Daily Archives: November 4, 2011

Wall Street vs. Greece: G20 Opens as Greek PM Pushes for Referendum on Bailout and Austerity Measures

Michael Hudson  “Polls report that 66 percent of the Greeks do want to stay in the eurozone. They want to stay in the euro. So, by trying to rephrase the question in a way that will get a “Yes” vote, they avoid asking the really important question: Do you Greeks want to push yourselves into a decade of depression and impose austerity? Do you vote to sell off the public domain, sell off the Athenian water supply, sell off your islands, sell off your mineral rights in the sea, sell off even the Parthenon—do you want to do that so that French banks and American bond insurers will not lose money?”

Do Harvard’s Econ Students Have a Point?

By Stephanie Kelton

Two days ago, a group of students at Harvard University submitted the following letter to their econ prof — Greg Mankiw – just before they got up and walked out of his introductory econ class.  In the letter,  Professor Mankiw’s students say, “If Harvard fails to equip its students with a broad and critical understanding of economics, their actions are likely to harm the global financial system. The last five years of economic turmoil have been proof enough of this.”
These students are clearly aware of the harm that economist scan do when they’re employing faulty models that rest on faith-based (theoclassical) assumptions to dispense policy advice in the real world.  See, for example:

Illegal Alien Guts Cause Republican Strategist to Worship Junk Economics for the One Percent

Aasif Mandvi’s interview of Noelle Nikpour,Republican Strategist, was broadcast on Wednesday, October 26, 2011.  Mandvi is an intrepid Daily Show investigative reporter. Ms. Nikpour, while vigorously wagging her finger, warned of a wave ofjunk science.
“Scientists arescamming the American people right and left for their own financial gain.”
“I think every Americanif they really thought about it would have a gut feeling that some of thesenumbers that the scientists are putting out are not right.” 
Her statements represented a sea change inRepublican Strategist strategy.  Byrelying on our gut feelings we are, as any Republican Strategist speaker onscience knows, relying on alien microflora to make our decisions.  Many Democrats are weak on protecting ournation from such alien invasions and call such microflora “undocumented,” butRepublican Strategists have the courage to call a phage a phage – these areillegal alien microflora.
Your gut is overwhelmingly populated by a mass(around three pounds) of illegal aliens. The microflora are literally non-human. They began to enter your body when you were a fetus – and RepublicanStrategists are fetuses’ most impassioned champions.  Your gut microflora first entered your bodyfrom your mother.  If she breast fed youshe reinforced the alien invasion of your innocent body.  It is no surprise that treacherous liberalslike Jamie Lee Curtis are pushing women to purchase yoghourts filled with“active cultures” designed to make the illegal alien microflora that rule ourguts more fruitful so they will multiply even more quickly.  The illegal alien microflora in our gutsalready outnumber our human cells by a factor of ten – and Jamie Lee Curtiswants them to go on an orgy of reproduction – much of it worse than homesexual– asexual alien reproduction in the gut of God’s vessel.  It is the dread mitosis in God’s eye. 

