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The Center has Fallen: Polarized Pluralism and Catalan Elections

by ManfromMiddletown Mon Oct 20th, 2014 at 08:46:21 AM EST

Color the staff at The Economist confused. Writing on the current situation in Catalonia, they note:

A three-way game of brinkmanship between Mr Rajoy, Mr Mas and the separatist Catalan Republican Left (ERC) party that props up his government in Catalonia is creating uncertainty. Mr Rajoy has used the constitutional court to block the referendum, though it may take another five months to rule definitively that it is illegal. He offers little else beyond a readiness to talk. ERC proposes civil disobedience, an illegal referendum and, eventually, a unilateral declaration of independence. If it cannot have these, it wants an election that it is likely to win.

While the results are uncertain, the probability of a snap election is increasing daily.  As is the collapse of CiU dominance of the Catalan regional politics, and the emergence of a form of polarized pluralism in the region as the political center flattens out, and the fringes rise.  The term postmodern 1930s certainly springs to mind. Stage set.

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Carbon Farming: Organic Agriculture Saves the World [Geotherapy]

by gmoke Tue Oct 7th, 2014 at 10:58:42 PM EST

Something is happening in the organic farming community. This year the Northeast Organic Farming Association has been exploring carbon farming, "regenerative organic agricultural techniques for sequestering atmospheric carbon in stable soil aggregates." The NOFA Summer Conference at the beginning of August (http://www.nofasummerconference.org) had a Soil Carbon and Climate Track with eight presenters, including the keynoter, Dr. Elaine Ingham, who gave workshops about farming methods that take carbon from the air and add it to the soil while improving fertility and tilth.

The sessions are available at
https:/www.dropbox.com/sh/9j2m9wm49z2l1dg/AAAz8Uc3Ve8Rp2zuEKeZ5zrya?dl=0

In September, the MA chapter of NOFA (NOFAMASS) (http://www.nofamass.org) held two seminars in Amherst and Newton with the Australian soil scientist, Christine Jones explaining the science of soil systems and talking about practical ways to sequester carbon in soil:
https:
/www.dropbox.com/sh/lvpd3pqb4z3vs7j/AADPwUQDJrbnkqEZY0Lr-UKVa?dl=0 
My notes from the Newton workshop
http://hubeventsnotes.blogspot.com/2014/10/christine-jones-on-soil-carbon.html

On Monday, November 3, 2014, NOFAMASS will have an all-day workshop on Succeeding with Grass-Fed Beef: Human Health, Carbon Sequestration, and Farm Viability at Heifer International, 216 Wachusett Street, Rutland, MA led by Ridge Shinn, an expert in grass-fed and grass-finished beef with experience in all parts of the industry.

http://www.nofamass.org/events/succeeding-grass-fed-beef
Registration questions: Christine Rainville, 508-572-0816, registrationma@nofamass.org
Event information: Ben Grosscup, 413-658-5374, ben.grosscup@nofamass.org

"What we are learning from the presenters recorded above is that not only is the world in enormous danger from climate disruption, but also the regenerative organic agricultural practices that NOFA promotes offer genuine promise for a livable future on this planet."

Organic farming saves the world. Rebuild soils while producing more and more nutritious food all while taking carbon out of the atmosphere. Sounds to me like ecological systems design or geotherapy.

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Balanced Budget Amendment Task Force B.S.

by ARGeezer Tue Oct 7th, 2014 at 02:12:55 AM EST

Since those with great wealth hold most of the debt issued by the US Government in the form of bonds, and since they have disproportionate influence on Congress via large campaign contributions they could insist that the government buy back their bonds and retire them. But they don't because that is not what they really want. The main reason they hold this debt is that there are no alternative investments they find attractive. The USA desperately needs to build a renewable energy and transportation infrastructure before the cost of fossil fuels makes such an investment much more expensive, and building that infrastructure now would cap the cost of electricity, as there is no fuel cost for renewables, so renewables come on line first, per the Merit Order Effect. But this would cut into the profits from their fossil fuel holdings. The real reason they are pushing this faux debt crisis is to provide a reason to cut program they despise - namely anything that benefits the average citizen: food stamps, long term unemployment, Social Security and Medicare.

