Links 2/19/12

Canadian government is ‘muzzling its scientists’ BBC

Tiny Robotic Bee Assembles Itself Like Pop-Up Book Wired (hat tip reader Paul S)

Bouncing off the walls: Can parkour boost urban economies? Grist (hat tip Lambert)

China to launch next manned spacecraft in summer Asahi Shimbun

Wireless drug implant takes the trouble out of treatment Nature (hat tip Lambert)

Arizona sheriff facing allegations of misconduct forced to publically announce he is gay Washington Post. Per Lambert: “Of course, Pravda doesn’t put that he’s a Republican in the headline. Closeted Republicans are really a ‘dog bites man’ story, at this point.”

Saudi Arabian millionaire ‘with links to 9/11 terror attacks’ living in luxury London home while working for state oil company Daily Mail. Reader May S. contrasts this with the “comfort arrest” reported yesterday.

“Economy Class Syndrome” Debunked Columbia Journalism Review. Not at all certain the indignant tone is warranted. What is wrong, exactly, with taking aspirin as a precaution on 8 hour plus flights? I know doctors who recommend a full dose (not a baby aspirin) daily as a stroke/colon cancer preventative for all patients save those with gastro-intestinal issues.

Problems alleged with major Afghan mining deal McClatchy (hat tip Lambert)

Riots in streets of Valencia against cuts in public education Demotix (hat tip reader Skippy)

Shanghai lowers tax on new flats South China Morning Press (hat tip Lambert)

China Cuts Bank Reserve Reqs; Exports ’Grim’ Bloomberg

Foxconn Plans to Lift Pay Sharply at Factories in China New York Times

Government issues Medicare Advantage guidelines Reuters. Lambert points out that this looks like a guarantee of insurer margins.

Romney runs against labor in the heartland Aljazeera

America’s Poorest People Running Out Of Places To Live: Study Huffington Post (hat tip Lisa Epstein)

When a County Runs Off the Cliff New York Times. The article omits the fact that the municipalities within the county are also substantial providers of services and are functioning on a normal basis.

Modern Monetary Theory, an unconventional take on economic strategy Washington Post. Lambert found a really serious typo which looks to have been introduced by editors who can’t grok that you don’t need taxes to fund a sovereign currency issuer.

The Case of the Missing Premium Columbia Journalism Review. You must read this. Now.

Wall Street insider blasts his industry MarketWatch (hat tip reader George E)

“Memento”, the Meltdown, and the Mainstream Gerald Epstein, Triple Crisis (hat tip Doug Smith)

Mortgage Foreclosure Settlement: Who Pays? Huffington Post

Bonds Backed by Mortgages Regain Allure New York Times. The Times is quoting Greg Lippmann, the patient zero of subprime? If the SEC investigation of Deutsche Bank were remotely serious, Lippmann would be in serious trouble. What Greg Zuckerman and Michael Lewis have written about them in their books on subprime shorts alone is grist for a good civil suit. And even worse, the headline implies that there is a market for newly issued non-government guaranteed bonds (wrong, that’s dead) when this is about speculation in vintage subprime.

The funniest bit is that the Times is acting as if the fact that Lippmann is talking up the market is a tip of sorts. As one of my buddies pointed out long ago, what you worry about when an investor talks up his book is not that he is trying to get more people in to raise the price, but he is trying to get more people in so he can complete his exit.

Antidote du jour:

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  1. Jim Sterling

    A UK study recently concluded that even a baby aspirin a day could cause more harm through bleeding (not just intestines but eyes and other parts of the body) than good through stroke and heart attack prevention. It can still be worth it for people at risk, but it can’t be considered a no-brainer any more.

      1. John L

        I put it between my knees instead. So far it’s working. I haven’t become pregnant. Guess that’s why they call them “baby aspirin”.

      2. John L

        Agree with Yves that the tone of the cjr article is awful. And nowhere in either the original article or the cjr piece is any data showing whether aspirin is effective against this type of clot, and how any benefit compares to the risks. If you google “dvt aspirin” you’ll learn pretty quickly that aspirin is not considered effective against clots in leg veins.

        1. Yves Smith Post author

          That is after the clot has formed. You need special anti coagulants if you have a clot. The aspirin is meant as a preventive, not to treat an existing clot.

          Look, moving around during a flight is a better remedy, but most people on a long haul flight try to sleep, and if you are successful, you could easily be immobile for 6-8 hours.

          1. John L

            Venous side clots which move to the lung are caused by fibrin. Aspirin blocks platelet clumping which cause arterial side clots which move to the brain. Different animal.

        2. neo-realist

          Zero stomach problems taking 81mg. However, I seek out and use slow release formulas if it makes a difference.

      3. Yves Smith Post author

        1. The stats I have seen say bleeding w/o aspirin use occurs in about 1.5% of the population and w/ aspirin use rises to 2.5%. So this seems to be a problem for only 1% of the population.

        2. Who funded this study, pray tell? Big pharma does not like aspirin

        3. Don’t have time to read the study, but did anyone who had reason to be worried re GI sensitivity take basic precautions to buffer the acid in aspirin, like having a bit of food with the aspirin?

        1. John L

          Universities. Retrospective study of 100,000 patients. Bottom line it doesn’t prolong life. Risk of serious bleeds cancels benefit from non fatal heart attacks. No change in fatalities from heart attack, stroke. Increased diverticulitis cancels benefit from reduction in polyps.

          1. Lidia

            For the longest time there has been no generic aspirin in Italy; it’s still almonst all Bayer. Costs about $9 for 20 pills. Only recently has the Communist “COOP” come up against the Big-Pharma/aristocratic-pharmacists cartel to try and introduce generic OTC medicines. (But they’re just another monopoly.)

        2. Don't GS me please!

          As an MD (trible BC), I have been taking aspirin (2 adults =730mg) every other day or at least once in 3 days over 20+ years! I am in my mid 60s. No problems of whatsoever so far. No cardiovascular or strokes, no gingivitis, no gall stones, no cancer of any kind! My blood profile is almost perfect for nearly 10+ years. My coronary risk is 25% of average.

          Aspirin has tow factors- Coxa inhibitor 1 and Coxa inhib 2. Inhib#1 prevents platelet aggregation(clotting) and inhib#2 is ANTI-INFLAMMATORY reduces chronic fulminating inflammation in ALL organs! Well known prevent colon cancer and other GI cancers. Facilitates glucose transference across cell membrane- reduces diabetes. Boosts immune response.

