Thursday, August 21, 2014

Scholar Behind Viral 'Oligarchy' Study Tells You What It Means — Sahil Kapur interviews Martin Gilens

SK: Let's talk about the study. If you had 30 seconds to sum up the main conclusion of your study for the average person, how would you do so? 
MG: I'd say that contrary to what decades of political science research might lead you to believe, ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups -- of economic elites and of organized interests.

SK: You say the United States is more like a system of "Economic Elite Domination" and "Biased Pluralism" as opposed to a majoritarian democracy. What do those terms mean? Is that not just a scholarly way of saying it's closer to oligarchy than democracy if not literally an oligarchy?

MG: People mean different things by the term oligarchy. One reason why I shy away from it is it brings to mind this image of a very small number of very wealthy people who are pulling strings behind the scenes to determine what government does. And I think it's more complicated than that. It's not only Sheldon Adelson or the Koch brothers or Bill Gates or George Soros who are shaping government policy-making. So that's my concern with what at least many people would understand oligarchy to mean. What "Economic Elite Domination" and "Biased Pluralism" mean is that rather than average citizens of moderate means having an important role in determining policy, ability to shape outcomes is restricted to people at the top of the income distribution and to organized groups that represent primarily -- although not exclusively -- business.
Talking Points Memo
Scholar Behind Viral 'Oligarchy' Study Tells You What It Means
Sahil Kapur interviews Martin Gilens, Professor of Politics at Princeton University

Matt Bruenig — John Locke Says Everything Belongs to Everyone

As I’ve pointed out before, people misread Locke as if he is some kind of hardcore absolute propertarian, but he simply isn’t.
In the very first sentence of his treatment of property, Locke cites to Psalm 115:16 and remarks that “it is very clear, that God … has given the earth to the children of men; given it to mankind in common.” Locke reaffirms that the earth belongs to everyone in common over and over again in the ensuing paragraphs: “God, who hath given the world to men in common”, “the fruits it naturally produces, and beasts it feeds, belong to mankind in common”, “the earth, and all inferior creatures, be common to all men,” etc.
That Locke says everything belongs to everyone is not surprising, as it would have been a massive break with Christian tradition to say otherwise.
From the starting point that the entire world is owned in common, Locke then argues for creating and respecting property institutions as being instrumentally valuable for administrating the use of the collectively-owned earth. He notes that, although the world belongs to everyone, it is intended that people “make use of it to the best advantage of life, and convenience” and “for the support and comfort” of human beings. Accordingly, “there must of necessity be a means to appropriate” the earth to mobilize its resources towards these ends.
So, on the abstract normative framework level, Locke’s view is that the world belongs to human beings in common, that we need some mechanism to allow for the utilization of its resources, and that a propertarian system “might” serve that instrumental end. If this seems familiar to you, it’s because that’s the Thomist view, which, again, was fairly prevalent at the time.
Demos Policy Shop
John Locke Says Everything Belongs to Everyone
Matt Bruenig
Locke’s other writings on resource rights make this all very clear. In addition to the famous Lockean Proviso (which requires that property cannot be appropriated unless there is enough left in common for others), Locke straightforwardly claims that the poor have a right to the “property” of the rich:
God, the lord and father of all has given no one of his children such a property in his peculiar portion of the things of this world, but that he has given his needy brother a right to the surplusage of his goods, so that it cannot justly be denied him when his pressing wants call for it, and therefore, no man could ever have a just power over the life of another by right of property in land or possessions, since it would always be a sin in any man of estate to let his brother perish for want of affording him relief out of his plenty.
If ever there was a clearer call for the right of redistribution, I haven't seen it. And, of course, this too was the prevailing Christian thought on this matter at the time. Locke's musings on property have acquired a radical character more so from anachronistic misreads and half-reads than what Locke actually wrote.
Seem that John Locke was more of a socialist than Pope Francis. Who knew?

Wolf Street — This Economy Is Ruined For Everyone

Uncertainty and its socio-economic consequences.

Once uncertainty and distrust in the leadership sets in to the collective mindset, it is very difficult to reverse and tends to self-fulfilling prophecy of doom.

