Options for prosperity

Options for prosperity – Warren  Mosler (for ICEC – Basque Countries)

6/26/2017

Author: Warren Mosler

Short biography: (in http://moslereconomics.com/warren-mosler-bio/)

One of the brightest minds in finance” – CNBC

Warren Mosler is an American economist and theorist, and one of the leading voices in the field of Modern Monetary Theory (MMT). Presently, Warren resides on St. Croix, in the US Virgin Islands, where he owns and operates Valance Co., Inc.

An entrepreneur and financial professional, Warren Mosler has spent the past 40 years gaining an insider’s knowledge of monetary operations. He co-founded AVM, a broker/dealer providing advanced financial services to large institutional accounts and the Illinois Income Investors (III) family of investment funds in 1982, which he turned over to his partners at the end of 1997. He began his career after graduating from the University of Connecticut with a B.A. in Economics in 1971 and has been deeply involved in the academic community, giving presentations at conferences around the world and publishing numerous articles in economic journals, newspapers, and periodicals.

He is attributed with creating Mosler’s law that states, “there is no financial crisis so deep that a sufficiently large fiscal adjustment cannot deal with it.”

In addition to his work in the field of economics, he developed – and later sold – his own automobile line, Mosler Automotive, responsible for producing the Mosler MT900 and the Consulier GTP. He also designed his own catamaran that is lighter, faster, and more fuel-efficient than other models.
Mosler is the author of “The Seven Deadly Innocent Frauds of Economic Policy” that has been translated into Italian, Polish, and Spanish.

Work: Options for prosperity

Introduction:

In the following presentation Mosler deals with the options the eurozone has. He presents two plans for any member state in the eurozone, (in this work he deals with Italy).

Plan A is to work with the EU to expand fiscal limits.
A credible Plan B is essential to achieving Plan A.
Transitions Jobs are also necessary.

(The work can be applied to any member state in the eurozone, as well as to any new state that can arise through the application of the principle of self-determination.)

Presentation: April 26, 2016 Policy options for the eurozone

ICEC-Euskal Herria

Non dago ezkerra? Zertan dabil?

Ezkerra erabat galduta dago nonahi.

Ezkerraz hitz pare bat ikus dezakegu ondoko linketan1.

Zer esan Euskal Herriko egoeraz, non sasi-ezkerra XIX. eta XX. mendeetako eskema zaharkitu eta aspergarriei lotuta dagoen.

Agian datorren liburu honetan zertxobait ikas dezakegu!

Bill Mitchell-en Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World2

My latest book co-authored with Thomas Fazi will be published by Pluto Press (UK) on September 15, 2017.

The crisis of the neoliberal order has resuscitated a political idea widely believed to be consigned to the dustbin of history. Brexit, the election of Donald Trump, and the neo-nationalist, anti-globalisation and anti-establishment backlash engulfing the West all involve a yearning for a relic of the past: national sovereignty.

In response to these challenging times, economist William Mitchell and political theorist Thomas Fazi reconceptualise the nation state as a vehicle for progressive change. They show how despite the ravages of neoliberalism, the state still contains resources for democratic control of a nation’s economy and finances. The populist turn provides an opening to develop an ambitious but feasible left political strategy. Reclaiming the Nation State offers an urgent, provocative and prescient political analysis of our current predicament, and lays out a comprehensive strategy for revitalising progressive economics in the 21st century.

You can Pre-order the book.

The Paperback is £18.99 and the Hardcover is £67.08. The book is 320 pages.

UEUko blog honetan Bill Mitchell-en hamaika lan ukitu ditugu.

Progre guztiek (politikari, ekonomialari, kazetari edo eta ‘intelektuala’ izanik berdintsu diolarik) ulertzen ez duten Brexit fenomenoa dela eta, eta sarrera gisa aipatutako eta laster plazaratuko den hurrengo libururako, ikus ondoko lantxoak:

Bill Mitchell: Brexit?

Brexit: nor da nor?

Bremain versus Brexit

Brexit eta W. Schäuble

Brexit: Kataluniako ekonomialari baten ikuspegia

Brexit: gaur?

