Friday, 14 July 2017

Friedrich List, railways, and MMT

The creator of the German railways, Friedrich List, spent 12 years in the USA, where he was able to experience the American System of Political Economy. List had to face the same aversion we see today in the mainstream and collective conscious - namely, 'how are you going to fund this?' - 'where will the money come from?' In response List wrote a treatise, ``On a Railway System in Saxony as the Foundation of a General German Railway System,'' which appeared in the year 1833:

"People say that we do not have, here in our region, any such an amount of capital, not so much ready money for undertaking such a gigantic national work.... As for the financial point, we need not fear any further objection from sensible people, once it is pointed out that the capital so used bears the highest interest rate of return in the country. With that as a premise, no expense can be found that is too great. Furthermore, Saxony, if it is serious about the undertaking, will have at its disposal more than a hundred times more capital and cash than required. That North America possesses more capital and more cash is not even true; most of the settling of accounts there is done with paper money, which we can create just as well here in Saxony. Here an amount of 4 to 6 million bank-issued bills of exchange make up one-third of the currency in circulation, while in North America, there are two and three times as many of these notes in circulation than ready cash.''

Right off the bat, List nails it by saying that the object of credit is to be an instrument for settlement payments - and that the success of the USA lies in recognizing this feature. Further on he makes the distinction between commodities (gold and silver) and money/credit/ (aka debt) by saying...

"People will probably ask me, where will Bavaria get the money to complete such giant works [railways]? I answer, that I have not yet seen any silver or gold in any of the canals or railways. To build them we use only consumer goods, steel, stones, wood, manpower, the power of animals. But is there not a surplus of all this in Bavaria? To the extent that we transform this surplus into canals and railways, which are not yet in existence, we create permanent and enduring value, we create an instrument which doubles the productive power of the entire nation. The money, however, does not leave the country, it only settles accounts.''

List was the leading promoter of railways in Germany. In 1841 he summed up the advantages of that technology.

-It is a means of national defence: it facilitates the concentration, distribution and direction of the army. 
-It is a means to the improvement of the culture of the nation.... It brings talent, knowledge and skill of every kind readily to market. 
-It secures the community against dearth and famine, and against excessive fluctuation in the prices of the necessaries of life. 
-It promotes the spirit of the nation, as it has a tendency to destroy the Philistine spirit arising from isolation and provincial prejudice and vanity. It binds nations by ligaments, and promotes an interchange of food and of commodities, thus making it feel to be a unit. The iron rails become a nerve system, which, on the one hand, strengthens public opinion, and, on the other hand, strengthens the power of the state for police and governmental purposes.
If List were alive today, he would endorse MMT.

Come on, get with the century

~Communists seeking to abolish labor in the pursuit of 100% unemployment, donning the hammer and sickle (labor-intensive tools). Stupid, no?~

The Strange Capitalist Embrace of Austerity Viewed in Terms of Marx’s Falling Profit-Rate Law

"Taking the views of Marx, Kalecki and Keynes into account, it may be that revival in the rate of profit is a necessary condition of capitalist recovery, but not sufficient. It seems that recovery of private investment will require the satisfaction of two conditions: both a revival in the rate of profit (Marx) and a sustained growth in autonomous expenditure (Kalecki, Keynes). For the global economy as a whole, currency-issuing governments are the only limitless source of autonomous expenditure." ~Peter Cooper

Read the whole thing at Heteconomist

Wednesday, 12 July 2017

Basic Income experiment at national level

Since we're hearing more and more on Basic Income, either from governments who are preparing experiments at local level or from influential business men, advertising it (for obvious self-interest, in my humble opinion), a point will come (I think) in which an experiment will be required at national level, in order to assess the metrics and scheme of a Basic Income (or UBI) proper.

I propose two ways to do this:

1) A UBI experiment that takes the form of basic food stamps for all, which would be issued one day before the beginning of every month in value as to cover a month's basic food basket. Food is a regenerating commodity. There is surplus production of food globally, with so many metric tons of unsold bread being turned into fodder each year or simply being disposed off, while people still go hungry, because they are not integrated with the monetary system (with their own's country's system, let alone those of other countries). The price of food, sadly, is another story, and several factors come into play - but that's a subject for another time.