Wolf Street
This Economy Is Ruined For Everyone

Kenneth Thomas — Political EconomistUnderstanding Piketty, part 3

Part 3 of Thomas Piketty's Capital in the Twenty-First Century is the longest section of the book (230 pages out of 577), providing his analysis of inequality at the level of individuals. Notably, Piketty largely avoids the use of the familiar Gini index because, in his view, it obscures the issue by combining the effects of inequality based on income with those of inequality based on wealth. He treats the two sources of inequality separately throughout this analysis. 
The first point Piketty emphasizes is one regular readers will be familiar with from my previous discussions of the Crédit Suisse wealth reports: Wealth is always more unequally distributed than income.…
Piketty then turns to the evolution of inequality over the course of the 20th century.…
Piketty's final points refer to global dimensions of inequality of wealth.… 
This long section of the book is the necessary set-up for Part Four, where Piketty takes on still more received theories, and proposes his own recommendations for what can be done about inequality. I will turn to those questions in my next post.
Middle Class
Political EconomistUnderstanding Piketty, part 3
Kenneth Thomas | Professor and Research Fellow, Center for International Studies, UMSL

Willem H. Buiter — The Simple Analytics of Helicopter Money: Why It Works – Always

The author provides a rigorous analysis of Milton Friedman's parable of the 'helicopter' drop of money – a permanent/irreversible increase in the nominal stock of fiat base money rate which respects the intertemporal budget constraint of the consolidated Central Bank and Treasury – the State. Examples are a temporary fiscal stimulus funded permanently through an increase in the stock of base money and permanent QE – an irreversible, monetized open market purchase by the Central Bank of non-monetary sovereign – debt. Three conditions must be satisfied for helicopter money always to boost aggregate demand. First, there must be benefits from holding fiat base money other than its pecuniary rate of return. Second, fiat base money is irredeemable – viewed as an asset by the holder but not as a liability by the issuer. Third, the price of money is positive. Given these three conditions, there always exists – even in a permanent liquidity trap – a combined monetary and fiscal policy action that boosts private demand – in principle without limit. Deflation, 'lowflation' and secular stagnation are therefore unnecessary. They are policy choices.
Economics — The Open Access Open Assessment E-Journal
Willem H. Buiter | Chief Economist. Citigroup
(h/t Brad DeLong)

Living in the American police state

Very scary.

Turning America Into a War Zone, Where ‘We the People’ Are the Enemy  
By John W. Whitehead
August 21, 2014  

“If you don’t want to get shot, tased, pepper-sprayed, struck with a baton or thrown to the ground, just do what I tell you.”—Sunil Dutta, an officer with the Los Angeles Police Department for 17 years 

Life in the American police state is an endless series of don’ts delivered at the end of a loaded gun: don’t talk back to police officers, don’t even think about defending yourself against a SWAT team raid (of which there are 80,000 every year), don’t run when a cop is nearby lest you be mistaken for a fleeing criminal, don’t carry a cane lest it be mistaken for a gun, don’t expect privacy in public, don’t let your kids walk to the playground alone, don’t engage in nonviolent protest near where a government official might pass, don’t try to grow vegetables in your front yard, don’t play music for tips in a metro station, don’t feed whales, and on and on.

For those who resist, who dare to act independently, think for themselves, march to the beat of a different drummer, the consequences are invariably a one-way trip to the local jail or death.
What Americans must understand, what we have chosen to ignore, what we have fearfully turned a blind eye to lest the reality prove too jarring is the fact that we no longer live in the “city on the hill,” a beacon of freedom for all the world.

Wednesday, August 20, 2014

Daron Acemoglu and James A. Robinson — The Rise and Fall of General Laws of Capitalism

Thomas Piketty's recent book, Capital in the Twenty First Century, follows in the tradition of the great classical economists, Malthus, Ricardo and Marx, in formulating "general laws" to diagnose and predict the dynamics of inequality. We argue that all of these general laws are unhelpful as a guide to understand the past or predict the future, because they ignore the central role of political and economic institutions in shaping the evolution of technology and the distribution of resources in a society. Using the economic and political histories of South Africa and Sweden, we illustrate not only that the focus on the share of top incomes gives a misleading characterization of the key determinants of societal inequality, but also that inequality dynamics are closely linked to institutional factors and their endogenous evolution, much more than the forces emphasized in Piketty's book, such as the gap between the interest rate and the growth rate.

The Rise and Fall of General Laws of Capitalism (PDF)
Daron Acemoglu and James A. Robinson
(h/t Tyler Cowen at Marginal Revolution)

Pranjul Bhandari, Jeffrey Frankel — Central banks in developing countries should consider targeting nominal GDP

More nonsense about monetary policy. It's the fiscal, stupid.
Central banks in developing countries should consider targeting nominal GDP
Pranjul Bhandari, Jeffrey Frankel

Bruno Biais, Jean-Charles Rochet, Paul Woolley — Ballooning finance

Minsky without attribution.
Ballooning finance
Bruno Biais, Jean-Charles Rochet, Paul Woolley

Heather Digby Parton — Militarized cops’ scary new toys: The ugly next frontier in “crowd control

Now that the sight of American police decked out as if they are replaying the events of Blackhawk Down has alerted the American public to the militarization of our police agencies, perhaps they will finally be receptive to the warnings that some of us have been making for years about the next generation of weapons that are being developed for “crowd control.” As we’ve seen over the past few days, regardless of whether it’s created for military purposes, this gear tends to eventually end up on the streets of the United States.
Gives new meaning to the polarity between law & order and liberty.