          Yes, 1 % are hypersensitive and has limitations in very old and those bleeding disorders and uncontrolled hypertension. Besides taking high dose Niacin (Vit B3) another non-prescription, the cost of generic (No need for Bayer’s!) Aspirin is next nothing! Consumer Health Reports had a nice article several years ago on the benefits of higher dose Aspirin IF YOU CAN tolerate it.

          No wonder Big pharma don’t like it and most of the docs I know including Cardiologists don’t know it’s therapeutics beyond 80-160 mg!

          To Each his own!

          1. John L

            Thanks for the info. Much appreciated. Will go do some more digging. It’s tough to get good info on thus sound bite world.

          2. Carla

            Aspirin is great. It’s the only thing I ever take for pain because tylenol, ibuprofen and other new-fangled OTC drugs just never cut it for me. Now I hear that children’s tylenol causes asthma!!!

            I’m definitely gonna pop an aspirin before long plane trips (the only kind I take) from now on….

        3. LeonovaBalletRusse

          They hate it because it is effective and inexpensive (although Bayer aspirin prices have gone way up). Aspirin got through the net of monopoly price fixing long ago. If Big Pharma monopolists could get it off the market, they would.

    1. FaustCarton

      Just went to a talk given by one of our best food techies in Aus, you have to get more resistant starch (RS) into your large intestine to avoid the colo/rectals. You need to spread the complex sugars between the small and the large and the RS and low GI’s are the ticket. Yep, and that means more methane out your bum.
      Also look into Jerry Brunetti, one of your great unsung genius-esses in the US. It all starts with your guts.

    2. Perkins


      Weston Price Institute

      Would you believe one of the best heart attack prevention strategies is….eating more butter?

      Price, a dentist doing research, correlated heart attacks with the amount of waxy milk fat that milk has in the spring because of the abundance of grass and feed. The more the fat, the LOWER the rate of heart attacks. The lower the fat, the higher the rate of heart attacks.

      The low fat diet is a fad and a scam and you know what? You’ll be happier eating whatever you want, as long as it’s high quality and organic of course.

      The site has a lot of very interesting links and resources.

    1. F. Beard

      Republican(!) homosexuals? That seems rather ungrateful to liberals and Progressives but narcissism is ungrateful by nature, isn’t it?

      1. Lidia

        Closeted R homosexuals, criminals and other hypocrites have become an everyday “dog bites man” occurance almost too boring to keep track of. Each case outdoes the last for sheer chutzpah (the lawyer for this latest sociopath says that voters will judge him “by his record as a 20-year veteran of the United States Armed Forces, police officer who has saved two lives in the line of duty and responded to thousands of emergencies, and Iraq war veteran.”

        You’d think they’d exercise some hygiene among the ranks, but it seems that instead every transgressor only amplifies their externally-targeted intolerance. It’s a tribal thing, the most repeated description of which is “IOKIYAR”.

        1. Mel

          Way back when, somewhere else, somebody commented on the phenomenon. They said that if you’re in an authoritarian hierarchy, it’s useful to have something on every one of the people under you so you can swat them down if they get ideas above their station.

          It’s very clear that the Republican party is an authoritarian hierarchy, but the rest? Seems overly strange, makes me wonder.

  2. SR6719

    Topic: Walking in L.A., Walking in L.A., nobody walks in L.A.

    Eccentric British writer Will Self goes on a walking tour of Los Angeles, from LAX to Hollywood, and along the way, discusses the concept of psycho-geography, the Situationists (“a tiny group of insufferably pretentious Marxists”), Wilshire Blvd, (“the first street ever designed to be viewed from a car, not on foot), among other things…

    extract from the Australian film “Obsessed with Walking” by Rosie Jones:

    1. SR6719

      On the other hand, the Situationists did have a major influence on the May 1968 student uprising in France, which helped to bring about a general strike with up to 10 million workers participating, the largest industrial strike ever in French history.

      And some think their ideas have influenced the Occupy Wall Street movement as well, although this is debatable.

  3. F. Beard

    This doesn’t mean that taxes are unnecessary. Taxes, in fact, are key to making the whole system work. The need to pay taxes compels people to use the currency printed by the government. Taxes are also sometimes necessary to prevent the economy from overheating. If consumer demand outpaces the supply of available goods, prices will jump, resulting in inflation (where prices rise even as buying power falls). In this case, taxes can tamp down spending and keep prices low. from Washington Post (Modern Monetary Theory, an unconventional take on economic strategy)

    I see nothing inaccurate with the above if this is what Lambert means by “typo” though instead of taxing, government might simply cut spending to allow the economy to catch up to the government’s money supply. An adjustable “Social Dividend” comes to mind.

    1. F. Beard

      Also, government spending is not the main source of price inflation; the government enforced counterfeiting and usury cartel, the banking system, is.

    2. Lidia

      “The economy” can never catch up with an interest-based money supply. It’s mathematically impossible at any stage of the game.

      1. F. Beard

        A monetarily sovereign nation should NEVER pay interest. It should just spend its inexpensive fiat into existence and tax it out of existence if necessary to control price inflation.

        And, assuming we ever get to a society that is just enough to eliminate the need for most social spending, the need for ANY taxation might be eliminated, permanently.

        1. Dave of Maryland

          There’s no point for a sovereign to spend money into existence so long as uncontrolled 1% rentiers can destroy that same money by removing it from circulation. Doesn’t anyone understand that uncontrolled hoarding is the problem?

          1. F. Beard

            Doesn’t anyone understand that uncontrolled hoarding is the problem? Dave of Maryland

            That’s one reason I insist on the allowance of genuine private money supplies; they can’t all be hoarded since new ones could rise to take the place of those that were hoarded.

            Also, without government backing/enforcement, usury and counterfeiting (so-called “credit creation”) would be a lot more difficult to accomplish. Also, a universal and equal bailout from ALL credit debt would go a long way toward reducing unjust wealth disparity.

          2. Dave of Maryland

            And “spend it into existence / tax it out of existence” isn’t the problem nor the solution. It’s a mythical fairy tale of a world that never existed and never will.

            In the real world there are people who hoard money. It’s what they do. They will be with us always, you can never make them go away, so we have to find some way of living with them. They should be taxed as the unproductive parasites they are.

