Bill Black appearing on The Real News Network

NEP’s Bill Black appeared on The Real News Network (TRNN) discussing the bill that the House of Representatives passed that further weakens financial regulation. The video is below. If you wish to view the transcript at TRNN, click here.

The BBC and the Economist Combine to Try to Defeat Syriza

By William K. Black
Bloomington, MN: January 20, 2015

As the Greek election nears, the mainstream media is ramping up its efforts to attack Syriza. As I have often explained, the trauma caused by the Washington Consensus’ economic malpractice in inflicting austerity on Latin America led to the election of a substantial number of leaders opposed to austerity and the troika’s infliction of austerity may lead to a similar dynamic in the EU. The BBC and The Economist agree that this could occur – and it terrifies them. A January 19, 2015 BBC article, presented as news rather than opinion, is entitled “BBC Democracy Day: Europe ‘faces political earthquakes.”

The article abounds in unintentional self-parody. First, the article admits austerity is a major driver of the “political earthquakes.” For reasons that pass all understanding the BBC hired the Economist’s “Intelligence Unit” to write what any right-wing BBC columnist would have written for no additional fee. Given that the Economist is one of the entities most culpable for the economic malpractice of inflicting austerity on the eurozone the idea that it is good journalism for them to opine about their opponents is sad or laughable depending on how one responds to absurdity.

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The Politics of MMT (Strange Bedfellows)

By Jonathan Denn

There are the cut-and-dried facts, about how money actually works, which MMT succinctly explains—that those who were unaware—seem to readily grasp.

  1. The US is the issuer of currency not just currency users like households, towns, businesses and US States.
  2. If a country has a marvelous productive capacity, a free floating sovereign currency, and little to no debt denominated in foreign funds—then there is no external reason it cannot spend regardless of taxing or borrowing.
  3. The last seven US depressions were preceded by seven rare public surpluses.
  4. A public deficit is a non public surplus, which means a private surplus after taking into account what leaked overseas.
  5. A private surplus is the point of a prosperous nation, as long as it doesn’t cause hyperinflation.
  6. Banks create money, too. But since it usually has to paid back someday, those dollars are temporary.

The conclusion is that the US is the monopoly issuer of net financial assets. So, given a stable foreign trade balance the only way the private sector can grow is with increased government spending, asset appreciation (inflation), people spending out of savings, or people/businesses borrowing (temporarily) from banks.

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The Triumph of Radical Right Economics in Greece – At the Hands of “Socialists”

By William K. Black
Bloomington, MN: January 19, 2015

In my January 18, 2015 column, I explained that German Prime Minister Angela Merkel’s sweetest triumph was successfully extorting George Papandreou, Greece’s Prime Minister, head of the Greek Socialist Movemnt (PASOK), and President of the Socialist International, to inflict austerity and a war on workers’ wages on the Greek people.  I quoted a passage from the Papandreou administration’s  May 3, 2010, “Memorandum of Economic and Financial Policies” (the Papandreou Plan) agreeing to the European Commission’s (EC) austerity and anti-worker demands that was made part of The EC’s  Occasional Papers No. 61 “The Economic Adjustment Programme for Greece” (May 2010).

In this column I explain how radically right-wing the Papandreou Plan was and the completeness with which it embraced rather than resisted the troika’s theoclassical nostrums that forced Greece, Italy, and Spain into gratuitous second Great Depressions.  In Greece’s case, the Merkel Great Depression has proven more severe and longer in duration than the Great Depression of 80 years ago.  The EC’s Economic Adjustment Programme for Greece description of the Papandreou Plan was accurate.  The Greek leaders “strongly own and support the [austerity] programme policies and objectives.”

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The New York Times Fears that Syriza Will Put “Ordinary Greeks First”

By William K. Black
Bloomington, MN: January 18, 2015

Even when the New York Times seems to think it is trying to open minded about the troika’s infliction of austerity on the peoples of the eurozone, its reporters are infected by the bizarre notion that austerity was the economically sensible response to the Great Recession. Even more bizarrely they are infected with the view that more austerity is the sensible response to the worse-than-Great Depressions that austerity inflicted on Greece, Italy, and Spain. The latest installment is entitled “Party Leader’s Populist Pitch in Greece Could Pay Off.”

