13 h

Defizit gastua hasiberrientzat https://unibertsitatea.net/blogak/heterod

abe. 12

Finally serious evidende that rate hikes work.

@wbmosler is clearly wrong

https://cnbc.com/2023/12/12/why-fed-rate-hikes-take-so-long-to-affect-the-economy.html

oooooo

abe. 12

@gonzo_mm

erabiltzaileari erantzuten

Finally! Now I can stop doing all this and get a life!

Warren B. Mosler@wbmosler

abe. 14

@BaseForGrowth

@malcolm_reavell

eta

@theSNP

erabiltzaileei erantzuten

https://moslereconomics.com/wp-content/graphs/2009/07/natural-rate-is-zero.PDF

abe. 14

@Time2BeOutraged

@_tokuninai

eta

@edugaresp

erabiltzaileei erantzuten

https://moslereconomics.com/wp-content/uploads/2023/06/Argentina_Inflation-Presentation.pdf

abe. 20

Wednesday’s blog post (20/12) is now posted (10:02 EAST) – The parallel universe in Japan continues and is delivering superior outcomes, while the rest look on clueless

• https://billmitchell.org/blog/?p=61468

oooooo

Megatron@Megatron_ron

Bideoa: https://twitter.com/i/status/1740338950898602346

EU nations unwilling to comply with their own sanctions?

There are many trade flows from the #EU to #Russia via Central Asia: mostly dual-use goods that are not subject to export controls, such as cars and spare parts

Not only Germany, but also Poland, Czechia and the Baltics are apparently not against such trade

@tobararbulu # mmt@tobararbulu

19 s

Nobel Economist Joseph Stiglitz Hails New BRICS Bank Challenging U.S.-Do… https://youtu.be/fjyaGLFWWNA?si=0Pz-6FQDXk4EJFyn

It’s a comforting fable, designed to excuse their own failures. It is, however, completely untrue. Neoliberalism wasn’t exported to Europe from across the Atlantic (or from across the Channel, for that matter). It was a largely homegrown affair — one that was, in fact, spearheaded by European Socialists, and by one Socialist in particular: Jacques Delors, President of the European Commission from 1985 to 1995, who died this week.

To understand this tragedy, we need not return to 1945, but 1981. In May, the Socialist François Mitterrand was elected France’s president, after more than two decades of the Left being excluded from office. He went on to form a government that also included Communist ministers for the first time since 1947, prompting a widespread belief that France was headed for a radical break with capitalism.

At the time, such a notion was not inconceivable. Most European governments still firmly believed in the importance of economic dirigisme and the need for capital controls and regulated financial markets, which presupposed a high degree of economic sovereignty. Nowhere was this truer than in France: the French had always been particularly reluctant to agree to any supranational authority — a consistent position that had hampered progress towards an economic and monetary union. In general, there was still the belief that individual nations had the power to shape their own economic and political destinies — and even to challenge the capitalist system itself.

Nothing exemplifies this better than Mitterrand’s victory in the spring of 1981. The new president’s policy agenda embodied an ambitious reform programme of Keynesian economic reflation and redistribution. It also proposed extensive nationalisations of France’s industrial conglomerates. By implementing this platform, Mitterrand claimed, his government would precipitate a “rupture” with capitalism, and lay the foundations for a “French road to socialism”. It’s easy to see why this represented a moment of immense hope not just for the French Left, but for the entire European Left — of the kind not witnessed since.

Soon after the Mitterrand experiment began, however, it started to unravel. As a reaction to the Socialists’ ambitious plan for economic reform, capital started to flee France almost immediately. Despite the imposition of draconian capital controls, the government was unable to halt the flight.

This created a downward pressure on the franc (further exacerbated by the post-1979 global interest rate hikes), threatening France’s membership in the European Monetary System (EMS) — the system of semi-fixed exchange rates created in 1979. Under the EMS, the central banks of participating states had little choice but to shadow the Bundesbank’s restrictive monetary policy. Yet this was incompatible with Mitterrand’s reflationary programme — and Mitterrand found himself in a position where a decision had to be made about whether to leave the EMS or abandon his progressive agenda. Regrettably, he chose the latter path.

And so, in the spring of 1983, Mitterrand and the Socialists drastically reversed course, in what came to be known as the tournant de la rigueur (turn to austerity): rather than growth and employment, the emphasis would now be on price stability, fiscal restraint and business-friendly policies. A crucial aspect of this was the gradual rollback of virtually all capital controls and restrictions on financial transactions. And who was the main architect of this shift? Mitterrand’s finance minister, Jacques Delors.

