That's my nutshell desription of the current global crisis of capitalism: people must die so our fictions may live.
Screwflation, "austerity," bailouts -- they are all about protecting the integrity of balance sheets that reflect accumulated "wealth" that does not exist in the real world and which depends entirely on perpetual exponential economic growth in a finite world. Unfortunately, this fictitious wealth is real to those who claim to own it, and they refuse to lose any of it. So, people in the real world must die so the wealthiest 0.5% of the world's population don't lose any points off their score.
Because that is what "wealth" becomes when you have so much of it that you can't possibly spend it all: nothing more than a score in a video game.
Sunday, September 25, 2011
Monday, September 19, 2011
At an Impasse
It grows increasingly more difficult for me to even attempt to add to an internet "discussion." Regardless of the forum and its contributors, we are all, each of us, slave to our own worldview.
My worldview is both cynical and optimistic at the same time. On the one hand, I have no faith in human institutions, which have proven over the millenia to be mechanisms for command and control. On the other hand, I have great faith in humanity itself.
The trouble is that the architects of human institutions understand humanity better than most humans do, and so they are able to "evolve" human institutions faster than most humans are able to recognize and respond to those changes.
This trouble is exacerbated by the fact that most humans stop questioning our worldviews once we have become comfortable with them, and so we seek to confirm what we think we already know. This is what the architects understand better than most humans, and they understood it long before Kahneman et al. and the formation of "behavioral" economics.
Today, the folks over at The Automatic Earth had a post up analogizing economics to religion. But there is no analogy as the two are one and the same, at least in modern times. Economic schools of thought, just like the religions that sprang from Judaism (Judaism, Christianity and Islam), are nothing more and nothing less than a means by which to command and control the masses of humanity who just want to live, to make them serfs through which to wield power.
Also today, over at Naked Capitalism, we had a discussion about debt inequality that was a year later and nowhere near as empirical as my own analysis here and here. I was quite tempted to join the conversation but determined that doing so would be a waste of my time. The memes are too ingrained to overcome, even among those who think they are "fighting the system." The architects of the system framed the memes, and most who are convinced they are fighting the system have actually adopted choices that are the Plan B of the architects. MMT is an example of this phenomenon.
The system cannot be reformed. It can only be scrapped. The moment where we can scrap the current system is moving towards us rapidly, although it may still be a decade or two away. Unfortunately, some have been convinced that reform that is apparently more radical is the same as scrapping the current system. It categorically is not. No "One God to Rule Them All" religion is reformable. Neither is any "One Rationale to Rule Them All" economic theory reformable. Both exist to command, control and enslave the vast majority of humanity who just want to live and let live.
My personal interpretation of "blessed are the meek; for they shall inherit the Earth" is that plain folk will be left behind by the elite, which is happening right now in the U.S. and has been for over 30 years now. "Here you go, meek, see what you can squeeze out of the heap of refuse that we left you called the Earth. We're outta here. Losers."
My worldview is both cynical and optimistic at the same time. On the one hand, I have no faith in human institutions, which have proven over the millenia to be mechanisms for command and control. On the other hand, I have great faith in humanity itself.
The trouble is that the architects of human institutions understand humanity better than most humans do, and so they are able to "evolve" human institutions faster than most humans are able to recognize and respond to those changes.
This trouble is exacerbated by the fact that most humans stop questioning our worldviews once we have become comfortable with them, and so we seek to confirm what we think we already know. This is what the architects understand better than most humans, and they understood it long before Kahneman et al. and the formation of "behavioral" economics.
Today, the folks over at The Automatic Earth had a post up analogizing economics to religion. But there is no analogy as the two are one and the same, at least in modern times. Economic schools of thought, just like the religions that sprang from Judaism (Judaism, Christianity and Islam), are nothing more and nothing less than a means by which to command and control the masses of humanity who just want to live, to make them serfs through which to wield power.
Also today, over at Naked Capitalism, we had a discussion about debt inequality that was a year later and nowhere near as empirical as my own analysis here and here. I was quite tempted to join the conversation but determined that doing so would be a waste of my time. The memes are too ingrained to overcome, even among those who think they are "fighting the system." The architects of the system framed the memes, and most who are convinced they are fighting the system have actually adopted choices that are the Plan B of the architects. MMT is an example of this phenomenon.
The system cannot be reformed. It can only be scrapped. The moment where we can scrap the current system is moving towards us rapidly, although it may still be a decade or two away. Unfortunately, some have been convinced that reform that is apparently more radical is the same as scrapping the current system. It categorically is not. No "One God to Rule Them All" religion is reformable. Neither is any "One Rationale to Rule Them All" economic theory reformable. Both exist to command, control and enslave the vast majority of humanity who just want to live and let live.
