Yearly Archives: 2014

A Proposal for Eliminating Youth Unemployment

Posted on May 21, 2014 by | 2 comments

Pavlina R. Tcherneva presents her proposal for a Youth Employment Safety-net (YES!) at the Interdisciplinary Conference on Youth Unemployment in Times of Crisis “¡No Mas! Strategies and Alternatives”. Middlebury College, VT (starts at 38min 45secs)

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Essay Contest for Congress

Posted on May 21, 2014 by | 39 comments

By J.D. Alt

alt-ryanI’d like to propose an Essay Contest that might inform us better than any news talk show or presidential debate what we’re up against with our National Budget—and what might be the best course of action we should consider. Everyone in Congress should be required to participate, governors and state legislators who might become future congressional leaders should be encouraged to join in, and op-ed economic analysts invited to submit. The essays would be posted on a Congressional website established specifically to enable the public to vote on the best explanation of the topic. The topic I propose is this:

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Forget Taxes for Redistribution: What to do about Inequality

Posted on May 19, 2014 by | 31 comments

By L. Randall Wray

America has discovered inequality. But, as Jared Bernstein says, dealing with that will be expensive. He comes up with a nice wish list of policies to help the poor:

What will work here is a large, publicly funded infrastructure program to begin to repair our deteriorating public goods, with the jobs targeted at the working poor. All of the above — the expanded earned-income tax credit, universal preschool, job-creating infrastructure — will take more tax revenue, and much of that new revenue will need to come from those at the top of the wealth scale. 

He wags his finger at those who think there’s some free lunch that would let us help the poor without soaking the rich. Nope, he claims. Uncle Sam needs those taxes. The rich will have to pay-up.

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Sutherland Explained in 1939 Why GM Killing Customers Isn’t Treated as “Real Crime”

Posted on May 18, 2014 by | 5 comments

By William K. Black

The New York Times headline was dominated by a seemingly strong word:  “G.M. Is Fined Over Safety and Called a Lawbreaker.”

As I will explain, however, the seeming strength of the label “lawbreaker” is undercut by the rest of the title, the text of the article, and the reality of the Justice Department’s refusal to apply the rule of law to powerful domestic corporations and their controlling officers.

The first discordant note is the word “safety.” The article reports that GM, for the purposes of avoiding the expense of repairing a design defect that endangered the lives of its customers, covered up the defect and caused the death and injury of a number of those customers. The article does not report the (minor) cost of GM fixing its design defect. The article does not report on the number of people who were injured and killed because GM designed a defective ignition system, knowingly hid the defect from its customers and the government, and once it knew that its defective design was injuring and killing its customers GM deliberately covered up the existence of the defect and the cause of the easily avoidable injuries and deaths. The article states that GM was finally required to recall 2.6 million vehicles due to the defective design of the ignition switches.

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The New Joke Defining the Supercharged Version of Chutzpah

Posted on May 16, 2014 by | 4 comments

By William K. Black

The old joke about how to answer the question: “what does chutzpah mean?” – has been rendered woefully inadequate by events. The old answer was: “Chutzpah is when a son kills his mother and father and asks the court at sentencing to show him mercy because he is an orphan.” The two variants of the new answer to the question of what chutzpah means are: Continue reading →

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WHAT ARE TAXES FOR? THE MMT APPROACH

Posted on May 15, 2014 by | 39 comments

By L. Randall Wray

This is part of a series, following on from the last instalment that asked “Do We Need Taxes?”.

Previously we have argued that “taxes drive money” in the sense that imposition of a tax that is payable in the national government’s own currency will create demand for that currency. Sovereign government does not really need revenue in its own currency in order to spend.

This sounds shocking because we are so accustomed to thinking that “taxes pay for government spending”. This is true for local governments, provinces, and states that do not issue the currency. It is also not too far from the truth for nations that adopt a foreign currency or peg their own to gold or foreign currencies. When a nation pegs, it really does need the gold or foreign currency to which it promises to convert its currency on demand. Taxing removes its currency from circulation making it harder for anyone to present it for redemption in gold or foreign currency. Hence, a prudent practice would be to constrain spending to tax revenue.

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Three Principles for a Democratic Capitalism

Posted on May 14, 2014 by | 20 comments

By Brian Andersen

In my previous posts I stated several times that a currency should be equally spendable, savable and earnable. But I never tried to justify that idea, or explain why we should pursue those features as opposed to others. So the purpose of this post and the next is to explain that position. It is impossible to say what features the currency should have without some underlying value system to motivate the existence of currency in the first place. So in this post I will lay down the values I think should guide a sound currency administration. And in the next post I will use those values to explain my view that an equally spendable, savable and earnable currency should be our primary objective.

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“COST” & CONFUSION

Posted on May 13, 2014 by | 12 comments

By J.D. Alt

Even the most progressive proponents of climate change mitigation frame their argument with the proposition that the “cost” of mitigation today is far less than what the “cost” of climate change will be down the road if we fail to act now. While it sounds compelling, this argument perpetrates a deep confusion about what “cost” means when applied to the idea of inventing, designing and building the carbon-neutral infrastructure and energy systems that climate mitigation will require. This confusion, in turn, makes it more difficult for the political process to make rational decisions.

To illustrate, we need look no further than the recent United Nations IPCC report which, for the first time, not only details the potential catastrophe of climate change by the end of this century, but projects a “cost” for preventing that catastrophe from unfolding. This “cost” is calculated as a percentage of annual global GDP.

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DO WE NEED TAXES? THE MMT PERSPECTIVE

Posted on May 13, 2014 by | 40 comments

By L. Randall Wray

What do you get when you drop taxes? Well, Bitcoins.

Sometimes the only appropriate response to critics is embarrassment. For them.

Witness the following exchange on twitter:

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Geithner’s Other Ad Hominem Attacks on Barofsky

Posted on May 12, 2014 by | 7 comments

By William K. Black

In my first article on Timothy Geithner’s book entitled “Stress Test” I exposed the revealing and disgusting nature of his bizarre ad hominem attack on Neil Barofsky, the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) for the great sin of providing his law enforcement officers (LEOs) with side arms and protective vests – an action any responsible leader of SIGTARP would make a priority.  In this second article I discuss very briefly his other two ad hominem attacks on Barofsky and his staff.

Geithner Damns Barofsky for Lack of Expertise

This attack constitutes further proof of our family rule that it is impossible to compete with unintentional self-parody.  Geithner complains:

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