Tuesday, 9 February 2016 - 12:06pm
Sigh. I can't even be bothered to make some sarcastic quip. It's all too sad.
In years to come, the Mid North Coast will be an anthropological puzzle, like Easter Island. How did this enclave of morons within an advanced western society come to so fear flouride that they took to drinking exclusively from stagnant ponds? As once-eradicated diseases tore through the population of unvaccinated children, how could their parents be so sure that their symptoms were entirely caused by gluten intolerance? As the last handful of survivors lay dying in agony, their spines buckled by the accumulated weight of crystals and charms, why did they persist in refusing medical assistance, instead demanding magnetic pillows, wheatgrass detox shakes, tarot readings, and ear candles?
UPDATE: Now you can detox with lead!
Note to self
I forget this every time I go to upgrade Drupal, because it's so simple, and spend an hour trying to make absolutely sure I have it right and haven't missed anything. So assuming you're deploying Drupal with git (with the contents of sites/ untracked, presumably), all you have to do is:
git fetch
git rebase origin/7.x
drush @sites updb
Optionally, you can do a git hard reset to the latest tagged release.
Sunday, 7 February 2016 - 12:59pm
This week, I have been mostly reading:
- The political aftermath of financial crises: Going to extremes — Manuel Funke, Moritz Schularick, Christoph Trebesch at VOX, CEPR’s Policy Portal:
The bottom line is that financial crises stand out. They are followed by significantly more political instability than other types of economic crises. This raises the question – why are financial crises different? One explanation is that financial crises may be perceived as endogenous, ‘inexcusable’ problems resulting from policy failures, moral hazard and favouritism. In contrast, non-financial crises could be seen as ‘excusable’ events, triggered by exogenous shocks (e.g. oil prices, wars). A second potential explanation is that financial crises may have social repercussions that are not observable after non-financial recessions. For example, it is possible that the disputes between creditors and debtors are uglier or that inequality rises more strongly. Lastly, financial crises typically involve bailouts for the financial sector and these are highly unpopular, which may result in greater political dissatisfaction.
[Also:] - Right-wing political extremism in the Great Depression — Alan de Bromhead, Barry Eichengreen, Kevin Hjortshøj O’Rourke at VOX, CEPR’s Policy Portal:
Our statistical results […] show that that the Depression was good for fascists. It was especially good for fascists in countries that had not enjoyed democracy before 1914; where fascist parties already had a parliamentary base; in countries on the losing side in WWI; and in countries that experienced boundary changes after 1918. […] Importantly, it shows that what mattered was not the current growth of the economy but cumulative growth or, more to the point, the depth of the cumulative recession. One year of contraction was not enough to significantly boost extremism, in other words, but a depression that persisted for years was.
- Can philosophy survive in an academy driven by impact and employability? — Simon Blackburn (et al.) in the Times Higher Education:
One of the most potent causes of mistrust of philosophy is that it provides no answers, only questions, so that to many it does not seem to have progressed since its very beginnings in Plato, or even in pre-Socratic Greece (or China or India). Of course, one might similarly ask whether other human pursuits, such as music, literature, drama, architecture, painting or politics, have “improved” (and by what measure this judgement is supposed to be made), and if the answer is at best indeterminate we might query whether this reflects badly on those practices, or whether perhaps it indicates a problem with the question.
- Changing private investment activity requires higher fiscal deficits — Bill Mitchell:
So if non-financial corporations are themselves increasingly becoming net lenders to the rest of the economy then the idea that household saving provides the investment funds for firms has to be questioned. Further, this shift in behaviour implies a serious new leakage to aggregate demand has developed, which if left unchecked would bias the economy to recession. The mainstream alternative is that growth is maintained by rising consumer spending by households driven by increased credit. In other words, the lenders and the borrowers have swapped seats. Of course, such a growth scenario is unsustainable because households cannot cope with ever-increasing levels of debt, as we learned in 2008.
- IMF forgives Ukraine’s Debt to Russia — Michael Hudson:
[O]n Tuesday, the IMF joined the New Cold War. It has been lending money to Ukraine despite the Fund’s rules blocking it from lending to countries with no visible chance of paying (the “No More Argentinas” rule from 2001). When IMF head Christine Lagarde made the last IMF loan to Ukraine in the spring, she expressed the hope that there would be peace. But President Porochenko immediately announced that he would use the proceeds to step up his nation’s civil war with the Russian-speaking population in the East – the Donbass. […] By doing so, it announced its new policy: “We only enforce debts owed in US dollars to US allies.”
- House Prices and Job Losses — Emma Lyonette and Gabor Pinter, Bank Underground:
This blog summarises the findings of recent research by Pinter (2015) that emphasises the role of real estate as an important determinant of firms’ borrowing capacity. This is because real estate is widely used by corporates as collateral when trying to obtain external financing. Fluctuations in real estate prices may therefore cause fluctuations in firms’ borrowing capacity, which then affects firms’ decisions to undertake new investment, to create new jobs and to destroy existing jobs. The paper shows that this so-called collateral channel is important in understanding not only the recent Great Recession but historical UK business cycles in general.