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The Barons, the Empire Builder and the Czar

by DoDo Fri Oct 3rd, 2014 at 02:12:25 PM EST

When the expanding transcontinental railroads completed the conquest of Native American lands in the Western USA from the 1860s, the owners of these exclusively private companies weren't exactly popular. The public's view was that they are selfish money-men seeking to cash out fast while they provide a crap service on shoddily-built infrastructure, seek monopolistic power and blackmail farmers, and buy politicians: the perfect example of the excesses of unfettered capitalism. The public backlash against the railroad Robber Barons led to anti-trust laws (Sherman Act, 1890).

More than half a century later, philosopher and cult leader Ayn Rand sought to re-interpret the Robber Baron era of US railroads by blaming those excesses of capitalism on state meddling, in the form of land grants. Her counter-example was one of the most successful railroad barons in the West: James J. Hill, nicknamed "The Empire Builder", who built his empire without any land grants.

Reading up on the history of the transcontinental railroads another half a century after, I drew the conclusion that neither of the two views was entirely correct, and see the importance of a different key factor: a general shortage of capital of these private companies. In this respect, the railroad baron I see as most noteworthy and significant is one of the last: E. H. Harriman, nicknamed the "The Railroad Czar", whose legacy lasts to this day.

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Vampire Squid and the Fed

by Crazy Horse Mon Sep 29th, 2014 at 02:13:21 PM EST

I haven't read through (or listened to) a story Michael Lewis is pushing regarding the  NY Fed's "Regulation" of Big Banks ; with a transaction between Goldman and Santander as a highlight.

I don't know if this story appears elsewhere on ET in the past days, but immediately felt I should post it here.

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Explaining the EU to outsiders

by Frank Schnittger Mon Sep 29th, 2014 at 10:48:55 AM EST

In Booman's continuing absence through illness, I have written another diary primarily for a US audience at the Frog Pond. However it deals with a complex subject which I really need help in elucidating.  I would appreciate if readers here would point out any errors of fact, or needlessly contentious interpretations, in the comments, as I do not wish to mislead our US readers.

-----------

Having written a piece on American Exceptionalism I thought it might be appropriate to turn my attention to the EU, and to try to define what makes it a unique constellation of notionally independent states today. There are many misconceptions about what the EU is and is not, so perhaps some clarification from a citizen of a relatively enthusiastic member state (Ireland) may be helpful in understanding the phenomenon.

The first thing to be said about the EU is that it is in a state of continuous evolution, with different member states pushing that process along at somewhat different speeds and in sometimes quite different directions. That it hasn't all fallen apart (yet) may be regarded as quite an achievement in itself, especially given the the European propensity for fractious nationalism leading to regional and world wars.

But what, positively does the EU stand for?

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A European perspective on Booman

by Frank Schnittger Sat Sep 27th, 2014 at 08:45:00 AM EST

Crossposted from the Booman Tribune

Given Steven D's impassioned pleas for content in Booman's continued absence through illness I thought I'd break my vow of Omertà on all things USA which normally applies between Presidential election cycles.  You see I have a certain resistance to writing about things I know little about and also have a strong sense that a countries own citizens have the primary right and responsibility to determine its policies free of interference from outsiders - well meaning or otherwise.

I make the exception of Presidential elections and some global issues like human rights and climate change because the election of "the leader of the free world" effects us all dramatically and often traumatically and because the USA state, whatever about its own citizenry, makes no bones about the fact that it regards the whole world as its back yard when it comes to dumping its externalities on others.

