Yves here. This post is important because even though the Fed is focused on the impact of QE (and hence the taper) on the domestic economy, it’s been getting enough of a hard time from central bankers of leading emerging markets economies that it least has to feign concern credibly.
The Eichengreen/Gupta paper summarized in this post concludes that, quelle surprise, the countries most vulnerable to changes in Fed policy (which really means hot money in and outflows) are those with the biggest financial markets relative to GDP. Curiously, Eichengreen and Gupta fail to note that this means the orthodox advice to developing economies, that financial “deepening” is a Good Thing and therefore should be supported by government policy, in fact reduces financial stability and makes them even more vulnerable to the moods of fickle foreign investors.
An interview with Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College, on the Renegade Economists radio/podcast
A mere day after strikes at Amazon warehouses in Germany, which caught the attention of the media in the US, Slate ran as its lead piece in Moneybox an article that bears all the hallmarks of being a PR plant: Amazon Warehouses Are the New Factories.
I suspect the author, Emma Roller, wouldn’t recognize a factory if it fell on her.
Yves here. Das makes some statements in this post that I am certain will provide grist for reader discussion. But even if you quibble on some of the particulars, I anticipate you’ll agree on the extent of the damage done to trust at various levels of society and how costly it is proving to be.
Here’s something to listen to with your morning coffee; it’s a lecture on co-operatives, with Q&A following, by Gar Alperowitz at the New Economy Summit in Boone, NC, in April of this year. I like the title, because the agency in “What Then Must We Do” is explicit, in contrast (intentional or not) to [Anglophone usage of] Lenin’s famous “What Is To Be Done” (sez who?) where lack of agency signals the Bolshevik’s intent to tell people what was to be done. We know how that movie ended; there were a lot of movies that ended that way in the 20th Century. The video:
By Don Quijones, a freelance writer and translator based in Barcelona, Spain. His blog, Raging Bull-Shit, is a modest attempt to challenge some of the wishful thinking and scrub away the lathers of soft soap peddled by our political and business leaders and their loyal mainstream media. Cross posted from Testosterone Pit
There are certain things politicians should never do – assuming, that is, they want to hold on to their jobs. Using the dirty “s” word (sovereignty) for example, is a definite no-no. Also high up on the list of “don’t dos” is threatening the interests of foreign creditors and bondholders.
Yet this is precisely what Oriol Junqueras, the firebrand leader of Esquerra Republicana Catalana (ERC), the second largest party in Catalonia’s government coalition, did last week
We have now passed the event horizon into a world run by Dr. Pangloss. In a Sunday afternoon post, Paul Krugman enthusiastically endorses an IMF presentation by Larry Summers which depicts asset bubbles as necessary and desirable. And that means they both agree they should not only continue, they should be encouraged.
I really enjoy speaking with Harry Shearer, both for his engaging manner and his thorough preparation. I also hope you’ll see fit to circulate this interview, since the more attention we can bring to this plan to legalize corporate pillage, the better.
I’m generally very taken with Ian Welsh’s work, particularly two recent posts, A New Ideology and How to Create a Viable Ideology. He then continued with 44 Explicit Points on Creating a Better World. And I hate to say it, but the last piece was no where near as well thought out as the preceding pieces. What troubled me about his latest piece was its combination of confidence (as opposed to modesty and soliciting reactions and input) in combination with it having internal contractions and a lack of precision of language. But perhaps the biggest shortcoming was trying to finesse the question of governance.
We continue to live with the idea of recovery, which in our minds equals a return to what we had, plus added growth. For some of us that may come true, but for a very rapidly increasing number amongst us, it will not. Because, and it’s high time we acknowledge this, at this point in time, the only way the upper echelons of our societies can achieve some level of growth is to take it away from everyone else. And those upper echelons, mind you, demand exponential growth, which means, in a society that cannot grow, that the numbers of poor people will rise exponentially as well.
In reality, we are of course already seeing a huge redistribution of wealth today, only this one increases inequality instead of decreasing it. Which means all those dreams about equal access for everyone to the best health care and education available are long gone. If we would only redistribute wealth in such a way that it would see us return to the level of inequality that existed when those dreams were relevant, 60-odd years ago, much of our poverty conundrum would be solved. It is really as simple as that.