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By J.D. Alt

I spent the last couple days reading and contemplating “Political Aspects of Full Employment”, the transcript of a lecture―given in 1942!!―to the Marshall Society by economist Michal Kalecki. This was recommended to me by Nat Uerlich in his May 2 comment to my post “False Choice or Real Possibilities.” Many thanks to Mr. Uerlich for taking the time to make the comment. I urgently recommend Professor Kalecki’s lecture to anyone who feels a little fuzzy (as I have lately been feeling myself) about what we are up against as a collective society as we now confront, once again, how collective society itself is structured to inexorably be its own worst enemy.

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The Myriad Mendacious Myths of “Market Regulation” of Finance

By William K. Black
June 7, 2016     Bloomington, MN

Representative Jeb Hensarling, Chair of the House Financial Services Committee has announced that he will introduce a Republican plan to repeal key provisions of the Dodd-Frank Act and replace them with “market-based” regulation.  I have explained in a prior column how theoclassical economists, for over 40 years, have created repeated criminogenic environments in finance due to their unholy ideological war against effective financial regulation.  The dominant policy view among economists and senior anti-regulatory policy advisers of every administration since President Carter embraced the myth that economists had invented means by which the “markets” will effectively “regulate” finance.

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An Argument Against Basic Income

NEP’s Pavlina Tcherneva speaks with Bloomberg’s Joe Weisenthal about Basic Income Guarantees. You can view the segment here.

The Lie That “China Wins” if the TPP Kangaroo Tribunals are Stopped

By William K. Black
June 5, 2016     Bloomington, MN

Proponents of the Trans-Pacific Partnership (TPP) know that they have a major problem.  Bernie Sanders, Hillary Clinton, and Donald Trump each oppose the deal.  CEOs, however, have not given up on their dream of being able to rig the international system through the creation of kangaroo tribunals that can, effectively, destroy effective regulation and the enforcement of rules to protect the public.  As I explained in my most recent column on this subject, “trade” is simply the pretext for this assault on the rule of law and national sovereignty.  President Obama plans to try to get the TPP approved by the lame duck Senate after the November elections.  Outgoing officials no longer must fear (or respect the will of) the voters and they are eager to cash in on the corporate largess that will reward politicians that vote for the international CEO impunity deals.

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Krugman’s Karma Forces Him to Feel the Bern and Attack the Kochs for “Buying Politicians”

By William K. Black
June 4, 2016     Bloomington, MN

When last we read Paul Krugman he was repeatedly demanding that Bernie Sanders cease criticizing Hillary Clinton for a lifetime addiction of taking tens of millions of dollars in political contributions and hundreds of thousands of dollars in speakers’ fees from Goldman Sachs and other business interests.  (I am an economic adviser to Bernie.)  While Professor Krugman consistently stressed that the data show that business campaign contributions do rig the system, Hillary Surrogate Krugman suddenly professed that business political campaign contributions and speaker fees have no corrupting effect on politicians.

Economists should be honest for all the usual reasons, but economists who wish to affect policy have an additional reason to embrace intellectual honesty.  Karma means that an intellectually dishonest economist is likely to be promptly confronted by the desirability of telling the truth in order to prevent disastrous policy on precisely the subject he or she just lied about.

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GOP Trumphemisms: “Completely Unacceptable” Means the Opposite

By William K. Black

Trump’s bigotry de jour was quadrupling down on his claim that the judge hearing the fraud lawsuit against the Trumphemistically-named “Trump U” (which was not a university and involved solely Trump’s wallet rather than his “leadership”) was biased against Trump because the judge, while born here, was of Mexican descent.  Trump’s free-floating bigotry is, of course, simply the norm, so the story here is the reaction of GOP leaders who have made public their support for making an open bigot our President.

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Money and Banking Part 17: History of Monetary Systems

By Eric Tymoigne

This is the last post of this series. Many more topics need to be covered to make a full Money and Banking course, but the series should help those of us who are dissatisfied with the current Money & Banking textbooks (I don’t use any).

Here is what is coming up in the near future: I will edit all the posts for typos (most of them hopefully) and to account for comments I received. Devin Smith kindly agreed to post the changes without changing any of the links. Formatting the text from a Word doc to a webpage is actually tedious work so many thanks to Devin. An M&B menu will be created at the top of the NEP homepage that will direct readers to links for each post. I will also make a fancy-looking pdf with all the posts, a table of content, etc. It will be more textbook-like and may be more appealing for some readers.

In the long term, there is a textbook coming. When? Difficult to say. I plan to write most of the first draft of the text next spring while on sabbatical. Then, several rounds of testing (and rewriting) must be done to include feedbacks from students. A test bank and exercises must be created and tested too. So there is some work to do.

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Money and Banking Part 16: FAQs about Monetary Systems

By Eric Tymoigne

The following answers a few question in order to illustrate the previous post and to develop certain points.

Q1: Can a commodity be a monetary instrument? Or, does money grow on trees?

Let us tackle the idea that “gold is money”. Clearly, a gold ingot is not a monetary instrument. There is no issuer, no denomination, no term to maturity or any other financial characteristics. A gold ingot is just a commodity, a real asset not a financial asset. On the other hand, gold coins have been monetary instruments and are still issued at times (Figure 1).

Figure 1. Gold (ingots) vs. Gold Coin (2009 $50 American Buffalo Gold Coin)

Figure 1. Gold (ingots) vs. Gold Coin (2009 $50 American Buffalo Gold Coin)

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Money and Banking Part 15: Monetary Systems

By Eric Tymoigne

Throughout this series, posts have used balance sheets extensively to get an understanding of the monetary operations of developed economies, but nothing has been said about what a monetary instrument is. It is time to spend some time on the nature of monetary instruments and the inner workings of monetary systems. A monetary system is composed of two core elements:

  • A unit of account that provides a common method of measurement: the euro (€), the pound sterling (₤), the yen (¥), the dollar ($), etc.
  • Monetary instruments: specific financial instruments denominated in the unit of account and issued by the government and the private sector.

This post first explains what financial instruments are and how monetary instruments fit within the existing range of instruments. It then delves into what determines the nominal and real value of monetary instruments and into what makes them accepted.

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