            Hoarders ought to pay 90 or 95 or 99% of their income in taxes, which the government then “spends into existence” by redistributing it to the non-hoarders, eg, the poor.

            Hoards of money, like hoards of electricity, should be strongly discouraged.

          3. F. Beard

            In the real world there are people who hoard money. It’s what they do. Dave of Maryland

            If people attempted to hoard government money then government could just equally distribute (or increase an existing) “Social Dividend”. If people attempted to hoard a private money then other private monies could spring up or the issuer of the private money might spend more of it into existence to counter the effect of the hoarding.

            It is monopolies that encourage hoarding and which make it destructive.

          4. be'emet

            confiscatory income taxes would be a great boost for society. more critical still, confiscatory taxes on excess wealth. for starter, progressive taxes on land and real propertyproperty (yes Henry George and all that), and eventually other sources of rentier income.

            AMI proposals have actually been presented in Congress! Kucinich is The Man.

      2. craazyman

        not if debts are written off. Let’s say I borrow $1 million and three years later, I can’t pay it back and it gets written off to $100,000. 900G of the money still exists, because I spent it on travel and automobiles and clothes but none of the interest on it. Or maybe I’m wrong. It’s always possible.

        I always think of the lyrics to “Lidia the Tatooed lady by Groucho Marx” when I see “Lidia” here

        I can’t help it, my mind does strange things to me. I bet you don’t have even one tatoo and you never met Groucho Marx. :)

        1. F. Beard

          my mind does strange things to me.

          And do you do strange things to your mind? :)

          But yeah, defaulting on loans is a good way to keep money in circulation especially when the banks aren’t lending anyway.

    3. Bev

      Taxes and other frequently asked questions to consider about DEBT FREE PUBLIC Money which our country has turned to six times in our past to benefit all people (therefore, it is not unconventional). Support and protect all brave politicians who support us with DEBT FREE Money via Representative Dennis Kucinich’s NEED Act (National Emergency Employment Defense Act) HR 2990.

      11) Is there any chance the AMA (American Monetary Institute) could eliminate the federal income tax?

      It “could,” and though that’s not likely in the near future, it is the direction the AMA goes in. Thanks to the immense savings our government will experience through control over its money system, taxation should decline substantially for middle and lower income groups. It should be raised for the super rich.

      In addition the AMA should directly lead to substantial reductions in interest rates, because as the US pays off its national debt in money rather than rolling it over, those receiving those payments will be looking for places to loan and invest those funds. Interest rates should drop substantially.


      9) If banks are no longer allowed to create money, where will banks get enough money to fill client’s needs for money under the American Monetary Act?

      We devote substantial space to this question because economists so used to confusing credit and money have to get used to the idea of money instead of credit. Usually they want to know how the AMA creates money within the present bank accounting framework. Well it does not! The AMA will change the accounting rules to deal with money not credit.

      There will be several substantial sources of money for banks to satisfy their clients money needs:

      a) Title III of the AMA converts through an accounting procedure, the existing credit the banks have circulated through loans (about $6 to 7 trillion, roughly the existing “money” supply) into US money, no longer bank credit. That process will indebt the banks to the government for the amount converted over and above their capital. At present when bank loans are repaid to the banks by their customers, those credits/debts go out of circulation/out of existence and the credit money supply contracts as loans are repaid, until they make new loans. But under the American Monetary Act, since it’s now money, those monies will not go out of circulation the way the credits did. They are repaid to the government in satisfaction of the debt the banks incurred in converting them from credit to money. That goes into a pool which can be used by Congress for the items in Title V of the AMA (as described on pages 8 and 9), or it can even be re-lent to the banks at an adjusted interest rate. Note: this action de-leverages the banks, but does not reduce the money supply.

      b) Probably the most important source of funds for bank lending will be the continuing government expenditures, over and above tax receipts, such as social security and other payments by government on the items in Title V of the American Monetary Act. Also the engineers tell us that $2.2 trillion is now necessary to make our infrastructure safe over the next 5 years. That’s $440 billion new money per year. Also the health care and education provisions, and grants to states in Title V can be introduced as new money. ALL these will eventually be deposited into various types of bank accounts where provisions of the Act will allow this money to be lent or invested. The banks will be lending and placing this money that has been deposited with them; not lending credit they create, masquerading as money. They will have to compete to attract such deposits from citizens and companies.

      c) Title II of the AMA specifies the repayment of US instruments of indebtedness (bonds/notes/etc). Instead of being rolled over as at present, new US monies will be paid to the bondholders as they become due. Those people/institutions will be looking for places to invest that money. One place would be in bank stock, which is a source of lending funds for banks. Of the $5 to 7 trillion in US bonds and notes privately held, about 3.5 trillion is due within 1 to 5 years; .72 trillion is due in 5 to 10 years; .35 trillion is due in 10 to 20 years. All these amounts will represent newly created US money and will eventually find their way to becoming new lend-able or investable bank deposits and even investments in banks.

      d) Finally the AMA does not allow the banks to decide their own leverage situations. The Act essentially eliminates most leverage from the banking system in a healthy, non deflationary way. That will be good. They will no longer be able to pretend they were “banking” when they made bad loans overextending their positions and creating bubbles, in order to grab huge bonuses on imaginary profits. In other words banks will no longer be able to make loans in a bubble creation process. That will be a big improvement!

      10) How will the U.S. Treasury create the money?

      The same way the Federal Reserve does now, as simple account entries, but as income, without the accompanying debt obligations. It’s described in the AMA, Sec. 103 NEGATIVE FUND BALANCES: The Secretary of the Treasury shall directly issue United States Money to account for any differences between Government appropriations authorized by Congress under law and available Government receipts.

      11) Is there any chance the AMA could eliminate the federal income tax?

      It “could,” and though that’s not likely in the near future, it is the direction the AMA goes in. Thanks to the immense savings our government will experience through control over its money system, taxation should decline substantially for middle and lower income groups. It should be raised for the super rich.

      In addition the AMA should directly lead to substantial reductions in interest rates, because as the US pays off its national debt in money rather than rolling it over, those receiving those payments will be looking for places to loan and invest those funds. Interest rates should drop substantially.

      12) Why does the American Monetary Act have an 8% maximum interest rate, including all fees?

