Our dumb discourse

Oh fergawdsakes

by digby

The question is do the soccer moms eat chicken and NASCAR dads drink coffee? At the same time? Only our punditocracy can sort it out for us and tell us what it all means:

“Meet the Press” host Chuck Todd on Sunday described the 2014 midterm elections as a battle between “Starbucks nation” and “Chick-Fil-A country.”

He split the U.S. into the Democratic urban areas that drink Starbucks and the Republican rural areas that eat Chick-Fil-A.

According to Todd, there are a few Senate seats up for grabs in Chick-Fil-A-loving states like Montana, South Dakota and West Virginia, giving Republicans the advantage. And he said that the major battlegrounds are Colorado and Iowa.

This is beyond dumb. If this were really the case the Democrats would have the 2014 election sewn up because Starbucks has way more locations than Chick-Fil-A, which has zero localtions in Montana. But of course this is just blather that Chuck Todd, for reasons best known to himself, chooses to visit upon his remaining viewers.

Chuck Todd could ask former Senator Bob Graham, someone with a history of getting national security right, to appear. Or he could ask Senator Mitch McConnel if he really plans another government shut down. Or he could invite Howie Klein of DownWithTyranny to ask Steve Israel about his leadership of the DCCC, the most under reported story of the 2014 election. But no, all Chuck Todd offers us is blather, and I think this is what we can expect in the future.

Real Fiscal Responsbility Today will be an economics show, which will only deal with economic side of our political discourse. We will not engage in the horse race side of it. However, we do plan to set an example that will demonstrate that we need not settle for blather.

Capitalism runs on sales


The Economy: Does More Government Help or Hurt – Complete Program

Presented at the Kansas City Public Library, Plaza Branch on September 16, 2014. This is the complete program and includes Dr. Haslag presentation and the Q&A session after both presentations.

“Businesses hire when they are swamped with demand, not when you dangle a tax cut carrot in front of them.” This may sound like captian obvious; but it is the sort of commense observation you will never hear on our current talk shows. Which is why we have decided to create our own talk show. Help us launch Real Fiscal Responsibility Today.

Addressing doubts about Modern Monetary Theory

Modern Monetary Theory is so breath-takingly different from the conventional view of economics that it takes some getting used to. Those interested in the long version might be interested in these excerpts from the Fiscal Sustainability Teach In Counter Conference, which was my first exposure to MMT.

I support MMT simply because it is an accurate description of the world as it is. Taxes do not fund the government. Let me provide two examples of how that is the case. From Scott Pelly’s interview with Federal Reserve Chair Ben Bernanke:

Asked if it’s tax money the Fed is spending, Bernanke said, “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing.”

“You’ve been printing money?” Pelley asked.

“Well, effectively,” Bernanke said.

So when banks are in trouble the Federal Reserve can, if it is so inclined, print money to bail them out. Banksters already have MMT, we just need to take this public resource and put it to public purpose rather than continuous bailouts of ailing banks.

Warren Mosler illustrates MMT by explaining that if you went to the IRS personally to pay your taxes in cash the IRS would hand you a receipt, thank you, and put your cash in the shredder. From the point of view of the IRS your cash is simply a symbol of your compliance. By contrast if you went to the D.C. Department of Taxation and paid your taxes in cash they would give you a receipt and put that cash in the bank. From D.C.’s point of view your cash has value. Clearly if the IRS puts your cash in the shredder they are not planning to use it to pay for government expenditure as would be the case in D.C.

These two examples demonstrate that Modern Monetary Theory explains the world as it is. Taxes do not finance government expenditure at the federal level. That alone is reason to embrace MMT. If it explains the world as it is, and I put it to you that it does, than we should use it as a basis for public policy.

I will try to address some of the inevitable doubts that spring up about MMT. Here I confine myself to honest critics of MMT, people who are sincerely trying to understand it. I will ignore those who I regard as propogandists for plutocrats, who are using the myth of scarcity to maintain control over our economic discourse.

