By William K. Black
This column was prompted by an unusual source for me. Cuenca High Life is a site for ex pats living in Ecuador. It often discusses serious issues of national importance. The three issues a recent volume discussed are all important economic issues and they have prompted a fourth economic issue I will discuss in this column.
In Part One of this series, I considered “Fix the Debt’s” claim that high levels of debt cause high unemployment and gave a few reasons why this is a false claim. In Part Two, I followed with a review of the historical record from 1930 to the present and showed that it refutes this claim throughout this period, and that there is not even one Administration where the evidence doesn’t contradict “Fix the Debts” theory. In this part I’ll continue my examination of the other four “top reasons” why “Fix the Debt” insists that the National Debt should matter to you.
Posted in Joe Firestone
Tagged $60 Trillion Coin, austerity, CBO projections, debt-to-GDP ratio, deficit reduction, deficit spending, High Value Platinum Coin Seigniorage, HVPCS, interest rates, MMT, modern money theory, national debt, Peter G. Peterson, Social Security, unemployment, “Fix the Debt”
By Dan Kervick
Josiah Neely enters into a recent discussion in the economics blogosphere about the potential impact of religious orientation on attitudes toward monetary policy. I find that discussion, which began with a partially tongue-in-cheek Project Syndicate piece by former Moody’s VP Christopher Mahoney, to be a bit tasteless for my tender sensibilities, and I have no intention of entering it myself. But Neely doesn’t actually spend much time on religious beliefs and instead zeroes in on cultural and political attitudes:
Still, I do think Mahoney has put his finger on one reason why many conservatives and libertarians view monetary expansion with such a jaundiced eye. If there is one economic lesson the Right has internalized, it is Heinland’s aphorism that There Ain’t No Such Thing As A Free Lunch. And attempts to improve the economy by what is often derisively described as “printing money” can at first blush seem like, if not a free lunch, then at least as free lunch money.
Posted in Dan Kervick
By William K. Black
(Cross posted at Benzinga.com)
FBI Director Robert Mueller is taking his victory lap as he steps down after 12 years of service. I have done three articles in a series that explains how the Mortgage Bankers Association (MBA) conned the FBI into adopting the Tea Party’s mythology about the causes of the crisis – virginal banks beset by ultra-sophisticated fraudulent hairdressers. The MBA created a faux definition of mortgage fraud under which the bank and its senior officers were always the victims instead of the perpetrators.
Posted in William K. Black
Tagged accounting control fraud, banksters, FBI, mortgage fraud, Robert Mueller, white collar crime
John Kenneth Galbriath’s book, The Good Society: The Humane Agenda, creates a blueprint for a more just, prosperous and stable world. I’m re-reading it for the nth time because I continue to believe we might just get there one day. Indeed, I’m convinced we must.
In Part One, of a critique of the most important of “Fix the Debt’s” reasons for “Why the National Debt Should Matter To You,” I asserted that high debt levels haven’t caused high unemployment in the United States, and that, if anything causation was in the other direction. I didn’t want to disturb the flow of the argument there with a relatively lengthy survey of some of the numbers in the historical record since the 1930s. But let’s test the idea that High debt causes fewer jobs and lower wages in the United States by looking at that record now.
I came across a post from the “Fix the Debt” campaign last month called “The Top Five Worst Reasons Why the National Debt Should Matter to You.” It’s a post full of debt/deficit lies that cry out for correction. That’s what I’ll provide in this series. Continue reading
By Dan Kervick
President Obama’s new “vision” for higher education is so crass, so ignoble, so barbarous, and so chilling that it is hard to believe that it could have been written by anyone other than the most vulgar and mercenary corporate suit in his employ. It is a plan aimed at speeding up the corporate takeover of our higher education system, and transforming it once and for all into nothing but an assembly line for the production of useful human capital. I will leave it to the reader to scan the philistine details. For those whose minds, upon hearing the term “higher education”, immediately run to associations with business-world terms such as “bargain”, “investment”, “competition”, “options”, “performance”, “ratings system” … well then, it might be to your taste.
Posted in Dan Kervick
By Dan Kervick
Brad DeLong has taper anxiety, and is wondering what the Fed is thinking. He notes that, “real GDP in the U.S. today is and remains at least 5.5% below the path that past history tells us is consistent with stable inflation, and thus with rough balance in the labor market.”
He then reminds the Fed to attend to its responsibilities, given the current political environment:
… when fiscal policy and financial policy are suboptimal it is the responsibility of the Federal Reserve to take proper steps to offset them. Potential harms from accelerating the Federal Reserve’s quantitative-easing asset-purchase policies do not appear major. The actual harm from the disaster of a depressed economy is immediate and dire.
But at this point, does anybody really know what central bank policy would actually be most conducive to getting back to trend growth? Let’s run it down, PowerPoint style, shall we?
Posted in Dan Kervick
This is my second column discussing Federal Reserve (Fed) regulation in the context of the question of who President Obama should appoint to be Ben Bernanke’s successor. This column focuses on the sudden discovery by economists (and, purportedly, Obama) that the Fed Chair’s most important function is to regulate. (If that sounds like common sense to you, (1) you are not an orthodox economist and (2) you do not understand the Fed’s culture.) This column begins the process of explaining why most of the economists and finance scholars (Robert Prasch is the exception) writing to urge that the new Fed Chair be chosen based on their regulatory skills demonstrate that they lack any understanding of the fundamentals of financial crises and supervision (and aiding prosecutions). This column begins my response to Amar Bhide’s op ed entitled “Wanted: A Boring Leader for the Fed.”
Posted in William K. Black
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