Monday, August 3, 2015

Elias Kulukundis — Tsipras and Hamlet

If it is true, as Varoufakis maintains, that at the last minute Tsipras back-tracked, it is as though Tsipras had planned a prison break, in which all the factors for success were set, but at the last moment he was not willing to run across the open ground to the wall. He called off the break after it had already started, and in the process left Varoufakis, his lieutenant in charge of the logistics, stranded.
To use another analogy, one former Minister Lafazanis might well appreciate, it was as though in October 1917, Lenin had called the Bolsheviks off the streets, left Trotsky and the Red Guards to be arrested, and gone back to the Provisional Government to negotiate a solution.

Tsipras now talks of a party-wide referendum on the Eurozone's demands which may be a prelude to elections in September. We will see what the results will be, but it appears that whatever the pulse of the public may be at any given time, the long-range judgment of history should be hard on the Prime Minister. Tsipras is a clever politician who was able to ride the wave of protest a long way, but in the end he was not able to find a coherent destination, and at the present moment he is being buffeted by the waves, struggling to keep his board afloat.
The World Post
Tsipras and Hamlet
Elias Kulukundis
ht Clonal

Jon Schwarz — 239 Years Ago, Adam Smith Predicted Fury of Seattle Business at CEO Who Pays Workers Well

Powerful post with lots of keeper Adam Smith quotes.

Yanis Varoufakis — "They bury the values of democracy"

I once spoke with the former US finance minister, Larry Summers. He said to me: “Yanis, you’ve made a huge strategic mistake.” I asked him in what way. “You won the election.” From the very outset, Syriza has borne the brunt of tremendous anger because we called a programme into question that has been the dominating and unchallenged doctrine in Europe for years: austerity. A policy of cuts that has been failing for years but that is systematically impoverishing our population. It leaves people feeling hopeless. Both young and old. What we are currently experiencing is the total triumph of neoliberalism [over democracy]. It spells the end of humanity.
Amen if that is so. But the fat lady hasn't sung just yet. Conquering a small country like Greece is not conquering Europe, let alone the world.

Working on a new podcast interview with David Walker

Hi folks. I am working on a new podcast interview with David Walker, former Comptroller General of the USA and self proclaimed, "Deficit Ranger." (

It's been a while. Many of you might recall this: Interview with David Walker on my radio show.

Or this: bumping into him at Fox News several years ago where he insisted that he was not pushing for ending Social Security and that he NEVER said it would go bankrupt. Remember?

Well, hopefully I will get him. (And I will be nice.) Give me questions to ask.

He said possibly late next week. (Tweet to him!)

Cool how Mike Norman Economics is starting to get some pull. (I think.)

Scott Adams Blog — What is Better Than a Republic?

Digital voting scheme.

Scott Adams Blog
What is Better Than a Republic?
Scott Adams, creator of Dilbert

Patrick Armstrong — WaPo Says the NED Does What the CIA Used to Do

But they’ve forgotten they said that.
Armstrong reminds us.

Russia Insider
WaPo Says the NED Does What the CIA Used to Do
Patrick Armstrong
The Russian Central Bank has lowered the key interest rate to 11 percent. By doing so the Russian government is trying to improve the investment climate in the country. However, experts believe the move is a compromise – a drastic slashing of the rate would result in a spike in inflation, which has already reached 15.8 percent.
Food price has stabilized.

Russia Beyond the Headlines
Russian Central Bank steps in to cut key interest rate again

Connor Forrest — Chinese factory replaces 90% of humans with robots, production soars

Here come are the robots.
Chinese factory replaces 90% of humans with robots, production soarsChangying Precision Technology Company in Dongguan city has set up an unmanned factory run almost entirely by robots. The factory has since seen fewer defects and a higher rate of production.…
The Changying Precision Technology Company factory in Dongguan has automated production lines that use robotic arms to produce parts for cell phones. The factory also has automated machining equipment, autonomous transport trucks, and other automated equipment in the warehouse.
There are still people working at the factory, though. Three workers check and monitor each production line and there are other employees who monitor a computer control system. Previously, there were 650 employees at the factory. With the new robots, there's now only 60. Luo Weiqiang, general manager of the company, told the People's Daily that the number of employees could drop to 20 in the future.
The robots have produced almost three times as many pieces as were produced before. According to the People's Daily, production per person has increased from 8,000 pieces to 21,000 pieces. That's a 162.5% increase.

