By Houses and Holes, editor of MacroBusiness and founding publisher and former editor-in-chief of The Diplomat magazine. Originally published at Macrobusiness.
Lambert here: Listen to this with your morning coffee. Two cups, it’s long but lively.
Read more...One of the big news stories of the weekend is that JP Morgan and the Department of Justice, brokering a settlement of liability across multiple Federal agencies, have reached a tentative $13 billion settlement on the bank’s mortgage-related conduct in the run-up to the crisis. But the size is not necessarily a metric of accomplishment.
Read more...By Stephanie Kelton, Associate Professor and Chair of the Department of Economics at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives
Many economists (perhaps even those who agree with us) refuse to talk about the national debt and government deficits the way we do on this blog. Instead of boldly challenging the assertion that the U.S. faces a long-run debt (or deficit) problem, headline progressives typically do what Jared Bernstein did in his column today — i.e. they pay “obligatory” tribute to the Balanced Budget Gods, thereby reinforcing the case for austerity at some point in the not-so-distant future when we will be forced to to deal with this very bad thing called the government deficit. Followers of my work here and on Twitter know that I refuse to pay homage to the Balanced Budget Gods. Instead, I prefer to shift the burden of proof onto those who contend that the U.S. faces a long-term debt or deficit problem. The first step is to establish that solvency can never be an issue for a government that spends, taxes and borrows in its own (non-convertible) currency. The following quote from the St. Louis Federal Reserve usually does the trick, but this great confession from Alan Greenspan also helps.
Read more...We continue to live with the idea of recovery, which in our minds equals a return to what we had, plus added growth. For some of us that may come true, but for a very rapidly increasing number amongst us, it will not. Because, and it’s high time we acknowledge this, at this point in time, the only way the upper echelons of our societies can achieve some level of growth is to take it away from everyone else. And those upper echelons, mind you, demand exponential growth, which means, in a society that cannot grow, that the numbers of poor people will rise exponentially as well.
In reality, we are of course already seeing a huge redistribution of wealth today, only this one increases inequality instead of decreasing it. Which means all those dreams about equal access for everyone to the best health care and education available are long gone. If we would only redistribute wealth in such a way that it would see us return to the level of inequality that existed when those dreams were relevant, 60-odd years ago, much of our poverty conundrum would be solved. It is really as simple as that.
Read more...I hope Naked Capitalism readers will check out our new article at Aljazeera, The shutdown is over, but the austerity fight continues.
Read more...The latest Bill Moyers broadcast features the widely-respected lead editorial writer of the Financial Times, Martin Wolf, who discusses the Federal shutdown/debt default negotiations and the prospects for the coming budget talks.
Read more...Without attempting to wade too deeply into the goo of Friedman’s latest column, let’s limit ourselves to the the fact that Friedman is running PR for former Soros Fund Management lead investor Stan Druckenmiller. The column also serves to illustrate how Serious People like Friedman were ready to jump on the deficit cutting bandwagon once the shutdown/debt ceiling drama was put to rest for a bit.
Druckemiller’s latest cause is to foment generational warfare.
Read more...You cannot make this stuff up.
Obama gave his usual adult talking to the children, meaning American citizens, type of speech to mark the cease-fire in the budget battle so that the two sides can work out a peace accord. These speeches are unpleasant to read because the blarney is so thick it could be packaged and sold as an industrial lubricant. But underneath the greasy veneer is the message that the Important People in the Beltway, meaning Obama, Democrats, and “responsible Republicans” in Congress must dedicate themselves to the pursuit of prosperity…of the 1%.
Read more...The Wall Street Journal looks to have used an interview by Ezra Klein on Obamacare tech woes as the basis for a reported piece on how insurers were having so much trouble with the Federal marketplaces that they were having to check and in some cases process enrollments manually. That’s clearly unworkable at anything resembling the scale of expected participation. But not only does the Journal article corroborate and add more color to an ugly story, but it also mentions a different type of problem, that of eligibility, in passing. That’s actually a hugely important and presumably separate subroutine in the system, and if that is also broken or buggy, it has serious implications of its own.
Read more...Even though the press has repeatedly described the nearly-two-week reduction in Federal government activities as a “shutdown,” it in fact was a partial closure, since some offices remained open at reduced levels of activity and others operated normally. This post tallies which operations were favored, which were deemed dispensable, and how lost out as a result.
Read more...Yves here. When Edward Snowden began revealing the true scope of the surveillance state and the degree to which major American tech and communications companies were partners, Ed Harrison almost immediately recognized how damaging the news was to the cloud computing model. Yours truly, among others, wondered how quickly some countries would try to regain control of their Internet architecture, at least to keep the NSA from snooping on strictly domestic communications. That trend would also favor non-US service and equipment providers. For instance, a book I’m reading now, Spies for Hire by Tim Shorrock, mentions in passing that the NSA wanted to restrict US companies developing stronger forms of encryption because if they got too good, the NSA would not be able to crack it either. The Americans were very unhappy, and argued that that restriction would enable Europeans and the Japanese to take the lead in that field. The solution? The NSA let our domestic players go ahead as long as they got secret decryption keys. Mind you, this tidbit was public knowledge before the Snowden exposes, but remember also that aside from websites that needed encryption to allow for Internet commerce, most people didn’t give encryption a passing thought. These sort of security/privacy issues have gone mainstream, to the detriment of some US players.
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