DTM, zer da berri? (3)

Hasierarako, ikus DTM, zer da berri? (1) eta DTM, zer da berri? (2) in Zipriztin ekonomikoak (7)

Segida:

Bill Mitchell-en Modern Monetary Theory – what is new about it? – Part 3 (long)1

Sarrera2

(i) DTM eta gobernu subiranoa3

(ii) Zergapetzea4

(iii) Langabezia5

(iv) Abba Lerner6

(v) Kontabilitatea7

(vi) Estatu dirua8

(vii) Gobernu gastuen mugak9

(viii) Politika fiskala eta ziklo ekonomikoa10

(ix) Ekonomia irekia11

(x) Enplegu osoa12

(xi) Politika fiskala eta bankugintza13

(a) Financial crowding out14

(b) Interes tasa15

(c) Aipatutako hipotesien akatsak16

(xii) Literatura post keynestarra17

(xiii) DTM: alderantzizko jarrera18

(xiv) DTM: banku zentrala eta berorren trantsakzioak19

(xv) Merkataritza bankuak. Transakzio horizontalak20

(xvi) Merkataritza bankuak eta banku zentrala21

(xvii) Merkataritza bankuen erreserbak22

(xviii) Banku zentralaren parte hartzea23

(xix) Garrantzitsua: defizit fiskalak eta bonoen salmentak24

(xx) Banku zentrala eta altxor publikoa25

(xxi) Eskudirua eta bonoak26

Erreferentzia:

Tymoigne, E. and Wray, L.R. (2013) ‘Modern money theory 101: a reply to critics’, Working Paper No. 778, Levy Economics Institute of Bard College, Annandale-on- Hudson, NY, November. http://www.levyinstitute.org/pubs/wp_778.pdf

(Segituko du)

(Hurrengoan banku zentral eta altxor publikoaren sendotzea ikusiko da27)


2 Ingelesez: “(…) Today’s blog considers another section of the paper – the dynamics of fiscal deficits and public debt. We consider the difference between deficit doves, who consider fiscal deficits are appropriate under some conditions but should be balanced over some definable economic cycle, which we argue has been the standard Post Keynesian position, and the MMT approach to deficits, which considers the desirable deficit outcome at any point in time to be a function of the state of non-government spending and the utilisation of the productive capacity of the economy. We argue that fiscal rules expressed in terms of some rigid balance to GDP target are not only meaningless but dangerous. Fiscal rules in MMT are only meaningful if related to the state of non-government spending and the utilisation of the productive capacity of the economy. This body of MMT work is clearly novel and improves on the extant Post Keynesian literature in the subject which was either silent or lame on these topics.”

3 Ingelesez: “MMT says that a sovereign government is never revenue constrained because it is the monopoly issuer of the currency.

A sovereign government in MMT is one that issues its own currency, floats it on international markets, sets its own interest rate and never accumulates liabilities in foreign currencies.

Never revenue constrained means that such a government is not financially constrained and can spend whatever it likes without recourse to ‘funding’, unlike a household (a user of the currency), which has to finance all its spending from income earned, prior savings, asset sales and/or borrowing.

(…)

MMT authors have never claimed that they were the first to understand that point. The language that these authors use is clearly different to the way that mainstream or other Post Keynesian macroeconomists discuss this point.

And their understanding of the options that follow from that are very different.

(…)

Once again, MMT does not consider that the government deficit is restrained in any way by tax revenue or bond sales. The ability to earn income or have access to credit is important to a household or business firm, which uses the currency.

But to a sovereign government the role of taxes or bond sales is not akin to any experience that a household or business firm would know.

The accounting structure (…) is, in fact, a trivial exercise in adding and subtracting.

Does it provide any clue to the real constraints facing a sovereign government intent on creating full employment? Answer: Absolutely not.

And it is here that MMT has provided significant new insights.

4 Ingelesez: “For example, if taxes are not necessary to fund government spending then what role do they play at the macroeconomic level (and here I ignore taxes designed to alter resource allocations – such as carbon or tobacco imposts)?

(…)

By linking taxation to real resource usage in the non-government sector, MMT brings to the fore the insight that taxation functions to promote offers from private individuals to government of goods and services in return for the necessary funds to extinguish the tax liabilities.

The orthodox conception is that taxation provides revenue to the government which it requires in order to spend. In fact, the reverse is the truth. Government spending provides revenue to the non-government sector which then allows them to extinguish their taxation liabilities.

This insight allows us to see another dimension of taxation which is lost in mainstream and extant Post Keynesian analysis, (…).

Given that the non-government sector requires fiat currency to pay its taxation liabilities, in the first instance, the imposition of taxes (without a concomitant injection of public spending) by design creates unemployment (people seeking paid work) in the non-government sector.

5 Ingelesez: “The unemployed or idle non-government resources can then be utilised through demand injections via government spending, which amounts to a transfer of real goods and services from the non-government to the government sector.

In turn, this transfer facilitates the government’s socioeconomic program.

While real resources are transferred from the non-government sector in the form of goods and services that are purchased by government, the motivation to supply these resources is sourced back to the need to acquire fiat currency to extinguish the tax liabilities.

Further, while real resources are transferred, the taxation provides no additional financial capacity to the government of issue. Conceptualising the relationship between the government and non-government sectors in this way makes it clear that it is government spending that provides the paid work which eliminates the unemployment created by the taxes.”

6 Ingelesez: “That perspective is not found in the non-MMT literature. It is true that way back Abba Lerner’s Functional Finance approach recognised that (Lerner, 1943: 39):

The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and its withdrawal of money, shall all be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine about what is sound and what is unsound. This principle of judging only by effects has been applied in many other fields of human activity, where it is known as the method of science opposed to scholasticism. The principle of judging fiscal measures by the way they work or function in the economy we may call Functional Finance …

Government should adjust its rates of expenditure and taxation such that total spending in the economy is neither more nor less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is a deficit, greater borrowing, “printing money,” etc., then these things in themselves are neither good nor bad, they are simply the means to the desired ends of full employment and price stability …

Taxation thus drains non-government purchasing power.”

7 Ingelesez: “Palley (…) thinks it is a body blow against MMT to point out that “it is easy to show that budget surpluses destroy high-powered money balances and lower the privately held high-powered money supply”.

But that trivial accounting fact was at the heart of Lerner’s observation and no MMT author claims any originality for building it into the monetary framework they use.

The more important point, which is not at the forefront of Lerner’s representation, and certainly not apparent in the trivial accounting relationship that links the monetary flows, is that the MMT literature directly links taxation to the real constraints that governments have to deal with to achieve socio-economic goals.”

8 Ingelesez: “This brings out into relief – in a clear way – why mass unemployment arises.

It is the introduction of State Money (which we define as government taxing and spending) into a non-monetary economics that raises the spectre of involuntary unemployment.

As a matter of accounting, for aggregate output to be sold, total spending must equal total income (whether actual income generated in production is fully spent or not each period).

Involuntary unemployment is idle labour offered for sale with no buyers at current prices (wages). Unemployment occurs when the private sector, in aggregate, desires to earn the monetary unit of account through the offer of labour but doesn’t desire to spend all it earns, other things equal.

As a result, involuntary inventory accumulation among sellers of goods and services translates into decreased output and employment. In this situation, nominal (or real) wage cuts per se do not clear the labour market, unless those cuts somehow eliminate the private sector desire to net save, and thereby increase spending.

So the purpose of State Money is to facilitate the movement of real goods and services from the non-government (largely private) sector to the government (public) domain.

Government achieves this transfer by first levying a tax, which creates a notional demand for its currency of issue. To obtain funds needed to pay taxes and net save, non-government agents offer real goods and services for sale in exchange for the needed units of the currency.

This includes, of-course, the offer of labour by the unemployed. The obvious conclusion is that unemployment occurs when net government spending is too low to accommodate the need to pay taxes and the desire to net save.

9 Ingelesez: “This analysis also sets the limits on government spending.

It is clear that government spending has to be sufficient to allow taxes to be paid. In addition, net government spending is required to meet the private desire to save (accumulate net financial assets).

From the previous points, it is also clear that if the Government doesn’t spend enough to cover taxes and the non-government sector’s desire to save the manifestation of this deficiency will be unemployment.

Keynesians have used the term demand-deficient unemployment. In our conception, the basis of this deficiency is at all times inadequate net government spending, given the private spending (saving) decisions in force at any particular time.

That type of construction is clearly an innovation introduced by MMT authors.

10 Ingelesez: “Fiscal policy and the economic cycle

There is also misunderstandings in the Post Keynesian literature about the role that fiscal deficits should play over the economic cycle.

(…)

There is no question that if nominal spending continues to grow at a rate that outstrips the capacity of the productive sector to meet that spending with real output then firms will move to price-adjustment and inflation will result.