The effects of this U-turn cannot be overestimated. Mitterrand’s victory in 1981 had inspired the widespread belief that a break with capitalism — at least in its extreme form — was still possible. Yet two years later, the French Socialists had succeeded in “proving” the exact opposite: that globalisation was an inescapable reality. Even though there were alternatives available to Mitterrand (such as leaving the EMS and floating the franc), the conclusion most people drew was that the “Keynesian road to socialism” had failed. Capital had won.

To make matters worse, the French Socialists, after having embraced neoliberalism at home, then proceeded to export their newfound views — on everything from capital movements to monetary integration — to the rest of Europe. Here, Delors was also central. “National sovereignty no longer means very much, or has much scope in the modern world economy,” he said. “A high degree of supranationality is essential.” This was a radical departure from France’s traditional souverainiste stance, which had already been seriously compromised by France’s decision to join the EMS, under which, as noted, the country was effectively forced to subjugate its own monetary-fiscal policy independence to the Bundesbank’s monetary policy.

For all of France’s historical concerns about supranational (that is, “European”) encroachment on its sovereignty on the one hand, and German hegemony on the other, few missed the irony of it being the Socialists who gave up that freedom — and to Germany of all nations. But by the late Seventies, French politicians on both sides of the political divide had come to accept that maintaining France’s status required them to remain firmly “in Europe” — that is, in the EMS — which in turn entailed adopting a low-inflation, stable-currency policy.

This brought about a distinct shift in attitudes among the Socialists towards Europe — a mood that Delors summed up in October 1983: “Our only choice is between a united Europe and decline.” As Rawi E. Abdelal, professor of business administration at Harvard Business School, noted: ‘To the extent that the French Left continued to hope for socialist transformation, its members could see Europe as the only arena in which socialist goals could be achieved.” The problem was that, by 1983, they had little to offer in terms of a Europe-wide progressive alternative, since they had accepted the notion that social-political objectives should be subjugated to “price stability”.

And so, two years later, France strongly supported Delors’s nomination to the post of President of the European Commission — a position he would go on to hold for a decade, serving for three terms, longer than any other holder of the office. It is no exaggeration to say the Delors presidency was groundbreaking, giving the European integration process a momentum that had been lacking in the preceding decade. It is also the period in which the foundations of monetary union, and more generally of neoliberal Europe, were laid down — a development in which Delors, and the French Socialists in general, played a key role.

Their logic was the following: given that, within the EMS, the Bundesbank effectively set the interest rates for all participating states, and that leaving the EMS wasn’t considered an option, the French became increasingly convinced that there was only one way to preserve a low-inflation fixed exchange rate system while also wrestling control of monetary policy away from Germany: to push for a full European monetary union. For Delors, creating a single European currency became an utmost priority, and he set out to persuade his reluctant fellow European policymakers to embrace the idea. The first step was the signing of the Single European Act, in 1986, which set the objective of establishing a single market by 1992. Delors also proceeded to export France’s new views on capital movements to the rest of Europe, by pushing for the full liberalisation of capital flows across the continent — paving the way for a monetary union.

This brings the historical importance of the French Left’s neoliberal turn into stark relief: if the French hadn’t embraced financial liberalisation at the domestic level, they never would have offered their support for an integrated European financial market — and a monetary union would likely never have seen the light of day.

The Commission’s proposals were initially met with fierce resistance from a number of governments. But by the late Eighties, Delors had succeeded in radically changing Europe’s approach to capital controls — and in getting EU member countries to introduce full capital mobility by 1992, effectively making the free movement of capital a central tenet of the emerging European single market. This was a binding obligation not only among EU members but also between members and third countries.

In effect, Delors had succeeded in pushing Europe to fully embrace the “Paris consensus”, the European equivalent of the Washington consensus. The consequence of this was a European financial system that was, in principle, the most liberal the world had ever known. In this sense, the Europeans, far from being passive recipients of the free-market policies being concocted in Washington, actually preceded the Americans in embracing neoliberal globalisation, and promoting the spread of global capital.

This also profoundly influenced the construction of the monetary union. In short, Delors succeeded in convincing European governments that, by joining the EMS and liberalising capital flows, they had effectively already lost much of their economic sovereignty; they therefore had little choice but to embrace monetary integration as a way to regain some sovereignty at the supranational level, by “having a say” in Europe’s collective monetary policy. It was a shrewd argument, but a fallacious one: as history would show, by ceding their monetary policy to a supranational central bank, European governments simply ended up losing what little sovereignty they had left.

