Author Archives: Devin Smith

Is the euro a foreign currency for peripheral Eurozone (EZ) countries? – Part 2

Posted on August 14, 2016 | Comments Off

By Ignacio Ramirez Cisneros

Some considerations on the IMF’s Independent Evaluation Office (IEO) latest assessment on the handling of the euro crisis.

Part II

If decisive large scale interventions on the part of the Eurosystem would have been enough to quell financial panic –along with the strategic functioning of the EZ large transactions payment platform, Target2, allowing capital repatriation by core EZ financial agents- the IMF should not have had a role in the crisis resolution process to begin with. The IMF is brought in when a country is in need of foreign reserves to bridge temporary difficulties in the balance of payments or when debt restructuring is imperative. The first case does not apply to any of the main three EZ countries that turned to the IMF for assistance, since the large majority of capital outflows were to EZ partners, and in any case almost all liabilities were euro denominated. Continue reading →

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Tagged euro, Eurozone

Is the euro a foreign currency for peripheral Eurozone (EZ) countries?

Posted on August 11, 2016 | Comments Off

By Ignacio Ramirez Cisneros

Some considerations on the IMF’s Independent Evaluation Office (IEO) latest assessment on the handling of the euro crisis.

Part I

The most recent IEO assessment of the IMF’s role in the lending and structural adjustment programs in Greece, Ireland and Portugal (and Cyprus) makes reference to a past held belief within the IMF ‘that large current account imbalances were little cause for concern [for the IMF], and sudden stops could not happen within a currency union that issues a reserve currency’ (IEO 2016, 46). In the document, it is made clear that this understanding of EZ financial realities was mistaken given all the financial and economic turmoil since 2010.

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An Open Letter to Hillary Clinton about Pragmatism in 2016

Posted on August 10, 2016 | 12 comments

June Carbone
Robina Chair in Law, Science and Technology, U. Minn. Law School
August 10, 2016 Bloomington, MN

I like Hillary. Would I like to have a mimosa with her? Wrong question. I suspect that that neither she nor I have much interest in partying during the mimosa part of the day. Indeed, I suspect that no woman who meets the mimosa test would run for President or be elected if she did. Instead, for me, a detail oriented policy wonk, the more relevant question is whether I would find a discussion of political strategy to be exhilarating. And in spite of the fact that I have supported Hillary for the last thirty years (since I was thrilled to discover that someone who had worked for the Children’s Defense Fund was running for Yale Alumni Trustee) and went out of my way to stick up for her over Bernie Sanders in the Minnesota caucuses, I still have no idea whether she sees the issues – the defining issues of our day – in the same terms that I do.

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Posted in June Carbone

Tagged Hillary Clinton

Minsky Meets Brazil

Posted on August 10, 2016 | 3 comments

By Felipe Rezende

Part I

This series will discuss at length the underlying forces behind Brazil’s current crisis.

A consensus has emerged in Brazil (and elsewhere) blaming Rousseff’s “new economic matrix” policies for the country’s worst crisis since the Great Depression (see here, here, here, here, and here). With the introduction of policy stimulus through ad hoc tax breaks for selected sectors seen as a failure to boost economic activity and the deterioration of the fiscal balance – which posted a public sector primary budget deficit in 2014 after fifteen years of primary fiscal surpluses – opponents argued that that government intervention was the problem. It provided the basis for the opposition to demand the return of the old neoliberal macroeconomic policy tripod and fiscal austerity policies. There was virtually a consensus that spending cuts would create confidence, reduce interest rates, and stimulate private investment spending. Fiscal austerity, according to this view, would be expansionary and pave the way for economic growth.

