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Progressives can't see the real enemy is Clinton, not Trump

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Helsworth
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Post: #11
RE: Progressives can't see the real enemy is Clinton, not Trump

Sure, there are differences on social issues. But Kakatia asked about economics specifically.

I include Neocons, Neolibs, Neoclassicals, Supply-siders, and Monetarists as part of the Orthodoxy. Thatcher & Reagan abandoned full employment post-war Keynesianism - and monetarist thought took hold on the academies. Pluralism was crushed. Dogmas were set in place, never to be questions, and were called "science" rather than what they truly were - i.e. religion.

What did the Orthodoxy do? They deregulated finance. They lowered organized labor's bargaining power. They privatized public utilities. They scrapped government buffer stock policies. And they shifted fiscal policy away from full employment to corporate welfare - and brought instead the NAIRU to "keep inflation in check". The NAIRU is a deliberate policy, whether the people or the politicians are aware of it or not, in which a certain % of the population is kept in a state of permanent & involuntary unemployment.
Both deficit hawks & doves get it wrong. And until the deficit owl POV will become mainstream, the political debate will persist within artificial bounds - the arbitrary limits of zombie economic theology. When the true debate ought to be, what's the most efficient way to achieve a particular set of aims - and not "where will the money for this come from?" The money will come from Fed Gov fiscal debits. The real constrains are available physical resources, available labor (people willing & able to work), and know how (technology level).


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This post was last modified: 11.03.2016 12:38 by Helsworth.

11.03.2016 12:36
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Jaiddin
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Post: #12
RE: Progressives can't see the real enemy is Clinton, not Trump

I guess my view of the labels is just that neoconservative is a foreign policy school that doesn't imply anything about domestic policy.

Meanwhile, neoliberal is a domestic policy classification that implies nothing about foreign policy.

In that sense, Hillary is both a neoliberal (her domestic policy) and a neoconservative (her foreign policy). Obama is a neoliberal domestically but a foreign policy realist.

11.03.2016 13:50
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Helsworth
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Post: #13
RE: Progressives can't see the real enemy is Clinton, not Trump

Well, neoconservative domestically implies some form of blatant corporate welfare.
Neoliberal domestically implies "structural reforms". It's still a policy of corporate welfare, but with some crumbs added in for the plebs. If you look at Europe, neoliberalism rules. You see it in Merkel's policies. In Cameron's policies. In the Troika's philosophy & policy prescriptions. You see it in Greece. You see it pretty much everywhere. And it's precisely the wrong thing to do - especially during a balance sheet recession period. For the love of life, politicians, just let the automatic fiscal stabilizers do their job if active counter-cyclical fiscal policy is too much for you to consider.


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This post was last modified: 11.03.2016 14:26 by Helsworth.

11.03.2016 14:23
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adder
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Post: #14
RE: Progressives can't see the real enemy is Clinton, not Trump

Sorry for not getting what you hint at - that might be an US vs. Europe misunderstanding - but I really do not get why you group neo-conservatives and neo-liberals together that much. In essence, there are much more economical differences between neoliberals (and classical liberals) on the one side and neoconservatives on the other side than between neocons and socialists/"progressives".
neoliberals, classical liberals and ordoliberals want a free market devoid of state regulation (or at least as much free of state regulation as possible in case of ordos) and are be opposed to every form of subsidy.
Neocons, socialists, conservatives, whatever, want a state controlled market or no market at all. They are favoring state regulation for everything, and are in favour of subsidies.
At least this is what I took from my political education, economic readings and from reading Mises and Hayek. Maybe wrong, but economically I think that socialists and conservatives are much more aligned than neolibs/classical libs and ordos are aligned to conservatives.

Helsworth Wrote:
When the true debate ought to be, what's the most efficient way to achieve a particular set of aims - and not "where will the money for this come from?" The money will come from Fed Gov fiscal debits.


While I tend to agree to the first part (if reaching a particular goal is seen as necessary, then the most efficient way to achieve that is very likely the best way, unless there are really inadequate measures on it), I definetly do agree to the second: state deficit, money printing or whatever you like to call that is not the most efficient way for anything. Free market economy is the most efficient way for everything.


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12.03.2016 06:06
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Helsworth
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Post: #15
RE: Progressives can't see the real enemy is Clinton, not Trump

adder Wrote:
Sorry for not getting what you hint at - that might be an US vs. Europe misunderstanding - but I really do not get why you group neo-conservatives and neo-liberals together that much. In essence, there are much more economical differences between neoliberals (and classical liberals) on the one side and neoconservatives on the other side than between neocons and socialists/"progressives".
neoliberals, classical liberals and ordoliberals want a free market devoid of state regulation (or at least as much free of state regulation as possible in case of ordos) and are be opposed to every form of subsidy.
Neocons, socialists, conservatives, whatever, want a state controlled market or no market at all. They are favoring state regulation for everything, and are in favour of subsidies.
At least this is what I took from my political education, economic readings and from reading Mises and Hayek. Maybe wrong, but economically I think that socialists and conservatives are much more aligned than neolibs/classical libs and ordos are aligned to conservatives.

Helsworth Wrote:
When the true debate ought to be, what's the most efficient way to achieve a particular set of aims - and not "where will the money for this come from?" The money will come from Fed Gov fiscal debits.


