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Thursday Open Thread

by dvx Thu Jan 3rd, 2013 at 12:33:26 PM EST

There's something to be said for...


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Having said that, however...

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Jan 3rd, 2013 at 12:33:49 PM EST
You done gone done it again!
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 3rd, 2013 at 12:34:25 PM EST
[ Parent ]
I take your point and raise you ten.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 3rd, 2013 at 12:35:07 PM EST
[ Parent ]
Intense sunny day with 5C temperature.
by asdf on Thu Jan 3rd, 2013 at 12:54:52 PM EST
Oops, -5C.
by asdf on Thu Jan 3rd, 2013 at 12:55:12 PM EST
[ Parent ]
Slight difference.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Jan 3rd, 2013 at 01:16:11 PM EST
[ Parent ]
That's colder than here!

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Jan 3rd, 2013 at 01:25:23 PM EST
[ Parent ]
Cold? we've had two weeks of 7-9 C, with today at 11C. winter.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Thu Jan 3rd, 2013 at 01:44:04 PM EST
[ Parent ]
It's quite cold here,too. Only 33°C...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Jan 3rd, 2013 at 05:28:00 PM EST
[ Parent ]
grrrrr

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Jan 3rd, 2013 at 05:49:45 PM EST
[ Parent ]
Show-off.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jan 4th, 2013 at 02:29:21 AM EST
[ Parent ]
You can shed the scarf, then?

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Jan 4th, 2013 at 02:47:53 AM EST
[ Parent ]
Cash is so divine...

Vatican Is 'Cash Only' As Bank Of Italy Blocks Electronic Payments Over Money Laundering Concerns

VATICAN CITY -- It's "cash only" now for tourists at the Vatican wanting to pay for museum tickets, souvenirs and other services after Italy's central bank decided to block electronic payments, including credit cards, at the tiny city-state.

Deutsche Bank Italia, which for some 15 years had provided the Vatican with electronic payment services, said Thursday that the Bank of Italy had pulled its authorization to do so after Dec. 31.

The Corriere della Sera newspaper reported that the Italian central bank took the action because the Holy See has not yet fully complied with European Union safeguards against money laundering. That means Italian banks are not authorized to operate within the Vatican, which is in the process of improving its mechanisms to combat laundering.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Jan 3rd, 2013 at 01:35:53 PM EST
a-intelligentsia-paris-jan-2013-02762


degaulle-moquet-text-paris-jan-2013-02723

Maybe it's because I'm a Londoner - that I moved to Nice.

by Ted Welch (tedwelch-at-mac-dot-com) on Thu Jan 3rd, 2013 at 01:54:12 PM EST
Patent trolls want $1,000 - for using scanners

When Steven Vicinanza got a letter in the mail earlier this year informing him that he needed to pay $1,000 per employee for a license to some "distributed computer architecture" patents, he didn't quite believe it at first. The letter seemed to be saying anyone using a modern office scanner to scan documents to e-mail would have to pay--which is to say, just about any business, period.


Skepticism is the first step on the road to truth. -- Denis Diderot
by ATinNM on Thu Jan 3rd, 2013 at 03:12:50 PM EST
Wow, in a sane and honest world, these people would be on the receiving end of a visit from Seal Team 6

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Jan 3rd, 2013 at 03:29:40 PM EST
[ Parent ]
Maybe we should file a patent for using binary patterns to represent alpha-numerical characters?

