Inspectors,
It may seem odd that I am putting an article about MMT, Modern Monetary Theory at the top of the stack, but it is not a "thing" in itself.
It is a lens through which one may see the workings of power in a country/society, and what choices the society makes, and what the limits to those choices actually are. This is a discussion we are entering, out of necessity, yet again...
Finally, despite showing that currency-issuing governments don’t face a financial constraint, MMT doesn’t claim that a nation faces no spending constraints whatsoever; rather, it shows that the real constraints faced by governments are the real resources (plants, machines, workers, etc.) available to the nation either locally or through trade. It follows that the real limit to government spending is the capacity of the economy to absorb it without generating runaway inflation...
In fact, MMT is not a regime that you ‘apply’ or ‘switch to’ or ‘introduce’. Rather, it is a lens which allows us to see how our fiat monetary systems already work. How you decide to use that understanding depends on the value system or ideology you apply to it. It thus makes little sense to talk of ‘MMT-type prescription’ or an ‘MMT solution’. Indeed, governments already operate according to the framework offered by MMT, regardless of what they may claim in public (and the accounting smokescreens they may employ).
Citizens are constantly told that the government cannot afford to invest more in education, healthcare, infrastructure, welfare and other public services. Yet, there is never a lack of money when it comes tax cuts for the rich, bank bailouts, military activities and other programmes that benefit our political and economic elites. As of March 2006, approximately £4.5 billion had been spent by the UK in Iraq, enough to pay for the building of around 44 new hospitals and to fund the recruitment and retention of over 10,300 new teachers for ten years. Yet, there was never any debate about how the UK would ‘fund’ the war...
But if there is a need to attenuate spending growth in the economy, MMT demonstrates the superiority of an employment buffer stock approach–the Job Guarantee–over the current unemployment buffer stock approach to inflation control. Instead of creating unemployment to discipline wage demands, MMT proponents advocate that the government would, instead, offer a public sector job at a socially- inclusive minimum wage to anyone who seeks to work. Redistributing labour from the inflating sector to the fixed price sector would ensure price stability and avoid costly mass unemployment...
In the presence of an external deficit, the government will have to run a fiscal deficit to maintain spending sufficient to keep all resources fully employed. Since Britain has run an external deficit since the 1970s, and is not likely to generate large external surpluses in the foreseeable future, it follows that the only way private debt–and the power of financial institutions over society–can be brought under control without driving the economy into recession is for the government to run persistent and substantial fiscal deficits...
The support of mainstream economists and financial operators for certain theories and policies doesn’t stem from a sincere belief in their virtue, but from the fact that they promote the interests of the dominant forces in society. The idea that a socialist government could guarantee itself the support of the economic establishment simply by adhering to the ideological framework that its members claim to believe in, with the aim of deploying mainstream theories and policies for progressive ends, is naïve.
Moreover, Meadway neglects the fact that the power of the capitalist establishment derives as much from its command of the state and means of production as it does from its capacity to frame the narrative. The primacy of these fiscal rules is a key part of the way in which the economic establishment censures governments that might be intent on redistributing national income or improving welfare services and the like.
Ultimately, the ideology of scarcity of money is integral to the maintenance of our deeply unequal relations of power in society. If there’s anything the establishment fears more than the working classes seizing the means of production, it’s the working classes seizing the means of production of money (or more precisely, of currency)...
MMT gives us the power to imagine truly transformational politics, without getting caught up in meaningless debates about whether we can ‘afford’ it or not. This is also why it is being attacked so fiercely. Not because of its theoretical foundations, but because of the range of economic and political possibilities that it opens up. The bottom line, however, is that MMT is here to stay.
These mules can't pull the economic wagon, and they are giving up.
The net worth of millennials (18- to 35-year-old) has collapsed 34% since 1996, according to a new, shocking report from Deloitte.
Millennials are financially worse off than any other generation before them. With student loans, auto and credit card debts, rising rents, and out of control, health-care costs have pushed their average net worth below $8,000.
https://www.zerohedge.com/news/2019-06-02/millennial-net-wealth-collapses-study-finds
The current monetarist capitalist framework pumps "money" into anything that can hold it, which amplifies the current system of wealth-distribution. The rich get richer and the poor get poorer. This has become a very sick structure, and these sick structures ultimately collapse, because of reality. When the structure collapses, nobody is rich, because the economy does not function. This is monetarist analysis...
Hey, look! It ends up in the same place.
