Monthly Archives: November 2013

DID SCOTT SUMNER FIND MMT’S ACHILLES’ HEEL?*

By L. Randall Wray

*The title of this post was inspired from a post by Mike Sax.

First an admission. I’m not really a blogger. I occasionally write pieces that somehow find their way onto blogs, but I rarely read or respond to blogs. I have no idea who is who in the blogosphere. For example, I do not know someone named Scott Sumner, who is apparently a Very Important Person in blogoland.

I note that he’s associated with the proposal that the Fed target nominal GDP. When I first heard about this, I thought it was a joke. Yeah, right, might as well have the Fed target the Earth’s Wobble. Gee, I’d really like the Fed to stabilize the tilt, to achieve San Diego’s invariantly moderate climate in upstate NY where I spend much of my time!

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The U.S. Attorney Who Prosecutes JPMorgan Will Be Its First Witness

By William K. Black
(Cross Posted at Benzinga.com)

The U.S. Attorney for the Eastern District of California is Benjamin Wagner.

“Once the U.S. government built a case against J.P. Morgan and settlement talks began, the Justice Department made several threats that it would file its civil lawsuit, and each time J.P. Morgan responded by offering to talk more or increase the amount of money it might pay, the people familiar with the discussions said.

One critical moment came as the department set an internal deadline, Sept. 24, to file a suit against the bank.

The day before the deadline, the bank offered to pay $3 billion to settle a case tied to mortgage-backed securities—an offer the attorney general rejected. That same day, Ben Wagner, the U.S. attorney from Sacramento, Calif., flew to Washington with two large charts he meant to display at a news conference describing the bank’s alleged misconduct. A criminal and civil investigation into J.P. Morgan’s past sale of mortgages bonds had been handled by Mr. Wagner’s office.”

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Texas is the New Jerusalem of Free Market Fundamentalism, but how’s that working out for the Lone Star State’s great unwashed?

By Glenn Stehle

Texas is the De Civitate Dei, the new holy city of free market fundamentalism, and Ted Cruz, the upstart Tea Party senator from Texas, has been quick to canonize himself as its patron saint.  In case you haven’t heard it yet, Texas is now “the light and the way,” and if you don’t believe it, just ask Ted Cruz or Rick Perry, or better yet ALEC:

The Texas growth narrative is well-known by now. Texas’ population grew by 11 million people (79 percent) between 1980 and 2011, more than double the rate of growth of the nation as a whole.   With that population growth came job growth. Since the 1990s, the rate of Texas job growth has been a full percentage point or more above the national average most years.

The American Legislative Exchange Council, among others, has suggested that other states should adopt policies that will make them more like Texas in order to grow their economies. One example from the introduction to ALEC’s recent Rich States, Poor States report: “[M]any governors are looking at Texas, which has led the nation in job growth over the past three years, as the state with the best policy to emulate.”   In particular, ALEC notes the state’s tax policy as a plus.

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House Passes Deregulation Bill Written by Citigroup

The Latest edition of the Black Finance and Fraud Report on TRNN. The House of Representatives has passed a deregulation bill written by Citigroup – supported by both parties.

What Was Inside that Red Pickup Truck?

By Dan Kervick

Driving home from work last night here in New Hampshire, I ended up behind a man in a tidy red pickup truck. The man had written a very elaborate message on the back of the truck, carefully arranged with block letter decals of the kind you use to put a name on a mailbox. I couldn’t read the entire message without tailgating, and some of the letters toward the end of the message were smaller, but here was the part I could read:

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The Taylor Rule: Ignore Fraud Epidemics and Worship Markets

By William K. Black

I recently posted a detailed article in response to Raj Chetty’s lament that scientists make fun of economics’ pretense to science.

The thrust of my article was that the problem was not that economics was inherently incapable of becoming more scientific.  The problem was that so many economists wear ideological blinders that recurrently cause them to perform a parody of the scientific method.

Chetty claimed that economists who are “testing precise hypotheses” in quantitative studies that exploit natural experiments are (finally, in 2013) “transforming economics into a field firmly grounded in fact.”  Chetty’s metaphor is that economics is like epidemiology.  (One assumes that his column is posted in the CDC’s common areas for the general amusement of epidemiologists.)

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