Skepticism is the first step on the road to truth. -- Denis Diderot
by ATinNM on Thu Jan 3rd, 2013 at 03:42:32 PM EST
[ Parent ]
Billy Blog: Modern Monetary Theory and environmental sustainability - Part 1 (December 31, 2012)
There is regular commentary here that seeks to argue that Modern Monetary Theory (MMT) is flawed, bereft or worse because apparently it avoids any discussion of the natural environment. This apparently arises from the inherent conclusion in MMT that growth in aggregate demand (and real GDP) is required to maintain high levels of employment, which are considered both economically and socially desirable. This is the first part of a two-part blog on this topic. We will see that MMT is highly sympathetic to the challenges posed by anthropogenic global warming (a catch-all term) and central policy indications that follow from an understanding of MMT (for example, the superiority of employment buffer stocks) lead to an understanding of how MMT is a green paradigm as opposed to mainstream (neo-liberal) economics and much of Post Keynesian thinking, the latter which relies on generalised expansion as the solution to entrenched unemployment. We conclude that those who seek to dismiss MMT because it doesn't satisfy their particular pet solution to climate change issues have probably not read some of the earlier MMT literature nor understood fully what is required to develop and disseminate a new way of thinking about the economy. Further, MMT is not a theory about everything! What we will see is that when MMT advocates economic growth it does so with a very different view of what that economic growth might be comprised of and driven.

...

But the point is that the early MMT work clearly recognised that economic growth and environment decay are intrinsically linked and an answer to the latter required a different approach than that offered by the mainstream economists (more about which later).

...

These issues have occupied our research group for the last 15 years or so. What we argue is that full employment and the continuity and health of the social settlement are necessary conditions for achieving economic and social sustainability, which is the overarching aim.

However, they are not sufficient conditions. Without a balance being achieved between these elements and the natural (physical) environment, the macroeconomic situation is not sustainable.

Thus, a forward-looking, progressive macroeconomics - such as Modern Monetary Theory (MMT) - requires economic activity to be in balance with the natural environment. There are two aspects of this concept of `sustainability' that are relevant to macroeconomic policy design: (a) the level of production (and consumption) must be consistent with the demands of the physical environment; and (b) locally- or community-based production should be encouraged.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Thu Jan 3rd, 2013 at 04:18:54 PM EST
And my reply:
I think the key issue preventing MMT and Environmental Economics from being seen as compatible (which I think they ultimately are) is that it is extremely easy for Environmental Economics to fall into the position that what we need is thermodynamic accounting and that the fiat money system, which is by and large conflated with the fractional reserve banking system, is unable to properly incorporate thermodynamic accounting because money values are arbitrary (fiat). Therefore, a theromodynamic standard (energy, thermodynamic free energy, entropy, ore some similar quantity) for money is often proposed as the solution to all our economic woes. Anyone who takes MMT seriously will recognise that an energy standard is just as deflationary in terms of employment as a gold standard or any other commodity standard. The resolution of the dilemma is to point out that employment does not need to mean high-environmental-impact employment. Clearly employing people in personal services has a much lower environmental impact than employing the same people in resource extraction, energy-intensive manufacturing, etc. And the economy can "grow in nominal terms' while not growing in environmental impact by an adjustment in the mix of goods and services consumed, in the direction of lower resource intensity goods and services.

A lot of people come into Environmental Economics from engineering or natural science, and such a background predisposes one against social convention ("fiat" money, nominal accounting) and for objective measures (real accounting, hence commodity money, gold standards, and thermodynamic money standards). "Money as a thing" is one of the most engrained concepts in our culture and it dovetails with the engineer/scientist tendency to prefer a commodity standard for money.

At present, monetary austerity is being used as an argument for environmental business as usual ("we cannot afford the investment needed to transition to a green energy economy"). This is a conceptual mistake of mixing resource austerity with money austerity, but if you believe money should map resources, you can't break the link between money austerity and resource austerity. The fact is that MMT through "functional finance" provides a way to justify that yes, we do (if only we have the political will) have the money to mobilize the resources necessary for the massive investment involved in a wholesale transition to a green energy future. This is akin to Keynes' quip that

"Thus we are so sensible, have schooled ourselves to so close a semblance of prudent financiers, taking careful thought before we add to the 'financial' burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment".

