Steve's Politics Blog

Update on 2016/06/06 – I discovered that the problem was limited to one browser, Firefox, on one of my three computers.  Turns out that clearing the cookies solved the problem.

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If you are unhappy that you can’t easily query Yahoo for a list of stock quotes as of today, vote for this suggestion I have made to Yahoo.

Make list of quotes query from the URL work again, or provide an alternative

Without signing in, the following query used to get me a list of stock quotes.

http://finance.yahoo.com/q?s=CAT+CBRL+CINF+CMI+COP+CVX+EMR+EPD+GIS+GPS+KO+LMT+MCD+MDP+PPL+SON+T+TGT+TMP+WEC

This does not work anymore. How do I get the same functionality that used to work so well. That functionality was just about the only reason why I used Yahoo. Without it, you have lost another customer. Why would you do that?

This is an historical occurrence  that too few people today remember or were educated about.  Rather than continue to talk about this based on my own recollections, I decided to search for a telling of the story  on the internet.  The Federal Reserve History web site has this article Nixon Ends Convertibility of US Dollars to Gold and Announces Wage/Price Controls.

President Richard Nixon’s actions in 1971 to end dollar convertibility to gold and implement wage/price controls were intended to address the international dilemma of a looming gold run and the domestic problem of inflation. The new economic policy marked the beginning of the end of the Bretton Woods international monetary system and temporarily halted inflation.

This history is key to understanding our current fiat money system that is described as the USA being sovereign in its own currency.  I doubt that economists at the time this action was take would have had a full appreciation of all the ramifications of this change.  However, after more than 55 years of living with this situation, some open minded economists are starting to come to grips with what this all means.

There are at least two web sites that I regularly follow to try to keep abreast of recent research and thinking.  They are New Economic Perspectives and Naked Capitalism.  Some other web sites are Levy Economics Institute of Bard College, and The Institute For New Economic Thinking.

Economists that I used to think were Liberals and Progressives, Paul Krugman, e.g., seem to be highly resistant to understanding how different the economic world is from when they received their training in the subject.

According to the Wikipedia biographic article on Paul Krugman:

Krugman earned his B.A. summa cum laude in economics from Yale University in 1974 and his PhD in economics from the Massachusetts Institute of Technology (MIT) in 1977 with a thesis titled Essays on flexible exchange rates.

I wonder if this timing of his education is what has him boxed in to his current refusal to understand how things have  changed.  Having finished is thesis in 1977, there were only 6 years of experience with the new monetary system for him to study.  I am sure this put him on the forefront at the time.  Since then, he seems to have stagnated, perhaps with his over egotistical view of his own infallibility.

Not being nearly as smart as Paul Krugman, I find it a little easier to shed my previous views in light of new information.  Of course, it is not being smart that is the problem.  It may be, as I have conjectured, that being too smug is the problem.  By the way, Paul Krugman is one of the eminent advisors and defendants of Hillary Clinton.  Economists from the newer camp, Stephanie Kelton and William K. Black are Bernie Sanders’ advisors.  Perhaps the fact that Bernie Sanders is older than Hillary Clinton and Paul Krugman, but has chosen advisors that are younger than those two may explain why he can understand the modern world better.

Naked Capitalism has the post New IMF Paper Challenges Neoliberal Orthodoxy about an IMF paper.

While the IMF’s research team has for many years chipped away at mainstream economic thinking, a short, accessible paper makes an even more frontal challenge. It’s caused such a stir that the Financial Times featured it on its front page. We’ve embedded it at the end of this post and encourage you to read it and circulate it.

The article cheekily flags the infamous case of the Chicago Boys, Milton Friedman’s followers in Pinochet’s Chile, as having been falsely touted as a success. If anything, the authors are too polite in describing what a train wreck resulted. A plutocratic land grab and speculation-fueled bubble led quickly to a depression, forcing Pinochet to implement Keynesian policies, as well as rolling back labor “reforms,” to get the economy back on its feet.

Voters need to become more aware of these ideas before they just accept Hillary Clinton’s economics advisers’ pronouncements over Bernie Sanders advisers’ pronouncements .

