Category Archives: Macroeconomic policy

Public Money for Public Purpose: Toward the End of Plutocracy and the Triumph of Democracy – Part VI

By Dan Kervick, a PhD in Philosophy and an active independent scholar specializing in the philosophy of David Hume who also does research in decision theory and analytic metaphysics. Cross posted from New Economics Perspectives.

I will conclude by proposing six social tasks for the rising generation – six challenging tasks whose successful pursuit will help us achieve a more just, equal and democratic society. It is my view that the resulting society will not only be fairer and more decent. It will also be more economically productive, and will better promote human happiness and flourishing by more effectively distributing the goods and services we produce. Most of us will be happier in such a society as well, because the practices of democratic equality do a better job satisfying the human desires for cooperation, solidarity, trust, stability and fellowship that are the foundation of the social life for which human beings are naturally framed.

Extreme laissez faire capitalism of the kind extolled off and on over the past two centuries, and increasingly preached by economists, financiers and conservative thinkers over the past four decades, is a perverse distortion of human nature, foisted upon us by cold and demented thinkers captivated by inhuman notions of efficiency and domination. In the end, it is a system that reduces each human being to an object whose value is nothing beyond what it is worth in the market. We need to restore a social balance, in which private property, entrepreneurialism and commercial activity do not dominate our lives and set all the rules for our existence, but function within a democratic social order framed by a politically coherent and effective commitment to the public good. In a democratic social order there exists an activist public sector controlling a substantial store of social goods, and channeling democratic energies and intelligence into the ambitious perfection of such goods.

The six proposed tasks are not intended to be in any way exhaustive. They all pertain to the economic sphere of life alone. But the realization of a genuinely democratic society will require efforts that transcend the economic sphere. We need to rejuvenate the democratic spirit in America, educate ourselves and our fellow citizens on the unfulfilled potentialities of democratic existence, recapture the salvageable institutions of our threatened but still existing democracy, and further expand the institutions and habits of democratic practice. There is much to be done, but the prospect of doing it is exciting.

Wray: Krugman has shined the headlights on the crucial currency issuer-currency user difference

Edward Harrison here. The post by Randall Wray below is an interesting one because it points out how the world has changed since the end of the gold standard and why the sovereign debt crisis is centered in the euro zone. While I have an Austrian bias overall, for me, MMT is the best way […]

ECB Success and Folly

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Yet another interesting night in Europe. Spain managed to over sell as it latest auction with €6.03 billion sold versus €3.5 billion targeted which in the current environment is seen as a good result.

Dog Whistle Economics’ Code Words

Here are a few code words that you will often see in economic writing followed by their true meaning. The code word is a dog whistle. It acts like an emotional marker only for those attuned to the underlying ‘moral’ issues implied by the code. While you may agree with the logical framework behind the […]

Central Banks Plan for Possible Euro Breakup as Merkel Focuses on Wrong Issues

The denial about the existential nature of the Eurozone crisis seems to be lifting. The press has featured reports of companies and banks doing contingency planning for the possibility of a Euro dissolution or exits by some member states.

In keeping, the Wall Street Journal tonight reports that even central banks are starting to contemplate what had heretofore been unthinkable:

On the Austerity and Rule by Big Finance in Greece

This Real News Network interview nominally is about whether Greece should leave the Euro. But it is really about the struggle between the bondholders, who are crushing Greek democracy and society, versus the population. The interviewee Costas Lapavitsas makes an forceful case why defying the banks is the best route for Greek society, even thought the transition will also be difficult.

David Apgar: Could Germany Be Right about the Euro?

By David Apgar, co-founder of GoalScreen, a web app still in trials that lets investors test alternative price drivers of specific securities (free though the end of the year at www.goalscreen.com. He has been a manager at the Corporate Executive Board, McKinsey, the Office of the Comptroller of the Currency, and Lehman, and writes at www.goalscreen.com/blog.

What if there are good reasons for the preternatural calm of German Chancellor Merkel’s inner circle as the English-language media (based, after all, in the investor capitals of London and New York) light their collective hair on fire about the euro’s imminent immolation? Surprisingly, you can make a decent argument that the euro zone is at no risk of breakup – unless someone secretly switches its purpose from facilitating European trade to providing investors an implicit guarantee against losses.