MMT puts that generally accepted observation at front and centre of its analysis – but has never claimed to have introduced it into the literature.

In part, it helps us to understand the previous discussion over the role of taxes. For there to be real space in the economy for the government to spend, the non-government sector has to be deprived of its capacity to utilise the real resources the government seeks to command.

(…)

…MMT authors have moved away from the ‘deficit dove’ position to properly articulate the role of deficit spending in the monetary economy.

In this blog – The full employment fiscal deficit condition – I outlined what I called the full employment fiscal deficit condition, which is the only fiscal rule that is important, despite the plethora of rules proposed by the mainstream (deficit to GDP ratios etc) and Post Keynesians (balanced budgets over the cycle).

Tymoigne and Wray (2013) are correct to say that at full employment there is no necessity for the fiscal balance to be zero. Under some conditions, a fiscal surplus might be appropriate. In other situations, which will be more often encountered by nations, continuous fiscal deficits will be required.

That is a central insight provided by MMT authors and you will struggle to find it in the mainstream or Post Keynesian literature.

But is it correct?

11 Ingelesez: “In an open economy, if there was no government spending or taxation (so a fiscal balance of zero) the level of economic activity (output) will be determined by private domestic spending (consumption plus investment) and net external spending (exports minus imports). If one or more of those spending sources declines, then activity will decline.

A spending gap is defined as the spending required to create demand sufficient to elicit output levels which at current productivity levels will provide enough jobs (measured in working hours) for all the workers who desire to work.

A zero spending gap occurs when there is full employment. From a functional finance perspective the role of government fiscal policy is obvious – to ensure there is no spending gap.

It becomes obvious (and incontestable) that if the non-government spending sources decline from a given position of full employment, the only way that the spending gap can be filled is via a fiscal intervention – direct government spending and/or a tax cut (to increase private disposable income and stimulate subsequent private spending).

That is standard Keynesian thinking and certainly not newly introduced by MMT.”

12 Ingelesez: “What about the maintenance of full employment?

The fiscal position (deficit or surplus) must fill the gap between the savings minus investment minus the gap between exports minus imports (with net income transfers included).

But that relationship can be easily satisfied at levels of economic activity that are associated with persistently high levels of unemployment. Keynes’ General Theory was important in history because it showed how market economies could get stuck in these sort of high unemployment steady-states.

To maintain a full employment level of national income, which is generated when all resources are fully utilised according to the preferences of workers and owners of land and capital etc, the fiscal deficit has to be sufficient to offset the saving and imports that occurs at that level of income, less the sum of private capital formation and export revenue that is forthcoming at that level of income.

I could have written that in algebra (along Palley’s lines) to get a ‘model’ if I chose::

Full-employment fiscal deficit condition: (G – T) = S(Yf) + M(Yf) – I(Yf) – X

Where Yf is the full employment level of income and the sum of the terms S(Yf) and M(Yf) represent drains on aggregate demand when the economy is at full employment and the sum of the terms I(Yf) and X represents spending injections at full employment.

Either way, the point is clear:

If the drains outweigh the injections then for national income to remain stable, there has to be a fiscal deficit (G – T) sufficient to offset that gap in aggregate demand.

If the fiscal deficit is not sufficient, then national income will fall and full employment will be lost. If the government tries to expand the fiscal deficit beyond the full employment limit (G – T)(Yf) then nominal spending will outstrip the capacity of the economy to respond by increasing real output and while income will rise it will be all due to price effects (that is, inflation would occur).

In this sense, MMT specifies a strict discipline on fiscal policy. It is not a free-for-all. If the goal is full employment and price stability then the Full-employment fiscal deficit condition has to be met.

But also note that the full-employment fiscal deficit condition does not necesarily (or usually given history) solve to zero on the right-hand side (more algebra talk!).

If it did, then at full employment, the appropriate fiscal position would be a balance.

But there is nothing necessary for that to happen and as history tells us, it usually will not happen.

Making this deficit condition explicit is novel in MMT and has not been articulated in the extant Post Keynesian literature, which has become trapped into thinking that deficits in downturns must be offset by surpluses in upturns to stabilise public debt.

MMT breaks with that Post Keynesian tradition because it places no particular importance on any specific public debt ratio. It also recommends breaking the nexus between deficit spending and debt-issuance per se, by advocating Overt Monetary Finance, which Post Keynesians have typically rejected because they have bought the mainstream line that it would be inflationary.

(…)

In the real world, capital formation is rarely constrained to equal depreciation. In other words, the capital stock typically grows and, with it, the productive capacity of the supply side. (…)

13 Ingelesez: “Fiscal policy and banking

Finally, it is without doubt that the MMT authors have introduced new insights in the relationship between fiscal policy and the banking system which overturn much of the conventional wisdom found in the macroeconomics literature.”

14 Ingelesez: “One of the enduring myths that are to be found in the mainstream macroeconomics literature relates to the so-called ‘financial crowding out’ assertion.

The financial crowding out assertion is a central plank in the mainstream economics attack on government fiscal intervention. At the heart of this conception is the theory of loanable funds, which is a aggregate construction of the way financial markets are meant to work in mainstream macroeconomic thinking.

The original conception was designed to explain how aggregate demand could never fall short of aggregate supply because interest rate adjustments would always bring investment and saving into equality.

At the heart of this erroneous hypothesis is a flawed viewed of financial markets. The so-called loanable funds market is constructed by the mainstream economists as serving to mediate saving and investment via interest rate variations.

This is pre-Keynesian thinking and was a central part of the so-called classical model where perfectly flexible prices delivered self-adjusting, market-clearing aggregate markets at all times.

If consumption fell, then saving would rise and this would not lead to an oversupply of goods because investment (capital goods production) would rise in proportion with saving.

So while the composition of output might change (workers would be shifted between the consumption goods sector to the capital goods sector), a full employment equilibrium was always maintained as long as price flexibility was not impeded.”

15 Ingelesez: “The interest rate became the vehicle to mediate saving and investment to ensure that there was never any gluts.

So saving (supply of funds) is conceived of as a positive function of the real interest rate because rising rates increase the opportunity cost of current consumption and thus encourage saving. Investment (demand for funds) declines with the interest rate because the costs of funds to invest in (houses, factories, equipment etc) rises.

Changes in the interest rate thus create continuous equilibrium such that aggregate demand always equals aggregate supply and the composition of final demand (between consumption and investment) changes as interest rates adjust.

According to this theory, if there is a rising fiscal deficit then there is increased demand is placed on the scarce savings (via the alleged need to borrow by the government) and this pushes interest rates to “clear” the loanable funds market. This chokes off investment spending.

So allegedly, when the government borrows to ‘finance’ its fiscal deficit, it crowds out private borrowers who are trying to finance investment.

The mainstream economists conceive of this as the government reducing national saving (by running a fiscal deficit) and pushing up interest rates which damage private investment.

16 Ingelesez:”The basic flaws in the mainstream story are that governments just borrow back the net financial assets that they create when they spend. Its a wash! It is true that the private sector might wish to spread these financial assets across different portfolios. But then the implication is that the private spending component of total demand will rise and there will be a reduced need for net public spending.

Further, they assume that savings are finite and the government spending is financially constrained which means it has to seek ‘funding’ in order to progress their fiscal plans. But government spending by stimulating income also stimulates saving.

Additionally, credit-worthy private borrowers can usually access credit from the banking system. Banks lend independent of their reserve position so government debt issuance does not impede this liquidity creation.”

17 Ingelesez: “But we jump ahead.

The Post Keynesian literature rejects the crowding out claims. Davidson’s (…) discussion (…) is representative of the arguments that are offered in this regard. He places the debate within the so-called IS-LM framework, where the debate as to whether fiscal deficits cause rising interest rates comes down to whether the LM curve is vertical or not (which comes down to a debate about the income and interest-rate sensitivity of the demand for money when the money supply is fixed).

Clearly, even the starting points of this framework are at odds with reality. Most Post Keynesians eschew the crowding out hypothesis by recourse to statements about the capacity of the government to ‘print money’ or the access global capital markets, which are outside of the direct influence of domestic interest rates, offers local borrowers.

In other words, they do not directly challenge the notion that fiscal deficits drive up interest rates per se, an effect which can be mitigated by these other channels (money printing, global borrowing).”

18 Ingelesez: “Where MMT departs from this literature is to explicitly integrate bank reserves into the analysis in a way that no previous Post Keynesian author has attempted.

The MMT framework shows that far from placing upward pressure on interest rates, fiscal deficits in fact, set in place dynamics that place pressure on interest rates in the opposite direction.

You will not find that result in the extant Post Keynesian or mainstream literature.”

19 Ingelesez: “How does that occur?

The central bank operations aim to manage the liquidity in the banking system such that short-term interest rates match the official targets which define the current monetary policy stance.