Militarized cops’ scary new toys: The ugly next frontier in “crowd control
Heather Digby Parton

Bill Mitchell — Austerity does not necessarily require a cut in government spending

The Bloomberg Op Ed article (August 19, 2014) – European Austerity Is a Myth – is about as flaky as it gets. The author is intent on justifying the article title by examining changes in government spending (as a per cent of GDP). He produces what he claims is “more appropriately called the ‘graph of the decade’”, which would mean it was some graph, but in reality tells us very little and does not provide the basis for his conclusion that rising government spending since 2007 is evidence that austerity has not been imposed. Oh dear! Some points need to be made.
Bill Mitchell – billy blog
Austerity does not necessarily require a cut in government spendingBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Lars P. Syll — Econometric forecasting — a retrospective assessment

The kinds of laws and relations that econom(etr)ics has established, are laws and relations about entities in models that presuppose causal mechanisms being atomistic and additive. When causal mechanisms operate in real world social target systems they only do it in ever-changing and unstable combinations where the whole is more than a mechanical sum of parts. If economic regularities obtain they do it (as a rule) only because we engineered them for that purpose. Outside man-made “nomological machines” they are rare, or even non-existant. Unfortunately that also makes most of the achievements of econometrics – as most of contemporary endeavours of economic theoretical modeling – rather useless.
Lars P. Syll’s Blog
Econometric forecasting — a retrospective assessmentLars P. Syll | Professor, Malmo University

Outcomes Based Cultural Evolution - Measured by Nominal Metrics Like GDP, Or By Cultural Outcomes? (Why Must We Ask The Obvious?)

   (Commentary posted by Roger Erickson)

There's a reason why homo-econo-ignoramus doesn't appear on this chart. All those pompous Nobel Prize winners simply don't matter, any more than the methane coming from livestock.

Does GDP correlate with general welfare of the people ... or with national Adaptive Rate?

More to the point, what do we do with all our increasingly possible leisure time?

Oh, maybe quit trying to tell people what to do and how to do it, and instead leave exploration of our expanding options up to their increasingly distributed ingenuity?

Ya think? 

Did every one of the soldiers working with General Patton have a defined job? No and yes. Their JOB was to cooperate ingeniously in navigating their dynamic context, AS AN AGGREGATE! The best way to survive as an aggregate is to NOT assign arbitrary jobs to all members, and to instead invest in distributed freedom to increase the net adaptive value of distributed decision-making.

GDP? Jobs? Really?

There are more relevant questions to ask. Start with the fact that no amount of humans is ever "necessary," except in the viewers perspective. Do we know who or what will be asking these questions? Not yet we don't.

The only known reason for separate classes within any species or culture, is as a tool for extending dominance hierarchies, i.e., to use your neighbors before they use you.

To see that, all you have to do is perceive "the value that dominants gain from suppressing their subordinates" - which is right out of biology-101, and presupposes a perspective where competition for over-subscribed static resources exists. What if that perspective itself no longer applies? How? Once an aggregate transitions to a state where the importance of dynamic assets is finally recognized as far outweighing the importance of static assets. That's always been true, of course, ever since the first "better way" was first recognized. It's just that most humans STILL don't recognize that tautology!

Relevant answers, and the data to support them, depends on who defines context, and why. Without a useful definition of our changing context, we don't arrive at an optimal definition of "value." For instance, is the ratio of static vs dynamic value changing rapidly, as the ability of humans to transcend biological niches continues to expand? Unfortunately, you won't hear that question posed in many, if any, economics textbooks, simply because the very perspective of orthodox economics is too primitive to even keep up with the existing range of other human disciplines.

Again, these observations about dominants suppressing subordinates - and WHY - are right out of biology-101, and have been documented out the wazoo, for many social as well as non-social species (despite what these particular authors claim, that it's been proven ONLY for meerkats - they're likely just posturing for tenure in some academic department :( ).

For example, in most "pack" animals, from meerkats to lion prides to wolves, the dominant male & female completely prevent subordinates from reproducing (often over 90% of the time), so all you really have to follow are the boundary conditions - i.e., who's offspring do & don't survive. You can see the same dynamics at every level of the phylogenetic scale, from viruses to human beings. The core system dynamics don't change very much, but the accumulated methods sure do.

Same thing occurs in upper class vs lower class humans and other primates - e.g., chimpanzees. Lots of poor people scrimp on their own child rearing or forgo reproducing, while working to help rear the children of rich people. Offspring of chimps less dominant in their packs don't get the same perks that "yuppie" chimp kids do. But there's a clear reason for that, as long as access to static assets is a point of competition.

