Economist Ann Pettifor discusses how economies around the world moved from using borrowing to support productive investments to fueling speculation and consumption, and how that led to the financial crisis. She also describes how the post-crisis response to the debt overhang isn’t merely ineffective but in fact counterproductive.
Read more...Yves here. We feature two new entries from Michael Hudson’s incisive and entertaining The Insiders Economic Dictionary.
Read more...So many of the assertions made about “maximizing shareholder value” are false that they should be assumed to be a lie until proven otherwise.
Read more...Yves here. Two new entries in Michael Hudson’s answer to Ambrose Bierce’s The Devil’s Dictionary, his The Insiders Economic Dictionary.
Read more...Why behavioural economics is nothing but Victorian morality passed down to the modern age.
Read more...Yves here. I’m featuring this post in part as a development exercise to Cliff, a German economist who has been blogging off and on since 2011 and plans to post on a more consistent basis. He has been warned that the NC readership can be rough. His thesis: “Home production may be a popular or cultural preference, economically sensible it is not.”
Read more...Minimum-wage increases are associated with a lower probability that a job will end, and with a lower probability that an unemployed person will find work.
Read more...“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
Read more...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….
Read more...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).
Read more...Both the IMF and the ECB call for “structural reforms” which are code for further weakening labor protection as beneficial to “competitiveness” and job creation. Does this claim stand up to scrutiny?
Read more...One peculiar aspect of modern marginalist economics is its obsession with equilibrium.
Read more...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.
Read more...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.
Read more...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.
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