- Simpson, PL, Guthrie, J, Lovell, M, Doyle, M and Butler, T 2015, 'Assessing the Public’s Views on Prison and Prison Alternatives: Findings from Public Deliberation Research in Three Australian Cities', Journal of Public Deliberation, Vol. 11, No. 2:
Despite decreasing crime victimisation rates in Australia, incarceration rates have doubled over the last thirty years. Australia’s use of imprisonment has major economic and social equity costs, especially given the over-representation of Indigenous Australians and other socially disadvantaged groups in prison. Evidence increasingly points to the limitation of incarceration as a tool for effective offender rehabilitation suggesting that a new policy agenda on responses to offending is warranted. Yet, public opinion is generally assessed and perceived to hold punitive views towards offenders.
- Sorry, but Your Favorite Company Can’t Be Your Friend — Josh Barro in the New York Times:
As social psychologists describe it, there are two broad categories of human relationships: exchange relationships, in which we trade for mutual benefit; and communal relationships, which are based on mutual caring and support. Normally, you are supposed to have the former with people you do business with and the latter with your friends and relatives. But sometimes, companies try to blur the lines, insinuating themselves into your friend zone.
- Working Until It’s Time for Your Grave — Tiffany Williams, Common Dreams:
My [Institute for Policy Studies] colleagues recently released a report on the retirement gap between CEOs and workers. They found that nearly half of working age Americans have no access to retirement plans through their jobs. When I asked my mom about her own retirement savings, I learned she had nothing at all.
- The Potential of Debtors’ Unions — the Debt Collective in ROAR Magazine:
Experienced alone, debt is isolating, frightening and morally laden with shame and guilt. Indebtedness is being afraid to open the mail or pick up the phone. But as a platform for collective action, debt can be powerful. Consider oil tycoon JP Getty’s adage: “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” Student debt alone stands today at $1.3 trillion. Together, we can be the banks’ problem.
- Humans vs Houses: Australia's perverse tax system — Cameron K. Murray:
It is certainly now time for the government to end these tax concessions for investment property. Raising the GST, the current government’s preferred tax policy, is probably the worst choice in terms of both equity and efficiency compared to the low-hating fruit of removing these property tax advantages which currently cost the budget about $11billion a year. Obviously removing them would change incentives, reduce prices, and so forth, meaning that actual budget gains from their removal will be lower. But even so, the shift of incentives across the economy would be hugely advantageous in terms of both efficiency, and equity, as these tax incentives primarily benefit the wealthy.
- How George Osborne exploited our psychological biases to secure his cuts — Ben Chu in the Independent:
Mr Osborne’s July Budget proposed to save £4bn a year by 2020 by freezing all working age benefits in cash terms for the next four years, meaning a deep cut after inflation for recipients. And that was actually a bigger saving than the one generated from the cuts to tax credits. But unlike the tax credit cuts, the benefit freeze prompted no outcry. Why? Because the immediate cash losses loomed far larger than the forgone gains of benefits rising in line with inflation.
- Education and Equality in the 21st Century — Danielle Allen, Crooked Timber:
The preparation of citizens, through education, for civic and political engagement supports the pursuit of political equality, but political equality, in turn, may well engender more egalitarian approaches to the economy. An education that prepares students for civic and political engagement brings into play the prospect of political contestation around issues of economic fairness. In other words, education can affect income inequality not merely by spreading technical skills and compressing the income distribution. It can even have an effect on income inequality by increasing a society’s political competitiveness and thereby impacting “how technology evolves, how markets function, and how the gains from various different economic arrangements are distributed.”
- Nobody's home: Housing boom leaves swathe of empty properties — Angus Whitley in the Age on a new report from the Henry Georgists at Prosper Australia:
Sudden property price declines or an economic slowdown risk unmasking the vacant supply. Owners would start to sell up or look for rental income to cushion the blow from falling prices, [Catherine Cashmore, author of the Prosper report] said. "Suddenly, you find there's no one there to buy it or nobody to rent it. That's a common pattern in a housing crash," Cashmore said. "What we're trying to do is it to make it visible before it happens."
- Corbyn – after Oldham — Geoffrey Heptonstall, openDemocracy:
The headlines should have read: ‘Big Swing to Labour Boosts Corbyn at Critical Time.’ The fact is that the phrase ‘swing to Labour’ was suspiciously absent. The affirmation of Jeremy Corbyn’s position was conceded with something close to a snarl.
- In support of a Universal Basic Income – introducing the RSA Basic Income Model — Anthony Painter, RSA:
A couple of years ago, I was told of two young mothers who were studying for a qualification in nursing care. Towards the end of their studies a local Job Centre Plus insisted that they make themselves available for work or face sanction. They left their course and failed to qualify. They lost out and their time had been wasted. They were locked in the same oscillation between benefits and poor quality work. And society lost too - we need nursing care workers.
- Donald Trump and the ugliness in Las Vegas — Michael A. Cohen, Boston Globe:
But there is another side to Trump that merits greater attention — fear. This is not the fear of “others” — immigrants, Muslims, etc. There is plenty of that, but in talking to Trump’s supporters, a different kind of fear emerges — a sense that the country is falling apart, that the nation’s safety and security are at risk, and that America needs someone who is strong, decisive, and unafraid to say what he thinks must be done to fix things.