Once you look, do you see any difference whatsoever - once you compare fungi, meerkats or humans? (Note also that continual revolutions - in all species - illustrate frequent turnover among which phenotypes are dominant, and which are suppressed. There's no guaranteed permanence, at least not out on the cutting edge of an evolving species or culture.)

But now we're talking about a whole new layer of opportunity, never before exposed (at least to this extent) by any species except human cultures! What happens if OUR context changes markedly, and the prior relevance of dominance hierarchies becomes less relevant, or completely irrelevant? How long would it take humans to even notice, and re-adapt?

If there are countless machines around to solve increasing proportions of support tasks .... then there is a point beyond which there is no longer any previously recognized gain to be had from suppressing subordinate humans!


We've been discussing teamwork, military resiliency, and democracy for over 2000 years, and still not really catching on. So no, human cultures don't instantly re-orient to altered context. Perhaps it's finally time to automate the production of cultural return-on-coordination. How? Perhaps by subtly adjusting K-12 education? It'll take practice, not predictions.

If our survival pressures switch from reproduction of humans to reproduction of increasingly more adaptive human cultures, then the "moment" of adaptive pressure moves even further away from inter-personal competition and towards aggregate coordination, a complete transition in perspective that has actually been underway throughout biological history.

Yes, past transitions equal or greater in scope have already been documented. Apparently, you're not required to learn about them in order to get a degree or even a prize in economics. There have been multiple "singularities." In the big scheme of things, that topic is actually quite passé. We're just taking the upcoming one rather personally, due to our very constrained perspective on context. :)

Here are just some of the known transitions, or past singularities.

1) Transition from "inorganic" chemistry to self-replicating organic molecular assemblages (there may have been prior ones, this is just an arbitrary start to our list, for now; and don't forget quantum physics & the prior Big Probability Events; they're candidate singularities too)

2) Transition from self-replicating molecules (autocatalysis) to self-replicating template structures (i.e., appearance of condensed methods for "directed" construction; e.g., protein catalysts and the incredibly old rna-based ribosome enzyme)

3) Further transition from partially to fully template-driven self-replication - i.e., the dna/rna/protein based replication sequence common to prokaryotes, archaeryotes & eukaryotes

4) Even further transition from unicellular to massively multicellular template-driven self-replication
("layers" of self-replication, where only "germ cells" replicate, and trigger the build-out process we call embryogenesis)

5) Yet another transition is known? Yes! Various "social" - and very few "Eusocial" - species already exhibit various stages of passing another transition, where "germ members" dominate replication to various degrees (including humans), and the rest of an entire social culture divert increasing proportions from hyper-local to more indirect reproductive efforts.

Many people are asking what the next transition might be, and how soon?
There's no freaking way to know! The race is to PARSE what's happening, and adjust while it happens, not to predict it.
Compared to the known history of biological diversity, the entirety of economics writing is just pure BS, incredibly boring, noise, of no adaptive consequence whatsoever.
The truth is, Economics Lacks Imagination.
We gotta be on our toes, and think harder about what's coming down the pike OUTSIDE of the brain-dead dung-box we call orthodox economic theory. It's always time to move on, or we won't be among those moving on.

At what point is the entire human species "needed?" Depends on who or what is asking, and how the questioners define need. If robots become self-replicating, will it actually be far easier to advance "culture" by doing away with humans altogether. SciFi folks have been imagining & discussing that for many decades.

However nothing yet, from dying planets to SuperNovas to the BigBang has extinguished biological evolution, so it's doubtful that anything we can imagine can hold a candle to the real options. Consensus is that some variety of carbon life would undoubtedly colonize and live off/in/within any robotics we can build.

Relevance is obviously a moving target.

Jerrit Erickson writes:
"Ten billion humans are no more or less necessary than any humans, or
life itself for that matter; we don't know why we're here, if there
even is a reason. That hasn't stopped everyone from acting like
there's a plan up to this point."
Precisely. The whole point is aggregate resiliency through net diversity, either static or generated on demand. Hence, in our human cultures there are countless competing plans, each becoming obsolete as fast as contexts change.  Plus, all our plans are soon replaced by even better plans, which are made obvious just by observing unpredictable change. So a corollary point is to never stop SELECTING from all those proposed plans.

We navigate contexts by reacting and adapting, and NOT just by blithely predicting.

Zero predictive power, seemingly unlimited adaptive power (so far, at least), that's what we have.

What would General Patton have said about telling people HOW to manage GDP, or to "get a job?" Here's my 1st guess: "@#$%^&*! Don't be a fool, Cultural Soldier! Now what's our situation?"