The increased production rate hasn't come at the cost of quality either. In fact, quality has improved. Before the robots, the product defect rate was 25%, now it is below 5%.
 China is following Japan's example of using technological innovation to address its demographic problem of an aging population resulting from the one child policy.

Tech Republic
Chinese factory replaces 90% of humans with robots, production soars
Connor Forrest
ht Alexrpt at Red Pill Times

Johnson's Russia List — Russian Poll Shows Strong Support For Internet Censorship

Russians are way more authoritarian that Westerners.

Johnson's Russia List
Russian Poll Shows Strong Support For Internet Censorship

Theodore P. Gerber and Jane Zavisca — What 18 Focus Groups In The Former USSR Taught Us About America’s Image Problems

Revealing study, even considering that it was funded by the US Army.
The United States has a major public relations problem in former Soviet countries. Not only in Russia, but in Azerbaijan, Kyrgyzstan, and even Ukraine, ordinary people see the U.S. as an arrogant, hegemonic superpower that meddles in the affairs of other countries in a cynical pursuit of its own interests — perceptions that dovetail with the Russian government’s official critiques of the United States, which may explain the success of these particular memes. At the same time, citizens of these countries respect and admire American economic power, technology, culture, and, to some extent, its political institutions. This dual-sided picture — often obscured by crude survey-based measures of views of America in post-Soviet nations — emerged from 18 focus groups we conducted in Russia, Azerbaijan, Kyrgyzstan, and Ukraine between April and August 2014.
To restore American soft power in the region, the United States should reduce direct support for civil society organizations in former Soviet countries and others that lack intrinsic demand for civic engagement. American financing of these organizations has played into the hands of authoritarian leaders who portray such backing as evidence of American interference, hurting the reputations of both the U.S. and the local NGOs that receive American funds. Instead, American policies should emphasize programs which spread and deepen knowledge and appreciation of American institutions — more exchanges of people, ideas, and cultural products….
The Wilson Quarterly
What 18 Focus Groups In The Former USSR Taught Us About America’s Image Problems
Theodore P. Gerber, professor of sociology and director of the Center for Russia, East Europe, and Central Asia at the University of Wisconsin-Madison., and Jane Zavisca is an associate professor of sociology at the University of Arizona

This material is based upon work supported in part by the U.S. Army Research Laboratory and the U.S. Army Research Office via the Minerva Research Initiative program under grant number W911NF1310303.

Oleg Tsarev — Why did the Times publish an article about a Novorossia dirty bomb?

False flag in the making?
But the fact is that when someone wants to commit a crime — he must first create an alibi. Or, in our case, to create the background information that would blame the enemy.
In other words, if the Times - and perhaps with help of Ukrainian and Western intelligence agencies - publishes leaks about a "bomb", that means Kiev is contemplating a big provocation with its curators.
Sanctions didn't help to "defeat" Russia.
And a Boeing tribunal did not work out.
And a UAF attack would have ended in defeat under the current circumstances.
Which means that Kiev needs a disaster with the greatest possible number of victims on the despised territory to make Donbass the area of international disaster, and this time to force Russia to agree to enter their "peacekeeping troops" or any other form of pressure, chosen by America and its satellites.
Hence the talk about a "dirty bomb".….
Fort Russ
Why did the Times publish an article about a Novorossia dirty bomb?
Oleg Tsarev | Chairman of the Parliament of Novorossia
Translated by Kristina Rus

Greg Palast — The Globalizer Who Came In From the Cold

2001 post by Greg Palast on Joseph Stiglitz on the neoliberal rape and looting of Russia.

Raging Bull-Shit
The Globalizer Who Came In From the Cold
Don Quijones

Yanis Varoufakis — Greek Tragedy – by Christos Tsiolkas (in conversation with Yanis Varoufakis), MONTHLY magazine

Novelist Christos Tsiolkas (The Slap, Baraccuda etc.) wrote this piece (for the Australian magazine MONTHLY) from a Greek-Australian perspective (after the two of us had talked extensively over the telephone).
Yanis Varoufakis
Greek Tragedy – by Christos Tsiolkas (in conversation with Yanis Varoufakis), MONTHLY magazine

Chris Dillow — Is Corbynomics inflationary?

