Wednesday, October 29, 2014

Derek Wall — What Elinor Ostrum taught: democratic control is not only possible, it's normal

The market fundamentalism of Hayek seems to dominate political discourse. Hayek, the liberal free market Austrian economists, argued that state planning would end in failure and only the market could promote economic efficiency. This agenda seems, since Thatcher and Reagan, to have swept the world but it is, of course false. Neo-liberals far from reducing state intervention use the state to support corporations. Privatization is about helping powerful firms and market competition is no longer an issue. A good example is the current transformation of the NHS into a cash cow for Virgin and US health corporations. Neo-liberals promote corporate welfare and monopoly. Elinor Ostrom is powerful ally for all those of us who want to challenge that neo-liberal dogma and create people centred cooperative economics. 
Elinor Ostrom, who sadly died in 2012, was the first and so far only women to win a Nobel Prize, strictly speaking the Swedish bank prize, for economics. She was awarded it for her work on commons, collective resources and collective communal property. If we want a practical alternative (s) to privatisation she helps in a number of ways.…
Open Democracy
What Elinor Ostrum taught: democratic control is not only possible, it's normal
Derek Wall | International Coordinator of the Green Party of England and Wales. He is a political economist, whose last book was ‘The Sustainable Economics of Elinor Ostrom’ Routledge 2014. He is married to the community musician Emily Blyth and is a founder of Green Left, the anti-capitalist network in the Green Party. He is also a columnist with the Morning Star and is completing his new book for Pluto ‘The Economics of anti-capitalism’ which will be published in 2015.

Alexandra Kulikova — What is really going on with Russia's new internet laws

Alexandra Kulikova, an independent ICT and internet policy researcher, provides what seems to be an objective assessment.

Open Democracy
What is really going on with Russia's new internet laws
Alexandra Kulikova

Chris Mayer — Modern Monetary Theory (MMT): How Fiat Money Works

Chiefly about Warren Mosler.

Daily Reckoning
Modern Monetary Theory (MMT): How Fiat Money Works
Chris Mayer | managing editor of the Capital and Crisis and Mayer's Special Situations newsletters

Roberto A. Ferdman — Why the South is the worst place to live in the U.S. — in 10 charts

Charts ranking the states on various criteria.

Rather concerning that the some seem dedicated to making the whole of the US look more like the South.

The Washington Post
Why the South is the worst place to live in the U.S. — in 10 charts
Roberto A. Ferdman

Theme Song For MMT? "We Make Money (Money Don't Make Us)"

   (Commentary posted by Roger Erickson)

Jerry Jeff Walker
Last I'd heard, he'd retired from San Antonio to Costa Rica. (Or was it Belize?)

Anyone know how to contact Jerry Jeff about licensing that jingle?

Or making a dedicated version:
We Make Fiat (Fiat Don't Control Us)

Or commission a new album: Mr. Banksterangles?

Kevin G. Hall — New book slams economists, their theories and their forecasts

Jeff Madrick has a bone to pick with the economics profession, and that’s putting it nicely. Consider the title of his new book: “Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World.”… 
Madrick is a longtime writer on economic matters for Harper’s magazine and a former New York Times columnist. He dropped by McClatchy’s Washington Bureau recently to discuss his book. Here are some of his thoughts, edited into a question and answer format.

Read more here:

Read more here:
McClatchy DC
New book slams economists, their theories and their forecasts
Kevin G. Hall | McClatchy Washington Bureau

TASS — Most Russians consider US major enemy of Russia — pollster

According to a poll by the All-Russia Public Opinion Research Center, 73% of respondents said the US was Russia’s number one enemy…
…less than one percent named the United States a partner-country, while 73% agreed that America was Russia’s number one enemy. Besides the US, Ukraine (32%), the EU and Germany (10%) are believed to be among Russia’s rivals. Moreover, Italy, France and Japan were considered Russia’s partners by only one percent of the surveyed. 
As a matter of fact, 82% of the respondents supported the idea that the criticism of foreign mass media towards Russia’s President Vladimir Putin could be considered as an attempt to destroy the country and to make it fall apart. Nevertheless, 12% disagreed with the statement, while 6% remained unsure.