Marshall Auerback — Higher GDP Growth Does Not Equate To Greater Social Well-Being And Happiness

For rich, developing, and transition countries, whether pooled or analyzed separately, there is no time series evidence that a higher economic growth rate increases the rate of improvement in life satisfaction. Doubling the rate of economic growth does not double the increase in life satisfaction; rather, the evidence is that it has no significant effect at all.
If there is any less developed country for which one would expect a positive impact of economic growth on SWB it is China, whose growth since 1990 from an initially very low value has been at the highest rate ever recorded, a four fold multiplication of real GDP per capita in two decades (Heston, Summers, and Aten 2012). Household appliances such as refrigerators and washing machines – quite rare in 1990 – are now commonplace in urban areas. Color television sets currently average over one per household. By 2008, almost one in ten urban households owned a car and China had become the world’s leading automobile producer, according to the OECD.
Yet, the combined evidence from six separate surveys is that life satisfaction in China has not improved, and, if anything, may have declined somewhat, according to Richard Easterlin, a Professor Emeritus at USC, who has made a lifetime study of the phenomenon…. 
Macrobits by Marshall Auerback
Higher GDP Growth Does Not Equate To Greater Social Well-Being And Happiness
Marshall Auerback
While psychologists have long used surveys of reported well-being to study happiness, economists only recently ventured into this arena. Early economists and philosophers, ranging from Aristotle to Bentham, Mill, and Smith, incorporated the pursuit of happiness in their work. Yet, as economics grew more rigorous and quantitative, more parsimonious definitions of welfare took hold. Utility was taken to depend only on income as mediated by individual choices or preferences within a rational individual’s monetary budget constraint. 
Even within a more orthodox framework, focusing purely on income can miss key elements of welfare. People have different preferences for material and non-material goods. They may choose a lower-paying but more personally rewarding job, for example. They are nonetheless acting to maximize utility in a classically Walrasian sense. 
The study of happiness or subjective well-being is part of a more general move in economics that challenges these narrow assumptions. The introduction of bounded rationality and the establishment of behavioural economics, for example, have opened new lines of research. Happiness economics – which represents one new direction – relies on more expansive notions of utility and welfare, including interdependent utility functions, procedural utility, and the interaction between rational and non-rational influences in determining economic behaviour.…

Reuters — U.N. Chief Calls For Protection Of Rights In Ferguson Protests

U.N. Secretary-General Ban Ki-moon called on U.S. authorities on Monday to ensure the protection of the rights of protesters in Ferguson, Missouri, where there have been demonstrations and rioting over the fatal police shooting of an unarmed black teen.
The Huffington Post
U.N. Chief Calls For Protection Of Rights In Ferguson Protests

Christopher Mathias — Former NYPD Commissioner Ray Kelly Thinks Police In Ferguson Are Out Of Hand

Former NYPD Commissioner Ray Kelly once boasted that his department-- which he described as a "quasi-military organization"-- had “some means to take down a plane" if necessary.
It was this same militarized police force that, under Kelly, conducted a midnight raid on Zuccotti Park in lower Manhattan in 2011, rounding up and arresting journalists and scores of Occupy Wall Street protesters.
It was Kelly who defended his department after the Associated Press uncovered its surveillance of the city's Muslim communities.
Amidst growing outrage, Kelly also defended his department's use of stop-and-frisk. Hundreds of thousands of New Yorkers were stopped by police during his stint as commissioner, the overwhelming majority of whom were black or Latino.
And it was during Kelly's tenure as commissioner that police officers killed Sean Bell, Tamon Robinson, and Ramarley Graham -- all unarmed black men.
And yet, even Ray Kelly thinks police in Ferguson, Missouri, have gone way too far in their handling of the turmoil after the death of 18-year-old Michael Brown, who was shot and killed by police officer Darren Wilson last week….
The Huffington Post
Ray Kelly Thinks Police In Ferguson Are Out Of Hand
Christopher Mathias

Elena Holodny — This Map Shows What $100 Is Actually Worth In Your State

Business Insider
This Map Shows What $100 Is Actually Worth In Your State
Elena Holodny
Internal fx rates.

Henry Blodget — Why Does The Economy Stink? Because America's Owners Are Greedier Now Than Ever Before

Henry Blodget gets it. It's the ratio of capital share to labor share, stupid.
Why is growth so slow and weak?
One reason is that average American consumers, who account for the vast majority of the spending in the economy, are still strapped.
The reason average American consumers are still strapped, meanwhile, is that America's companies and company owners — the small group of Americans who own and control America's corporations — are hogging a record percentage of the country's wealth for themselves.
"Hogging" is much more metaphorical than "hoarding."