Brexit: bidea ireki dute

Zenbait iritzi Brexit dela eta

Brexit-ez haratago

Brexit eta ‘ezkerra’

Brexit: lehen erresakaBrexit: erresaka (teoriko eta praktikoa)

Brexit eta autodeterminazioa

Brexit: erresaka (segida)

Zer dela eta Brexit emaitza handia den

Post-Brexit eta auzo lotsa

Post-Brexit: Eurolandia eta NATO eztabaidagaiak

Bill Mitchell-ek Brexit-i buruz

Post-Brexit: nor da nor?

Post-Brexit: Bill Michell eta kazetariak

Post-Brexit: austeritatea eta defizit fiskalak gehi Italiako bankugintza

Post-Brexit: Britainia Handia eta alderdi laborista

Post-Brexit: politika-paradigma berri bat behar da

Brexit: Europar Batasunarekiko euro ‘estandarraren’ bukaera

Hazkunde ekonomikoa txartuz doa, Brexit-en aldeko botoak ez dauka zerikusirik horrekin

Brexit-ez haratagoko balediko hondamendiaz hitz bi

Zipriztin ekonomikoak (Brexit)

El brexit ha demostrado que hay vida fuera de la Unión Europea”

Twitterrak: Brexit dela eta

Brexit eta geroko Britainia Handiko egoera

Brexit aferaren muinean

Ekonomia: zenbait data (2007-2014), Brexit

Austeritatea da arazoa, ez Brexit

Brexit, ezkerra eta Lexit

Brexit eta Egiptoko izurriteak

Eurolandia eta Brexit


2 In When Austrians ate dogs: http://bilbo.economicoutlook.net/blog/?p=36298.

Katalunia: Nazioarteko Komisioa, begiraleak direla eta

http://www.berria.eus/argazkiak_jarraia/egunekoak/2017-06-25/zaldieroa.jpg

CADCI‏ @CADCI1

@anna_arque @ICECintl fa proposta al @govern per crear comissió internacional per supervisar 1-Octubre

2017 eka. 26

Anna Arqué Solsona‏ @anna_arque2

Hem aportat centenars d’Obs Int però sempre hem explicat la necessitat d’1 Comissió Garanties amb participació Intl ?https://twitter.com/cadci/status/879242279415947264 …

2017 eka. 26


Periko Solabarriari egindako bigarren omenaldia

Solabarriari omenaldia, Barakaldon.

Bertan egon nintzen atzo, joan den urtean lehen omenaldian egon nintzen moduan eta hil eta berehala egin zen omenaldi erraldoian ere egon nintzen legez…

Jende nahikoa, gazte gutxi oraingo honetan.

Periko Solabarria nola ezagutu nuen blog honetan jadanik plazaratua dut (Periko).

(Harrez geroztik elkar gurutzatzean beti oso abegikor agurtu genion elkarri, azkenean Zugaztietan.)

Goizean Lutxanako plazan, sindikalista ospetsu batek galdetu zidan ea zergatik ez dudan orain idazten euskal prentsan…

Nire erantzun zuzena:

“Zentsuragatik. Soilik blog batean idazten dut, UEUko blog batean, bereziki ekonomiaz…”

Haren erantzuna:

Gogoratu Aresti, zer nolako tratua jaso zuen eta gero denak Arestiren alde azaldu dira, bera goraipatuz.

Orain, berriz, norbera hil behar da eta gero ospea, eta abar…!

Heterodoxiak ez dauka lekurik gaurko prentsan, are gutxiago ekonomia arloko heterodoxiak.”

Biok ados geunden hemen eta orain dagoen apurra ELA eta LAB edo LAB eta ELA direla1… gazteengan iristeko ahaleginak egin beharko direla…

Bai ados geunden hainbat puntutan. Baina ni neu munstroa zen Arestirengandik oso urrun nago, urrunegi. Gutxienez, hori bai, Aresti zalea izan naiz eta naiz, beti eta betiko!

Baina lagunak luzaturiko mezuarekin, sakonean, ados nago.

Hic et nunc heterodoxiak ez dauka espaziorik. Espazio lortu behar du, lurraldetasun berriak landu behar dira hala politikan nola ekonomian.

Biok hor geunden, jende artean, anonimatuan… Perikori gorazarrea egiteko asmoz…Rontegiko zubi azpian, agian laster Periko Solabarriaren zubia izango denaren azpian…

Eskaini zidaten hitz egiteko aukera, hitz batzuk esateko.

Hitzak pentsatu bai, baina neurekiko gorde nituen, anonimatuan.

