Moving Beyond Dollar Hegemony   Recently updated !

Michael Hudson has posted an article Moving Beyond Dollar Hegemony.

Understanding of the dollar’s world role is dominated by the ideas of ‘dollar hegemony’ and ‘US hegemony’. In this paper, based on our extensive past work, we reveal how these ideas are ideologies, not theories.

The article links to the paper Beyond the Dollar Creditocracy: A Geopolitical Economy by Radhika Desai and Michael Hudson.

However, Professor Summers misses the point. The twentieth century, from our point of view, was actually more an attempted American Century than an accomplished one (Desai 2013) and the shift away from it is looking more certain and decisive than the ‘ifs’ in his assessment let on. The pandemic is less a hinge than an acceleration of the decline of US power based on financialised neoliberal capitalism (Desai 2020a). The structure of world domination that the US had sought to foist on the world in recent decades is breaking down. The US never succeeded; the structure was too unstable and volatile to work. Therefore, one cannot blame the pandemic for reversing even its limited successes. The reversal is rooted in a geopolitical economic earthquake whose rumblings date back decades. They have loosened more and more countries from the contradictory and crisis-prone structures of US domination.

A 4000-year Perspective On Economy, Money, and Debt

YouTube has the video Webinar with Michael Hudson: a 4000-year perspective on economy, money and debt.

The history of money and debt can make us understand more of the economy, the power of the financial elite and how the world is governed today. This is the claim of economics professor Michael Hudson, who has also been an adviser to governments in the USA, Russia and China. Now he comes to Positiva Pengar to tell how history has been a struggle over who should benefit from the ownership, the money and the debts.

The Bible talks about jubilee years that recurred at certain intervals when all debts were written off. This was to correct imbalances that arise in economies over time. When economics professor Hudson in 1994 published his research that biblical debt relief dates back two thousand years to the Babylonian and Sumerian traditions, it was very controversial. Today it is recognized by Assyriologists, but among most economic thinkers the idea is taboo.

Why was debt write-off a matter of course several thousand years ago, but not today? Hudson’s research shows that, as he writes, “Debts that can’t be paid, won’t be paid.” How then will it be resolved? Do you want to know more? Watch this webinar.

I think there is some overlay, but not complete of the Q and A session of this video and the Q and A session of the post that I made previously – Financialization Is Suffocating the Economy. Actually the video in this post was the first part of the Webinar, and the previous post on this blog was the last part of the webinar. (Actually what I call the second part of the webinar is a later webinar that occurred about a month after this one.)

Financialization Is Suffocating the Economy

YouTube has the video Webinar with professor Hudson: financialization is suffocating the economy

More and more economists state that we have created a “financialised” economy where it pays more to passively own than to work, to run companies or in general to do things that benefits society. The financiers are becoming increasingly powerful and richer, while households, business owners and society must tighten their belts. Why do we accept this?

Welcome to an exciting webinar with professor Michael Hudson. He will show how economic and historical myths about money, debt and value have been used to justify an economic system that benefits financiers at the expense of everyone else.

The real meat of this video starts at about 5 minutes in. There is a previous video titled “Webinar with Michael Hudson: a 4000-year perspective on economy, money and debt” which I will post later.

This was a fabulous video. Michael Hudson explained so much. The questions and answers were quite instructive but one. There was a question about the provision of a basic income. Michael Hudson’s thinking about the term was nowhere near what the questioner was thinking. Essentially, Michael Hudson was supporting the Jobs Guarantee, while the questioner was asking about a UBI like what Andrew Yang proposed. If Michael Hudson had realized what the questioner had asked, he would not have supported it. What Michael Hudson said that Pavlina R. Tcherneva supported was incorrect. She does not support not UBI, but she does support the Jobs Guarantee. That shows the Hudson did not understand the question.

Naked Capitalism has a transcript in the article Michael Hudson Discusses Financialization, Rentierism, and Other Favorite Topics with Jessi Ora of Swedish Positiva Pengar Group.

July 13, 2021

Michael Hudson mentioned “The Chicago Plan” in the video. Here is one paper from the Levy Institute – The ‘Chicago Plan’ and New Deal Banking Reform.

Maybe Ron and Rand Paul aren’t as crazy when they talk about fractional reserve banking as I had thought.

Will China Save the US from Inflation Fears?

Isabella M. Weber has the article Will China Save the US from Inflation Fears?

The Federal Reserve Bank of Atlanta warned last month that the US might be headed toward an inflationary episode on par with the period following World War II, when the release of pent-up demand fueled a 20% surge in prices. But China’s efforts to stabilize commodity prices should help to avoid a worst-case scenario.

I have been reading articles about the possibility of inflation in the USA economy. This is the first article I have read about the history of practical attempts to control inflation.