2) A UBI experiment that takes the form of Government interest-free loans to its citizens. I'd levy a 20K loan (the figure is up for the debate, I'd say it can be even higher for the purposes of this experiment) for each adult citizen, extinguishable in 3 years, without any debt payment schedule. In other words, the citizen decides how fast or slow, given the time period, he or she repays the debt. In case the debt is not repaid, it shows up as a tax bill.

I'd be very curious to see private sector consumption patterns under both of these experimental schemes. Their impact on labor force participation & on output elasticity. An impact study will have to be made (obviously) for the schemes. As always, what's important is the impact on demand and supply, not on trivial Government deficit and debt to GDP ratios - unless the countries in question are currency users, and not issuers (in the sense that the Government spends and taxes either in a foreign currency or is working under a fixed exchange rate or metal standard).

BIG/UBI tests at local level will always yield net positive results for reasons which should be fairly obvious - idle capacity being available, and the extra income afforded to the region in question is far away from putting a strain on the economy's ability to adjust to increased demand. What every supporter & doubter of BIG/UBI should be looking for is - what I call - sustainable behavior patterns. Less stress. Less crime. Smaller drop-out rates. Lower hospitalization rates. Fewer cases of domestic violence. Smaller poverty rates. Increased worker solidarity at the workplace (i.e. more bargaining power for labor). And improved labor participation, whether this occurs in a formal job, or outside of a job (voluntarism).

Feel free to comment if you agree or disagree with the above. Thanks.

Important note: This is in no way an advocacy of BIG/UBI as a "silver bullet" solution or panacea to the myriad ailments afflicting our societies.

Deficit doves are so frustrating

Paul Mason is asked: Where is the Magic Money Tree? He responds: It's in the Bahamas where Amber Rudd has 2 accounts.




Completely misses the point. Rudd's accounts are the fruit of the magic money tree, not the tree itself. The tree is UK Treasury & CB.
https://twitter.com/SerbanVCEnache/status/884896904076767232

Monday, 10 July 2017

Resolution of the Bitcoin experiment, by Mike Hearn

"If you had never heard about Bitcoin before, would you care about a payments network that:
-Couldn’t move your existing money
-Had wildly unpredictable fees that were high and rising fast
-Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)
-Is suffering large backlogs and flaky payments, which is controlled by China
-In which the companies and people building it were in open civil war?"

Read more about it here 

Sunday, 9 July 2017

Pope Francis is such a crododile


'Pope warns G20 against 'dangerous alliances' damaging poor, migrants: paper'

Read more here https://www.reuters.com/article/us-g20-germany-pope-idUSKBN19T09W


LoL. It was a dangerous alliance BEFORE Trump. Who created the refugee crisis anyway + the mercenaries + the deaths? Sure as hell wasn't Russia, China, and North Korea. No mention of US insane foreign policy. No mention of Saudi Arabia, Turkey, Israel, UAE et co. You care about the poor, dear Francis? Then start attacking rent seeking, and begin first by attacking and ending the Catholic Church's position as a long time big-ass rent seeker (receptacle of unearned income, i.e. the rentier excess charge levied upon the real economy, which is a huge cost to production and consumption).

Wednesday, 5 July 2017

The North is booming



At a time when the US is trying to squeeze the Kim regime through new sanctions — pressure that is likely to increase as a result of the death of US student Otto Warmbier who was jailed in North Korea — the economy is showing signs of vitality that could make it even harder to exert leverage on Pyongyang.

Any analysis of the North Korean economy has to proceed with some caution. Reliable economic data for the isolated nation are scarce and estimates vary wildly. Forecasts for 2015 growth in gross domestic product per capita ranged between -1 per cent by the Bank of Korea in Seoul to 9 per cent from the Hyundai Research Institute.

“The challenges of accurately computing North Korea’s GDP are many and are derived principally from a paucity of credible macroeconomic data,” says Kent Boydston, analyst at the Peterson Institute for International Economics. But for close watchers of the reclusive nation, the signs of change are clear. Notably, wages have surged, as has the growth of a moneyed class known as the donju. “The changes are obvious when you go to Pyongyang. There is vehicular traffic and the city has a skyline like never before,” says a former US intelligence official, pointing out the growing use of previously rare items like solar panels and air conditioners……..

