Monday, 28 July 2014

My reply to a certain view regarding the siege of Gaza

Serban, the key thing you're missing is that Israel is doing it's best not just to reach a cease-fire because everyone knows that won't mean shit to Hamas. The point of the infrastructure war isn't to cripple the people, it's to destroy their capability to make war and therefore create a lasting peace. I'd bet my house that if they achieved that goal and disabled the Hamas war machine they'd immediately send aid to the civilian population again like they have in the past. Sometimes violence has to be solved with violence whether you or anyone else likes it or not; that's indisputable.

What war machine, dude? Where is this war machine lying behind apartment blocks, schools, hospitals, and UN centers?
The intention of the IDF is to destroy civilian infrastructure. By the logic of bombing and razing to eliminate Hamas threat - they'd have to literally destroy the WHOLE country. As the minister of interior said, "Bomb them to the middle ages."
Again, why do this!? It doesn't do away with Hamas! It simply ensures future vengeance actions against Israel.
If they want to eliminate Hamas - use covert-ops. Otherwise, the next time terrorists take shelter in a populated building; the police should simply bring in the artillery and kill everything that's inside.
Gaza does not have an army, doesn't have artillery, doesn't have a navy. Doesn't have air forces. Doesn't have a land army.
Israel has all these things.
If they wanted to eliminate Hamas, they could do it without destroying the lives of innocents and their property. It's like a right-wing regime bombing the entire neighborhood of a certain ethnicity - because "terrorists" live among them. To hell with everyone else, we see only terrorists and we'll kill them at any cost.
Israeli murderers are called commandos, arab commandos are called terrorists. Once again, this is my opinion and I stick to it; the present operation in Gaza has nothing to do with eliminating Hamas. You cannot remove an enemy political faction without having another faction (one you favor) step in to fill the power vacuum. Israel isn't interested in finding and funding a political voice within Gaza with which to negotiate - not ceasefire or peace - but a two state agreement and honor it. If Hamas were to be eliminated, the israeli hawks would no longer be able to justify their abject policies to the moderates. They'd be required to make concenssions - and they don't want that.
Once again, even Franco - who was the fucking dictator - didn't go and bomb The Basque Country in response to ETA's own terrorist actions. Indiscriminate killing done by the government CANNOT be justified by blaming it on the other side - using the civilians as shields. There's no justification for such actions. Israel is not being invaded. Is not at war with a country. It can't invoke the issue that - this is our last option, we've tried everything else.

And the other idea that I've seen around the web, that, "well, the palestinians voted for Hamas - so they're terrorists also. Kill them all." This is so fucking warped. It's like a palestinian saying, since the IDF killed my brother and sister, put my father in jail, wounded my mother and destroyed my home - that gives me the right to kill all and any israelis I encounter in my life."
This is utter malefaction at work. This is what the israeli hawks sow within Gaza. This is what Hamas feeds upon.

Saturday, 26 July 2014

It's not about taking down Hamas, it's about destroying infrastructure

It's getting more and more clear that the IDF's operations are not about killing Hamas, but destroying infrastructure.

Israeli Interior Minister: “The Goal of the Operation Is to Send Gaza Back to the Middle Ages”, “Destroying All the Infrastructure Including Roads and Water”.

The UN has repeatedly found Israeli’s actions in Gaza to be a war crime. See thisthis and this.

The same year, Gilad Sharon – the son of former Israeli Prime Minister Ariel Sharon – wrote an Op-Ed in the Jerusalem Post saying:

“We need to flatten entire neighborhoods in Gaza. Flatten all of Gaza. The Americans didn’t stop with Hiroshima – the Japanese weren’t surrendering fast enough, so they hit Nagasaki, too.

“There should be no electricity in Gaza, no gasoline or moving vehicles, nothing.”

At the same time, in my opinion, the IDF is doing a huge favor for Hamas. Via indiscriminate killing, they are giving Hamas a larger pool of manpower to raise. From adults, to elders and youth, people who've lost family members, loved ones, and property in Israel's siege - ready to commit vengeance killing. It's a sure strange way to "combat terrorism" in my view. If one wants to destroy infrastructure, no matter the cost, they blow it up with AOE means. If one wants to combat terrorist groups, one does it via covert-ops. I pity Israel's soldiers as well, those who have not been brainwashed into behaving as killer drones - like Captain R. Their government is sending them out to slaughter and be killed for no goddman reason, outside pure bloody geopolitics.