We may in fact paraphrase Keynes: "Thus we are so sensible taking careful thought before we add to the financial burdens of posterity by building them windfarms to power their society, that we have no escape from the sufferings of environmental destruction".

To be sure, I personally agree that "a forward-looking, progressive macroeconomics - such as Modern Monetary Theory (MMT) - requires economic activity to be in balance with the natural environment", but I think it is really important, to address and break the easy conceptual link between Environmental Economics and Commodity Money.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Thu Jan 3rd, 2013 at 04:19:24 PM EST
[ Parent ]
Have you said this before? I don't recall this thesis in this particular form.

paul spencer
by paul spencer (spencerinthegorge AT yahoo DOT com) on Fri Jan 4th, 2013 at 12:58:44 AM EST
[ Parent ]
I have said it here on ET in bits and pieces, and I said something similar - but longer - in the questions period of a lecture by Matt Forstatter at the Minsky seminar in June last year.

The Keynes paraphrase is new, though.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Fri Jan 4th, 2013 at 02:03:53 AM EST
[ Parent ]
Re: Matt Forstater, Bill Mitchell writes in the blog above:
At an early Centre of Full Employment and Equity Conference (CofFEE) held in 1999 in Newcastle, Australia, I presented a paper, which probed the question of the "Future of Work" and the environmental constraints facing capitalist economies. This conference paper was subsequently published as W.F. Mitchell (2000) `The Job Guarantee in a Small Open Economy'. Economic and Labour Relations Review, Vol. 11, supplement). A scanned copy is available - The Job Guarantee in a Small Open Economy.

At the same conference, UMKC MMT colleague Mat Forstater gave an exceptional paper - Full Employment and Environmental Sustainability - where he outlined the way in which the central themes of MMT (with respect to policy implications) were consistent with the goal of environmental sustainability.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Jan 4th, 2013 at 06:10:34 AM EST
[ Parent ]
Thanks for the link. I see that Forstater's thesis adviser was Robert Heilbroner - one of my favorite social analysts of the '60s.

Another was Bill Domhoff.  Mirta and I are driving south in April to try to catch the Canyonlands area in Spring bloom, and I am working on a lunch date with him in Santa Clara. I want to discuss the next phase of trying to recapture the Democratic Party.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Fri Jan 4th, 2013 at 11:50:11 AM EST
[ Parent ]
I want to discuss the next phase of trying to recapture the Democratic Party.
From a comment by Warren Mosler on Bill Mitchell's blog post:
I also recall presenting on at your conferences on how often the cause of environmental degradation is unemployment. When the govt. doesn't spend enough to cover its tax liabilities and residual `savings desires' the economy will cut down trees, pollute the air and water, and in general do whatever it takes to avoid the non payment penalties.

...

Also, let me suggest the only reason we are mmt and not pk [postkeynesian] is because the remaining pk's failed to ingest `the currency is a public monopoly' and run with it as we did.

Also interesting is how the only progressives left standing are mmt. All the `out of paradigm progressives'/deficit doves/logically deficient/etc. have turned regressive, supporting US FICA tax hikes and cap and trade, VAT, and other highly regressive taxation, as well as `entitlement cuts' and export led growth policy.

I am reminded of how a certain DNC attack dog blogger uses "progressive" as a term of abuse...

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Jan 4th, 2013 at 06:42:06 PM EST
[ Parent ]
And thanks again for the additional link.

Yes, DNC probably all think that way but leave it to the designated attack-dogs to say it. Out here in the WA state sticks, though, our Progressive Caucus is supported by about 40% of the State Party organization on almost any subject and often can field a majority. Same in California and Oregon.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Fri Jan 4th, 2013 at 09:04:17 PM EST
[ Parent ]
Well, Warren Mosler runs a hedge fund, which provides more narrative fodder for people who would want to attack 'progressives' from the "left".