      Because before 1980/1981, forty nine States had “anti-usury” laws which limited normal interest rates to a maximum of between 6% and 10% p.a. (one state had 12%). The American Monetary Act takes the middle of this range to represent a restoration of the interest rate limits prevailing across the country prior to 1980/1981. See page 9 of the AMA.

      13) Won’t you be breaking the sanctity of contracts when you convert the existing bank credit already in circulation, into U.S. Money?

      No. First of all a contract requires understanding of the terms by all parties to it, and that certainly did not exist. But more likely it will be viewed as very acceptable by the banks, considering the security it confers on banking, especially when the alternative is going broke. There would be no reason to extend the legal tender privilege (acceptance for taxes) to the credits of any disagreeing banks.

      14) How would the ACT affect our position with China?

      The ACT would have a number of positive effects on Chinese – American Trade. Particularly it would encourage the Chinese to use more of their dollar earnings to really trade with us rather than just sell to us, and then invest their earnings in US bonds as at present. More details forthcoming!

      15) What about other countries, and international systems such as the IMF (International Monetary Fund) and the BIS (Bank for International Settlements)?

      We’d expect other countries to follow quickly in our footsteps to each obtain the advantages of issuing their own national monies. The United Nations is already putting forward suggestions that member states shift now to nationally created, debt free; interest free moneys. They are way ahead of the US Congress just now. A much reformed IMF, already organized under United Nations Article 57; #3, will see a greatly expanded role for the SDR and more responsibility for international accounts clearing as well as real assistance to member states, rather than acting as a destructive collection agent for the big banks. The role and importance of the BIS should be rapidly reduced, and perhaps eliminated. Just look at the mess created under their guidance and rules. Some job they did!

      16) The latest craze “question” making the rounds in the organized disinformation campaign that is attacking our national psychology, is not a question at all, but a vicious assertion:

      “Government is so corrupt and so much in the hands of the worst people and they won’t ever let you do this reform! Or any good thing”

      This popped up simultaneously from LA to Seattle. I’ve told friends to put that stupidity out of their minds. This assertion, designed to discourage, is a variant of the Sun Tzu method of winning the battle by convincing the opposition not to fight because they can’t win. It reminds me of the cyborg “Borg Wars” line “Resistance is futile” from the Star Trek New Generation series. Don’t fall for it!

      As our people suffer more deeply from the unfortunate monetary/banking system, any remaining bad elements in government can and must be cleansed. That’s what we’ll do instead of whining about it. Become a part of the solution not a cry-baby! Get up and fight for your family and nation!

      1. F. Beard

        Any lending by a monetarily sovereign nation is essentially credit creation – money creation. So the US Government is to lend to the banks wholesale so they can lend retail?! And who gets the new money? Everyone equally? Or are the so-called “credit-worthy” to be allowed to steal everyone’s purchasing power as they do today?

        Also the AMA does not go far enough. Usury is not just high interest; it is ANY interest. As for the banks, government should have NOTHING to do with them other than to punish them for fraud and insolvency.

        That said, I am indebted to Stephen Zarlinga’s book The Lost Science of Money which I recommend.

      2. Lambert Strether

        More on the typo. A disclaimer now appears at the top of the story. It reads:


        An earlier version of this article included an incorrect anecdote regarding a Modern Monetary Theory meeting. This version has been updated.

        The anecdote, describing a meeting between Warren Mosler, Paul Krugman, and his wife, had contained the typo. Good for WaPo!

      3. Bev

        Taxes, the way they work now…

        It’s obvious most politicians don’t understand.
        The bankers know full well and they are counting on YOU not understanding, too.

        There Is One Way That New Money Is Created or “Born”.
        One Way.

        A Loan.

        That means:

        1. When a loan is made, only the principal is created.
        2. If only the principal is created, then no money is created to pay the interest on the loan.
        3. Therefore there is always more debt than money to pay it.

        If all money is created as a loan, then taxes are paid with loan principal (borrowed money).

        Increasing taxes WILL MAKE THINGS WORSE!

        Why? If taxes are to be paid in money, and all new money is loaned into existence, then somewhere the money collected as taxes had to be borrowed. You cannot borrow your way out of debt. Increasing taxes will place a two-fold burden on the economy (less money to grow the private sector, and an increase in private sector debt) and you will worsen the depression.

        Expect more lay-offs, more inner city decay, decreased revenue as fewer people can find work.

        Oh, and expect voters to blame you.

        If the principal on a loan payment gets extinguished at the time of payment, then “balancing the budget” WILL MAKE THINGS WORSE!

        Why? If the only source of new money coming into the economy is new loans (government, business or personal) and you slow the new borrowing, while at the same time loan payments are being made (mortgages payments made, car payments made, credit card payments made, government bonds paid, Treasury securities redeemed, student loan payments made) and that principal amount is extinguished from circulation, you will worsen the depression.

        Increasing taxes will make things worse.

        “Cutting spending” (they should say borrowing) will make things worse.

        Your ONLY remedy is a wealth based monetary system.

        With a wealth based money system, you could turn this economy around in a flat hurry, launch a full scale, value added infrastructure rebuild, pay off our debts, build a thousand ship ocean clean-up fleet (for oil, toxic chemicals and plastics), bring desalination plants online, rebuild the electric grid, provide jobs, jobs, jobs, and heal the world of this economic cancer called debt money.

        Or, do as you have been doing and rearrange the deck chairs some more, as this debt money system begins to groan in earnest, rivets popping and our nation taking on water faster then we can bail it out. It will sink. It’s math – you can’t outrun it, no matter how many knobs you turn or switches you flip – you cannot borrow yourself out of debt!

        If the GWP (Gross World Product) is just over $70 Trillion, and the U.S. owes over $250 Trillion, how will raising taxes fix that balance sheet? How will cutting spending fix this when the gross production OF THE ENTIRE WORLD cannot pay what we owe?

        You cannot fix it with the same thinking as created this debt cancer. You need a cure.


        They miss key points

        a. Principal is extinguished when a loan payment is made.

        1) That means whenever you, anyone, or all of us make a loan, credit card, student loan, mortgage payment, money is removed from the system – a draw or vacuum in the economy. If nothing is done, the system will run totally dry. That’s why they are so busy making the bailouts, stimulus programs and Quantitative Easing – to get more money into the system.

        2) Therefore, their assumptions that “more money in the economy makes the existing money worth less” is faulty. It’s NOT more money that is the enemy, it’s more debt.