Friday, 25 July 2014

Israeli Government Spokesman Mark Regev speaks to Emily Maitlis

Regev didn't know shit about the operation. So if terrorists hold children in a building as hostages - the IDF fires anyway. Can't the IDF use covert-ops to kill Hamas operatives? Why do they have to use AEO operations that don't discriminate between targets? I've no expectations from Hamas to fight a "clean" fight; but a posteriori reasoning tells me that the IDF isn't concerned about children casualties.

See here the infamous case of Captain R: An Israeli army officer who fired the entire magazine of his automatic rifle into a 13-year-old Palestinian girl and then said he would have done the same even if she had been three years old was acquitted on all charges by a military court yesterday.

Thursday, 24 July 2014

Minnesota man guns down teen girl after she asks him to stop riding lawnmower in her yard

Minnesota man guns down teen girl after she asks him to stop riding lawnmower in her yard

A Minnesota man who admitted shooting a 17-year-old girl multiple times because she asked him to stop trespassing on his riding lawnmower has been charged with attempted first-degree murder.

According to a criminal complaint obtained by The Associated Press, 40-year-old Chad Pickering shot the 17-year-old girl in the chest, right thigh and left ankle while she was standing on the deck of her Bemidji home on Monday night.

“The victim herself was able to describe what had happened and talk to us and tell us that she’d simply been shot when she stepped out of her house to check on her dogs,” Sheriff Phil Hodapp explained to WCCO.

The teen told investigators that she had asked Pickering not to ride his lawnmower through her yard. She also said that he often carried a pistol with him on the lawnmower.

Read the entire article here:

PS: What worries me, is that I have a new neighbor on my floor (whom I hate with sheer coldness) who has those crazy eyes just like the nut above.

Saturday, 19 July 2014

How to Fuel the Economy Without Increasing Debt

Ben Dyson, Founder of Positive Money, speaking at the Positive Money 2014 conference. He recapped how the nature of money has changed since the Bank Charter Act of 1844, which outlawed bank creation of paper money. Most money today is electronic. There had yet to be a democratic debate on the consequences of this. Indeed, there had hardly been any democratic debate on the consequences of Quantitative Easing (QE).

In terms of where this private bank money went -- 40 per cent went into the property market, 37 per cent to financial markets, 10 per cent to credit cards and personal loans and only 13 percent to productive business.

In our system today, "more money means more debt". If we have a crisis and we want less debt then we have to accept that we will end up with less money circulating, because when the loans are repaid, the money disappears from the economy.

Under the present system, there are two ways to get more money into the economy: 

The first way is to get the private banks creating new money by creating new debt. That is the situation where "more money equals more debt." So, interest rates were lowered to 0.5% in the expectation that "lower interest rates will get people to borrow more." There have also been various "funding for lending" schemes.

The second way is to get the Bank of England to create money. It has initiated QE, whereby it creates money and buys bonds from pension funds and insurance companies.

This money floods into the bond market and some floods into the stock market. It artificially increases bond prices, in the same way that the banks' privately-created money pushes up mortgage prices.

The idea behind QE is that those who see the value of their bonds go up will then spend more on the High Street. But in reality, it means that the relatively small number of people who have the money in the first place, take their money and put even more of it into the bond market. In short, QE is a scheme which has made the very wealthy much better off, but has done very little to create jobs and get the real economy going.

Incredibly, around £375 billion has been created but there has been very few questions asked in Parliament about the wisdom of this process, about how the money is created and where it is spent. This is remarkable considering the tortured debates in Parliament about the spending of sums which are a mere fraction of this figure!

Ben explained that the alternative is Sovereign Money. 

The idea of Sovereign Money is that instead of the BoE creating money and putting it into the financial markets, it should be put into the real economy, through spending on infrastructure, through tax cuts, or through the simple expedient of giving it to people. This would allow us to escape from the debt trap where, if we need more money then we must have more debt.

He said that for every £10 billion which gets added to the government account and spent into the economy then we would get £6 billion coming back in taxes, and that for every £1 which goes in, we would get £2.80 of spending throughout the economy. He suggested that a Sovereign Money creation of £10 billion would lead to 28 billion spending, up to 284 000 jobs and 5.6 billion tax revenue, and lower personal debt. (These calculations come from CBI figures.)

Furthermore, this is a policy which can be done now. Private banks will still lend, but Sovereign Money will, to an extent, offset the negative effects of debt. Once it can be shown that Sovereign Money works, then we can point to the full solution, outlined in Modernising Money which is stopping banks creating money in the first place.

Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation's money supply through the accounting process they use when they make loans - an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of - or a major contributor to - problems of poverty, excessive debt, growing inequality and environmental degradation.