In achieving this aim the central bank may: (a) Intervene into the interbank money market (for example, the Federal funds market in the US) to manage the daily supply of and demand for funds; (b) buy certain financial assets at discounted rates from commercial banks; (c) offer a return on excess bank reserves, and (d) impose penal lending rates on banks who require urgent funds.

In practice, most of the liquidity management is achieved through (a), although in recent times (as QE has become the norm) central banks are using option (c) more than in the past.

That being said, central bank operations function to offset operating factors in the system by altering the composition of reserves, cash, and securities, and do not alter net financial assets of the non- government sectors.”

20 Ingelesez: “Money markets are where commercial banks (and other intermediaries) trade short-term financial instruments between themselves in order to meet reserve requirements or otherwise gain funds for commercial purposes. In terms of the diagram all these transactions are horizontal and net to zero.”

21 Ingelesez: “Commercial banks maintain accounts with the central bank which permit reserves to be managed and also the clearing system to operate smoothly.

In addition to setting a lending rate (discount rate), the central bank also sets a support rate which is paid on commercial bank reserves held by the central bank. This support rate becomes the interest-rate floor for the economy.

The short-run or operational target interest rate, which represents the current monetary policy stance, is set by the central bank between the discount and support rate. This effectively creates a corridor or a spread within which the short-term interest rates can fluctuate with liquidity variability. It is this spread that the central bank manages in its daily operations.

MMT has highlighted those relationships but does not claim any originality for doing so.

22 Ingelesez: “In most nations, commercial banks by law have to maintain positive reserve balances at the central bank, accumulated over some specified period. At the end of each day commercial banks have to appraise the status of their reserve accounts. Those that are in deficit can borrow the required funds from the central bank at the discount rate.

Alternatively banks with excess reserves are faced with earning the support rate which is below the current market rate of interest on overnight funds if they do nothing.

Clearly it is profitable for banks with excess funds to lend to banks with deficits at market rates. Competition between banks with excess reserves for custom puts downward pressure on the short-term interest rate (overnight funds rate) and depending on the state of overall liquidity may drive the interbank rate down below the operational target interest rate.

When the system is in surplus overall this competition would drive the rate down to the support rate.

The demand for short-term funds in the money market is a negative function of the interbank interest rate since at a higher rate less banks are willing to borrow some of their expected shortages from other banks, compared to risk that at the end of the day they will have to borrow money from the central bank to cover any mistaken expectations of their reserve position.

The main instrument of this liquidity management is through open market operations, that is, buying and selling government debt.”

23 Ingelesez: “In the absence of adjustments to the support rates offered on reserves, when the competitive pressures in the overnight funds market drives the interbank rate below the desired target rate, the central bank drains liquidity by selling government debt.

This open market intervention therefore will result in a higher value for the overnight rate.

The significant point for this discussion is to expose the myth of crowding out.

Net government spending (deficits) which is not taken into account by the central bank in its liquidity decision, will manifest as excess reserves (cash supplies) in the clearing balances (bank reserves) of the commercial banks at the central bank.

MMT refers to this a system-wide surplus.

In these circumstances, the commercial banks will be faced with earning the lower support rate return on surplus reserve funds if they do not seek profitable trades with other banks, who may be deficient of reserve funds.

The ensuing competition to offload the excess reserves puts downward pressure on the overnight rate. However, because these transactions necessarily net to zero, the interbank trading cannot clear the system-wide surplus.

Accordingly, if the central bank desires to maintain the current target overnight rate, then it must drain this surplus liquidity by selling government debt or offering a competitive return on the excess reserves to choke off the competitive forces.

That is, the bond sales (debt issuance) allows the central bank to drain any excess reserves in the cash-system and therefore curtail the downward pressure on the interest rate. In doing so it maintains control of monetary policy.

24 Ingelesez: Importantly:

  • Fiscal deficits place downward pressure on interest rates;

  • Bond sales maintain interest rates at the central bank target rate.

Accordingly, the concept of debt monetisation, which is a central part of mainstream thinking, is a non sequitur. So Friedman, for example, claimed that “the entire deficit must be financed by a concomitant increase in the supply of money (to avoid ‘crowding out’) (…).

That assertion remains standard doctrine. Even the Post Keynesian economists consider crowding out to be overcome by the government’s capacity to print money (…).

But once we understand how bank reserves are affected by fiscal deficits (an MMT insight), we quickly realise that once the overnight rate target is set by the central bank, the latter should only trade government securities if liquidity changes are required to support this target.

25 Ingelesez: “Given the central bank cannot control the reserves then debt monetisation is strictly impossible unless the central bank permits the excess reserves to rise indefinitely and pays a return to the banks for excess reserve holdings.

Imagine that the central bank traded government securities with the treasury, which then increased government spending. The excess reserves from the fiscal deficits would force the central bank to sell the same amount of government securities to the private market or allow the overnight rate to fall to the support level (which might be zero).

This is not monetisation but rather the central bank simply acting as broker in the context of the logic of the interest rate setting monetary policy.

26 Ingelesez: “Ultimately, private agents may refuse to hold any further stocks of cash or bonds.

With no debt issuance, the interest rates will fall to the central bank support limit (which may be zero).

It is then also clear that the private sector at the micro level can only dispense with unwanted cash balances in the absence of government paper by increasing their consumption levels.

Given the current tax structure, this reduced desire to net save would generate a private expansion and reduce the deficit, eventually restoring the portfolio balance at higher private employment levels and lower the required budget deficit as long as savings desires remain low.

Clearly, there would be no desire for the government to expand the economy beyond its real limit.

Whether this generates inflation depends on the ability of the economy to expand real output to meet rising nominal demand. That is not compromised by the size of the budget deficit.”

27 Ingelesez: “Next week I will provide the fourth part of this series which will consider the consolidation of the central bank and the treasury.

RUI (ideia argiak) (4)

(1) CUP

CUP Països Catalans1

Abuztua 18

Camí del referèndum, per una república per canviar-ho tot!

(2) Anna Arqué Solsona@anna_arque2

Tots independentistes volem Declarar Independència, la millor manera d’arribar-hi és amb RUI @jordipauls9 @epaluzie @mvperis75 @skidipawnee

2016 abu. 23

(3) ANC: Sánchez diu que el RUI serà present a la Diada3

El president de l’ANC, Jordi Sánchez, ha anunciat que l’entitat inclouria el referèndum unilateral d’independència entre les reivindicacions de l’Onze de Setembre. En una entrevista a la SER, Sánchez s’ha mostrat convençut que l’opció del RUI ja s’havia convertit en majoritària entre l’independentisme i seria assumida aviat tant pel parlament com pel president de la Generalitat.”

(4) La CUP veu factible organitzar el RUI el juliol del 20174

(5) Elisenda Paluzie: “Ara hauríem d’estar parlant de l’economia del nostre nou estat

(….) No és el prototipus de persona de carnet.

… I la crítica serveix per avançar i millorar. És un pèl problemàtic, aquí, però. A d’altres països es veu amb normalitat que hi hagi diputats que votin diferent. Que cada vegada que toca votar ho facin amb consciència, independentment del partit al qual pertanyen. Aquí els grups parlamentaris són una cosa jeràrquica, hi ha una disciplina i, en general, als partits, i és una cosa que fa que la militància costi tant, es veu malament el fet d’opinar una mica diferent de la línia oficial del partit, expressar opinions que no hagin estat passades pels argumentaris, aquesta cosa que fan els partits. Recordo els quatre anys que vaig militar a Esquerra Republicana: quan hi havia un tema candent, rebíem un argumentari; els trobava sempre tan ridículs, amb tres o quatre paràgrafs molt senzills en què hi havia l’opinió del partit sobre el tema en qüestió. Un argumentari, com si fóssim tontos.”

(…) Balances amunt, balances avall.

També en parlem poc, de les balances fiscals, perquè ja no en tenim ganes. Si estem plantejant un escenari d’independència, tant ens farà com Espanya calcula les balances fiscals. Hauríem d’estar parlant de l’economia del nostre nou estat, de quines són les despeses imprescindibles, de com ho farem...”

(6) The Voluntieer

Ara o mai ||*||@araomai5

La web de la Brigada Lincoln veu la independència de Catalunya com la fi real del franquisme http://araomai.cat/la-pagina-web-de-la-brigada-lincoln-veu-la-independencia-de-catalunya-com-la-fi-real-del-franquisme/ …

2016 abu. 26

Hortaz,

Katalunia: aitzina doan herria!


Katalanak Gipuzkoan

(Begirale batzuk Azpeitiko kioskoan)

Joan den ekainaren 5ean, kontsulta dela eta, hiru katalan interesgarri ezagutu nituen (Anna, Elisanda eta Joan).

Azpeitiko plazan, mahai batean eserita, atsedenean, garagardoak hartuz, elkarrizketa informal eta era berean oso sakona izan genuen.