How China Escaped Shock Therapy

The Institute or New Economic Thinking has the podcast and transcript How China Escaped Shock Therapy.

Isabella Weber, assistant professor of economics at UMass Amherst, discusses her new book on how China managed its transition from central planning to markets

This answers a lot of questions that I have had about China even though I have been reading commentaries from people who have been economic consultants to China. I am only now getting a picture of how the Chinese Cultural Revolution of the 1970s played into China’s situation today. I was always mystified as to how they went from the 1970s to now.

This ends up being an explanation of my “What Worksism” policy.

Job Guarantee

The web site We Can Have Nice Things has a page about the Job Guarantee.

Feb 2021
On February 18, 2021, the Job Guarantee Now! coalition joined Congresswoman Ayanna Pressley to launch the Federal Job Guarantee Resolution.Jobs for All: A Prosperity Economy “The Job Guarantee Now! campaign is led by PolicyLink, the National Jobs for All Network, and Public Money Action.”
House Resolution Recognizing the Duty of the Federal Government to Create a Federal job guarantee. — Rep. Ayanna Pressley, D-MA 07

How Intel Financialized and Lost Leadership in Semiconductor Fabrication

Naked Capitalism has the post How Intel Financialized and Lost Leadership in Semiconductor Fabrication.

Yves here. Get a cup of coffee. This is an extremely well documented account of how Intel chose pumping up its stock over defending a core business.

A side-note of little interest to anyone but me, Morris Change was Vice President at the division of Texas Instruments where I worked from 1969 to around 1973.

Responding to the opportunity to manufacture chips for fabless firms, in 1987 Morris Chang, a Taiwanese native with electrical engineering degrees from MIT and Stanford and 25 years of work experience at TI, launched Taiwan Semiconductor Manufacturing Corporation (TSMC) as the world’s first “pure play” foundry.

Since I retired in around 2007, I had no idea how far Intel had fallen behind.

Use this link to search of other mentions of finacialization on my blog.

The End of American Exceptionalism

The Institute for New Economic Thinking has the interesting video from 2018 – The End of American Exceptionalism.

Jeffrey Sachs sits down with Rob Johnson to discuss his new book, A New Foreign Policy: Beyond American Exceptionalism (Columbia University Press, 2018).

Arguing against American exceptionalism is what I try to do. The above video explains why. Even Bernie gets hung up on American exceptionalism. It’s probably a political necessity in this country. That is one of our fundamental problems.

America vs Everyone

The Institute for New Economic Thinking has this wonderful video America vs Everyone.

Jeff Sachs talks with Rob Johnson about the tragedy of modern geopolitics, and how our current race to the bottom could be reversed.

Most of this is completely aligned with the message I try to deliver on this blog. When I try to explain that technology (robots and AI) could be such a boon to society when done right, I get a lot of resistance. Same thing when I talk about the possible benefits of free trade. Maybe Jeffrey Sachs can say it more convincingly than I have. Sachs was no innocent when he first went to Russia to “help” them after the collapse of the Soviet Union, but in recent years he seems to have changed into a different person.

Can Biden Build Back Better?

Levy Economics Institute of Bard College has the paper Can Biden Build Back Better? Yes, if he abandons fiscal “pay fors” by Yeva Nersisyan and L. Randall Wray.

From the preface too the paper comes these two paragrahphs

Instead of matching an expenditure price tag with the revenue that can be raised, Nersisyan and Wray urge policymakers to evaluate spending and tax proposals on their own terms, according to the goals each is intended to meet. On the expenditure side, for instance, one of the motivations behind Biden’s physical infrastructure plan is to make progress in transitioning to a green economy. Nersisyan and Wray note, however, that the Biden plan falls short of what would be required for significant progress on this front. Their concern is that tethering the spending to tax increases means the former will be limited to the political feasibility of the latter.

On the tax side, there are a number of purposes one might want to achieve through tax policy changes, such as reducing income inequality, discouraging undesirable activities, or reducing private demand to head off inflationary pressures. In the pay-for game, however, “raising funds” becomes the central objective and, as Nersisyan and Wray illustrate, simply matching the spending number to the revenue number does not ensure any of these other purposes will be served effectively. For example, budgetary offsets for new spending could be desirable if the economy were at full employment. However, if tax policy is going to play a role in curbing inflation, then we would need to choose the appropriate instruments for this task. Nersisyan and Wray argue that the tax changes being proposed are poorly suited to relieving inflationary pressures. In this context, the types of tax increases—those that will free up real resources to be mobilized by some new public initiative—are more important than the total revenue number. They also stress that there are other proven means, beyond the tax system, of controlling inflationary pressures.

Here is the link to the pdf of the paper.