“All of this is particularly bizarre because the Trump administration is having enormous difficulty getting any of its supposed agenda done, and the only person who is actively implementing the Trump agenda is Jeff Sessions,” says NEP’s Bill Black. You can view here with a transcript.
More than fifty economists signed onto an open letter, written by professors Ha-Joon Chang of the University of Cambridge and James K. Galbraith of the University of Texas at Austin, ahead of this year’s presidential elections in Ecuador. The letter noted:
Over the past ten years, Ecuador has achieved major economic and social advances. We are concerned that many of these important gains in poverty reduction, wage growth, reduced inequality, and greater social inclusion could be eroded by a return to of the policies of austerity and neoliberalism that prevailed in Ecuador from the 1980s to the early 2000s. A return to such policies threatens to put Ecuador back on a path that leads not only to a more unequal society, but to more political instability as well. It is important to recall that from 1996 to 2006, Ecuador went through eight presidents.
The authors and signatories emphasized that “our goal is not to tell Ecuadorians whom to vote for, or to interfere in Ecuador’s political processes,” but instead to counter misinformation in mass media and “correct the record.”
Carlos Uribe-Teran and Pablo Vega-Garcia, both professors of economics at the Universidad de San Francisco de Quito, responded in kind with a critique of the open letter. In their concluding remarks, the authors generously offered up an opportunity to address their analysis, as well as to re-publish any exchange on their blog. We hope they will post this response there.
Jamie Dimon talked about his personal pain recently using the exact phrase that many of us have used to explain his personal anguish that “It’s almost an embarrassment to be an American citizen traveling around the world and listening to the stupid sh—t we have to deal with in this country.” The Wall Street Journal’s “Market Watch” described Dimon’s fervor.
“J.P. Morgan Chase & Co.’s outspoken CEO on Friday broke into an impassioned, expletive-tinged rant.”
The WSJ, in the introduction of an online video interview of Paul Gigot, its editorial page editor, termed it a “remarkable diatribe.”
Orthodox economists are often inclined to think of law as an external force that ‘intervenes’ to regulate otherwise naturally occurring economic phenomena. In contrast, Modern Monetary Theory and its antecedent intellectual traditions have long recognized that law in fact constitutes and shapes modern economies and the monetary regimes that underpin them. For example, Knapp argued explicitly that money was a “creature of law.” Similarly, Keynes, in A Treatise on Money, stated:
“The State…comes in first of all as the authority of law which enforces the payment of the thing which corresponds to the name or description in the contracts. But it comes in doubly when, in addition, it claims the right to determine and declare what thing corresponds to the name, and to vary its declaration from time to time-when, that is to say, it claims the right to re-edit the dictionary. This right is claimed by all modern states and has been so claimed for some four thousand years at least.”
Today, many of the core propositions of MMT can be understood as essentially legal arguments. Here are a few examples:
I delivered the talk published below as part of a panel at Yale’s annual Rebellious Lawyering Conference, on February 17th, 2017. The panel, entitled “Financing Criminal Justice”, co-hosted by The Modern Money Network, focused on the connections between fiscal austerity and the horrors of the U.S. criminal legal system. I was joined on the panel by Thomas Harvey, Co-Founder and Executive Director of ArchCityDefenders, Judge Jaribu Hill, Director of the Mississippi Workers’ Center for Human Rights, and Mitali Nagrecha, Director of Harvard Law School’s National Criminal Justice Debt Initiative.
Together, we discussed how financially-strapped local government entities, charged with public safety, perpetuate social violence, especially upon low-income communities of color. My presentation focused on macroeconomic context. More specifically, I attempted to build a bridge between the insights of MMT and arguments asserted by opponents of mass incarceration, police brutality, and criminal justice debt.
Good afternoon, everyone. Buenas tardes. In my short legal career, I have had some hands-on experience with these issues. After law school, I joined the Enforcement Division at the Consumer Financial Protection Bureau. We did (some) work at the intersections of private consumer debt and criminal justice debt. I’m currently at New Economy Project, an anti-poverty organization, in New York City. Some of our clients do wind up behind bars because of failures to appear and failures to pay. Some do leave incarceration only to return home to frozen accounts and judgment liens in addition to the fees they were charged for their time in the system. I’m not here to speak about all that, though. I’ll leave it to the experts.
Politico has just published a column with a title and analytics that drive white-collar criminologists nuts: “In a major setback for businesses, CFPB opens door to consumer class actions.” Logically, the title should have read: “In an important step forward for consumers, investors, and honest bankers and lenders, CFPB begins to restore the rule of law to banking.”
The CFPB is the acronym for the Consumer Financial Protection Bureau. The problem that led to CFPB to issue its new rule has six parts. First, it is often profitable for lenders to abuse and defraud borrowers. Second, lenders are able to do this because financial understanding is highly asymmetric. Third, even if the borrower eventually spots the fraud or abuse it is rare that the typical borrower could profitably prove the fraud and recover enough funds in a lawsuit to (net of legal expenses) recover effectively and could never recover enough to deter future misconduct. Fourth, the only potential legal remedy for the typical victim to recover and deter is the class action suit.
The Grenfell Tower Block fire in London is a predictable consequence of policies that can be traced to Margaret Thatcher, Tony Blair and Gordon Brown, as well as those of David Cameron and Theresa May, says NEP’s Bill Black on The Real News Network. You can view here with transcript.