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GET AMERICA BACK TO WORK

Author: 
Alan Blinder,Joseph Stiglitz,John Cassidy ,Derek Shearer
Source: 
http://www.thedailybeast.com

Fourteen million out of work! Sixteen notable economists and historians have joined in a consensus statement for The Daily Beast demanding urgent action on unemployment and the faltering recovery. Joseph Stiglitz, Alan Blinder, Robert Reich, Richard Parker, Derek Shearer, Laura Tyson, Sir Harold Evans, and other thought leaders have produced a manifesto calling for more government stimulus and tax credits to put America back to work.

GET AMERICA BACK TO WORK

Fourteen million unemployed represents a gigantic waste of human capital, an irrecoverable loss of wealth and spending power, and an affront to the ideals of America. Some 6.8 million have been out of work for 27 weeks or more. Members of Congress went home to celebrate July 4 having failed to extend unemployment benefits.

Irving Fischer: The Debt-Deflation theory of Great Depressions

Good read: The Debt-Deflation theory of Great Depressions

Keynes Versus Hayek 1932 newspaper article

Keynes Versus Hayek 1932 newspaper article. FOund on a wierd dutch site.

Thorstein Bunde Veblen: The Theory Of The Leisure Class

In The Theory of the Leisure Class, which is probably his best-known work, because of its satiric look at American society, the instincts of emulation and predation play a major role. People, rich and poor alike, attempt to impress others and seek to gain advantage through what Veblen coined "conspicuous consumption" and the ability to engage in “conspicuous leisure.” In this work Veblen argued that consumption is used as a way to gain and signal status. Through "conspicuous consumption" often came "conspicuous waste," which Veblen detested.

Great read!

The Toronto G20 Riot Fraud: Undercover Police engaged in Purposeful Provocation

Author: 
Terry Burrows
Source: 
http://www.globalresearch.ca

Toronto is right now in the midst of a massive government / media propaganda fraud. As events unfold, it is becoming increasingly clear that the 'Black Bloc' are undercover police operatives engaged in purposeful provocations to eclipse and invalidate legitimate G20 citizen protest by starting a riot. Government agents have been caught doing this before in Canada.

http://www.globalresearch.ca

Why GDP Cannot Be Used to Measure Economic Benefit

Author: 
Shaun Snapp
Source: 
http://counterecon.com

Fake Knowledge

One of great falsehoods of modern economics is that the
profession has a strong way of measuring the economic benefits that the economy
produces. The way they do it is by combining all economic transactions within a
country in a calendar year, and call it the “Gross Domestic Product” (GDP). When
a doctor performs an operation that goes bad and the patient gets sepsis and
dies, and the bill comes to $130,000, that is marked down as a transaction and
counted as part of GDP. Car accidents, legal fees, and purchases of luxury goods
all count as part of GDP. Whether any of these transactions is of any benefit,
or a good allocation of resources is irrelevant to modern economists. Like most
people, economists are lazy, and they would greatly prefer to use an easy but
flawed measurement, over something that would take more work. The entire
profession requires an overhaul in how it measures, what it measures and a
removal of the highly doctrinal pro-concentrated power orientation. A recently
article in Global Research.ca brought this point up very well.

Keynes and Social Democracy Today

Author: 
Robert Skidelsky
Source: 
http://www.project-syndicate.org/

LONDON – For decades, Keynesianism was associated with social democratic
big-government policies. But John Maynard Keynes’s relationship with social
democracy is complex. Although he was an architect of core components of social
democratic policy – particularly its emphasis on maintaining full employment –
he did not subscribe to other key social democratic objectives, such as public
ownership or massive expansion of the welfare state.

Read the full article at http://www.project-syndicate.org

NeoLiberalism and the Counter-Enlightenment

Author: 
Michael Hudson
Source: 
http://michael-hudson.com

The last few years have seen Social Democratic and Labour parties fall into disarray throughout the world. Retreating from the economic program that powered their electoral takeoff a century ago, they have lost their traditional constituencies. Their golden age was an outgrowth of classical political economy from Adam Smith via John Stuart Mill to Progressive Era reformers advocating progressive taxation of land and other wealth, public infrastructure investment at subsidized prices, price regulation of monopolies, and public banking reforms to socialize the financial system.

Industrial protectionists, nationalists and neocolonialists – the parties of heavy industry and military power – also endorsed a strong role for government. Across the political spectrum the wave of the future appeared to be a rising role for public oversight of markets, subsidies for capital formation and education, public health, social welfare and infrastructure spending. This program was most successful in the United States, Germany and Central Europe.

Balancing the State and the Market

Author: 
Josef Ackermann
Source: 
http://www.project-syndicate.org

BERLIN – The financial and economic crisis that erupted in 2008 will, in retrospect, be regarded as a transformative moment, because it raised fundamental questions about the future shape of our economic systems. These questions are not so much about the end of capitalism – as some perceive or even desire – but rather about the different ways in which capitalism is understood in different countries.