Lindsay Abrams — The energy myth that refuses to die: Why renewables are taking over in the developing world

Poor nations are embracing clean energy at twice the pace of rich ones, a new report finds
Not surprising. emerging nations went directly to cellphones, and digital payments, too.

The energy myth that refuses to die: Why renewables are taking over in the developing world
Lindsay Abrams

Greg Palast — Jim Crow Returns

Election officials in 27 states, most of them Republicans, have launched a program that threatens a massive purge of voters from the rolls. Millions, especially black, Hispanic and Asian-American voters, are at risk. Already, tens of thousands have been removed in at least one battleground state, and the numbers are expected to climb, according to a six-month-long, nationwide investigation by Al Jazeera America.

At the heart of this voter-roll scrub is the Interstate Crosscheck program, which has generated a master list of nearly 7 million names. Officials say that these names represent legions of fraudsters who are not only registered but have actually voted in two or more states in the same election — a felony punishable by 2 to 10 years in prison.

Until now, state elections officials have refused to turn over their Crosscheck lists, some on grounds that these voters are subject to criminal investigation. Now, for the first time, three states — Georgia, Virginia and Washington — have released their lists to Al Jazeera America, providing a total of just over 2 million names.

The Crosscheck list of suspected double voters has been compiled by matching names from roughly 110 million voter records from participating states. Interstate Crosscheck is the pet project of Kansas’ controversial Republican secretary of state, Kris Kobach, known for his crusade against voter fraud.

The three states’ lists are heavily weighted with names such as Jackson, Garcia, Patel and Kim — ones common among minorities, who vote overwhelmingly Democratic. Indeed, fully 1 in 7 African-Americans in those 27 states, plus the state of Washington (which enrolled in Crosscheck but has decided not to utilize the results), are listed as under suspicion of having voted twice. This also applies to 1 in 8 Asian-Americans and 1 in 8 Hispanic voters. White voters too — 1 in 11 — are at risk of having their names scrubbed from the voter rolls, though not as vulnerable as minorities.

If even a fraction of those names are blocked from voting or purged from voter rolls, it could alter the outcome of next week’s electoral battle for control of the U.S. Senate — and perhaps prove decisive in the 2016 presidential vote count.

“It’s Jim Crow all over again,” says the Rev. Joseph Lowery, who cofounded the Southern Christian Leadership Conference with Martin Luther King, Jr. Lowery, now 93, says he recognizes in the list of threatened voters a sophisticated new form of an old and tired tactic. “I think [the Republicans] would use anything they can find. Their desperation is rising.”

Though Kobach declined to be interviewed, Roger Bonds, the chairman of the Republican Party in Georgia’s Fulton County, responds, “This is how we have successfully prevented voter fraud.”

Based on the Crosscheck lists, officials have begun the process of removing names from the rolls — beginning with 41,637 in Virginia alone. Yet the criteria used for matching these double voters are disturbingly inadequate.…

Al Jazeera America
Jim Crow Returns
Greg Palast

Alexey Eremenko — Russia Wants State Control of Root Internet Infrastructure

Russia has mounted an effort in recent weeks to bring the root infrastructure of the Internet under control of state-affiliated bureaucracies, both internationally and at home.
The global push is likely to fizzle out, industry experts said — but at home, the plan has every chance of succeeding.
Backers of the Kremlin line say bigger state control of the Internet is mandatory for national security, hinting that the U.S. could disconnect Russia from the Web.
But critics say that Russia, which already censors the Internet, simply wants to expand its means of political censorship.
"Russia wants state control of the global network … instead of public control," said Artem Kozlyuk, a freedom of information activist with, an independent Internet freedom watchdog. 
The latest wave-generating proposal came from Russian Communications and Mass Media Minister Nikolai Nikiforov, who urged the launch of a reform at the United Nations to give control of the Internet to national governments. 
The move would prevent deliberate disconnections of national segments of the Internet, Nikiforov said earlier this week in South Korea at a session of the International Telecommunications Union, a UN body. 
He identified the United States as a possible threat to other nations' Internet access, according to a transcript on the ministry's website.…
The Moscow Times
Russia Wants State Control of Root Internet Infrastructure
Alexey Eremenko

Alexander Mercouris — Putin Just Made the Most Important Speech of His Career. The West Should Listen More Closely

