More Misdirection from Rampell in the Service of Generational War

By Joe Firestone

In my last post, I took issue with a recent column by Catherine Rampell, who tries to make the case that seniors haven’t paid for their Social Security and Medicare because they “generally receive” more in benefits out of these programs than they pay into them. Rampell relies on an Urban Institute study to make her case. Since that post, she’s offered another that replies to some of the questions raised by commenters on her earlier effort. I’ll reply to that new post shortly, but first I want to present key points emerging from my analysis of Federal monetary operations in my reply to her earlier post. See that post for the full argument.

First, once Congress mandates spending, there is no way that the Treasury can be forced into insolvency or an inability to pay its obligations as long as it is willing to make use of all the ways it can cause the Fed to create reserve credits in Treasury spending accounts which can then be used for its reserve keystroking into private sector account activities that today represent most of the reality of Federal spending.

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What Banks Should Expect in the Future

By William K. Black

Bill talks with CCTV America about the future expectations for Banks.

The Reality of the Present and the Challenge of the Future: Fagg Foster for the 21st Century

By L. Randall Wray

Here is a presentation that I’ll give today at the University of Denver at the annual J. Fagg Foster honors ceremony. Most of you will not know of Foster, but you should. While he did not publish much, he was the professor of a number of prominent institutionalists who attended DU in the early postwar period. I was lucky to have studied with his student, Marc Tool, and was introduced to Foster’s work at the very beginning of my studies of economics. My presentation below is based on two of Foster’s articles: J. Fagg Foster (1981) “Understandings and Misunderstandings of Keynesian Economics”, JEI, vol XV, No 4, p. 949-957.; and (1981) “The Reality of the Present and the Challenge of the Future”, JEI vol XV, No 4, p. 963-968. Both are from 1966, republished in a special issue of the Journal of Economic Issues, 1981. You should read them.


Is this the age of Keynes? That’s the question raised by Fagg Foster in 1966.

In the 1960s the answer seemed obvious. Keynes dominated economics—or, at least, macroeconomics—and Keynesianism dominated policy. And it worked! Or, so most thought.

Foster wasn’t sure. While he agreed that “[t]here probably has been no instance in history in which a pattern of ideas has had so much effect on the everyday life of everyone in so short a time”, he thought most of Keynes’s followers misunderstood his theory.

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Misdirection: Rampell Views Entitlements Through the Generational War Lens

Some of the favored children of the economic elite who have a public presence, work hard in their writing and speaking to divert attention from inequality and oligarchy issues by raising the issue of competition between seniors and millennials for “scarce” Federal funds. That’s understandable. If millennials develop full consciousness of who, exactly, has been flushing their prospects for a decent life down the toilet, their anger and activism might bring down the system of wealth and economic and social privilege that benefits both their families and the favored themselves in the new America of oligarchy and plutocracy.

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Turn That Frown Upside Down

(Updated – slides added)

Stephanie Kelton’s keynote address to the students, faculty, and visitors at Augustana College’s (Sioux Falls, SD) Undergraduate Research Symposium on Saturday, April 12, 2014 at 10am. Stephanie begins at 2:40. The topic of the keynote is Debt and Deficits in the Modern Economy. The slides are available below the video.

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The 11th Lesson We Need to Learn from Charles Keating’s Frauds: Bring back Glass-Steagall

By William K. Black

On April 2, 2014, as news broke of the death of Charles Keating, the most infamous savings and loan fraud, I posted an article entitled “Ten Lessons We Must Learn from Charles Keating.”   (The April 2 date was ironic, because it was the 27th anniversary of the meeting at which the senators who would become known as the “Keating Five” began to seek to intimidate the savings and loan regulators on Keating’s behalf.)

I failed to explain perhaps the most important lesson we should have learned from Keating and Lincoln Savings.  One of the subtle aspects of the savings and loan debacle that is often overlooked is that we ran a real world test of the importance of the provisions of the 1933 Banking Act known as the Glass-Steagall Act.  Glass-Steagall prohibited “commercial” banks that received federal deposit insurance (created by the same 1933 banking act) from owning equity positions in nearly all financial assets (“investment banking”).  With very limited exceptions, a commercial bank could not own real estate, companies, or stock in companies.  (Banking regulators, hostile to Glass-Steagall despite its immense success, would later add many exceptions.)  The ideas behind Glass-Steagall’s separation of “banking” from “commerce” always made eminent sense from conservative and progressive perspectives.  Commercial banks received a federal subsidy through deposit insurance, so it made no sense for them to be allowed to compete against regular businesses that lacked that subsidy.  It would distort markets to allow such a subsidy. 

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A Business Strategy Long Overdue

By J.D. Alt

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The Washington Post recently reported that Day Care now costs more—in 31 U.S. states—than a college education. In a fit of logic rarely exhibited in today’s journalism, the article explains that since it takes the average family eighteen years to save enough for a child’s college education, that same child now needs to start saving for his or her own children’s Day Care beginning at age eight. The article didn’t mention—I suppose because they thought it was obvious—that this necessity is against America’s child labor laws. And, of course, Little League Baseball would be devastated.

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PBS goes MMT, Cites JKG

What gives money its value?  PBS explores. You can check it out here.

Speculation in the Commodities Market: Part 2 A Response to Price Asset Management

By Ben Strubel

Recently, a nice man named George H. Rohrs Jr. from Price Asset Management, a firm that specializes only in commodities and managed futures investments, emailed me a copy of the newsletter his firm sent to clients in which he wrote a response to my article on commodity funds. Mr. Rohrs asserted:

I wouldn’t call Ben Strubel, the author of this article “stupid.” I would just call him “ignorant” and “unprofessional” and “biased.” I just believe that he ought to get his facts straight before embarrassing himself by publishing the compendium of misinformation contained in his article.

I wouldn’t call Mr. Rohrs an expert in the usage of quotation marks but I would call him a man with some very strong opinions about me. Let’s look at the points he raises in his article and find out if I am in fact ignorant, unprofessional, and biased. Okay. I’m currently sitting in my office not wearing my shoes, so I’ll cop to the unprofessional part.

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Sorry, Kyoto Signatories, Emissions Traders, Carbon Taxers, Homo Oeconomicus Won’t Save the Climate – Part 4

By Michael Hoexter

[Part I] [Part II] [Part III] [Part IV]

8.  Effective Climate Policy:  A Massive Commitment of Public and Private Resources

The long list above of features of an effective climate policy may fail the requirement that some would place on documents such as these that they be short and easily absorbed from a momentary scan of the page.  Perhaps at a future date, I or someone else will produce a shorter summary of what would go into effectively transforming the energy basis of society and maintaining and developing civilization beyond its current state.  However when the scale of the challenge is taken into account as well as the stakes involved, I believe the length of the mere sketch I have produced here is warranted.

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