The result, according to North Korea watchers such as Prof Lankov, is “a significant improvement in living standards” and economic vibrancy, most evident in the flourishing number of restaurants and markets. Known as jangmadang, these markets — both official and unofficial — have proliferated rapidly in recent years and are now increasingly the norm for purchasing consumer goods.

According to a survey of more than 1,000 defectors by the Korea Development Institute, a state-run think-tank in Seoul, more than 85 per cent of North Koreans now use these markets for food, compared with 6 per cent who rely on state rations.

Wages have also appeared to increase exponentially in recent years. According to the institute, salaries in the official state sector have increased more than 250 per cent in the past 10 years to about $85 (more than 75,000 North Korean won) a month, while wages in unofficial “side” jobs, such as private enterprises, have boomed more than 1,200 per cent. Lee Byung-ho, then head of South Korea’s intelligence service, estimated earlier this year that 40 per cent of North Korea’s population is now engaged in some type of private enterprise.
Read more here

Monday, 3 July 2017

Something is rotten in the state of … Britain



"They cannot keep accumulating debt and reducing saving while income growth is flat and real purchasing power growth is negative.

The crunch will come and Britain will fall into recession unless the Tories end their obsession with austerity.

Of course, the recession will be falsely blamed on the Brexit choice, whereas, in fact, it will be the result of poor policy choices." ~Bill Mitchell

Read more here

Thursday, 29 June 2017

Trade and the Gains from Diversity: Why Economists Failed to Predict the Consequences of Brexit

In this brief article I explain why the expectation amongst economists that Brexit means Britain will experience significant economic losses, thanks to the reversal of the gains from specialisation, is incorrect. The background assumptions regarding comparative advantage are false and cannot inform real-world situations. However, this is not the same as to suggest Britain as a post-Brexit country will follow successful trade policies.
~Steve Keen

Tuesday, 13 June 2017

Top Cat joke



A great bit if you ask me from a GREAT '61 cartoon Dibble: "Why don't you guys ever go to work and earn money?" TC answers...

https://www.youtube.com/watch?v=C7_c5wdRtaI&feature=youtu.be&t=149

Thursday, 8 June 2017

Glow discharge plasma in ST40

Christian Bradley shows us the glow discharge plasma in the ST40 tokamak and how the colour changes with the pressure in the vacuum vessel.

Monday, 5 June 2017

Democrat or Republican, only insanity in the Middle East

https://twitter.com/wikileaks/status/871591038191894528

Re: Here's what I mentioned


Wednesday, 31 May 2017

Can't label me a partisan, cuz I don't ignore MMTers when they commit strawmen

Tcherneva again lines up a couple of straw men, defeats them, and then proclaims victory. + UPDATE at the bottom
See this. https://twitter.com/ptcherneva/status/869945138319159297


Pavlina:
"Cut ppl's bread & gas subsidies, give them small #UBI and wonder why they still need jobs?! Where's the UBI success?"


Me:
"Why are you attacking Iran's UBI, when you should be attacking Iran's macro policy?"


Pavlina:
"I am not. UBI supporters are circulating it as some kind of evidence that #UBI does not negatively effect labor force participation."


Me:
"So was this tweet of yours sarcasm, or did you just contradict yourself now? Quote from Pavlina "Of course labor force doesn't drop. Turns out UBI doesn't empower ppl to opt out, yet jobs are still not there. Double digit unempl for yrs"


Pavlina:
"UBI advocates can't have it both ways "UBI liberates ppl from work/post work society". "UBI does not impact LFPR". There's a contradiction."


Me:
"That's just PR slogans. You won't find in any serious UBI literature a line that says "Macro fiscal policy doesn't matter under UBI. Under Ceausescu, Romania had a JG. However Ceausescu also imposed austerity. Output was going abroad while people at home went hungry & cold. Was that a failure of the JG, or a failure of macro fiscal policy? The political establishment, owned by the rent seekers, calls the shots."


Pavlina:
"We've been over this with you Serban. Romania didn't have a JG. It had mandatory labor. We've explained 1000x that's not what the JG is."