Money Game 

Tuesday, August 19, 2014

Lynn Parramore interviews Barry Lynn — How the New Monopoly Capitalism Will Crush You to Smithereens

Well, not exactly the "new" monopoly capitalism, rather the new improved monopoly capitalism.
I see the true populists on the left and the true populists on the right. I believe that those groups can absolutely come together and fight monopolists and restore democracy within our economy and within our political system. Because what they actually believe in is a distribution of power foremost. They believe in open markets, foremost. And what they’re aiming at is the distribution of power and the open and fair markets. And if you establish that, then you have real democracy. You have real liberty.
The problem with most of the libertarians—and certainly with the libertarians who are official libertarians, meaning they work with the Libertarian Party, they work with libertarian operations like the Cato Institute—is that they say we need to get rid of all regulation. We need to get rid of all government.
The true populists — what they understood is that, well, you might not want to use government to fix all your ills. You might not want to use government to fix even most of your ills. But what you do need is, you need to have government to keep yourself free. To keep markets open, to prevent the consolidation of power over markets by monopolists. If you don’t have government, then every single system will be taken over by a private monopolist, which really means private government….
The purpose of government, the reason we founded government, is to break up dangerous concentrations of power at home and abroad. Concentrations of power that threaten our liberty as individuals at home and abroad. That is the foremost purpose of government.
How the New Monopoly Capitalism Will Crush You to Smithereens
Alternet's Lynn Parramore interviews Barry Lynn, senior fellow at the New America Foundation, where he directs the Markets, Enterprise, and Resiliency Initiative.

Matt Bruenig — Tradition-Aggression-Desert Whack-A-Mole

Matt debates against the non-aggression principle and propertarianism.

Tradition-Aggression-Desert Whack-A-MoleMatt Bruenig

Denis Krassnin — EU advisors advocate use of military against strikes and protests

Experts at a European Union (EU) think-tank are demanding that the EU prepare to put down strikes and protests with military force. Due to the deepening social inequality in a globalised economy and growing military conflicts within the EU’s borders, such outbursts will inevitably increase.
In the study by the European Union Institute for Security Studies, the authors bluntly state that in the face of these developments, the army will have to be used increasingly for policing duties to protect the rich from the anger of the poor.
The book appeared a year after the near-collapse of the global financial system in 2008, entitled “Perspectives for European Defence 2020.” It makes clear that academics and politicians are very aware of the revolutionary implications of the crisis. They are working through scenarios that would allow the opposition of the vast majority of the population to social attacks to be suppressed.
“Within the framework of the joint foreign and security policy, the responsibilities of the police and armed forces are increasingly being merged, and the capacities to tackle social protest built up,” radio station Deutschlandfunk reported on the study last month. Officially this was concerned with interventions in countries outside the EU.
“But under article 222 of the Lisbon treaty, a legal basis has been created for the deployment of military and paramilitary units within EU states in crisis.”
The book was authored by a team of academics and experts in the area of European security, defence and foreign policy. The foreword was written by EU foreign policy representative Catherine Ashton. In it she set out the long-term parameters of the EU’s security policy. Her introduction, and the fact that the institute is an EU institution, give the study an official stamp of approval.…
It gets worse.

TPTB are recognizing the only way to sustain neoliberalism is through force. But we already knew this from the way protests of global institutions have been put down and activists classified as terrorists.

The surveillance state and militarization of internal security is not just about racism and keeping the lid on ghettos.
EU advisors advocate use of military against strikes and protests
Denis Krassnin

Brad Friedman — WTF, Ferguson Police?!

The "streets" did not "flare up". The cops in Ferguson flared it up, perhaps, according to pretty much all of the live coverage we followed for hours last night on TV, on the web and, most crucially, on Twitter.
Yeah, that's what I was doing last night until the wee hours and that was my take, too. Police riot.

Brad Blog
WTF, Ferguson Police?!
Brad Friedman

Kara Dansky — The real reason Ferguson has military weapons

Because not white.
It used to be billy clubs, fire hoses and snarling German shepherds. Now it's armored personnel carriers and flash-bang grenades. The weaponry has changed, but the target is still the same.
If some of the photos from Ferguson last week were in black and white, you might confuse them with scenes from the 1950s south. White police officers beating black protestors. Young black men lying face down in the street with police officers standing over them with assault rifles.
We have a long history of aggressively policing communities of color in America. Police have treated black and brown people like the enemy for decades. In that context, the recent events in Ferguson in the wake of Michael Brown's shooting come as no surprise. But they go way beyond Ferguson.….
It might be tempting to think that the brutal tactics we've seen are the result of a few bad police officers. It might be comforting to think this is a fluke. And that might be partially true. But when the government arms cops like soldiers, trains them in counter-insurgency tactics, tells them they are fighting an enemy, we should expect this type of combustive, tragic result.
CNN Opinion
The real reason Ferguson has military weapons
Kara Dansky | senior counsel for the ACLU's Center for Justice and author of "War Comes Home: The Excessive Militarization of American Policing."