Hona pentsatutako hitzak, goiz bertan izandako elkarrizketari lotuak: “Periko ametsen ingeniaria izan da, Aresti bertsoen ingeniaria  izan zen antzera…”


1 Nahiz eta biak mandangaz aritzen diren, politika arloan.

Abertzaleen drama

Sarrera gisa, ikus Jende arruntaren botoa

Segida:

Tragedia. Drama. Hona hemen abertzaleen drama:

Alderdikeriaz erabiltzea herri oso baten autodeterminatzeko1 daukan eskubidea, eta horrela aukera kolektiboa alferrik galduz, soilik espazio politikoa markatzeko interesagatik aritzea

Dramaren erro modernoak: karlistadak.

(a) Lehen eta (b) bigarren karlistadak, non Foruak deuseztatzeko espainolek bi gerla odoltsu eta luze egin behar izan zituzten (eta, hala ere, ez zuten lortu foruak erabat ezabatzea). Baina euskaldunak politikoki galdurik…

(c) Hirugarren karlistada, non gudariek hein handi batean Espainiako errepublikaren alde borrokatu zuten, noski bazeuden salbuespenak, Kandido Saseta komandantea tartean2

(d) Laugarren karlistada, non ezker abertzale ofizialak Espainia aldatzeko hainbeste aldarrikapen eta mugimendu egin dituen3

Orain, beste ‘saiakera’ baten aurrean gaude.

Orain badakigu, azkenean!, Euskal Herrian ez dagoela herririk, zonbiz  edo beteriko ‘mapa4‘ (sic) bat besterik ez dela Euskal Herria.

Eta horrela doa Granada hau, hanka-sartze batetik hurrengo batera, gero eta sakonagoa izango dena.

Baina, lasai… denok pozik, dena dago gure esku.

Dena?

Zer dago gure esku? Bai, Gure Esku Dago: zer?


1 Bantuzko hizkeraz asmaturiko mandanga nonahi erabiliz: ikus Euskara bantuzko hiztegi berria.

Jende arruntaren botoa

El vot de la gent normal1

Anna Arqué

Diu el refrany que “un poble que canta mai no serà vençut”. I sembla que per uns moments, tot escoltant la Gemma Humet cantar aquell matí davant les quatre columnes de Puig i Cadafalch, ens permetíem escoltar-nos les emocions, acostumats des de fa mesos, potser anys, a preparar només les paraules que embastin arguments raonats, “com si la raó fos per si mateixa garantia de justícia i el sentiment ho fos només de desgavell”, em deia un bon amic que ho acabava reblant amb un “santa paciència”. Un silenci imposat a un poble per la força, perquè els silencis imposats sempre ho són per la força. Els catalans hem patit la imposició d’un silenci quotidià i amargant per part d’un Estat espanyol via TOP, per enumerar-ne un de tants, i que continua volent imposar-se, ara via TC. Una societat que assimila amb normalitat els silencis imposats per l’Estat a una població que vol autodeterminar-se mitjançant les urnes, té molt poc de democràtica i com ha fet fa pocs dies el Tribunal de Drets Humans d’Estrasburg, a l’Estat espanyol se li ha de recordar que el silenci imposat pot ser legal i raonat però també, i sobretot, és equivocat.

De l’emoció del cant al batec de la terra. El representant dels pagesos a l’acte, en Pep Riera, l’únic que amb urna a les mans utilitza la paraula autodeterminació, crida un sentit “Visca la terra!”. La terra, la “terreta” que en diuen els valencians, que sempre hi és, i vulguem tots que amb ella hi siguin sempre els pagesos, la falç i l’horta que atura tants espants.

El discurs final, la versió il·lustrada del batec, aquelles paraules seleccionades per a l’ocasió van ser pronunciades per l’exemple d’èxit català on millor es reflecteix l’ànima processista que s’aixeca aviat per fer feina i fer país: en Pep Guardiola. Em va encantar veure tantíssima gent contenta i per això, gràcies, Pep. El nostre Sean Connery, a nivell de punch internacional, donava titulars arreu del món encarnant la serenor i la racionalitat del qui sap que, efectivament: “Referèndum és democràcia”. Només un però, qui fos qui redactés el text va deixar-se portar per aquella pàtina d’incredulitat catalana, forçada pels fets viscuts durant anys i panys de funambulisme. Un vertigen que demana ajuda perquè es pensa que hi ha d’haver algú més important que el seu propi poble alçat i en marxa, alguna cosa més poderosa que el poder que el seu poble es dona exercint el dret que té a autodeterminar-se i que, en circumstàncies democràtiques, cap Estat pot obstaculitzar sense posar en risc el seu bon lloc entre els països democràtics.

