Monthly Archives: November 2012

Will We Be The Lamest Generation?

By Dan Kervick

Matt Yglesias is now hawking an initial White House budget proposal that is apparently being negotiated by Tim Geithner.   Predictably, the two-stage proposal involves entitlement “savings” and cuts in both stage one and stage two, and backs off a bit on higher tax rates on the rich.  In exchange, the White House gets some more stimulus spending.  Yglesias advises Republicans to tell Obama:

… he can have his stimulus and he can even have higher tax revenue if he really wants it, but that the price is giving up his obsession with higher rates. Is he more interested in soaking the rich or in creating jobs? I don’t think Obama says no to a deal like that, and if he does lots of sensible liberals (like this guy) will call him out on it. Then we can put this sorry episode behind us, proclaim the Grand Bargaining Era done for, and hopefully move on to other things.

It seems strange to endorse a grand bargain in order to move on and proclaim the Grand Bargaining Era over.  Maybe next week Democrats should propose the elimination of the minimum wage so we can then declare an end to the Era of the Fight Over the Minimum Wage?

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CONFERENCE: The Return of Full Employment Policy

Date: December 3, 2012
Venue: Paasitorni, Sirkussali, Helsinki

It is often argued that the era of full employment and Keynesian economic policy is over. Most orthodox economists claim that, in the long run, real full employment cannot be achieved with demand management policies. Active demand management is, thus, deemed to be too costly and inflationary. Continue reading


By J. D. Alt

It was in the year 2020 that a majority of people first began to “see” what money is. For a few months—after the “realization” started hitting the pages, airwaves, blogs, tweets and twits of mainstream media—it became a silly joke: “2020 perfect vision, at last! How could things have been so blurry for so long?” For thousands of years, in fact. Continue reading

Neoliberal Mythologies

By Dan Kervick

It’s hard enough for ordinary citizens to keep up with the routine crony rackets the American plutocracy runs with their lackeys in Washington to rob us blind and lock us in the neo-feudal cages they are trying to build out of the bones of what was once the US middle class.  But the task of keeping up with the scams becomes even harder when central bankers promulgate myths and hide behind shibboleths designed to prevent the public from grasping just how much power we all still possess to seize control of our own destinies.

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More Austerity Advice From the Very Rich: Buffett On Deficits!

By Joe Firestone

Warren Buffett’s recent op-ed in the New York Times is making a stir because it calls for a minimum tax on high incomes above $One million annually. But I was much more interested in some deficit targeting he proposes which exposes his ignorance about the sectoral financial balances model of macro-economics, and reveals him as a deficit hawk whose advice, if followed would be unsustainable and lead the United States into another deep recession. I’ll comment on a couple of paragraphs in Buffett’s op-ed. Continue reading

Let’s Defend Social Security and Other Entitlements With the Second Bill Of Rights

By Joe Firestone

The favorite defense of Social Security by progressives harkens back to Franklin Roosevelt who famously said:

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The Bank of Canada Governor is Wrong on Too Big To Fail and Wrong on Canada’s Banking System

By Marshall Auerback

As a Canadian, perhaps I should feel a surge of patriotic pride now that Mark Carney has been designated the new head of the Bank of England – quite a step up for the current governor of the Bank of Canada.  There is no question that Mr. Carney is a market-savvy guy (he did, after all, work for the vampire squid), and his experiences as Chairman on the Financial Stability Board (FSB) suggests that he is sensitive to the ongoing systemic risks present in our increasingly complex global banking system.

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Two Ideas for Promoting Multi-Sectorial Analysis

By Thornton (Tip) Parker

This discussion goes beyond MMT and MS, and advocates of those ideas may or may not agree.  Much written here is prefaced with “I think”.

Wealth and income concentration:  The claim that money in the hands of the wealthy trickles down through the economy is just backward.  Money is like cream—it rises to the top.  In 2007, the ten percent with the highest incomes received nearly half of all personal incomes in the country.  This concentration was not just due to merit, much of it was  structural, institutional, and rent seeking.  In part because of Occupy, the public is gradually becoming aware of this fundamental problem.        Continue reading

William Black on HuffPost Live

NEP’s William Black appeared on Huff Post Live’s Sound Off hosted by Mike Sacks. The topic was tax hikes on the middle class. You can view the clip below or if you want to go to HuffPost Live – click here.

Ecuador: Bank Spreads, Taxes, Executive Compensation and Growth

By William K. Black
(Cross Posted at

One of the distinctive features of banking in scores of developing nations is the very large spreads between the rate of interest they pay their depositors and the rate they charge borrowers.  Academics have frequently focused on the exceptionally high spreads in Latin America in articles published over the last three decades.  Economic theory predicts that these spreads should impose a major drag on development.  The high interest rates charged to lenders should lead to very large “hurdle rates” for prospective borrowers’ projects.  The two obvious implications of high hurdle rates, sometimes discussed in the literature, are that fewer worthwhile investments will be made by prospective entrepreneurs and more of the loans in Latin America are likely to go to high risk borrowers.  High risk investments should be, if financial markets are efficient, more likely to produce higher returns exceeding the hurdle rate.  The standard neo-classical economic assumption is that financial markets are efficient.

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