Putin as a traditional (Burkean) conservative valuing law, order and stability positioned against a liberal US policy of favoring a new world order under its conception of (Lockean) liberalism manifesting as neoliberalism and neoconservatism.
What he really wants are stability, rules, and a global balance of power - traditional conservative ideas. He thinks the rest of the world needs to rein-in out-of-control US global activism.
Russia Insider
Putin Just Made the Most Important Speech of His Career. The West Should Listen More Closely
Alexander Mercouris

See also
The National Interest
Putin's Play at Valdai — A Russian quest for stability?
James W. Carden

Lars P. Syll — Macroeconomic aspirations

More on micro foundations and realism. Microfoundations are supposed to add realism. They don't, because the assumptions of conventional modeling are unrealistic. Representative agent models are hopelessly simplistic and agent based model quickly get intractable unless they are kept very simple, too. Simplicity may be a virtue, but over-simplying in modeling isn't. And complexity is complex. 

The challenge is accounting for the complex as simply ("economically") as possible, while also "saving the appearances," as Aristotle put it. The danger lies in generalizing a special highly stylized case based on assumptions that make the model irrelevant to reality.

The basic challenge of science lies in successfully connecting models with reality. Many models can be devised to account for the same data. The generally accepted criteria are correspondence, consistency, elegance (simplicity, economy) and practicality. Preferring consistency and simplicity to correspondence and practicality doesn't cut it.

Lars P. Syll’s Blog
Macroeconomic aspirations
Lars P. Syll | Professor, Malmo University

Matt O'Brien — The worst possible case for the worst possible idea, the gold standard

Paul Krugman versus Peter Thiel.

The Washington Post — Wonkblog
The worst possible case for the worst possible idea, the gold standard
Matt O'Brien

Bill Mitchell — The case of the financial commentator who turned into a banana

On June 2010, Halligan gave an – Interview – to CNBC about the impact of : “If this policy isn’t inflationary, I’m a banana!” 
During that interview he claimed the combination of “a big budget deficit and the Bank of England’s quantitative easing policy” would cause inflation to get get worse.
He said:
This really is economics 101 … We’re running a budget deficit of 12-13 percent of GDP, if that’s not inflationary I am a banana … 
Inflationary expectations start to spiral once inflation is above a significant level
He also claimed that the bond market would see the higher deficit and eventually stop funding the government. This is a government that issues its own currency.
The following graph (courtesy of the BBC) shows the evolution of the Consumer Price Index and the Retail Price Index in the UK since 2000.
Britain is now heading towards very low inflation.
Bill Mitchell – billy blog
The case of the financial commentator who turned into a banana
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Brian Romanchuk — For Fiscal Policy, The Future Is Now

The problem with modern analysis of fiscal policy is that it has fallen into the trap of following a certain conventional wisdom: it has to be very forward looking, in fact it is meant to have an analysis horizon longer than the expected lifetime of the Universe (depending upon the cosmological model). Upon reflection, I think the correct philosophy was the one expressed by the famed American Football coach George Allen: The Future Is Now.…
Bond Economics
For Fiscal Policy, The Future Is Now
Brian Romanchuk

Tuesday, October 28, 2014

Wolf Richter — New Home Prices Plunge the Worst EVER (in One Ugly Chart)

Wolf Street
New Home Prices Plunge the Worst EVER (in One Ugly Chart)
Wolf Richter

See also
Zero Hedge
This Has Never Happened Before Without A Massive Bubble Bursting

Wolf Richter — Beyond the Sanctions, Russia Wins Currency War

Is Russia laughing up its sleeve? Reminiscent of Br'er Rabbit pleading with Br'er Fox not to throw him in the briar patch.
So the Central Bank of Russia has been selling $20 billion of its stash of foreign currency and buying rubles to mop them up and relieve some pressure. But rather than trying to stop or reverse the ruble’s decline, the Central Bank appears to be managingthe decline. A sudden crash of the ruble could have chaotic consequences, while an orderly decline in the middle of a currency war may well be just what it wants.
Wolf Street
Beyond the Sanctions, Russia Wins Currency War
Wolf Richter

Dr. Housing Bubble — Rental rates are outpacing wage growth: What are the implications of rising rents when wages are simply not keeping up?

