Author Archives: Mitch Green

The Mixed Economy Manifesto – Part 5 (of 5)

Posted on July 3, 2012 | 23 comments

By Michael F. Hoexter, Ph.D.

[Part 1 is posted here; Part 2 is posted here; Part 3 is posted here; Part 4 is posted here] 

Principles of Mixed Economies and Their Study

The challenge goes out to all of those who claim to know something about the macro-economy and society more generally to refute, dispute, modify or amend these principles listed below.  Additionally, after public discussion, having arrived at a perhaps-truer version that accords with the evidence, to go on and challenge in their professional and everyday lives unreal and dysfunctional beliefs about how our economies and human civilizations actually work.  Continue reading →

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The Mixed Economy Manifesto – Part 4

Posted on July 2, 2012 | 1 comment

By Michael Hoexter, Ph.D. 

[Part 1 is posted here; Part 2 is posted here; Part 3 is posted here] 

The Anti-Keynes Revolt

Against the Keynesian consensus of the WWII era and afterwards, there remained marginalized economic schools that held to ideal notions about markets and remained convinced that a reliance on government was tantamount to a “Road to Serfdom” and ultimately led to Communism.  The core of the neoliberal campaign, gathered around the Mt. Pelerin Society founded by economist/social philosopher Friedrich von Hayek, denied that government management of capitalism’s excesses was needed and that the price system and the market were pure, self-regulating entities which bring maximum prosperity and liberate the individual.   Continue reading →

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Brad DeLong: We’re All Minskians Now!

Posted on June 30, 2012 | 19 comments

By L. Randall Wray
(Cross-posted from Great Leap Forward)

Earlier this week I noted, tongue-firmly-in-cheek, that we’re all MMTers now, following Paul McCulley’s recommendation that we just declare victory. And be nice about it.

Well here is a strange post from Brad DeLong: He proclaims that essentially anyone who is anyone is a Minskian. And apparently always was. That is why mainstream economists like “Paul Krugman, Paul Romer, Gary Gorton, Carmen Reinhart, Ken Rogoff, Raghuram Rajan, Larry Summers, Barry Eichengreen, Olivier Blanchard, and their peers” ought to be trusted. Continue reading →

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Why Latvia’s Austerity Model Can’t Be Exported

Posted on June 22, 2012 | 12 comments

By Michael Hudson and Jeffrey Sommers
(Cross-posted from FT)

Austerity’s advocates depict Latvia as a plucky country that can show Europe the way out of its financial dilemma – by “internal devaluation”, or slashing wages. Yet few of the enthusiastic commentators have spent enough time in Latvia to understand what happened. Its government has chosen austerity, its people have not. Finding no acceptable alternative, much of the labour force has elected to emigrate. This is a major factor holding down its unemployment rate to “just” 15 per cent today. Continue reading →

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Dimon Lambastes Loans and Expresses His Devotion to Derivatives

Posted on June 20, 2012 | 11 comments

By William K. Black

The ongoing U.S. crisis was driven largely by financial derivatives.  Nine of America’s systemically dangerous institutions (SDIs) failed or had to be bailed out – Bear Stearns, Lehman, Merrill Lynch, Fannie, Freddie, AIG, Countrywide, Wachovia, and Washington Mutual (WaMu).  The SDI failures were primarily due to losses caused or aided by the sale and purchase of enormous amounts of fraudulent derivatives, and deregulation, desupervision, and de facto decriminalization proved exceptionally criminogenic.  The Commodities Futures Modernization Act of 2000 and the Gramm, Leach, Bliley Act of 1999, respectively, made credit default swaps (CDS) into a regulatory black hole and repealed the Glass-Steagall Act’s prohibition against banks mixing commercial and investment banking. Continue reading →

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How Many MBD Do We Need to be Geniuses?

Posted on June 19, 2012 | 1 comment

By William K. Black

Jamie Dimon is the smartest U.S. banker – as he, the Senate banking committee, the media, and President Obama told us.  They told us this in the context of Dimon’s bank, JPMorgan, suffering a huge loss due to (if Dimon is to be believed) his top lieutenants’ stupidity.  We are told that Dimon is the smartest banker because he ordered JPMorgan to sell its collateralized debt obligations (CDOs) (“green slime” “backed” primarily by endemically fraudulent “liar’s” loans) at the end of 2006 and close its special investment vehicle (SIV). Continue reading →

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Greece and the Rest of the Eurozone Remain on the Road to Hell

Posted on June 18, 2012 | 12 comments

By Marshall Auerback

So for the short term, it appears we won’t have a “Grexit”, which has led many commentators to suggest (laughably) that a crisis has been averted. Typical of this sentiment is a headline in Bloomberg today  “Greece avoids chaos; Big Hurdles Loom”. To paraphrase Pete Townsend, meet the new chaos, same as the old chaos. It is worth pondering how acceptance of the Troika’s program (even if cosmetic adjustments are made) will help hospitals get access to essential medical supplies (see here), whilst the government persists in enforcing a program which is killing its private sector by cutting spending and not paying legitimate bills, and an unemployment rate creeps towards 25 per cent and 50 per cent for youth.  Continue reading →

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Dimon’s Dictum: “Poorly underwritten loans represent income today and losses tomorrow.”

Posted on June 18, 2012 | 2 comments

By William K. Black

The aphorism is by Jamie Dimon. I took it from his March 30, 2012 Letter to shareholders (p. 8).  The immediately preceding sentence was: “Low-quality revenue is easy to produce, particularly in financial services.” Continue reading →

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MMP Blog #51: The Efficiency Fairy and Inflation Goblins

Posted on June 17, 2012 | 94 comments

By L. Randall Wray

The main objection to MMT is the belief that adoption of a fiat money necessarily leads to high inflation if not to hyperinflation. Those who adopt this critique usually see MMT as a proposal, although some (like Paul Samuelson) recognize that MMT actually describes the system we already have. The latter group fears that if we tell the truth about the existing monetary system, then elected officials will “run the printing presses” to create high inflation. Hence, best to adopt what Samuelson described as the “old time religion” of lies about the fiscal options open to sovereign government to keep the inflation goblins at bay. Continue reading →

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Marshall Auerback’s Latest Appearance on BNN

Posted on June 13, 2012 | Comments Off on Marshall Auerback’s Latest Appearance on BNN

Click here to view Marshall’s latest appearance on BNN’s Business Day.

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