The Eurozone is an instrument of the globalization process that is setting financial elites over all nations of the world, including the democracies. The situation in Greece exposes the true nature of the Eurozone institutions as a naked fact, beyond spinning, for all to see. They are popular sovereignty-thieves and democracy-killers, with the power necessary to shut democratic governments down.
The architectural flaw in the Maastricht Treaty: that the nations of Europe were giving up their monetary sovereignty, was immediately recognized as fatal by acute economists, and many predicted failure. But, what was not seen clearly were the political implications of giving the ECB, the ability to deny liquidity to the banking systems of nations, and, in so doing to perform, essentially, coups rendering elected governments of democratic nation states powerless to enact policies they were elected to pass. This “theft of democracy” contradicts the EU’s commitment to advance democracy. It steals what was so hard won from the peoples of Europe. Continue reading
By Pavlina R. Tcherneva
Discussions of the ‘politically possible’ always remind me of a favorite quote: “Argue for your limitations, and sure enough they’re yours.”
Bernie Sanders’ issues page reads like a list of everything we’ve been told is not politically possible. And yet he’s getting record breaking support, precisely because people are tired of being told that something cannot be done–that it is impossible to get money out of politics, or that tackling inequality and racial injustice is unrealistic, or that securing a living wage is a political nonstarter.
Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’. And now he should add the Job Guarantee (JG) to his list of issues. Indeed, he already has the key ingredients—a bold proposal to eliminate unemployment by creating 13 million decent-paying jobs, a living wage, and a federally-funded youth job guarantee, which Sandy Darity correctly called a stepping stone (a pilot program) to a blanket job guarantee for all.
For all our Italian speaking visitors, our friends over at RETE MMT have undertaken the arduous task of translating Randy Wray’s MMT Primer into Italian. The project is a work in progress and not all posts have been translated as yet. As they add to their list of translated posts, we will update this list to reflect their accomplishments. The links will take you directly to the relevant post on RETE MMT.
By William K. Black
Bloomington, MN: August 8, 2015
I have often noted the existence of a primitive tribal taboo shared by virtually all economists against using the “f” word – “fraud.” I have found a new example that sums up many of the pathologies of economics and economists. It is an article entitled “Going for Broke: New Century Financial Corporation, 2004-2006.” Given that New Century was a classic accounting control fraud, the use of the long-discredited gambling metaphor (our “autopsies” of S&L failures refuted it in 1984) demonstrates the crippling power of the taboo. The three economists who authored the September 2010 article are Augustin Landier (Toulouse School of Economics) David Sraer (Princeton University) David Thesmar (HEC & CEPR) (collectively, “LST”).
For our spanish speaking (and reading) friends, the spanish version of Randy Wray’s book Teoría Monetaria Moderna is now available as a Kindle e-book. The details are available here.
By William K. Black
Bloomington, MN: August 7, 2015
The Republican debate last night revealed one area of broad agreement among Americans – we now live in a system of crony capitalism that is systematically rigged to favor the ultra-wealthy. That is all the more remarkable as an admission because the Republican candidates are overwhelmingly (and increasingly) funded by the ultra-wealthy. It is also remarkable because the Republican policy prescription for crony capitalism is to make the ultra-wealthy wealthier at the expense of the American people. This last point is logical, but obscene.
KCUR.org feature includes recorded interview with Randy Wray and others regarding the current crisis in the eurozone. Randy explains that some economists predicted the problems with the European Monetary Union with an explanation of sectoral balances.
By J.D. ALT
I recently attended a panel discussion called by Bernie Sanders—and moderated by Stephanie Kelton—to discuss the crisis in Greece. The panelists were Joseph Stiglitz, Jacob Kirkegaard (of the Peterson Institute) and James Galbraith (who, it had been disclosed just a few days earlier, was part of a secret committee in Greece which evaluated how, and at what cost, an actual Greek exit from the Euro could be managed.)
Jacob Kirkegaard was game in acknowledging that he’d been invited to lend “diversity” to the discussion—and then proceeded, without even wearing a uniform, to give a highly credible impersonation of a six foot nine inch SS storm-trooper. Joseph Stiglitz was a charming rambler who punctuated each point he made with a bright smile—the more painful the point, the brighter the smile. James Galbraith punctuated his points with the very first word of each sentence, which came out as a kind of uncontrolled squawk quickly followed by an incisive and original intelligence that I found truly mesmerizing. (I’d never before seen or heard any of these people.)
By William K. Black
Bloomington, MN: July 31, 2015
The Ohio State University (OSU) marching band is back in the news, which is a very bad thing. Sometimes a story that has no obvious connection to economics provides an understandable example of why economic analysis is often so poor. The OSU band story is featured in the Wall Street Journal in an article entitled “Holocaust Victims Mocked in Ohio State Band Parody Songbook.” The WSJ has a copy of the “OSU songbook” and the title is not an overstatement. The lyrics mock the Jewish victims in graphic terms. The lyrics are also juvenile and lame. The author(s) of the songbook have no future in any creative activity. The lyrics to other songs are homophobic and equally lame. I won’t quote the lyrics and spread the hate.
By Felipe Rezende
Hobart and William Smith Colleges
S&P has issued a negative outlook regarding Brazilian sovereign debt. The S&P’s announcement stated that “Over the coming year, failure to advance with (on- and off-budget) fiscal and other policy adjustments could result in a greater-than-expected erosion of Brazil’s financial profile and further erosion of confidence and growth prospects, which could lead to a downgrade. The ratings could stabilize if Brazil’s political certainties and conditions for consistent policy execution–across branches of government to staunch fiscal deterioration–improved. It is our view that these improvements would support a quicker turnaround and could help Brazil exit from the current recession, facilitating improved fiscal out-turn and provide more room to maneuver in the face of economic shocks consistent with a low-investment-grade rating.”