It's widely agreed that Jeremy Corbyn's popularity is due in large part to the mediocrity of the alternatives. As if to demonstrate this, Chris Leslie - Shadow Chancellor - claims that Corbynomics would be inflationary.
This isn't wholly unreasonable. A money-financed fiscal expansion - which is all "people's QE" is - would increase employment and aggregate demand. Conventional economics says this would reduce the "output gap" which would tend to add to inflation.
The claim might be reasonable. But we cannot make it with much confidence, for three reasons.…
Stumbling and Mumbling
Is Corbynomics inflationary?
Chris Dillow | Investors Chronicle

Bill Mitchell — Long-term unemployment behaviour reflects austerity bias in Eurozone

The Economist is in for it today.
The Economist magazine, never one to resist the urge to promote flawed ‘free market’ analysis, does not seem to have learned any lessons from its erroneous coverage of the GFC. It the latest version of what has to be one of the worst-named columns ‘The Economist explains’ (given explanation usually requires knowledge to be imparted) – Why long-term unemployment in the euro area is so high (August 2, 2015), all the usual myths about the labour market are propagated and the obvious ignored because it doesn’t fit the ideological position of the magazine.…
Enjoy the smackdown.

Bill Mitchell – billy blog
Long-term unemployment behaviour reflects austerity bias in Eurozone
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Alexander Douglas — Macroeconomic Theory and Operational Reality

Brilliant. A philosopher shows Greg Mankiw and Paul Krugman not only how to teach macroeconomics (write textbooks) but also how to do it.

Origin of Specious
Macroeconomic Theory and Operational Reality
Alexander Douglas | Lecturer in Philosophy at Heythrop College, London

U.K. Rates

Maybe if the U.K. were to go first, then the current crop of U.S. monetarists-in-charge would be more likely to raise here.

Sunday, August 2, 2015

Robert Reich — The Revolt Against the Ruling Class

“He can’t possibly win the nomination,” is the phrase heard most often when Washington insiders mention either Donald Trump or Bernie Sanders.

Yet as enthusiasm for the bombastic billionaire and the socialist senior continues to build within each party, the political establishment is mystified.
They don’t understand that the biggest political phenomenon in America today is a revolt against the “ruling class” of insiders that have dominated Washington for more than three decades.
In two very different ways, Trump and Sanders are agents of this revolt. I’ll explain the two ways in a moment.
Robert Reich
The Revolt Against the Ruling Class
Robert B. Reich | Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration

Merijn Knibbe — Fast population decline in Greece. Is it following the Detroit example?

Elstat has published new population estimates for Greece. And what happened to Portugal, Ireland, Estonia, Spain Latvia, Lithuania, Romania or Bulgaria is happening to Greece, too.…
Which is a problem: Detroit went bust because its population dwindled from 1.7 million to 0.7 million – and the city council wasn’t able to cut financial obligations (including pensions) to a level which could be sustained by this much smaller number of people. In may of these countries this process is aggravated by, very low birth rates.
Real-World Economics Review Blog
Fast population decline in Greece. Is it following the Detroit example?
Merijn Knibbe

Jaume Ventura and Hans-Joachim Voth

Is debt really that bad? This column looks at the towering debts, rapid tax hikes, and constant state of war that led to Britain’s Industrial Revolution, showing that the devil is in the detail when assessing sovereign debt. When we consider the dangers of debt in today’s world, we should keep an eye on its potential benefits as well.
Debt miracle: Why the country that borrowed the most industrialised first
Jaume Ventura, Senior Researcher, CREI, Universitat Pompeu Fabra; International Macroeconomics Programme Director, CEPR, and Hans-Joachim Voth, Chair of Development and Emerging Markets at the Economics Department, Zurich University and CEPR Research Fellow
ht Ralph Musgrave

Alexander Douglas — The Theoretical Underpinnings of Osborne’s Budget

In sum: the budget draws upon empirical research that is conducted with no sensitivity to an enormous institutional difference. It misrepresents that research, for instance by treating averages as universals. It makes no attempt to understand how financing actually works for a government that spends in its own currency. The authors may not have even read the research they cite.
Origin of Specious
The Theoretical Underpinnings of Osborne’s Budget
Alexander Douglas | Lecturer in Philosophy at Heythrop College, London
ht Random in the comments

See also

How to Sell an Idea – Wisdom from Abba Lerner

The Interactive Economy Is Too A Supply Chain Economy

   (Commentary posted by Roger Erickson)
The P2P Foundation shows how all bureaucracies inevitably miss the point of why they were founded. In this case the P2PF argues:
The interactive economy is not a supply chain economy

Sorry, but they're applying apple bandages to a constantly bleeding orange challenge.