However, Delors was aided by the fact that, by the early Nineties, even the German establishment had come round to the idea of a monetary union — and indeed, national elites in most European countries had come round to the notion of a supranational central bank, fully immune to democratic pressures, as a useful way to insulate economic policy from popular contestation. By 1989, the Delors Committee had published its hugely influential Delors Report, which essentially acted as a blueprint for the construction of monetary union in the coming years.

The final act of this democratic tragedy came three years later with the Maastricht Treaty. This didn’t only establish a timeline for the establishment of monetary union (in line with the Delors Report), but also created a de facto economic constitution that embedded neoliberalism into the very fabric of the European Union. By the time the Delors Commission came to an end, in 1995, much of the groundwork for the techno-authoritarian and anti-democratic juggernaut that the EU would later become was laid — and, to a large degree, we have Delors, a French Socialist, to thank for that.

Ironically, this didn’t just lead to the demolishing of the Left’s cherished European social model, to the benefit of financial-corporate interests (and, of course, Germany), but it also paved the way to the demise of the European socialist Left — and to the rise of the populist Right. More than anyone else, it is the latter who, today, should pay tribute to Delors.

abe. 20

Scott Ritter Show Ep. 58

As always, the EU’s top brass waxed lyrical about the single currency, but this year their musings sounded more delusional than ever. In an opinion piece published across the eurozone, the presidents of the European Central Bank, Commission, Council, Eurogroup and Parliament praised the euro for giving the EU “stability”, “growth”, “jobs”, “unity” and even “greater sovereignty”, and for being an overall “success”.

Such self-congratulatory back-slapping is common among Eurocrats. In 2016, for example, as Europe was still reeling from the disastrous consequences of the euro crisis, Jean-Claude Juncker, then President of the Commission, said that the euro brings “huge” though “often invisible economic benefits”. This year’s statement, however, had a particularly Orwellian feel to it. The euro has not brought any of those things to Europe: the EU today is weaker, more fractured and less “sovereign” than it was 25 years ago.

Since 2008, the euro area has essentially been stagnating — and its overall long-term growth trend has been negative. This has led to a dramatic divergence between its economic fortunes and those of the US: adjusted for differences in the cost of living, the latter’s economy was only 15% larger than the euro area’s economy in 2008; it is now 31% larger. Today, the euro’s share of global currency reserves is significantly lower than its predecessors — the Deutsche Mark, French franc and ECU — in the Eighties.

But this is far from the only result of the euro’s failure. When it was introduced, it was hoped that the single currency’s “culture of stability” would narrow the difference in terms of its members’ economic performance. In effect, as the IMF has noted, the opposite has happened: “the envisaged adjustment mechanisms under monetary union have been insufficient to support convergence, and have in some cases contributed to divergence”. Added to this, exports between euro nations as a percentage of total eurozone exports have been on a downward trend since the mid-2000s.

It seems clear, then, that the introduction of the euro was a mistake — but only if we take its proponents’ stated intentions at face value. For it is important to understand that the euro was always as much a political project as an economic one. And, from that standpoint, it has been an extraordinary success.

There’s a reason the foundations of the monetary union were only laid in the early Nineties, even though the idea had been around since 1970. That year, the first report examining the feasibility of monetary union was published. Known as the Werner Report, it stressed that, in addition to the creation of a European central bank as the issuer of the new single currency, “transfers of responsibility from the national to the Community plane will be essential” for the conduct of economic policy.

Seven years later, the MacDougall Report reinforced the need for a sizeable EU budget — of 5% or more of EU GDP — to underpin any European monetary union, with responsibility for it handed to a European Parliament. Given the reluctance of member states to move towards a fully-fledged monetary and fiscal union, which would have involved significant transfers between countries, the plans for monetary union floundered for another decade. However, new life was then breathed into the euro project in the late Eighties and early Nineties — not because the economics of the project had improved, but because the politics around the idea of monetary union had changed, especially at the level of Franco-German relations.

The official story is that the French, who had always been particularly reluctant to agree to any supranational authority, came round to the idea of a monetary union in the wake of German reunification, as a way of “shackling” German power. Germany, meanwhile, relinquished its much-loved national currency, the symbol of its post-war economic achievement, in order to quell concerns about its growing hegemony.