My personal interpretation of "blessed are the meek; for they shall inherit the Earth" is that plain folk will be left behind by the elite, which is happening right now in the U.S. and has been for over 30 years now. "Here you go, meek, see what you can squeeze out of the heap of refuse that we left you called the Earth. We're outta here. Losers."
Sunday, September 11, 2011
This Grows Tiresome
Update: Both my comments are now up at NC. Apparently, something I said got caught in a filter. I don't know what word caused the hiccup (liberal, maybe?). In any event, the explanation Yves gave Russ for how comments are moderated/filtered does not match my experience.
Earlier this evening, I posted a comment on Naked Capitalism. I did not attempt to post, I confirmed that I had posted. I saw it with my own two eyes.
I looked a bit later, and my comment had been disappeared.
What kills me is that my comment was not the least bit disrespectful or even critical. Indeed, it was much along the lines of what I set forth immediately below:
Yves is part of the neoliberal establishment. Period.
Confirmation: I now have a screenshot showing the above-quoted comment identified in the "Recent Comments," but when you click on the link, you are delivered to a page that does not include that comment (i.e., the place where the comment was actually made). This truly grows tiresome. There is nothing in the above comment that is worthy of moderation, even if you think I personally need to be moderated.
Earlier this evening, I posted a comment on Naked Capitalism. I did not attempt to post, I confirmed that I had posted. I saw it with my own two eyes.
I looked a bit later, and my comment had been disappeared.
What kills me is that my comment was not the least bit disrespectful or even critical. Indeed, it was much along the lines of what I set forth immediately below:
So . . . let me try this again.
Nice effort, Richard.
The problem, as I see it, is that you've identified as "radical" things that were part and parcel of classical liberalism.
If you are correct, and I'm not saying that you aren't, then today's liberal is a neoliberal, not a clssical liberal.
Adams Smith, a classical liberal, was anti-corporate.
Teddy Roosevelt, a classical liberal, although labeled a "conservative" was anti-monopoly (what you call "anti-trust"). The fact is that many businessmen were anti-monopoly in the late 19th century, before the "Progressive Era" (i.e., during the Gilded Age). Check out the online archives of the NY Times.
If it truly is "radical" to embrace classical liberal ideology, we're all screwed.
IF you are correct, that means that the modern "progressive" embraces the neoliberal frame of negative liberty, which is in opposition to the classical liberal frame of positive liberty. No wonder modern progressives cannot win: they give up before the fight.But when I tried to post up THIS comment, it got disappeared immediately.
Confirmation: I now have a screenshot showing the above-quoted comment identified in the "Recent Comments," but when you click on the link, you are delivered to a page that does not include that comment (i.e., the place where the comment was actually made). This truly grows tiresome. There is nothing in the above comment that is worthy of moderation, even if you think I personally need to be moderated.
Tuesday, September 6, 2011
Because Naked Capitalism Won't Publish My Comment
I attempted to respond to this post by PeePee. I submitted my comment once, but it didn't show up. Tried to resubmit, but I was told that the comment was already made. The clear implication is that my comments go to moderation these days (I had numerous similar issues last week, but I chalked them upt to being out of town with crappy internet service.)
The comment:
The comment:
It goes back to how financial institutions make money – primarily, by lending other people money (that has always been and still remains the core of banking profits).
I'm surprised you didn't correct the man, Philip. We all know that money is created by lending it. A decades-old Fed working paper establishes this fact, as Steve Keen has noted on this very site.
Once they figured out the game borrowers just lied about their finances – this is why terms like ‘liar loans’ and ‘NINJAs’ (no assets no jobs or assets) sprung up in the mortgage industry.
If you believe the other Michael Hudson, this narrative is a complete whitewashing of what liar loans were all about. In many documented cases, it was the lender who was lying about the borrower's finances, and without the borrower's knowledge.
It’s silly to think that everybody in finance is ‘evil’ or engaged in fraud (though there are people who assert that). Most people involved are very smart, diligent, hard working and passionate about what they do.
Wow. Nice strawman. Financial fraud that dwarfed the S&L debacle and there has been no criminal convictions outside of the lone wolf, small fry scamsters like Bernie Madoff? Really? The government's view appears to be that there was no crime, apparently because fraud is the new official business model of the FIRE sector. (h/t Janet Tavakoli)
And again you didn't call him on it.
Elites who allow their empathy for their fellow elites to overwhelm their conception of the rule of law cannot be trusted to enforce the law. Satyajit Das is no Bill Black.
Monday, September 5, 2011
History of Socialism
A few months ago I picked up an early twentieth century edition of a late nineteenth century tome by Thomas Kirkup entitled History of Socialism. I opened it up to the chapter on Marx and noted a couple of things.