For instance, this extract from a section of the paper gives a hint as to the overturn of some cherished economic beliefs.

It is surely the case that many countries (such as those in southern Europe) have little choice but to engage in fiscal consolidation, because markets will not allow them to continue borrowing. But the need for consolidation in some countries does not mean all countries—at least in this case, caution about “one size fits all” seems completely warranted.

So when we say that the need for fiscal austerity does not apply to the United States at this point in time, remember that we are not saying that other countries are immune from this need nor are we saying that the United States will always be immune.

Perhaps this next excerpt best encapsulates what I think is the message of heterodox economists of this day.

Faced with a choice between living with the higher debt—allowing the debt ratio to decline organically through growth—or deliberately running budgetary surpluses to reduce the debt, governments with ample fiscal space will do better by living with the debt.

If we can get people to understand that this is all we are saying, and not some other horrible thing that they imagine, then maybe we can make some progress in having a rational discussion.  To have this rational discussion, we cannot dismiss the provisos as unimportant frills – governments with ample fiscal space. If a government does not have ample fiscal space, then it cannot  follow these prescriptions.

Salon has the article What the hell are you doing, Bernie? The Vermont senator inexplicably agrees to debate Donald Trump.  I haven’t read the article, but the title gives me an excuse to state my 2 cents worth.

When Sanders wins the nomination, he will then have to debate Trump for the general election. But somehow, it is a stupid idea to debate him now? Hillary is mired with still fighting Bernie which her supporters abhor, but it is stupid of Bernie to bypass Hillary and go after Trump directly?

If he can debate Trump well, then this is a very smart move. I am not sure of Bernie’s debating skills, but if he can’t take on Trump, better to learn that now than when he takes him on in the general election.

My fear of Sanders’ debating Trump is that Sanders will try to use the conventional arguments against Trump that have proven to be such losers to all those Republican contenders that are no longer in the race. With all the debates that Sanders has been through with Hillary Clinton, he and his team had to know every single ploy that she repeatedly used, yet they didn’t come up with good rebuttals for many of them.

Saying Trump is evil and dangerous and doesn’t know what he is talking about are all losing strategies. Saying that Trump recognizes the justifiable anger in the voters, but he identifies exactly the wrong causes would be a good start. Saying that Trump identifies the wrong culprits in an effort to divide people and shield the real culprits is the way to go.

Bernie needs to keep harping on the questions, Who are you shielding by going after the weak and powerless? Why don’t you go after the big banks, and break them up? Why don’t you try to undo the rigging of the system that your fellow billionaires have done so successfully over the last 40 years? Why not seek to punish white collar criminals who have done so much harm to ordinary people? Why not bail out the 99% instead of giving all the bail outs to the already wealthy?

Rock Trump back on his heels. Put him on the defensive. Take the fight right to him.

CNN has the article Dems worry DNC chair ‘too toxic’ after Sanders blast. Notably, CNN does not take comments on their article, so I will post my comment here.

The big lie has been repeated often enough that it has now passed into the realm of perceived truth not even needing a qualification when repeated. There is not even a hint here that what DWS said is turning the truth upside down. The chaos, such as it was, was sparked by the caucus chairwoman running roughshod over the proceedings. Does she expect Bernie Sanders to apologize for being victimized?

Wasserman Schultz was swept into the center of the ongoing intraparty war between Hillary Clinton and Bernie Sanders after she criticized Sanders on CNN last week. Wasserman Schultz said Sanders’ tepid response to chaos sparked by his supporters at the Nevada Democratic Convention was “anything but acceptable” and compared it to a Donald Trump campaign event.

Sanders and his campaign condemned the outburst and death threats his supporters sent to the Nevada chairwoman, but refused to apologize for them. Wasserman Schultz said his decision to complain about how his supporters were treated in Nevada only “added more fuel to the fire.”

I have tried to warn people that not fighting the big lie will turn it into accepted folklore.

Here is another example of trying to explain away the truth.

Former Mayor of Philadelphia Michael Nutter, whose city will host the Democratic convention in two months, defended Wasserman Schultz and compared Sanders to an ungrateful guest of the Democratic Party.

