Periodic Posts

Posts made periodically by a particular author. The periodicity may be totally random.

How Rent Controls Cause Housing Shortages.

Democracy at Work has the video AskProfWolff: How Rent Controls Can Solve Housing Shortages.

Of course this headline makes no sense. Prof. Wolff tells you all the problems that rent control causes, and then tells you how the government can repair the damage. That’s what makes sense.

If the government built the housing that Prof. Wolff describes, there would be no need for rent controls. It is definitely not rent controls that are the solution.

Matt Taibbi: The Media’s Role In Dividing Us In Light Of Capitol Chaos

YouTube has Rising’s interview Matt Taibbi: The Media’s Role In Dividing Us In Light Of Capitol Chaos.

Journalist, Matt Taibbi, reacts to how the media both contributed to and covered the riots at the United States Capitol.

They still don’t seem to remember the beneficial effects of the fairness doctrine, and the anti-monopoly enforcement that prevented domination of a market by a single corporation.

This Substack approach is not good enough for the 21st century. The internet gives access to so many different voices, that nobody should be forced to choose a subset of voices that they want to pay a subscription for. Scroll has, maybe an imperfect, model for the 2st century. Scroll is a clearing house for as many voices as want to sign up with their service. Scroll then takes the viewers subscription money, and distributes it to the people that actually get watched. This is done by looking at the traffic to a person’s media outlet on a minute-by-minute measurement. The subscriber ends up paying for sources that she or he actually views on any given day.

Glenn Greenwald REACTS: Twitter, Facebook SUSPEND Trump Accounts

YouTube has Rising’s interview Glenn Greenwald REACTS: Twitter, Facebook SUSPEND Trump Accounts.

Journalist, Glenn Greenwald, reacts to both Twitter and Facebook suspending President Trump’s accounts and deleting two of his posts.

I agree with Glenn Greenwald. Furthermore, the problem in the USA is deeper than a President lying. Truth has been the previous antidote to lies. We have to look at why it is so hard for the truth to get out in the USA these days. The corporate media is a bigger source of lies than any social media. We used to try to prevent the media from going unchallenged with the fairness doctrine for broadcast media, and anti-monopoly laws for the print media.

Looking Forward to 2021

Naked Capitalism has the post Michael Hudson: Looking Forward to 2021

Michael Hudson focuses a bit more than usual on politics, particularly on the way the left gets the shaft in elections. But he also focuses on the grim results that are virtually baked in for the US this year: rising homelessness, deteriorating government services, more diseases and more crime. In other words, the world of neoliberalism, coming to your town ahead of schedule thanks to Covid.

Actually there are two interviewees in this featured video, Chris Williamson and Michael Hudson. Chris Williamson is from the U. K. and Michael Hudson is from the USA. The parallels in political events in the two countries is rather amazing.

However you look at it, 2020 was a train wreck. So as we look forward to 2021, we wanted to get political and economic insight from two friends of the show.

Chris Williamson and Michael Hudson share their views on what we can look out for in the new year.

A Hard Look at Rent and Rent Seeking with Michael Hudson & Pepe Escobar

Naked Capitalism has posted a transcript and a video of A Hard Look at Rent and Rent Seeking with Michael Hudson & Pepe Escobar.

Yves here. Another belated Christmas offering, a second talk by Michael Hudson, this one with the trenchant Pepe Escobar. Get a cup of coffee, because this is a meaty talk, and Michael provides extensive detail on the operation of rents and rentiers, with detail on who did what when. For instance, early in the conversation, Hudson gives a back-of-the-envelope of how little the average worker has left after paying for essentials like rent, medical care, and taxes. Also forgive the occasional typo; it took a lot of effort to transcribe a talk of this length.

An interactive discussion on wealth inequality and the “Great Game” on the control of natural resources.

Polarisation, Then a Crash: Michael Hudson on the Rentier Economy

Naked Capitalism has the post Polarisation, Then a Crash: Michael Hudson on the Rentier Economy.

Allied with landlords and monopolists, the finance sector is extracting economic rents from the economy that’s impoverishing US government, industry and labor says Michael Hudson discussing the chokehold of pro-finance, pro-rentier capitalism reaching into the present COVID-19 crisis.

This is something that neither the right nor the left of politics seems to understand. If the left understood this, they would stop calling for the destruction of (industrial) capitalism.

Hudson is partially wrong in his assessment of China. In reading the book Trade Wars are Class Wars, I come to realize how China is shortchanging the workers too.

Author: How elites sold out American workers and how to fix it

The Hill channel on YouTube has the video Author: How elites sold out American workers and how to fix it.

Author Matthew Klein discusses his new book, Trade Wars are Class Wars, in which Klein explains how today’s trade conflicts are caused by governments promoting the interests of elites at the expense of workers.

For years, I have been trying to get people to understand this. One thing not mentioned in the interview is that countries used to negotiate with each other on tax laws to prevent the wealthy from fleeing one country to go to another country that charged them less in taxes. George W. Bush put a stop to the USA’s participation in these negotiations. Biden could get these talks started again, but I bet he won’t.

The Jain Family Institute channel on YouTube has the video Trade Wars Are Class Wars: Adam Tooze, Michael Pettis, & Matthew Klein in conversation. There are echo problems when Michael Pettis speaks.