The reality, in fact, was more complicated. It is true that France hoped that monetary integration would constrain Germany. But France was also influenced by domestic developments — in particular the French Socialists’ neoliberal turn in the early Eighties, under Mitterrand. This led it to embrace the idea that “national sovereignty no longer means very much” and that “a high degree of supranationality is essential”, as Mitterrand’s finance minister, Jacques Delors, put it — an idea that Delors would then export to the rest of Europe during in his role as President of the European Commission from 1985 to 1995.

As for Germany, the notion that the country reluctantly accepted to have the euro foisted upon itself, in exchange for its European partners’ acceptance of reunification, is largely a myth. German elites were perfectly aware that the eurozone would give an immense boost to Germany’s export-led mercantilist strategy, by ensuring a significantly lower exchange rate with the euro than it would have had with the Deutsche Mark, even in the face of persistent trade surpluses. In other words, the German elites viewed the euro as a way of reasserting their hegemony over Europe — the exact opposite of what the French were hoping to achieve.

For a while at least, history would prove the Germans right. They seized the opportunity to ensure that the future monetary union would be functional to German interests, partly by getting other member states to agree to the creation of a fully independent central bank — that is, fully insulated from a democratically elected polity — with the sole mandate of ensuring price stability. No wonder Helmut Kohl, Germany’s Chancellor, admitted to pushing through the euro “like a dictator” in face of a reluctant public, while Theo Waigel, his finance minister, boasted about “bringing the Mark in Europe”.

Why did other countries agree to join a monetary union destined to boost the German economy at the expense of other less export-dependent economies, such as Italy? There were certainly ideological elements at play, such as the rise of monetarism, but, as with France, the reasons were mostly political rather than economic. By the early Nineties, national elites in most European countries had come to view the euro as a “Trojan horse” with which to push through neoliberal policies for which there was little political support, by engaging in what Kevin Featherstone has called a “‘blameshift’ towards the ‘EU’”.

Moreover, by explicitly prohibiting the ECB from acting as lender of last resort and forcing states to rely solely on loans from the financial markets for their financing needs, the idea was that representative democratic institutions would be subject to the supposed “discipline” of the markets. Angela Merkel coined a rather ominous term for such a system: “market-conforming democracy”.

In short, the euro saw the light of day because national elites came to embrace the idea for different but convergent reasons: in some cases (such as Germany), it was a matter of gaining an economic advantage at the expense of other countries; in others (Italy, for example), it was a matter of gaining an advantage at the expense of domestic actors, even if that cost economic growth.

The result was an extremely dysfunctional monetary union. And when the financial crisis hit, and a series of credit-led economic booms — fuelled by massive capital flows from Europe’s core to the periphery — went bust, the implications of its structure hit home. Those members in a slump could not devalue. Since they could not print their own money, and because the central bank was unwilling to act as lender of last resort, they risked sovereign default, or national insolvency, as they came under attack from financial markets. Essentially, the euro was their downfall.

Yet, by late 2010, European elites — the Germans, in particular — had rewritten history. The financial crisis was not the fault of an out-of-control system exacerbated by the dysfunctional nature of the monetary union; it was, they claimed, the fault of excessive government debt inflated by countries that had “lived well beyond their means”. The fact that most euro countries had registered primary fiscal surpluses in years leading up to the financial crisis, and that public debts had exploded only in the latter’s aftermath as a result of the massive bank bail-outs, was conveniently brushed aside. There was only one possible “cure”, Europe’s leaders proclaimed: austerity. The leading proponent of this theory was Germany’s ultra-hawkish finance minister, Wolfgang Schäuble, who died last week.

The imposition of such harsh fiscal austerity measures across the eurozone didn’t just raise unemployment, erode social welfare, push populations to the brink of poverty and create a genuine humanitarian emergency — it also completely failed to achieve the stated aims of kickstarting growth and reducing debt-to-GDP ratios. Instead, it drove economies into recession and increased debt-to-GDP ratios. Meanwhile, democratic norms were dramatically upended, as entire countries were essentially put into “controlled administration”. The result was a “lost decade” of stagnation and permacrisis that led to a profound divide between the eurozone’s north and south, and brought the monetary union to the brink.

This wasn’t simply the “automatic” outcome of the defective architecture of the monetary union. Rather, the European “sovereign debt crisis” of 2009-2012 was largely “engineered” by the ECB (and Germany) to impose a new order on the continent. Indeed, former ECB president Jean-Claude Trichet made no secret of the fact that its refusal to support public bond markets in the first phase of the financial crisis was aimed at pressuring eurozone governments into consolidating their budgets and implementing “structural reforms”. But the ECB then went further, resorting to various forms of financial and monetary blackmail — most notably in Ireland, Greece and Italy — with the aim of coercing governments to comply with the overall political-economic agenda of the EU.

