This week, I have been mostly going to pieces, so only reading this much:

• The Optimism Error — Robert Skidelsky proposes a British Investment Bank to fend off hysteresis: So we now have a situation in which the main tools available to government to bring about a robust recovery are out of action. In addition, sole reliance on monetary policy for stimulus creates a highly unbalanced recovery. The money the government pours into the economy either sits idle or simply pumps up house prices, threatening to re-create the asset bubble that produced the crisis in the first place. We already have the highest rate of post-crash increase in house prices of all OECD countries. This suggests that the next crash may not be far off. [Though I disagree vehemently with the view that "printing money to pay for public spending should only be a remedy of the last resort". Money creation through central-bank-funded fiscal deficits should be the norm for any government that does not want to hand responsibility for money supply to commercial banks, who are responsible for channeling money into the very bubbles Skidelsky is worried about.]
• Australian copyright reform stuck in an infinite loop — Kathy Bowrey in The Conversation: For example, section 113M allows libraries and archives to make “preservation copies” of original material that is of historical or cultural significance to Australia, but they are not allowed to make these copies available to patrons except through a terminal on site. As a researcher I am not allowed to make an electronic copy of the material so I can use it in writing up my research. As is common practice in libraries I would probably be allowed to transcribe a document by hand. However transcribing by hand is, as a matter by law, no different to a digital reproduction. Why does this law require me to spend public research money to physically attend the institution, perhaps also requiring an airfare and accommodation expenses, so I can take out my quill?
• Paul Krugman, Bernie Sanders, and Medicare for All — Dean Baker, CEPR via Econospeak: Ordinarily economists treat it as an absolute article of faith that we want all goods and services to sell at their marginal cost without interference from the government, like a trade tariff or quota. However in the case of prescription drugs, economists seem content to ignore the patent monopolies granted to the industry, which allow it to charge prices that are often ten or even a hundred times the free market price. (The hepatitis C drug Sovaldi has a list price in the United States of $84,000. High quality generic versions are available in India for a few hundred dollars per treatment.) In this case, we are effectively looking at a tariff that is not the 10-20 percent that we might see in trade policy, but rather 1,000 percent or even 10,000 percent.
• SWEET HOLY F---!!!! — exclaims Brad DeLong:
  
• Neoliberalism, public and private goods and the digital revolution: Part one — Nicholas Gruen at Club Troppo: […] if knowledge and digital artefacts are always and everywhere a potential public good, you’d expect that expressing the collective interest in that fact would lead to a role for collective institutions (not necessarily government) representing the public interest as a countervailing force against private interests. As Robert Kuttner argues, an identifying idea of progressives since the turn of the 20th century if not before that capital needs a counterweight – in the state and other collective institutions. An obvious agenda is IP, which is becoming progressively more unbalanced towards the interests of private IP holders (Will Mickey ever go free?). Likewise arrangements for the creation of knowledge about drugs is a big mess, incredibly poorly suited to the interests of lower income countries but also to economic efficiency more broadly.
• The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding — Ellen Brown: Rep. Peter DeFazio (D-Oregon), ranking member on the House Transportation Committee, retorted [to Ben Bernanke], “For the Federal Reserve to be saying [deficit spending] impinges upon their integrity, etc., etc. — you know, it’s absurd. This is a body that creates money out of nothing. [I]f the Fed can bail out the banks and give them preferred interest rates, they can do something for the greater economy and for average Americans.”
• The Remarkable Bernie Sanders Journey That Will Overcome the Crowning of Clinton — RoseAnn DeMoro of National Nurses United at Common Dreams:
  
  Enthusiasm for the Sanders campaign, the transformative program that he presents, which is really the program NNU and grassroots activists have long championed, is off the charts, and continuing to grow.

This week, (actually posted a day late, but back-dated) I have been mostly reading:

• Older Students Learn for the Sake of Learning — Harriet Edleson at the "Well, d'uh!" desk of the New York Times: For lifelong learners the focus is outward. At Osher, classes are not specifically skill-based, like learning a language or weaving. Instead, students generally delve into subjects they may have been interested in for years but simply didn’t have time to study.
• Report From the Student Privacy Frontlines: 2015 in Review — Annelyse Gelman, Electronic Frontier Foundation: This year the fight to protect student privacy hit a boiling point with our Spying on Students campaign, an effort to help students, parents, teachers, and school administrators learn more about the privacy issues surrounding school-issued devices and cloud services. We're also working to push vendors like Google to put students and their parents back in control of students’ private information.
