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Text of the page (random words):
terest labels debt ceiling 2023 saturday april 22 2023 we need a better plan two points to keep in mind if our economy went into decline after 1973 then 2023 marks half a century of decline long term economic decline is indistinguishable from the decline of civilization in why raising interest rates to fight off energy inflation is counterproductive by hielke van doorslaer we read that hiking interest rates our go to method of fighting inflation puts monetary policy at cross purposes with other policy priorities such as investing in renewables and energy efficiency and risks further entrenching years of public and private underinvestment in this way prohibitive interest rates will further exacerbate the trend of secular stagnation defined by low rates of growth productivity and investment that has plagued advanced economies for at least a decade with some even dating the onset of the declining trend back to the 1970 s i agree that our existing anti inflation policy is at cross purposes with other policy priorities as new anti inflation policy i have suggested pruning back the policies that promote credit use and creating policies that induce people and businesses to accelerate their repayment of debt by offering tax benefits for doing so but this is not today s topic at the end of the excerpt van doorslaer points out that slow economic growth has plagued advanced economies for at least a decade and adds with some even dating the onset of the declining trend back to the 1970 s this is today s topic long term slowing of economic growth a footnote attached to the van doorslaer excerpt links to jack copley s decarbonizing the downturn addressing climate change in an age of stagnation copley points out that gdp growth and investment have trended downward globally since at least the 1970s since at least the 1970s since the 1970s or before yep i wrote for the blog one time since the 1960s but then i went back and changed it because people might accept the 1970s as start of decline but it sounds crazy to say our long decline began in the 1960s so ya knock off the sharp edges and try to look sane but it amazes me that so many people even economists regularly fail to see the long decline people too often see what they ve been told they see instead of looking with their own eyes copley also says brenner has labelled the years 1965 1973 a transition period from long boom to long downturn 2006 37 and if i read steve keen right minsky put the end of the golden age at 1966 scott sumner has said i am not denying that growth in us living standards slowed after 1973 rather i am arguing that it would have slowed more had we not reformed our economy yeah yeah if the economy slowed after 1973 despite the reforms sumner mentions then those reforms were not the right solution if you don t know how and when the problem started what the cause really was and what the problem really is all you can do is guess at the solution america has had no doubt for half a century that we must balance the federal budget but america refuses to acknowledge that the only way to balance the federal budget is by reducing private sector debt so that the economy can grow and people can afford to live once we get the economy growing we can easily balance the federal budget easily it will be easy and now you re questioning my sanity again we ve been trying to balance the budget the wrong way for 50 years we have not restored vigor to our economy we have not even once actually balanced the federal budget the last time the federal debt fell was in 1969 we need a better plan at april 22 2023 6 comments email this blogthis share to x share to facebook share to pinterest labels debt ceiling 2023 slow growth friday april 21 2023 an inflation prediction graph 1 price increase from previous month the last data shown is for march 2023 inflation became newsworthy after the covid recession of 2020 and reached a month on month peak in june 2022 the following month july the number dropped to zero according to the stats at least prices didn t go up in july and since july the monthly increases have been pretty tame similar to what we had for 10 years before 2020 the news doesn t report the month on month increases that are shown on the graph above they report the 12 month change the price level for the month relative to the price level 12 months before for example the percent change from a year ago inflation rate for the high point june 2022 included all the price increases since june 2021 this makes the inflation number much higher than it is on the first graph the second graph shows the inflation data in this more newsworthy form graph 2 price increase from a year ago this graph shows the same source data but it figures 12 month increases rather than 1 month increases notice that june 2022 is a high point on both graphs but inflation is almost 9 percent on the second graph and not much more than 1 percent on the first one is newsworthy and one is not next a prediction on the first graph from june to july 2022 inflation drops all the way to zero but on the second graph inflation is still high in july that s because the second graph figures 12 months not just one for the june 2022 number they take june 2021 as a starting point and then count all the increases from july 2021 to june 2022 then for the next month the july 2021 number is used as a new starting point this time it doesn t count as an increase the july 2022 number drops the july 2021 increase counts the other 11 increases used the month before and adds in the july 2022 increase this is like why people don t like math i guess anyway the last data point shown on both graphs is for march 2023 march of 2022 is the starting point and april 2022 is the first of a dozen monthly numbers used to figure the march 2023 number on the second graph that s the process it s kind of an incremental shift one month at a time the high point on the first graph was the june 2022 increase for june 2023 that increase no longer counts when they figure from year ago inflation instead it serves as the starting point for the calculation the last time the june 2022 increase the big one figures into the inflation rate is for may 2023 as of june 2023 all of the increasing inflation from 2020 to june 2022 will be out of the calculation the first monthly increase that comes into the june 2023 from year ago number is the july 2022 number the zero inflation shown on graph 1 and the inflation we got in the months after july 2022 was about as low as the inflation we had for the first ten years shown on graph 1 so my prediction is that the inflation for july 2023 and after will be back to normal or close to it it will hardly be newsworthy anymore that doesn t mean prices will come back down of course but at least we won t have to listen to them talk about it on the news at april 21 2023 1 comment email this blogthis share to x share to facebook share to pinterest thursday april 20 2023 debt and inequality in the paper from servant to master the financial sector and the financial crisis by michael lim mah hui we read among the reasons for this increasing income and wealth inequality are the effects of technology on the job market favouring skill based professions over blue collar work globalisation that saw the outsourcing of work overseas the erosion of union power particularly after the reagan era stagnation of minimum wage the lag of wage rates behind productivity increases the