Galdera batzuk atera nituen txarla hartatik1. Horietako batzuek erantzunak jaso dituzte zeharka bada ere, ondoko oharrean ikus daitekeen moduan2.

Beraz, hona hemen galdera sorta berria (sorta zaharraren antzekoa da baina pixka bat hobetua eta gaurkotua).

oooooo

(1) Batzuk International Commission of European Citizens taldeko partaideak zarete.

Zer talde mota da hori?

Zeintzuk dira haren helburuak?

(2) Gonbidatuak izan zarete Azpeitian eta Goierrin gauzatu diren Independentziari buruzko kontsultetan begirale gisa.

Nola ikusten duzue prozesu hau?

(3) Euskal Herrian aspaldi honetan Erabakitzeko Eskubidea (EE) aipatzen da, ez ohikoa zen Autodeterminazio Eskubidea (AE).

Nola ikusten duzue aldaketa hori?

(4) Urteak direla, CIEMEn-en bidez, Aureli Argemi-rekin AEz sakondu genuen, teoria mailan eta maila praktikoan, Baltikoko Errepubliketako aldaketak baino leheanago.

Dirudienez, gaur egunean oraindik aipatzen da AE soilik egoera kolonietan erabiltzen dela. Zer gartatu zen Eskozian? Eta Kosovon?, … Baita Alemanian ere, bi Alemaniak batzeko?…

(5) Ez al gaude ahulezia kontzeptual eta intelktual baten aurrean? Ez al da EE, AE-tik desbideraketa lotsagarri eta lotsakor bat? Aurka bilakatuko al zaigu aldaketa hori?

(6) Katalunia dela eta: Berriki hala Elisanda-k3 nola Antoni Abat Ninet-ek4 bi artikulu on argitaratu dituzte Kataluniaren etorkizun hurbilari buruz.

Joan den igandean, Carles Puigdemont-i elkarrizketa bat egin diote El Pais-en5.

Nola analizatzen dituzue fokapen horien arteko desberdintasunak?

(7) Katalunia: oro har, nola ikusten duzue gaurko egoera eta prozesu independentista? Azken bilakaerak, RUI dela eta?

(8) Maila teorikoan, badirudi progresia berria zirkulu karratua berdeskubritzen ari dela (“el derecho de autodeterminación no se puede aplicar en Europa, (…) las reivindicaciones identitarias deben ser rechazadas, (…) hay que apostar por el post-nacionalismo, (…) el estado está desapareciendo en la Unión Europea, (…) con la globalización para qué un estado catalán, vasco?“ eta abar luze bat).

Ezagutu al duzue Katalunian EHko egoera ‘berri’ horren antzekoren bat?

(9) Subiranotasuna versus Independentzia? Nola gainditu iruzur hori?

(10) Ezer gehiagorik?

Mila esker!

joseba

Oharrak:

(1) Anna-k eta Elizenda-k behin baino gehiagotan esan didate erantzungo didatela baina uda aurrera doa eta oraingoz ez dago inongo erantzunik6.

Dena den, RUI dela eta, afera nahiko argi dago, ikus 2. oharra.

(2) Autodeterminazio eskubideaz ere gero eta argiago dago kontua: ikus Dugun egina… eta Brexit eta autodeterminazioa

(3) Nazio estatuaz, ikus Nazio-estatua ezina omen da, Islandiak frogatzen du nazio-estatua bizirik eta ongi dagoela (1), eta Islandiak frogatzen du nazio-estatua bizirik eta ongi dagoela (eta 2)

(4) Eta Euskal Herrian, zer?: ikus Euskal Herria: 25 urte galduta


6 Bi ohartxo Anna-z eta Elizendaz:

Ohartxoa A. Arqué-z: Independentista sutsua, EPI-ko kidea (EPI: European Parnership for the Independence). Ez dakit euroaz zer pentsatzen duen baina haren webgunean, ekonomiaz, jarrera oso ortodoxoak (are neoliberalak) azaltzen dira. Ikus International Commission of European Citizens, Autodeterminazio Eskubidea eta ekonomia pixka bat.

Ohartxoa E. Paluzie-z: Ekonomialaria, ERC-koa izandako, Junts pel Si-koa, CUP-ekin ados ez dagoena, Eurolandian segitzekoaren aldekoa (oraingoz, behintzat!)… eta hala ere, independentista… Noski independentista arlo politikokoan; ez dakit nik katalanek Eurolandian segituko balute, nola konponduko lituzkete austeritatearen eta langabeziaren aferak.

Gogoratu Bill Mitchell: Katalunia eta DTM.

 

Zipriztin ekonomikoak (8)

(i) Euroa

The Euro is a failure1

(a) Failure to create fiscal authority

… deceased British economist Wynne Godley got it right in 1992 when he wrote about “Maastricht and all that

… the Maastricht Treaty was framed. It is a crude and extreme version of the view which for some time now has constituted Europe’s conventional wisdom (though not that of the US or Japan) that governments are unable, and therefore should not try, to achieve any of the traditional goals of economic policy, such as growth and full employment. All that can legitimately be done, according to this view, is to control the money supply and balance the budget…

It should be frankly recognised that if the depression really were to take a serious turn for the worse – for instance, if the unemployment rate went back permanently to the 20-25 per cent characteristic of the Thirties – individual countries would sooner or later exercise their sovereign right to declare the entire movement towards integration a disaster and resort to exchange controls and protection – a siege economy if you will.”

(b) Currency weakness

Former Fed Chair Ben Bernanke called the Germans out on this in Apr, …

(c) Lack of intra-eurozone Harmonization

(d) One size fits all monetary policy

(e) Banking system fractured

(f) Monetary financing failure

(g) The resignations at ECB represent failure

(ii) Florentzia (1427-2016)

How to Stay Rich in Europe: Inherit Money for 700 Years2

The richest Florentine families in 1427 still are: New research shows Europe leads the world in inherited wealth.

(iii) Italexit

nero@federiconero3

le probabilità di euroexit dell’italia nei prossimi 12 mesi sono ai massimi storici: bloomberg – h/t @Tcommodity

2016 abu. 23

(iv) Liburua

The financial system and the economy4

Principles of money and banking

(v) Bail-in

Albistea: La proposta della Germania: bail-in anche per i titoli di Stato5

Definizioak:

Bail-out (orain arte oso ezaguna)6

Bail-in (hemendik aurrera ezagutuko dena)7

Non è tardi però per avvertire almeno il prossimo «fischio», perché riguarda un tema per l’Italia anche più delicato: il debito pubblico e l’ipotesi che i termini di rimborso sui titoli di Stato vengano fatti slittare e poi drasticamente rivisti al ribasso. La proposta arriva dall’establishment di politica economica tedesco, a un livello avanzato di dettaglio, e applica agli Stati lo stesso approccio che domina la direttiva sui salvataggi bancari. L’idea di fondo è creare un meccanismo semiautomatico per far sopportare ai creditori parte delle perdite di una crisi di debito pubblico, in modo simile a come con il «bail-in» si colpiscono gli investitori quando una banca ricorre all’aiuto dello Stato.

«Un meccanismo per regolare la ristrutturazione dei debiti sovrani» è il titolo del documento di lavoro che nel cuore dell’estate il Consiglio tedesco degli esperti economici ha fatto comparire sul proprio sito. Questo organismo dei «cinque saggi» nominati dal governo di Berlino ha il compito di valutare le politiche economiche in Germania; sempre più spesso però agisce anche da influente fabbrica di idee per il ministro delle Finanze Wolfgang Schäuble.”

(vi) Joan Robinson8

Stephanie Kelton@StephanieKelton9

Minsky referencing Joan Robinson.

2016 abu. 25

(vii) 1998ko maiatzaren 5ean. Warren Molser

Stephanie Kelton@StephanieKelton10

Talk about nailing it. May 5, 1998 @wbmosler

2016 abu. 26


6 A bail-out is a colloquial term for giving financial support to a company or country which faces serious financial difficulty or bankruptcy: ikus https://en.wikipedia.org/wiki/Bailout.

7 A bail-in is rescuing a financial institution on the brink of failure by making its creditors and depositors take a loss on their holdings. A bail-in is the opposite of a bail-out, which involves the rescue of a financial institution by external parties, typically governments using taxpayers money: ikus http://www.investopedia.com/terms/b/bailin.asp.

8 Joan Robinson-i buruz, ikus Joan Robinson eta Joan Robinson-en eskutitz irekia.

DTM praktikan, espainieraz (in progress, prozesuan) (2)

Hasierarako, ikus DTM praktikan, espainieraz (in progress, prozesuan)

Segida: La puesta en práctica de la Teoría Monetaria Moderna (II)

(…) El objetivo final, proponer una especie de programa de gobierno donde se detalle una estrategia de pleno empleo compatible con la TMM y donde la estabilidad de precios salga incluso reforzada. (…) Detallemos ahora la relación entre los déficits presupuestarios y los ahorros, así como los efectos de los déficits públicos sobre las reservas bancarias y los tipos de interés.

