Saturday, 18 July 2015

How prophetic Polychroniou was about Syriza (March 3rd 2015)

Since 2010, Greek political leaders have been sacrificing the interests of their own people in order to rescue Europe's banks and keep the euro game going. Syriza's strategy, with Varoufakis and other pro-eurozone zealots as their main architects, could have had no other outcome than Greece's complete capitulation to the commands of Europe's neoliberal rulers and to the vision of empire builders.

Read the full article here!

Monday, 13 July 2015

Sanders is pseudo opposition for Hillary's coronation

Cynical Democratic Party Leaders Will Say Anything You Wanna Hear For Your Votes Or Your Cash
by Bruce A. Dixon

So why is the Democratic National Committee, thoroughly committed to the Hillary Clinton campaign featuring Bernie Sanders in its fundraising emails? How can the California Democratic party raise money pretending to oppose the president on TPP without even pointing in his direction, let alone mentioning his name? Are they really that cynical? Are Democrat donors that gullible?

Last month, Talking Points Memo noted that the Democratic National Committee or DNC, the recipients of tens of millions of dollars in legal bribes (campaign contributions, they're called under US law) from Big Oil, Big Ag, Big Pharma, Wall Street, the military contractors and more every year, the DNC was featuring Bernie Sanders on the mass fundraising mailings it sent to thousands of likely Democrat donors.

At first glance this does seem quite strange. While Bernie Sanders does talk and vote like many other pro-war liberal Democrats, while official Democrats across the country think he's Democrat enough to run in Democratic primaries and caucuses, and while Bernie's even pledged to support the eventual Democratic party nominee, pointing out to George Stephanopoulos that he does that every election anyhow, Bernie Sanders describes himself as a socialist, and talks about what he calls “a political revolution.”

So what's happening here? There's no question that the Democratic National Committee is the subservient tool of its ruling class donors, and of their candidate Hillary Clinton. TPM's Josh Marshall explains that although Hillary remains the official candidate of the DNC and its donors, they need an official opposition to make the year-long run up to the Democratic nominating convention a year from now look less like a coronation.

Bernie's presence, and his half-hearted pro-war brand of socialism, as Paul Street also explained in Black Agenda Report a few weeks ago doesn't further any “political revolution” at all. What it does is make Hillary's absolutely certain Democratic party nomination look almost legit, as though she emerged from some kind of process where the Democrats' base voters actually get to have their say. It makes sense, if only a profoundly dishonest kind of sense.

But the cynicism of corporate Democrats runs much deeper than this. Immediately after President Obama muscled fast track legislation needed to pass his so-called trade bills though Congress without the bother of legislators being able to amend them, or even see what's in them, the California Democratic party was emailing thousands of likely small and medium sized donors with the promise that it would “continue the fight” against “unfair trade agreements” like the TPP.

The California Democratic Party being effectively the local branch of the DNC chose not to remind prospective donors that their Democratic president forced TPP's fast-track provision through Congress, that their Democratic president is hounding, harassing convening secret grand juries and jailing on espionage and terrorism charges Wikileaks and other persons for revealing parts of the so-called trade agreements, which are really corporate power grabs.

The California Democratic Party isn't about to fight the Democrat in the White House over TPP, the privatization of schools, cutting the military budget, rolling back the prison state or anything else. Their feeble and hypocritical pretense of opposing TPP is aimed at the most deluded and gullible among their donor base, in the same spirit that the DNC uses Bernie Sanders to supplement fundraising. It's a measure of how uninformed and stupid Democratic party leaders on the state and national level imagine Democratic donors and voters to be, another marker of the boundless contempt that Democratic party leaders have for ordinary Democrats, and ordinary people.

Also, read comment nr 1 of this article, which I'll quote here:

Martin Luther King had another description for the kind of people described in this article, or "moderates" as he called them in 1963. In his letter from the Birmingham jail, he called them "worse" than the worst racists. The kind of people who make a pretense of being against the ideals of those who relentlessly mistreat others as subhuman, but when it comes time to actually do something to bring it to an end, they go out of their way to police everyone else into leaving things the way the are -with comments like, "it is not time," or "it is unrealistic."
Since the onset of the Nader-haters in 2000, these people are constantly screaming "you are causing the republicans to win" at anyone who dares to question the wisdom of giving eternal life to the 1%. And the inevitable side effect of giving eternal life to the 1% is also eternal life for the republican party -as the re-election of "our nation's first black president" clearly shows (not least with his service to oil investers such as Koch brothers who then in turn have more money to fund republican candidates)
I still struggle with how to word this better, but it is pretty clear even for those who refuse to acknowledge that the 1% is worse than the republicans and controls both parties, that we can't "defeat the republicans" without also defeating the democrats.