Even just half way through this second video, I find the situation explained with much more insight than I have been able to figure out on my own.

Watching this second video to the end, I notice that all the people involved in the video fail to recognize the overhead on the USA economy due to the financialization of the USA economy. If you remove this overhead, then people in the USA don’t need increased wages to have a higher standard of living.

We have to restore the laws against usury, we have to change the tax advantages of financialized enterprise, we have to restore laws against monopolies and trusts. If we were able to do that, and then have the Federal Reserve Bank (Federal Government) payoff the private debt burden and prevent the debts’ rebuilding, then we could compete in trade in the international arena. If restoring anti-usury laws made it unprofitable for the credit card companies to make a profit the way they do now, there would be less of an incentive for them to entice people into credit card debt. If public colleges were free, student debt wouldn’t get built up again. If the tax cuts to the rich were rescinded and replaced by tax cuts to the not rich, the need for the not rich to borrow money to pay taxes would go away. This is all laid out by MMT proponents like Stephanie Kelton and particularly Michael Hudson.

Undoing Joe Biden’s bankruptcy reform laws would also take the incentive out of financializing the economy.

Making it illegal for vulture capitalists to rob private pension plans of the companies they take over, would also slow down that pernicious process. The vulture capitalists make their money by buying companies, stripping the assets, and putting the proceeds into their own pockets. If we could put the brakes on the takers like Mitt Romney, it would go a long way toward solving our economic problems.

Perhaps the boo discount code YETWC will prove useful in purchasing the book.

Reading Trade Wars Are Class Wars is essential. I am half way through the book. I am sure I’ll have to digest a lot and think about what I have read a lot before I will fully appreciate it. I am learning that even some of the recent economic miracles in China and Germany were won on the backs of the lower classes.

Looking at my subsequent post Polarisation, Then a Crash: Michael Hudson on the Rentier Economy you get to see Michael Hudson explain the role of the overhead in stifling our economy.

Macroeconomics, Money (MMT Style) and Post-Brexit Recovery, All in One Twitter thread

Naked Capitalism has the post Macroeconomics, Money (MMT Style) and Post-Brexit Recovery, All in One Twitter thread.

Money is just a promise to pay.
If you think you have ‘money in the bank’, think again. You have not. You just have a promise from the bank to pay you money if you demand it. And if they can pay it, of course. You’re now the banker. They’re the borrower. And you have the risk they won’t repay.

I emphasize this part because this is what I have been trying to explain about private-bank created “money”. It is not “money”. It is a promise to pay you money if you want to take your “money” out of that private bank’s system. By hook or by crook (or by Federal Deposit Insurance Corporation in the USA), the bank will fulfill that promise.

Even if Warren Mosler doesn’t want me saying this, I am sticking to my story as explained in this article. In my mind “the promise of money” explains a whole lot of things that seem to be hand waving to me in the “official” explanation of MMT. My explanation does not contradict anything that the “official” explanation says. I think it clarifies.

Jamie Galbraith: How Jason Furman and Lawrence Summers Reinforce a Destructive, Debunked Mainstream Paradigm to Support Deficit Spending

Naked Capitalism has the post Jamie Galbraith: How Jason Furman and Lawrence Summers Reinforce a Destructive, Debunked Mainstream Paradigm to Support Deficit Spending.

Here is an excerpt from Yves Smith’s introduction to the article.

The fact that the Washington Post depicted an article by Jason Furman and Larry Summers pumping for deficit spending as evidence of an “intellectual revolution” shows how bad a grasp most commentators have on economics. As the post by Jamie Galbraith describes long form, the Furman/Summers argument was incoherent and relied on the “loanable funds theory” (loans come from existing savings and are therefore limited; interest rates serve to balance supply and demand) that was debunked by Keynes nearly 100 years ago.

Here is an excerpt from the Galbraith article itself.

FS therefore arrive at a correct conclusion – interest rates will remain low indefinitely – by a route that requires them to argue that the world has changed in some fundamental, relevant (“structural”) way, for which no evidence exists. The effect is to leave in place an incoherent theory of interest rates, which does not even claim to explain the phenomenon – low long-term rates – that their paper is trying to address. But a correct and viable explanation, as above, of a form long-ago explained carefully by no less than John Maynard Keynes, is readily available and wholly sufficient.

Some times it amazes me how the people who claim to be experts can get things so wrong. In this case it is Larry Summers who continues to be wrong year after year. It is nice to see James Galbraith confirm my thinking that John Maynard Keynes is still correct about some very fundamental economics.

This discussion of the “loanable funds theory” gives me an opportunity to state my explanation of what is wrong with the “loanable funds theory”. In my own quirky way, I explain that private banks do not create money when they make a loan. They create a promise of money to the borrower. As long as the promise of money circulates among customers of the bank, the promise never needs to be fulfilled with actual USA money. If the promised money is given to someone outside the private bank’s customer base, then and only then does the promise of money need to be fulfilled. The bank has many ways to fulfill that promise that I won’t describe here.

The larger the bank is, the smaller the fraction of its promises of money will ever leave its own customer base. Also the money going out is mostly offset by money flowing in from other banks’ customers giving money to the original bank’s customer for deposit in the original bank. Very little of all the private banks’ promises of money ever have to be realized in actual Federal Reserve Bank USA money. Some of that realization will come from “loanable funds”, but not even all of it.