- This week, the US government will take action to slow the economy and prevent wage growth — Matt Yglesias at Vox:
The Federal Reserve is structured as an independent agency precisely on the theory that for the long-term good of the economy we sometimes want the central bank to slow the pace of job creation in order to avoid inflation, even though standing in front of a podium and saying, "I want to slow the pace of job creation" sounds terrible. But the weird thing about this week's push for higher interest rates is that there's no inflation problem to solve.
- Australian government fiscal outlook – irresponsible and will fail — Bill Mitchell:
Basically, the Outlook shows that the federal fiscal deficit is larger than previously estimated (in the May 2015 Fiscal Statement aka ‘The Budget’) and this demonstrates the automatic stabilisers in operation to put a floor under the slowing economy. This counter-cyclical movement is something that we should be comforted by because as private spending contracts and the economy slows the expansion of the deficit limits, to some extent, the job losses and the number of businesses that might become insolvent. However, the mainstream reaction has been hysterical (as in hysteria) with all sorts of predictions about national insolvency, credit rating agencies downgrading us, and “deficits for as long as you can see”. The problem is that the so-called average Australian believes all this nonsense and doesn’t understand that the rising deficit is a good thing in the context of poor developments in private spending. […] A career of reading this junk leads me to wish I’d become an anthropologist or something else like that.
Democratic: You keep using that word. I do not think it means what you think it means.
According to Mark Weisbrot, in the recent Venezuelan election:
The opposition got their message out and their voters to the polls, which is not surprising, given the state of the economy and the resources of the opposition. They still have most of the wealth and income of the country, they get millions of dollars from the U.S. government and they receive a lot of media coverage, too. Data from the Carter Center for the 2013 presidential election, for example, show that the opposition candidate got more TV coverage than the government candidate, and more of that coverage was favorable.
On this basis, he concludes:
So the Venezuelan political system, with all its flaws, is much more democratic than the conventional wisdom has maintained.
… if by "democratic" one means that, with patience, one can eventually buy an election victory.
P.S. Greg Palast reckons:
Chavez' revolution is permanent. The redistribution of wealth and power to the Black and Indian population from the white "Spaniards" is irreversible.
Chavez is gone but Chavismo lives despite the crying and moaning of the world financial elite.
Which I'd like to believe, despite the fact that Palast is in the habit of wearing a hat indoors. I can't be having that sort of nonsense. A cap of some kind (other than baseball) maybe, if it's cold, but not the full rumpled gumshoe fedora.
P.P.S. And then there's this.
Sunday, 31 January 2016 - 5:57pm
This week, I have been mostly reading:
- Beyond ISIS: The Folly of World War IV — Andrew Bacevich at TomDispatch:
A de facto collaboration of four successive administrations succeeded in reducing Iraq to what it is today: a dysfunctional quasi-state unable to control its borders or territory while serving as a magnet and inspiration for terrorists. The United States bears a profound moral responsibility for having made such a hash of things there. Were it not for the reckless American decision to invade and occupy a nation that, whatever its crimes, had nothing to do with 9/11, the Islamic State would not exist. Per the famous Pottery Barn Rule attributed to former Secretary of State Colin Powell, having smashed Iraq to bits a decade ago, we can now hardly deny owning ISIS.
- Men at work — Allison J Pugh, in Aeon:
Most Americans might expect very little from their employers – as one layoff survivor told me: ‘Just a paycheck and a certain amount of respect, I would say.’ They might shrug their shoulders about job insecurity as the inevitable cost of doing business in a globalised economy (even though some economists have found that layoffs usually end up costing firms rather than boosting stock prices or productivity). At home, however, working‑class men expect more of their intimate partners, and brittle yearning turns those expectations into betrayal if they fall short. Abandoned by both employer and wife, Gary aims his ire at just one of these.
- Twitter Wants You To Feel Bad — Britney Summit-Gil in The Society Pages:
The analytics don’t teach you how to tweet better, how to reach a broader audience, or how to make a bigger impact. For example, last month the tweet on my account that got the most impressions also had zero engagement. People saw it and breezed by, not even clicking on it. And, of course, Twitter isn’t interested in making you a better tweeter, it’s interested in selling you promotional services.
- QE for People – Neither Right nor Left, Just the Way Forward — Frank Van Lerven, of Positive Money, and some notable quotables:
In sum, there is a strong intellectual body of history behind the various alternative proposals for QE. That this body of history is composed by some of most important economists of our time, on both sides of the political spectrum, should show that these types of ideas are credible and merit more consideration. Ultimately, People’s QE types of proposals are nether right nor left, they are simply the way forwards!
- Racism: the achilles heel of middle class liberalism — Kevin Ovenden:
Anti-Semitism – the socialism of fools, as the great German socialist August Bebel so brilliantly put it – had a special corrupting effect. It provided an alternative world view – what we might now recognise as a “clash of civilisations” – with The Jew representing both international finance and international Marxism. It glided the path from socialist opposition to the capitalist system towards all sorts of reactionary positions, including fascism, which had a pseudo-antiestablishment veneer. Islamophobia is the Jewish Question of our day. It is not simply one reactionary idea among many, which all principled socialists oppose. It plays a particular corrupting role across politics and society as a whole.
- How to Be an Anticapitalist Today — Erik Olin Wright, Jacobin:
If you are concerned about the lives of others, in one way or another you have to deal with capitalist structures and institutions. Taming and eroding capitalism are the only viable options. You need to participate both in political movements for taming capitalism through public policies and in socioeconomic projects of eroding capitalism through the expansion of emancipatory forms of economic activity.