In this sense, we could say that the euro crisis was both an economic disaster and a political success for Europe’s financial-political elites. After all, it allowed them to radically restructure and re-engineer European societies and economies along lines more favourable to capital, while creating one of the single biggest upward transfers of wealth in history — all in the name of the allegedly inescapable realities of the euro.

Since then, not much has changed in terms of the inner workings of the monetary union. Even the temporary suspension of the EU’s fiscal rules during the pandemic is in the process of being curtailed; a rehashed but fundamentally unchanged version of the EU’s fiscal framework is set to come back into force this year, spelling the return of austerity to the continent. That Germany has fallen from grace in the process, going from unchallenged European hegemon to American vassal-in-chief, is one of the great ironies of the past decade.

Nonetheless, when European elites say that the euro has been a success, they are unwittingly revealing a truth. From their perspective, it undoubtedly has; and their greatest success has arguably been to convince everyone that there is no alternative. To paraphrase Mark Fisher, it’s easier to imagine the end of the world than the end of the euro.

Mark Flowerchild #MMT #RealProgressives@MarkFabian21

urt. 3

What “debt?” #LearnMMT

Aipamena

urt. 4

The world can switch towards green energy without relying on #FossilFuels. #Solarenergy is perfectly capable of electrifying industry. The world has enough real resources.

@FadhelKaboub

@IndiaMMT

@sdgrumbine

Brian Romanchuk@RomanchukBrian

urt. 4

From the dispassionate perspective of a news organization, “Public Debt Hitting A Big Record Round Number” is an inexhaustible source of material. The alternative is doing actual work to find a real story, and doing actual work is a pain in the butt.

urt. 11

@ashane888

eta

@FedGuy12

erabiltzaileei erantzuten

The gov’s *deficit* spending itself creates the reserve balances that pay for the Tsy secs. The public debt is the $ spent by gov that haven’t yet been used to pay taxes. The $ to pay taxes and buy Tsy secs are the reserve balances created by the gov’s deficit spending.oOooooo

Macro n Cheese Podcast #MMT@CheeseMacro

urt. 11

@CheeseMacro

@sdgrumbine

eta

@les_leopold

erabiltzaileei erantzuten

Wall Street’s War on Workers w/ @les_leopold. Join us for the video premiere tonight at 7 pm ET! #WallSt #Workers #Layoffs #Austerity

From youtube.com

@tobararbulu # mmt@tobararbulu

urt. 11

Job Guarantee. Lan bermea

Pavlina R. Tcherneva

Read Pavlina R. Tcherneva’s newly published book on her Case for a Job Guarantee project.

Glenn Diesen@Glenn_Diesen

urt. 10

Before: Russia exported cheap energy to European industries & imported European industrial goods

Now: Russia exports cheap energy to Asia & imports Asian industrial goods -Europe is de-industrialising & becoming too reliant on the US, while the economies of China & Russia grow!

Mark Flowerchild #MMT #RealProgressives@MarkFabian21

urt. 13

ΛЦƧƬΣЯIƬY IƧ MЦЯDΣЯ@sdgrumbine

2020 urt. 15

If you are media of any flavor and you still believe that the nation has to “find the money” or that it can go broke, you should be forced to resign. Even alternative media. No excuses for not slamming that shit down hard.

Warren B. Mosler@wbmosler

urt. 12

Interesting how the MMT reminder that markets can only express relative value, with absolute value a function of prices paid by gov, etc. remains so universally taboo?

https://msn.com/en-us/money/markets/a-great-deal-of-damage-has-been-done-economist-james-galbraith-says-the-fed-should-cut-rates/ar-AA1mPeXr?ocid=msedgntp&pc=LGTS&cvid=78edf9a109514746956994df5c94949a&ei=24

urt. 4

This week’s @CheeseMacro episode ft.

@les_leopold, Co-founder & Director of The Labor Institute, & Author of, Wall Street’s War on Workers: How Mass Layoffs & Greed Are Destroying the Working Class & What to Do About It, will drop Sat, Jan 6 @ 8 AM EST.

@ http://realprogressives.org/macro-n-cheese-podcast/

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youtube.com

BRICS Summit 2024 in Russia: a history of strength and strategy…

The year of Russia’s BRICS presidency under the motto “Strengthening multilateralism for equitable global development and security” has just begun. Let’s loo…