Una de las ideas (…) de la TMM, es que el gasto vía déficit del sector público genera los superávits (ahorros) del sector no público. Ello va contra de la secuencia causal ortodoxa en la que se apoya la creencia popular, ya que es el déficit público el que financia el ahorro no público, es decir, el gasto vía déficit del sector público proporciona el ingreso que permite que el sector no público obtenga un superávit.

Desde un punto de vista financiero, la existencia de déficits del sector público durante un período de tiempo significa que hay más cuentas bancarias cuyo saldo ha aumentado que cuentas bancarias cuyo saldo ha disminuido (recordemos que implicaba que el gobierno recaude impuestos o compre bienes y servicios sobre el saldo de las cuentas bancarias de los contribuyentes o beneficiarios). Inicialmente el sector no público de la economía recibe sus superávits bajo la forma de aumentos de saldos netos en cuentas bancarias.

En el caso de superávit del sector público este análisis se invierte: el sector no público incurre en un déficit de manera que el saldo neto de las cuentas bancarias disminuye, siendo la destrucción de activos financieros netos del sector no público equivalente al superávit presupuestario del sector público. 

Efectos déficits presupuestarios sobre reservas y tipos de interés

Los déficits presupuestarios aumentan las reservas bancarias en el mismo importe. ¿Por qué? Muy sencillo, el gasto del Tesoro conlleva un aumento del saldo simultáneo en la cuenta de ahorro del beneficiario y en la cuenta de reservas de su banco en el Banco Central. Veamos cómo. Para ello analizamos en primer lugar un sistema donde el Banco Central no paga intereses por las reservas, que es lo usual y, posteriormente, que sucedería si el Banco Central pagara intereses por las reservas (lo que han hecho distintos Bancos Centrales con la actual crisis sistémica).

En el caso en el que el Banco Central no paga intereses por las reservas, el gasto vía déficit que crea las reservas bancarias producirá un exceso de reservas: los bancos, y el sistema bancario en su conjunto, tendrán más reservas de las que desean. Los bancos con excesos de reservas ofertarán el préstamo de reservas a tipos de interés cada vez más bajos, lo cual empujará a que la tasa de descuento real se sitúe por debajo de la tasa objetivo fijada por el Banco Central. Como la demanda de reservas es inelástica respecto al tipo de interés, bajar los tipos de interés no aumentará mucho la cantidad de reservas demandada. El Banco Central intervendrá retirando el exceso de reservas, vendiendo parte de su stock de bonos del Tesoro (operación de mercado abierto). Se sustituye el exceso de reservas por bonos, de manera que los pasivos del Banco Central disminuyen al igual que las reservas del banco comprador. A su vez la cantidad de títulos de deuda soberana en posesión del Banco Central disminuye y los activos del banco comprador aumentan.

Se trata de una sustitución de activos donde el banco comercial poseerá ahora un derecho sobre el Tesoro (bonos), en vez de un derecho sobre el banco central (reservas). Asimismo el Banco Central posee menos activos (bonos) pero debe menos pasivos (reservas). El banco comercial estará satisfecho porque recibirá finalmente los intereses de los bonos.

¿Qué ocurre si el  Banco Central paga intereses por las reservas? Hay dos efectos. En primer lugar, una vez que los bancos han acumulado todas las reservas deseadas tratarán de sustituirlas por títulos de deuda del Tesoro (son más rentables). Ya no empujarán el tipo de interés a un día por debajo del tipo oficial del Banco Central, ya que ningún banco le prestará a otro a una tasa menor de lo que puede recibir del Banco Central. Por el contrario, los bancos con reservas indeseadas acudirán inmediatamente al mercado de títulos de deuda soberana en busca de una mayor rentabilidad. El impacto será el de empujar los tipos de interés de los títulos de deuda soberana hacia abajo, que es lo que está sucediendo ahora.

Solo dos reflexiones finales de calado en todo este planteamiento. Por un lado, ¿qué pasaría si el Banco Central se negara a cooperar con el Tesoro? El Banco Central no alcanzaría el objetivo para el tipo oficial, es decir, el tipo de interés a un día y pondría en peligro el sistema de pagos.

Por otro lado, ¿qué pasaría si las preferencias en lo que respecta al gasto y a la cartera de valores del sector privado no se corresponden con el resultado deseado para el presupuesto público? Muy sencillo. Si la política fiscal del gobierno no es coherente con el grado de ahorro deseado por el sector no público, entonces los gastos e ingresos se ajustan hasta que el resultado fiscal y el balance del sector no público sean coherentes el uno con el otro.”

(Segituko du)


 

Brexit-ez haratagoko balediko hondamendiaz hitz bi

Bill Mitchell-en Mayday1! Mayday! The skies were meant to fall in … what happened?2

Filologoentzako oharra, Brexit hitza dela eta3.

Sarrera:

Nazioarteko mailan, ekonomiak gaizki funtzionatzearen errua Brexit-i leporatu nahi izan diote hainbat lanetan. Ikusia daukagu: Hazkunde ekonomikoa txartuz doa, Brexit-en aldeko botoak ez dauka zerikusirik horrekin.

Orain gauza bertsua gertatzen ari da Britainia Handian bertan, azti eta zoritxar-igarle guztiak batu dira atsekabezko deialdiak plazaratzeko eta larrialdizko oihuak egiteko, zerua eroriko delakoan… Alta, zerua ez da erori, ezta eroriko ere.

Aipaturiko punturik garrantzitsuenak:

(i) Britainia Handiko estatistika (ONS)4

(ii) Zerua erori behar zen5

(iii) Hala ere, errealitatea bestelakoa da6

(iv) Zerua ez da erori: Europako herrialdeek ikasi behar dute eta Eurexit praktikan jarri7

(v) Aurreiritziak nonahi Brexit-ez geroztik8

(vi) Baita Brexit baino lehen ere9

(vii) Alderantzizko datu onak egon arren, berdin segitzen dute zoritzar-igarleek10

(viii) Dena den, etorkizunean ekonomia ez da aldatuko egun batetik bestera11, eta aldaketa hartuko duten politikaren araberakoa izango da12

(ix) Nola eta noiz hasi zen desastrea Britainia Handian?13

(x) Afera ziklikoak hor daude14

(xi) Noski, denborak esango du eta orain arte desastrearen aurka hitz egiten du15

(xii) Izan ere, salmenten datuak ez dira txarrak16

The following graph shows the annualised growth (red bars) and monthly growth (blue line)

in retail volumes since January 2008

UK_Retail_Sales_Volumes_2008_July_2016

(xiii) Beraz?17

(xiv) Albisteak…18

(xv) … eta datuak, berriz19

(xvi) Espainiara joandako Britainia Handiko turismoa20

UK_Overnight_Stays_Spain_2007_July_2016

(xvii) Are gehiago: Britainia Handira egindako Suitzako esportazioak handitu dira21

(Adi Urkullu jauna, Euskal Herriko politikari eta ekonomialari guztiak, kazetari ia guztiak eta progre guztiak, gogoratu ondoko hau: herrialde baten aberastasuna hauxe da: bertan ekoiztutako guztia gehi inportazioak ken esportazioak!

Gogoratuko al duzue hori hurrengoan?)

(xviii) Turismoa gorantz doa: aurreikusitako hondamendia ez da azaldu22

(xix) Industria: ez dago inongo kolapsorik23

Mitchell-ek dioenez,

As regular readers will know, I am pro-Brexit and scorned the doom predictions at the time.”

Ondorioak:

(1) Zerua eta austeritatea24

(2) Gobernuak tresnak ditu atzerapeneranzko edozein joera alboratzeko25

(3) Hala ere, “… the current data doesn’t suggest a recession is on its way

(4) Eurexit da etorkizunerakoko ikasgairik garrantzitsuena26


1 Mayday: an international radiotelephone distress call: atsekabe deialdia.

3 Brexit izen ‘propioa’ da, ez arrunta. Beraz, Brexit idatzi behar da eta ez Brexit-a. Ekonomian, gainera, aparteko garrantzia historikoa dauka gertaera horrek. Beraz, idatz dezagun bera letra larriz eta ez letra xeheaz. Argi?

4 Ingelesez: “The British Office for National Statistics, which although recently revamped continues to have the most user-unfriendly home page and dissemination service of all the national statistical agencies, published the latest – Retail Sales in Great Britain: July 2016 – data last week (August 18, 2016). It looked good to me. In the past week or so there has been a stream of data coming out of Britain or about Britain, which also looks good to me.”

5 Ingelesez: “What the hell is going on? The skies over Britain were meant to have fallen in by now. Unemployment was meant to be going through the roof or was the roof meant to collapse first. All manner of despair was meant to be visiting the shores of Britain after the June 23 vote to get out of the dysfunctional European Union.”