• Japanification Revisited — Ian Welsh: In choosing the method we chose to do the bailouts, we also made the choice to have a shitty economy. Employment has never recovered, in terms of the percentage of the population, and will not (we’re about to hit a recession), wages are down for much of the population, and all the gains of the last economic cycle have gone to the top three to five percent. Mind you, there was an historic stock bubble. The rich are even richer than they were in 2007. Obama and Bernanke’s policy has done what it was intended to: It has preserved, and then increased, the wealth of the rich.
• The corporate university and its threat to academic freedom — Sean Phelan in openDemocracy: It would be simplistic to suggest that the corporate university represents an ideological vision spontaneously brought into being by a managerial class. As recent changes to the governance of New Zealand university councils – rescinding the guaranteed representation of both students and staff – suggests, the desire for a corporate university is often a state-led political project, pushed by governments who want to reduce public funding to universities, and reconfigure the university as little more than an engine of economic growth.
• Neoliberalism and its forgotten alternative — David Ridley, openDemocracy: Sociologists and social scientists need to be a part of an active process of giving back social inquiry to the public, emancipating this deeply human and social activity first and foremost from the elitism, specialisation and instrumentalism of academia. We may need to reduce the working week even further to enable people to have time for community activities and public research. We certainly need to prevent education from being turned towards a class-based, narrowly vocational process of training people to be profit-making machines.
• Because you can never have too many charts on the economics of credit cards — Harold Pollack in The Reality-Based Community: [P]rofit margins are really high for the small group of borrowers with low FICO scores in the range of about 550. Amazingly, the industry made about $0 in cumulative profits on the top 80% of accounts that have FICO scores exceeding 630. The bottom 10% of accounts account for the majority of total industry profits. It’s also striking that the industry actually seems to lose money on consumers near the median of the distribution with FICO scores around 700, and then makes profit again on the best credit risks.
• Why Minsky Matters: An Introduction to the Work of a Maverick Economist — Victoria Bateman reviews Randy Wray's new book about the work of his mentor: As 2008 so clearly showed, we simply cannot have our cake and eat it. Financial crises are not just events that happened a long time ago in history – or far, far away in distant and much poorer lands. They are hard-wired into the capitalist system. Minsky was one of the valiant few who tried to draw attention to this fact, and one of the few to predict the global financial crisis decades before it actually hit. Unfortunately, his warnings fell on deaf ears. Like many a great artist, his popularity soared only after his death and only once the crisis hit – in what came to be known as a “Minsky moment”.
• #ResistCapitalism — Cameron K. Murray: [S]ome kind of welfare state is essential for maintaining the dynamism of the capitalist part of the economy. Without this cushion against failure, who would risk their life savings on inventing and investing in new products and innovations? Essentially we all want a mixed economy, a level of safety net that reflects the wealth of the country, and basic services provided in an equitable manner. […] But when the political power of a select few capitalists overwhelms the system to the extent that the other non-capitalist parts of the mixed economic suffer, there are obvious and genuinely satisfying moral grounds for protest.
• Facebook is no charity, and the ‘free’ in Free Basics comes at a price — Mark Graham in The Conversation isn't keen on Zuckerberg's reboot of Compuserve: In much the same way that Nestlé offered free baby formula in the 1970s as development assistance to low-income countries – leaving nursing mothers unable to produce sufficient milk themselves – Free Basics is likely to impede commercial alternatives.
• The Procrustean Economy — Neil Wilson: The data collected from [neoliberal] economies will resemble the data you would expect from the [neoliberal] model. It really can't do much else - since the policies are there to prevent deviation from the norm. Therefore when you do empirical studies what you are actually using as data is the output from a system rammed into an inappropriate model. The data is tainted and what the taint means has to be understood.
• The Fed Doesn’t Work For You — J. W. Mason in Jacobin: A rising wage share supposedly indicates an overheating economy — a macroeconomic problem that requires a central bank response. But a falling wage share is the result of deep structural forces — unrelated to aggregate demand and certainly not something with which the central bank should be concerned. An increasing wage share is viewed by elites as a sign that policy is too loose, but no one ever blames a declining wage share on policy that is too tight. Instead we’re told it’s the result of technological change, Chinese competition, etc. Logically, central bankers shouldn’t be able to have it both ways. In practice they can and do.
