The U.S. needs to make its financial accounting more reliable.
Alan F. Fogelquist's insight:
Here De Soto points out overlooked but relevant Point 10 of the "Washington Consensus" De Soto sums this up in the quote below:
"Advanced nations seem to have forgotten Point 10 of that consensus: how important documenting assets and transactions is to the creation of credit. Consider that most private credit is made up not of bills and coins, anchored in bank reserves, but in papers that establish rights over the assets, equity and liabilities that guarantee loans. Over the past 15 years, however, as they package, bundle and resell securities, Americans and Europeans have gradually undermined the reliability of the records that guarantee or make credit trustworthy — the deeds, titles, liens and other documentation that establish who owns what and how much, and who holds the risks."
By Dan Kervick As part of his Tuesday night statement on the fiscal cliff deal he had just concluded with Congress, President Obama boldly affirmed that he would not negotiate over the debt ceiling, implicitly raising the dire specter of...
Contending Economic Theories: Neoclassical, Keynesian, and Marxian [Richard D. Wolff, Stephen A. Resnick] on Amazon.com.
Publication Date: September 7, 2012
"Contending Economic Theories offers a unique comparative treatment of the three main theories in economics as it is taught today: neoclassical, Keynesian, and Marxian. Each is developed and discussed in its own chapter, yet also differentiated from and compared to the other two theories. The authors identify each theory's starting point, its goals and foci, and its internal logic. They connect their comparative theory analysis to the larger policy issues that divide the rival camps of theorists around such central issues as the role government should play in the economy and the class structure of production, stressing the different analytical, policy, and social decisions that flow from each theory's conceptualization of economics. The authors, building on their earlier book Economics: Marxian versus Neoclassical, offer an expanded treatment of Keynesian economics and a comprehensive introduction to Marxian economics, including its class analysis of society. Beyond providing a systematic explanation of the logic and structure of standard neoclassical theory, they analyze recent extensions and developments of that theory around such topics as market imperfections, information economics, new theories of equilibrium, and behavioral economics, considering whether these advances represent new paradigms or merely adjustments to the standard theory. They also explain why economic reasoning has varied among these three approaches throughout the twentieth century, and why this variation continues today--as neoclassical views give way to new Keynesian approaches in the wake of the economic collapse of 2008."
Investigators on Sunday were probing the communications of a shooter who killed five US troops in Chattanooga to determine his possible motive, following reports he allegedly sent a text message declaring "war" hours before the rampage. Four Marines and a sailor were killed in Thursday's attack on two military centers in Tennessee -- which authorities are treating as "an act of terrorism" -- before the gunman, Mohammad Youssuf Abdulazeez, died in a shootout with police. The Federal Bureau of Investigation (FBI) has asked foreign intelligence agencies to help trace Abdulazeez's movements and activities abroad, and analysts are monitoring his activity on social media.
"The global imbalance hypothesis, a view held by Ben Bernanke and other prominent economists, attributes the global financial crisis to the so-called “global saving glut”—that is, an excess of domestic savings over investments in emerging market, oil-producing and some advanced countries. This view explains the crisis as triggered by the interaction of exogenous economic shocks with that massive build-up of excess saving. Junji Tokunaga and Gerald Epstein present an alternative approach, building from the work of Hyman Minsky. Their approach focuses on the the destructive global expansion of an unregulated shadow banking system, which is then funded by the rapidly expanding global supply of dollars."
This five part series will explore at length (warning!) and in detail (another warning—wonk alert!
"While the approach suggests a macroeconomic policy mix and strategies for both fiscal and monetary policies that most neoclassical economists currently believe are unsustainable, ultimately the MMT preference for a significant role for fiscal policy in macroeconomic stabilization is shown to be consistent with traditional neoclassical views on fiscal sustainability."
This five part series will explore at length (warning!) and in detail (another warning—wonk alert!
"This fourth part integrates the content of the first three parts with the functional finance strategy for fiscal policy. Warning again—this part is the longest and most detailed of the four.Functional Finance and Fiscal Sustainability"
"We reach the point now where we can integrate the concept of fiscal sustainability—i.e., convergence or at least bounded growth of debt service—with functional finance. In order to do that, though, we first need a brief digression on the concept of Ricardian fiscal policy (see Pavlina Tcherneva’s paper for more on the MMT view of this). The New Consensus view that came to dominate neoclassical economics in the 2000s argued for a macroeconomic policy mix in which monetary policy managed the economy and targeted inflation through a Taylor Rule-like strategy for adjusting the interest rate and fiscal policy largely got out the way by simply adhering to its intertemporal budget constraint by setting current and future taxes and spending such that the debt ratio does not rise without bound (a bit more on the policy mix here). Fiscal policy that achieves this is called Ricardian by neoclassicals. A Ricardian fiscal policy does not interfere with the central bank’s management of the macroeconomy—in most cases it preferably passive and responds endogenously to its intertemporal budget constraint only."