Rickards: Going back to the 1929-1937 period, the old rule was to prick bubbles to relieve speculative pressures. But, this ended up causing recessions rather than preventing them. By the 1998 - 2001 period, the conventional wisdom was to let bubbles run their course and then clean up the mess afterwards. But the Fed has failed to distinguish between credit driven bubbles and mania driven bubbles. The former are dangerous because they are connected with the credit system, the latter less so because people loose money but the crisis is not systemic. The 2000 dot.com bubble was speculative, but not credit driven so it did not turn into a systemic crisis when it popped. Of course 2008 was credit driven and it did metastasize throughout the system right up to the top of the food chain with large banks and the housing GSEs failing. When you are kicking around the idea of should I or should I not pop the bubble, this is a key distinction and the threshold question for policy. You should pop or defuse credit driven bubbles, but perhaps let speculative bubbles (most recently Bitcoin) run their course. The problem is that Fed policymakers do not seem to grasp this fundamental distinction. This leads to credit bubbles being allowed to spin out of control into systemic crises...
Rickards: That is a profound question you raise about the impact of monetary policy on visible credit metrics. The answer very simply is that you can’t get out. It's one thing when loose monetary policy results in private credit extremes. The Fed can reign that in. But, what happens when public credit from the Fed is the source of the problem? The Bernanke choice of stoking asset price inflation via zero rates and QE is not something that can be reversed without a great deal of pain. Once you make that trade-off between promoting inflation and future market instability, you have no way out. You’re much better off taking the pain and accepting a lower level of economic growth in the short-run rather than deferring the pain but creating far larger asset bubbles down the road. There is no way out of the Bernanke policy choice without bigger bubbles and much larger market crash that results. This is why I believe that we face a financial market crash as bad or worse than 1929 or 2008...
Rickards: When all of the solutions from Washington and all of the big ideas about economic growth fail, then we may need to fall back on a community based, semi-agrarian model that resembles austerity in today’s terms. Such a model is far more stable than the radical boom and bust model of Greenspan and Bernanke.
Rickards: We need to move beyond ideology and towards a more pragmatic discussion about how we measure and describe growth. Let’s do what works.
Pepe Escobar covers (leaked rumors of) the recent Biderberg meeting of 130(ish) global power elites in Switzerland.
The major issue discussed this year was “A Stable Strategic Order”, a lofty endeavor that can be interpreted either as the making of a New World Order or just a benign effort by selfless elites to guide mankind to enlightenment...
The Greens who won in Europe – contrary to the US Greens – are all humanitarian imperialists, to quote the splendid neologism coined by Belgian physicist Jean Bricmont. And they all pray on the politically correct altar. What matters, from Bilderberg’s perspective, is that the European Parliament will continue to be run by a pseudo-Left that keeps defending the destruction of the nation-state.
Just like Castries and his pupil Macron.
The great Bilderberg secret of 2019 had to do with why, suddenly, the Trump administration has decided that it wants to talk to Iran “with no preconditions”.
It all has to do with the Strait of Hormuz. Blocking the Strait could cut off oil and gas from Iraq, Kuwait, Bahrain, Qatar and Iran – 20% of the world’s oil...
An American source said a series of studies hit President Trump’s desk and caused panic in Washington. These showed that in the case of the Strait of Hormuz being shut down, whatever the reason, Iran has the power to hammer the world financial system, by causing global trade in derivatives to be blown apart...
Tehran has not voiced this “nuclear option” openly. And yet General Qasem Soleimani, head of the Iranian Revolutionary Guards Corps’ Quds Force and a Pentagon bête noire, evoked it in internal Iranian discussions. The information was duly circulated to France, Britain and Germany, the EU-3 members of the Iran nuclear deal (or Joint Comprehensive Plan of Action), also causing a panic.
Oil derivative specialists know well that if the flow of energy in the Gulf is blocked it could lead to the price of oil reaching $200 a barrel, or much higher over an extended period. Crashing the derivatives market would create an unprecedented global depression...
And that brings us to Secretary of State Mike Pompeo’s long, non-scheduled stop in Switzerland, on the Bilderberg’s fringes, just because he’s a “big cheese and chocolate fan”...
After weeks of ominous threats to Iran, the US said “no preconditions” would be set on talks with Tehran, and this was issued from Swiss soil...
Henry Kissinger was a 2019 Bilderberg participant. Rumors that he spent all his time breathlessly plugging his “reverse Nixon” – seduce Russia to contain China – may be vastly overstated.
Long-term, intense economic competition between China and the United States is inevitable. It’s simply a result of China’s new economic size. It’s about wealth and power, not political systems or ideology. Forget these two countries per se.
Russia is acutely aware of the international power structure, and has always been wary of her huge neighbor, China, but Russia does what she must do each day... [I believe Russia's long term interests align with the US, but not global elites running our show.]
Just one month after conducting joint military exercises, Russia and China are set to sign an agreement which would boost the use of their national currencies in bilateral and international trade in an attempt to move away from the current dollar-denominated financial system, according to Russian state-owned news outlet TASS.