Dr. Housing Bubble Blog
Rental rates are outpacing wage growth: What are the implications of rising rents when wages are simply not keeping up?

Shane Ferro — Peter Thiel: There Was Virtue In The Gold Standard

Huh? Theil has been hanging with Glenn Beck too much?

Derek Thompson — Homeownership in America Has Collapsed—Don't Blame Millennials

Atlantic Business
Homeownership in America Has Collapsed—Don't Blame Millennials
Derek Thompson
In 2012, Jordan Weissmann and I observed that young people were turning away from homes and cars, the twin engines of the economy.

TASS — Hungary to withdraw from EU in case of interference in internal affairs — parliament speaker

Hungary’s parliament speaker on Tuesday threatened Brussels that the country would withdraw from the European Union if it interferes into the country’s internal affairs.
Member of Hungary’s Fidesz conservative party, Laszlo Kover, said, “The EU attempts to dictate Hungary what to do will lead to the country’s withdrawal from the Union slowly and carefully.”
An initiative by the Fidesz ruling party to impose a tax on the Internet was a motive for such strong statements. Thousands of people took to streets for protest actions on Sunday, October 26 that led to disorders. At the moment European Commissioner for the Digital Agenda Neelie Kroes urged people to take part in protest actions. 
“If Brussels believes that the countries can be dictated the rules of conduct, this reminds us of the USSR actions in 1956,” Hungary’s MTI news agency quoted the parliament speaker as saying.
Hungary to withdraw from EU in case of interference in internal affairs — lawmaker

Vegasjessie — Blackwater's Erik Prince Blames The Left For Occupation 'Failures'

The former head of Blackwater and author of "Civilian Warriors" asserts that his company's much maligned contractors are the scapegoats in Iraq and Afghanistan.
Crooks and Liars
Blackwater's Erik Prince Blames The Left For Occupation 'Failures'

Robert Parry — How the Washington Press Turned Bad

There was a time when the Washington press corps prided itself on holding the powerful accountable – Pentagon Papers, Watergate, Vietnam War – but those days are long gone, replaced by a malleable media that puts its cozy relations with insiders ahead of the public interest, writes Robert Parry.… 
Many of the fond recollections surely are selective, but there was some truth to Bradlee’s “front page” approach to inspiring a staff to push the envelope in pursuit of difficult stories – at least during the Watergate scandal when he backed Bob Woodward and Carl Bernstein in the face of White House hostility. How different that was from Bradlee’s later years and the work of his successors at the Washington Post!…
What Happened to the Press?
How this transformation of Washington journalism occurred – from the more aggressive press corps of the 1970s into the patsy press corps of the 1980s and beyond – is an important lost chapter of modern American history.
Much of this change emerged from the political wreckage that followed the Vietnam War, the Pentagon Papers, the Watergate scandal and the exposure of CIA abuses in the 1970s. The American power structure, particularly the Right, struck back, labeling the U.S. news media as “liberal” and questioning the patriotism of individual journalists and editors. 
But it didn’t require much arm-twisting to get the mainstream news media to bend into line and fall on its knees. Many of the news executives that I worked under shared the view of the power structure that the Vietnam protests were disloyal, that the U.S. government needed to hit back against humiliations like the Iran-hostage crisis, and that the rebellious public needed to be brought back into line behind more traditional values… 
Fitting a Pattern
In other words, the vicious destruction of Gary Webb following his revival of the Contra-cocaine scandal in 1996 – when he examined the impact of one Contra-cocaine pipeline into the crack trade in Los Angeles – was not out of the ordinary. It was part of the pattern of subservience to the national security apparatus, especially under Republicans and right-wingers but extending to Democratic hardliners, too.…
So, perhaps it should come as no surprise that this thoroughly corrupted Washington press corps would lash out again at Gary Webb as his reputation has the belated chance for a posthumous rehabilitation. 
But how far the vaunted Washington press corps has sunk is illustrated by the fact that it has been left to a Hollywood movie – of all things – to set the record straight.