6 Ingelesez: “The reality is that things are looking okay there. Skies are intact and quite blue I believe which has boosted the confidence of British consumers. Tourism is booming. Unemployment is falling or at least those claiming unemployment benefits. One investment bank put out a briefing last month with a Mayday! Mayday! warning that unemployment was about to rise dramatically. Who has been sacked for that piece of public misinformation. George Osborne, remember him, said in mid-June that British public finances were about to collapse and an immediate, emergency fiscal response would be needed.”

7 Ingelesez: “Days have passed – things are looking ok. Eurozone nations should take note! Ignore the neo-liberal scare mongering. Follow Britain’s lead in abandoning the ridiculous notion that there is something special about ‘Europe’. Eurozone nations should get out of the currency union as soon as possible.”

8 Ingelesez: “In the weeks after the Brexit vote, the sore losers were in abundance – predicting the worst and even worse, accusing those who voted the sensible way (to exit) of being dumb, racist, or regretful, or all three things.

What was going to happen? Scan back in the media and you will spikes of unemployment, financial collapse of the banks, diving sharemarkets, first division soccer teams losing players and the idiocy kept outdoing itself on a daily basis.

9 Ingelesez: “Remember back in mid-June, when the then (failed) Chancellor warned British citizens that if they voted to leave the European Union on June 23 it would be disastrous for the government finances.

The BBC report (June 15, 2016) – EU referendum: Osborne warns of Brexit budget cuts – documented the bullyboy tactics that Osborne employed to try to distort voter choice.

Osborne and his creepy partner-in-misinformation (Labour’s Chancellor Alistair Darling) told an audience that the Government would:

have to slash public spending and increase taxes in an emergency Budget to tackle a £30bn “black hole” if the UK votes to leave the European Union.

Does sick joke come to mind!

10 Ingelesez: “In fact, the British ONS released data showing that the UK government actually was in surplus in July 2016.

Even with the evidence emerging to the contrary, they are still at it. William Keegan’s article in the UK Guardian (August 21, 2016) – Leavers should be ashamed of the harm yet to come from Brexitis an example.

Keegan is playing it safe. He talks up things which are impossible to verify – among them being his claim that there is now ” an outbreak of buyer’s remorse”.

He defers any of his doom predictions to a period in the future where causality will be unclear. So the next recession, whenever it will come, will be Brexit-inducedirrespective of what the policy of the government of the day is at that time.

The likes of Keegan will wax on about having told his fellow citizens what venal dopes they were for “the chaos they have helped to create, not least for their grandchildren” by voting to exit the dysfunctional European Union.

He is already lecturing them – “They should be ashamed of themselves”.”

11 Ingelesez: “What was interesting was his characterisation of the British economy and the upcoming fiscal statement from the new Chancellor:

Make no mistake, this is going, to all intents and purposes, to be a budget for an economy that is already suffering severe structural damage

Structural damage doesn’t emerge the day after a vote is taken – one way or another. If the British economy is “suffering severe structural damage” then it has nothing to do with the Brexit vote outcome.

It has more to do with years of stupid policy decisions which promoted the financial sector and starved the productive side of the economy of incentives.”

12 Gogoratu: “…The next recession, whenever it will come, will be Brexit-inducedirrespective of what the policy of the government of the day is at that time.”

13 Ingelesez: “It started with the surrender by the Callagan Labour government to the Monetarist madness in the mid-1970s. The trend was accelerated under Thatcher (who wrecked manufacturing and promoted the banksters) and entrenched by Tony Blair and Gordon Brown’s ‘light touch’ financial market regulation – which basically saw all the unproductive, incompetents run riot.

It is obvious that the British economy has relied too much on household debt and on housing markets to drive growth.

These ‘structural imbalances’ have been a long time in the making and certainly nothing at all to do with the June 23 vote.”

14 Ingelesez: “The upcoming fiscal statement might have to address some cyclical issues arising from the referendum vote given the amount of doom that was predicted – which may have affected the confidence of households and firms.

But we should reject notion that the Brexit vote has suddenly exposed the structural vulnerabilities of the British economy. They have been there for all to see if one could get free of the denial that accompanies the neo-liberal narrative.

If you then read the rest of Keegan’s article the descriptor ‘vacuous’ comes to mind. He really says nothing despite the alarming headline.”

15 Ingelesez: “Of course, time will tell whether being out of Europe is going to be the millstone that the doomsayers predicted. I think not.

And time is already ticking and the first data is starting to come init doesn’t look good for those who are demanding another vote.

You know – we lost the first one because people are stupid – so lets go again until we win – sort of mentality. The sort of nonsense that the contender for Labour Party leadership (Smith) is now trying to get away with. He should be sent to the boondocks by the Labour Party membership and encouraged to seek a different career.

16 Ingelesez: “The retail sales data released last week by the ONS covered the period from July 3 to July 30, 2016 – so well after the Brexit vote had concluded and after the doomsayer economists used the week following the vote to predict all manner of crisis and mayhem.

The retail sales data measures first-hand how strong consumer spending is – it is immediate and doesn’t lie. The result for July 2016 didn’t produce the strongest monthly growth rate since the GFC but the result was not far off it.

ONS say that:

In July 2016, the quantity bought (volume) of retail sales is estimated to have increased by 5.9% compared with July 2015; all sectors showed growth with the main contribution coming from non-food stores.

Compared with June 2016, the quantity bought increased by 1.4%; all sectors showed growth with the main contribution again coming from non-food stores.

17 Ingelesez: “So what have we got here?

Those stupid Brits spending up big with their last pounds because they are worried the shops are all going to close and the government is going to run out of money as a result of the Brexit vote?

Or some genuine confidence, aided by good seasonal conditions, a national team going gangbusters at the Rio Olympics (on raw medal tally that is), and a rejection of the nonsense my profession tried to foist onto them leading up to the Brexit vote.

Hmm. What else?

18 Ingelesez: “Remember this headline from July 14, 2016 – CREDIT SUISSE: ‘Mayday! Mayday!’ — Britain’s impending recession will kill nearly 500,000 jobs.

The headline was accompanied by a picture of working class men in the Jarrow March (Crusade) which “was a protest march in England in October 1936 against the unemployment and poverty suffered in the northeast Tyneside town of Jarrow during the 1930s.”

The Jarrow March was a response to extreme hardship brought on by the Great Depression. It invokes pain and suffering.

The report tells us that:

In their note, reassuringly titled “Mayday! Mayday!” Credit Suisse’s Boussie et al. also note that they expect rising unemployment to trigger a slackening of the “robust” consumer sector, which in turn could cause even more serious problems for the economy.

Well the retail sales data isn’t quite what they were hoping for when they sent out their Mayday alarms.

And on August 17, 2016, the ONS also released the latest – Total Claimant count SA (UK) – thousands – which provides information about the number of people seeking unemployment benefits.

Changes in this statistic are not a perfect measure of the changes in unemployment but are closely related enough to make inferences.”

19 Ingelesez: “I was looking for a dramatic rise in claimants (unemployment).

What did I find?

A rather large decline of 8,600 or 1.1 per cent (seasonally adjusted) in July 2016. Oops!

Since January 2016, the claimant count has been rising each month. July marked a break in the trend even though the economists in the financial markets had reached a “consensus prediction” of a rise of 9.5 thousand.

A little matter of a massive prediction error – nothing to worry about. No one will be punished for spreading spurious information designed to alarm the public.

The other labour market data released on August 17, 2016 by the ONS covers the quarter to the end of June and while the unemployment rate was stable, it is not really reasonable to claim that as another piece of evidence that the vote didn’t matter much.

I haven’t looked at the sharemarkets today but last time I looked the aggregate indexes were heading towards the stratosphere – like record high levels.

And other financial market indicators appear to be unaffected – for example, the bid-to-cover for British government gilts is not plunging. The large pension funds are falling over each other to keep stocking up on government debt – yum, lovely public debt, more corporate welfare!

Markit released the latest – Household Finance Index – for the UK on August 17, 2016. This provides a guide to the state of household expectations about their financial situation.

The summary results for August 2016 are:

Outlook for household finances recovers in August …

Job insecurities ease amid rising workplace activity levels …

Current inflation perceptions remained broadly steady in August …

The news kept coming in yesterday (August 23, 2016).

20 Ingelesez: “The Instituto Nacional de Estadística is the national statistical office for Spain and publish excellent data on Tourism into Spain.

Guess what? The hotel short terms trends data released yesterday shows that British citizens are flooding to that sunny destination even though travel costs have risen due to the decline in the pound. Overnight stays rose strongly in July 2016.

The following graph shows the data for overnight stays by British residents in Spain since November 2017. You can see the seasonality.