Thursday, 17 July 2014

Some thoughts on the Israeli-Palestinian conflict

On the rights issue, there's no debate as to where it's better to live. Yet there are many historic wrongs that have been perpetrated against the simple palestinian citizen. Israel never offered them the right to return - or at least, provide them with some funds for the property they seized from them.

Israel exists where it is because of western imperialism/colonialism.

In my opinion, Hamas is the life-essence for the israeli hawks and religious nuts. Without palestinian fundamentalists (other nuts) they can't justify their colonialist stance in the West-bank. Who the hell would even want to live with all that bloody strees and death in the West-bank, if they weren't religious zealots?

Gaza is a massive prison region. They don't have an army, they don't have a navy, an air force; but Israel has all these things including nuclear weapons. If anyone wants to invade them, they'll start a nuclear war - and I don't think anyone is willing to do that.

It's more than clear that Israel doesn't give a shit about the international community or the UN. They just use them to their convenience. Their argument is that "We want a bilateral negotiation with Palestine." Oh, yeah? Bilateral in the sense of the giant imposing conditions on the hobo. I for one don't believe in a two-state solution. It will either be a perpetual conflict and bloodshed in which civilians (and children) are gonna get slaughtered - or there will be a one state, secular, and multicultural.

And as for the PO, as long as their funding is coming from outside, they will be the whore of the political whims of others. Mosler's Palestinian Development plan should be on the top of their list of worries - not independence. Many countries in Africa are independent, and it's hell to live in these places.

The following is by a dude on the net, Roger Mexico

I mean, I've known some middle eastern people over the years--educated, liberal people--and they generally have a lot to say about this "Islam just hasn't evolved" meme.

It's not the "history of involvement" so much as current active involvement that fuels anti-Western militancy. India and South Africa haven't been bombed by a Western country in a while--this is not true of the Arab Levant or Central Asia, where Islamist militancy is most concentrated.

The reactions to what would be trivial symbolic provocations in the West (like the stupid movie full of bullshit about Muhammad, or the Danish cartoon thing) come from these things being seen, to use one guy's metaphor from a blog I read, "like the person who just broke your nose deciding he's also going to call your mother a whore." (That is, attempts to contain anger over a major provocation sometimes fall apart when another minor provocation is suddenly added to it.)

The whole "OMG somebody wants to build a mosque at Ground Zero" thing a few years ago--and the hysterical reactions it very much did provoke--would be a better comparison than the "Piss Christ" art show.

(The Danish cartoon controversy also specifically involved the editors of a right-wing newspaper advertising a "contest" designed to provoke objections from Muslim immigrants. The Muslims who got angry about it weren't just out randomly looking for blasphemy or something.)

What Westerners see from the outside is also often the result of effort to present a united front and keep internal debates internal. It's not that everybody in Gaza loves Hamas--it's just that they're not going to say "we hate Hamas" in front of Western TV cameras because that plays into the hands of the Israelis, and they have a lot of specific reasons to hate the Israelis, which may be the one thing they actually do agree with Hamas about.

The economic side of things has a lot to do with it all, too. Between the Israeli blockade, and the way that their "security measures" seem to conspicuously involve things like destroying farms and denying Arabs access to wells that Jewish settlers are still free to use, the Israelis don't exactly seem interested in alleviating the poverty that contributes to extremism in the occupied areas. (Rather the opposite--it looks a hell of a lot more like a "starve them out" policy of gradual ethnic cleansing.)

If these areas got properly developed--as I'm sure would be quite possible given how wealthy Israel proper is compared to the rest of the region--the amount of extremism and violence among the Palestinian population would almost certainly be reduced dramatically. Unfortunately Israeli policy at present seems to be not so much "we want there to be less violence" as "we want there to be fewer Arabs in what we will eventually annex into 'Greater Israel.'"

Eh, yeah, generally speaking the whole situation is a good illustration of how weak and irrelevant the UN currently is. This is really the exact kind of scenario the UN theoretically exists to deal with--the two parties are clearly unable to independently reach an agreement to stop an armed conflict which is destabilizing their entire region, meaning that outside arbitration is probably necessary and in the general interest of the international community as a whiole--but the UN is so toothless that at least one side feels confident in completely disregarding them.

I'd point out, though, that this is largely because of a longstanding policy of the US running interference to stop the UN from being able to enforce anything there. ICC proceedings would clearly be called for regarding the Hamas rocket attacks, but then if the Israelis acceded to the ICC having jurisdiction it would no doubt become relevant that the damn Geneva Conventions specifically prohibit moving civilian residents into disputed territory under military occupation. The US Security Council veto has been employed countless times to block proceedings on the settlement issue, and of course the US government still refuses to recognize the ICC as an authoritative judicial body at all.