Me:
"Minsky's JG was mandatory. I'm not discussing political preferences here. I'm saying Macro policy rules everything else. You can have Universal health care on paper, but if politicians don't pass an adequate budget for health care, people are gonna get screwed. And the problem with employment right/obligation under Ceausescu was not lack of jobs or even lack of pay, but lack of things to purchase. Domestic consumption was rationed."


Pavlina:
"Minsky never said such a thing"


Me:
"He called food stamps "funny money printing". He explicitly says his WPA program is a SUBSTITUTE, not an add on on unemployment benefits.


Pavlina:
"Minsky's analysis of welfare programs/payments is very different from your claim that 'he said JG is mandatory'. This is not going anywhere"


Me
"It's not going anywhere b/c you attacked a bunch of strawmen regarding BIG. As for Minsky, he didn't like welfare period & wanted to end it. That's why I said his employment scheme was mandatory. Either work for the private sector, the Gov sector, or you starve. Neil Wilson and others like this philosophy, and it's their right to have an opinion, as is mine. Have a good day."


Pavlina:
"My colleagues and I have written a ton on the JG for over 20 yrs (some even longer). It's no use to try and mis-characterize our work."


Me:
"I've talked with some of your colleagues and not all of them support JG as complimentary to welfare checks, but prefer it a substitute. At any rate, I'm not attacking the JG, whether its form is progressive, regressive, or in the middle."

PS: The reason I even touched on the JG with my Ceausescu example was to point out that the JG WASN'T to blame, but austerity was.

Saturday, 20 May 2017

Reflections on the state, economic regulation and violence reduction


Rehabilitating Leviathan:
Reflections on the state, economic regulation and violence reduction

STEVE HALL AND SIMON WINLOW
Northumbria University, UK and University of Teesside, UK

Abstract
This article argues that some currently influential liberal-culturalist discourses tend to underplay the direct link between violent street crime, economic marginalization and the more ruthless adaptive aspects of advanced capitalist culture. In doing so they consistently reify the state, misconstrue its social role and represent its decline as a fait accompli. There is also a tendency to misrepresent the relative and moderate success in reducing street violence that it once achieved by using its political mandate to help maintain underlying economic stability above the required threshold. Underneath these discourses is a tacit political endorsement of the global neo-liberal project that is revealed by their collusion in the political neutralization of populations and the delegitimization of the potentially democratic state and its vital role in socio-economic stabilization and violence reduction.

Friday, 19 May 2017

I have a dream...

This graph is for Australia. I've seen similar nrs for the USA, about 30% of GDP is rent seeking. Now, imagine that grey area pledged as taxes. And most of the pink area, if not all, shifting its colour to blue. With the rentier excess charge destroyed, you'd have a lower cost of production and consumption. LVT at or near 100% rate would keep land values stable and fair. You'd probably need a progressive tax on non-rent income that only the opulent minority would qualify to pay. A tax on luxuries and an excise on fossil fuels. Patents ought to be abolished too, as they're just another form of rent seeking. Banking regulated on the asset side, being run as a public utility by the Gov for non-profit (my personal preference). Couple all this with a JG, BIG, Single Payer (or NHS)... Oh, orgasmic...

Wednesday, 17 May 2017

They kill pregnant whales but they won't kill Breivik

It's ok to kill rare peaceful mammals with big brains, but it's not ok to kill Breivik. More so, Breivik needs a bigger cell + all the latest video games. *sigh*
https://www.rt.com/news/380105-norway-kills-pregnant-whales/#.WRyKBHVmz3A.twitter

Sweden, the tyranny of the SJWs

LoL!
https://twitter.com/spectatorindex/status/864770350470447105
Also, here's the reaction of Israel's ambassador to Sweden, and I agree with him https://twitter.com/isaacbachman/status/864434826765578240

Check this out as well


ISRAEL: Sweden has placed Israeli Foreign Ministry and Israel's Ambassador on a Twitter block list for 'hate speech' (Via Jerusalem Post)

Now, that 's MFA and ambassador are blocked - is much safer in reading Iran and others, that were not blocked.

