Yanis Varoufakis: Why Bitcoin Is Not a Socialist’s Ally – Reply to Ben Arc

Naked Capitalism has the post Yanis Varoufakis: Why Bitcoin Is Not a Socialist’s Ally – Reply to Ben Arc

In summary, the monetary system is like the dog’s tail. It cannot wag the capitalist dog, in the sense that democratising money by means of a monetary commons will not democratise economic life but, rather, make capitalism uglier, nastier and more dangerous for humanity.

Having said all this, a monetary commons (that may very well rely on something like the blockchain underpinning Bitcoin) will, I have no doubt, be an essential aspect of a democratised economy; of socialism.

The article gives reasons to support the first paragraph quoted above. I have no idea what thinking backs up the second paragraph. For all the problems he raises about Bitcoin, I don’t see how taking control of the money supply out of the hands of government is going to help anything. Yanis needs to explain the automatic stabilizers he envisions for such a system before I can imagine hos such a system would prevent the crises he depicts in his post.

Private-equity crowd wants your 401(k) money — ‘yikes!’

Yahoo! Market Watch has the opinion piece Private-equity crowd wants your 401(k) money — ‘yikes!’,

From the Department of Dangerous Ideas comes the news that your employer may soon offer you the “opportunity” to invest some of your hard-earned money in private equity as well as in the public stock and bond markets.

I read most of this. “yikes!” is the appropriate response. One thing the article didn’t mention in the part that I read is that much of the superior performance is attributable to insider trading which has caused a few hedge fund managers to go to jail. As William Black titled his book, “The Best Way To Rob A Bank Is to Own One“. Just imagine how rich we could all be if we just resorted to robbery.

AskProfWolff: What is the Labour Theory of Value?

Every now and then, I need to refresh my memory about what Richard Wolff had to say about the labor theory of value. I have been a little off the mark lately.

Here is another explanation from Richard Wolff.

This makes a nice ending to the trilogy. Wolff’s explanation of the transition from feudalism to capitalism is a bit apocryphal compared to the way Modern Money Theory explains it, so take the point his is trying to make, but the details are somewhat ahistorical. Markets and the division of labor have existed throughout history. They were not invented by capitalists.

I think the USA today is an example of how market pricing misallocates labor in the USA. Too much labor is going into the financialization of our economy instead of productive uses that makes life better for us all. Financialization means making profits from moving money around rather than producing anything that improves people’s lives.

Financialization: Tackling the Other Virus

Naked Capitalism has the post Financialization: Tackling the Other Virus.

Financialization has involved reorganizing finance, the economy, and even aspects of society, to enable investors to get more from financial market investments, effectively undermining sustainable growth, full employment and fairer wealth distribution.

Most people seem to have no idea of the pernicious effects of this virus. For years, I have been trying to raise awareness with my blog where you are reading this post now.

Some people don’t know that our former Governor, Mitt Romney, made his fortune as a vulture capitalist, which is my word for some practitioners of financialization. Even our erstwhile former progressive Governor, Deval Patrick, could not resist the lure of vulture capitalism when he left office. Patrick now works for Bain Capital where Mitt Romney made his fortune.

I suspect that former President Barack Obama is making money this way. The fact that Obama and his Attorney General, Eric Holder, refused to prosecute the worst crimes of financialization is now being well rewarded.

Afghanistan War Exposed: An Imperial Conspiracy

YouTube has the video Afghanistan War Exposed: An Imperial Conspiracy.

Abby Martin covers the whole truth about the Afghanistan War, from the CIA construct of the 80’s through today’s senseless stalemate. Two decades, three administrations, tens of thousands of lives; it’s time to #EndTheForeverWar.

If you have been reading the latest lies about Afghanistan promoted by The Dreaded New York Times and The Dreaded Washington post, and our anonymous “intellignece” agents, maybe this will knock some sense into you.

Do you ever wonder why you should believe the people who have been lying to you for decades?

Stephanie Kelton and Yanis Varoufakis: Another Now #3 | DiEM25 TV

Wow, I stumbled across this great video, Stephanie Kelton and Yanis Varoufakis: Another Now #3 | DiEM25 TV. The only thing “wrong” with it is that Stephanie Kelton gave away the ending of her book. The butler didn’t do it

For those of us interested in the Movement For A People’s Party, there is inspiration here.

Welcome to DiEM25 TV’s ANOTHER NOW. The program that owes its existence to a mindless virus that placed capitalism in suspended animation, something not even WW2 managed to do. The one-hour discussion every Monday where, together with a weird and wonderful guest, we rant and rave with one ambition in our souls: To prevent a return to normality once the pandemic passes.

This week I have the honour and the privilege to be joined by Stephanie Kelton – an academic economist who felt the need to throw her lot in with Bernie Sanders, become his chief economic adviser and use her economic knowledge to fight the good fight not just in academia but wherever economic mystification is utilised against the many.

Shadow Government

Here is another thought that came to me last night. If we are to start a new political party with the Movement for a People’s Party, then beside organizing voters, it might be good to start planning a shadow government. We could organize policy groups that matched the departments of the actual government. These policy groups could formulate plans for how the People’s Party would actually run these departments when we elect a President in 2024. Having this in place would give voters the confidence that our President and our party were actually ready and able to run the government.

Personal Bonds Similar To Corporate Bonds

Here is a thought that came to me last night. If the Fed can try to stimulate the economy by buying corporate bonds, why not come up with a mechanism where the bottom 90% can create a bond-like instrument for the Fed to buy from them. This would inject money into the economy where it might actually do some good. A corporation already has too much capacity to make stuff for the size of the shrinking consumer market. Giving corporations more money when they have nothing useful to use it for is hardly going to help the economy. The bottom 90% have useful things they want to buy, if only they had the money.

When the Fed gives corporations a trillion or so to make things that they will sell wholesale, can’t you just hear them respond “Now, if only the consumers had enough money to buy this stuff at retail.” That sort of makes me think that the amount of money the Fed gives to consumers should actually be larger than the amount it gives to corporations.

USA Treasuries and Bank Reserves

Stephanie Kelton’s book The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy finally clarifies something I always wondered about.

In studying Modern Money Theory over the years, I have always felt that selling Treasury Bonds to “offset” federal budget deficits was somewhat counter-productive. On the one hand, deficit spending injects money into the private sector of the economy. On the other hand, selling Treasury Bonds drains money out of the private sector. Every time I have heard Stephanie Kelton talk, she says that Treasury Bonds are just another form of money. I kept saying to myself, but although Treasury Bonds can be bought and sold (traded) in the bond market, they are not like ordinary money. You cannot go to the grocery store and buy a loaf of bread with a Treasury Bond.

It took until page 98 in her book for Stephanie Kelton to finally say the words I have been longing to hear for years.

When the Fed wanted to raise interest rates, it sold some of its Treasuries. Buyers paid for those bonds using a portion of their bank reserves. By removing enough reserves, the Fed could move the interest rate up. To cut rates, the Fed would do the opposite, buying Treasuries and paying for them with newly created reserves.

When I first started reading this excerpt, my mind played its usual trick of thinking you don’t raise interest rates by selling bonds. Selling a large quantity of something lowers its price. Then my other brain kicked in to remind myself that the bond price changes inversely to the bond interest rate. A cheaper bond has a higher interest rate. When interest rates go down, existing bonds that pay the old, higher rate get more expensive to buy.