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3 Comments

Posted in Felipe C. Rezende

Tagged Brazil

Three Tales of Rigged Elections: The Narratives of The Political Revolutionary, The Billionaire, the Ballot Bandit, and the Corporate Media

Posted on August 9, 2016 | 6 comments

By Payam Sharifi

An oft repeated phrase you hear every election cycle is that “this is (one of) the most important elections in our lifetime”. This is usually said within the context of competing and (supposedly) incommensurable policy positions, during a (supposedly) rare moment of crisis that will transform American policy at home and abroad for at least four years. Yet this phrase has, much to my surprise, not been said once by anyone in the media or among the social media groups that celebrate either Hillary Clinton or Donald Trump. Instead, it is characterized as a historical moment where the threat of a neo-fascism in the form of Donald J. Trump must be stopped.

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Posted in Guest Blogger

Another Dimension

Posted on August 6, 2016 | 14 comments

By Thornton “Tip” Parker

As NEP readers know, the economy consists of private, government, and foreign sectors. Financial flows among the sectors always add up to zero; that is, one sector’s deficits must be offset by surpluses in either or both of the others.

If the private sector imports more than it exports, ignoring investment flows, it will run a financial deficit while the foreign sector runs a surplus and the economy will then slow down as money in the private sector becomes scarce. Unless the trade deficit is reduced, the only way to keep the economy running is for the government to run large deficits, as is it is doing now. While few people understand the sectoral view of the economy, many are aware of problems that this one-dimensional view does not explain. Continue reading →

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Posted in Uncategorized

Tagged MMT, Modern Monetary Theory

How Dallas Exposed the Blood Libels of the Police and Whites in the New York Times

Posted on August 1, 2016 | 5 comments

Part 3 of my series on Race, Crime, and Policing

By William K. Black
July 31, 2016 Bloomington, MN

This is my third installment in my series of columns about race, crime, and policing. I chose as my initial example of dangerous blood libels a New York Times contributor’s op ed. I use also a NYT editorial about blood libels involving crime and race that demonstrates the editorial board’s hypocrisy and analytical failures.

The New York Times Spreads a Blood Libel Against LEOs and Whites

On July 11, 2016, the editorial board of the New York Times denounced a man for propagating “racial myths,” through a “garbled, fictional statistic,” “false equivalencies,” “defam[ation],” and “race-baiting.” There were only three problems with the editorial. First, the man they were denouncing made his unscripted remarks on an interview program, while the New York Times invited one of their editorial contributors to write an op ed dated July 7, 2016 that exemplified the characteristics that the editorial denounced. The writer of the op ed presented no data, so he did not present a fictional statistic. The racial myths, race-baiting, and false equivalencies of the op ed were so much worse than the talk show participant that his defamation degenerated into blood libels against LEOs and whites as a race.

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Posted in William K. Black

Tagged Crime, Policing, Race

Bill Black on The Real News – Boris Johnson

Posted on July 16, 2016 | 1 comment

NEP’s Bill Black appears on the The Real News with Sarmini Peries discussing Boris Johnson. Johnson’s demonization of the EU and virtually all of its leaders in his role as an alleged journalist makes him the worst conceivable person to put in a top diplomatic post. Video below. Transcript available here.

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Posted in William K. Black

A Travesty of Financial History – which bank lobbyists will applaud

Posted on July 15, 2016 | 4 comments

Review of William Goetzmann, Money Changes Everything:
How Finance Made Civilization Possible (Princeton University Press, 2016)

By Michael Hudson

Debt mounts up faster than the means to pay. Yet there is widespread lack of awareness regarding what this debt dynamic implies. From Mesopotamia in the third millennium BC to the modern world, the way in which society has dealt with the buildup of debt has been the main force transforming political relations.

Financial textbook writers tell happy-face fables that depict loans only as being productive and helping debtors, not as threatening social stability. Government intervention to promote economic growth and solvency by writing down debts and protecting debtors at creditors’ expense is accused of causing an economic crisis (defined as bankers and bondholders not making as much money as they thought they would). Creditor lobbyists are not eager to save indebted consumers, businesses and governments from bankruptcy and foreclosure. The result is a biased body of analysis, which some extremists project back throughout history.

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