Saber-te bo fent feina quan has perdut en la més gran de totes les tasques, la que preserva la teva llibertat, et permet sentir-te una mica cofoi, fins i tot feliç dins la captivitat

El director anglès David Lean ens mostra al film El pont del riu Kwai (1957) un grup d’anglesos que cauen presoners de guerra i s’esmercen a construir un pont perfecte perquè els qui els tenen en captiveri, els japonesos, hi passin i avancin posicions. Treballen per l’enemic mentre xiulen animadament. Es poden aconseguir moments de felicitat sense llibertat? Devia tenir raó Max Aub quan deia que “la llibertat no fa l’home feliç, la llibertat el fa home”. Saber-te bo fent feina quan has perdut en la més gran de totes les tasques, la que preserva la teva llibertat, et permet sentir-te una mica cofoi, fins i tot feliç dins la captivitat. Als catalans ens pot agradar que ens demanin ajuda, fer les coses bé i que se’ns reconegui, ens dona un bri de dignitat dins la castració que significa saber que com a poble no ens hem organitzat prou bé per a tornar a manar legislativament i executiva sobre la nostra vida. Tanmateix, en general, demanar ajuda no afalaga a qui escolta, ans el contrari, diria que causa una enorme desídia en un món en permanent alerta vermella. Com hem dit tan sovint dins i fora de Catalunya, “els catalans avui no ens queixem, no demanem, els catalans informem”. No demanem ajuda, convidem als demòcrates d’arreu del món que ens acompanyin, perquè ser al costat de la democràcia és sempre excitant i, per què no dir-ho, símptoma de felicitat. Ser al costat de Catalunya ajuda a definir-se un mateix i a definir l’Europa i el món que en definitiva volem.

Aquesta última petició d’ajuda al món, com la campanya “Let catalans vote”, que demana permís no sabem a qui, a tothom?, com els debats sobre el dret a l’autodeterminació de Catalunya que es van promoure a parlaments com el de Dinamarca, són accions tan ben intencionades com exponents soft de les rèmores d’una Catalunya empobrida d’ella mateixa que encara busca convençuda, i quasi necessitada, de qui li posi i tregui límits, però que sembla que Puigdemont, Junqueras, Gabriel i Rovira han decidit superar. Perquè, ei, la porta és oberta, només cal travessar-la.

El drama dels comuns

Des de la mort del dictador espanyol Franco, cap president de la Generalitat havia defensat la pràctica efectiva de l’autodeterminació ni havia parlat de fer vinculant el resultat del referèndum que l’aplica, fins ara, que el president Puigdemont ha anunciat data i pregunta apel·lant al dret de Catalunya a l’autodeterminació dels pobles. I només per això estem d’enhorabona, reconèixer-nos és una primera però enorme passa. Sobretot perquè trenca amb el contorsionisme discursiu de l’inconcret i poc garantista dret a decidir que fins fa ben poc feia de vas comunicant entre l’antiga Convergència i l’actual Catalunya en Comú.

Un partit, CeC, que sembla mentida que sigui el que més s’omple la boca exigint garanties a un referèndum d’autodeterminació —que les tindrà, totes—, alhora que és el primer valedor d’un dret a decidir sense cap regulació internacional. Sembla mentida que els qui més parlen de representar el poble i els treballadors afectats per un PP desbocat a retallar drets socials en l’àmbit estatal, siguin els qui anteposin un pacte pel referèndum, precisament, amb aquest govern espanyol trampós i corrupte abans que defensar la vinculació que el poble demana i que el poble atorga. Sembla mentida que els de la Catalunya en Comú, que repeteixen el concepte cupaire de “fer fora el règim del 78” (PP/PSOE) però el redueixen a conveniència quan hi pacten per mantenir-se a la capital catalana, siguin els qui contemplen la maquinària de l’Estat espanyol com a solvent procurador de garanties en lloc d’atribuir-ho a la força que emana de la determinació combinada d’institucions i ciutadania catalana, amb ells inclosos. Sembla mentida que qui representa voler ser la veu dels comuns dels treballadors vulgui reunions privades amb el president de la Generalitat en lloc de reunions col·lectives on sí que acudeix el secretari general de Podem a Catalunya. Un tracte molt selectiu, demana el partit dels comuns. Potser és que, malauradament, el més comú és la vella política.