But even with the pound at much lower levels than before the vote, those sun-loving Brits have not been discouraged from heading down to beautiful Espana for vacations.

The GFC slowed the summer vacations down a lot. But Brexit doesn’t seem to have had much affect. July overnight stays pretty much increase by 11 per cent on June each year and so they did in July 2016.

21 Ingelesez: “And if that wasn’t enough, the Verband der Sshweizerischen Uhrenindustry aka the Federation of the Swiss Watch Industry, published data on August 20, 2016 that shows that Swiss watch exports to Britain rose to 110.2 million CHF in July 2016, up from 90.6 million CHF in June 2016.

This 21.6 per cent increase was the fastest growth of all the Swiss manufacturers’ major export markets.

What is going on there? Well Britain is now a tourist mecca itself courtesy of the lower pound since Brexit and within that shift the so-called “luxury goods market” is booming.

This shopping boom is part of the retail sales data reported above.

22 Ingelesez: “The UK Guardian article (August 22, 2016) – Tourist spending in UK surges after pound’s Brexit slump – summarises trade data (Global Blue) which shows that:

Japan, Indonesia and the US were the nations that accounted for the biggest increase. Despite Japan’s own economic problems, spending by Japanese visitors was up 96% in the UK compared with July 2015, while travellers from Indonesia spent 88% more than last year on tax-free shopping.Chinese tourists’ spending was up just 6% for July, but the country still accounted for the largest portion of spending overall, with a 32% share.

Whether you judge that to be a desirable trend or not doesn’t evade the reality that the doom predicted is not emerging.

23 Ingelesez: “And, finally, the Confederation of British Industry – released the latest monthly – Industrial Trends Survey – which showed for July that:

19% of businesses reported total orders to be above normal (compared with 18% in July), and 24% said orders were below normal, giving a balance of -5%21% of businesses reported export orders to be above normal and 27% below, resulting in a balance of -6%, the highest since August 2014 (-3%).34% of businesses reported a rise in output volumes, and 23% a fall, giving a rounded balance of +11%, down from +16% last month, but better than expected (+6%)Output growth is expected to remain steady over the next three months, with 30% companies expected a rise and 19% expecting a fall, leaving a balance of +11%

The CBI said that “export order books reached a two-year high, suggesting that the depreciation of sterling since the end of last year may be feeding through to stronger overseas demand … [and] … remained comfortably above the long–run average”.

No collapse there.”

24 Ingelesez: “While the sky may well still fall inespecially if the British government attempts any austerity stunts – I think it is unlikely.

25 Ingelesez: The Government has all the capacity it needs – as a currency-issuer – to divert any tendencies towards recession.”

26 Ingelesez: “The failure of the doom merchants’ predictions should also be a guide to what might happen if a Eurozone Member State walked out. All the prophecies of doom would follow (and precede) but the nation would soon find out that with renewed currency sovereignty things would settle down fairly quickly and growth would be rapid.”

Zipriztin ekonomikoak (7)

(i) DTM-ko Mathew Forstater (eta Karl Marx)

TAXATION AND PRIMITIVE ACCUMULATION: THE CASE OF COLONIAL AFRICA1

The history of direct taxation in colonial capitalism also has some wider theoretical implications. It shows, for example, “that ‘monetization’ did not spring forth from barter; nor did it require ‘trust’ – as most stories about the origins of money claim” (…). In the colonial capitalist context, money was clearly a “creature of the state.

(ii) DTM, zer da berri? (1)

Bill Mitchell-en Modern Monetary Theory – what is new about it?2

(a) Paul Krugman-ek ez du ulertzen bankugitzazko transakzioak3

Paul Krugman-ez eta DTMz, ikus oharrean dauden linkak4.

(b) DTM-k analizatzen dituen lau arlo5

(iii) DTM, zer da berri? (2)

Bill Mitchell-en Modern Monetary Theory – what is new about it? – Part 2 (long)6

(c) Bi indargetzaile stock7

(d) Job guarantee edo lan bermea8

(e) Langabeziaren ondorioak9

(f) NAIRU10 delakoaren markoa: langabezia/inflazio erlazioa11

(g) DTM-ren markoa: enplegu osoa eta egonkortasuna12

(h) Randall Wray eta lan bermea13

(i) DTM eta inflazio/langabeziaren erlazioa14

Ondorioak:

(1) Lan bermea ez da soilik sektore publikorako enplegu-sormen bat15

(2) Lan bermeak egonkortasun makroekonomikoa hornitzen du16

(3) Phillips kurba deuseztatuta geratzen da17

(4) Langabezia/inflazioren arteko erlazioa desagertzen da18

Lan bermeaz, Mitchell-en garrantzi handiko lana!

Karitatezko ‘errenta banaketatik’ eta ‘errenta unibertsaletik’ oso urrun.

Gogoratu: Errenta unibertsala? Ez, lan unibertsala! eta Errenta unibertsala: noizean behin zapatak garbitu behar


3 Ingelesez: “Krugman seems to misunderstand the banking operations that occur when governments spend and issues debt. (…)

The only difference between the Treasury ‘borrowing from the central bank’ and issuing debt to the private sector is that the central bank has to use different operations to pursue its policy interest rate target.

A simple way of understanding this is that the funds used by the non-government sector to purchase the debt represented a part of its saving and was therefore not being spent anyway.

Further, the banks are able to create as much credit as they can find credit-worthy customers to hold irrespective of the operations that accompany government net spending.

All components of aggregate demand carry an inflation risk if they become excessive, which can only be defined in terms of the relation between spending and productive capacity. It is totally fallacious to think that private placement of public debt reduces the inflation risk.

5 Ingelesez: “The four areas we focus on here are:

1. The introduction of buffer stocks into a theory of inflation and the juxtaposition between employment guarantees and unemployment.(…)

2. The importance of the consolidation of the treasury and the central bank and the emphasis on banking arrangements. A thorough understanding of the way the banking system operates within the macroeconomic flow of funds has largely been ignored by mainstream macroeconomics and Post Keynesian economists.

MMT has provided new insights into the way these arrangements influence the impact of fiscal deficits on bank reserves and interest rates and the role played by the central bank.

(…)

3. The explication of the dynamics of fiscal deficits and public debt. We consider the difference between deficit doves, who consider fiscal deficits are appropriate under some conditions but should be balanced over some definable economic cycle, which we argue has been the standard Post Keynesian position, and the MMT approach to deficits, which considers the desirable deficit outcome at any point in time to be a function of the state of non-government spending and the utilisation of the productive capacity of the economy.

Fiscal rules in MMT are only meaningful if related to the state of non-government spending and the utilisation of the productive capacity of the economy. They are never meaningful if expressed as some target percentage of GDP or some balance over a cycle.

4. The importance of language and its relation to ideology. MMT authors have also incorporated developments from cognitive linguistics and social psychology into their work to emphasise the role that metaphors play in reinforcing perceptions.

While the MMT authors did not develop these understandings they were the first to apply them to macroeconmomics.

We contend that the extant mainstream and Post Keynesian Theory, despite protests to the contrary, have not considered these significant aspects of the fiat monetary system and, as such, MMT provides important new perspectives that should be incorporated into a unified macroeconomic theory.”

7 Ingelesez: “MMT and buffer stocks

While the previous discussion has highlighted that the Monetarists, Post Keynesians and even Marxists have developed theories of inflation that relate unemployment to price level changes in some way, MMT economists have introduced a new idea – the use of employment buffer stocks.

(…)

The two broad buffer stocks we will compare and contrast are:

  • Unemployment buffer stocks: Under a NAIRU regime, inflation is controlled using tight monetary and fiscal policy, which leads to a buffer stock of unemployment. This is a very costly and unreliable target for policy makers to pursue as a means for inflation proofing.

  • Employment buffer stocks: The government exploits the fiscal power embodied in a fiat-currency issuing national government to introduce full employment based on an employment buffer stock approach. The Job Guarantee (JG) model is an example of an employment buffer stock policy approach.”

8 Ingelesez: “Under a Job Guarantee, the inflation anchor is provided in the form of a fixed wage employment guarantee.

(…)

MMT argues that a superior use of the labour slack necessary to generate price stability is to implement an employment program for the otherwise unemployed as an activity floor in the real sector, which both anchors the general price level to the price of employed labour of this (currently unemployed) buffer and can produce useful output with positive supply side effects.

(…)

… the government offers a fixed wage (that is, a price) to anyone willing and able to work, and thereby lets market forces determine the total quantity of government spending that would be required to satisfy the demand for public sector jobs under the Job Guarantee.

Spending on a price rule provides the government with a superior inflation control mechanism. When the private sector is inflating, a tightening of fiscal and/or monetary policy can shifts workers into a fixed-wage Job Guarantee sector to achieve inflation stability without causing costly unemployment.”