I also want to pay tribute to the extent to which Booman has informed my thinking on all matters of US politics. He's up there with Paul Krugman as perhaps the most influential blogger and thinker shaping my world view on key issues of economics (Krugman) and US politics (Booman).  Just as I sometimes take issue with Krugman's politics (his recent ham-fisted interventions on Ukraine and Scotland in particular), I sometimes take issue with Booman's take on economics which sometimes seems more influenced by the Chicago School of economics than by Keynes, Krugman, Stiglitz or Piketty.

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The economics of saving the world

by Cyrille Wed Sep 24th, 2014 at 02:11:24 AM EST

In his New York Times column, Paul Krugman reports on two new studies, both of which indicate that limiting carbon emissions would be much cheaper than initially thought, and may actually increase economic growth. This would be in part because fossil fuels have negative side effects over and above global warming, in particular health effects that "drive up medical costs and reduce productivity".

Further in his column, he takes a swipe at those on the left who claim that "saving the planet requires an end to growth" (a position he calls "climate despair", such as groups like the degrowth movement and the Post-Carbon Institute. This, he reckons, is in large part due to a misunderstanding of what growth is, where those making such claims probably see it as a "crude, physical thing, a matter simply of producing more stuff, [not taking] into account the many choices -- about what to consume, about which technologies to use -- that go into producing a dollar's worth of G.D.P."

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See It? Say It? Do Something About It?

by afew Mon Sep 22nd, 2014 at 10:00:34 AM EST

Robin Fransman has a post on Pieria that neatly sums up a lot of what has been said here over the last few years (and that continues to prove depressingly accurate). Citing approvingly Mario Draghi's recent speech at Jackson Hole for its mention of a lack of an EU budget and of a lender of last resort as problems for the euro, he goes on to what Draghi didn't talk about:

Mr Draghi, is it really that difficult to see?

Using the EIP, the Commission can force countries into austerity when deficits and sovereign debts are too high, but can't force them into stimulus or tax cuts when surpluses are high. It can force countries into wage moderation and real wage declines when Unit Labour Costs rise too rapidly, but is powerless when wages rise too slowly. EIP will kick in when a country has a negative international investment position greater than -35%, but a high positive position goes unnoticed. It kicks in when inflation is too high, it does nothing when inflation is too low. Every indicator in the EIP is biased this way. The only indicator that has some balance is the current account indicator: deficit of more than -4% will sound the alarm bells, as will a surplus greater than +6%. But even this is simply another glaring asymmetry.

This is not a system that works towards a benign equilibrium. This is not an Excessive Imbalance Procedure. It's a deflation machine. It works towards an economy with perpetual current account surpluses and suppressed domestic demand, leaving exports as the only possible growth engine, under conditions that put constant upward pressure on the exchange rate of the Euro.

As has been pointed out many times here, all the partners in a single currency can't simultaneously run current account surpluses with each other; and, if Europe's sole vocation is to export, that calls for a big world (or Mars) with a growing appetite for Europe's goods and services. Fransman points out that projecting Eurozone export growth to the rest of the world in line with international trade and economic growth only adds 0.5% to GDP growth. Before one counts the effect of the shortfall in investment due to export gearing via demand depression.

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Catalan scenarios

by Migeru Sun Sep 21st, 2014 at 03:47:43 AM EST

Now that Scotland voted 'no' in its independence referendum, the focus should shift to Catalonia and its campaign to hold an independence referendum on November 9. The referendum is opposed by the Spanish government. The Catalan regional parliament petitioned the Spanish parliament for the right to hold an independence referendum but was rejected. The Catalan parliament has just passed a "consultation law" intended to legalize the vote, which will be challenged shortly by the Spanish government in the Constitutional Court, which is expected to strike it down, at which point all bets are off.

It is my opinion that Catalan Premier Artus Mas of CiU jumped on the independence bandwagon two years ago only because his government was on the verge of collapse from the independentist challenge from the street and the looming insolvency of his government brougth about by the crisis and his own austerity policies. The Spanish government took the chance to bail out the Catalan government with austerian strings attached.

Below the fold, an enumeration of possible scenarios for the coming autumn of discontent.