Ens trobem davant el “Drama dels Comuns”: utilitzar partidístament el dret de tota una societat a autodeterminar-se, malmetent l’oportunitat col·lectiva només pel propi interès de marcar espai polític

Volem catalanes més compromeses amb la voluntat del poble que compromeses a representar el poble. I per sorpresa d’adversaris i, encara més, per incomoditat de propers, l’Albano-Dante Fachin ha demostrat que té criteri propi fent una consulta interna, però també ajudant els comuns a tenir un mínim de relat i no quedar-se estancats, que no seria gens propi dels qui volen anomenar-se activistes i han cantat més d’un cop amb el puny alçat allò de “no prendre part és prendre part per l’statu quo”. I encara que ara convergeixin tots en l’anomenada “mobilització no vinculant”, també, molt propi d’activistes socials entendre les mobilitzacions massives com a no vinculants (ironia), la disposició democràtica de Fachin i Urban dista de la d’en Domènech. Fachin explicava el resultat de la consulta interna en termes d’autodeterminació, de sobirania en mans del poble i de no sentir-se previnculat a un resultat sense saber la dimensió que la gent ha decidit donar-li amb el seu vot i els fets que se’n desemboquin. En Domènech, però, sense haver consultat les bases, continua aferrant-se al 9-N com a idea deslegitimadora i rebutja acceptar la votació de l’1 d’octubre com a referèndum perquè diu que és el full de ruta del govern català, tractant com a dada totalment prescindible el fet excepcional que més del 70% de la societat catalana estigui disposada a votar sense acord amb l’Estat (CEO). El domina més el partidisme de marcar distàncies amb el PDeCAT que les tossudes realitats que suren sense remei, només cal veure el resultat del PNR. Viuen amb el pas en fals, i ho saben. L’ecologista Hardin el 1968 feia evolucionar “la tragèdia dels comuns”, plantejada per l’economista Foster (1833), encunyant el conegut Dilema dels comuns: com evitar que els usos individuals malmetin els recursos comuns. Doncs, com si es tractés d’una involució, ens trobem davant el “Drama dels Comuns”: utilitzar partidístament el dret de tota una societat a autodeterminar-se, malmetent l’oportunitat col·lectiva només pel propi interès de marcar espai polític.

No creure que s’hagi de fer efectiva la voluntat de la gent comuna si no hi ha un Estat espanyol que digui que ho garanteix, no té cap mena de coherència amb l’històric activisme de mobilitzacions catalanes

El referèndum és, importantment, el full de ruta de la majoria de la societat catalana, de la majoria absoluta del Parlament i, en conseqüència democràtica, del Govern català, només faltaria. Però el que caldria recordar al secretari general dels comuns és que el que sí és el full de ruta del govern espanyol de Rajoy, és precisament negar a la gent de Catalunya la força vinculant del seu vot, exactament el que vol fer el senyor Domènech. Treure al poble la força vinculant del seu vot, no creure que s’hagi de fer efectiva la voluntat de la gent comuna si no hi ha un Estat espanyol que digui que ho garanteix, no té cap mena de coherència amb l’històric activisme de mobilitzacions catalanes; us diria el nostre noi del sucre.

Farem el referèndum l’1 d’octubre, amb totes les garanties electorals, i el vincularem oficialment i popular, com toca, com fa la gent que creu en la gent, la comuna i l’excepcional, la que lluita i per la que hem de lluitar perquè ella sola no pot. Perquè com dirien els que ja han treballat amb tants d’altres consentits: “Qui vol fer una cosa la fa, i qui no la vol fer només troba excuses”.

Tothom pot ser-hi, és hora de fer un pas endavant a favor de la gent normal.

Katalunian herria, lurra, autodeterminazioa,… jende arrunta.

Euskal Herrian ez dago herririk, … Herria? Hay que hacer pueblo (sic)… à la maoista?

Euskal Herriak autodeterminazio-eskubidea du, eta kito!

Zer gara gu, gu jende arrunta? Zonbiak?

Ez ote dira benetako zonbiak progre horiek guztiak?

Gora Euskal Herria, Gora Herria, Gora Lurra, Gora lur askea!