Rob Johnson on Real News Network on the Fed’s Lifeline to Eurobanks, and the Rationale for Austerity

Rob Johnson brings a wide ranging perspective (from politics, as a former Senate staffer; from markets, as a former hedge fund manager; and an economist, by training and via his current role as head of the Institute for New Economic Thinking) to this interview on the immediate and deeper implications of the central bank intervention on behalf of the Eurozone earlier this week. Johnson is deeply skeptical both of the near and longer-term approaches taken to rescue the Euro. This talk has a particularly clear and layperson friendly discussion of the rationale for and failings of austerity.

Wolf Richter: French Presidential Election – Coup De Grâce For The Euro?

By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.

Amidst a flood of proposals, plans, and rumors to save the euro and the Eurozone, much has been made of the Merkozy couple, the uneasy partnership between French President Nicolas Sarkozy and German Chancellor Angela Merkel. During his speech today in Toulon, an ancient Mediterranean port town, Sarkozy reemphasized his commitments: the ECB must remain independent, and France and Germany must remain the pillar of stability. “To defend the euro is to defend Europe,” he said. Alas, he may be out of a job by May 2012—and his potential successors to the left and to the right have different ideas.

Mosler/Pilkington: Response to Yanis Varoufakis Regarding Our Eurozone Exit Plan

By Warren Mosler, an investment manager and creator of the mortgage swap and the current Eurofutures swap contract and Philip Pilkington, a journalist and writer based in Dublin, Ireland

Recently the Greek economist Yanis Varoufakis responded to the euro exit plan that we published on Naked Capitalism a few days ago. While Varoufakis was broadly supportive of the plan if an exit was absolutely necessary, he criticised some of the details therein.

Mosler/Pilkington: The IMF-ECB ‘Plan’ – Fig-Leaf upon Fig-Leaf

By Warren Mosler, an investment manager and creator of the mortgage swap and the current Eurofutures swap contract and Philip Pilkington, a journalist and writer based in Dublin, Ireland

Politics in the Eurozone has turned into a strange and tragic farce in the recent weeks and months. While the peripheral countries continue to judge successful economic policy on the amount of tax liabilities they can levy to smother their depressed economies, the big dogs play various games in which they try to hide their shame behind ever more sophisticated veils.

Tom Ferguson: Democratic Governance Is Becoming Discredited

I suspect many Naked Capitalism readers would regard “democratic governance” as something of an oxymoron in the US. Our favorite curmudgeon, political scientist Tom Ferguson, discussed the failure of the supercommittee negotiations and what it means for politics and the economy. He sees the danger of government by technocrats, meaning experts who are really fronts for banking interests, as rising.

Philip Pilkington: The Coming Age of Neocla

By Philip Pilkington, a journalist and writer living in Dublin, Ireland

We stand for the withering away of the state. At the same time we stand for the strongest state power that has ever existed. Is this “contradictory”? Yes, it is contradictory. But this contradiction fully reflects Marx’s dialectics.

– Josef Stalin in remarks to the Soviet Party congress in 1930

Such is the contorted nonsense that flows from doctrine and dogma when these become institutionalised. When dogma is confined to the armchair of the intellectual or the blackboard of the social scientist it is innocuous – simply an attempt by one individual to make sense of a world that they will never, in truth, ever make sense of. But when it comes to occupy a seat of power it becomes like a steamroller that can crush common sense and practicality in a misled attempt to change the world for the better.

Steve Keen on BBC on How to Get Out of Our Current Depression

Australian economist Steve Keen minces no words during this BBC interview, calling our downturn a depression and calling for radical measures, namely large scale debt writedowns. I can’t imagine a discussion like this getting airtime on a US mainstream media outlet.

IMF and ECB to offer Italy a 600 billion euro bailout (sources)

Cross-posted from Credit Writedowns There is a flurry of activity going on in Euroland this weekend. I have a number of stories up on different proposals in the offing. Clearly, European policy makers have got religion about saving the euro. Expect some kind of announcement soon. According to Austrian daily Der Standard, Italy is to […]