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Celtic Phoenix or Celtic Tiger revisited?

by Frank Schnittger Fri Sep 19th, 2014 at 09:39:52 PM EST

Ireland has been producing some fairly decent economic statistics for a couple of years now - despite the general stagnation in the Eurozone and the continuing "consolidation" of the public finances as the Troika imposed austerity plan seeks to reduce the current budget deficit to below 3% by next year. But the latest figures showing 9% GNP growth and 7.7% GDP growth in the last 12 months take the breath away, and even if they prove to be something of an anomaly, would seem to indicate that the Irish economy has reached take-off velocity despite the heavy gravitational pull of public sector spending cuts, a 125% debt to GDP ratio, and stagnant external markets.

About 5% of Irish GNP and GNP can be attributed to the tax avoidance strategies of (mainly US) corporates basing themselves in Ireland for tax purposes, whilst in reality, the vast bulk of their activities take place elsewhere. The marked divergence between GNP and GDP growth above can also be attributed in large part to the so called "Patent Cliff" which has resulted in a large fall in the value of pharmaceutical exports as blockbuster drugs like Lipator and Viagra come off-patent.

Ireland is the fifth biggest exporter of drugs in the world, and Irish chemical and pharmaceutical exports surged by more than a quarter in the five years to 2011 when they peaked at €56bn, a figure equivalent to almost a third of gross domestic product.  But the employment content of those exports is relatively small, and what is clear from these recent figures is that there is a much more broadly based recovery taking place in the Irish economy which is now even making up for the fall in drug export revenues.

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What Can Progressive America Learn From today's Independence Day Referendum of the Scottish Nation

by Democrats Ramshield Thu Sep 18th, 2014 at 07:18:53 PM EST

(Cross posted by author from the Daily Kos)
BBC Poll

Written by an American expat living in the European Union on the eve of the election referendum on the independence of Scotland and the birth of a new nation. The American media has portrayed the vote for Scottish independence (on the "Yes" side led by Alex Salmond and on the "No" side led by Alistair Darling) in little more than sound bites to match the bumper sticker attention span that matters too often are given in the plutocratic owned American corporatist media. The truth and simple matter is that the conservative government of British Prime Minister David Cameron has pushed austerity measures onto Scotland that are so severe that Scottish progressives along with a broad blanket coalition of patriotic minded citizens have organized through the ballot box a lawful election, the point of which is to secede from Great Britain so that oil rich Scotland, which has the greatest known oil reserves in the European Union can finally be in control of its own future.

(Below is a short (on the lighter side) entertaining 5 minute video made for non-British people that explains the history and background of what has led to Scotland's independence referendum today)

BBC - Scottish independence: Post-Yes Scotland 'to end austerity'
The Scottish government believes increasing public spending will help encourage economic growth after independence. Scotland would borrow billions of pounds in the first few years of independence in a bid to kick start the economy and end austerity, the Scottish government has confirmed.
http://www.bbc.com/news/uk-scotland-scotland-politics-27868468

So it is historically that we are witnessing nothing less than the peaceful lawful birth of a nation by democratic means through the ballot box, whereupon it must be asked, can we in America learn from Scotland into our pushed-to-the-wall fight to the finish with evermore draconian GOP austerity measures.

Ask yourself if an referendum for independence was available in the blue state that you're living in, how would your state vote? In asking yourself this question we start to understand the somber reality that Scottish voters are facing today on the eve of the birth of the independent nation known as Scotland.