        4. Hyperinflation is cause by banks not by too much money. In Germany the banks arbitrarily raised the interest rates to 900%. It it an act of economic warfare. Combined with misinformation, the masses never catch on. They only get their wealth and labor confiscated by the very ones manipulating the rates and crying about how they are so damaged financially, when they in fact, create money as a bookkeeping entry – just numbers that never existed before the loan was made.

        What we need is a wealth-based monetary system.
        It’s as easy as passing a simple accounting change into law.
        That’s it!


        Dennis Kucinich’s NEED Act HR 2990

        1. MyLessThanPrimeBeef

          There Is One Way That New Money Is Created or “Born”.
          One Way.

          A Loan.

          That means:

          1. When a loan is made, only the principal is created.
          2. If only the principal is created, then no money is created to pay the interest on the loan.
          3. Therefore there is always more debt than money to pay it.


          Bev, do you think (3) is always true?

          1. Bev

            Pardon the delay. I had to find this again. I think it explains a lot.

            The unpayable interest is paid with bankruptcies, fraud and money laundering.


            Bankruptcies – No End In Sight.

            Don’t you wonder what happens to the money that was borrowed and then spent into the economy, when a person goes bankrupt?

            The money is now “out” in the economy, right? It did not get paid back to the bank, right?

            That is the money, that the rest of the “customers” of this scam the banking system is running on the world, use to pay their interest. As you know, there is no mechanism in the system, to create money to pay interest, the way it is set up now.

            We should change that so that we have a system that works without requiring bankruptcies, fraud and money laundering – just to function.

    4. lambert strether

      Here’s the typo. The sentence that reads:

      A core tenet of the theory is that taxes serve to fund government [sic] but to prevent aggregate demand — or total spending — from getting too high and causing inflation…

      should read:

      A core tenet of the theory is that taxes serve not to fund government but to prevent aggregate demand — or total spending — from getting too high and causing inflation…

      How can we tell? Because as the sentence appears, it makes no sense. It’s not grammatical. The reporter surely wrote “not to fund… but to prevent” as parallel construction. So an somebody, perhaps an editor, broke it by striking out the “not.” And if only that sentence hadn’t been the key takeaway for policy makers…

      And back to the gardening for me…

      1. F. Beard

        OK. I must have inserted the “not” myself when I read it.

        Still, the error did lead to some fruitful thinking, I think.

          1. F. Beard

            This song title is often used in an informal psychological test. “Paris in the the Spring” is written with an extra “the.” A subject is asked to read the text, and will often jump to conclusions and fail to notice the extra “the,” especially when there is a line break between the two the’s. from

            An impressive wit you have, Lambert Strether. May we always be on the same side!

          2. F. Beard

            It’s not nice to make fun of the visually impaired though I am not complaining about my sight, mind you.

            Plus I did see the missing “r” before you pointed it out.

            But yeah, I missed the initial joke.

      2. JTFaraday

        So, do we think that this typo was introduced by a hasty copy editor who is not a content expert or do we think it was hastily censored by an Austerian Who Knows?

        1. Lambert Strether

          I think an Austerian would have made the sentence grammatical.

          My guess is copy editor, “helpful” grammar checker, writer error, in that order. But it’s fixed now, happily.

  4. Jim Haygood

    “I said economists used to understand that the running of a surplus was fiscal (economic) drag,” he said, “and with 250 economists, they giggled.”

    Galbraith says the 2001 recession — which followed a few years of surpluses — proves he was right.

    If Galbraith actually made this astonishing statement, then his mainstream peers could regard him with well-deserved contempt.

    That a budget surplus constitutes a fiscal drag, just as a deficit represents fiscal stimulus, is almost universally acknowledged — the concept goes back to Maynard Keynes.

    Two hundred fifty economists giggling at labeling a surplus as ‘fiscal drag’? Preposterous. Likely it was some ‘free money magic beanstalk’ aspect of MMT that they were giggling at. Or maybe his fly was unzipped.

    Cast your mind back to 1993. Newly-elected Bill Clinton, after promising a middle-class tax cut, imposed increased and retroactive taxes — fiscal drag, that is. But no recession ensued. Why not, Jamie?

    By the late 1990s, after Mad Al Greenspan had de facto eliminated reserve requirements in 1994 via overnight sweeps, a ferocious asset Bubble was generating huge but ephemeral capital gains. Two years of budget surplus were simply a passive byproduct of capital gains taxation.

    Fiscal drag did not cause the 2001 recession; rather, an unsustainable asset Bubble simply popped, as all Bubbles must do. Had the 2001 tax cuts been made in 1999 instead (to avoid running a surplus), would the tech-media-telecom bubble have soldiered on, Enron kept wheeling and dealing, and a permanent plateau of prosperity been achieved? That’s a far-fetched speculation. Ask Irving Fisher.

    Granted, the Lamestream Media is pretty bad at distorting statements. But if the two paragraphs above accurately represent Galbraith, then he’s not only deluded, but also a raging narcissist.


  5. KFritz

    Re: Shortage of Affordable Housing

    Other related distortions of the economy aside, the successive housing/real estate bubbles of the last 30 years skewed the housing construction market towards the high end of the market–yet another contributing factor to the shortage.

    In addition, the large amounts of money involved meant that the management skills and mindset necessary to produce affordable housing on a large scale atrophied (to some degree) and need to be relearned. This is not relearning the wheel, but it is an impediment/challenge.

    1. Lidia

      There’s plenty of affordable housing: millions of homes are standing vacant. It’s affordable by definition since we did build it.

      The abstract punitive mechanism by we make existant housing “unaffordable” does not negate the fact that there is plenty of housing—more than is needed in the US, in fact.

      We don’t need “affordable housing”; we need banks, insurers and other parasitic gatekeepers to get out of the way.

      1. F. Beard

        It’s affordable by definition since we did build it. Lidia

        Exactly! And via the entire population’s “credit” i.e. stolen purchasing power.

    2. KFritz

      Both excellent points. But a fair amount of the recently built houses are oversized, expensive to maintain. Not for any limited income folks, except large, extended families. Some particularly overbuilt locales, for example SoCal’s “Inland Empire,” are economically not viable and a good distance from economically viable areas.

      Of course, all our comments here are anecdotal. It would be interesting to see a study of the properties in or likely to be in foreclosure and how they dovetail with housing NEEDS.