First, the introductory paragraph about Marx himself focused on his Jewish ancestry. No surprise, I suppose.
Second, much of the chapter was spent on arguing that Marx was not the father of Socialist thought but merely its most outspoken prophet. Indeed, Marx's labor theory of value was traced all the way back to John Locke's conception of property and Ricardo's iron law of wages.
Which leads me back to the poster child of rationalist arrogance: MMT shill Philip Pilkington, who for some unknown reason gets a lot of air time over at Yves' site. I've complained before about the rationalist arrogance of CHS (or even Jesse, actually), but that's because they're not typically arrogant people. My complaints are about their behavior on a given occasion, not on who they are on a daily basis. My complaints about PeePee are about his arrogance, which is a feature of who he is and not a behavior.
I guess it all boils down to this: if Locke's revolutionary theory of natural law (including property) can be perverted to enslave the masses in the name of liberty, what hope does MMT have? Yes, I've skipped quite a number of steps in asking that question, including explaining what I mean about Locke, but rationalists are smart enough to figure out what I mean, right?
First, the introductory paragraph about Marx himself focused on his Jewish ancestry. No surprise, I suppose.
Second, much of the chapter was spent on arguing that Marx was not the father of Socialist thought but merely its most outspoken prophet. Indeed, Marx's labor theory of value was traced all the way back to John Locke's conception of property and Ricardo's iron law of wages.
Which leads me back to the poster child of rationalist arrogance: MMT shill Philip Pilkington, who for some unknown reason gets a lot of air time over at Yves' site. I've complained before about the rationalist arrogance of CHS (or even Jesse, actually), but that's because they're not typically arrogant people. My complaints are about their behavior on a given occasion, not on who they are on a daily basis. My complaints about PeePee are about his arrogance, which is a feature of who he is and not a behavior.
I guess it all boils down to this: if Locke's revolutionary theory of natural law (including property) can be perverted to enslave the masses in the name of liberty, what hope does MMT have? Yes, I've skipped quite a number of steps in asking that question, including explaining what I mean about Locke, but rationalists are smart enough to figure out what I mean, right?
Jesse's Monetarist View of Deflation
In his latest post, Jesse backtracks somewhat on deflation, limiting the concept to "monetary deflation."
When you redfine deflation to limit it solely to its monetary component, it is hard to argue with Jesse's conclusions. But I will.
In the short term, Jesse is absolutely correct. We have no "monetary deflation." Now. But we will.
Where I disagree with Jesse is in the long term outlook. As I've said before, we are in a period of managed deflation. What I mean (and have always meant) by "deflation" is an economy in contraction (as opposed to expansion). What I mean by "managed" is that financial speculation is being used to mask that contraction by creating higher prices for consumer staples. In short, I've argued that stagflation, what I call "screwflation" is not inflationary at all but is, in reality, deflation.
The problem, I think, is that Jesse's understanding of inflation/deflation is fully informed by Milton Friedman's Chicago School brand of monetarism. It was Friedman, after all, who famously stated that "inflation is always and everywhere a monetary phenomenon." (I've argued, as Henry George did long before me, that inflation is, in fact, always and everywhere the result of leveraged financial speculation.) Indeed, Jesse believes that the Federal Reserve, through its monetarist policies, has a profound influence over the economy. (As I've said before, with John Kenneth Galbraith's support, I believe the Federal Reserve is largely irrelevant.)
As a result in his belief in monetarism, i.e., the demonstrably false quantity theory of money, Jesse mistakenly believes that things like "monetary deflation" and hyperinflation are purely "policy decisions." Well, they weren't during the Great Depression, and the only reason they are at this point of the Greater Depression is because of the automatic stabilizers that world governments put in place as a result of the Great Depression. The problem is, as Jesse notes, that without substantial reform of the current system, things are going to get worse, to the point where no central bank and no government will be able to influence, let alone control, the final outcome. Why? Because the same cannibalistic system that ate the real economy is eating the automatic economic stabilizers.
One final note: Jesse says that "credit is NOT money." While I agree that credit is not M0, I'd argue that M2, which he relies upon, is credit. Riddle me this: what would happen if all of the owners of M2 would simultaneously demand that their "wealth" be turned into cash, i.e., M0?
When you redfine deflation to limit it solely to its monetary component, it is hard to argue with Jesse's conclusions. But I will.
In the short term, Jesse is absolutely correct. We have no "monetary deflation." Now. But we will.
Where I disagree with Jesse is in the long term outlook. As I've said before, we are in a period of managed deflation. What I mean (and have always meant) by "deflation" is an economy in contraction (as opposed to expansion). What I mean by "managed" is that financial speculation is being used to mask that contraction by creating higher prices for consumer staples. In short, I've argued that stagflation, what I call "screwflation" is not inflationary at all but is, in reality, deflation.