(I've made a collage posted as a graphic below as a service to the DKOS community. To access these election day newspaper headlines in full text please simply click on the graphic below which will take you to the UK BBC website and then simply click on the right arrow below the graphic to cycle through them. You can decide for yourself what Scottish newspapers are saying on election day wherein we are witnessing the birth of a new nation called Scotland.)
Please click on the link below to see what the Scottish headlines say

Link: http://www.bbc.com/news/uk-scotland-29217646

Like Scotland, we in America have been lied into wars for oil. Like Scotland, the power elite in America are living well at the expense of the poor and working class. American progressives are seeing so-called austerity measures always ever only aimed at them, their children and their communities. These things are never aimed at the 1% who are never made to pay their fair share of taxes. Week after week, month after month, year after year, the earning power of American working class people continues to shrink. Less money is made available for health care, welfare, education at the hands of conservative tyrants, it must therefore be said that American progressives share the same values, aspirations, hopes and dreams of the supporters of the Yes campaign in Scotland. Surely therefore we can say today that we are all Scottish and we stand with you on the eve of the birth of a new nation called Scotland and that our hopes and dreams and best wishes and those of us who are religious, prayers go with you this day and always in support of what William Wallace called "freedom" which is the bedrock of the American working class dream.

The power elite ignored for many years the cries of anguished of the people who live in Scotland, as did the power elite in the banking sector who seem to own everything but build nothing who followed policies to give more to those who have more at the expense of those who have less and in the case of too many, those who have nothing at all. So when the people living in Scotland could see the political corruption they were faced with, they turned to the only support they could find and indeed have ever known which is each other to form the Yes campaign in support of Scottish independence in the hope for a better tomorrow. Though underfunded they have now created a referendum vote that is too close to call and for the first time the power elite and the big powerful bankers who own everything and build nothing are left in white knuckled fear because of the power and sheer strength of one person, one vote at the ballot box, wherein working class people in a democracy still have a voice and power.

This despite the worst scare mongering campaign imaginable by the "No" side of the referendum on Scottish independence wherein they lied to people telling them  they would no longer be able to use the British pound when in fact the British pound is an internationally traded currency and therefore the Scottish people rightly may view it as their pound and they don't need London's permission to use it anymore then the  people of Panama need the permission of the US Congress to use the US dollar as their currency.

Bloomberg News:
 Nobel Laureate Says U.K. Can't Stop Scotland Using Pound

By Rodney Jefferson and Anna Edwards Aug 21, 2014 1:

"Scottish residents will vote in an independence referendum four weeks from today. The pound has taken center stage during the campaign, with the three main U.K. political parties all saying they would refuse to grant a currency union.

Fellow Nobel laureate Stiglitz said yesterday the U.K.'s stance was a bargaining chip and will be dropped should voters back independence. Polls suggest Scots will reject going it alone, though the gap isn't wide enough to rule out a Yes vote."
http://www.bloomberg.com/news/2014-08-21/nobel-laureate-says-u-k-can-t-stop-scotland-using-pound.htm l

As such, as American progressives, can't we learn from the Scottish example? Particularly in the states that have referendum that we can gather signatures and put measures on the ballot that can change the lives of working class people if we all stick together and work together, for the common good of this place called America in support of this thing called the American working class dream. This is something that the people of Scotland and the world over can understand because we all want good schools, clean streets, good infrastructure, access to health care and a tax system that is fair for working people and creates the ability to hold the super rich accountable in paying their fair share of taxes; in honest elections that aren't bought by the super rich, in a country where lobbyists are prevented from buying politicians just as soon as they're elected. (Please see the landmark Supreme Court's decision in Citizens United wherein the Supreme Court of the United States has declared that as corporations are people, they can dump unlimited amounts of money into buying elections with their private secret capital)

So yes, we in America can understand the drive and the hope of the people of Scotland in their drive for independence, freedom and liberty and control of their lives and their country. Many of us that are American progressives applaud you in your Yes campaign to build hope, prosperity and freedom, as we are part of the same progressive soul and as such we are with you. On this day the birth of a new nation called Scotland, may it shine bright forever from this historic moment onward right til the end of time!

(In recent years conservative Gov. Rick Perry of Texas has on several occasions threaten that Texas could vote to leave the United States, leaving many progressives tongue-in-cheek wishing he would).