• Globalisation and currency arrangements — Bill Mitchell: The thesis advanced by many analysts is that globalisation has reduced the capacity of the nation-state and forced governments to adopt free market policies at the microeconomic level and austerity at the macroeconomic level, for fear that capital flight will destroy their economies. It is a neatly packaged thesis that the political Left has imbibed, and, in doing so, has undermined the progressive basis of these institutions and left voters with little choice between right-wing parties and the social democratic parties who formally represented the interests of workers and acted as mediators in the class conflict between labour and capital. The major distinguishing feature these days between these two types of parties, who were previously poles apart in approach and mandate sought, is that the so-called progressive side of politics now claims it will implement austerity in a fairer way. These austerity-lite parties, buying into the myth that globalisation has undermined the capacity of the state to pursue full employment policies with equitable income distribution, do not challenge the basis of austerity, but just quibble over who should pay for it.
• In 2016, let's hope for better trade agreements - and the death of TPP — Joe Stiglitz via the Guardian: In place of global trade talks, the US and Europe have mounted a divide-and-conquer strategy, based on overlapping trade blocs and agreements. As a result, what was intended to be a global free trade regime has given way to a discordant managed trade regime. Trade for much of the Pacific and Atlantic regions will be governed by agreements, thousands of pages in length and replete with complex rules of origin that contradict basic principles of efficiency and the free flow of goods. […] Obama has sought to perpetuate business as usual, whereby the rules governing global trade and investment are written by US corporations for US corporations. This should be unacceptable to anyone committed to democratic principles.
• ObamaCare’s Neoliberal Intellectual Foundations Continue to Crumble — Lambert Strether via Naked Capitalism: Obama gives an operational definition of a functioning [health insurance] market that assumes two things: (1) That health insurance, as a product, is like flat-screen TVs, and (2) as when buying flat-screen TVs, people will comparison shop for health insurance, and that will drive health insurers to compete to satisfy them. As it turns out, scholars have been studying both assumptions, and both assumptions are false. […] the population studied reduces costs, not by comparison shopping, but by self-denial of care. […] it looks like ObamaCare has replaced a system where insurance companies deny people needed care with a system where people deny themselves needed care; which is genius, in a way.
• Mainstream macro and Minsky the maverick — Diane Coyle reviews, perhaps too briefly, Randy Wray's new book: The second chapter was to me the most interesting. It’s called ‘The Road Not taken’ and sets out the broad mainstream approach against which Minsky developed his arguments. This is the neoclassical synthesis, whose foundations were laid by John Hicks and Alvin ‘Secular Stagnation’ Hansen in the early years after Keynes’s death, then by both ‘Keynesians’ like Patinkin and Tobin and ‘Monetarists’ such as Friedman. Wray argues that these camps disagreed largely over parameter values, and that they essentially bowdlerised Keynes by ignoring his emphasis on investment, finance and uncertainty. [I admit to some satisfaction, bordering on relief, at finding somebody confirming that new Keynesians and neoliberals "disagreed largely over parameter values", having just this morning confidently asserted on a uni discussion board that there has long been "broad agreement within mainstream economics over what the appropriate policy levers are, but disagreement about where these levers should be set".]

This week, I have been mostly reading:

• The Helicopters already exist. If you know where to look — Neil Wilson braves the slippery slope from advocating for central bank independence to…: And then you move onto the question of war. If parliament can't be trusted with money, or social security, why should it be trusted in sending people to their deaths. […] Of course if the generals are in charge and are able to deploy troops independently of parliament, then we would rightly call that a military dictatorship. Therefore the notion of an independent central bank should be called out for what it is - an economic dictatorship ruled over by a class of individuals who look after the interests of the bankers and creditors and want to prevent government having first access to the resources of the country. Those supporting the idea are excuse makers for that destructive regime.
• The difficulty of ‘neoliberalism’ — Will Davies, Political Economy Research Centre: The reason ‘neoliberalism’ appears to defy easy definition (especially to those with an orthodox training in economics or policy science) is that it refers to a necessarily interdisciplinary, colonising process. It is not about the use of markets or competition to solve narrowly economic problems, but about extending them to address fundamental problems of modernity – a sociological concept if ever there was one. For the same reasons, it remains endlessly incomplete, pushing the boundaries of economic rationality into more and more new territories. […] The dramatic rise of student indebtedness in the UK makes little economic sense for anyone (even the government) but it succeeds in placing higher education in a quantitative framework, linking past, present and future.
