Ragnarok – Iceland and the ‘Doom of the Gods’
Iceland is widely portrayed as a post-bubble success story, but the reality is more conplex.
Read more...Category Archives: Economic fundamentals
Yanis Varoufakis: Confessions of an Erratic Marxist in the Midst of a Repugnant Eurozone Crisis
Yves here. Even though Yanis Varoufakis has savaged the Trokia’s austerity policies that are driving Greece and other periphery countries into economic and social distress as well as fueling the rise of extreme right wing parties, some readers of this blog have criticized him for advocating reforms to pull the Eurozone out of its nosedive […]
Read more...Ilargi: All The Plans We Make For Our Futures Are Delusions
What worries me most about the world today, in the last weeks before Christmas and New Year’s Day 2014, is that all the plans we make for our futures and more importantly our children’s futures are DOA.
Read more...Modern Monetary Theory Meets George Lakoff
By Lambert Strether of Corrente.
MMT’s Bill Mitchell narrates a slide presentation of a paper (draft) co-authored with Louisa Connors, Member, Centre for Literary and Linguistic Computing, University of Newcastle. I wish the paper had an abstract, so lazy people like me could just grab it, but here are what I see as the key paragraphs in the introduction:
It is reasonable to expect that professional failure on the scale of the GFC would lead to a re-evaluation of the paradigm with in which these economists work, and major changes in economic curricula and research. Mainstream economists, however, have re-energised their anti-government free-market biases and effectively reconstructed what was a private debt crisis into a sovereign debt crisis, obscuring their role in the crisis and deflecting attention from the flaws in their model. The dynamics that created the crisis (deregulation, reduced financial oversight, etc) continue to be advocated by the mainstream as solutions. The fact that mainstream macroeconomics has retained its hegemonic status in the face of its failure to resonate with reality is [and inability to master simple Excel macros as well they’ve mastered hegemonic status seeking, despite their field’s carefully cultivated reputation for scientific rigor], in no small way, due to the way economic debates are framed in the public discourse. Framing refers to the way an argument is conceptualised and communicated by speakers and listeners. Processes of conceptualisation proceed by way of adaptive reasoning on the basis of models and representations. Research in cognitive philosophy and cognitive linguistics suggests that the models that constrain our thinking operate at a largely unconscious level, and that the abstract concepts we draw on are “largely metaphorical”, “imaginative”, and “emotionally engaged” (Lakoff and Johnson, 1999:3-4).
So, light the fire in the woodstove with the Sunday Times, get a cup of coffee, and listen Mitchell’s laconic narration (and charming Australian accent):
Read more...Ilargi: Everything’s Fine In A Parallel Universe
Last week, I was reading parts of a report issued by Japanese investment bank Nomura, which started out saying that the “Global Financial Crisis” is over. If I lay out a statement like that side by side with a lot of other things I see, I can only conclude that Nomura doesn’t reside in the same universe I do.
Read more...The US Economy Can’t Take QE
Yves here. This post gives a good recap of where QE is and isn’t having an impact on the economy, and the “isn’t”s clearly prevail.
Read more...Yanis Varoufakis: What Europeans Should Know About the Current Situation in Greece
Yves here. In an interview with Edward Geelhoed, Varoufakis gives an urgent, sobering picture of the conditions in Greece, which contrasts dramatically with the claims made by Eurozone politicians.
Read more...Satyajit Das: The End of Trust? Part II
Yves here. Das continues his discussion of the impact of the erosion of trust (see here for Part I). Here he focuses on the political impact on international dealings and national politics.
Read more...Mathew D. Rose: Is It Time to Pull the Plug on the EU?
“Success is relative” wrote T. S. Eliot in his play The Family Reunion, “It is what we can make of the mess we have made of things.” This is an apposite description of the current “success” in the EU. A financial and political disaster has been transformed into a permanent calamity.
Read more...Wolf Richter: Strung-Out Consumers, Desperate Retailers, Crummy Sales
During this festive time of the year, the whole world is intensely focused on American consumers, watching their every move under a digital microscope to parse if the universe is going to live or die. Retailers and the media joined forces to create hoopla and excitement and frenzy and the perception of once-in-a-lifetime deals. Stores opened on Thanksgiving, stayed open late at night, and opened early in the morning. And consumers dove right into this extravaganza.
Read more...Servaas Storm: Some Remarks on “Larry Summers, Secular Stagnation and the Crisis of the New Consensus Model”
It is truly ironic to see Lawrence Summers and Paul Krugman promote sustaining asset price inflation as the only viable option left to get away from secular stagnation.
Read more...The European Balanced Budget Disaster
In the immediate aftermath of the financial crisis, most European governments allowed the automatic stabilisers to kick in and implemented some mild discretionary measures, despite the strictures of the Stability and Growth Pact (SGP). But it was not long before the siren calls for “fiscal consolidation” arose…
Read more...Olivier Blanchard: Monetary Policy Will Never Be the Same
The global crisis changed the face of monetary policy. This column, written by the IMF’s chief economist, reviews the main changes. It draws on contributions to a recent IMF conference on the topic.
Read more...Michael Hoexter: Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 2
While Pete Peterson and Bob Rubin have couched their campaign against Social Security and Medicare in the moral vestments of “fiscal responsibility”, they gloss over the macroeconomic financial reality of government and the requirement for deficit spending to maintain growth of the national and world economies. The moral fervor that they apply is inapplicable to government programs: while it may seem real to them or the gullible politicians they influence, the moral outrage they hope to play on is based on false and inhumane premises.
Read more...Identity Politics and the Stoking of Generational Warfare
I have to confess I find stereotyping annoying, and in almost all cases, it’s a poor substitute for more careful analysis and characterization. Yet it is marvelously effective in politics, as Karl Rove proved.
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