Friday, July 22, 2016

Will Neoliberals Ever Learn ?

Dean Baker paints the familiar Brexit story I was among the first to advance, that of not just the racist xenophobes (whose campaign indeed most likely carried the day) but of a wide range of people impoverished by neoliberalism, not at all because of the EU itself in Britain's case but because of conservative leadership (though the Euro Zone is intensely neoliberal, to the "ordoliberal" school of exacting fiscal rectitude, Britain has effectively escaped all of that so far, but only until a point in the future, I heard, with the ordoliberalism ultimately taking hold of Britain, perhaps giving a reasonable justification for voting Leave, but maybe that's wrong, I'm not exactly sure of the facts, but anyway any of the austerity in Britain so far has been largely the fault of Tory and New Labour, not the old Labor types like Corbyn--though they may be paying the political price, the world being so messed up and all.

But anyway, I love the place where he refers to the austerity dogmas prevalent in the EU, Belgium, and Germany, if not ruling nearly everywhere in the EU:

ut the leadership of the euro zone, especially the Germans, seems intent on continuing austerity. This is not based on economics – there is no serious support for their position — it is based on things their parents told them about the virtues of balanced budgets.
If the EU leadership continues to set policy based on folk wisdom from their parents rather than serious economics, the hardships among the population will continue. 

In other news, for me, I just discovered that JFK used the manueuver of bypassing the FED and just, well, printing the money and spending rather than having to go in hock to the FED (in the National Debt, which is actually a leading savings instrument, US Treasury Bonds) for the money, the way it's done, strange when you think of it that way.

This is, I believe, what MMT and/or many similar economic theorists maintain, and it's not particularly inflationary, perhaps with some limitations.  It costs far less, with less inequality created (less huge bankster salaries involved) and no messy debt to drag down the future.  Krugman claims it's too politically risky, that it would lead to the situations which led to the creation of the FED in the first place.  I'm not on the extreme downside of the FED since the departure of Alan Greenspan.  I think it's been a comparatively positive player in maintaining a prosperous economy.  But I'm inclined to believe MMT deserves a careful examination, and may provide a better way, if ultimately people could come to believe in it.

People, including me, might have to find other "safe" investments.  You could say there is little public good coming from the availability of a safe investment (actually, the same could be said about any financial investment, but I digress), and it does ultimately burden society.   If it were my direct money, I'd put it in a bank, but being pension fund money, I chose from a set of investments with few or no public guarantees, so I choose the fund that buys Treasuries.  Either case, nowadays, interest rates are about zero.  If Treasuries went out of business the fund would find something similar.)

But the benefit of people like me looking for safe investments, far from the folly of US banks and corporations, is less important to the overall prosperity and progress that an MMT policy combined with guaranteed work and massive green investment could provide.  One economist estimated the cost of not immediately (just borrowing and) spending $6T/yr on green infrastructure was unfathomable--as unfathomable as the ultimate costs of Global Heating will be.

Kennedy, however, may have done it merely to show political resistance to a reactionary FED, not as part of switching the US to MMT.

Anyway, his confrontations with banks was just another thing leading up to the date of the assassination.  (BTW, I believe the story the a mob hitman did it, many mobsters tried but one had the lucky place, behind the grassy knoll, to get a clear shot with a suitable weapon.  Oswald was a planted patsy, set up to take the heat, the cheap gun perhaps to ensure he couldn't make it.  Many have confessed.  The official story cannot be true.  Oswald himself was CIA, involved in infiltrating leftist groups, may well have infiltrated the actual assassin groups, or be one of them, by association, it's hard to tell.  Whether he tried or not he lacked the means and it was not his magic bullet that against all odds did the trick without getting damaged, but several bullets from the real assassin, James Files, IIRC, not in public hands and probably lost to history.)

But this is along with the long usually listed cast of subjects including the mob, LBJ, the CIA, CIA-connected insiders, George HW Bush, oil producers threatened with the end of the Depletion Allowance including many big timers in Texas like Hunt, millitary builders, proto-neocons, the list of those with an axe to grind is endless.  The banks is another on the list.

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