• Keywords for the Age of Austerity 24: Sullen — John Patrick Leary: The problem is not just that education is vocational here, because there’s nothing wrong with vocational education per se, nor is “critical thinking” or moral education or whatever you want to call it necessarily un-vocational anyway. Rather, it is the way “academic entrepreneurship” encourages students and others to see education, a public service subsidized to great extent by the people, as a publicly-funded adjunct of private business, useful for research, development, and employee training. Lesson number 1 of entrepreneurship class: Why take a financial risk when you can just outsource it to someone else?
• The Great Malaise Continues — Joseph Stiglitz: The obstacles the global economy faces are not rooted in economics, but in politics and ideology. The private sector created the inequality and environmental degradation with which we must now reckon. Markets won’t be able to solve these and other critical problems that they have created, or restore prosperity, on their own. Active government policies are needed. That means overcoming deficit fetishism.
• New Research. Inequality of Wealth Makes Us Short and Dead — Peter Turchin in Evonomics: So, the life expectancy of white middle-aged males has declined, and the average height of black women has also declined. Is this the beginning of a more broadly based trend, in which the biological well-being of the “other half”—the 50 percent of the poorer Americans—will decline?
• ‘Helicopter tax credits’ to accelerate economic recovery in Italy (and other Eurozone countries) — Biagio Bossone and Marco Cattaneo at VoxEU.org: Tax Credit Certificates (TCCs) […] are assigned to households in inverse proportion to their income, both for social equity purposes and to incentivise consumption. TCC allocations to enterprises are proportional to their labour costs, and act as labour-cost cutting devices, immediately improving their competitiveness, as any internal or external devaluation would do. Greater export and import substitution following price reductions not only create more output and employment, they also offset the impact of increased demand on the external trade balance. Smaller amounts of TCCs can also be issued and used by the government to pay for public infrastructure initiatives and social welfare programs.
• The DWP is trying to psychologically 'reprogramme' the unemployed, study finds — Jon Stone, The Independent: A study backed by the Wellcome Trust found that people without jobs were subject to humiliating “reprogramming” by authorities designed to change their mental states. The researchers said the new approach, which forced upon the unemployed a “requirement to demonstrate certain attitudes or attributes in order to receive benefits or other support, notably food” raised major ethical issues.
• Economists Don't Know Much About the Economy, #46,523: The Story of the Robots — Dean Baker in HuffPostBiz: Patent and copyright protection are not laws of nature, they come from the government. And in recent years we have been making them stronger and longer. […] In the absence of these protections, we might all look forward to paying a few dollars for the robots that will clean our houses, cook our food, and drive us wherever we want to go. Low cost robots would make almost all of us richer. Only if the government imposes patent monopolies that keep robots expensive do we have to worry about a redistribution from the rest of us to those who "own" the technology.
• Huge currency zones don’t work – we need one per city — Mark Griffith in Aeon: In the 1970s, the American/Canadian economist Jane Jacobs reached a radically simple insight. Her lifelong interest in urban history convinced her that cities, not countries, drive economics. Cities are messy, unplanned places where people who otherwise would never meet devise joint projects. Hence, Jacobs argued, all innovation happens in cities. It made sense, then, that each city’s currency should follow its business cycle. Forcing two or more cities to share one currency slowly pumps up one city and sickens the others.
• Designer nights out: good urban planning can reduce drunken violence — Kees Dorst in The Conversation: It is easier said than done, but we need to think away from knee-jerk reactions - where branding an incident as “alcohol-related violence” naturally puts the focus on policies around alcohol service restriction. There is so much more that can be done to keep young people safe at night.
• Why bullshit is no laughing matter — Gordon Pennycook in Aeon: It is now very common for proponents of alternative medicine to emphasise ‘open-mindedness’. Unfortunately, this can entail disregarding empirical evidence. For example, many anti-vaxxers do not appear to care that Andrew Wakefield’s infamous article in the Lancet in 1998 drawing a link between the MMR vaccine and autism has long been discredited and retracted. Indeed, straight-up explanations of this fact do little to dissuade those who have fallen prey to anti-vaxxer bullshit. Diseases such as measles and mumps are making a comeback in the US and, according to at least one website, there have been more than 9,000 preventable deaths due to failures to vaccinate in the US since 2007. Bullshit is indeed no laughing matter.