Read the full article at project-syndicate.org

Paul Davidson: RISK AND UNCERTAINTY IN ECONOMICS

Politicians and talking heads on television are continuously warning the public that the current economic crisis that began in 2007 as a small sub prime mortgage default problem in the United States has created the greatest economic catastrophe since the Great Depression. What is rarely noted , however, is that what is significant about this current economic crisis is that it origin, like
the origin of the Great Depression, lies in the operations of free (deregulated) financial markets. As I pointed out in two recent articles (Davidson, 2008a, Davidson 2008b), it is the deregulation of the financial system that began in the 1970s in the United States that is the basic cause of our
current financial market distress.

Jerome Ravitz: Faith and Reason in the Mathematics of the credit Crunch

Jerome Ravitz: Faith and Reason in the Mathematics of the credit Crunch

The Oxford mathematician Jerome Ravitz in an article entitled “Faith and Reason in The Mathematics of the Credit Crunch” appearing in Oxford Magazine (eighth week, Michaelmas term, 2008) has written:

“...the term faith is believed by these competent present observers to be relevant to the mathematics at the heart of the multi dimensional pyramid game that has led to our present [credit crunch] catastrophe. Combined with the corruption of quality and the abuse of uncertainty in mathematical models, blind faith in [classical] economics and mathematics forms... the toxic mix that has enabled greed an irresponsibility to wreak their destructive way. ... Mathematics first provided an enabling technology with computers, then with a plausible theorem it offered legitimation for runaway speculation....it framed the quantitative specification of its fantasised products. Mathematics thereby became uniquely toxic, what Warren Buffet has called ‘weapons of mass destruction’

ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY

Politicians and talking heads on television are continuously warning the public that the current economic crisis that began in 2007 as a small sub prime mortgage default problem in the United States has created the greatest economic catastrophe since the Great Depression. What is rarely noted , however, is that what is significant about this current economic crisis is that its origin, like the origin of the Great Depression, lies in the operations of free (deregulated) financial markets. As I pointed out in two recent articles (Davidson, 2008a, Davidson 2008b), it is the deregulation of the financial system that began in the 1970s in the United States that is the basic cause of our current financial market distress.

ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY

A Dark Age of macroeconomics

Author: 
Paul Krugman
Source: 
http://krugman.blogs.nytimes.com

Brad DeLong is upset about the stuff coming out of Chicago these days — and understandably so. First Eugene Fama, now John Cochrane, have made the claim that debt-financed government spending necessarily crowds out an equal amount of private spending, even if the economy is depressed — and they claim this not as an empirical result, not as the prediction of some model, but as the ineluctable implication of an accounting identity.

There has been a tendency, on the part of other economists, to try to provide cover — to claim that Fama and Cochrane said something more sophisticated than they did. But if you read the original essays, there’s no ambiguity — it’s pure Say’s Law, pure “Treasury view”, in each case. Here’s Fama:

Read the whole article over HERE

 

Tragedy of the Commons? Meet Elinor Ostrom

Common-pool resources (CPRs) are resources to which more than one individual has access, but where each person’s consumption reduces availability of the resource to others. Important examples include fish stocks, pastures, and woods, as well as water for drinking or irrigation.

On a grander scale, air and the oceans are common pools. Some common pools exist primarily due to technological properties of the resource. For example, difficulties in controlling people’s resource usage prevent the transformation of a common pool resource into a private resource. However, not all costs of precluding access are strictly technological. There are also cases in which common pools could be profitably privatized, whereupon access could easily be controlled, but where privatization attempts fail because the users cannot agree on the terms. For example, water basins and oil pools are frequently located underneath land that has many different owners.

Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—An Update to 2007

I find here that the early and mid-aughts (2001 to 2007) witnessed both exploding debt and a consequent “middle-class squeeze.” Median wealth grew briskly in the late 1990s. It grew even faster in the aughts, while the inequality of net worth was up slightly. Indebtedness, which fell substantially during the late 1990s, skyrocketed in the early and mid-aughts; among the middle class, the debt-to-income ratio reached its highest level in 24 years. The concentration of investment-type assets generally remained as high in 2007 as during the previous two decades. The racial and ethnic disparity in wealth holdings, after stabilizing throughout most of the 1990s, widened in the years between 1998 and 2001, but then narrowed during the early and mid-aughts. Wealth also shifted in relative terms, away from young households (particularly those under age 45) and toward those in the 55–74 age group. Projections to July 2009, made on the basis of changes in stock and housing prices, indicate that median wealth plunged by 36 percent and there was a fairly steep rise in wealth inequality, with the Gini coefficient advancing from 0.834 to 0.865.

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