you discover that it doesn’t cover you for a newly discovered ailment, you can then choose to switch to Medicare. In other words, as long as a cheap policy that covers nothing turned out to be inadequate, you could switch to the more expensive plan that gave you actual coverage. This is plan that enhances adverse selection to its most pernicious level. Biden is not too ignorant to notice this. He must have set up this plan with the intention of destroying a government run plan so that he could tell us that we need to privatize everything the government does.


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’.

After arguing in a pair of Guardian op-eds last month that a worldwide progressive movement is needed to counter the unifying rightwing “that sprang out of the cesspool of financialized capitalism,” former Greek Finance Minister Yanis Varoufakis announced in Rome on Friday that he and Sen. Bernie Sanders (I-Vt.) plan to officially launch “Progressives International” in the senator’s state on Nov. 30.

This is a very hopeful sign. As the oligarchs frequently point out that if a single country tightens the rules, then international capital will just move to a country where there are friendlier rules (meaning no rules). Only a fairly uniform international set of rules can solve that problem the oligarchs rightfully warn us about.

I have previous posts that talk about how such international cooperation was under way until George W. Bush put a stop to it. See International Tax Competition and Coordination.

Here is a search for all the posts where I may have touched on the subject – Search results for “international tax”


The Legitimization Machine: Elizabeth Warren

LA Progressive has the article The Legitimization Machine: Elizabeth Warren.

The fundamental problem with Warren is that she begins with the neoliberal assumption that one can prioritize markets and business, while still serving the public good with the right set of incentives and regulations.

This is the best analysis I have yet to read about what bothers me about Elizabeth Warren. I have disparaged her statement that she is a capitalist to her bones, but I never got to a complete analysis as good as the one in this article.


George Monbiot: The new political story that could change everything

TED has the video George Monbiot: The new political story that could change everything.

To get out of the mess we’re in, we need a new story that explains the present and guides the future, says author George Monbiot. Drawing on findings from psychology, neuroscience and evolutionary biology, he offers a new vision for society built around our fundamental capacity for altruism and cooperation. This contagiously optimistic talk will make you rethink the possibilities for our shared future


I have posted two other items by George Monbiot before. See Neoliberalism – the ideology at the root of all our problems and George Monbiot: This Bastardised Libertarianism Makes “Freedom” an Instrument of Oppression.


Economic Update: Homelessness in the U.S.

The Real News Network has rebroadcast the video Economic Update: Homelessness in the U.S..

This week: Updates on politicians’ “blame game” of scapegoating to avoid blaming capitalism; middle class squeezed by prices; limits of workers on corporate boards of directors; lessons from a courageous Puerto Rican people; Prof. Wolff interviews Rob Robinson, activist and global advocate for the homeless on the issues of homelessness in the U.S.


This explains why rampant homelessness is a visible indicator that our social system is broken. This is not just a problem of the people who are homeless. This is an indication that the way we have chosen to organize our society has some flaws we need to fix by changing some aspect of our social organization.

If the cost of housing is rising 5 times faster than incomes are rising, we have to understand that this cannot possibly continue forever. At some point we have to figure out how to make the cost of housing and the level of incomes to come into balance. This is a problem that an individual homeless person cannot possibly solve given how widespread the problem is.


Why Don’t Governments Demand Verifiable Electronic Voting?   Recently updated !

It does not take a genius to create an electronic voting system that is far better than paper ballots. What takes the genius is the creation of a hackable system. For well over 6 years, I have been proposing an electronic voting system that would allow individual voters to check the official voting database to see if their vote was properly recorded. If not, the voter would have acceptable legal proof that there was an error. Furthermore, anybody with a computer could download the official database and use their own computer to count the votes. Why are no governments at any level demanding a system with these capabilities?

Here is the earliest post on this blog that I can find, Making Electronic Voting Transparent.


Let Them Eat Cake: a Journey into Edward Said’s Humanism

Counter Punch has the article Let Them Eat Cake: a Journey into Edward Said’s Humanism.

We had learned in Hebrew school that Israel was a land without people for a people without land. Perfect, I thought. People gave me bar mitzvah gifts including certificates for trees planted there in my honor. A land without people suggested barrenness to me. Trees seemed like a sensible idea.

I remember having long discussions about Israel with a Palestinian friend. I described to him my upbringing that was similar to what was discussed in this article. My only point was that it would be understandable for people to believe what they had been taught as a child. I was not trying to make the case that what they had been taught was true. He educated me a lot about the Palestinian situation, but we never came to a point where I could see eye-to-eye with him. Over the years as we went our separate ways professionally, I have seen how right he was, and how wrong I had been. The final straw for me came when someone recommended that I read “My Promised Land: The Triumph and Tragedy of Israel” by Ari Shavit. The purpose of the suggestion was to make me less negative about the State of Israel. This book, written by the grandson of one of the founders of the Zionist movement, showed me how correct my Palestinian friend had been in ways that I could not have imagined.

After reading the book and commenting on what I had learned, the person who suggested I read it, banished me from his circle of friends, and we have never spoken since.


Max Blumenthal: Nicaragua beat US regime change, but sanctions and sabotage continue

YouTube has the video Max Blumenthal: Nicaragua beat US regime change, but sanctions and sabotage continue.

The Grayzone’s Max Blumenthal explains how Nicaragua celebrated the 40th anniversary of the Sandinista Revolution just one year after defeating a US-backed coup effort — and how US sabotage efforts continue today.


Here is some antidote to the lies you have been told about Nicaragua. Nicaragua used to be a focus of Bernie Sanders back in the 1970s. I have been curious as to why he seems to have forgotten that experience lately.