The article does not explain what a “populist pitch” is (other than alliterative string of four plosives in a single title). The mainstream press uses “populist” as a pejorative term synonymous with class warfare against the wealthy that ignores economic reality.

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Odds and Sods: Some Good Reads For a Cold Winter Friday

By L. Randall Wray

If you, too, are living in one of the sub-zero climes right now, you want some stimulating reading for Friday.

  1. Here’s one of the best and fairest summaries of MMT that I’ve seen:

As Joe says: “Few matters of economic importance are as woefully misunderstood as modern money. It can seem a fiendishly complicated subject, even to economists. Schumpeter confessed to never having understood money to his own satisfaction, while Keynes claimed to know of only three people who really grasped it: ‘A Professor at another university; one of my students; and a rather junior clerk at the Bank of England’.”

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It Would be Well if Economics Were Modest for it has Much to be Modest About

By William K. Black
Bloomington, MN: January 13, 2015

One of the many quips ascribed to Winston Churchill is that it was well that Clement Atlee were modest for he had much to be modest about. This article comments on a remarkable article dated September 19, 2009 by the French economist Gilles Saint-Paul that embodies why economics is the only field that purports to be a science that has gotten worse for decades, which actively makes the world worse in its supposed area of expertise, and that is proud of it. I learned of the article through the worthy blog site Unlearning Economics. That site has a special category for theoclasscial sermons, including Saint-Paul’s, that exemplify our family rule that it is impossible to compete with unintentional self-parody.

Saint-Paul’s title is “A ‘modest’ intellectual discipline.” Saint-Paul is one of the economists who was an architect of the ongoing disaster, so one could hope that writing in 2009 would have led him to conduct a thorough re-examination of his field’s catastrophic failures. He should have begun with a personal and professional mea culpa and a series of frank admissions as to what caused him and his discipline to fail yet again and cause such great harm to the world. That’s what a representative of a “modest” field that has so very much to be modest about would do.

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What if the Public Understood How Money Works?

By William K. Black
Bloomington, MN: January 13, 2015

Economists as the Secular Priestly Caste Guarding Knowledge of the Holy of Holies

There’s something invigorating about people freaking out about modern monetary theory (MMT). They treat MMT as akin to the Ark of the Covenant in the first Indiana Jones movie. They are petrified that knowledge of the financial equivalent of the “holy of holies” will be released to normal people because they project their greatest terrors onto the possibility that the public will be transformed and empowered by their knowledge of matters that much of the financial world has understood for at least a century.

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Which Economists Told the Wall Street Journal that 24% Unemployment Wasn’t “Dire?”

By William K. Black
Bloomington, MN: January 11, 2015

Sometimes it is the little things than make everything clear. The WSJ gem I ran across explains so much about what is wrong about economists and the Wall Street Journal. The headline of the January 9, 2015 article foreshadows the strong chance that the reader is about to be transported into a strange dimension: “Weak Industrial Data Suggest Eurozone Economy May Be Faltering.” I don’t know how to break this to Murdoch’s minions, but the word “may” is hilarious and “faltering” is a euphemism. Here’s the money quote.

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Senator Warren and America Win in a Skirmish in a Long Struggle

By William K. Black
Bloomington, MN: January 13, 2015

There is an excellent indicator that Senator Warren’s successful effort to block the appointment of Antonio Weiss, an Obama Wall Street bundler, to a senior Treasury position while merely a skirmish was an important accomplishment. The financial media that pander most slavishly to the Wall Street and the City of London’s CEOs is enraged at Warren’s success. The headline in the UK’s Business Insider reveals their angst “Elizabeth Warren Wins, The Treasury Loses.” The article doesn’t try very hard to support that headline with facts because there is no real case to support the claim.

“A number of former Treasury officials thought Warren was way out of line, and that Weiss’ experience was perfect for the position he was being nominated for.

The White House stood by its nominee throughout, stating last month, “This is somebody who has very good knowledge of the way that the financial markets work, and that is critically important.”

No argument on that here.”

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