Category Archives: politics

Modern Money Primer

There is burgeoning school of economics called Modern Money Theory (MMT) that I really think warrants consideration. Not only is it theoretically quite intriguing, but if accurate, has tremendous political and social implications. One might even say that (perhaps in contrast to the Obama administration), it is actual cause for hope.

So I’d like to bring MMT to your attention. If you have already encountered, and dismissed, MMT, I’d like to encourage you to give it a second look. If you have already encountered, and dismissed, the entire field of Economics, I’d like to propose MMT as the exception to the rule.

Specifically, I suggest you check out the Modern Money Primer, recently begun by L. Randall Wray, one of the more prominent MMT scholars:

http://neweconomicperspectives.blogspot.com/p/modern-money-primer-under-construction.html

This primer is meant to be accessible introduction to someone with no prior understanding of MMT or even Economics. Wray will be adding a chapter every Monday for the next year, and responding to comments every Wednesday. (And for those of you who can’t possibly wait a year, I highly recommend Wray’s textbook Understanding Modern Money)

Okay okay but what is MMT?

Well, Wray and his colleagues will do a much better job than I of explaining, but here’s the gist as I understand it:

  • In a fiat economy, public debt = private wealth
  • Taxes don’t fund government spending; taxes create demand for fiat currency so that people are willing to sell goods & services to the government in exchange for said currency
  • Taxation is a sufficient (though not necessary) means to create demand for fiat currency (& thus prevent against undesirable levels of inflation)
  • and finally, perhaps most radically:

  • By serving as an “Employer of Last Resort”, essentially hiring anyone who is willing but unable to find work in the private sector and paying them a living wage, the government can ensure both full employment and price stability.

If true, this is pretty huge. Calls for “austerity” and the need to “reduce the deficit” become specious; there is an economically-sound mechanism to employ everyone at a living wage; not to mention that the government can suddenly “afford” all kinds of neat social programs, like universal health care, daycare and public transportation.

Crazy talk!
Lunacy!
Socialism!
Zimbabwe! Wiemar Germany!
Nothing you just said made any sense to me!
Rebecca, what the hell makes you, with your film degree, qualified to talk about economics?!

Yes, in many ways MMT runs completely counter to our conventional understanding of money. It sounds insane at first. But I think, if you give Wray a chance, you will see all the above points (except perhaps the last one) thoughtfully addressed.

And unlike most branches of economics, which could be accused of hiding behind intimidating jargon and complicated mathematical models rooted in mythology, the folks at New Economic Perspectives (the group of scholars behind the primer) are actively soliciting comments & critiques from their readers in an effort to make this primer as clear and thorough as possible. So I encourage you to check it out and ask questions and follow along over the next 50 weeks, if that’s your sort of thing.

[[Modern Money Primer]]

PS. If you contacted me nearly a year ago about that economics discussion list I wanted to start, apologies for never actually getting around to making it. I’m gonna try and get that started up soon, for real. Perhaps we can work our way through the Modern Money Primer together. Everyone who requested an invite will get one. If you didn’t and want in, let me know!

“This is why I’m proposing to make my school a prison”

Nathan Bootz, a school superintendent in Michigan, writes a public letter to his governor:

Dear Governor Snyder,

In these tough economic times, schools are hurting. And yes, everyone in Michigan is hurting right now financially, but why aren’t we protecting schools? Schools are the one place on Earth that people look to to “fix” what is wrong with society by educating our youth and preparing them to take on the issues that society has created.

One solution I believe we must do is take a look at our corrections system in Michigan. We rank nationally at the top in the number of people we incarcerate. We also spend the most money per prisoner annually than any other state in the union. Now, I like to be at the top of lists, but this is one ranking that I don’t believe Michigan wants to be on top of.

Consider the life of a Michigan prisoner. They get three square meals a day. Access to free health care. Internet. Cable television. Access to a library. A weight room. Computer lab. They can earn a degree. A roof over their heads. Clothing. Everything we just listed we DO NOT provide to our school children.

This is why I’m proposing to make my school a prison. The State of Michigan spends annually somewhere between $30,000 and $40,000 per prisoner, yet we are struggling to provide schools with $7,000 per student. I guess we need to treat our students like they are prisoners, with equal funding. Please give my students three meals a day. Please give my children access to free health care. Please provide my school district Internet access and computers. Please put books in my library. Please give my students a weight room so we can be big and strong. We provide all of these things to prisoners because they have constitutional rights. What about the rights of youth, our future?!