Thursday, 9 July 2015

South Korea, pure awesome stats!

When you represent the American half of the Korean Peninsula buffer zone between China and the US, then you get to have textbook full employment (4% unemployment and below that), over 100 capacity utilization and great Education system. In such important geostrategic location, you can't afford to have social unrest and idle resources because of pervasive bad macro.
Of course, South Korea has problems too - but they're of a different sort compared to (say) those of the EU Periphery.

Germany has a higher percentage of gov employees compared to Greece

So much for the "bloated government" meme...

Wednesday, 8 July 2015

Greece is the scapegoat of a failed system & ideology

In a profoundly undemocratic union with arbitrary financial rules (not made to resist negative demand shocks), it is not the responsibility of the greek people or any other people in the EZ for that matter, to ensure euro bank deposits. The euro is a foreign currency for EVERYONE. It's not even a common currency union, it's just a system of hard pegs between countries. You can't have a common currency union without a common banking union. The so-called bailouts that the Troika made didn't come from the pockets of european tax-payers, it came from the ECB's computer via keystrokes.
A no vote against austerity IS a VICTORY for democracy and for EVERYONE in Europe, not just for Greece or for the Periphery.
If you understand double-entry bookkeeping and the fact that austerity is USELESS & NEEDLESS - and that what Greece is experiencing is just the symptoms of private debt deflation (the result of the end of the Great Moderation) amplified by active pro-cyclical fiscal policy, then you CANNOT be in favor of Troika policies of extend and pretend.
Government debt write offs while maintaining austerity DON'T work! You're simply draining more income while the Greek domestic private sector tries to deleverage. If the Greek government works to achieve a fiscal surplus & if the foreign sector works to be in surplus as well - the Greek domestic private sector can only be in a position of deficit. If Greece caves in to Troika package, they will continue their economic depression for another decade or even more.
The referendum was called by Tsipras in order to see if they have enough popular support to pursue their anti-austerity agenda. Without popular support, they cannot negotiate with the financial neocolonialists, nor organize a proper Grexit.
Hitler and the nazis came to power NOT during Weimar hyperinflation, but during Weimar hyper-austerity! The nazis brought in full employment via enough fiscal stimulus, pure and simple - sadly, they focused more on military production rather than civilian production. If the Weimar government would have run adequate fiscal stimulus, then nazis would have remained a minor/obscure political force.
I'm sorry, the EuroZone is run by criminals and charlatans! That's the very definition of neoliberal policies and the end result. Don't punish the banks, punish the poor and labor. IMF bloody well knew that the bailout provisions (austerity) would lead to negative economic growth, to negative social developments, and to the exacerbation of debt to GDP (once again, deficit to GDP and gov debt to GDP are SYMPTOMS, NOT causes). Troika wants to bleed Greece some more, cause otherwise the Periphery might start growing some actual balls between their legs and demand a better deal for their countries.

"What is happening in Greece (and in others parts of the Periphery) is a humanitarian disaster inflicted on people by a neo-liberal ideology that is invariant to reality and the facts of its own criminality."
~Bill Mitchell

Nigel Farage speech to Alexis Tsipras at the European Parliament

Whether you're a progressive or reactionary, Farage makes good points in this speech.

Tuesday, 7 July 2015

Visualisation of global average income between 1820-'70s-2000

Unfortunately this graph only shows the increase of average incomes, but not the rise of income equality.
According to the Chapter 11 of the report How Was Life? Global Well-being since 1820 the global income inequality has increased in the period between 1820 and 2000. It also has not decreased in the period between 1970 and 2000. Here is the link to the table from the Chapter 11 of the report that shows the development of situation with the global Gini coefficient:

Monday, 6 July 2015

Let's recap & summarize the Eurozone situation...

