Mish's Global Economic Trend Analysis |
- Another "Print Your Way to Prosperity" Mindless MMT Proposal
- Negative Sum Game; Winners and Losers
- Edward Snowden on TED: More Revelations to Come; Here's How We Take Back the Internet
| Another "Print Your Way to Prosperity" Mindless MMT Proposal Posted: 19 Mar 2014 02:38 PM PDT Adair Turner, former Chairman of the United Kingdom's Financial Services Authority, and current member of the UK's Financial Policy Committee and the House of Lords proposes a need to Rethink the Monetization Taboo. The Fed's tapering merely slows the growth of its balance sheet. The authorities would still have to sell $3 trillion of bonds to return to the pre-crisis status quo.Theory vs. Practice Anyone with an ounce of economic common sense will quickly realize Turner's scheme as just another mindless "print your way to prosperity" proposal. Monetization of government debt is undoubtedly technically feasible (at least until it isn't) as Bernanke has shown. Yet it promotes a "free lunch" mindset that government debt simply does not matter. Common sense suggests it cannot work. History shows the same thing. All sorts of useless projects have already been funded based on "free lunch" idiocies. And every time massive economic distortions occurred due to lack of valid price signals. Anything and everything seems doable. Want high speed trains from every city in the US to every other city in the US? Want $100 minimum wages? Want a chicken in every pot? All of those are "theoretically" possible (for a while) along with funding manned space missions to Jupiter, free healthcare, and even free college education for the masses. "Practically" speaking, such idiocy has already been tried numerous times. The results speak for themselves: numerous wars, and economic bubble after bubble, each larger than the one that preceded it. So along comes Adair Turner, proposing a step-up of clearly failed policies. Gong Show of Cacophony Want another opinion on this subject? Dave Stockman has an interesting take called Fed's Taper Kabuki is Farce; Gong Show of Cacophony, Confusion and Calamity Coming. Some label Turner's proposal Modern Monetary Theory (MMT). I label it Keynesian idiocy on steroids. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Negative Sum Game; Winners and Losers Posted: 19 Mar 2014 12:00 PM PDT Stick to the Economy In response to Ron Paul vs. USA Today on Crimea; Reflections on "High Costs" of USA Today Proposal one seriously misguided interventionist told me I do not know what I am talking about and to "stick to the economy". Well, I do know what I am talking about. 1000 years of history shows this is not our battle. But the big irony is that I am precisely talking about the economy. Military and Economic Foolishness It is military foolishness as well as economic stupidity to send missiles to the Czech Republic as senator John McCain wants us to do. I was against the War in Vietnam (and proud of it). I was against the War in Iraq (and proud of it). I am against the use of drones that have killed hundreds if not thousands of innocent victims (and proud of it). The cost of these wars has been staggering in both moral and economic terms. All we have to show for warmongering is a massive pile of government debt and a growing number of citizens in various countries who are sick of the US. Some of those people have so much hatred for the US they will become terrorists themselves. Negative Sum Game War is a negative sum game. Sanctions are a negative sum game as well. Anything that disrupts free trade is a negative sum game. Russia promises to act "in kind" to any sanctions. If provoked enough, it will shut off supply of natural gas to Europe. That may cost Russia $70 billion in badly needed monetary reserves. It will also cripple European nations dependent on Russian gas. No one wins from tit-for-tat economic sanctions. Yet economic illiterates propose such sanctions to "teach Russia a lesson". The real lesson is economic illiterates as well as warmongers never learn. More Economic Insanity From McCain Just today, warmonger-in-chief, Senator John McCain released a Statement on Ukraine. McCain wants to provide the Ukraine with military assistance, loans, food, small arms and ammunition, and conduct military exercises. McCain also wants to "deploy a large civilian monitoring mission in eastern Ukraine that could help set the record straight about alleged threats to ethnic Russians." Think that hand-picked group of civilian monitors will be unbiased? They will be biased all right, ignoring right-wing attacks on pro-Russian Ukranians, while nit-picking over the slightest abuse the other way. McCain's Mind is Economic Mush McCain wants to "Expand significantly the U.S. and E.U. targeted sanctions against the most corrupt Russian government officials, companies, and financial institutions." And Russia won't do the same? Clearly McCain's mind is economic mush. A simple question will prove it: Does the US have more investment in Russia that Russia can target or does Russia have more investment in the US that the US can target? Only the 11th of McCain's 11 proposals makes any economic sense: "enhance the exportation of U.S. oil and natural gas, especially to NATO allies and other European partners, in order to decrease Europe's reliance on Russian supplies of energy." Notice the difference in that proposal. It is the only one that promotes trade as a solution. It is the only one that can do any good, but it will take a while. Huge Human Rights Irony One of McCain's proposals was tremendously ironic. He wants to "Use the Magnitsky Act to sanction additional Russian officials for their gross violations of human rights." Speaking of human rights, the US policy of bombing nations into submission and wasting trillions of dollars in the process was one of the grossest violation of human rights in history. So is the US drone policy in which the US is willing to kill innocent civilians, writing off the deaths of children and loss of limbs as "collateral damage". Our drone policy is such a flagrant violation of human rights that it is far worse than anything Russia did in the Ukraine. Crimea had a vote. Rigged or not it is crystal clear that an overwhelming percentage of Crimeans want Crimea to be part of Russia. Where is Pakistan's vote on whether the US gets to keep killing innocent children in drone strikes? To return to the economy, there are negative economic consequences of our drone policy. Not only do we waste money on drones, we make more terrorists in the process. Winners and Losers The warmongers, those employed by warmongers, and morally corrupt politicians like McCain (via campaign contributions) make out OK but everyone else loses. So yes, we should stay out of this mess on both moral and economic grounds. Morally speaking the US is the biggest hypocrite in the world. Economically speaking, war and sanctions are negative sum games. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Edward Snowden on TED: More Revelations to Come; Here's How We Take Back the Internet Posted: 19 Mar 2014 01:47 AM PDT Here's an extremely interesting, educational, and important video interview with Edward Snowden on the right to privacy. Appearing by telepresence robot, Edward Snowden speaks at TED2014 about surveillance and Internet freedom. The right to data privacy, he suggests, is not a partisan issue, but requires a fundamental rethink of the role of the internet in our lives — and the laws that protect it. "Your rights matter," he say, "because you never know when you're going to need them." Chris Anderson interviews, with special guest Tim Berners-Lee. Link if video does not play: Here's How We Take Back the Internet The interview is about 35 minutes long. Please play it in entirety. It will be worth your time. It took me nearly two hours playing and replaying parts of the video to produce the following partial transcript. Partial Transcript Speaking about Dick Cheney, Snowden says "We should be suspicious about the same overblown claims about damage to national security from these kind of officials. But, But, let's assume these people really believe it. I would argue they have a kind of narrow conception of national security. The prerogatives of people like Dick Cheney do not keep the nation safe. The public interest is not always the same as the national interest. Going to war with people who are not our enemies in places that are not a threat doesn't make us safe. And that applies whether it's in Iraq or on the internet." TED: It's alleged that you have stolen 1.7 million documents. It seems only a few hundred of them have been shared with journalists so far. Are there more revelation to come? Snowden: There are absolutely more revelations to come. Some of the most reporting to be done is yet to come. TED: This is a story that for a lot of techies is the single most shocking thing that they have heard in the last few months. It's about a program called Bull Run. Could you explain what that is? Snowden: Bull Run is, and we have to thank the NSA for their candor. This is a program named after a civil war battle. They reason I believe it is named that way is they target our own infrastructure. Their programs intentionally mislead corporate partners. They tell corporate partners these are safe standards. Hey, we need to work with you to secure the system. But in reality their giving bad advice to these companies that makes them degrade the security of their services. They are building in back doors, that not only the NSA can exploit, but anyone else who has time and money to research and find, to let themselves in to the world's communications. This is really dangerous because if we lose a single standard, if we lose the trust of something like SSL, which was specifically targeted by Bull Run, we will live in a less safe world overall. We won't be able to access our banks, and we will not be able to access commerce without worrying about people monitoring those communications and subverting them for their own use. TED: Do those same decisions also potentially open America up to cyber attacks from other sources? Snowden: Absolutely. If we hack a Chinese business and steal their secrets, if we hack a government office in Berlin and steal their secrets, that has less value to the American people than making sure that the Chinese cannot get access to our secrets. By reducing the security of our communications, they are not only putting the world at risk, they are putting America at risk in a fundamental way. Intellectual property is the foundation of our economy. If we put that at risk with weak security, we are going to be paying for it for years. TED: They have made a calculation it is worth doing this as part of America's defense against terrorism. Snowden: When you look at the results of these programs to stop terrorism, you will see that is unfounded. You don't have to take my word for it. The first court that has reviewed this outside the secrecy arrangement, called these program Orwellian and likely unconstitutional. Two independent White House panels that reviewed all of the classified evidence said these programs have never stopped a single terrorist attack in the United States. So is it really terrorism that we are stopping? Do these programs have any value at all? TED: [pointing to a newspaper clip that reads "I would love to put a bullet in his head one Pentagon official told BuzzFeed"] How are you coping with this? Snowden: I've made clear, again and again and again that I go to sleep every morning thinking about what I can do for the American people. I don't want to harm my government. I want to help my government. But the fact they are completely willing to ignore due process, they are willing to declare guilt without ever seeing a trial, these are things we need to work against. We shouldn't be threatening citizens. We shouldn't be criminalizing journalists. And whatever part I can do to see that end, I am happy to do that. ..... [Regarding optimism] Snowden: I am living proof that an individual can go head to head against the most powerful adversaries and the most powerful intelligence agencies around the world, and win. That is something we need to take hope from. Journalism is not a crime, communication is not a crime and we should not be monitored on our everyday activities. TED: The New York Times called for amnesty. Would you welcome the chance to come back to America? Snowden: Absolutely. The principles that have been the foundation of this project have been the public interest. ... The government has hinted they want some kind of deal. That they want me to compromise the journalists with which I have been working, to come back. And i want to make it very clear, that I did not do this to be safe. I did this to do what was right. And I am not going to stop my work in the public's interest, just to benefit myself. [applause] ... We don't have to give up our privacy to have good government. We don't have to give up our liberty to have security. And I think by working together, we can have both open government and private lives. And I look forward to working with everyone around the world to see that happen. Thank you very much. [Standing ovation] Mish Comments I repeat my belief that Snowden is a hero and a true patriot. If you think otherwise, please play the video. You may change your mind. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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