Wednesday, 10 May 2017

Steve Hall contributes to my recent rant on couch communists

"What the communists didn't grasp, and what today's lazy narcissistic liberal-lefties can't even understand, is that the Enlightenment irrevocably changed human subjectivity - the way we feel and think about the world. Today's 'emotivist' individuals are no longer fit for any form of 'mutual help' society or economy" ~Steve Hall https://en.wikipedia.org/wiki/After_Virtue

Friday, 28 April 2017

Hayek & utter stupidity


If you had a fraction of respect for Hayek, this statement of his will erase that.

“It may perhaps be pointed out here that it has, of course, never been denied that employment can be rapidly increased, and a position of ‘full employment’ achieved in the shortest possible time by means of monetary expansion–least of all by those economists whose outlook has been influenced by the experience of a major inflation. All that has been contended is that the kind of full employment which can be created in this way is inherently unstable, and that to create employment by these means is to perpetuate fluctuations.
There may be desperate situations in which it may indeed be necessary to increase employment at all costs, even if it be only for a short period–perhaps the situation in which Dr. Brüning found himself in Germany in 1932 was such a situation in which desperate means would have been justified. But the economist should not conceal the fact that to aim at the maximum of employment which can be achieved in the short run by means of monetary policy is essentially the policy of the desperado who has nothing to lose and everything to gain from a short breathing space.” (Hayek 1975 [1939]: 64, n. 1).


http://socialdemocracy21stcentury.blogspot.ro/2014/08/liquidationism-and-early-1930s-germany.html

Sunday, 9 April 2017

Cures for stagflation, my opinion



In contrast to Roger Mitchell's deficit spending + high interest rates, here's how I would tackle stagflation.

First of all, rationing, if the cause is heavily supply-side intense.
If it's not, I'd do the following:

-increase capital requirements for banks (because this is more effective at putting drag on the growth in bank debt than rate hikes)

-increase the Land-value-tax (Why? The land value tax in and of itself puts drag on the economy, but it also has other beneficial effects; it lowers production and consumption costs. It leaves the landowner with less bargaining power. People pay less rent to the landowners, which leaves more income to be orientated towards investment and consumption. At least, that's how I see it in theory)

-see which sectors struggle with demand and underemployment, and adjust (increase) Government spending and (lower) other taxes appropriately (aka deficit spending)

Messing around with interest rates, you're modifying the cost of settlement payments. This doesn't deter Animal Spirits. If people feel comfortable with their level of income, and decide that going into debt is good now to achieve their aims, then they're gonna do it. If more and more people feel this way, you got an economy that officially looks good, which leads to more private debt and more private consumption.
Now, mainstream view is that OMF net Government spending is inflationary. I say that's bullshit. If OMF (Overt Money Financing) isn't inflationary, then I don't see how higher interest bearing bonds or higher IOR will be less inflationary. During the war bonds era, they were used to drain liquidity and as a psychological tool to improve the spirits of the population. In most cases, when you went to the market, some goods were rationed. And you also had price controls.
I don't think Mitchell's higher interest rates would solve the inflation part. This is just my 2 cents. Feel free to add your own thoughts.

Friday, 7 April 2017

Trump commits an act of war against Syria

It's truly a fucked up world, when republicans and democrats are more of a threat to world peace than neo-nazis...
http://mobile.abc.net.au/news/2017-04-07...ia/8425132
And yes, Hillary would have done the same thing.

Also, THIS!
Now that Obama’s poll numbers are in tailspin – watch for him to launch a strike in Libya or Iran. He is desperate.
~Donald Trump, October 2012

Thursday, 6 April 2017

Consumption taxes are fine? No, they're not

Very disappointed with Bruening's reasoning here.
http://mattbruenig.com/2017/04/05/why-co...-are-fine/

I reply to him via twitter the following:

--- Matt, by regressive, critics mean that the levy is the same for the rich & poor. The rich won't feel the tax, the poor will.
Also, since you're talking about the US, US Federal Taxes don't fund anything. They simply create demand for the US dollar.
State governments, unlike the Fed Government, are constrained in their spending by what they can borrow, tax, and receive from the Fed Gov.
So if you want state governments to levy a 10% VAT, that's fine. But there's absolutely no reason why the Fed Gov should levy a VAT.
If you want to tax the rich, levy a progressive tax on all incomes, that only the opulent minority will qualify to pay. ---

Whether he realizes or not, Bruening is actually making the case for flat taxation, invoking that a person's tax obligation is proportional to his or her spending. Proportional equity. So the rich pay more, the poor pay less, at the same tax rate. Very strange to see this type of argument from a progressive.