The first objection people raise is that of inflation, what about Weimar? Zimbabwe? The problem in both cases was not printing too much currency, but the collapse of productive capapcity. In the case of the Weimar Republic what was not destroyed in World War One was taken by France when they seized the Ruhr valley. When there is nothing to buy, the what little there is becomes very expensive. Retricting the money supply will not fix that, you need to expand productive capacity. The same is true of Zimbabwe, in that case farms owned by white farmers were seized and handed over to army veterans. Since the veterans had no agricultural experience production collapsed and a nation that had been a net exporter of food experienced famine. Restricting the money supply would not have fixed that, only restoring agricultural production would. That is why MMT economists focus on productive capacity and see unemployment as a symptom of a dysfunctional economy. It is appropriate for a government to keep spending into the economy as long as it results in the expansion of productive capacity.

Speaking only for myself, I consider increasing taxes on the rich as necessary for preserving democracy. It is clear to me that when inequality becomes too great the uber rich, the .001%, form a cabal to seize power and strip society of its assets. That is what is happening now in Detroit and will happen to the entire country if we are not careful. In my view, higher taxes on the uber rich are part of the checks an balances that preserve democracy. We limit the power of the President, Congress, and the Courts. Each institution serves as a check on the other two, and a free press,  the right of assembly and petition, and free elections serve as a check on the system as a whole. In addition to these checks we need to tax the uber rich to limit their resources so they can’t destroy the rest of us, as is the case in unchecked wealth. But this is a political arguement. We don’t need this money to fund the government, we need for no one to have so much money that they can destory society.

I would go farther, I think we need a requirement that no war can be taken without an increase on income taxes at the highest bracket. If it is not important enough to the elites to pay higher taxes, if it is not importnat enough for the elites to make so trifling a sacrifice, while sending others to their death, then it is not important enough for the nation to go to war. But that is a political arguement. We don’t fund wars from tax revenue.

MMT destroys the argument for austerity. Since we can indeed print money, unemployment is completely unnecessary. It is true that nothing in the theory of MMT requires a job guarantee. We can continue with the present system, endless MMT bailouts for banksters and austerity for the rest of us. But once the general public understands MMT that will be politically unsustainable. Once the public understands that the Federal Reserve can simply put money into the accounts of banks the questions arises, why can’t the Federal Reserve put money into our Social Security accounts? Why can’t the Federal Reserve put money into the account of the city of Detroit? Indeed, why not every municipality and state? Why not indeed. As long as that money is used for increasing productive capacity, schools, hospitals, transportaion, and the like, there will be no inflation. There is no justification for austerity. Which is why the elites hate MMT and are keeping it out of our public discourse.

Modern Monetary Theory is as destructive to economic plutocrats as the idea of popular democracy was to royal abolutism. That is why we need to bring it to the general public. Help us do so, help fund Real Fiscal Responsibility Today.

How to overthrow the politburo for correct economic thinking

Thomas Frank writing for Salon:

Ever wonder why the economic experts never seem to change, keep coming back, despite racking up such shattering failures as the housing bubble and the financial crisis and the bank bailouts? Ever wonder why a guy like Larry Summers gets to be chief economist at the World Bank, then gets to deregulate Wall Street, then gets to bail Wall Street out, then almost gets to become chairman of the Fed, and then gets to make sage pronouncements on the subject of—yes— inequality? It’s for the same bad reasons: Because D.C. worships expertise and because Summers, along with a handful of other geniuses, are leading figures in a professional discipline dominated by what a well-informed observer once called a “politburo for correct economic thinking.”

With very rare exception economists who get it right are not invited to write for the editorial pages, not invited to appear on TV. So, since the established media refuses to hear from those who got everything right, it is necessary to build our own media. That is why we have launched the project for the Real Fiscal Responsibility Today TV and Radio show. Join us, be part of the movement that is going to change our economic discourse.

Why errors persist

Paul Krugman asks a good question

And it’s not as easy to dismiss the phenomenon of obsessive attachment to a failed economic doctrine when you see it in major political figures. In 2009, Representative Paul Ryan warned about “inflation’s looming shadow.” Did he reconsider when inflation stayed low? No, he kept warning, year after year, about the coming “debasement” of the dollar.

Wait, there’s more: You find the same Groundhog Day story when you look at the pronouncements of seemingly reputable economists. In May 2009, Allan Meltzer, a well-known monetary economist and historian of the Federal Reserve, had an Op-Ed article published in The Times warning that a sharp rise in inflation was imminent unless the Fed changed course. Over the next five years, Mr. Meltzer’s preferred measure of prices rose at an annual rate of only 1.6 percent, and his response was published in another op-ed article, this time in The Wall Street Journal. The title? “How the Fed Fuels the Coming Inflation.”