Chinese traditional farming is extremely sophisticated. It allowed China to have an empire for 5000 years. Those farmers have been pulled out to work in factories and pour concrete, a one-time extraction of human wealth. The US already spent it's farmers long ago. Global Food War:
Beijing warns US farmers may lose China market for good, but plays down tariffs impact at home
Han Jun, vice-minister of agriculture and rural affairs, says Chinese farmers can export products to non-US markets to weather impact of trade war
Country will also be able to source enough soybeans to meet domestic demand
Farmers in the United States cannot afford to lose the Chinese market, but farmers in China will be able to withstand the impact of American tariffs, according to a top agriculture official in Beijing.https://www.scmp.com/economy/china-economy/article/3012779/beijing-warns-us-farmers-may-lose-china-market-good-plays
US farm output will be hugely down this year, and US farmers will need a lot of help, anyway.
Loss of exports to China to feed pigs may not hurt the American factory-agricultural sector much this year.
According to the latest May 20 report of the National Agricultural Statistics Service (NASS) of the US Department of Agriculture, corn and soybean crops are well behind the planting growth levels normal this time of the planting season. They report that only 49% of all planned corn acreage in the US has been planted compared with 78% at this time a year ago. Of that only 19% has yet emerged from the ground compared to 47% in May 2018. In terms of soybeans, barely 19% of crops have yet been planted compared with 53% a year before. Rice acreage planted is down to 73% compared to 92% a year ago in the six US rice-growing states. Of course, should weather dramatically improve the final harvest numbers could improve. It is simply too early to predict.
The USA is by a wide margin the world largest soybean producer with 34 percent of the world’s soybean production and 42% of world exports prior to the China trade battles. The US is also the world largest corn or maize producer, almost double China, the number two. A serious harvest failure in these two crops could significantly affect world food prices, leaving aside the unfortunate fact that almost all US soybeans and corn are GMO crops. They are mainly used in animal feed.
Donald Trump Is The most Honest US President Of All Time, Caitlin Johnstone:
To be clear, I am not saying that Trump actually tells the truth with his words; he obviously does not. Trump is so comfortable with lying that he once tweeted the claim that he’d never urged House Republicans to vote for a particular immigration bill, three days after posting a tweet explicitly urging House Republicans to vote for that bill. He left both tweets up. I mean, that’s like one click away from literally looking someone in the eye while urinating on their leg and telling them it must be the rain.
No, when I say that Trump is the most honest US president of all time, what I mean is that he has a unique gift for exposing the face of the empire for exactly what it is, in all its depravity, all its deceitfulness, all its corruption, and in this case, all its jaw-dropping ridiculousness. I mean, look at this photo:
Obama could have made this look normal. Bush would have looked a little bit goofy, but nothing that would make you spit your coffee on your screen. Hell, Bill Clinton would have looked downright at home, like he was born in Buckingham Palace and spent his whole life sipping champagne and groping the maids while he waited for this photo to be taken. It took the badly-dressed awkward posture and golf bod of a reality TV star who became president via 4chan prank to expose that whole absurd royalty display for the risible self-parody that it deserves to be seen as...
His whole cabinet is basically human versions of the departments they represent. His Secretary Treasurer was a Goldman Sachs executive. His CIA Director literally tortured people. His National Security Advisor is an Iraq-raping Bush-era neocon. His Secretary of Commerce is a former Rothschild executive. His EPA Administrator is a former coal lobbyist. His Secretary of State came straight out of the CIA. It’s like he designed a convenient labeling system for everyone who’s unsure of what it is that each department in the executive branch of the US government actually does.
Kushner: Palestinians not yet capable of governing themselves
(AKA: "They won't do what I say")
I am certain that Senator Elizabeth Warren understands Modern Monetary Theory (which does not mean that she groks everything.).
Warren’s latest plan is in a class by itself, even for Warren. She calls it an Agenda for Economic Patriotism.
Warren’s proposal does nothing less than turn inside out the globalist assumptions pursued by the past several administrations, Democrat and Republican alike. Where they have pursued more globalization of commerce as an end in itself (and as a profit center for U.S.-based multinational corporations and banks), Warren’s goal is to bring production and good jobs home.
Even better, she knits it all together with a coherent plan, beginning with a new Department of Economic Development “with the sole responsibility to create and defend quality, sustainable American jobs.” ...
Even better(er), Warren shows up Donald Trump on the question of trade. While Trump’s version of economic nationalism is all swagger, symbol, and shotgun retaliation. Warren’s would actually deliver tangible benefits for the voters who turned in desperation to Trump. By contrast, Trump’s version delivers nothing.
Those packing peanuts made of rice are edible. Rats can live in a box with them for a long time. Can we employ that knowledge somehow?
The average person eats at least 50,000 particles of microplastic a year and breathes in a similar quantity, according to the first study to estimate human ingestion of plastic pollution.
The true number is likely to be many times higher, as only a small number of foods and drinks have been analysed for plastic contamination. The scientists reported that drinking a lot of bottled water drastically increased the particles consumed.