9 Ingelesez: “It is well documented that sustained unemployment imposes significant economic, personal and social costs that include:

  • loss of current national output and income;

  • social exclusion and the loss of freedom;

  • skill loss;

  • psychological harm;

  • ill health and reduced life expectancy;

  • loss of motivation;

  • the undermining of human relations and family life;

  • racial and gender inequality; and

  • loss of social values and responsibility.

These costs are very large and are irretrievable. (…)

10 NAIRU: Non-accelerating inflation rate of unemployment.

11 Ingelesez: “The overwhelming quandary that the unemployment buffer stock approach to inflation control faces is whether the economy, once deflated by restrictive aggregate demand management, can be restarted without inflation.

If the underlying causes of the inflation are not addressed a demand expansion will merely reignite the tensions and a wage-price outbreak is likely. As a basis for policy the NAIRU approach is thus severely restrictive and provides no firm basis for full employment and price stability.

It success as an inflation anchor requires a chronic pool of high unemployment.”

12 Ingelesez: “MMT shows that the Job Guarantee – which operates a buffer stock of jobs to absorb workers who are unable to find employment in the private sector – is a superior alternative to the unemployment buffer stock approach.

The capacity to run a Job Guarantee follows from the unique characteristics that the government has as the issuer of the currency under monopoly conditions. This is core MMT doctrine.

While MMT clearly owes a legacy to the past influences (Marx through Lerner and beyond) it has also uniquely brought together the characteristics of the currency with the theoretical challenge to maintain macroeconomic efficiency, which for all time has been described in terms of full employment and price stability.

The introduction of employment buffer stocks (the Job Guarantee), while influenced by the earlier work by Benjamin Graham and the agricultural price support schemes common in Australia in the 1970s, is a significant new innovation in macroeconomics because it challenges the entire notion of a Phillips curve (trade-off or otherwise).

For a progressive agenda, it shows how an understanding of how the currency is, in fact a public monopoly, allows us to understand that the monopolist in this context (currency-issuing government) can always set the price to address the major constraints on activist fiscal policy posed by the NAIRU-NRH school.

In this way, the introduction of employment buffer stocks has directly challenged the dominant orthodoxy by proposing a way to achieve full employment with price stability.”

13 Ingelesez: “As Randy Wray noted in a 2011 Keynote Speech – MMT: A Doubly Retrospective Analysis – that the “buffer stock employment”:

analogy to commodities price stabilization schemes added an important component that was missing from Minsky: use full employment to stabilize prices. With that we turned the Phillips Curve on its head: unemployment and inflation do not represent a trade-off, rather, full employment and price stability go hand in hand.”

14 Ingelesez: In this way, the body of theoretical work now known as MMT directly and intrinsically addresses the major macroeconomic debate about the trade-off between inflation and unemployment in a way that no other macroeconomic approach (mainstream or Post Keynesian) had before.

And the way MMT does that is intrinsic to its theoretical framework and logically consistent with it. It is crucial to understand that notions of price stability all have some buffer stock underpinning them.

The theoretical offering that MMT provides is that if we are concerned about efficiency and price stability then there is a superior buffer stock available to a public currency issuing monopoly.

That is, if we really understand the way the currency works and the way the labour market works then we can have both full employment and price stability by using an employment buffer stock rather than an unemployed buffer stock.

One might still understand the capacities of a currency-issuing government yet dislike the idea of an employment buffer stock being used.

By integrating the Job Guarantee into their macroeconomic framework, MMT economists can show that it is far better to conduct fiscal policy by spending on a price rule. That is, the government just has to fix the price and ‘buy’ whatever is available at that price to ensure price stability.

The price the government fixes is the price it offers labour to enter the employment buffer stock.

So in a fiat monetary system, price stability is maximised using employment buffers rather than unemployment buffers.”

15 Ingelesez: “It should be noted that the Job Guarantee is not just a public sector job creation scheme. If it was just that then we would have no claim to novelty.”

16 Ingelesez: “The Job Guarantee in the body of work known as MMT provides a macroeconomic stability framework and avoids using unemployment as a means of achieving price stability.”

17 Ingelesez: “While the mainstream theory of inflation and the extant Post Keynesian approach has been constructed within the Phillips curve framework, where the debate centres on the existence (and the nature) or otherwise of the trade-off between inflation and unemployment, MMT departs significantly from either approach.

By constructing the understanding of inflation within a buffer stock theory, the promotion of employment buffer stocks, allows MMT to reduce the Phillips curve to a single dot or point within the unemployment-inflation space.

18 Ingelesez: “Through the use of employment buffer stocks, a government can maintain what MMT calls ‘loose’ full employment with price stability.

In other words, the trade-off between unemployment and inflation disappears.

That insight is a clear advance on the previous ways of dealing with the relationship between unemployment and inflation in the literature – mainstream or Post Keynesian.”

Euskal Herria: 25 urte galduta

Sorry, erdara batuko testuak plazaratzeagatik

Llibert Bertí@LlibertB1

Gorbachov pide a Lituania que anule su independencia: “Es un camino sin salida”. Us sona? http://elpais.com/diario/1990/04/01/internacional/638920812_850215.html …

2016 abu. 20

Llibert Bertí@LlibertB abu. 20

La posición de España: “España se niega a reconocer a Lituania”.

Gorbachov emite dos decretos que ilegalizan la secesión de Estonia y Letonia http://elpais.com/diario/1990/05/15/internacional/642722411_850215.html …

Llibert Bertí@LlibertB abu. 20

Gorvachov: “La independencia de estas dos repúblicas bálticas son “nulas” carecen de validez jurídica alguna y violan la Constitución”.

Llibert Bertí@LlibertB abu. 20

Coscubiela ofrece a Lituania la secesión en dos años. Molt LOL.

Llibert Bertí@LlibertB abu. 20

Estonia y Letonia desafían a Gorbachov con los plebiscitos sobre su independencia http://elpais.com/diario/1991/03/04/internacional/668041226_850215.html …

Llibert Bertí@LlibertB abu. 20

“Las dos consultas no tienen valor jurídico”. Es que em sonen tant els arguments!

Bai, 25 urte joan dira…

Remembrance:

1990eko hamarkadaren hasierako aukera galduez:

http://www.berria.eus/paperekoa/1781/011/001/2014-09-02/herriaren_askatasuna_ez_da_lortzen_museko_partida_batean.htm

Ezagutzen ditugu galdutako aukera horiek, ongi gainera: Gure Esku Dago: zer?

Bai, 25 urte erabat galduta: Sinplekeriatan murgiltzen ari gara…

Autodeterminazio eskubidea

Autodeterminazio eskubidea da giltza, ez inongo erabakitzeko eskubiderik (!?), aspalditik dakigun bezalaxe: Dugun egina…

Katalunia: eredua politikan

Malgré PNV-ko guztiak,


Bi sinbolo

Khalid Albaih artistak1 egindako karikatura2:

Choices for Syrian Children …

Syria‬ Omran Daqneesh 5 years old from ‪‎Eleppo‬ Syria was pulled from under the ruins after Russian air strikes, 3-year-old Syrian Aylan Kurdi drowned in the Mediterranean trying to get to Europe

Elkarrizketa: Displaced Cartoonist Khalid Albaih Finds Home On The Internet


1 Ikus http://www.cartoonmovement.com/p/3310: Khalid is a Romanian born Sudanese political cartoonist based in Doha, Qatar.

Politika sakona, oso (Euskal Herrian eta Katalunian)

Euskal Herrian (ideia oso sakonak, sakonegiak)

(a) Erdara batuan:

«Creo que el modelo catalán en este momento en Euskadi no lo reivindica prácticamente ninguna formación política»1

JOSU ERKOREKA (PNV)

(b) Euskara ‘partekatuan’:

“Erabateko” independentziaren ordez, Urkulluk “subiranotasun partekatuak” defendatu ditu

 

Katalunian: RUI (ideia argiak) (3)

(i) Sànchez, Castellà, Dedéu i Arqué reclamen incorporar el RUI al full de ruta

http://democrates.cat/index.php/2016/08/19/sanchez-castella-dedeu-i-arque-reclamen-incorporar-el-rui-al-full-de-ruta/

(ii) Més pressió pel RUI

http://www.elpuntavui.cat/politica/article/17-politica/996998-mes-pressio-pel-rui.html

(iii) El RUI se reivindica como instrumento para debilitar el Estado y a Podemos

http://www.lavanguardia.com/politica/20160818/404028548537/referendum-catalunya-universitat-catalana-destiu-jordi-sanchez.html

(iv) Independència o sobirania

http://www.elperiodico.cat/ca/noticias/opinio/opinion-xavier-bru-de-sala-independencia-sobirania-rui-5333181

(v) CUP #sensepor@cupnacional2

“Hi ha més motius que mai per generar una pista de solució al conflicte amb l’Estat i creiem que passa per un #RUI

2016 abu. 18