Category Archives: The dismal science

Philip Pillkington: Libertarian Paternalism is Clearly an Oxymoron

“Blackwhite…this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink.”

— George Orwell, 1984

The Robots are Coming for White Collar Jobs

Yves here. Bad enough having to worry about offshoring eating into your employment prospects and compensation level. Alan Blinder, in Senate testimony in 2007, had argued that up to 29% of US jobs were “offshorable,” including many service industry positions. And now this….

James Galbraith on the Predator State, Government Solvency

James Galbraith is a particularly effective communicator for an economist, so I thought readers would enjoy seeing him on the RT show Boom & Bust (although the theme song strikes me as designed to generate a headache).

Philip Pilkington: A Short Note on a Connection Between Marginalist Economics and Folk Medicine

One peculiar aspect of modern marginalist economics is its obsession with equilibrium.

Marshall Auerback: When is a Bubble a Bubble?

Bubbles have become a major focus of discussion in today’s financial markets. But very few people actually define what they mean when describing this financial phenomenon.

Servaas Storm: Secular Stagnation, Green Shoots or What?

The Obama administration and the mainstream media are now talking up an imminent recovery, perhaps even a modest boom. There is no reason why we should be optimistic now.

Chris Mayer: How Fiat Money Works

Warren Mosler tells a good story that shows how our economy works at its most basic level.

Imagine parents create coupons they use to pay their kids for doing chores around the house. They “tax” the kids 10 coupons per week. If the kids don’t have 10 coupons, the parents punish them. “This closely replicates taxation in the real economy, where we have to pay our taxes or face penalties,” Mosler writes.

So now our household has its own currency. This is much like the U.S. government, which issues dollars, a fiat currency. (Meaning Uncle Sam doesn’t have to give you something else for it. Say, like a certain weight in gold.) If you think through this simple analogy, all kinds of interesting insights emerge.

Diagrams and Dollars: Modern Money Illustrated (Part 1)

Yves here. I continue to get requests to explain Modern Monetary Theory. It isn’t easily done in a few words, but fortunately, the academics and writers associated with the New Economics Perspectives blog keep publishing primers of various sorts. This one takes a different approach in using visuals to help illustrate the difference between how most people believe the money system operates versus how it really works.

Yanis Varoufakis: Why Reinhart and Rogoff are Wrong About the Eurozone’s Debt Structure and the Costs of Debt Mutualisation

Yves here. I don’t know whether to be relieved or annoyed to see Carmen Reinhart and Ken Rogoff retreat from their pro-austerity stance and endorse debt restructuring, since their prior view (that budget-cutting was necessary and productive) served to justify considerable and unnecessary pain being inflicted on periphery Eurozone countries to preserve the illusion of health of French and German banks.

But as Yanis Varoufakis points out, although Reinhart and Rogoff are retreating from much of their erroneous thinking, they haven’t renounced all of it.

Gambling for Resurrection in Iceland

Yves here. This is a nice piece of crisis-related forensic work. Too bad we’ve seen so little of this sort of thing.

Satyajit Das: Strategy – The Idea of an Idea of an Idea

Yves here. Das reviews a book that has generally received extremely positive coverage and finds it wanting, in part due to being overly ambitious and inconclusive. But the big reason is that the book focuses on the idea of strategy, and Das finds that word, like “liberal,” has been used to mean so many different […]