Please provide for my students in my school district the same way we provide for a prisoner. It’s the least we can do to prepare our students for the future…by giving our schools the resources necessary to keep our students OUT of prison.

Respectfully submitted,

Nathan Bootz, Superintendent, Ithaca Public Schools

http://gcherald.com/letterseditor/letters-to-the-editor-may-12-2011-issue.shtml

Cornell West on Obama, the necessity of a third pary

“I was thinking maybe he has at least some progressive populist instincts that could become more manifest after the cautious policies of being a senator and working with [Sen. Joe] Lieberman as his mentor,” he says. “But it became very clear when I looked at the neoliberal economic team. The first announcement of Summers and Geithner I went ballistic. I said, ‘Oh, my God, I have really been misled at a very deep level.’ And the same is true for Dennis Ross and the other neo-imperial elites. I said, ‘I have been thoroughly misled, all this populist language is just a facade. I was under the impression that he might bring in the voices of brother Joseph Stiglitz and brother Paul Krugman. I figured, OK, given the structure of constraints of the capitalist democratic procedure that’s probably the best he could do. But at least he would have some voices concerned about working people, dealing with issues of jobs and downsizing and banks, some semblance of democratic accountability for Wall Street oligarchs and corporate plutocrats who are just running amuck. I was completely wrong.”

From an interview with Chris Hedges in Truthdig.

Towards the end, he calls for a third party, which I think is really the only sensible path at the moment. I’ve definitely been feeling this sentiment in the air lately, but West is the most prominent person I’ve heard yet to declare himself “not in” and does so quite eloquently of course:

“This was maybe America’s last chance to fight back against the greed of the Wall Street oligarchs and corporate plutocrats, to generate some serious discussion about public interest and common good that sustains any democratic experiment,” West laments. “We are squeezing out all of the democratic juices we have. The escalation of the class war against the poor and the working class is intense. More and more working people are beaten down. They are world-weary. They are into self-medication. They are turning on each other. They are scapegoating the most vulnerable rather than confronting the most powerful. It is a profoundly human response to panic and catastrophe. I thought Barack Obama could have provided some way out. But he lacks backbone.

“Can you imagine if Barack Obama had taken office and deliberately educated and taught the American people about the nature of the financial catastrophe and what greed was really taking place?” West asks. “If he had told us what kind of mechanisms of accountability needed to be in place, if he had focused on homeowners rather than investment banks for bailouts and engaged in massive job creation he could have nipped in the bud the right-wing populism of the tea party folk. The tea party folk are right when they say the government is corrupt. It is corrupt. Big business and banks have taken over government and corrupted it in deep ways.

“We have got to attempt to tell the truth, and that truth is painful,” he says. “It is a truth that is against the thick lies of the mainstream. In telling that truth we become so maladjusted to the prevailing injustice that the Democratic Party, more and more, is not just milquetoast and spineless, as it was before, but thoroughly complicitous with some of the worst things in the American empire. I don’t think in good conscience I could tell anybody to vote for Obama. If it turns out in the end that we have a crypto-fascist movement and the only thing standing between us and fascism is Barack Obama, then we have to put our foot on the brake. But we’ve got to think seriously of third-party candidates, third formations, third parties.

“Our last hope is to generate a democratic awakening among our fellow citizens. This means raising our voices, very loud and strong, bearing witness, individually and collectively. Tavis [Smiley] and I have talked about ways of civil disobedience, beginning with ways for both of us to get arrested, to galvanize attention to the plight of those in prisons, in the hoods, in poor white communities. We must never give up. We must never allow hope to be eliminated or suffocated.”

Related, another compelling argument for the need of a third-party(ies). I have no background info on the author, Smith Bowen, but these two essays (chapters of an unfinished book, I believe) are an enjoyable read:

What’s the matter with… liberals?
&
What is to be done?

You’ll have to be resolute, though, and vote for the Green anytime the Democrat isn’t up to snuff, even if the Republican is a wild-eyed berserker who wants to pave the world. It’ll take a few more losses like Gore’s in Florida in 2000 before the Democrats will get the message, if then — and you have to be willing to stay the course until they do get it. Just remember that the only difference between a pave-the-world Republican and an “environmentalist” Democrat is well, none, really; the Republican means what he says, but the Democrat means what the Republican says, too.

Anyone keeping track of potential third-party candidates? This list on wikipedia is a little slim. Green Party Watch has a more inspiring list. But we need this for congress as much if not more so than for president. In a dream world, who would you actually be proud and excited to vote for?