- Five things we learned from the Bank of England this week — Christine Berry at the New Economics Foundation:
Seven years on from the crisis of 2008, the Bank acknowledges that we are still seeing “relatively tight credit conditions” for small and medium-sized enterprises (SMEs). In other words, banks are still reluctant to support the real economy, despite all the subsidies that have been thrown at them. In that respect at least, the post-crisis period seems to be far from over. […] At the same time, lending for mortgages and consumer spending is starting to recover some of its pre-crisis exuberance: consumer lending increased at an annualised rate of 8.2% in October, the highest level since before the banking crisis.
- Do Not Be Impressed by Mark Zuckerberg’s Phony Generosity — Ted Rall:
If you’re a conservative who thinks government can’t do anything right, let me show you a charity that’s worse. The Gates Foundation wants to destroy teachers’ unions to take away their benefits and drive down their wages — hardly a way to attract the best and brightest young college graduates into the profession. And it has poured millions into the disastrous Common Core, which has created today’s “teach to the test” culture in public schools. Given Zuckerberg’s previous involvement in public schools, a $100 million fiasco in Newark, New Jersey that declared war on teachers, fetishized standardized testing and led to so many school closures that kids wound up walking miles through gang territory to new schools chosen for them by, really, an algorithm — it isn’t a stretch to guess that Chan Zuckerberg will look a lot like Bill and Melinda Gates.
- How can you help Flint? Do not send us bottles of water. Instead, join us in a revolt. — Michael Moore:
This is a catastrophe of unimaginable proportions. There is not a terrorist organization on Earth that has yet to figure out how to poison 100,000 people every day for two years – and get away with it. That took a Governor who subscribes to an American political ideology hell-bent on widening the income inequality gap and conducting various versions of voter and electoral suppression against people of color and the poor.
- Elizabeth Warren Challenges Clinton, Sanders to Prosecute Corporate Crime Better Than Obama — David Dayen, The Intercept:
In virtually all the cases she cites — from Standard & Poor’s delivering inflated credit ratings to defraud investors during the financial crisis, to Novartis giving kickbacks to pharmacists to steer customers to their products, to an explosion at a Bayer CropScience pesticide plant that killed two employees — the Department of Justice declined to prosecute individual executives or the corporations themselves, resorting to settlements with minuscule fines that barely disrupt the corporations’ business models. […] Warren also published an op-ed in the New York Times on Friday discussing her report.
- Unreasonable expectations and unpalatable truths — Frances Coppola:
Now, the supply of deposits vastly exceeds the demand for loans, interest rates are on the floor, and payments have become a vital (and largely free) public service. And this […] creates a problem. Customers - including asset managers, apparently - want banks to provide a deposit-taking service regardless of whether banks have a productive use for the money. Banks may of course provide such a service, but if they can't use the money to fund profitable activities, they will not pay customers for it. Why should they borrow money at interest when they have no profitable use for it? It would be wholly irrational, and probably a failure of fiduciary duty towards their shareholders.
[To my mind "a world of excess money" which is simultaneously a world of high un/underemployment requires intervention via fiscal policy, rather than fatalistic accommodation to the new normal.] - How bad were the good old days of Hawke/Keating? — Paul Frijters at Club Troppo:
In hindsight, I am simply not sure whether to call the Hawke/Keating years the glory days of de-regulation, or the disaster years of a regulatory explosion. I do know that inequality increased a lot following those reform years, in part because of the tax changes then introduced. And the interest groups then created are among the biggest obstacles to a fairer society now.
- US jobs recovery biased towards low-pay jobs — Bill Mitchell:
On average, the US labour market has added 237,000 net jobs per month over the last 12 months. What I was curious about was whether these were predominantly low paid jobs or not. I found that the jobs lost in low-pay sectors in the downturn have more than being offset by jobs added in these sectors in the upturn. However, the massive number of jobs lost in above-average paying sectors have not yet been recovered in the upturn. In other words there is a bias in employment generation towards sectors that on average pay below average weekly earnings.
- Defining austerity — Simon Wren-Lewis:
I want to define austerity as “fiscal consolidation that leads to a significant increase in involuntary unemployment, or perhaps more formally but less colloquially as leading to a noticeably more negative output gap.”
- When Inequality Kills — Joe Stiglitz at Project Syndicate:
The median income of a full-time male employee is lower than it was 40 years ago. Wages of male high school graduates have plummeted by some 19% in the period studied by Case and Deaton. To stay above water, many Americans borrowed from banks at usurious interest rates. In 2005, President George W. Bush’s administration made it far more difficult for households to declare bankruptcy and write off debt. Then came the financial crisis, which cost millions of Americans their jobs and homes. When unemployment insurance, designed for short-term bouts of joblessness in a full-employment world, ran out, they were left to fend for themselves, with no safety net (beyond food stamps), while the government bailed out the banks that had caused the crisis.
