Author Archives: Matt Stoller

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness. The SMP is dead! Long live the SMP! OMT? Surely they could have just called it SMP2 What am I talking about? Overnight Mario Draghi announced the new emergency program designed to […]

The Democratic National Convention’s message was simple: “Give Me More Time”. Every great speech, or bad speech for that matter, had at its core the argument that George W. Bush wrecked the economy, and slowly but surely, Barack Obama is repairing it. You might not feel it, but as Democratic partisan Paul Krugman notes, “there’s […]

Except for the 2004 Republican National Convention, I have never seen a national political convention where there was such unity of purpose, so much excitement, and such validation from media insiders as in this Democratic Convention. The left side of the aisle has been fully stomped on, getting crushed in nearly every significant electoral contest […]

Composite Purchasing manager Index(PMI) data was released overnight for the Eurozone and much like the manufacturing release earlier in the week there was nothing to get excited about. German services collapsed in August to their worst reading since July 2009 and the composite index for the country moved deeper in contraction at 46.3. It now has become clear that the slow-down in economic activity in the Eurozone is biting the export giant.

As the Democratic Convention continues, and generates positive headlines due to competent storytelling and effective use of show business tactics, it’s important to recognize that the ultimate meat of governing – policy – is disconnected from the election. It’s not that the election doesn’t matter to people, because clearly, people care deeply about which icon […]

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

If the comments from overly excited EU parliament members leaving a “closed door” meeting with Mario Draghi are correct then the ECB president is about to announce a plan to buy unlimited short-term sovereign debt up to 3 years on the proviso that  national governments formally request assistance and are therefore bound to fiscal compliance via an MoU.

I am yet to hear any negative reaction for the plan from anyone of importance within the European elite  and it is a fair assumption that the major players have been pre-informed of the basics of the proposal. The question is just how much has been shared and whether this is actually a “plan”, or simply a vague proposal for one.

I find it difficult to believe that the “open ended” nature of the plan is acceptable to the many Northern European governments and it is also difficult to see how this isn’t direct funding of governments. We’ve also already heard from the German Finance Minister, Wolfgang Schauble, warning people to lower their expectations.  That said, if Mr Draghi has managed to negotiate the political minefield of Europe to allow for unlimited purchases of sovereign bonds then it is a huge break-through. I do, however, remain sceptical that this is the case given the proximity to the German constitution court decision and the multitude of times previously these sorts of rumours have been shot-down.

Three months ago, on June 2, 2012, George Soros gave a widely circulated speech about the Eurozone crisis. He mentioned “three months” four times in the speech. In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends. By the authorities I mean […]

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Another night of Eurozone Production Management Index (PMI) data and the downward trend in activity continues as expected. This summary from Markit Economic’s head economist:

The final reading of the August PMI confirms that the Eurozone manufacturing sector remains firmly in contraction territory. The rate of decline was a little slower than in July, providing some heart that the manufacturing downturn may be easing, but the sector is on course to act as a drag on gross domestic product in the third quarter.

“The national picture remains one of widespread contraction. Only Ireland saw manufacturing output rise, while larger nations like France and Germany remain in reverse gear. The situation in Italy is also becoming more of a cause for concern, as it falls further down the PMI league table.

“The ongoing weakness is unsurprising given that Eurozone manufacturers and their clients are still in a largely defensive mode. The uncertainty and cost caution resulting from the currency union’s ongoing political and debt crises are now being reinforced by softer global economic growth. This is hitting domestic markets, intra-area trade and overseas trade alike and is one of the main factors underlying the job losses and excess capacity signalled by the latest PMI survey.

“The broader long-run issue is that the Eurozone product and labour markets are unlikely to show any real sustained improvement until regional structural issues are addressed and the broader global backdrop brightens.

By Ian Welsh, cross posted from IanWelsh.net.

1) the majority of new jobs are bad.

2) the economy has still not recovered all lost jobs, either in absolute #s or as a percentage of the population

3) so there are fewer jobs, and what new jobs have been created are worse. They pay worse.

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at https://twitter.com/matthewstoller and he can be reached at stoller at gmail.com.

Even authoritarian systems require legitimacy to retain the support of the governed, and the new authoritarian America is no exception. Since 2004, the brilliant public journalism advocate Jay Rosen has been asking, what is the point of a political convention? No news is made, yet over 15,000 journalists show up, ostensibly to cover the pomp. But everyone knows that coverage isn’t so much the point; these conventions trade shows for the political class, where party insiders, journalists, politicians, celebrities, corporate types, and lobbyists mingle to organize political hierarchies. The public is simply irrelevant, a mass of jeering and cheering message imbibers or apathetic and cynical former citizens, people who are unseen behind their TV screens. The only fresh elements are protesters, and they are met by a police state, lest they disrupt the insider deal-making.

A little over six months ago, negotiations over the mortgage settlement concluded with a 49 state agreement to address robosigning and other predatory mortgage servicing  and foreclosure practices. This was a pivotal moment, because it was possibly the last leverage point to look into problems with the securitization process that led to the financial crisis. […]