Biba Euskal Herri askatua!

Utikan progresia mota guztiak!


DTM: Warren Mosler eta Stephanie Kelton

Warren Mosler eta petrolioaren prezioa

What If OPEC Stopped Pricing Oil In Dollars?1

Warren Mosler discussing what if OPEC stopped pricing oil in dollars. The answer is that it basically does not matter at all. The relative price of oil (as priced by other goods and services) would not change, and therefore the price of oil to holders of dollars would not change. And, our imports and exports wouldn’t change either.

What would have an effect is if countries wanted to stop accumulating dollars and saving in dollar denominated assets. This would have some effects on our ability to import, and on financial asset prices. However, fewer imports would mean we would stop losing dollars to foreign bank accounts, so our government could have a smaller budget deficit. This is meaningless to the federal government, but could ease pressure on state and local governments.

Stephanie Kelton eta zor federala

Stephanie Kelton‏ @StephanieKelton2

The federal debt in 1939 reached $48B3. Cartoonists ridiculed the idea that this was OK.

2017 eka. 12

Stephanie Kelton‏ @StephanieKelton eka. 12

Replying to @StephanieKelton

By 1940, the debt surpassed $50B.

Stephanie Kelton‏ @StephanieKelton eka. 12

Then came WWII, and the debt more than quadrupled. The cartoonists had a field day.

Stephanie Kelton‏ @StephanieKelton eka. 12

Here’s the current picture. Somehow, all the bad stuff that was supposed to happen just didn’t. Don’t let the cartoons scare you.

Stephanie Kelton‏ @StephanieKelton eka. 12

The national debt is nothing more than the outstanding quantity one kind of financial asset, provided by the US government.

Warren B. Mosler‏ @wbmosler eka. 12

The national debt is the $US spent by gov that have not yet been used to pay taxes and constitute the $net financial assets of the economy.

Stephanie Kelton‏ @StephanieKelton eka. 12

Is it also what I said? ? I don’t like that language, probably because I hear “today’s debt = future taxes” and it burns my ears.

Warren B. Mosler‏ @wbmosler eka. 12

Just saying that your ‘one kind of financial asset’ is in fact just a tax credit, and an outstanding one at that… 😉

Dakienak badaki, ez dakienak baleki!


3 Amerikar bilioi bat = Mila milioi europar.

W. Mosler: serie berria

Warren B. Mosler‏ @wbmosler1

The first in a series just posted by one of my summer interns:

MMT for You and Me Part 1

Bideoa: https://www.youtube.com/watch?v=HOM9suirjPA

An introductory video to get you thinking about where the money comes from.

Based on the works of Warren Mosler.

The 7 Deadly Innocent Frauds free PDF:
http://moslereconomics.com/wp-content…

2017 eka. 16

Mitchell Shapiro‏ @mitch_shapiro

Replying to @wbmosler

A simple & nicely provocative start. Looking forward to rest of series @StephanieKelton @stf18 #MMT @billy_blog @ptcherneva @FadhelKaboub

Geoff Coventry‏ @gladkiwi eka. 15

Nice job, @CoachC0v

Warren B. Mosler‏ @wbmosler

Replying to @TickyW

Goes without saying! Part 2 to follow… 😉

2017 eka. 14

Warren B. Mosler‏ @wbmosler 2

MMT for You and Me part 2:

MMT for You and Me Part 2: Taxing and Spending

Bideoa: https://www.youtube.com/watch?v=3aM-3so0t9c

An introductory video on the way how the US government taxes and spends.

Based on the works of Warren Mosler.

The 7 Deadly Innocent Frauds free PDF:
http://moslereconomics.com/wp-content

2017 eka. 21


Warren Mosler-en kreditu kontrola (3)

Hasierarako ikus Warren Mosler-en kreditu kontrola (2)

Segida:

Warren Mosler — Credit check update1

Tom Hickey:

Still not looking good. 

The US is 96 months into this recovery, which is the longest and flattest on record, and it is looking long in the tooth.

And now the US is headed into what looks like a another battle over the debt ceiling, unless Gary Cohn gets his way and the Trump administration accepts some of the terms of the fiscal hawks, which would reduce the government contribution to “save money.”

That leaves exports to make up the difference. The global economic outlook is pretty iffy, too, and so reliance on net exports is not likely to pan out.