- The Politics behind Piketty — Elizabeth Anderson at Crooked Timber:
Ideology matters for politics. Once people have acquired income or wealth through the market, they feel strongly entitled to it. In the U.S. and increasingly in the rest of the OECD, the population at large, taken in by such representations, is reluctant to tax. Redistributing income and wealth by means of taxation, as Piketty proposes, becomes harder once people have it in their hands. We need to scrutinize the rules by which income and wealth get generated through the market, before it is taxed. They have been changing in a plutocratic direction for the past 45 years. The rule changes have not only increased r (at least for the top 1%), but also depressed g, by increasing monopoly power, shifting savings from real investment to speculation and scams, shifting top talent from production to value-extraction, and depressing aggregate demand.
- Liberal, Nationals and Labor combine to increase Australian students' debt up to 33% — Mid North Coast Greens:
Until now, the $1025 Student Start-Up Scholarship went to all eligible students twice a year. It was a modest amount of money that provided relief at critical times of year for uni students, allowing them to cover bills for textbooks, laptops, internet access and other necessities. Taking away scholarships and turning them into loans means an extra $6000 of debt for the average Bachelor student upon graduation.
- Reward is better than punishment: A Work for the Dole alternative — Jade Manson, Independent Australia:
The main argument for Work for the Dole is that it benefits community organisations and job-seekers themselves, by providing them with a chance to contribute and a daily routine. However, it also takes away people’s ability to decide who they will volunteer for. This goes against the spirit of volunteer work and the benefit it brings people knowing they are working for a cause they believe in. Although anecdotal reports have suggested Work for the Dole provides participants with a sense of purpose and "something to do", this assumes that they would not have found something better to do had they not been forced to participate in Work for the Dole.
- Delusion Regarding the Fall of Neoliberalism and Globalization — Ian Welsh:
Corbyn is not wrong to say “make the necessary adjustments so it will work today, and go back to post-war policies.” It failed, yes, but it was the last economy which spread money evenly through the economy. Make sure it’s not sexist and racist, update it for new energy technology, and try it. […] Until the developed world’s sanctioned intellectuals (as opposed to pariahs like myself and my ilk) and their masters come to grip with these facts, the population will continue to turn elsewhere. They may turn to sane and reasonable people like Corbyn, or they may turn to people like LePen and Trump, but people will not put up with “it’s going to get worse for the forseeable future” forever.
- Who should be responsible for creating money? — Duncan McCann at New Economics Foundation:
Currently commercial banks create 97% of the UK money supply. However the ultimate decision on whether to change the monetary system rests with our elected politicians who are in no rush to understand how it could work better, let alone change it. A recent survey revealed that only 10% of MPs understand the UK’s monetary system.
- No more nudges – only an entrepreneurial state can give us a green revolution — Mariana Mazzucato in the Green Alliance Blog:
Signals and nudges to the private sector will not get us where we need to go. If we are to have a green revolution, characterised by the kind of sweeping and widespread technological changes that characterised the IT revolution, then we need to learn the right lessons. More nudging is fudging it. Instead, states around the world must act boldly and courageously to tilt the playing field in the right direction.
- Donald Trump’s “Ban Muslims” Proposal Is Wildly Dangerous But Not Far Outside the U.S. Mainstream — Glenn Greenwald, The Intercept:
No matter how extreme and menacing Trump becomes, that’s all one can expect from large sectors of the U.S. media: cowardly neutrality, feigned analytical objectivity (how will Trump’s fascism play with New Hampshire independents?) as an excuse for not taking any sort of stand. We are indeed a long, long way away from Edward R. Murrow’s sustained, continuous, unapologetic denunciations of Joseph McCarthy.
Sunday, 24 January 2016 - 9:30pm
This week, I have been mostly reading:
- Beyond neoliberalism: Universities and the public good — Ravinder Sidhu in the Australian Review of Public Affairs reviews Learning under Neoliberalism: Ethnographies of Governance in Higher Education:
Writing almost twenty years ago, Clare O’Farrell made the prescient observation that: ‘the State has become educationally out of date. [It] must necessarily fall behind those institutions whose job it is to keep abreast with and create new developments in specialised fields [such as] universities’ (1996, p. 8). O’Farrell highlighted the need for academics to find alternative ways of self-governing. Her compelling argument, in favour of winding back the intrusion and displacement wrought by various accountability audits to restore ‘the scholarly balance’, retains its urgency. A small step towards this end is by attending to professional and democratic accountability in university governance. Such changes are necessary if universities are to continue to be relevant to public life.
- Iceland, Ireland, and Devaluation Denial — Paul Krugman, New York Times:
When big adjustments in a country’s wages and prices relative to trading partners are necessary, it’s much easier to achieve these adjustments via currency depreciation than via relative deflation — which is one main reason there have been such big costs to the euro.
- Review: Another “Minsky moment” may be on the way — Edward Chancellor for Reuters reviews Randy Wray's new book on the work of his late mentor:
Prudent financial arrangements give way to what he called “Ponzi finance,” which describes the situation when borrowers are unable to service their debts or repay principal from their current income. Ponzi borrowers depend on refinancing against the collateral of rising asset prices to maintain solvency. Long before former Fed Chairman Ben Bernanke and other economists hailed the “Great Moderation” of low inflation and stable growth, Minsky elaborated the “Financial Instability Hypothesis.” This is expressed in his trademark comment – “stability is destabilizing” – since, as Minsky argued, people respond to good times by changing their risk preferences.