Of course the interactive economy is a supply chain economy. 
It's supplying Increasing Cultural Adaptive Rate!

Members just aren't aware of what they're really supplying. Claiming that they aren't supplying what they are supplying isn't gonna make that task go away. This is tragic.

If you're gonna make a claim to being on the bleeding edge, you at least ought to be able to smoothly redefine blood as it evolves added functions. :(

Otherwise, you may as well be a tree claiming that it isn't forming a forest. This may be beyond rocket science, but they're still missing the point.

Saturday, August 1, 2015

Lord Keynes— Paul Mason on “Is Capitalism Dead?”

In my opinion, the whole debate cannot proceed until one has defined “capitalism” carefully. What is the essence of capitalism?
I think these are the core and essential attributes of capitalism:
(1) where there are strong (if often limited or circumscribed) private property rights;
(2) where most capital goods are privately owned and where most investment decisions are made privately. Defined in this sense, it is obvious that capitalism can come in many forms.
Here is just a small set of possible capitalist systems:
(1) a Rothbardian capitalist system where no government exists and where everything is privatised including justice;
(2) a Misesian or Hayekian Classical liberal capitalist system, where there is a minimal night-watchman state with basic public infrastructure (under Hayek’s system it might have some minimal social and economic interventions);
(3) a neoliberal capitalist system where governments attempt to control macroeconomics by monetary policy and varying degrees of government intervention (such as public infrastructure spending, regulation, social security, basic social services, and welfare), but where labour markets are deregulated, governments try to balance budgets, and involuntary unemployment is often a serious problem;
(4) a capitalist system where a Keynesian state maintains full employment by fiscal policy, strongly regulates businesses, and provides extensive social services (such as health care, education, and unemployment benefits) and welfare, strong public infrastructure spending, but where nationalisation of certain industries/services is minimal or non-existent;
(5) a capitalist system where a Keynesian state maintains full employment by fiscal policy, strongly regulates businesses, has strong public infrastructure, provides generous social services (such as health care, education, and unemployment benefits) and generous welfare, and where some industries are nationalised (e.g., the commanding heights of the economy).
I do not see any substantive problem with capitalism when it comes in form (4) or (5). (4) and (5) are what we would call the social democratic mixed economies of the post-WWII era.
The problem with capitalism is when it comes in forms (1), (2), or (3) (or anything in between).
Some would agree with this five-fold structure but others would deny that social democracy (# 4 and #5) in any of its forms constitute capitalism. Rather, they are forms of a mixed economy that combines features of capitalism and socialism. The argument is that self-ownership, self-autonomy, and ownership of property are the only basic natural rights, and other rights are constructed rather than natural.

Some would strongly contest the claim that neoliberalism with central banking cannot be a genuine form of capitalism, since a central bank setting interest rates, for example, is a technocratic command system.

I don't have any issue with the two assumptions of capitalism that Lord Keynes lists, in that I think they are generally agreed upon. However, I would define capitalism somewhat differently as that form of social, political and economic organization that favors "capital" (consolidating ownership of capital goods and land) over "labor," using the terminology of the traditional factors.

However, "capital," like "money," is a weasel word that is probably best avoided unless it is defined operationally (recalling the Cambridge capital controversy). "Labor" is also a weasel word because it includes all employees, workers, management and top management. I would rename the traditional factors, technology, the environment and the people as a matter of rectification of names in the traditional Chinese sense of social structure.
The Rectification of Names (Chinese: ; pinyin: Zhèngmíng; Wade–Giles: Cheng-ming) is the Confucian doctrine that to know and use the proper designations of things in the web of relationships that creates meaning, a community, and then behaving accordingly so as to ensure social harmony is The Good.[1] Since social harmony is of utmost importance, without the proper rectification of names, society would essentially crumble and "undertakings [would] not [be] completed." [2]
Then it becomes a question of whether favoring technological innovation to promote growth is a reasonable strategy based on assuming trickle down to the people based on a rising tide lifting all boats, and ignoring externalities that adversely affect people and the environment.