Pew Research, Stark Racial Divisions in Reactions to Ferguson Police Shooting

Philip Pilkington — Confusing Accounting Identities With Behavioral Equations

Here’s an interesting little debate from earlier this year that I came across yesterday evening. It is between a number of market analysts over whether the current stock market is overvalued. Why is that interesting? Because the argument is focused on one of the best known foundational stones of heterodox economics: the Levy-Kalecki profit equation.
Weird? Not really. James Montier, a well-known investment analyst at GMO, has been using the profit equation as central to his forecasting work for a number of years. You can see his latest offering here (page 5). Montier’s argument is that profits in the US at the moment are heavily reliant on the still rather large budget deficits that are being run there. I made a similar argument on the Financial Times Alphaville blog over a year ago.
This is actually a non-controversial point. Private sector savings are equal, to the penny, to the budget deficit minus net imports. This is intuitively obvious: when the government spends money that money either accrues to a private sector institution within the country or to a foreigner abroad. We then divide the private sector into households and firms and we quickly see that budget deficits are equal, again to the penny, to net imports, household savings and… you got it: profits.
All of this is just basic accounting. The above cannot be in any sense ‘untrue’ because this is how the accounting apparatus works. So, why is David Bianco from Deutsche Bank disputing this? Basically he confuses an accounting identity with a behavioral equation.… 
Fixing the Economists
Confusing Accounting Identities With Behavioral Equations
Philip Pilkington

See also Taxation, Government Spending, the National Debt and MMT if you missed it.

Karl-Theodor zu Guttenberg and Richard Werner — How Money is Made

Interesting post but this is bonkers.
 In order to stimulate productive bank credit – and boost the effectiveness of fiscal policy – governments should stop issuing bonds, and instead borrow from banks through loan contracts, often available at lower rates than bond yields. This would bolster bank credit and stimulate demand, employment, GDP, and tax revenues.
Project Syndicate
How Money is Made
Karl-Theodor zu Guttenberg, former German Minister of Economics and Technology, Chairman of Spitzberg Partners LLC, and a nonresident distinguished statesman at the Center for Strategic and International Studies, and Richard Werner, Professor of International Banking and Director of the Center for Banking, Finance, and Sustainable Development at the University of Southampton

A Vaccine Against the CDDC Virus (Confuse-Disorient-Divide-&-Conquer Social Virus) .... Coming to a K-12 Curriculum Near You (If We Want To Maintain A Resilient Democracy)

   (Commentary by Roger Erickson.)

"One way to keep [a voting block of] 50 million [poor people] fractured is through disinformation."

Once retired professional athletes are waking up to that fact, maybe there's hope.

It's also a hopeful sign that other citizens are starting to notice that many politicians don't know how fiat currency operations work.

Yet why is it taking so long for all these signs to be noticed, by more people? Is it partly because voters, in their turn, don't understand politics or politicians?

In general, most people in nearly all of our rapidly growing variety of disciplines don't understand much about the other disciplines. The downside is that our electorate understands LESS about its nation's context every year.

To generalize from an old academic joke, "citizens receiving increasingly specialized education and training know more and more about fewer and fewer of themselves, until they end up knowing everything about nobody (and about no aggregate context)."

Here's another old joke. Our nation and it's context have become hidden from our own view, buried beneath a churning mass of blind specialists, like a cloud of mosquitoes obscuring a victim. No wonder we're stumbling around like a drunken policy apparatus. We can't even tell if that's a pink elephant encapsulated by all the blind men!

More fundamentally, not enough citizens formally recognize that over-adaptation to transient context - excess efficiency - is a death knell. Why? Too much specialization, thereby shedding the capacity for resiliency, while also instituting runaway feed-forward loops cementing institutional momentum!

That constitutes growing dissociation rather than growing coordination.

What we have is a blind cultural growth spurt, where growing aggregates have to GET clumsier before they can discriminate the signs of their growing clumsiness (aka, less agile democracy). Recognition is required before an electorate can start taking steps to regain agility, on yet another scale.

Until then, we're all stuck with understanding less about ourselves, about our context and about our options.

We have a name for classes of humans stuck in that limbo, devoid of the talent of discernment.

Homo lemmings - defined as a sub-class of homo sapiens who regularly say that "no one could have expected" reality.

No pain, no urge to adapt. What if there's less capability to recognize looming cultural pain soon enough to take early evasive action? Then there's less willingness to adapt and survive, even if options are clearly presented.

Tell that to our legions of citizens with 30 second attention spans, who have come to accept countless exhortations to not read, not explore and, worst of all, not think - and certainly not outside the boxes - or cubicles - they've been handed.

Give these people an opportunity to think, and they are prone to call you a "lazy writer."

Is there a vaccine for lazy writing? Yes, and we call it extinction, ironically, since provocative writing, which asks readers to actually think, IS a cultural vaccine. A vaccine against a vaccine is therefore an example of self-assisted suicide. Those who don't get enough remedial practice at agile thinking are sometimes termed "literalists" - people who can only see what is, not what can be.