Wednesday, 22 March 2017

Life is bitter when you see it clearly as a Deficit Owl

People who complain that Trident is the reason they can't have housing & health care are so aggravating. How exactly does a nuclear submarine deprive you of bricks, mortar, medical doctors, and pharmaceuticals? Similarly, people who complain that the Welfare system is the reason why they can't have smaller taxes are aggravating as well. How does a food stamp or a minimum pension spent on output deprive you of extra numbers on your balance sheet?

Tuesday, 21 February 2017

How the UK Left Lost the Working Class

Chris Beck: There seem to be some areas of legitimate concern, but have they made Islam the scapegoat?


Steve Hall: The Islam issue has allowed UKIP to deflect the blame from global neoliberalism, the true source of the working class’s problems. This is the principal service UKIP offers to the establishment.

Read the full interview here.

Wednesday, 8 February 2017

Concerning Romania & all interested outsiders

The Constitutional Court of Romania just bitch-slapped the opposition, the prosecutors, and the superior council of the magistrates. The prosecutors & the magistrates DON'T MAKE the law. They APPLY the law. There is no conflict between the Executive and the Judiciary regarding Government decree nr 13.

Monday, 6 February 2017

The best article I've read, explaining the shit going on in Romania

Bogdan Herzog nails it.
http://katehon.com/article/muddy-waters-romanian-politics

Update. So I found out that this think tank is a Russian far right revisionist think tank. 😠 I've read many articles in mainstream publications, and all of them were lacking in key facts. This article is by far the most pertinent I've come across.

Friday, 27 January 2017

Double Standards: Where Were the Liberal Protesters During Obama's Wars?

The election of Donald Trump has sent millions of people pouring out onto the streets to protest a man they think is a racist, misogynist, xenophobic bully who will destroy US democracy in his quest to establish himself as supreme fascist ruler of the country.

Maybe they’re right. Maybe Trump is a fascist who will destroy America. But where were these people when Obama was bombing wedding parties in Kandahar, or training jihadist militants to fight in Syria, or abetting NATO’s destructive onslaught on Libya, or plunging Ukraine into fratricidal warfare, or collecting the phone records of innocent Americans, or deporting hundreds of thousands of undocumented workers, or force-feeding prisoners at Gitmo, or providing bombs and aircraft to the Saudis to continue their genocidal war against Yemen?

Where were they?

Read the whole article here! http://www.counterpunch.org/2017/01/26/double-standards-where-were-the-liberal-protestors-during-obamas-wars/

Saturday, 21 January 2017

A friend shared this story with me

"I was traveling with two women... my partner and her best friend, who is a PhD biologist at our university. I'm at the airports. They were playing the inauguration of Trump, and at one point she mentioned that she was going to the 'women's march' today. Our conversation went something like this:

Her: Tomorrow I'm going to the women's march to protest.

Me: What are you going to be protesting?

Her: Against women's oppression for women's equality.

Me: Where are women oppressed?

Her: Umm...well...it's about women's health issues and against the patriarchy that has prevailed in this country for generations.

Me: Do you have healthcare?

Her: Well, yes, but many women can't afford basic checkups, and we don't want Trump to overturn our rights to abortion.

Me: That's true! But aren't there lots of men who can't afford basic care also? That seems more like a class issue than a gender issue. Where in the country can you not get an abortion for free?

Her: Basic healthcare is more important to women than men, we need it more, and 'planned parenthood' is under attack.

Me: Isn't planned parenthood a privately funded organization?

Her: Well, mostly, but they do get some public funding.

Me: That's great! So we're already giving special funding for women's health, that men don't get. Are there any other areas where women are oppressed today?

Her: Well, women are underrepresented in some fields like engineering and economics.

Me: Aren't men underrepresented in social sciences? Isn't the most powerful economist in the country a woman (Yellen)?

Her: Girls aren't encouraged to go into those fields.