astronomical rise in the compensation of chief executives and the structure of tax relief and incidence policies that is a weighty list of reasons for the rise of inequality and valuable if we have in mind to reduce inequality but i had to quit reading when i got to that paragraph so i could write i have to say i ve had a lucky streak lately coming across several authors who think as i think john hotson john mcmurtry william hixson lawrence e mitchell and michael lim mah hui and these are guys that know what they re talking about not mere hobbyists like me i respect what they say and i want to read more and where i disagree with them it is no doubt because i m the amateur and they are pros but it looks to me like michael lim left something important off his list of the reasons for inequality debt maybe it is there on the next page but people tell me debt doesn t cause inequality inequality causes debt they think i have it backwards i think they have it backwards debt by means of the interest payments is a device or a mechanism that moves income into the financial sector some of that money probably most of it never comes out again or not for years and years unless it comes out as a loan in other words money only comes out of finance if it is going to be returned to finance with interest money only comes out of finance to bring more money into finance what goes into finance stays in finance people say inequality is the cause of debt but inequality is not a mechanism it is a measure of monetary imbalance it is an indicator we can use to see that there is indeed a problem but an indicator is not always a cause very often it is a result the interest on debt on the other hand moves money out of the pockets of working people and out of the transaction accounts of productive nonfinancial businesses and into the steely cold vaults of the financial sector the payment of interest is a cause of inequality and it moves significant amounts of money into finance every year mechanisms that move income are central to the problem of growing inequality debt is such a mechanism i must also emphasize that paying interest reduces the disposable income available for spending this reduces aggregate demand reduces employment and reduces economic growth the short version a growing debt not only contributes to inequality by shifting monetary balances but also by slowing economic growth and income growth which because of inequality hurts the rich much less than it hurts the rest of us at april 20 2023 no comments email this blogthis share to x share to facebook share to pinterest wednesday april 19 2023 financialism leads to mitchell and mitchell to lim i noted yesterday the pdf financialism a very brief history by lawrence e mitchell the abstract at ssrn says this essay describes various financial economic and legal developments in the united states from 1952 until 2007 and argues that they suggest a transformation of the american economic system from capitalism to one i term financialism mitchell puts the beginning of the process at 1952 this is the earliest date i have ever seen offered for the start of the financialization that turned capitalism into financialism i happen to think we could go with an earlier date but not based on fred s post wwii data graph 1 corporate finance as a share of gdp clearly however financialization did not wait for the reagan era to begin mitchell writes page 7 that dr michael lim mah hui attributes a significant proportion of the rise in what i call financialism to the dramatic increase in american debt between 1960 and 2007 lim uses a later start date than mitchell but i don t care because he attributes the problem or much of it to excessive debt he does and it seems mitchell does and so do i heart and soul in dr lim s paper from servant to master the financial sector and the financial crisis which mitchell references we read between 1960 and 2007 financial sector debt rose an astounding 490 times while household debt rose 64 times non financial corporate debt 53 times and government debt 24 times evidence of imbalance nuff said the irony in those numbers is that government debt the one america focuses on exclusively shows the smallest increase of them all nuff said at april 19 2023 no comments email this blogthis share to x share to facebook share to pinterest labels debt ceiling 2023 tuesday april 18 2023 financialism well it finally occurred to me that financialization is the process which turns capitalism into something that can only be called financialism so i looked that up jackpot at ssrn a download page for financialism a very brief history by ezra wasserman mitchell of the shanghai university of political science and law the paper is dated august 9 2010 and the download page contains an abstract the downloaded pdf has the same title but the author is lawrence e mitchell and there is no abstract i can see that lawrence e might be lawrence ezra the same person but i don t know that and i don t want to attribute the paper to the wrong guy anyway the 15 page paper grabbed my attention it is about half footnotes by the way a note at the bottom of the first page says an earlier version of this essay was presented as a lecture at creighton university law school and published at 43 creighton l rev 323 2010 the same search turned up the 12 page pdf financialism a lecture delivered at creighton university school of law by lawrence e mitchell theodore rinehart professor of law at george washington university this paper is dated september 25 2009 this version has no footnotes both versions of the paper end with the sentence we must destroy financialism for the sake of capitalism i m in at april 18 2023 no comments email this blogthis share to x share to facebook share to pinterest thursday april 13 2023 william hixson s a matter of interest in my post yesterday footnote 3 in the mcmurtry quote references the william hixson book noted in the title of this post at amazon a matter of interest reexamining money debt and real economic growth by william f hixson publication date august 30 1991 for 111 75 the blurb is a good one hixson describes how the largely laissez faire economy prior to 1929 was so structured to make a crisis of illiquidity and overindebtedness inevitable and how the mixed economy that has prevailed since world war ii is structured to result in a similar crisis and the reviews are good there s a flattering one from kenneth boulding and this attributed to choice this businessman turned author focuses on the performance of the us economy since ww i vis a vis the size and growth of the money supply the expansion of private and public debt and the interest burden that debt generates the soaring ratio of interest to total income is said to be the single most significant economic indicator in recent decades depressions like that of 1929 32 arise because the economy in order to grow becomes increasingly indebted illiquid and interest burdened indeed 1987 was more illiquid than 1929 though no panic had yet developed in the absence of public disillusionment that must eventually emerge hixson departs from mainstream economics in many surprising ways e g his belief that moderation of money growth and high interest rates promotes inflation and his approach to counting interest only as cost and not income wow i also focus on the size and growth of the money supply the expansion of private and public debt and the interest burden that debt generates i too think that the s...
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