Credit check2

More problematic by the week. Note the absolute level of c and I loans has been flat to negative since October:

Annual rate of growth remains sub 2%:

This is consistent with the weakening housing releases:

This is consistent with weakening consumer spending:

This is consistent with weakening vehicle sales:

Corporate bonds are not picking up the slack- quite the opposite:


Iruzkinak:

Matt Franko said…
Asset value of Bank credit up about 5% YoY even with 2 rate increases over the same period totaling 0.5% …. I don’t see this as a problem…

Interest income finally on the rise probably about an additional $50B annual increase so far in interest between IOR and interest paid on T-bills and increasing….

Mike has Leading flow +28b (0.8%) over same time last year not shabby…

Fed looking at starting to let QE run off later this year which will create 100s of $billions of room on bank bs for other assets …

Could be better… need more rate increases and draw down of the QE to get going…

MRW said…
People need jobs, Matt. Financial indices aren’t going to move the economy.
Warren Mosler said…
Bank credit contribution to growth this year a lot less than last year.
Greg said…
Matt sounds like Scott Sumner more and more everyday, except Sumner hates Trump.

Matt the monetarist

Matt Franko said…
Greg, I’ve only pointed out the small but still positive changes in flows not munnie supplies or anything monetarist…

Our only hope of getting out of this low growth environment is via automatic appropriation e.g. higher interest income from higher policy rate and a reversal of QE helping out banks do more financing of output assets … those seem to be starting

Everyone except the 1,000 or so of us thinks “we’re out of money!” hello….

Matt Franko said…
MRW,

I didn’t mention anything about financial indexes…

Increased interest income from from higher rates will result in higher expenditure and some employment increases… states (like Illinois) will get well too and be able to do more purchases…

Financial indexes will go up ex post of the increases in incomes… it’s not stochastic or complicated….

Matthew Franko said…
Tom from your link:

“Not only is the average annual growth rate of just 1.48% during Obama’s business cycle the weakest of any expansion since at least 1949, he has just become the only President to have not had even one year of 3% GDP growth.”

He was the only president to have ZIRP foisted upon him his whole 2 terms also… growth, as a function, has the policy rate in the numerator of one of the terms of the equation…

dont blame Obama or the “business cycle!” (‘cycle’ sounding very stochastic here)

Tom Hickey said
He was the only president to have ZIRP foisted upon him his whole 2 terms also… growth, as a function, has the policy rate in the numerator of one of the terms of the equation…

Matt, citing one potential factor with the implication that it is a major cause without providing substantiation is magical thinking. It’s a narrative and not a scientific explanation.

The problem in pseudoscience is choose your narrative and then argue with others with lots of handwaving but without providing compelling evidence.

Tom Hickey said…
Greg, I’ve only pointed out the small but still positive changes in flows not munnie supplies or anything monetarist…

But the point is where the interest payments are flowing and what happens then. If saving desire is still higher then spending desire (consumption and investment) at the macro level, then the flow will likely have little to no effect on growth.

Tom Hickey said…
Increased interest income from from higher rates will result in higher expenditure and some employment increases… states (like Illinois) will get well too and be able to do more purchases…

Financial indexes will go up ex post of the increases in incomes… it’s not stochastic or complicated….

Yes, it is complicated. If the increase flows to spending, then more growth. It is flows to saving, then no growth. So the ratio of saving to spending must be known rather than just assumed.

Moreover, there are seldom single causal factors in social situations, which is why it is difficult coming up with linear equations and writing functions in social science including economics.

One could do a statistical analysis of similar situations in the past to arrive at a probability distribution but it would be an estimate. Likely more accurate than a guess though, with the caveat that past performance is no guarantee of future performance.

Tom Hickey said…
I should qualify the statement, “Moreover, there are seldom single causal factors in social situations, which is why it is difficult coming up with linear equations and writing functions in social science including economics,” with the proviso that the outcome conforms to reality based on data.

Social scientists and especially economics simply their assumptions to make the math tractable and fit with their priors all the time, But the results are generally disappointing when compared with reality.

Not to worry though. Collecting data and processing it into useful information is difficult at the macro scale, so they are not caught out until embarrassing turning points when they get caught with their pants down.