So what’s going on here?

Human beings are social creatures. It is very difficult to go against conventional wisdom, no matter how obviously msitaken it is. There is no sustained challenge to the twin myths of austerity and the imagined threat of inflation. When human beings hear the same fear mongering again and again, from multiple sources, it is difficult to reject it.

It was precisely for this reason that Joe Firestone, lambert strether, and myself decided to launch Real Fiscal Responsibility Today, to create a place where the lies of austerity could be systematically exposed.

One million dollars for Rebecca Strauss

Via Susie Madrak we learn of Rebecca Strauss’ contributtion to deficit fear mongering:

“By 2040, public debt is projected to top 110 percent, equal to the highest levels reached during the Second World War,” Renewing America Associate Director Rebecca Strauss writes. “And absent any policy changes it will likely keep climbing afterward into uncharted territory for the United States.”

Americans will have to make difficult choices to get the public debt load under control. Sequestration, which took effect in 2013, only affected government spending projected to decline as a share of GDP. Meanwhile, U.S. policymakers left cutting entitlements or increasing tax revenues largely off the table, despite the fact that entitlements will account for nearly all new federal spending in the future.

In July of 2010 Warren Mosler offered a one million dollar challenge to anyone who could prove that it was possible for the United States to go broke:

Middletown, Conn. (June 2, 2010) – Warren Mosler, Independent candidate for US Senate, knows for a fact that, operationally, there is no such thing as the US government running out of dollars, being dependent on foreign borrowing, or potentially facing a solvency crisis like Greece, and he has pledged $1 million of his own money to any of his Senate opponents on the ballot who can prove him wrong.

“Those concerns are due to pure fear mongering from supposed experts. They have no factual basis, and they have become the true obstacles to the return of full employment and prosperity” said Mosler, who added “and there is absolutely no financial reason to cut Social Security or Medicare benefits.”

No one has ever come forward to collect the million dollars for the simple reason that it is impossible for the United States, or any other nation with a sovereign currency, to go broke.

This is but one example of the never ending barrage of deficit fear mongering Americans are subjected to. Help us change that, help us launch Real Fiscal Responsibility Today.

Warren Mosler destroys the case for austerity in 3 minutes and 49 Seconds


Warren Mosler: Money, Litter and The Tax Man
Warren Mosler explains how texes creates demand for currency. If government spending is arbitrarily restricted, some poeple will have to go without. Since the government can print enough for all, arbitrarily limitng spending, below the amont necessary to fund full employment, is willful cruelty.

Once you see this explanation of currency, you see right through deficit fear mongering. That is why we launched the project for Real Fiscal Responsibility Today, to give everyone the opportunity to listen to and evaluate modern monetary theory for themselves.

More than a talk show, we are building a movement

Judging by the Twitter buzz, Joe Firestone’s blog series evaluating the US Government’s record on Real Fiscal Responsibility is very popular. It confirms our view that Joe will be the perfect host and editor for our show.

We need your feedback; so we have designed a survey. What do you want us to do with the show? Your input is as important as your generous support. This is more than a show, this is a movement we are building, share the link to this page and help us spread the word.

Advertising is killing the Web

Eschaton

We’re in the phase of the internet ad cycle where companies believe the most annoying browser freezing ads are the best way to sell their products.

One of the problems is that third party adservers control most of the advertising on the web, espcially for smaller publications. The result is bandwidth hogs that destroys user experience.

We have all had the experience of clicking on a link, waiting for the page to download, and giving up because it was taking too long. I don’t user adblock, but I know why other people do. I don’t know what it is going to take to persuade advertisers to have more respect for other people’s bandwidth.

Hack Attack from Sony Pictures

George Clooney to Direct Movie About U.K. Phone Hacking Scandal

George Clooney has come on to direct “Hack Attack” for Sony Pictures, delving into the hot-button topic of celebrity privacy scandals.

The pic will be an adaptation of journalist Nick Davies’ account of the British phone hacking scandal surrounding Rupert Murdoch’s news empire. The adaptation will be produced by George Clooney and Grant Heslov through their Smokehouse banner for Sony Pictures Entertainment

If it is a success maybe he will film the obvious sequel.