- Who’s the most efficient of them all: income tax or GST? — Peter Davidson Holy cow, this is comprehensive — and worth memorising in order to quote from it at length at the next high-society soiree you attend, assuming you don't want to be invited to any more:
In short, the equity impacts of a change in the tax mix from personal income to consumption are quantifiable and negative, while any economic efficiency gains are uncertain and hard to quantify. Alternative tax reform options, such as broadening the income tax base by removing inefficient tax shelters, would improve equity and efficiency at the same time.
- Jeremy Corbyn 'Systematically' Attacked By British Press The Moment He Became Leader, Research Claims — Louise Ridley, the Huffington Post:
News articles, in which the media ostensibly do not editorialise, were actually the most critical of Corbyn, the report says. Out of 292 news pieces, 181 were judged negative, while 92 were 'neutral' and just 19 'positive', the report found. 'One might expect news items, as opposed to comment and editorial pieces, to take a more balanced approach but in fact the opposite is true.'
It's more a tally than a report, but the appendix on themes ("Them and Us - Extremism Vs. Moderation", "What will happen to Labour and the Left?", "Personal Character") is bang-on. - Challenging the Oligarchy — Paul Krugman in the New York Review of Books ah, reviews a book, in New York. A finer fulfillment of a publication's mandate you will search for in vain. Specifically, he reviews Robert Reich's new one.:
Modern technology, or so it was claimed, reduced the need for routine manual labor while increasing the demand for conceptual work. And while the average education level was rising, it wasn’t rising fast enough to keep up with this technological shift. Hence the rise of the earnings of the college-educated and the relative, and perhaps absolute, decline in earnings for those without the right skills. […] But while one still encounters people invoking skill-biased technological change as an explanation of rising inequality and lagging wages—it’s especially popular among moderate Republicans in denial about what’s happened to their party and among “third way” types lamenting the rise of Democratic populism—the truth is that SBTC has fared very badly over the past quarter-century, to the point where it no longer deserves to be taken seriously as an account of what ails us.
- Hungover Bear and Friends: Flying Solo — Ali Fitzgerald in McSweeney's Internet Tendency:
- 'Poor internet for poor people': India's activists fight Facebook connection plan — Cory Doctorow in The Guardian:
Since the spring of 2015, Indian activists have built ferocious momentum against Facebook’s bid to take charge of the nation’s internet through a program called Free Basics. […] Free Basics’s pitch has been: we’ll get “the next billion internet users” (that is, poor people in developing nations) connected by cutting deals with local phone companies. Under these deals, there will be no charge for accessing the services we hand-pick. We will define the internet experience for these technologically unsophisticated people, with our products at the centre and no competition. It’s philanthropy!
- Against School — the late lamented Aaron Swartz in New Republic:
A group of bold entrepreneurs find they can make cloth more efficiently by building large mills. The girls who staff them keep causing strikes and other trouble, so they require their employees go to school from a young age and learn to behave themselves. But obviously most people won’t be thrilled to go to school so that they can learn to accept lower wages without complaint. So the bosses develop a cover story: schools are about teaching people the things they need to know to survive in the world of business. It’s not true, of course—there’s no connection between the facts memorized in school and the skills needed on the job—but the story is convincing enough.
- Are luxury condo purchases hiding dirty money? — Husna Haq at the Christian Science Monitor:
An investigation conducted by The New York Times in 2015 revealed that nearly half of homes that sold for more than $5 million across the country were purchased by shell companies. That figure would probably be higher in high-end real estate markets like New York and Miami. In fact, using shell companies, or limited liability companies, to hide a buyer's identity is actually relatively common, and legal. But the practice could drive up real estate prices in some markets, and contribute to real estate booms. Federal authorities are also concerned that the practice enables foreign buyers to easily find a safe haven for illicit money in American real estate.
- Six Responses to Bernie Skeptics — Robert Reich practically endorses Bernie. This is huge, because Reich is very influential and used to work for… ah… Clinton… Bill Clinton, the president who… I'll get me coat.
- In Late 2007, Obama Trailed Clinton By 26 Points. Bernie Sanders Is 2016's Barack Obama — H.A. Goodman, Huffington Post:
[I]t's difficult to generate enthusiasm when you're a Democratic nominee who voted for Iraq and is funded by prison lobbyists, but alas, Clinton supporters base their vote upon the perception of political power. This viewpoint ignores the fact that Democrats lose elections when voter turnout is low, and only Bernie Sanders can ensure a high voter turnout in 2016. Between an expanding FBI investigation, Clinton's negative favorability ratings, and her longstanding ties to Donald Trump, Republicans would win the White House with a Clinton nomination.
- 'Australia headed for recession': Yanis Varoufakis, former Greek finance minister — Mark Mulligan, Australian Financial Review:
He said after nearly 25 years without recession, Australia was caught up in the same global pattern of weak aggregate demand and excessive corporate savings, which are being handed back to shareholders via buybacks and dividends instead of being re-invested in additional capacity or productivity enhancement.
Taking issue with Varoufakis is: - Recessions are always a problem and can always be avoided — Bill Mitchell:
Recessions are incredibly costly and totally unnecessary. The claims that they offer a bush-fire type “cleansing” to drive higher productivity in the future and increased material living standards are often made but not very strongly evidenced in the research literature. Governments can always maintain full employment if they choose and should do so given the highly damaging effects that recessions have on individuals, which span many generations as a consequence of the inheritance of disadvantage by children in jobless households. I am surprised that a progressive economist (so-called) is buying into the mainstream myth that recessions are not a problem.