While I tend to agree to the first part (if reaching a particular goal is seen as necessary, then the most efficient way to achieve that is very likely the best way, unless there are really inadequate measures on it), I definetly do agree to the second: state deficit, money printing or whatever you like to call that is not the most efficient way for anything. Free market economy is the most efficient way for everything.

Ok, since you mention Hayek & Mises, we are going to disagree on a lot of things.
Firstly, all monetary systems rely on the expansion of debt in order to work properly. Spending is Income. Someone's debit is another's credit. Someone's financial debt is another's financial savings.
Under a free floating nonconvertible fiat regime, the Gov can run all the deficits/debts it wants without going bankrupt.
The Gov fiscal deficit = the nongovernment sector's net financial surplus.
The Gov debt = the nongovernment sector's stock of financial savings.

(I-S)+(G-T)+(X-M)=0
(G-T)= -(I-S) -(X-M)
This is not someone's opinion or ideology. It is double-entry bookkeeping.

And before you mention hyperinflation. A careful study of all hyperinflations throughout history lists the following causes: loss of a war, collapse in output, brazen corruption, political instability, finally - collapsing fixed exchange rate with a strong currency. The overproduction of money is ALWAYS the CONSEQUENCE of a crisis of hyperinflation, NEVER the CAUSE of it. (Note: the caps are meant for emphasis, not shouting. Happy)

As for the banking system. Banks are not intermediaries between savers & debtors. Banks are the originator of loans. Banks do not loan out people's deposits. Banks do not loan out reserves to their customers. Loans create deposits is an operation in endogenous money which leads to no new net financial assets being created or destroyed. Banks are constrained in their lending by their capital & the actual demand for loans, not by reserves. Loanable funds theory & fractional reserve banking are myths.

There is a hierarchy of money in society. While it's true that the vast amount of money in the economy is in the form of bank debt - in order to settle between themselves and between the Treasury & CB, banks have need of reserves. Reserves are used for accounting purposes & settlement payments.

There are 3 kinds of government debt:
-cash & coins
-reserve accounts at the CB
-securities accounts at the CB

Banks purchase cash from the CB with reserves.

The quantity theory of money is bunk; but inflation is not always everywhere a monetary phenomenon. QTM assumes that output is always capped & inelastic. Most of the time, however, a country's economy doesn't run at full output. So sensible macro economic policy is for the currency sovereign (there are government w/o monetary sovereignty) to allow the fiscal deficit to GDP ratio & the debt to GDP ratio go in whatever direction, so long as full employment & price stability is achieved & maintained.

The Gov's net fiscal position is reactive to nongovernment spending behavior.
Aggregate Demand is not just income, like all the mainstream text-books claim; it is income + the change in private debt. Private debt inflation adds to AD & economic activity. Private debt deflation shrinks AD & lowers economic activity.

Purpose of Gov money taxation, first & foremost, is to create permanent demand for Gov IOUs. All the money that goes to paying taxes & buying government debt come from government spending. All money is debt. All money is credit. All financial assets are always without exception backed by debt.

Here are some links I'd like for you to check out, if you're interested & if you have time.

1- Debunking Austrian Economics 101:
http://socialdemocracy21stcentury.blogsp...-page.html

2- Debunking Monetarist/Neoliberal/Neoclassical theory
https://www.youtube.com/watch?v=WZ_Q94eQ-Kg

2.5- The Money Multiplier Myth
http://www.businessspectator.com.au/arti...multiplier

3- The Historical Evolution of Money and Debt
https://www.youtube.com/watch?v=0zEbo8PIPSc

4- Money and the Myth of Barter
http://katehon.com/es/node/21113

5- David Graeber's Debt the First 5000 years
https://libcom.org/files/__Debt__The_Fir..._Years.pdf

6- Chartalism 101, Governments are not households
https://www.youtube.com/watch?v=ba8XdDqZ-Jg

7- 5 buffer stocks for macro policy
https://prezi.com/4g7ljmskquon/five-buff...ic-policy/

8- Modern Monetary Theory—A Primer on the Operational Realities of
the Monetary System
http://moslereconomics.com/wp-content/pd...lwiler.pdf

9- The Entrepreneurial State: Debunking Public vs. Private Sector Myths, by Mariana Mazzucato
http://www.amazon.com/The-Entrepreneuria...0857282522

10- What the St Louis FED says about the US Gov is true for the UK, for Canada, for Australia, Turkey, Russia etc. Just swap US Gov with any other Gov that has monetary sovereignty & that incurs debts denominated in its own free floating nonconvertible fiat currency.


11- Crowding out is a myth
https://modernmoney.wordpress.com/2010/0...wding-out/

12- Deficit Spending 101, part 1
http://bilbo.economicoutlook.net/blog/?p=332

13- The Classical Gold Standard Era is a Myth
http://socialdemocracy21stcentury.blogsp...-myth.html

14- The BoE explains endogenous money creation
http://www.bankofengland.co.uk/publicati...eation.pdf

15- Sectoral balances for the US & for the EU


https://www.patreon.com/SerbanVCEnache

This post was last modified: 12.03.2016 11:29 by Helsworth.

12.03.2016 11:11
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