By Douglas K. Smith, author of On Value and Values: Thinking Differently About We In An Age Of Me
Earlier this month, Matthew Yglesias of Slate tweeted “EXCLUSIVE: The activities of individual business executives have no relationship to the level of economy-wide employment.”
It’s hard to choose what is most ridiculous here…
Read more...By 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
A shorter version of this article in German will run in the Frankfurter Algemeine Zeitung on January 28. 2012
The inherently symbiotic relationship between banks and governments recently has been reversed. In medieval times, wealthy bankers lent to kings and princes as their major customers. But now it is the banks that are needy, relying on governments for funding – capped by the post-2008 bailouts to save them from going bankrupt from their bad private-sector loans and gambles.
Yet the banks now browbeat governments – not by having ready cash but by threatening to go bust and drag the economy down with them if they are not given control of public tax policy, spending and planning. The process has gone furthest in the United States.
Read more...em>By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Warren Mosler recently ran a very succinct account of why the Fed/Bank of England’s easy monetary policies – that is, the combination of Quantitative Easing and their Zero Interest Rate Programs – might actually be killing demand in the economy.
Warren Mosler recently ran a very succinct account of why the Fed/Bank of England’s easy monetary policies – that is, the combination of Quantitative Easing and their Zero Interest Rate Programs – might actually be killing demand in the economy.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
The Financial Times recently ran a series on the future of capitalism. The FT is usually an excellent publication – but the series came up seriously lacking.
The lack arises because of the question posed.
Read more...By Paul Davidson, America’s foremost post-Keynesian economist. Davidson is currently the Holly Professor of Excellence, Emeritus at the University of Tennessee in Knoxville. In 1978 Davidson and Sydney Weintraub founded the Journal for Post-Keynesian Economics. Davidson is the author of numerous books, the most recent of which is an introduction to a post-Keynesian perspective on the recent crisis entitled ‘The Keynes Solution: The Path to Global Prosperity’.
Introduction by Philip Pilkington
In a recent interview I asked the US’s leading post-Keynesian economist and founder of the Journal of Post-Keynesian Economics, Paul Davidson to discuss what is known as the ‘ergodic axiom’ in economics. This is a particularly important axiom as it allows mainstream economists (including left-wing Keynesians like Paul Krugman and Joseph Stiglitz) to claim that they can essentially know the future in a very tangible way. It does this by assuming that the future can be known by examining the past.
Without this axiom the whole edifice of mainstream theory rests on very shaky grounds.
Read more...It’s surprising and refreshing to see Bloomberg News, via an editorial, take on the way the economics profession has failed to clean up its act not simply in the wake of a massive intellectual failure but after the movie Inside Job highlighted some examples of corruption in the ranks of Famous Economists.
Read more...Adam Davidson has an article in the Sunday New York Times Magazine, “The Other Reason Europe is Going Broke,” that manages the impressive feat of making you stupider than before you read it. It misrepresents most of the few facts it contains in appealing to American prejudices about our cultural, or in this case, economics superiority, to sell worker bashing.
Davidson uses the spectacle of Europe going into an economic nosedive to claim that one of the big things wrong with Europe is its spoiled workers. The piece is anchored in a glaring, fundamental misrepresentation. It argues that Americans are much better off than Europeans because we have a higher GDP per capita (more on that in due course) and asserts that that is because Europeans are not able to compete in world markets:
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
There are some strange and interesting passages in Keynes’ General Theory of Employment, Interest and Money – and it is these, I think, that give it its deserved status as a classic. Many of these passages are the tangential reflections of a man – who we should not hesitate to call a genius – on his subject matter. And it is these passages that truly make Keynes what he was: a wise man.
One of the most fascinating passages on the so-called Keynesian beauty contest is worth quoting here in full.
Read more...Although it is remarkably difficult to come up with decent data, from what I can tell, the Japanese bubble was considerably bigger relative to the size of its economy than the US debt binge was. Yet even though the Japanese aftermath has been remarkably protracted, and arguably worsened by a slow and cautious initial response, visitors to Japan find the country wearing its malaise remarkably well.
One of the reasons may be the Japanese preoccupation with employment. Entrepreneurs are revered not for making money but for creating jobs. Japanese companies went to great lengths to keep workers, cutting senior pay to preserve manning. That was done largely for cultural reasons, since companies are seen as being like families.
But was this preoccupation also good economic policy, and might it have played a more direct role in buffering the worse effects of the bubble aftermath?
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Working as a journalist and as an opinion writer each have their charms. Journalists have the pleasure of discovery and revelation: uncovering new facts, talking to people, sometimes acting as a catalyst to move events forward.
Opinion writing, aside from being a comfy way to make a living, gives the writer greater stylistic freedom, and the challenge and opportunity of making a dent in readers’ views. The problem is that you have a limited amount of space and, often, an easily distracted readership. Now, that’s fine for something like, say, an observation about an upcoming election or the loutish behavior of a major sports figure but it is a patently awful format from which to raise Big Questions.
The normally sound Clive Crook fell into this trap in an opinion piece at Bloomberg, “A Crisis of Leadership, Not a Crisis of Capitalism.” Bluntly, this article is a train wreck.
Read more...Corey Robin teaches political science at Brooklyn College and the CUNY Graduate Center. His latest book, The Reactionary Mind, is available from Amazon.com.
Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.
PP: Okay, let’s move on. One of the chapters in the book deals with Ayn Rand. I’m going to quote from it directly as I don’t think there is a better way to sum it up.
“Saint Petersburg in revolt gave us Vladamir Nabokov, Isaiah Berlin, and Ayn Rand. The first was a novelist, the second philosopher. The third was neither but thought she was both.”
Read more...Corey Robin teaches political science at Brooklyn College and the CUNY Graduate Center. His latest book, The Reactionary Mind, is available from Amazon.com.
Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.
Philip Pilkington: The overarching thesis of your new book The Reactionary Mind is a provocative one. In it you contend that conservatism has always been a radical doctrine.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Matt Stoller recently ran a thoughtful piece on this site about Ron Paul. Stoller’s thesis is that Ron Paul confronts Big Government liberals (my term, not Stoller’s) with the dark underbelly of their policy prescriptions. Stoller points out that Paul’s ideology touches at least three very sensitive areas for the modern liberal: their ties between Big War and government spending; their ties to the Federal system and its related monetary apparatus; and their ties to Big Finance.
To deal exhaustively with any of these complex topics is a daunting task and one which I will not pursue here. But Stoller dropped a name when he invoked the contradictions of liberalism; one well worth bringing up: Christopher Lasch.
Read more...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.
Read more...Matt Stoller is a fellow at the Roosevelt Institute. You can follow him on twitter at http://www.twitter.com/matthewstoller.
Over the past few months, the concept of “Financial Repression” has come into the lexicon and is increasingly used to describe a possible set of government strategies that constrains the financial sector. It has far more political significance than its users would have you believe.
Read more...