Matt Franko said…
Tom, Functional equations often have more than one term and multiple variables…

State and local govts will spend any increase in govt interest income they get on their erisa accounts $4$ until the accounts become over funded … this will take a while …. so will modest income savers…

You guys are the ones who keep saying everything is going to hell meanwhile it isn’t happening … I’m telling you here why it isn’t happening the system is being provisioned with modest yoy3 increases of Treasury withdrawals so we will continue to see modest measures of growth…

Tom Hickey said
Matt, I am not saying your are wrong. I am waiting for your to spell out the argument so that is more than a narrative. I have shown ways that the narrative can be attacked, while you say it is not complicated. If it’s not show it with more than more narrative.

I appreciate that this takes time that you may not wish to devote to this, or sharing research that is proprietary. Those are good reasons, but then the claim remains an unsubstantiated assertion supported only by narrative.

This is an important claim, however, since it would radically revise current thinking. So I am pushing you on it. You are the one taking about competence, being qualified, writing deterministic functions, etc. So I am saying put up or shut up. : )

Warren Mosler said…
I was born in 1949…
Also, a positive policy rate is basic income for those with money…
😉
Matt Franko said…
Tom it always has to start this way

https://en.m.wikipedia.org/wiki/Fermi_problem

“Scientists often look for Fermi estimates of the answer to a problem before turning to more sophisticated methods to calculate a precise answer. ”

It’s good enough for now, let’s see what happens we’ve had almost 10 years of zirp/QE and high savings resulting in tepid growth now let’s see what happens to growth as the zirp and QE is reversed leaving other fiscal areas slightly up to flat….

If we return to higher levels of growth then it would be worth more formal documentation…

Zirp/QE has certainly not led to decent growth in prices or output like the monetarist people claim it would….. just the opposite…

Tom Hickey said…
That’s post hoc ergo propter hoc aka questionable cause. It is an informal fallacy.

It’s another way of asserting something without showing substantiation.

Correlation is not causation.

To put it in your terms, where’s the determinism?

This requires showing a transmission mechanism, and I have offered objections to a simple linear model above. The flow can go in different directions that will influence the effect.

The Rombach Report said…
Warren Mosler said…

“Bank credit contribution to growth this year a lot less than last year.”

Warren – Happy Father’s Day!

The Rombach Report said…
Matt Franko said…

“Our only hope of getting out of this low growth environment is via automatic appropriation e.g. higher interest income from higher policy rate and a reversal of QE helping out banks do more financing of output assets…”

Matt – Flattening yield curve in the face of Fed rate hikes suggest the economy is losing traction. The Trump election has fueled 20% stock market gains on expectations for large fiscal expansion from tax cuts, defense & infrastructure spending, all of which is looking more doubtful now. Maybe it wouldn’t be the worst thing in the world for the Fed to hold off on further rate hikes until that policy agenda gets back on track.

Matt Franko said…
The transmission mechanism is govt crediting non non govt bank accounts…
Matt Franko said…
Tom I could demonstrate osmosis to you and the change in concentration across the membrane and you would say “where is the evidence!”…
Tom Hickey said…
The transmission mechanism is govt crediting non govt bank accounts..

That is saying that income leads to spending detemninisticallly. There are several issues with that.

First, income is either spent or not spent (saved). The portion that is saved doesn’t become someone else income and has no effect on growth. So the ratio of saving to spending is important here and that ratio is variable, determined by the liquidity preference those receiving the income.

Current low interest on the longer end of the yield curve would suggest that saving desire is still elevated. In addition, the one bright spot is financial investment in equities not to be confused with primary investment in production. The presumption is that a significant portion of an increase in income will flow into equities, which falls under saving.

Secondly, spending flows into different channels that have different economic effects, so affecting growth more than others. For example, the multiplier effect of productive investment is higher than consumption.

Different types of consumption and investment also have different effects. For example, its’ possible that Silicon Valley does very well as a result of the increased injection but the rest of the economy not so much.

Tom Hickey said…
Tom I could demonstrate osmosis to you and the change in concentration across the membrane and you would say “where is the evidence!”…

I am not asking for evidence but a fleshed out explanation that can be tested.

In the osmosis example, you would explain the theory and the mechanism behind it, and show how evidence supports it and no evidence contradicts it. You would further point out that the explanation is comprehensive, internally consistent and consilient with the rest of scientific knowledge, corresponds to evidence, is useful and economical. Moreover, there is no competing theory. As a result, I would agree that is is the best explanation.

You have not made that case wrt your claim.


3 Year Over YearYOY.