“This is like someone who comes to your house, says they don’t like the food, your TV is too small and I’m not particularly thrilled with what your kitchen looks like and then walks out complaining,” said Nutter, now a CNN contributor. “She’s been leading the party, he just became a Democrat and now suddenly believes that he should be in charge.”

The more apt analogy would be to think of Bernie Sanders as someone you have hired to analyze your failing business and help you fix it. He is just honestly telling you why you are failing. That’s exactly what you want him to do. As a person who sees the continued failure of a political party that I have supported for 50 years, this is what I like about Bernie Sanders. Sometimes an outsider is the only one who can see the problems clearly. (Followers of this blog will know that I have seen these faults and have pointed them out long before Bernie Sanders decided to run for President.)

Naked Capitalism has the story Inflation Targeting and Neoliberalism, Part 3.

We proposed an employment-targeting regime for the central bank. The Reserve Bank of South Africa, in conjunction with the government of South Africa, would develop a set of policies and tools—such as credit allocation policies, subsidized credit, lower interest rates, capital controls to keep the capital in the country, more expansionary and targeted fiscal policy—so that monetary policy and fiscal policy would work hand-in-hand to lower the massively high unemployment rate in South Africa. That’s an example of an alternative structure for monetary policy and one that has worked for other developing countries. So, for example, in South Korea in the 1950s ,1960s, and 1970s, the central bank supported the government’s industrial policy—by lending to development banks that would lend to export industries, by subsidizing credit for export industries, and they would do this as part of the government plan to develop the economy. I call this developmental central banking, that is, central banking that in combination with the government is oriented to developing the country using a variety of tools—interest rates, credit allocation tools, etc..

For years the Legislative and Executive branches of our government have been working at cross-purposes to the FED.  While the first two entities in the government refused to use their best tools of fiscal stimulus, this third independent entity of the government has had to use its ineffective tools to try, in some measure, to counteract what the rest of the government were refusing to do.

It is going to take some out of the box thinking that only Bernie Sanders can supply for a President to promote the changes we need to make this country great again. Hillary can’t do it because she only has inside the box economic advisers. Trump can’t do it because he holds too many self-contradictory ideas at any one time.

A foreign policy example of Trump’s is on the one hand his calling Hillary Clinton too trigger happy to be President and then on the other hand consulting with Henry Kissinger, the war criminal, on foreign policy.

Naked Capitalism has the article Economics for the Rest of Us Explains NAIRU, Including Its Political Implications. The article discusses the video below.

One obvious point which does not fit into this discussion’s framework: economists frame wages at the big potential driver of cost increases, when for manufactured goods, direct factory labor (which are in the class of worker most exposed to macroeconomic swings) is a small percentage of total product cost. By contrast, the NAIRU framing leads economists to obsess over unemployment levels (with the new “structural” level curiously higher than in the 1960s, when workers were less mobile than now) and ignore the roles of monopolies and oligopolies.

I am going to go back and look at previous podcasts on the this YouTube Channel.

Naked Capitalism has the article How the “Maximize Shareholder Value” Myth Weakens Companies and Economic Systems. The interview/article has a link to one of the participant’s paper The Myth of Maximizing Shareholder Value.

There is a discussion of how Milton Friedman and others introduced this myth to our society.

Consider first Friedman’s erroneous belief that shareholders “own” corporations. Although laymen sometimes have difficulty understanding the point, corporations are legal entities that own themselves, just as human entities own themselves. What shareholders own are shares, a type of contact between the shareholder and the legal entity that gives shareholders limited legal rights. In this regard, shareholders stand on equal footing with the corporation’s bondholders, suppliers, and employees, all of whom also enter contracts with the firm that give them limited legal rights.

Here is some economic thinking that Bernie Sanders would embrace if you asked him to enunciate how capitalism/democratic socialism works.

This is way outside the box of Clinton thinking. When she talks about economic plans that her advisers approve, I wonder if any of them take the premises of this article into consideration.

Naked Capitalism has the article The New Abnormal: “Disequilibrium Flirting with Deflationary Depression”.

