Steve's Politics Blog

Naked Capitalism has the post Reversing 30 Years of Damage from the Clintons, the DOJ Closes A Price-Fixing Loophole Wide Enough to Drive a Truck Through.

Well, it took thirty years, but the DOJ has finally admitted this specific scheme started under the Clintons was a massive mistake, and it marks another sign that business as usual might be changing at the FTC and DOJ.

Here are some details on how the Clinton administration and the Obama administration opened the doors to inflation in health care and real estate.

Michael Hudson has published the article America’s Real Adversaries are Its European and Other Allies.

Without subsidy from these countries, especially as China, Russia and their neighbors de-dollarize their economies, how can the United States maintain the balance-of-payments costs of its overseas military spending? Cutting back that spending, and indeed recovering industrial self-reliance and competitive economic power, would require a transformation of American politics. Such a change seems unlikely, but without it, how long can America’s post-industrial rentier economy manage to force other countries to provide it with the economic affluence (literally a flowing-in) that it is no longer producing at home?

I think this is in a nutshell why the current USA economic and political policies are not good for USA inhabitants,

The Institute for New Economic Thinking has the article We Need to Talk About the Original Sin of Economics.

For Christian thinkers like Northcott, the pessimistic individualism that lives on in neoliberalism is the Original Sin of economics – a sin that has proliferated for the last two hundred years, culminating in the precarious situation of humanity of the twenty-first century. For them, as the welfare of people and planet are increasingly threatened, it is this stain that must be removed if we are to save ourselves and, as Wordsworth urges, “come forth into the light of things.”

I remember studying this topic in college. I don’t remember much detail of what I learned. I do remember some of these ideas expressed in this article.

YouTube has the video Understanding money and the dollar system’s contradictions with Radhika Desai & Michael Hudson.

Economists Radhika Desai and Michael Hudson explain the relations between money and debt, their role in imperialism, and the rise of the US dollar system.

This is the third episode of their Geopolitical Economy Hour” series.

Very educational talk. They introduced some ideas I had not considered despite years of reading Michael Hudson’s books. I certainly have some questions about some of the things they said. Questions to stimulate further research, not questions to challenge what they said.

I took some quick notes to use for that further research.

№116 Beyond the Dollar Creditocracy: A Geopolitical Economy .

“We are Witnessing the birth of a new monetary order” – March 2022 article by a Credit Suisse expert. Zoltan Pozsar. “Great Power Conflict puts the dollar’s exorbitant privilege under threat” in Financial Times

Nouriel Rubini – “A bipolar currency regime will replace the dollar’s exorbitant privilege” – Financial Times

Kindelberger promoted dollar hegemony. I think I may have taken a course from Kindelberger when I was in college. The World in Depression, 1929–1939.
MIT Professor Kindleberger dies at 92

“Indian Currency and Finance” John Maynard Keynes

Marcello de Cecco “Money and Empire“

Seymour Hersh has published the article How America Took Out The Nord Stream Pipeline.

The [Dreaded] New York Times called it a “mystery,” but the United States executed a covert sea operation that was kept secret—until now.

When Seymour Hersh publishes something like this, even the USA Deep State panics. I wonder how they are going to try to wriggle out of this one.

YouTube has the video THE ECONOMICS OF THE UKRAINE PROXY WAR w/ MICHAEL HUDSON AND RADHIKA DESAI!

Economists Michael Hudson and Radhika Desai join to break down the economics of the Ukraine proxy war between NATO and Russia as the one-year anniversary of the military operation approaches.

So far I have listened to the first 90 minutes which takes one to the end of the interviews with Radhika Desai and Michael Hudson. It certainly helps to have a background in the Geopolitics that Hudson, Desai, and Haiphong espouse. Of course you can develop that background by watching discussions like this. What I have come to realize is the weakness of MMT (Modern Money Theory) as practiced by almost all the rest of the MMT community (but Hudson and Desai) is the focus on sovereign currency issues. This focus tends to make MMT theorists downplay the importance of the international aspects of geopolitics. That makes MMT good as far as it goes, but it just does not go far enough.

Stephanie Kelton has published the article Danger Ahead: Mike Pence Would Pick Up Where Paul Ryan Left Off.

She uses the following video clip of Alan Greenspan tying to explain Social Security to Paul Ryan:

Clearly Paul Ryan did not understand a word that Alan Greenspan said. The problem with Alan Greenspan’s answer is that you have to know the economics behind his answer to fathom what he is talking about. You can see that it went over Paul Ryan’s head completely.

You have to think of the basket of goods and services that the economy must produce (or purchase from foreign sources) that will support the life styles we want to provide for all the people living in the country.

Can our economy produce this in a way that can be paid for with USA money? That is the issue to worry about. The Federal Reserve is capable of creating an infinite supply of USA money. Will that be enough to purchase what will need to be purchased every year into the future?

If there are politicians who are worried that this may not be available in the future, they need to explain what will most likely go wrong, and how they are going to fix it. If the politician cannot even imagine how it will go wrong, how can we expect that politician to figure out ways to prevent the calamity? Why do we need people who can’t figure this out to be running our country?

Have I presented the issue better than Stephanie Kelton has? If neither Stephanie Kelton nor I can get ordinary people to understand this, then ordinary people should be complaining very loudly that they need a better explanation. Any comments? Please speak up.

Columbia Journalism Review has the 4 part article The press versus the president.

Here is a quote from the Editor’s note on this 4 part article.

The result is an encyclopedic look at one of the most consequential moments in American media history. Gerth’s findings aren’t always flattering, either for the press or for Trump and his team. Doubtless they’ll be debated and maybe even used as ammunition in the ongoing media war being waged in the country. But they are important, and worthy of deep reflection as the campaign for the presidency is about, once again, to begin.

I have not read the article yet, but it has received high praise from The Grayzone.

YouTube has the video What causes inflation? Economists Radhika Desai & Michael Hudson explain.

In this episode of Geopolitical Economy Hour, economists Radhika Desai and Michael Hudson discuss inflation: what it is, what causes it, and what are the problems in how the Federal Reserve and other central banks respond to it.

They start off with the point I have been making for years. The rise in asset prices like the stock market prices is a form of inflation that everybody likes. There is no complaint when stock prices rise.

In the comments I inserted this.

Let me see how people here take to my explanation. Private banks do not create money. They create promises of money. The promise is that if you ever need “real” money from the private bank, they will find enough “real” money to satisfy your needs in the form of Federal Reserve Bank money. One example shows what I mean. When you go to a bank’s ATM to withdraw money, you get Federal Reserve Notes. You don’t get anything that represents private bank money.

Another question to ask, is “If private banks create money, why don’t they just create more of it when there is a run on a bank?”

What is it that the Federal Reserve Bank creates that satisfies the demand that private bank money cannot satisfy?

Where is the debt that came from the trillions of dollars the fed created to stop the crash of 2008/2009? The only debt was the USA government’s promise that you could pay your taxes with Federal Reserve Bank money. Why did China need so much Federal Reserve money when they were not subject to USA taxation?

You can find the transcript on the Geopolitical Economy web site article What Causes Inflation?.

I have just discovered the Q & A sessions with Michael Hudson. The episode on YouTube is Systemic Sponsors of Self-Interest.

Prof Michael Hudson answers questions from his Patreon supporters during the quarterly Q&A session. Discussions cover geo-political affairs through China, Russia, USA in light of inflationary pressures.

Even though I am a regular follower of Michael Hudson, each time I view one of these sessions, I learn something new.