  6. Paul Tioxon

    The suppression of scientists and science, by politicians in Canada, is part of general reaction of entrenched power. Not only the faux controversy over global warming, but even something as innocuous as dinosaur fossils in US National Parks have been suppressed by those asserting a new authoritarian political order. What is the most critical agent for change, which has overwhelming and most times immediate consequences for overnight societal change, is science.

    And of course, its calling card are the practical consequences that can be processed by the 5 senses without intermediation. If it’s getting hotter in the summer and milder in the winter, that’s pretty hard to deny to the populace who can not be shielded from the weather.

    Similarly, medical science is also under attack by reactionary politics. And the trusty sword and shield of the right wing has always been religion. When things move too far and too fast, and you can’t rile up a good reason to stop the movement, invoke god almighty. Of course, god almighty is and always has been a metaphor of the powerful for themselves. The pathetic attempts to invoke the carnal menace of sex with women in all of its transgressive glory by the republican congressman Issa, flanked by flunkies of the religious kind is too rich an image not to enjoy debunking. Ladies first. While it would be even more appropriate for a committee of all women representatives flanked by Lorena Bobbit, Catherine Kieu Becker, Gloria Allred, and Elaine Pagels, you have to wonder how god would respond to being thwarted by the birth control pill taken by a virgin he would have become the mother of god! What kind of havoc would that produce? Apparently science can free us from subservience to the whims of nature, unless women use science for themselves and their unique nature of becoming pregnant or not at their own whim.

    The end of a culture is noted by decadence, which does not mean having too much wine, women and song. It is the contempt of the very culture that produces nothing new and is attacked by its very ungrateful inheritors, who despise being trapped in a world that they did not consent to and who argue among themselves about the response to this world not yielding to their complaints. Of course, building a new world, better than the old one is difficult. Discontent with the current state of affairs runs high with a failure of the rule of law, respect for the findings of science considered a democratic choice to make in private and the failure of what was the liberal promise of economic progress being replaced with neo-liberal austerity. And of course, there is no science in economics, but only the new god of money of which there is a dwindling supply. And no politically correct means of distributing money to the populace without empowering them to think a lifetime of drudgery in slavery can be over earlier than management deems acceptable.

    Science has freed us from theology, and now on the verge of freeing us from slavery, well, that is just too much. Time to try on god again, to see if that will build a new coalition of the faithful with the powerful to stop the leisurely life of the working class from spreading. And you know what we do with idle hands? Have as much sex as possible now that women are on the pill.

        1. JTFaraday

          A day for typos! Is this curious slip an oblique reference to the Hedgehog’s Dilemma?

          “The hedgehog’s dilemma, or sometimes the porcupine dilemma, is an analogy about the challenges of human intimacy. It describes a situation in which a group of hedgehogs seek to become close to one another in order to share heat during cold weather. They must remain apart, however, as they cannot avoid hurting one another with their sharp quills. Though they all share the intention of a close reciprocal relationship, this may not occur for reasons they cannot avoid.

          Both Arthur Schopenhauer and Sigmund Freud have used this situation to describe what they feel is the state of individual in relation to others in society. The hedgehog’s dilemma suggests that despite goodwill, human intimacy cannot occur without substantial mutual harm, and what results is cautious behavior and weak relationships.”


          1. F. Beard

            A day for typos! Is this curious slip an oblique reference to the Hedgehog’s Dilemma? JTFaraday

            Nope, just a senior moment. The dang spell checking technology has ruined my once excellent spelling.

  7. Valissa

    Solar Tornadoes Dance Across Sun’s Surface in NASA Video

    The Animals – House of the Rising Sun (1964)

    That was back in the day when the rock performers wore matching suits (and these are particularly awful) and tried to look tidy and presentable. Listening to the quality of his voice and looking at Eric Burdon’s face while he sings, however, tell a different story. [btw, the quality of this video is excellent, must have been remastered!]

    1. Lidia

      I saw Eric Burdon live in a sort of supper club in London back in the 190s. I could never understand why he didn’t eclipse Mick Jagger. Just a great, primeval presence.

    2. LeonovaBalletRusse

      Valissa, thanks for reminding us that there was once real music with real musicians, whose numbers were well rehearsed, where the performers weren’t stoned jerks trying to top one another with violence and grotesque obscenities.

      I guess this group was not brought to us by Theodore Adorno and “The Tavistock Insttutute for Global Manipulation” (

  8. SR6719

    Being a Situationist looks like a lot of fun.

    Guy Debord’s philosophy was “Never work” and he once said:

    “I have written much less than most people who write; I have drunk much more than most people who drink.”

    Also in the film extract above (comment at 7:35 AM) it looks like their main strategy for overthrowing global capitalism was to wander aimlessly around Paris, stopping off at one tavern to another, and getting drunk.

    If that’s all there is to it, then count me in.

        1. Valissa

          That was the sexiest (and best choreographed) version I found on YouTube ;)

          Searching on ‘legs’ brought me to this very different type of song, which I had to listen to based on the title… and even though I’m not a big fun of country music, I quite enjoyed it!

          Deana Carter – Did I Shave My Legs For This?

          1. F. Beard

            Pretty funny! But you have tortured me with scenes of domestic bliss! (I would not need the beer or the loutish friends, however.) I’ll take her and the trailer and maybe even one or two of the kids if they are nice.

      1. SR6719

        Nancy Sinatra: “these boots are gonna walk all over you”

        Sounds like an S&M party hosted by Walt Disney.

          1. SR6719

            Tom Lehrer: “you caught my nose in your left castanet, love…. fracture my spine and swear that you’re mine”

            This guy is hilarious.

  9. Susan the other

    Good Links. McClatchy on the Afghan Mine Contracts now being reviewed, presumably for corrupt contracting. What ever happened to the curious partnership of JPM and the US Military to go in to Afghanistan in a mining venture, gold wasn’t it? And a new twist to the war dialog – now we have to set up a proper mining industry or Afghanistan will remain destitute and our mission of nation building will therefore fail. Blah Blah Blah.

    About hidden insurance premiums. You are lucky if you find them printed but sometimes on the very last page in fine print. Why do we put up with this? Where is single payer? And what exactly is the significance of 2014? A lot more than insurance premiums are being withheld.