6 Terms to Help Understand & Critique US Political Journalism

From Jay Rosen’s “Clowns to the Left of Me, Jokers to the Right: On the Actual Ideology of the American Press“:

1. The Church of the Savvy. This is my name for the actual belief system that prevails in political journalism. I’ve been keeping a kind of public notebook on it via my Twitter feed.

Prohibited from joining in political struggles, dedicated to observing what is, regardless of whether it ought to be, the savvy believe that these disciplines afford them a special view of the arena, cured of excess sentiment, useless passon, ideological certitude and other defects of vision that players in the system routinely exhibit. As I wrote on Twitter the other day, “the savvy don’t say: I have a better argument than you… They say: I am closer to reality than you. And more mature.”

Now in order for this belief system to operate effectively, it has to continually position the journalist and his or her observations not as right where others are wrong, or virtuous where others are corrupt, or visionary where others are short-sighted, but as practical, hardheaded, unsentimental, and shrewd where others are didactic, ideological, and dreamy. This is part of what’s so insidious about press savviness: it tries to hog realism to itself.

2. The Quest for Innocence, which is the agenda (I say) the press must continually serve, even as it claims to serve no one’s agenda.

Innocence [is] a determination not to be implicated, enlisted, or seen by the public as involved… The quest for innocence in political journalism means the desire to be manifestly agenda-less and thus “prove” in the way you describe things that journalism is not an ideological trade.

3. Regression to a Phony Mean, an especially dubious practice that is principally about self-protection.

Journalists associate the middle with truth, when there may be no reason to… Writing the news so that it lands somewhere near the “halfway point between the best and the worst that might be said about someone” is not a truthtelling impulse at all, but a refuge-seeking one, and it’s possible that this ritual will distort a given story.

4. The View from Nowhere, the taking of which journalists associate with their claim to legitimacy.

Occupy the reasonable middle between two markers for “vocal critic,” and critics look ridiculous charging you with bias. Their symmetrical existence feels like proof of an underlying hysteria. Their mutually incompatible charges seem to cancel each other out. The minute evidence they marshall even shows a touch of fanaticism. It can’t be that simple, that beautiful, that symmetrical… can it? Temptation says yes.

When you have an obligation to remain outside the arena, it is also tempting to feel above the partisans who are struggling within that arena. (But then where else are they going to struggle?) You learn the attractions of a view from nowhere. The daily gift of detachment keeps giving, until you’re almost “above” anyone who tries to get too political with you, or at least in the middle with the microphone between warring factions. There’s power in that; and where there’s power, there’s attraction.

5. He said, she said journalism, a formation I have been trying to bust up by pushing for more fact checking.

“He said, she said” journalism means…

– There’s a public dispute.
– The dispute makes news.
– No real attempt is made to assess clashing truth claims in the story, even though they are in some sense the reason for the story. (Under the “conflict makes news” test.)
– The means for assessment do exist, so it’s possible to exert a factual check on some of the claims, but for whatever reason the report declines to make use of them.
– The symmetry of two sides making opposite claims puts the reporter in the middle between polarized extremes.

When these five conditions are met, the genre is in gear.

6. The sphere of deviance. The power to place certain people, causes and ideas within the deviant sphere is one of the most ideological things journalists ever do.

In the sphere of deviance we find “political actors and views which journalists and the political mainstream of society reject as unworthy of being heard.” As in the sphere of consensus, neutrality isn’t the watchword here; journalists maintain order by either keeping the deviant out of the news entirely or identifying it within the news frame as unacceptable, radical, or just plain impossible…

Anyone whose views lie within the sphere of deviance—as defined by journalists—will experience the press as an opponent in the struggle for recognition. If you don’t think separation of church and state is such a good idea; if you do think a single payer system is the way to go; if you dissent from the “lockstep behavior of both major American political parties when it comes to Israel” (Glenn Greenwald) chances are you will never find your views reflected in the news. It’s not that there’s a one-sided debate; there’s no debate

Q&A: Kathryn Bigelow 

I would have shot in Iraq if it had been possible. That’s kind of a joke, but we did get close, at times five kilometers from the border. Architecturally, Jordan is a very good match for war-torn Baghdad. Plus, the military equipment was available. A bonus I had not anticipated was the one million Iraqi refugees in Amman, a contingent of whom were actors. All of our extras were Iraqi actors. Two of them told me they had been prisoners of the Americans in Iraq, and now they were playing prisoners in the film. It was surreal — and a little uncomfortable — but they laughed and said they were happy to have the work.