Consortium News
How the Washington Press Turned Bad
Robert Parry

Pepe Escobar — And the loser in Brazil is - neoliberalism

Brazil's complexities boggle the mind. It starts with arguably the key, multi-layered message a divided country sent to winner Dilma Rousseff. We are part of a growing middle class. We are proud to be part of an increasingly less unequal nation. But we want social services to keep improving. We want more investment in education. We want inflation under control (at the moment, it's not). We support a very serious anti-corruption drive (here's where Dilma's Brazil meets Xi Jinping's China). And we want to keep improving on the economic success of the past decade.

Rousseff seems to get the message. The question is how she will be able to deliver - in a continental-sized nation suffering from appalling education standards, with Brazilian manufacturing largely uncompetitive in global markets, and with corruption run amok.
Asia Times Online
And the loser in Brazil is - neoliberalism
Pepe Escobar

Greg Palast — Palast's Biggest Exposé Ever — 3.5 Million Voters Threatened with Purge

A six-month-long nationwide investigation by Al Jazeera America has discovered that voting officials in 27 states, almost all of them Republicans, have launched what is threatening to become a massive purge of black, Hispanic and Asian-American voters. Already, tens of thousands have been removed from voter rolls in battleground states, and the numbers are set to climb. 
The full story will be released on Wednesday morning, October 29, on
And watch the two-part exposé on "America Tonight" on Al Jazeera America
this Wednesday & Thursday - 9pm ET.
Greg Palast
Palast's Biggest Exposé Ever — 3.5 Million Voters Threatened with Purge

Derek Thompson — It's Coming: $65 Oil

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower that we hoped, and (2) global oil production is improving faster than we expected.
The Atlantic
It's Coming: $65 Oil
Derek Thompson

Ambrose Evans-Pritchard — Riksbank cuts rates to zero and mulls currency war to fight deflation

Sweden’s Riksbank has torn up the rulebook of global central banking, cutting interest rates to zero even though the economy is in the grip of a credit boom.

The extraordinary step is intended to stave off deflation but it comes at a time when the Swedish economy is growing at almost 2pc and property prices are rising briskly. The bank has abandoned earlier efforts to curb asset bubbles by “leaning against the wind”.

The Riksbank cut the deposit rate to -0.75pc in what looks like a preparatory move to drive down the krona. Governor Stefan Ingves said the bank has a toolkit of extreme measures in reserve, including use of the exchange rate. The comment is the first hint that Sweden may follow Switzerland and the Czech Republic in imposing a currency floor through unlimited purchases of foreign bonds.
Riksbank cuts rates to zero and mulls currency war to fight deflation
Ambrose Evans-Pritchard

Murtaza Hussain — The U.S. Government Is Suddenly Way, Way More Interested In Tracking Snail Mail

Just so you feel more safe and secure with your government on watch. We gotta protect our freedoms they hate, you know.
A report published yesterday by The New York Times showed an unexplained sixfold increase in the number of approved government requests to spy on the snail mail correspondence of American citizens in recent years.
Roughly 50,000 requests to spy on Postal Service metadata — the names, return addresses, and postmark locations on the outside of envelopes sent to a particular location or individual — were granted by the United States Postal Service in 2013 alone, The New York Times points out today. That’s up from an average of just 8,000 requests per year between 2001 and 2012. This increase happened with essentially no explanation as to why it was necessary, or with any added mechanisms to protect such a program from abuse….
The Intercept
The U.S. Government Is Suddenly Way, Way More Interested In Tracking Snail Mail
Murtaza Hussain

Michael Stephens—New Book: Economic Development and Financial Instability, Selected Essays of Jan Kregel

The first collection of essays by Jan Kregel, focusing on the role of finance in development and growth, has just been made available through Anthem (edited by Rainer Kattel).
Multiplier Effect
New Book: Economic Development and Financial Instability, Selected Essays
Michael Stephens

Michael Perelman — The Anarchy of Globalization

Part of the problem is that the nature of globalization is generally framed according two conflicting ideological perspectives. On the one hand, the anti‑globalization side emphasizes the effects of self‑interested intentionality, in which major powers want to extend their access to markets or resources. The opposing story of globalization emphasizes a complete absence of intentionality in which people merely respond to presumably efficient, impersonal market forces in a way that supposedly allows the invisible hand to spread shared prosperity throughout the globe.
The Anarchy of Globalization
Michael Perelman | Professor of Economics at California State University, Chico