    WAPO. Just before they blocked me I was on page 2 so I got this far on the MMT article: MMT is more or less embraced by blogs like “Naked Capitalism, an irreverant and passionately written blog with nearly a million monthly readers…” It quoted Randall Wray. Jamie Galbraith. I’m not sure what the WAPO take on taxes was all about. They implied that taxing is how a government controls price inflation in an MMT economy. That isn’t the case today. The only economic governance being done today is triage by the Fed. That is why there are no jobs. Congress is too dumb to create them and provide sufficient stimulus and funding so the Fed is forced to print money in a time of brutal austerity of 20% unemployment, unemployment which is meant to control “inflation.” It is the worst of all worlds. Did the WAPO article get that far? I don’t see how our tactics are different from what is being done to Greece so the bondholders can be repaid. And we’ve already bailed our banks out.

    1. PQS

      Re: Premiums “Why do we put up with this?”

      It’s been my experience that most people have NO idea how much their premiums are. Think about it: if you are an employee, your employer picks up the premiums – you have to maybe chip in for your family. The only information most people have is how much family coverage is, how much they have to chip in for their own coverage, and how much deductibles and copays are. Most employers I have had don’t share the premium information (for whatever reason.)

      I know this because I worked at a very small shop and we shared the premium information during the downturn so we could all decide what we wanted to do during a renewal period: either pay more or accept a higher deductible. But at most places of business, this information is like some state secret. And in conversations I’ve had with people over the past few years concerning HCR, I have yet to meet one person (not self employed) who knows how much premiums cost. It’s been a great opportunity for education. I never fail to point out that basic Medicare costs $97/month ….. nor do I fail to point out that for-profit Insurance costs TWICE what non-profit insurance does, at least in my home state with big-name providers.

      1. Lidia

        Insurance costs far exceed taxes for many folks. I can’t remember where I saw someone arguing that “we don’t need tax relief; we need insurance relief”.

        And it’s not just health insurance: a small-business-owner was describing how the liability policy alone that his client wanted him to have cost more than what his entire bid was for service he’d provided the previous year, so he had to drop the job and the client.

        Exponentially-growing demands from insurers and other corporations will eventually kill the geese (us) which are laying the golden eggs they routinely dine on.

  10. F. Beard

    re: Tiny Robotic Bee Assembles Itself Like Pop-Up Book

    Ha! Mankind is truly becoming “god-like” (as predicted in Genesis 11:5-8?)

    God-like powers and an unethical, unstable money system. Looks like another disaster in the making. “Technological progress is like an axe in the hands of a pathological criminal.” Albert Einstein.

  11. craazyman

    I thought “economy class syndrome” was a form of brain damage you got from taking economics classes. I wondered how an aspirin could help with that. But I see it’s another kind of cattle car they’re talking about.

  12. Elliot

    The constant inveighing against taxes is creepy and makes me sad for my fellow humans.

    I WANT society to come together to help each other. I WANT to belong to a group that knows it can do more together than apart. I WANT to contribute to the welfare of others.

    It’s a sign of insularity and narcissism to not understand that. Time to get out into the real world, beyond your keyboard and cubicle, and join the human race, where groups come together and pool resources to make good things happen.

    For example: Farmers’ Markets, operated on dues and percentage of vendors’ sales; we fund liability insurance, advertising, entertainment, kids’ programs, signage, etc. out of our assessments. Or the community garden, where people join together to raise food (selling the excess cheaply to feed others) and pay the water bill and land rent in common. Or the local rural water department where our dues fund clean water, our fire district where our dues fund protection. In a city, instead of the wilds where I live, those things would be accomplished with taxes, and like the tax that funds Social Security, Medicare, the public health department, free education and the like, not only am I proud to pay taxes for those things, I am embarrassed at those who rail against them.

    1. F. Beard

      Taxes by a monetarily sovereign government DESTROY money, leaving less for you to spend or give away. Is that what you want?

  13. Elliot

    Time for you to get out into the real world, and deal with real humans, instead of simply soapboxing your greed. Taxes don’t destroy money or anything else. But then, I actually make a living off my work, and my dues for the groups I belong to actually make it possible for me and others to do so. We don’t sit around theorizing about how much richer we’d be if we didn’t have to give up any of our investment income to the hoi polloi.

    1. F. Beard

      Taxes don’t destroy money or anything else. Elliot

      That’s the way monetary sovereignty works. A monetarily sovereign government creates money by spending it into circulation and destroys it by taxing it out of circulation.

    2. F. Beard

      Also, since you think that taxes fund social spending you mistakenly accuse me of wanting to cut social spending because I might be in favor of cutting taxes. The two have no necessary connection.

      1. VietnamVet

        I don’t know if it is old age or MMT terminology; but, this flies over my head.

        I was taught almost half a century ago in Econ 101 that government spends money to kick start the economy out of depression/recession. Government in the good times builds a surplus to spend when the economy naturally cycles down.

        The following decades have documented that this is impractical because of human nature. We are hoarders. Wealth and power are mixed together. Adrenaline and sexual rushes come with money. War Profiteers promote conflict. The Penniless don’t count. Capitalism does not work for the greater good. When the Bourgeoisie are fed up with inequality, they revolt. Greece is a foretaste of our future under the current Oligarchs rule.

        I know government works; I was raised in America’s Golden Age; when it worked for you if you were White. Dwight Eisenhower was President and America was at peace for eight years. When government stops working for its citizens; Somalia and Mexico happen. Neo-liberal policies of endless wars, flushing government down the drain, and self-righting economic ideologies only guarantee chaos.

          1. F. Beard

            Do you second this, skippy?

            Government in the good times builds a surplus to spend when the economy naturally cycles down.

            So you think government has to save money it can create at will by simply spending it? Whatever for?

            It’s sad to see “liberals” and “Progressives” with the same errors in thinking as conservatives.

          2. Skippy

            No labels here, only human. I change with every bit of new information I come into contact with, and with further understand of it all… in time.

            This is what I agreed with the most strenuously “Neo-liberal policies of endless wars, flushing government down the drain, and self-righting economic ideologies only guarantee chaos”… Vet.

            Skippy… “So you think government has to save money it can create at will by simply spending it? Whatever for?”… beard.

            That depends on whom is running the show, as of today I would not. Friction is better at the moment, waking people up. Under direct democracy it would be a good experiment as long as there was an escape clause. But then again, the question of what the neighbors would think has not been addressed. In reality… I think we will never know.