The first ingredient of the New Abnormal is the fact that the mediocre growth that has been achieved over the past few years has depended on unprecedented and progressively more aggressive monetary policy initiatives. Meanwhile, fiscal policy, after the emergency easing of 2009-10, has been largely side-lined as a stabilisation tool. High levels of public debt have led most governments to calculate that they have little scope for fresh fiscal stimulus, notwithstanding the sustained fall in the yields on government bonds.

Several factors and actions are intermingling in a way that adds to the confusion of exactly what is going on.  The neoclassical economists are worried that the increased Fed’s pumping of liquidity into the market will cause inflation.  In fact there is no consumer price index inflation anywhere to be seen.  The Fed is trying to create a little inflation, but cannot seem to do so no matter how much liquidity they pump in.  In fact inflation has been created, but it is in the stock market and in asset prices, not in consumer prices.  The inflation of stock market values is applauded by the capitalists because it appears to increase their wealth.  As the article suggests, the problem with this view is that stock prices are artificially inflated.  The new wealth could easily disappear if the market adjusts by having a stock market crash.

The proper prescription for what ails the economy would have been fiscal policy rather than monetary policy.  A fiscal policy of investing in infrastructure and direct job creation would seem to mean more government deficits which the public has been convinced are bad things.

The real issue is not so much government deficits as it is an issue of what those deficits have been used for.  Recently those deficits have been used to finance tax cuts for the wealthy.  The wealthy use that money to inflate the stock market and asset prices without creating new jobs and higher wages in the economy.  There is no creation of physical assets that would benefit the economy.

If the deficits had been used to invest in improving infrastructure rather than tax cuts, we would have more and better physical assets to increase the capacity of the economy, keep people employed, lead to higher wages, and produce a higher standard of living for the bottom 99%.

In normal times, increasing taxes and lowering deficits is associated with putting the brakes on the economy.  This adds another level of confusion to what is currently happening.  When taxes previously have been cut to put money into the hands of the wealthy where it is ill used, there may actually be an economic benefit to taxing this money out of the hands of the wealthy and putting that money to good use instead of bad.  In this case, increased infrastructure spending might not lead to as enlarged deficits as it normally would.

Instead of using indirect measures like government deficits, stock market growth, and interest rates to judge what policy we should promote, we need to look at wages, employment, inflation, income distribution, and standard of living.

Naked Capitalism has the article After Distancing Herself From Bill Clinton’s Economic Policies, Hillary Wants Him as Mr. Economic Fix It.

After having institutionalized the neoliberal economic policies that have enriched the 1% and particularly the 0.1% at the expense of everyone else, Hillary Clinton wants to give the long-suffereing citizenry an even bigger dose. As she said in Fort Mitchell, Kentucky:

My husband, who I’m going to put in charge of revitalising the economy, because you know he knows how to do it,” Clinton said in Fort Mitchell, Kentucky, on Sunday. “And especially in places like coal country and inner cities and other parts of our country that have really been left out.

This plan is revealing, and in not a good way.

This article is a devastating analysis of all the things Bill Clinton did wrong to the economy when he was President. These are the things I try to post about. This is the best compilation of all the factors that I have seen in a relatively brief article.

If you don’t read this, or haven’t studied this on your own, then you don’t really have a clue as to all the damage that the Clintons have done to our economy. This article even mentions some of the damage that Bill Clinton wanted to do, but couldn’t get accomplished.

If you don’t understand why I will not vote for Hillary Clinton for President after reading this, then there is no hope of reaching you.  Either Hillary Clinton has no understanding of federal level economic policy needs, or she does understand how to make it work for the benefit of the 0.1% and devastating it for the rest of us.  I don’t like either alternative.

Even Donald Trump wouldn’t be this bad.  I don’t say that about Donald Trump just because of his reputation as a business man, but in spite of that reputation.  There are two things he has said lately that give me the impression that he really does understand the economic policy needed to be President.  He mentioned that the USA never needs to default on our debt exactly because we create our own money.  He also mentioned that the government needs to be a net issuer of debt when interest rates are low, and a net buyer of its own debt when interest rates are high.  Everybody right and left purposely misstated what he said so that they could accuse him of economic ignorance.  In fact he was only stating what every investor has to know – buy low and sell high.