• Saturday Morning Breakfast Cereal by Zach Weinersmith [Yes, education really works like this]:
  

This week, I have been mostly reading:

• The Guantánamo in New York You’re Not Allowed to Know About — Arun Kundnani, The Intercept: Mahdi Hashi, a young man of Somali origin who grew up in London, had never been to the United States before he was imprisoned in the 10-South wing of the Metropolitan Correctional Center in lower Manhattan in November 2012, when he was 23. For over three years, he has been confined to a small cell 23 hours a day without natural light, with an hour alone in a slightly larger indoor cage. He has had no physical contact with anyone. Apart from occasional visits by his lawyer, his human interaction has been limited to brief, transactional exchanges with guards and a monthly 30-minute phone call with his family.
• Full employment is a tenet of classic social democracy – but is it still applicable? — Nick Srnicek and Alex Williams in the New Statesman: While Jeremy Corbyn’s opponents have presented him as a throwback to an old-left style of politics, in fact he has been the only one to recognise the changed realities of the UK in the 21st century. Creating a mental health position in his shadow cabinet, questioning the utility of the Trident nuclear programme and NATO, calling for social support for the self-employed – all these reveal a politics that is very aware of contemporary Britain and its discontents. Meanwhile, his opponents’ prevailing thinking appears mired in the past: a cold-war fascination with obsolete security communities, fond nostalgia for the 1990s, and increasingly punitive attempts to create good workers when good jobs no longer exist.
• Trying to simulate the human brain is a waste of energy — Peter Hankins in Aeon: It’s as though we decided to build a Tardis immediately, on the basis of the knowledge we have about it now – call it the ‘Blue Box’ project. We know it’s blue, squarish, probably uses electricity for some purposes, makes a whooshy noise, travels in time and is bigger on the inside; let’s get started! Of course, we have no idea how the last two things (the time travel and the strange geometry) are done, but then the brain also does things – subjective experience, intentionality, personhood, to name three – that currently seem to be beyond the reach of either science or philosophy.
• The Basic Income Guarantee: what stands in its way? — Tom Streithorst guestblogging for Frances Coppola: Fear of scarcity is built into our DNA. For the Basic Income Guarantee to seem viable for most people, they need to learn that demand, not supply, is the bottleneck of growth. We need to recognise that money is something humans create, not something with fixed and limited supply. With Quantitative Easing, central banks created money and gave it to the financial sector, hoping it would stimulate lending. Today, even mainstream figures like Lord Adair Turner, Martin Wolf and even Ben Bernanke recognize that “helicopter drops” of money into individuals’ bank accounts could have been more effective. Technocrats are beginning to recognise the practicality of Basic Income. […] The Basic Income Guarantee solves the problem of demand, stimulates the economy, increases corporate profits, gives workers more freedom, and provides a safety net to the most vulnerable. It is economically sound and politically savvy. But the very rich don’t fear unemployment, they fear redistribution and they will be the most significant force against the implementation of the Basic Income Guarantee.
• The Fed Raises Rates--by Paying the Banks — Marty Wolfson in Dollars & Sense: Under current Chair Janet Yellen, the Federal Reserve has shown a genuine concern about unemployment, but it is still trapped in its assumptions: There is a “maximum feasible” level of employment. Above that level (or below the corresponding rate of unemployment) inflation will exceed its 2% target. The conclusion from these assumptions is that the Fed should raise interest rates to prevent employment from exceeding the “maximum feasible” level. Instead, the Fed should adopt a real full- employment target: a job for everyone who wants to work. It should adopt a “minimum feasible” target for inflation: the lowest possible rate compatible with full employment. We need a policy perspective in which economic justice for workers is a higher priority than paying the banks.
• Working Paper: The Upward Redistribution of Income: Are Rents the Story? — Dean Baker from CEPR says yes: This paper argues that the bulk of this upward redistribution comes from the growth of rents in the economy in four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors and other highly educated professionals. The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality, as for example argued by Thomas Piketty.
• Good things happen at full employment — Jared Bernstein in the Washington Post: Dean Baker and I have long contended that at full employment, pressures from labor costs […] mean that firms either have to find new efficiencies, raise prices or start cutting into profit margins. Since they’d generally rather avoid the latter two, full employment can lead to higher productivity growth.
• A Missed Opportunity of Ultra-Cheap Money — Peter Eavis, NYT: [William A. Galston, a former adviser to President Bill Clinton and now a senior fellow at the Brookings Institution] in particular lamented the failure to set up a government-backed infrastructure bank in recent years. “This will go down as one of the great missed opportunities,” he said. Public investment spending as a share of overall economic activity has fallen to lows not seen since the 1940s, according to an analysis by James W. Paulsen of Wells Capital Management.
