Daily Archives: November 26, 2013

What if There Are No Conventional Price Mechanisms?

Posted on November 26, 2013 by Devin Smith | 9 comments

By Frederic S. Lee

Whether it be inflexible prices, wage rates that are too high and sticky, or interest rates that cannot become negative, they all have the common property of disrupting the smooth workings of the price mechanism, thereby causing recessions, preventing economic recovery, and creating unemployment. But what if there is no price mechanism that allocated scarce resources among competing ends? Then the ‘price problem’ would disappear and the causes of recessions and persistent unemployment would be quite different. Ignoring the issue whether scarce resources as defined in mainstream economics exist or not, I am going to interrogate the supposed existence of the price mechanism that lies at the theoretical core of all mainstream explanations of recessions and unemployment.

Continue reading →

9 Comments

Posted in Frederic S. Lee

Tagged administered prices, price mechanism, price problem, recession, unemployment

Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 1

Posted on November 26, 2013 by Devin Smith | 8 comments

By Michael Hoexter

The austerity push by politicians, political operatives, and pundits of the last 5 years is the height of economic, political, and social perversity and stupidity. Yet, as it still resonates in the halls of power, in the White House and Congress, and in many parts of the media, it still requires explanation and clarification. Besides inspiring the reduced level of government funding we are now seeing in the US and elsewhere, the deficit hysteria campaign is threatening to undermine what remains of the American social safety net that helped form and support the American middle class over the past 70 years. In addition, now and in the future, we will need a government able to use the full range of fiscal (i.e. financial) tools to combat climate change, tools which the austerity campaign seeks to lame or sequester for the benefit of a small financial elite. In the latest turn, deficit hysterics are trying to incite intergenerational warfare between the young and the old, accusing the latter of taking more than their share of public financial resources which the young will need later in life.

Continue reading →

8 Comments

Posted in Michael Hoexter

Tagged Deficit Hysteria, deficit hysterics, wall street

The NYT Implies that Not Prosecuting JPMorgan Proves DOJ’s Vigor

Posted on November 26, 2013 by Devin Smith | 3 comments

By William K. Black
(Crossposted at Benzinga.com)

No one expects Andrew Ross Sorkin’s slavish “Deal Book” lackeys to demand that the elite Wall Street bankers whose frauds drove the financial crisis be imprisoned, but the slavishness to the banks revealed when major news stories emerge continues to irritate if not surprise. A recent embarrassment can be found here.

The “Deal Book” Spinmeisters

The context of the NYT article was the expected settlement between DOJ, various states, and JPMorgan. The spin comes fast and hard, which would be great in cricket (or quarks) but, sadly, exemplifies the national paper of record’s “Deal Book” devotional pages. The “Deal Book” shows that cricket masters can impart very different spins. The first substantive paragraph’s spin is to minimize JPMorgan’s fraud.

Continue reading →