The problem, I think, is that Jesse's understanding of inflation/deflation is fully informed by Milton Friedman's Chicago School brand of monetarism. It was Friedman, after all, who famously stated that "inflation is always and everywhere a monetary phenomenon." (I've argued, as Henry George did long before me, that inflation is, in fact, always and everywhere the result of leveraged financial speculation.) Indeed, Jesse believes that the Federal Reserve, through its monetarist policies, has a profound influence over the economy. (As I've said before, with John Kenneth Galbraith's support, I believe the Federal Reserve is largely irrelevant.)
As a result in his belief in monetarism, i.e., the demonstrably false quantity theory of money, Jesse mistakenly believes that things like "monetary deflation" and hyperinflation are purely "policy decisions." Well, they weren't during the Great Depression, and the only reason they are at this point of the Greater Depression is because of the automatic stabilizers that world governments put in place as a result of the Great Depression. The problem is, as Jesse notes, that without substantial reform of the current system, things are going to get worse, to the point where no central bank and no government will be able to influence, let alone control, the final outcome. Why? Because the same cannibalistic system that ate the real economy is eating the automatic economic stabilizers.
One final note: Jesse says that "credit is NOT money." While I agree that credit is not M0, I'd argue that M2, which he relies upon, is credit. Riddle me this: what would happen if all of the owners of M2 would simultaneously demand that their "wealth" be turned into cash, i.e., M0?
Charles Hugh Smith's Challenge
CHS is back from vacation, clearly recharged and invigorated by his time off. As well as more sober.
In a particularly poignant post, CHS describes the plight of "Russ in Redding," a young homeless man who had graduated from culinary school but couldn't find a job. CHS ended his post with the following challenge:
But his Plan B is no Plan B at all. It provides no alternative to Plan A. Rather, it proposes that involuntary servitude-- i.e., slavery-- is the price for the welfare provided by his Savior State. His idea is so bad, so impractical, that I don't know that he is credible enough to issue any kind of challenge.
That being said, his heart is in the right place, even if his two minds are not thinking clearly. For this reason, I'll take up his challenge.
Plan B is to do nothing. For now. Remember that Plan A, according to CHS, is to continue bailing out the speculators (something that he calls "Keynesian" but which is categorically NOT Keynesian but Chicago School monetarism). (It continues to irk me that so many libertarian-inspired types want to label Milton Friedman's policies as "Keynesian" when he was the anti-Keynesian.) So, my Plan B is not Plan A.
I get CHS's sense of urgency. I really do. But it will take a bit longer for things to unfold to the point where people are desparate for change. It is then that most of us will realize that community matters, that our neighbors matter. These things simply take time.
In a particularly poignant post, CHS describes the plight of "Russ in Redding," a young homeless man who had graduated from culinary school but couldn't find a job. CHS ended his post with the following challenge:
If you didn't like Getting 20 Million Unemployed Back to Productive Work: Here's How (August 16, 2011), then outline your own Plan B. Doing nothing--waving dead chickens and painting dials on rocks to please the cargo cult priests--is going to accomplish just that: nothing.What is Plan A? This:
As I have made clear here many times, Plan A--millions of jobs appearing out of thin air, magically called into existence by the incantations of cargo-cult Keynesians and their Wall Street banker brethren who think all our structural unemployment will go away if only the Federal Reserve shoves another couple trillion dollars into the banks and speculators' hands every year--has failed. We need a Plan B, and we have no models for Plan B.I agree with CHS that Plan A can't create millions of jobs, but it wasn't designed to do so. Plan A exists to finalize the neofedualization of the Western world.
But his Plan B is no Plan B at all. It provides no alternative to Plan A. Rather, it proposes that involuntary servitude-- i.e., slavery-- is the price for the welfare provided by his Savior State. His idea is so bad, so impractical, that I don't know that he is credible enough to issue any kind of challenge.
That being said, his heart is in the right place, even if his two minds are not thinking clearly. For this reason, I'll take up his challenge.
Plan B is to do nothing. For now. Remember that Plan A, according to CHS, is to continue bailing out the speculators (something that he calls "Keynesian" but which is categorically NOT Keynesian but Chicago School monetarism). (It continues to irk me that so many libertarian-inspired types want to label Milton Friedman's policies as "Keynesian" when he was the anti-Keynesian.) So, my Plan B is not Plan A.
I get CHS's sense of urgency. I really do. But it will take a bit longer for things to unfold to the point where people are desparate for change. It is then that most of us will realize that community matters, that our neighbors matter. These things simply take time.
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