          3. F. Beard

            Under direct democracy it would be a good experiment as long as there was an escape clause. Skippy

            That’s what the allowance of genuine private currencies (for private debts only) does – it provides an escape should the government mismanage its money supply. Normally, most people would use fiat for all debts.

  14. MyLessThanPrimeBeef

    This doesn’t mean that taxes are unnecessary. Taxes, in fact, are key to making the whole system work. The need to pay taxes compels people to use the currency printed by the government.


    Why can we be treated like adults and just be told to use?

    Let’s if you dont pay taxes, you go to jail

    Why not just put people in jail for not using the printed currency, skipping the extra step about paying taxes if the objective is to make people use the currency?

    So, back to the original question? Why can’t we be just told to use it or go to jail? That’s how you deal with adult lawbreakers.

  15. Valissa

    NASA Map Sees Earth’s Trees in a New Light (press release)

    A NASA-led science team has created an accurate, high-resolution map of the height of Earth’s forests. The map will help scientists better understand the role forests play in climate change and how their heights influence wildlife habitats within them, while also helping them quantify the carbon stored in Earth’s vegetation.

      1. Max424

        Good one. Agree, tear the motherfucker down. Also, any song that gets Mary T. dancing is all right with me.

        I’m off to the ever dangerous pool room, no tellin’ if I’ll return. Hopefully PP&M are right, and if I’m gone, there’ll be one little Max425 … to carry on.

        Note: Look at those Down Under radicals in the audience. Never could abide the Australian hippie.

  16. just me

    Modern Monetary Theory, an unconventional take on economic strategy Washington Post. Lambert found a really serious typo which looks to have been introduced by editors who can’t grok that you don’t need taxes to fund a sovereign currency issuer.

    h/t for grok :-)

    1. barrisj

      Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. (Josiah Stamp, former Director of the Bank of England)

  17. barrisj

    BTW, any NC readers who are interested in the evolution of the infamous Boosh “Global War on Terror” to what the US has in place currently under the Obama administration should read a recent piece authored by Andrew Bacevich, writing in the Tom Engelhardt blog. “Uncle Sam, Global Gangster” nicely summarises Obama’s spin on a militarised foreign policy which is no more than institutionalised murder by another name.

    Andrew Bacevich, Uncle Sam, Global Gangster
    Posted by Andrew Bacevich at 8:13am, February 19, 2012.

    Scoring the Global War on Terror
    From liberation to assassination in three quick rounds
    By Andrew Bacevich

    With the United States now well into the second decade of what the Pentagon has styled an “era of persistent conflict,” the war formerly known as the global war on terrorism (unofficial acronym WFKATGWOT) appears increasingly fragmented and diffuse. Without achieving victory, yet unwilling to acknowledge failure, the United States military has withdrawn from Iraq. It is trying to leave Afghanistan, where events seem equally unlikely to yield a happy outcome.

    Elsewhere — in Pakistan, Libya, Yemen, and Somalia, for example — U.S. forces are busily opening up new fronts. Published reports that the United States is establishing “a constellation of secret drone bases” in or near the Horn of Africa and the Arabian Peninsula suggest that the scope of operations will only widen further. In a front-page story, the New York Times described plans for “thickening” the global presence of U.S. special operations forces. Rushed Navy plans to convert an aging amphibious landing ship into an “afloat forward staging base” — a mobile launch platform for either commando raids or minesweeping operations in the Persian Gulf — only reinforces the point. Yet as some fronts close down and others open up, the war’s narrative has become increasingly difficult to discern. How much farther until we reach the WFKATGWOT’s equivalent of Berlin? What exactly is the WFKATGWOT’s equivalent of Berlin? In fact, is there a storyline here at all?

    Viewed close-up, the “war” appears to have lost form and shape. Yet by taking a couple of steps back, important patterns begin to appear. What follows is a preliminary attempt to score the WFKATGWOT, dividing the conflict into a bout of three rounds. Although there may be several additional rounds still to come, here’s what we’ve suffered through thus far.

    JSOC, drones, the “Dark Side”, this isn’t constitutional government, it’s a crime syndicate operating under no constraints of any sort, not criminal sanctions, not moral sanctions, just acting pursuant to “exceptionalism” and the “God-given” right to invade, occcupy, assassinate, and generally terrorise globally as it sees fit. And all done in extreme secrecy and lack of accountability, which seems to suit every party who should be concerned but isn’t.

  18. C. Santiago

    Yves, have you seen the Transparency Grenade at ?

    Made in the form of a Soviet F1 Hand Grenade, the Transparency Grenade houses a tiny computer, microphone and powerful wireless antenna. It captures network traffic and audio at the site and securely and anonymously streams it to a dedicated server where it is mined for information. Email fragments, HTML pages, images and voice extracted from this data are then presented on an online, public map, shown at the location of the detonation.

    1. Valissa

      This has to be satire right? Because when the police see someone holding something that looks like a grenade, how do you think they will respond? What good is having a device to capture events as they are unfolding if it attracts undue attention and increases the chances of violence escalation?

      If you’re going to capture information it would be best to do that secretly so you can ensure getting the information out to people. This data capturing advice should look like something innocuous, normal, unremarkable… something that doesn’t look like a weapon or draw any type of unwanted attention.

        1. Valissa

          I was thinking more along the lines of a faux water bottle, or a hat. But there are many possibilities! I have to admit the grenade works as a work of art and a political statement. It’s lovely! Just impractical, and dangerous for it’s stated purpose. What’s interesting to me is the violence that’s symbolically indicated by the choice of shape… it’s purposefully provocative.

  19. exomike

    That’s Olympic caliber Basking if I’ve ever seen it. However, if I didn’t know it was a Seal I might think it was one of the Masters of the Universe flaunting it in front of some Socialists.

  20. Skippy

    The Battle of Oakland

    On January 28th, 2012, Occupy Oakland moved to take a vacant building to use as a social center and a new place to continue organizing. This is the story of what happened that day as told by those who were a part of it. it features rare footage and interviews with Boots Riley, David Graeber, Maria Lewis, and several other witnesses to key events.

    Skippy… expect more…

      1. Skippy

        Having a hard time getting an answer for you Lambert (too many layers). Will Msg when I know some thing OK.

        Skippy… Cheers.

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