Many Evangelical Republican Strategists findthemselves in a dilemma with regard to this illegal placental border crossingand the subsequent maternal invasion by lactation.  Republican Strategists are great believers inmothers, but Southern Baptist Republican Strategists are taught to believe thatit is against God’s plan for a woman to ever have power over a man.  Republican Strategists counsel us to make ourdecisions based on illegal alien microflora that gained a foothold in ourhelpless bodily temples due to our mothers. When secular Republican Strategists urge us be guided by our guts we aregiving maternal microflora dominion over men. We may think we are men, and ordained to rule our households, churches,and nations, but our guts were all originally colonized alien maternalmultiflora.  Women’s sinful nature didnot end with the apple.  Our treacherousmothers infected us with invasive alien multiflora even before birth.  Indeed, our mothers are so insidious thatthey infect our guts with maternal multiflora that fool us into believing thatwe were created to rule and do rule – while we are actually dominated by andsubordinate to the maternal microflora that rule our guts and make ourdecisions.     
I have consulted my alien gut microflora, and theyhave led me to predict that liberal traitors are providing aid and comfort toour alien masters by pushing energy bars upon our innocent children.  Our alien masters are using our mothers tobetray our very humanity even at the cellular level.  Mitochondria, according to scientists’ aliengut microflora, are cell organelles that are the product of an alien invasionhundreds of millions of years ago.  Thesefifth columnists invaded not only our bodies but our very cells.  They stowed away in us before we were“us.”  Scientists’ alien gut mitochondriatell them that the creatures (probably bacteria) that eventually co-evolved toform mitochondria invaded far back in the evolving origin of species andcreated the Eukaryotes.  Scientists’ alien gut microflora are soskewed toward scamming that they believe in evolution.  Fortunately, Southern Baptists’ alienmicroflora cause them to reject such scams and have faith in a “young earth.”
Mitochondria are so despicable that they createtheir own DNA.  Illegal aliens, ofcourse, are adept at forging citizenship documents.  Worse, this inhuman DNA comes solely from ourmothers.  Our traitorous mothers areagain infecting us with alien organelles. Mitochondria are now the OPEC of broad swaths of life forms – they havea strangle hold on our energy supply. Republican Strategists should start a national movement for energyindependence and to reassert the security of our cross-species barrier(border).  What is our ATP doing in theirorganelles?  We need a no tolerancepolicy against mitochondria.  No amnestyfor alien organelles!  We can reassertenergy independence and reassert control over our precious bodily fluids bydrilling into every cell and expelling their alien organelles.  Drill baby drill!   
Republican Strategists should also begin a mass(bowel) movement to cleanse themselves of illegal alien gut microflora.  Ignore the snide scientists who predict thatthe strategy won’t work, but will make it easier for the Strategists to inserttheir heads up their favored orifice.
Scientists’ alien gut microflora and organelles tellthem that the alien microflora help our guts and that the mitochondria areessential to life.  Our guts’ alienmicroflora tell us that this is a typical “scientific” scam. 
The illegal alien microflora dominating my gut havedriven me to ask this question to Republican Strategists: why don’t your gutsever cause you to question the theories, findings, and policies that emergefrom the guts of theoclassical economists? Daniel Fischel and Judge Frank Easterbrook write in their 1991 treatiseabout the corporate law that   “a ruleagainst fraud is not an essential or … an important ingredient of securitiesmarkets.”   Why doesn’t your gut lead youto reject such tripe?  They publishedtheir treatise after Fischel applyied this theory in the real world as anexpert for three of the worst “control frauds” and produced disastrousconclusions and policy recommendations. The treatise does not mention those failures.  Doesn’t that make your guts queasy?  

Responses to Blog #22: Bonds, Reserves and Savings

Sorry am traveling, so the Blog has had a bit of a vacation.Must be brief today:
Q1: What about Ellen Brown?

A: I like the idea of public banking. Not a topic for today.Do not completely agree with her view of Fed.

Q2: What encourages a bank to lend money?

A: Most important: a profit opportunity to lend to aborrower likely to service her debt. Hint: has nothing to do with reserves.

Q3: At what point does borrowing at discount window push updiscount rate?

A: Never. This is not about quantity, it is about price.Central bank sets the rate at the discount window, so rate rises only whencentral bank decides to increase it.

Q4: Why does Japan have low bond rates?

A: Because BofJapan wants low rates. Set the overnight rateat zero, keep it there for a generation, and just like magic markets price in azero cost of overnight funds! You could just as well have asked why the USA hadnear zero bond rates throughout WWII in spite of budget deficits that would causea Greek to blush.

Q5: Many say rest of world funds the US trade and budgetdeficits.

A: And they be wrong. Dazed and confused. Where did everydollar the Chinese have come from?

Q6: Convince Bill Gross and we win the lottery.

A: Right. Note how well PIMCO did before Paul left PIMCO,and how poorly it is doing now. Paul and his rabbit understood MMT (more orless).

Q7: Isn’t treasury mandated to sell bonds equal to itsdeficit and to have funds in its account at the central bank before cuttingchecks?

A: Yes, true of many treasuries around the world. Goodexample of a government willing to tie its hands behind its back. Topic forlater blog. It is a specific case, not the general case. But, yes important butwe will see it makes no difference.

Q8: Banks create deposits out of thin air?

A: Yes when they make loans.

Q9: Deposit multiplier story: banks lend their excessreserves and through the magic of a multiplier money is created by a multiple.

A: Pure textbook fantasy. No, doesn’t work that way.

Q10: What would happen if reserves were discretionary?

A: Central bank has given up interest ratetarget, lets checks bounce, and bank checks don’t clear at par, so paymentssystem breaks down.