- IMF continues with its wage-cutting line — Bill Mitchell:
Now if we took the [IMF's logic] one could easily argue that with inflation so low in the Eurozone, these results would suggest that an across-the-board wage increase in the Eurozone would have strong positive impacts on growth without undermining any relative competitiveness for any particular nation. The IMF, of course, doesn’t take the reader down that interpretation of their results because the paper is really designed to justify the existing policy of wage cutting and so-called ‘structural reforms’, which are really about undermining working conditions, job security, Occupational Health & Safety regulations, and other things that make work more tolerable.
- German wage moderation and the EZ Crisis — Peter Bofinger at VOX, CEPR's Policy Portal:
An EZ Crisis narrative that does not that does not account for the effects of the German wage moderation is incomplete. Germany is by far the largest EZ economy and it is a very open economy with strong trade links to all other EZ member states. It would be difficult to explain why such a strong internal devaluation, which is regarded as a key determinant of Germany’s success story in the 2000s (Dustmann et al. 2014), did not have significant repercussions for the rest of the EZ.
- Secular stagnation and the financial sector — John Quiggin:
[T]he financial sector benefits from an evolutionary strategy similar to that of an Australian eucalypt forest. Eucalypts are both highly flammable (they generate lots of combustible oil) and highly fire resistant. So eucalypt forests are subject to frequent fires which kill competing species, and allow the eucalypts to extend their range.
- This might be the most controversial theory for what’s behind the rise of ISIS — Jim Tankersley, The Washington Post:
Piketty is particularly scathing when he blames the inequality of the region, and the persistence of oil monarchies that perpetuate it, on the West: "These are the regimes that are militarily and politically supported by Western powers, all too happy to get some crumbs to fund their [soccer] clubs or sell some weapons. No wonder our lessons in social justice and democracy find little welcome among Middle Eastern youth." Terrorism that is rooted in inequality, Piketty continues, is best combated economically.
- Corbyn - what's a leader really for? — Jeremy Gilbert:
One perspective basically thinks that politics is about selling your party to consumers; the other thinks that it’s mainly about building up a coalition of social groups with common interests. Spoiler alert: it’s the second one that’s right, mostly.
- The New Supply-Side Economics — Mark Thoma in The Fiscal Times:
During the period of mild fluctuations in output and employment from 1982 through 2007 known as the Great Moderation monetary policy could do the job by itself, and to a large extent we forgot about fiscal policy as a stabilization tool. But the Great Recession made it clear that monetary policy can only do so much, and fiscal policy has an important role to play in deep economic downturns. We didn’t fully exploit the potential of fiscal policy during the Great Recession, and the turn to austerity in 2010 was a mistake that worked against the recovery, but the lesson is there to be learned for those willing to take off their ideological blinders and see it.
- Chart of the day — David F. Ruccio:
Consumer spending isn’t growing because, face it, most people’s incomes (whether measured in terms of real wages or median incomes) are stagnant. Whatever spending they are doing (e.g., on cars and higher education) is fueled by taking on more and more debt. What about investment? While profits (especially from domestic sources) continue to grow, corporations are using those profits not for investment, but for other uses, including stock buybacks, mergers and acquisitions, and CEO salaries.
- Going down the same old road: driverless cars aren’t a fix for our transport woes — Curtin's peter Newman in The Conversation:
Autonomous trains have been around for 30 years and have a very good track record. That’s because they don’t require humans suddenly being able to intervene. Nor do they have a chance of harming others as they are completely isolated on separate tracks. But autonomous cars present both these problems.
- Jeremy Corbyn and the Syrian Bombing Vote — Ian Welsh:
Corbyn has always said he would bring more democracy to Labour, and this is in line with that promise. This is a case of one principle “no war” going against another principle “more democracy.” Also, letting Labour MPs vote against bombing Syria, when the majority of Labour party members are for it, may be very smart politics. Smoke the pro-war MPs out, let them run up their flags, and when the time comes for candidate selection, well, everyone will know who is for war. The majority of voters selecting candidates are free to use the next election to ensure that Corbyn has a party of MPs who are anti-war.
- Woody Guthrie, ‘Old Man Trump’ and a real estate empire’s racist foundations — Will Kaufman, The Conversation:
For Guthrie, Fred Trump came to personify all the viciousness of the racist codes that continued to put decent housing – both public and private – out of reach for so many of his fellow citizens.
Saturday, 23 January 2016 - 8:37pm
Until Hawke first exploited the Australian flag a-flutter in government propaganda, leading to its logical, and ridiculous, extreme in Tony Abbott refusing to appear in public with fewer than eight flags, the flag's use was largely restricted to identifying government buildings and military installations. Schoolchildren risked, and often succumbed to, heat-stroke as it was raised and lowered at morning assembly, and Boy Scouts learned the finer points of folding it in an appropriately reverent manner, but for Australia, that was pretty much it, flag-wise.
