billy blog Wed 2010-09-08 19:04 EDT

Michal Kalecki -- The Political Aspects of Full Employment

...several readers have asked me whether I am familiar with the 1943 article by Polish economist Michal Kalecki -- The Political Aspects of Full Employment. The answer is that I am very familiar with the article and have written about it in my academic work in years past. So I thought I might write a blog about what I think of Kalecki's argument given that it is often raised by progressives as a case against effective fiscal intervention...[Job Guarantee concepts briefly summarized]...While orthodox economists typically attack the Job Guarantee policy for fiscal reasons, economists on the left also challenge its validity and effectiveness. In 1943, Michal Kalecki published the Political Aspects of Full Employment, in the Political Quarterly, which laid out the blueprint for socialist opposition to Keynesian-style employment policy. The criticisms would be equally applicable to a Job Guarantee policy...Kalecki's principle objection then seemed to be that ``the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders.''...the major political blockages are no longer those that Kalecki foresaw. The opponents of fiscal activism are a different elite and work against the ``captains of industry'' just as much as they work against the broader working class. The growth of the financial sector and global derivatives trading and the substantial deregulation of labour markets and retrenchment of welfare states has altered things considerably since Kalecki wrote his brilliant article in 1943...

Billy Blog; full employment; Michal Kalecki; political aspects.

Minyanville Sat 2010-08-21 10:33 EDT

How Pimco Is Holding American Homeowners Hostage

David Stockman

...According to Bill Gross ...the American economy can be saved only through ``full nationalization'' of the mortgage finance system and a massive ``jubilee'' of debt forgiveness for millions of underwater homeowners...As overlord of the fixed-income finance market [Pacific Investment Management Co. (Pimco)] generates billions annually in effort-free profits from its trove of essentially riskless US Treasury securities and federally guaranteed housing paper. Now Pimco wants to swell Uncle Sam's supply of this no-brainer paper even further -- adding upward of $2 trillion per year of what would be ``government-issue'' mortgages...This final transformation of American taxpayers into indentured servants of HIDC (the Housing Investment & Debt Complex) has been underway for a long time, and is now unstoppable because all principled political opposition to Pimco-style crony capitalism has been extinguished...At the heart of the matter is the statist Big Lie trumpeting the alleged public welfare benefits of the home-ownership society and subsidized real estate finance...the congregates of the HIDC lobby -- homebuilders, mortgage bankers, real estate brokers, Wall Street securitizers, property appraisers and lawyers, landscapers and land speculators, home improvement retailers and the rest -- have gotten their fill at the Federal trough. But the most senseless gift -- the extra-fat risk-free spread on Freddie and Fannie paper -- went to the great enablers of the mortgage debt boom, that is, the mega-funds like Pimco...there isn't a shred of evidence that all of this largese serves any legitimate public purpose whatsoever, and plenty of evidence that the HIDC boom has been deeply destructive...there are upward of 15-20 million American households that can't afford their current mortgages or will be strongly disinclined to service them once housing prices take their next -- and unpreventable -- leg down. But Pimco's gold-coast socialism is exactly the wrong answer. Rather than having their mortgages modified or forgiven, these households should be foreclosed upon, and the sooner the better...

Holding American Homeowners Hostage; Minyanville; PIMCO.

Wed 2010-07-21 10:34 EDT

Paul Debates Jamie and MMT | Corrente

Paul Krugman, well-known for his opposition to the austerity concerns of the deficit terrorists and his advocacy of additional Government stimulus to lower unemployment and end the recession, just ignited a paradigm conflict which promises to clarify for many, the issues dividing ``deficit doves'' like Paul, from economists who take a Modern Monetary Theory (MMT) approach to economics, which holds, among other things, that Government deficits and surpluses are not, in themselves important, and that Government spending has to be evaluated relative to its impact on public purposes...this conclusion and also Paul's first post both set up a ``straw man,'' because Jamie never claimed that deficits are never a problem, and even pointed to circumstances (conditions of full employment) where deficits could lead to inflation. Given the comments on Paul's first blog, including a very clear comment by Marshall Auerback, it should have been clear to him that he was distorting the position of both Jamie and MMT. But evidently, Paul didn't want to admit that...Jamie and the MMT economists are opposed to the very idea, the very framing of Government's role in the economy in a way that makes everything subject to deficits, national debts, and debt-to-GDP ratios. The position of MMT is that these numbers are just endogenous consequences of real economic activity including Government fiscal activity, and that it is this activity that ought to drive them and not the other way around...

Corrente; MMT; Paul Debates Jamie.

New Deal 2.0 Fri 2010-07-16 18:16 EDT

The G20 Plan for Prosperity: Rubber Bullets and Shredded Social Safety Net

Paul Jay

The Toronto G-20 summit sent a message to poor and working people in Europe and North America. ``You will pay for the global financial crisis through cuts to your social safety nets. There will be no taxing of those who actually caused the crisis and made fortunes in the various bubbles over the last decades.'' ...This was bad enough. But there was another message, too, sent through the Canadian police: ``If you don't like it, how about a rubber bullet?'' It looks like G-20 countries will deal with opposition to their plans through martial law and police brutality...

0; G20 planned; new dealing 2; prosperity; rubber bullets; Shredded Social Safety Net.

Sat 2010-04-24 08:59 EDT

Rent-A-Front: New Group Wages Stealth Battle Against Wall Street Reform | TPMMuckraker

TPM Media

...every indication is that Stop Too Big To Fail is an astroturf operation funded by corporate interests to give the appearance of grassroots opposition to reform..."These guys made the KGB look like amateurs, and I used to work in Russia quite a lot," says Simon Johnson, a former chief economist at the IMF, now at MIT, who is a prominent advocate of breaking up the big banks...the group pays lip service to the idea of breaking up the big banks while at the same time adopting "bailout fund" rhetoric used by Republicans, all the while devoting its resources to trying to kill financial reform altogether...Stop Too Big To Fail co-founder Bob Johnson...is president of Consumers for Competitive Choice (C4CC), which runs Stop Too Big To Fail...Before C4CC was Consumers for Competitive Choice it was Consumers for Cable Choice. That group was funded by big telecoms like Verizon and fought to deregulate the cable industry...the man who reached out to economist Simon Johnson about joining the Stop Too Big To Fail call was Oliver Wolf, a director with the DCI Group. DCI is the Washington public affairs firm that specializes in astroturf efforts and has worked for everyone from the Burmese junta to the tobacco industry.

front; New Group Wages Stealth Battle; renting; TPMmuckraker; Wall Street reforms.

The Full Feed from HuffingtonPost.com Wed 2009-11-25 10:44 EST

Fed Beaten: Bill To Audit Federal Reserve Passes Key Hurdle

The Huffington Post News Editors

In an unprecedented defeat for the Federal Reserve, an amendment to audit the multi-trillion dollar institution was approved by the House Finance Committee with an overwhelming and bipartisan 43-26 vote on Thursday afternoon despite harried last-minute lobbying from top Fed officials and the surprise opposition of Chairman Barney Frank (D-Mass.), who had previously been a supporter. The measure, cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed's opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.

Audit Federal Reserve Passes Key Hurdle; billed; com; Fed Beaten; full Feeds; HuffingtonPost.