Literalists are people who, when faced with contexts describable ONLY through a seemingly near-infinite polynomial set of interdependent variables, have difficulty imagining more than one variable changing at one time. Agile thinkers, on the other hand, practice the cultural equivalent of combinatorial chemistry - throw everything together, change many variables simultaneously in many, interleaved, experiments, and practice the ability to discriminate novel signals, on the fly, from the expanding mass of noisy data.

Literalists, ironically, often call agile-thinkers lazy. Usually because the literalists won't stoop to asking enough questions to keep up. So who are the lazy ones?

In the end, there is a simple solution to that particular friction - between the literalist and agile ends of the thinking spectrum. How much could it hurt to add many more agile-thinking "games" to all levels of K-12 education, so that a threshold proportion of citizens get adequate practice at our constantly escalating task of coordinating on a larger scale - aka, get them practice at emulating evolution? That's one elegant way to prepare a growing electorate for a better balance between long-term cultural resiliency and instantaneous cultural efficiency.

Greg Hannsgen — A fiscal policy rule without austerity

Discussion of fiscal policy rules.

Multiplier Effect

John Nichols — Defend Journalism That Speaks Truth to Power: From Ferguson to Washington

“A popular government, without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy; or perhaps both,” declared James Madison, the author and champion of the Bill of Rights. “Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
This is still the essential truth of an American experiment that can only be advanced toward the equal and inclusive justice that did not exist in Madison’s time by a broadly informed and broadly engaged citizenry. When journalists are harassed, intimidated, threatened and detained, the basic premise of democracy — that the great mass of people, armed with information and perspective, and empowered to act upon it, will set right that which is made wrong by oligarchs — is assaulted.
Where assaults on the gatherers and purveyors of popular information occur, those assaults must be challenged immediately. Social media and then mainstream media did just that after Washington Post writer Wesley Lowery and Huffington Post writer Ryan Reilly were arrested, detained and then released without charges or an explanation by police in Ferguson, Missouri, as they were reporting on the tensions that developed after 18-year-old Michael Brown was killed in a police shooting. The detention of reporters is merely one illustration of the seriousness of the broader battering of civil liberties and civil rights in Ferguson, a battering so severe that Amnesty International has made the unprecedented move of deploying human rights observers to the city.
Moyers & Company
Defend Journalism That Speaks Truth to Power: From Ferguson to Washington
John Nichols

See also Katherine Fung, James Risen: Obama Is 'Greatest Enemy To Press Freedom In A Generation' at Huffington Post.
New York Times columnist Maureen Dowd spoke to Risen for her Sunday column"Where’s the Justice at Justice?"

"How can he [Obama] use the Espionage Act to throw reporters and whistle-blowers in jail even as he defends the intelligence operatives who 'tortured some folks,' and coddles his C.I.A. chief, John Brennan, who spied on the Senate and then lied to the senators he spied on about it?" Dowd wrote.

Risen had one word to describe Obama's actions: "hypocritical."

"A lot of people still think this is some kind of game or signal or spin," he told Dowd. "They don’t want to believe that Obama wants to crack down on the press and whistle-blowers. But he does. He’s the greatest enemy to press freedom in a generation."

"How can he [Obama] use the Espionage Act to throw reporters and whistle-blowers in jail even as he defends the intelligence operatives who 'tortured some folks,' and coddles his C.I.A. chief, John Brennan, who spied on the Senate and then lied to the senators he spied on about it?" Dowd wrote.
Risen had one word to describe Obama's actions: "hypocritical."
"A lot of people still think this is some kind of game or signal or spin," he told Dowd. "They don’t want to believe that Obama wants to crack down on the press and whistle-blowers. But he does. He’s the greatest enemy to press freedom in a generation."

Brad DeLong — In Which I Make Myself Very Confused About Cyclical Recovery

So which is it? Has hysteresis done 1.8%-points of damage to 25-54 employment or 0.9%-points to total employment? Have we done 3/4 of the work of recovery relative to the proper labor force-trend share benchmark? Or have we done only 1/3 of the work of recovery?
The 25-54 data and the economy-wide aging trend-adjusted data used by the CEA appear to be telling us very different things both about the cyclical state of the labor market and about the damage done by hysteresis. How to reconcile? Which is right?
WCEG — The Equitablog
In Which I Make Myself Very Confused About Cyclical Recovery
Brad DeLong

21st Century Wire — MH17 Verdict: Real Evidence Points to US-Kiev Cover-up of Failed False Flag

Russia released its tracking information on Monday. No response yet from the West.

21st Century Wire
MH17 Verdict: Real Evidence Points to US-Kiev Cover-up of Failed False Flag
(h/t Yves Smith at Naked Capitalism)