Texas Governor Rick Perry Threatens Secession From The Union

Texans like to talk about independence and the fact that it's been part of six countries in its history. At the State House, they honor all Six Flags of Texas (The US, the confederacy, Mexico, Spain, France and its own flag as a once-independent state.) So it's allegiance to the US is a bit less than other states, which for the most part have only known one country.

http://www.businessinsider.com/texas-governor-rick-perry-talks-about-seceding-from-the-union-2009-4

This diary points out that the only way to elect better progressives in keeping with the site's mission and to gain power at the ballot box is to register to vote. In the Scottish election over 90% of eligible voters are expected to vote. Let's imagine what progressives could do if we had a 90% turn out in the polls and how this could change America. I think we have a lot to learn from Scotland, don't you? One of the things we can learn from Scotland is how to run a positive Yes campaign. Another thing we can learn from Scotland is that everyone in America as a human right should have full access cradle to grave universal medical coverage paid for under a single payer system through taxes, that are fair and equitable. The United States is the only major industrialized nation in the world that doesn't offer job protected paid maternity leave by right of law. Yes I think we have a lot to learn from Scotland as well as history. The only question is are we open minded enough to listen. For it is said those who don't learn from history are doomed to repeat it.

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)))))) UPDATE: Here's a link to the BBC's live steam which will broadcast online the results of the referendum as of 10PM British Time.
http://www.bbc.com/news/events/scotland-decides/live

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(More info about the Scottish Referendum - These pages automatically updates)
#1 http://www.bbc.com/news/events/scotland-decides
#2 http://www.bbc.com/news/live/uk-scotland-29233956

Swedish election sadness

by A swedish kind of death Mon Sep 15th, 2014 at 09:20:30 AM EST

This did not end well.

Looked good half a year ago with the left in the lead, but now my facebook flow is filled with grief.

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My Call is Scotland to Vote Yes By A Good Margin

by ChrisCook Sun Sep 14th, 2014 at 01:41:41 AM EST

Here from my Eagle's Nest in Linlithgow, in Scotland's Central Belt, I thought it would be rude not to chip in my thoughts as to next Thursday's referendum vote.

My first data points are historic election turnout figures in Scotland covering both UK & Scottish Parliament Elections.

Election Turnouts 1997 to 2011

Then there's the 2011 Scottish Parliament Election outright win for the SNP which the voting system had pretty much been gerrymandered to prevent. I assume that very few of those voting SNP in 2011 will either abstain or vote No.

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Why Scotland may now vote YES to independence

by Frank Schnittger Thu Sep 11th, 2014 at 04:18:10 AM EST

Luis de Sousa's excellent diary has provoked a long comment by me saying a lot of things I've been meaning to say for some time, but which are not all a direct response to his thoughts.  So I think a separate diary is merited analyzing what has changed in the Scottish Independence debate.

What I think has shifted the debate in Scotland is the realization that institutions and assets which they had always been told were British, were in fact English.

Thus the Pound Sterling belongs to England (the central bank name: Bank of England should have been a giveaway).  The military bases and manufacturing facilities in Scotland will be moved south - proving that the Army and associated industries belong to England not all of Britain.  And the general sense that the Scots will have to develop all institutions and skills of Governance from scratch - as if Scots have had no hand act or part of the Departments of State in Whitehall.

In other words the implied blackmail of taking all these things away has only confirmed that Scotland was being ruled not just from, but by, England in the first place.  Parties to a divorce normally split their joint assets and one party cannot claim virtually all the house and contents as their own: and yet this is partly what the No campaign have been claiming.

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Scotland independence: the case for Yes

by Luis de Sousa Tue Sep 9th, 2014 at 04:28:55 AM EST

Thursday the 18th Scotland is going to vote what may well be the most important political decision in several centuries for itself and the UK. The reasons that prompted this process are many: the perception of a slow derision of Scottish identity and culture, the crystallisation of the UK's democracy (where non elected individuals still retain important powers), natural resources, budget sharing, NATO, just to name a few.  