Me: But women outnumber men in almost all universities, does that mean men are oppressed?

Her: 😠well, the march is about providing a voice for oppressed women all over the world, and it shows they're not alone.

Me: That's great! We should encourage the liberation of women everywhere, but would you say that women in westernized countries are severely oppressed?

Her: This election was about misogyny, that is why Trump got elected. I'm going to carry a sign that says, "This pussy grabs back."

Me: But didn't Hillary receive the majority of the popular vote? It seems more like an electoral college anomaly than a statement of patriarchy. Don't women hold power in universities, politics, and corporations?

Her: I'm not sure you understand what women face every day.

Me: Then give me specifics, so I can help you fight against the oppression.

Her: 😡well, it's also about race and fighting white nationalism.

Me: Ahh, ok. I certainly don't want to see that either. But as far as women's rights go, it seems like you should call it the 'Women's Victory March' right?

Her: 🔥😡🔥"

Wednesday, 18 January 2017

Monday, 2 January 2017

Friedman and blatant sophistry



Hendry told Ericsson that:
The graph in Friedman and Schwartz … made UK velocity look constant over their century of data. I initially questioned your plot of UK velocity–using Friedman and Schwartz’s own annual data–because your graph showed considerable nonconstancy in velocity. We discovered that the discrepancy between the two graphs arose mainly because Friedman and Schwartz plotted velocity allowing for a range of 1 to 10, whereas UK velocity itself only varied between 1 and 2.4.
Hendry went on:
Testing Friedman and Schwartz’s equations revealed a considerable lack of congruence. Friedman and Schwartz phase-averaged their annual data in an attempt to remove the business cycle, but phase averaging still left highly autocorrelated, non-stationary processes.
As Hendry puts it in the interview:
Margaret Thatcher – the Prime Minister – had instituted a regime of monetary control, as she believed that money caused inflation, precisely the view put forward by Friedman and Schwartz. From this perspective, a credible monetary tightening would rapidly reduce inflation because expectations were rational. In fact, inflation fell slowly, whereas unemployment leapt to levels not seen since the 1930s. The Treasury and Civil Service Committee on Monetary Policy (which I had advised in … had found no evidence that monetary expansion was the cause of the post-oil-crisis inflation. If anything, inflation caused money, whereas money was almost an epiphenomenon. The structure of the British banking system made the Bank of England a “lender of the first resort,” and so the Bank could only control the quantity of money by varying interest rates.
In the book by J.D. Hammond (1996) Theory and Measurement: Causality Issues in Milton Friedman ‘Monetary History, published by Cambridge University Press (page 199) you see the letter that Hendry wrote to Friedman on July 13, 1984. In part it said:
… if your assertion is true that newspapers have produced ‘a spate of libellous and slanderous’ articles ‘impugning Anna Schwartz’s and … [your] … honesty and integrity’ then you must have ready recourse to a legal solution.
Friedman never sued!
As Hendry notes in the interview:

One of the criticisms of Friedman and Schwartz was that is was “unacceptable for Friedman and Schwartz to use their data-based dummy variable for 1921—1955 and still claim parameter constancy of their money-demand equation. Rather, that dummy variable actually implied nonconstancy because the regression results were substantively different in its absence. That nonconstancy undermined Friedman and Schwartz’s policy conclusions.
Friedman and Schwartz (FS) have claimed (page 624) that their UK money demand model was constant (that is, stable in its estimated parameters):
… more sophisticated analysis … reveals the existence of a stable demand function for money covering the whole of the period we examine.

As HE showed – it was certainly a fudge in the FSs models. They wrote that FSs models were not constant once the evidence was properly considered and that the:

… inferences which Friedman and Schwartz draw from their regression would be invalid … [due to biases]
They also report a range of problems with the FS models.
In conclusion they say:

Taking this evidence together … [the FS preferred model] … is not an adequate characterization of the data and is not consistent with the hypothesis of a constant money-demand equation … none of the relevant hypotheses could have been tested by Friedman and Schwartz … without their having obtained a rejection …
Excerpts from here http://bilbo.economicoutlook.net/blog/?p=20281
For those unfamiliar with the notion of money velocity, here's Asher Edelman (aka Gordon Gekko) explaining it in under a minute.