Ok, let's get some things straightened. One, banks create money endogenously - loans create deposits is an operation in endogenous money which creates no new net assets for the economy. The only way net financial assets are created is via fiscal deficits. The only way financial assets are eroded is via fiscal surpluses. Loans create deposits expand the money supply. The money supply shrinks when those loans are paid off or defaulted on. Private debt deflation puts negative pressure on aggregate demand levels. Spending is Income. Higher private sector saving desire leads to less private sector spending which leads to fewer sales - less income, less production, and more unemployment. As such, the automatic fiscal stabilizers (always work counter-cyclically) work to expand the deficit in the downturn. It's the system trying to correct itself - but Maastricht arbitrary neoliberal rules don't allow this to happen with a political crisis. So it's not a question of Greece borrowing someone else's hard-earned money. The euro is a foreign currency for all member states. The currency issuer is the ECB. The ECB creates, according to the fiscal policy of each individual member state, all the euros that go to paying taxes and buying government debt. When the first bailout to the banks was made, Merkel didn't go with a hat to European taxpayers to raise money - the ECB simply credited the bank accounts of the recipients and debited the Greek gov's securities account. Problem with the first haircut was that it was correlated with austerity policy (i.e. pro-cyclical fiscal policy in the downturn). The Greek private sector cannot deleverage while the foreign sector and the government sector are working to be in surplus. If shortfall in nongovernment sector spending is not covered by government spending, then output remains unsold and the result is unemployment. Greece is in depression and has been for years. (G-T)= -(S-I) -(X-M) Austerity didn't work for Chile, din't work for Argentina, din't work for the Weimar Republic (on the contrary, it paved the way for Hitler and the Nazis to come to power - which they did & subsequently rebuilt the economy and ended unemployment via fiscal stimulus), didn't work for Argentina, didn't work for Romania (under Ceausescu), and it didn't work for Greece. It wouldn't have worked for Germany post-WW2, that's why the Allies annulled it. All money is credit. All money is debt. In all of human history, those debts which could not be paid were not paid - and that's what responsible sovereigns did in order to protect their interests and those of their people. Besides, every net exporter of goods and services is a net importer of aggregate demand. Germany is shooting itself in the foot mid to long term by imposing needless austerity to the Periphery, as less aggregate demand will be available for them to import - thus less business for their exporters. The EuroZone is just an arbitrary scheme of hard pegs between countries. All member states are de jure and de facto currency users, and the ECB is the currency issuer. The member states share the ownership of the ECB, but they refuse to take charge of it politically. Varoufakis, Hollande, and Galbraith in their Modest Proposal give a simple solution/alternative to austerity without need of changes in the arbitrary Maastricht Treaty - by making the EIB (the European Investment Bank) act as Federal Treasury for the EZ. The EIB sits on a mountain of idle capital, by the way. Money is not a physical resource! Money is just records of transactions. The ECB's balance sheet can hold negative equity indefinitely without going bankrupt - so that the economies of the EZ can hold the corresponding positive equity. Government debt = private sector savings.



Saturday, 4 July 2015

The Greek referendum, why is it important?

1- I am not idolizing Tsipras. In fact, I lost faith in Syriza and in Varoufakis some time ago. Corrupt Greek politicians brought Greece into the Euro without a referendum - by using the same accountants from Goldman that Germany used. They should at least decide on austerity.

2- There's ton of points to reform and make better the Euro-system. There's Varoufakis, Hollande's and Galbraith's Modest Proposal - which are changes that don't require modifications of the treaties And then there's simply mods which can be applied but require new treaties - such as for the ECB to guarantee euro bank deposits and to discipline the banks on the asset side; which they are completely unregulated.

3- There's no question how much German political elites (German exporters and banks) benefited after the adoption of the Euro. If you think it's post hoc ergo propter hoc, then you're not looking at the other half of the balance sheet. Every net exporter of goods and services is a net importer of aggregate demand. Since all member states are de jure and de facto currency users - the net exporters of aggregate demand will ultimately get the axe of the neoliberal machine when private debt deflation will cause weak aggregate demand levels to increase the deficits and debt to GDP ratios of the countries in question - thus violating arbitrary Maastricht rules and setting up the stage for the Troika to do some extend and pretend, while profits are privatized and losses socialized. Point of the matter is that there's no modeling one country to be like another. You will always have regions that will be in net deficit to others and vice-versa. The European Investment Bank can play the role of surplus recycling - till this fucking continent of idiots will have the sense to create a Federal Government (and Federal Treasury). So, while the rest of the world contracted bank debt to fuel both Germany's domestic private and government sectors, Merkel et company went on to spew the 'virtues' of fiscal discipline/responsibility - and then when deleveraging happened within the foreign sector (the deficit countries), Merkel took the initiative to attack them for being lazy (ant vs grasshoper story, which is a cunning and totally false analogy in the realm of economics) and irresponsible with their finance. All of this happened in the Great Moderation, and no one in the mainstream saw the great crisis coming. In fact, some of them were writing/praising the Great Moderation and predicting a future of stability and prosperity, just as the crisis was unfolding in '08. So this is where one spots the lie, if one understands double-entry accounting. While you were building your surplus on the back of other people's deficits it was alright. When those people started having problems, you (Merkel et com) come in and start to talk of bullshit ethics and zombie economics, while you subjected people needlessly to socio-economic hardships just to prove that you're the one running the show and by making an example out of Greece, you keep the rest of them (the Periphery) in line.