I'm not overly idealistic here, but the ICC or something like strikes me as a pretty damn useful way of establishing an institutionalized international system for dealing with terrorism. Hamas isn't a real military threat to anyone--they're just a source of pointless mayhem--but what would seem like the obvious move of building an infrastructure to treat them and groups like them as criminals keeps faltering because governments like the US and Israel don't like the idea of legal constraints on their use of their militaries. It's kind of pathetic, really.

Now I know that the average palestinian and the average israeli don't want mutual annihilation, don't want for the other to dominate the other et all. But the people in charge HAVE NO interest to achieve peace in the region, nor development. Otherwise they wouldn't be able to be kept in power.

I'm gonna do a nazi analogy here, but not for Israel, but for Palestine. Hyperinflation didn't bring the nazis into office, austerity did. What's austerity? High unemployment, low wages, lack of proper services, poverty and humiliation. When the people in Gaza are faced with these things - how can you expect them to remain idle vis-a-vis all this hardship? Isn't it clear they will fall prey to extremism? Well, that happened to Germany, and the political colour of the new regime wasn't pink. Far from it.

The hyperinflation of the early 1920s hit brutally German society. Not yet brought Hitler into government. As Germany thalassodernotan of hyperinflation, the percentage of Nazis ranged below 4% (see the 1928 elections). In 1930 hyperinflation was tamed now. When the new Finance Minister Kurt von Brouningk imposed harsh austerity in the early 1930s, increasing unemployment vertically, gave the Nazis their first success (18.3% in September 1930). Two years later, under the ever harsher austerity Brouningk, unemployment and poverty drove Hitler to 37.2% in the 1932 elections. ~Yanis Varoufakis

Wednesday, 9 July 2014

This is my problem with deficit doves

Deficit dove comment via the ars-regendi forum:
When the economy is healthy, you have to get rid of as much of the national debt as possible, so when the economy hits hard times (as in '07-'08 in the USA) you can deficit-spend to help get out of it. By GWB massively cutting taxes to turn the surplus into a deficit, he left himself and then Obama without wiggle room when the economy hit an iceberg. A much bigger stimulus package would have been possible if the budget had been in surplus and the debt reduced or eliminated when Obama took office.

My (long) reply to this:

See, this is why both deficit hawks and doves get it wrong. The doves think that the public debt needs to be lowered, that the fiscal deficit needs to be cut in the upward cycle. These things are precisely the things which MAKE the upward cycle drop into a recession.Obama's fault was that he allowed the Bush tax cuts to expire - that brought the deficit even lower. Government fiscal surpluses ARE NOT national savings. Net fiscal surpluses don't accrue anywhere; when the government takes in more money out of the private sector via taxation than it spends in, it makes the net financial savings within the private sector negative. All the money in the nongovernment sector used to pay taxes and buy government debt - it all comes (according not to ideology, but to double-entry bookkeeping) it all comes from government spending. Unemployment is always the result that fiscal deficits are too low in satisfying the private sector's desire to pay taxes and net save. Employment in capitalism is driven by sales. I can't produce and hire people if I can't sell. And I can't sell if you can't buy. So either the foreign sector leverages itself in order to buy my products (I'm relying on importing aggregate demand from abroad) or the government creates domestic aggregate demand by running adequate fiscal deficits.
The public debt is, at operational level, the movement between 2 buffer stocks: the currency and reserves. To quote Abba Lerner, the purpose of the national debt is to let the public hold interest bearing bonds instead of letting the public hold reserves earning interest.The US dollar is nothing more than a tax-credit; fiat money is tax-driven money. The public debt, tax-credits outstanding. The public debt serves several purposes - such as allowing the gov/CB to control short term interest rates in the market and provide a vehicle for institutional savings (pension funds for instance). But its purpose is NOT to "finance" public spending.In a free-floating fiat regime, public spending finances government taxation not the other way around. As a point of logic, in order for the government to borrow its own money - it needs to have spent that money into existence in the nongovernment sector; before the gov takes it on as a loan and promises to pay interest on it.To claim otherwise, that government taxation finances gov spending is not only illogical, it is an operational impossibility. When the government borrows its own currency, the central bank (who is the scorekeeper, keeps all the numbers in a massive spreadsheet) is simply shifting figures on the government's own books from one account to the other. When the government pays off the debt, it debits the checking/reserve accounts and it credits the securities account. Vice-versa when it contracts debt.
All transactions within the nongovernment sector net to 0. One man's spending is another's income. One man;s loan is another's surplus. Every country net exporter of goods and services is a net importer of aggregate demand. The only way the financial net in the nongovernment sector (the balance of nonresidents + the balane of domestic firms and households) can be positive or negative is via VERTICAL transactions. Positive, if the government is running a fiscal deficit, or negative if the government is running a fiscal surplus. Fiscal deficits create net financial assets within the nongovernment sector.
Government taxation creates unemployment of money paying jobs, and public spending employs the unemployed previously created by taxation. Thus, permanent and involuntary unemployment is a government policy choice. The neoliberal establishments call it "the unemployed buffer stock" or NAIRU; but the NARIU is predicated simply only on data fudge.
The purpose of taxation is to create unemployed people looking for paid work (paid in the government's own debt-tokens), its purpose is to create a permanent demand for the government debt-tokens or money - thus giving value to the currency. The purpose of public spending is to create aggregate demand in the economy; the purpose of taxation is to drain excess aggregate demand from the economy.
So long as you have unused resources and unemployment (people willing and able to work) - the government is either taxing too much, spending too little or both. The correct-sized fiscal deficit is that which achieves and maintains full employment and price stability. I suggest you drop the new-keynesian (orthodox) route, and look at MMT (modern monetary theory or chartalism) and the post-keynesian school. After all, Krugman got his ass handed it out to him by Steve Keen. ALL the neoliberal models, the reason why they fail, is because they DO NOT incorporate debt and money in their measurements.