"On the other hand, when fiscal policy is set exogenously to run permanent surpluses inconsistent with keeping the debt ratio from rising without bound, this is called non-Ricardian fiscal policy. This obviously does interfere with the central bank’s attempts to manage the macroeconomy. This is because raising the interest rate to slow inflation in the non-Ricardian scenario results in more aggregate demand through government debt service, or the government “printing money” to avoid defaulting, and thus more inflation."
Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards (The Anthem Other Canon Series) [Norbert Häring, Niall Douglas] on Amazon.com. *FREE* super saver shipping on qualifying offers.
"Best economics read of 2012: Economists and the Powerful by Norbert Häring and Niall Douglas went with me to Majorca and it was a rewarding and enjoyable mistake ... it is an important book for understanding the times in which we live. For both works, the role of power in the economy and the successful efforts of the ultra-powerful and their minions to keep their doings off society's radar is the central theme." - Real-World Economics Review Blog (rwer.wordpress.com/2012/11/09/best-economics-read-of-2012/)
"In their new book, Economists and the Powerful, Norbert Häring and Niall Douglas trace how the most powerful of all the social sciences became a doctrine for helping the rich - with the aid of huge sums from business ... But the history unearthed by Häring and Douglas is far more disturbing - because they argue that vested interests have slanted some of economics' most fundamental ideas." - The Guardian Newspaper UK (guardian.co.uk/commentisfree/2012/nov/26/big-business-corrupted-economics)
"In their new book Economists and the Powerful, Norbert Häring and Niall Douglas show that the economics discipline did not get this way by accident. They are leading organizers of the World Economic Association ... Toward this end they provide a wealth of references tracing how economics was turned into a propaganda exercise for financiers, landlords, monopolists, insiders, fraudsters and other rent-seeking predators whom classical economists sought to tax and regulate out of existence." - Counterpunch (counterpunch.org/2012/12/10/reality-economics/)
“Best economics read of 2012: Economists and the Powerful by Norbert Häring and Niall Douglas went with me to Majorca and it was a rewarding and enjoyable mistake [...] it is an important book for understanding the times in which we live. For both works, the role of power in the economy and the successful efforts of the ultra-powerful and their minions to keep their doings off society's radar is the central theme.” —Edward Fullbrook, “Best economics read of 2012,” Real-World Economics Review Blog
“‘Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards’ by Norbert Haring and Niall Douglas nails one central fact with impeccable and uncompromising clarity: the concentration of power in the hands of a very few has ensured that the rewards at the top of the finance and business pyramids are increasingly disproportionate in relation to the economic contribution they make.” —“Cambridge Business”
“In their new book, ‘Economists and the Powerful,’ Norbert Häring and Niall Douglas trace how the most powerful of all the social sciences became a doctrine for helping the rich – with the aid of huge sums from business. You may be familiar with a version of this critique, thanks to the film Inside Job, which described how some of the best-known economists practising today are in the pay of Wall Street. But the history unearthed by Häring and Douglas is far more disturbing – because they argue that vested interests have slanted some of economics' most fundamental ideas.” —Aditya Chakrabortty, “Big business has corrupted economics,” “Guardian”
“[Häring and Douglas] provide a wealth of references tracing how economics was turned into a propaganda exercise for financiers, landlords, monopolists, insiders, fraudsters and other rent-seeking predators whom classical economists sought to tax and regulate out of existence. This state of affairs reflects the century-long drive of these free lunchers to fight back against classical economics by sponsoring self-serving fictions that depict them as earning their fortunes not in predatory and extractive ways, but by contributing to output as ‘job creators.’” —Michael Hudson, counterpunch.org
“Häring and Douglas have provided a useful account of the ways in which the rich and powerful have steered the economics profession in directions that support their own interests. Economic theory predicts that those with money will try to corrupt the discipline. This book is an effort to find the evidence to support the theory.” —Dean Baker, Co-director of the Center for Economic and Policy Research, Washington, DC
FINANCE CAPITALISM AND ITS DISCONTENTS [MICHAEL HUDSON] on Amazon.com. *FREE* super saver shipping on qualifying offers. This book contains the most important interviews and speeches that Prof. Hudson has given over the past decade (2003-2012).
By Michael Hudson [...] [Part 2] [Part 3] How today’s fiscal austerity is reminiscent of World War I’s economic misunderstandings When World War I broke out in August 1914, economists on both sides forecast that hostilities could not...
A political rift was opened in Portugal after the country's president sent the 2013 budget to its highest court for review, an unusual move that highlights deepening opposition to a two-year austerity drive.
By Michael Hoexter Rational public debate about the economy and government’s role in the economy is currently in extremely short supply. In a debt-deflation, a weak economy saved from Great Depression-level misery by half-way,...
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