By Rumplestatskin, a professional economist with a background in property development, environmental economics research and economic regulation. Cross posted from MacroBusiness
A recent blog post about ‘culture’ making a lousy explanation of social and economic phenomena sheds even more light on the bizarre culture that is economics.
Read more...A couple of months ago, I wrote about devolution:
Read more...It’s become fashionable to discuss the creeping decay in advanced economies, particularly the US, both in term of third worldification and end of empire. The more apocalyptic turn to theories of collapse from writers like Jared Diamond and Jacques Tainter. But I think they miss one aspect that may prove to be important, that of how the pursuit of efficiency doesn’t always produce net gains, as economic theory might tell us.
Yves here. The longer you look at the Cyprus “rescue,” the worse it looks. As you can learn from our compendium in today’s Links, the Cypriot economy is already reeling. It’s straining under the extended bank holiday, which is scheduled to end Thursday. Moreover, the impact of losses radiating from number two bank Laiki are already propagating through the island.
And that’s before we get to the wider ramifications. Whether Germany understands it or not, it has delivered a fatal blow to the Euro project. How long it continues is anyone’s guess, but the Balkanization of the financial system that the Eurocrats have set in motion means they won’t be able to go the US/Japan zombification route.
Read more...By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
We have a lot to be thankful for today that we owe to Alan Turing – who is generally recognised as among the first, if not the first, computer scientist. But, on the other hand, we also have a lot that we can trace back to Turing that we should be in no way grateful for as it has filled our minds with stupidities and our universities with people talking nonsense. Without detracting from Turing’s undoubtedly important achievements we here focus on the latter and how some of Turing’s ideas came to infect the human sciences in general and economics in particular.
Read more...By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
Dreaming, I was only dreaming
I wake and I find you asleep– Billie Holiday “Gloomy Sunday”
The criticisms of Modern Monetary Theory (MMT) on the internet and in academia can be placed into three categories: the cranks; the nit-pickers; and the Kaldorians.
Read more...Yves here. The Congressional Budget Office is widely depicted in the media as “nonpartisan” and therefore above reproach. It’s time to treat that view as outdated. Like the Fed, the CBO continues to profess its independence but is in fact an aggressive promoter of neoliberal policies. We discussed at some length how Fed economists savaged its health care cost model, which is the driver of budget hysteria.
Jeff Madrick describes even more problems with CBO forecasts, and how they have become so significant that the public needs a shadow CBO to challenge the often-flawed official projections.
Read more...By Dale Pierce. Cross posted from New Economic Perspectives
Modern Monetary Theory is a way of doing economics that incorporates a clear understanding of the way our present-day monetary system actually works – it emphasizes the frequently misunderstood dynamics of our so-called “fiat-money” economy. Most people are unnerved by the thought that money isn’t “backed” by anything anymore..
Read more...By Steve Keen, professor of economics & finance at the University of Western Sydney and author of Debunking Economics and the blog Debtwatch. Professor Keen has invented a simple way to build monetary models of the economy, and he’s raising funds via Kickstarter to pay programmers to develop he software, which he’s calling Minsky. He’s raised over $50,000 already, but as much as $1 million is needed to pay for 10,000 hours of programming time to fully develop the program. Please pledge support now at Minsky campaign: http://kck.st/XhKtdX.
Krugman describes himself as a “sorta-kinda New Keynesian”, and explains in his book End This Depression NOW! that New Keynesian macroeconomics evolved in reaction to the failure of the new classical approach to “explain the basic facts of recessions”…..
By Nathan Tankus, a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus
Money is a social construct. It also facilitates many complex, interrelated social relations. As a result, it’s difficult to pin down for the average person what the effects of a particular policy will be, especially with regard to economic policy. While inflation may have negative effects in certain times or places, it’s difficult to figure that out just by looking around a city or country. As a result when politicians or other figures with agendas want to talk about inflation, they inevitably go for the most visceral descriptions available. For some number of decades now, the example they go to do decry inflation is people carrying around “wheelbarrows full of money” to go buy something such as bread. One of their favorite examples is Weimar Germany. So let’s talk about it.
Read more...Yves here. This post is useful in that it suggests short, simple ways to debunk the idea that deficit cutting is a good thing and to make the argument politically palatable. The trouble some readers will have is in positing that Obama is interested in policies that are good for middle class Americans, as opposed to his wealthy backers.
Read more...By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil
While it is probably true that no one has ever gone broke underestimating the intelligence of the public, it is also true that many who try to turn a profit from stupidity often become the victims of their own nonsense. As we have discussed previously, the fear industry that has grown up since 2008 – mainly centred on the gold market – is a manifestation of this dynamic.
Read more...One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political leaders masquerades as news in the US. And we have a less controlled press than, say, Italy does.
So I will give readers some fresh data points and let you duke it out.
Read more...Jonathan Harris of the Global Development and Environment Institute has a new post at Triple Crisis, Green Keynesianism: Beyond Standard Growth Paradigms, in which he argues that pro-growth policies need to find a way to deal with environmental/resource constraints. On the one hand, a lot of NC readers will find that argument to be welcome, if a bit overdue, since quite a few members have been arguing that growth-oriented economic policies need to acknowledge environmental constraints.
Having read Harris’ well-intended post, I’m increasingly convinced that environmentalists have it backwards.
Read more...At the end of 2011, Steve Waldman wrote:
Read more...Arjun Jayadev at Triple Crisis provides a quote from Thomas Phillipon that somehow never sees the light of day in the financial press:
Read more...…the unit cost of intermediation is higher today than it was a century ago, and it has increased over the past 30 years. One interpretation is that improvements in information technology may have been cancelled out by increases in other financial activities whose social value is difficult to assess.