• Beyond social mobility — Chris Dillow: A simple thought experiment will tell us that social mobility is nothing like sufficient. Imagine a dictator were to imprison his people, but offer guard jobs to those who passed exams, and well-paid sinecures to those who did especially well. We'd have social mobility - even meritocracy and equality of opportunity. But we wouldn't have justice, freedom or a good society. They all require that the prisons be torn down.
• CEO pay still out of control and diverging again from workers’ earnings — Bill Mitchell: Two things caught my attention among other things last week. The Australian Tax Office (ATO) released the – 2013-14 Report of Entity Tax Information – which tells us about the total income and tax payable was for 2013-14 tax year for 1539 Australian and foreign companies operating in Australia with incomes above $A100 million. The rather startling revelation is that 579 of the largest Australian companies including Qantas did not pay any tax at all in that financial year. The second (unrelated but pertinent) report was released last week by the British Chartered Institute of Personnel and Development (CIPD) – The power and pitfalls of executive reward: a behavioural perspective – which found that the increasing gap between British CEO earnings and their employees is unrelated to company performance and reflects “self-serving tendencies”.
• Dear Parents: Everything You Need to Know About Your Son and Daughter’s University But Don’t — Ron Srigley in the Los Angeles Review of Books: First, [sessional contract staff] are not scholars but employees. They think of administrators as people they work for rather than people who work for them by supporting their teaching and research. Second, they are vulnerable and therefore remain mostly silent about critical matters. If a sessional instructor complains publicly about her institution or its declining standards, she will do so only once. […] Finally, the very act of employing, empowering, and often elevating such people denigrates real scholars and scholarship by definition. If a person who knows next to nothing of what you know can do what you do just as well as you do it, then what is the value of what you know?
• Finland's hugely exciting experiment in basic income, explained — Dylan Matthews in Vox: The idea is to see what happens to a community under a basic income, rather than just to individual people. Having a whole town get benefits could have cascading effects as households escape poverty, as some people use the income guarantee as insurance so they can take risks and form companies, as universities see increased enrollment from people better able to afford supplies, etc. "If people in a smaller area are getting the benefits, their behavior vis-a-vis other people will change, employers and employees will change their behavior, encounters between clients and their street-level bureaucrats (social workers, employment offices, etc.) will change, and the interplay between different bureaucracies will change," Kangas says.
• Love from mom and dad … but who gains from Mark Zuckerberg’s $45bn gift? — Linsey McGoey in the Guardian: As if sensing that our newfound effervescence had fizzled rather abruptly, a crack team of management scholars and business journalists took up arms, manning airwaves and TV stations and the open-planned domiciles of new media startups funded by tech entrepreneurs based in Hawaii – and tried to cheer us with a single message. You’re right, they conceded. It’s not charity. But here’s the thing: it’s better than charity. It’s a new, radical movement that we like to call “philanthrocapitalism” – and it’s going to make you all rich. How, you might ask? By giving more philanthropy to the wealthy.
• The IMF Changes its Rules to Isolate China and Russia — Michael Hudson: A nightmare scenario of U.S. geopolitical strategists is coming true: foreign independence from U.S.-centered financial and diplomatic control. China and Russia are investing in neighboring economies on terms that cement Eurasian integration on the basis of financing in their own currencies and favoring their own exports. They also have created the Shanghai Cooperation Organization (SCO) as an alternative military alliance to NATO. And the Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank tandem in which the United States holds unique veto power.
• The world of threats to the US is an illusion — Stephen Kinzer in the Boston Globe: I recently asked a United States Navy officer what threats he believed the United States might confront in the future. To my astonishment, he answered, “Venezuela.” The South American country is in political crisis and careening toward bankruptcy. Its combat navy counts six frigates and two submarines, none of them seaworthy. Yet last month President Obama designated Venezuela an “extraordinary threat to US national security.” The search for enemies can lead to odd places.
• Piketty and the Australian exception — John Quiggin at Crooked Timber: Australia’s relatively equal distribution of income and wealth depends on a history of strong employment growth and a redistributive tax–welfare system. Neither can be taken for granted. […] The move towards a patrimonial society already happening in the US is evident at the very top of the Australian income distribution. As in the US, the claim that the rich are mostly self-made is already dubious, and will soon be clearly false. Of the top 10 people on the Business Review Weekly (BRW) rich list, four inherited their wealth, including the top three. Two more are in their 80s, part of the talented generation of Jewish refugees who came to Australia and prospered in the years after World War II. When these two pass on, the rich list will be dominated by heirs, not founders.