If people and the environment are prioritized socially, politically and economically over technology, is that still capitalism?

Social Democracy For The 21St Century: A Post Keynesian Perspective
Paul Mason on “Is Capitalism Dead?”
Lord Keynes

Daniel Little — Microfoundations 2.0?

Little considers to what degree microfoundations is a necessary condition for causal explanation in social science.

Understanding Society
Microfoundations 2.0?
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Yanis Varoufakis — Death by Debt: My Response to The German Finance Ministry, by Jeffrey Sachs

Sachs is a debt dove.Jef

Yanis Varoufakis
Death by Debt: My Response to The German Finance Ministry, by Jeffrey Sachs

See also

David F. Ruccio — Only in America

Former US Senator Phil Gramm: It’s the one form of bigotry that is still allowed in America, and that’s bigotry against the successful … My friend Ed Whitacre at AT&T, if there’s ever been an exploited worker, even though they made a big deal about him getting $75 million when he retired, the man added billions of dollars of value, he was exploited, it was an outrage!
Occasional Links & Commentary
Only in America
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Detroit Dan — Political Economic Quadrants for 2016

Political Economic Quadrants for 2016
Detroit Dan

Asia-Europe Container Rates

Pretty significant decline here; continued bearish price developments being exhibited in factors of global merchandise trade.  This is to the continued benefit of the merchandise importing nations.

Gordon M. Hahn — Putin’s Asia-Eurasia Pivot: ‘Isolation’ from the West Spurs Eurasian Integration and Russian Globalization

Good summary of developments.
In all of the the above ways and others Moscow’s efforts to counter isolation from the West with closer ties to Beijing and the rest of the non-West are bearing a perhaps bitter fruit. Eurasian integration is now invigorated on a potentially much grander scale than the scare-mongering cliche’ regarding ‘Putin’s goal to restore the Soviet Empire.’ China and Russia are overseeing a consolidation of Eurasia that could assist Moscow’s (and Beijing’s) goal of delimiting the West’s influence.
Moreover, the Sino-Russian strategic partnership is going global, leveraging both powers’ ability to network internationally for purposes of trade, development and national security vis-avis both the potential NATO threat and the kinetic global jihadi threat. In combination with the other major Sino-Russian international project – BRICS – the SCO Eurasian project can be seen as a key building block in the efforts of Eurasia’s two great powers – China and Russia – to tap markets easier to access than Western ones, where political criteria often trump cooperation, and insure themselves from American hegemony, humanitarian interventionism, and adventurist revolutionism or ‘regime change.’
Thus, the West’s Kiev gambit has crystallized a consolidation and expansion of the Sino-Russian global partnership that at the least will circumvent U.S. hegemony and at most could challenge and overthrow it.
Russian and Eurasian Politics
Putin’s Asia-Eurasia Pivot: ‘Isolation’ from the West Spurs Eurasian Integration and Russian Globalization
Gordon M. Hahn, Analyst and Advisory Board Member of the Geostrategic Forecasting Corporation, Chicago, Illinois; Senior Researcher, Center for Terrorism and Intelligence Studies (CETIS), Akribis Group, San Jose, California Analyst/Consultant, Russia Other Points of View – Russia Media Watch; and Senior Researcher and Adjunct Professor, MonTREP, Monterey, California

Gilbert Doctorow — Sanctions Have Failed. 'Buy Russian' Is Working

It is now more than a year that Russia imposed its food embargo on the EU and other states which had applied sanctions to it over its absorption of Crimea and intervention in southeastern Ukraine. The results of the change-over in overseas suppliers and rising import substitution through the efforts of domestic producers have now become fairly clear.
In this brief report based on visits to retail outlets ranging from convenience stores and market stalls to hypermarkets and from the St Petersburg city center to hamlets 80 km away in the hinterland, I will try to make some sense of what has occurred, how Russians’ shopping basket has changed so far and where the trend lines are leading. Put another way, I will start with a number of small and specific observations and end with some generalizations and forecasts of what broad processes are underway and how they can affect the global food trade.…
Sanctions are helping Russia to restructure its economy, avoid Dutch disease, and become more competitive as a food exporter.

Russia Insider
Sanctions Have Failed. 'Buy Russian' Is Working
Gilbert Doctorow