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sat Jan 5th, 2013 at 03:25:36 AM EST
[ Parent ]
I have posted a reply to Warren Mosler's comment, too
@ Warren Mosler:

You write

I also recall presenting on at your conferences on how often the cause of environmental degradation is unemployment. When the govt. doesn't spend enough to cover its tax liabilities and residual `savings desires' the economy will cut down trees, pollute the air and water, and in general do whatever it takes to avoid the non payment penalties.
and today I read The environmental impact of austerity
The Greek state without any real understanding of the needs of its people, without any understanding of the consequences of its actions imposed another tax on heating oil which increased its price by 48%. The consequences?

A lot of fuel businesses will close which will result in further unemployment
People are freezing in their homes with disastrous consequences for vulnerable groups like the elderly, the disabled and the sick

School students in the north of the country are freezing

The smog in urban areas is reaching dangerous levels (scientists at the University of Athens are talking about a further 5,000 premature deaths per year in the area of Athens alone)

The few remaining woodlands of Greece are being looted by illegal logging.

The irony is that the state has been unable to collect even 1/5 of the projected tax revenues. So, what has come out of this initiative that is endangering the health of the population and is an ecological disaster? Nothing. Another blunder that is making the Greek people suffer, another blunder of the incompetent people that govern us. Where will it all end?

I am also reminded that one of the many themes of David Graeber's recent book on Debt is that indebted people are prone to committing atrocities in a flight forward as they raise the stakes trying to get out of debt by striking it lucky. Graeber's dramatic example is the Spanish conquistadors in Central and South America, but obviously "environmental destruction for the purpose of avoiding the penalties of debt nonpayment" reflects the same social and (a)moral dynamics.


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Jan 6th, 2013 at 05:33:21 PM EST
[ Parent ]
Migeru:
The Keynes paraphrase is new, though.

that's the jewel in the lotus!

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Fri Jan 4th, 2013 at 11:57:14 AM EST
[ Parent ]


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri Jan 4th, 2013 at 03:49:58 AM EST
[ Parent ]
You will come around yet.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Jan 4th, 2013 at 05:10:22 AM EST
[ Parent ]
Well, so much for any threat to Boehner's re-election as Speaker of the House due to militant Tea Party loons:
Boehner re-elected as House speaker

John Boehner was re-elected Speaker of the House of Representatives Thursday with 220 votes, just a few more than he needed.

The Ohio Republican began his second term as speaker by warning of the "anchor of debt" hanging over the nation.

And he urged the House to be humble, remembering that "We're standing here not to be something, but do something."

There had been some thought that conservatives might challenge Boehner, but in the end, no serious opponent emerged. Democrats voted for Minority Leader Nancy Pelosi, but no Republican other than Boehner got more than three votes.

But the drama of this Kabuki Theater show served admirably as cover for the renewal of tax breaks for Goldman-Sachs, NASCAR, et cetera ad nauseum. That has got to please our political class from the center-right, Obama, to the far right, Tea Party Caucus.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jan 3rd, 2013 at 04:48:48 PM EST
The fact that nothing changes demonstrates that it is all for show. The GOP are still pretty much lockstep and the Dems are still scared of their own shadows

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Jan 3rd, 2013 at 05:06:23 PM EST
[ Parent ]
The Economics of Smaug
Forget about the divisions between saltwater and freshwater economists. The hottest debate in economics right now is about Smaug, the dragon nemesis in J.R.R. Tolkein's novel "The Hobbit."


Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Fri Jan 4th, 2013 at 07:53:17 AM EST
The gold hoard!

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Jan 4th, 2013 at 06:42:30 PM EST
[ Parent ]
Maybe they could also study the privatization program instituted by Saruman in the Shire when Frodo and his friends were away?
by gk (g k quattro due due sette "at" gmail.com) on Fri Jan 4th, 2013 at 07:00:05 PM EST
[ Parent ]
How about the sustainable growth of the Isengard complex as Saruman builds his army?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sat Jan 5th, 2013 at 03:24:02 AM EST
[ Parent ]


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