Having a flagpole in the front yard, or little flags fluttering from one's car, as if one was the self-appointed ambassador from bogan-ville would until recently have been considered deeply weird. Having it painted onto the face of one's children as some sort of stamp of ownership, or tattooed onto an intimate part of a partner's anatomy for — one presumes — nocturnal appreciation, would be regarded as a symptom of psychological pathology, and possibly criminal abuse.
If flying the flag, as an individual citizen, isn't racist, what is it? I can't think of any reason that isn't just as irrational. If, according to Hartsukyer, it's the litmus test of whether one deserves "the rights and privileges that come with living in Australia", it's a very odd one. If you're going to withhold citizenship on that basis, you may not actually be a racist, but you might as well be.
Friday, 22 January 2016 - 1:59pm
David Hume to Adam Smith, on the publication of Smith's The Theory of Moral Sentiments:
My Dear Mr. Smith, have patience: compose yourself to tranquillity: show yourself a philosopher in practice as well as profession: think on the emptiness and rashness and futility of the common judgments of men: how little they are regulated by reason in any subject, much more in philosophical subjects, which so far exceed the comprehension of the vulgar.
[…]
Supposing, therefore, that you have duly prepared yourself for the worst by all these reflections; I proceed to tell you the melancholy news, that your book has been very unfortunate: for the public seem disposed to applaud it extremely.
It was looked for by the foolish people with some impatience; and the mob of literati are beginning already to be very loud in its praises. Three bishops called yesterday at Millar's shop in order to buy copies, and to ask questions about the author. The Bishop of Peterborough said he had passed the evening in a company where he heard it extolled above all books in the world.
You may conclude what opinion true philosopher will entertain of it, when these retainers to superstition praise it so highly.
Tuesday, 19 January 2016 - 2:06pm
"Attention poor person! Google means you no harm! You may proceed across the street using the legacy technology of perambulation. This act of courtesy is sponsored by…"
Sunday, 17 January 2016 - 4:37pm
This week, I have been mostly reading:
- Meet the lefty club behind a blitz of new laws in cities around the country — Lydia DePillis at the Washington Post on municipal governments joining together to think big:
The central idea of Local Progress […] is that no issue is out of bounds for city government. Besides environmental groups, it has heavy involvement from the labor movement; an AFL-CIO vice president sits on the organization’s board, and the conference in October had a session on the Service Employees International Union’s Fight for $15 minimum wage campaign, along with numerous appearances by union officials. Those outside groups are essential to getting new policy ideas into practice.
- Why Do Americans Work So Much? — Rebecca J. Rosen, The Atlantic:
According to [Benjamin M.] Friedman, “Between 1947 and 1973 the average hourly wage for nonsupervisory workers in private industries other than agriculture (restated in 2013 dollars) nearly doubled, from $12.27 to $21.23—an average growth rate of 2.1 percent per annum. But by 2013 the average hourly wage was only $20.13—a 5 percent fall from the 1973 level.” For most people, then, the magic of increasing productivity stopped working around 1973, and they had to keep working just as much in order to maintain their standard of living.
- This Fake Bomb Detector Is Blamed for Hundreds of Deaths. It’s Still in Use. — Murtaza Hussain, The Intercept:
The BBC investigation led to a subsequent export ban on the devices, as well as a 10-year prison sentence for the British businessman, James McCormick, responsible for their manufacture and sale. An employee of McCormick who later became a whistleblower said that after becoming concerned and questioning McCormick about the device, McCormick told him the ADE 651 “does exactly what it’s designed to. It makes money.”
- Coding Bootcamps and the New For-Profit Higher Ed — Coding Bootcamps and the New For-Profit Higher Ed:
Of the more than 5000 career programs that the Department of Education tracks, 72% of those offered by for-profit institutions produce graduates who earn less than high school dropouts.
- Did Money Evolve? You Might (Not) Be Surprised — Steve Roth, Evonomics:
The main finding from all this: the earliest uses of money in recorded civilization were not coins, or anything like them. They were tallies of credits and debits (gives and takes), assets and liabilities (rights and responsibilities, ownership and obligations), quantified in numbers. Accounting.
- How the Gates Foundation Reflects the Good and the Bad of “Hacker Philanthropy” — Michael Massing, The Intercept:
Despite its impact, few book-length assessments of the foundation’s work have appeared. Now Linsey McGoey, a sociologist at the University of Essex, is seeking to fill the gap. “Just how efficient is Gates’s philanthropic spending?” she asks in No Such Thing as a Free Gift. “Are the billions he has spent on U.S. primary and secondary schools improving education outcomes? Are global health grants directed at the largest health killers? Is the Gates Foundation improving access to affordable medicines, or are patent rights taking priority over human rights?” As the title of her book suggests, McGoey answers all of these questions in the negative.
- Australia – investment spending contracts sharply, recession looming — Bill Mitchell:
In light of the latest investment expectations revealed in today’s ABS data release, the Government should abandon their fiscal strategy immediately and announce a significant stimulus package. Unemployment is already at elevated levels and will rise further under the current trends. This is another case of neo-liberal austerity white-anting the capacity of the economy to deliver prosperity for all.
- Stay the course — Wondermark:
- Spending Review 2015: the graphs you need to see — Olivier Vardakoulias. New Economics Foundation:
As real wages stagnate, unsecured household borrowing – like credit card debts, personal loans, or utility bills – are propping up activity in the economy.