I am not Scottish, nor do I live in Scotland, thus I can not possibly fathom everything driving the vote. But one exercise I can make: assess the economic risks associated with the decision. And by doing so the complexity of this question becomes apparent, as so how uncertain is the outcome.

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LQD: BP, Corexit and Coverup

by Crazy Horse Sat Sep 6th, 2014 at 08:23:01 AM EST

A US judge has ruled that BP is guilty of gross negligence in the Deepwater oil catastrophe. If upheld (of course BP will appeal) it will increase the fine from $1100/barrel to $4300/barrel, totaling an estimated $18 Billion.

BP had already plead guilty to 14 felonies, with a fine of $4.5B in a plea bargain with the US Gov! (Yes, felonies.)

So how does one count the number of barrels already spilled, especially when BP publicly stated it was leaking 5000 barrels/day, while internal reports stated the leak could be between 62,000 and 146,000 barrels per day?

A colleague of mine has now reported for the first time the effects of using as "dispersant" Corexit, both on the health of some 47,000 cleanup workers, and how the amount of oil spilled was camouflaged.

Read on to discover why I continue to use the word poison in describing fossil fuels.

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The bottom falls out

by Migeru Thu Sep 4th, 2014 at 08:46:17 AM EST

If you thought the ECB setting its deposit rate at negative 0.10% was the end of the road for interest-rate policy, you got another think coming:

4 September 2014 - Monetary policy decisions

At today's meeting the Governing Council of the ECB took the following monetary policy decisions:

  1. The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.05%, starting from the operation to be settled on 10 September 2014.
  2. The interest rate on the marginal lending facility will be decreased by 10 basis points to 0.30%, with effect from 10 September 2014.
  3. The interest rate on the deposit facility will be decreased by 10 basis points to -0.20%, with effect from 10 September 2014.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.
How deep does the rabbit hole go?

Comments >> (38 comments)

Ultra-liquidity…

by Metatone Sat Aug 30th, 2014 at 04:09:42 AM EST

Ultra-liquidity

Ultra-liquidity
Posted by Frances Coppola on Aug 27th 2014, 2 Comments

This is the first of several posts covering topics discussed at the recent Lindau Meeting for Economic Sciences.

Several economists at the Lindau meeting were severely critical of central banks' conduct of monetary policy in the light of continuing depression in the US, Japan and much of Europe, and called for greater use of fiscal policy to bring about recovery. Among the most critical was Christopher Sims, who gave a trenchant presentation on "Inflation, Fear of Inflation and Public Debt".

He started by announcing the death of the quantity theory of money, MV=PY. Due to interest on reserves and near-zero interest rates, "money" can no longer be clearly distinguished from other financial assets. This is a fundamental point which requires some explanation.

These days, nearly all forms of money bear interest, which makes them indistinguishable from interest-bearing assets. For Sims, the paying of interest on bank reserves, coupled with the decline of physical currency, all but eliminates the distinction between interest-bearing safe assets such as Treasury bills and what we traditionally call "money". All assets can be regarded as "money" to a greater or lesser extent: the extent to which assets have "moneyness" is really a matter of liquidity.

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Keynes and Friedman hype from Google Ngram.

by Xavier in Paris Fri Aug 29th, 2014 at 06:49:49 AM EST

In english books: In french books: To follow on my comment in a previous thread: Hollande has been at economical scholl in the 70s, which corresponds in both graphs to a minimum in Keynes hype vs a maximum in Friedman's. And yes, France seems to be be much more keynesianite than the US/UK...

note: if somebody manages to insert an iframe in a comment thread, I'd be glad to transfer this "diary" to the thread it belongs.

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News and Views

 25-26 October 2014

by DoDo - Oct 24, 32 comments

Your take on today's news media

 24 October 2014

by In Wales - Oct 24, 41 comments

Your take on today's news media

 This Is The Weekend OT

by afew - Oct 24, 3 comments

Like it or not

 Midweek Open Thread

by Helen - Oct 22, 66 comments

One day this love will all blow over

Occasional Series
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