4- You don't require fiscal transfers. You don't require to levy a special tax on people and then to distribute that income to the deficit regions. The ECB can do that via key-strokes by letting the government fiscal position to float in consequence. To let the automatic fiscal stabilizers do their job i.e. enlarge the fiscal deficit during the downturn and close the deficit during the upturn. Active measures should only be taken to ensure that full employment and price stability are achieved and maintained. There is no fixed deficit to GDP rule or debt to GDP that will allow that to happen. It needs to be mercurial, for the nongov sector has its own behavior - and the gov reacts to it (that's what endogenous money creation means) - private sector creating bank debt which leverages off of HPM (high powered money).
Net fiscal deficits are equity for the nongovernment sector. How that equity is appropriated, though, is another story.

5- The people of Greece, and the people of any other country for that matter, cannot be expected to insure euro bank deposits. It's neither fair nor is it a possibility for them to do so. It's like the government of Wales trying to insure pound bank deposits, or the government of Detroit trying to insure dollar bank deposits. They can't do that. The Central Bank is supposed to do that - because the CB has the hotwire and the printing press. In the EZ's case, it's the ECB who should take on the role of deposit insurance.

Conclusion is, it matters what the Greeks will vote for on Sunday. If they vote yes, that's a triumph for ignorance, for fear, and for future poverty (via austerity) not just for them, not just for the Periphery, but for the whole damn Union and mayhaps even beyond. If they vote no, then that may empower people in other parts to stand up for their rights and not cave in to fear-mongering propaganda, to blackmail, to theft, and to zombie economics (economic myths which refuse to die). It's important for the future of our own personal wallets & welfare.

Friday, 3 July 2015

Massive fear propaganda in Greece

A Greek friend of mine told me how Mega Channel (the most popular tv channel in Greece) aired fake footage of people standing in lines at ATMs. Ex: an old lady leaving an ATM (which turns out is from 2012, South Africa) and images with people going to ATMs wearing jackets. Jackets! In July in Greece! There is a lot of fear-propaganda and exaggerations going on, coming both from within Greece and from without - in anticipation of the referendum; the subject being a vote for austerity or a vote against austerity. The vast majority of Greeks are pro-European. They want to remain in the EU. They just don't want to be put through the sword anymore by the corrupt Troika & its neoliberal clients - just to keep the others (the Periphery) in check. Greece is 'negotiating' not with partners, but with necolonialists. They will continue to bleed (remain in economic depression for about a decade more), if they vote yes for austerity. I firmly believe there is NO alternative to Grexit - to sovereign free-floating nonconvertible Drachma and to full employment and price stability. It would drastically change Greece's trade balance and it would be nr 1 in tourism. I hear it from all my friends, they all want to go to Greece for their vacations!
In my opinion, the biggest obstacle for Syriza is internal political division and social unrest, if they attempt a Grexit. Secondly, the problem is that the Syriza government lack the heterodox knowledge of how to do a Grexit properly. Once again, here's the strategy in short and here are the necessary bank reforms in detail
I tweeted this also to Varoufakis. I told him that MMT-style Grexit is not about nationalism or misanthropy, but about HUMAN RIGHTS!
In conclusion, vote NO to austerity! You tried that before! It didn't work! It CAN'T work! The IMF itself knows this!!!
What the Greek economy needs (what every economy needs) is less taxation of labor & consumption & more spending on public services + asset side discipline for the banks!!!

Wednesday, 1 July 2015

Positive money's reply to Bill Mitchell and my criticisms to that reply

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