Q&A: Kathryn Bigelow | Men’s Journal

Yasha Levine muckrakes Cali’s water crisis

When left, right, print, broadcast and mainstream media outlets agree, it has to be true, right? Well, not exactly. Here’s what an end-of-the-year update published in November 2009 by the US Bureau of Reclamation had to say about the drought: precipitation in 2009 was about 94 percent of average in Northern California, which is pretty much the only region that matters since it is where three-quarters of the state’s water comes from.

Ninety-four percent of average? That does not sound like severe drought conditions at all. But don’t tell that to California’s Department of Water Resources, which still has a huge DHS-style “Drought Condition Severe” orange alert plastered on its Web site.

The power of simple fact-checking aside, why would California officials exaggerate — if not outright lie — about the drought? Well, the issue here is less about the drought itself and more about what a drought — real or not — can help achieve. If there is one thing 2009 revealed about California’s “action hero” governor, it’s that he is eagerly willing to serve as the front man for the sleaziest, most crooked business cartel in the state: a de facto water oligarchy made up of billionaire corporate farmers who run vast stretches of the state like their own personal fiefdoms, exploiting migrant workers for slave labor and soaking the taxpayers for billions of dollars in subsidies every year. And like all good businessmen, they aren’t letting a good mini-crisis go to waste. Their objective is to whip up fears of a drought-related calamity to push through a “solution” they’ve been having wet dreams about for the past five decades: a multi-billion-dollar aqueduct the width of the Panama Canal that would give them near total control of more than half of California’s water supplies.

Billionaire Thugs Plot To Steal California’s Water And Everything They Tell You Is A Lie – By Yasha Levine – The eXiled

The Great American Bubble Machine

giant squid

The bank’s unprecedented reach and power have enabled it to turn all of America into a giant pumpanddump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere — high gas prices, rising consumercredit rates, halfeaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you’re losing, it’s going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it’s going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth — pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They’ve been pulling this same stunt over and over since the 1920s — and now they’re preparing to do it again, creating what may be the biggest and most audacious bubble yet.

– Matt Taibbi, The Great American Bubble Machine

also, this is a useful resource: Financial Crisis for Beginners

Obligatory Obama Post

School has me very busy and hence not blogging much. But there’s been some little things I want to post, mostly creative endeavors by my pals and smidgens of youtube joy, and it seems wrong to do so without first addressing the election. Not so much cause I have anything new to say about the topic, but because as Guy put it, “insofar as this blog functions as some kind of archival document of my shit I thought it would be appropriate to note this (4 th3 future and @!!).” So two weeks late but better than never:

obama fam
[CC-BY-NC-SA David Katz/Obama for America]

GO AMERICA!

Its clear at this point that the lefty wet dream of Obama being a closet radical who will dismantle capitalism from the inside is but a tantalizing fantasy. Luckily we have the financial crisis to accomplish that mission and Obama’s victory represents many other awesome things. For one, we’ve defeated the fascist elements in this country. Democracy finally pulled through and now I can stop being paranoid about prison camps and nuclear wars (hopefully). And maybe the Constitution will finally be rescued from the bathroom of the White House, where its been used as toilet paper for the past eight years. It will be nice to believe that I have rights because I am an American, not because I am a privileged white college student.

This is a definite win of intelligence over ignorance. I still can’t tell if our past few leaders (sans Clinton, maybe) were actually stupid or just pretending, but either way its fantastic that America elected someone who is not just crazy smart and competent but also graceful and stately. It almost makes me proud to be a Harvardian. Not so much because he went here but because he is a model of an elite (meaning those who are highly skilled and educated, not necessarily born rich) actually contributing to society, not just plundering it.

From a multicultural and racial perspective, this is huge and empowering, and not just as a welcome break from all those scowled white faces. I’m thinking about the difference in how the black students my sister goes to school with will view this country and their options for the future, compared to when I was in middle school. I doubt many students at MMS, black or white, would have believed you nine years ago if you told them a black man would be president less than a decade from now, however much they would have liked to. Now its real. Obama is inspiring to everyone, but for young minorities he opens up possibilities that may have previously seemed unattainable. I look forward to the next generation of leaders.

And the Obama family, what a joy to see such a power couple and their adorable children. Michelle and Barack are both intelligent, strong, and beautiful. They seem to sincerely love and respect one another, to treat each other as equals. They make matrimony seem both sexy and fulfilling.

Finally, how exciting to hear my peers say they feel patriotic for the first time in their lives. To cry with my friends and then cheer for hours in the streets with strangers. To have a couple weeks of feeling hopeful and optimistic, before settling back into pessimism. Which unfortunately is already trickling in, hence the need to dash this out for the archives.

Liberty and justice for all.