A deficit agnostic's (leaning more toward a hawk) comment:

All debt must be repaid....what happens when debt exceeds GDP several times over? How will the people ever repay the debt? After all the debtors do demand interest on the debt. Look at Argentina.....the government cannot just print a trillion pesos to pay off the debt because the cost of dollars in Argentina will rise with the inflation of pesos..Credit is not infinite. Helsworth your theories aren't for every nation. Maybe for some but not all, since many economies are different.

My (another long) reply to this:

Argentina chose to default because that's what the politicians agreed upon. Argentina kept the peso at a fixed exchange rate with the US dollar - it wasn't free floating. If it was, then sovereign default would not have been an operational concern. Under the fixed exchange rate it was. Of course Argentina suffered a little bit of hyperinflation after the fixed exchange rate fell with the US dollar. It's a no-brainer.
Second, you do not understand the operational reality when a government issues debt in its own currency. As a simple point in logic, in order to borrow its own money, the government must first spend it into existence (and it spends it into existence in the nongovernment sector).The fiscal deficit funds remain in the nongovernment sector as net financial savings - and then the government chooses to take on those particular funds as debt on which the gov promises to pay interest. At an operational level, the public debt is nothing more than the movement of 2 buffer stocks: the currency and reserves. To quote Abba Lerner, the choice of issuing gov debt is a preferene of the government that the public (bankers) should own interest bearing bonds, rather than IOR on reserves.When the government issues sovereign debt, it simply debits the treasury account and credits the reserve account. When the government pays off its debt, it simply debits the reserve account and credits the treasury account.That's all the CB registers on its spreedsheat - the government simply changing numbers on its own books from one account to the other.
The size of the public debt needs to be what it is, depending on the government's goals and the private sector's goals. Public debt itself is an intrinsic part of monetary policy, NOT fiscal policy. So it has to do with controlling the overnight interest rate and providing a vehicle for institutional savings - such as for pension funds for instance. The size of the public debt DOES NOT impact future generations with higher taxes or what not - simply because taxes don't finance government spending.Japan's debt to GDP ratio is around 220%. Is there inflation in Japan because of this reason alone? No. Other countries have super low levels of debt and they still have rampant inflation. So the size of the public debt is NO measurement of inflation. Is there a risk of bankruptcy for the Japanese government? No.
Not all economies are the some. Correct. Credit is not infinite. Incorrect. Money is NOT a constraint - physical resources and free labor are - and those physical things are the true yardstick. That's why MMT uses the byword: full-employment and price stability. And not anything beyond that. At operational level, it doesn't matter whether we're talking about Sweden, Turkey, Nigeria or Honduras.If you get the institutional framework enforced according to the right rules, society can achieve its aims by applying Chartalist principles.

Tuesday, 1 July 2014

How a fiscal sovereign operates, quick course

What is Money?

Why is it accepted?

What is the relationship between money & government?

What backs up our money?

Can the US government run out of money?

You may be surprised by the answers!