#economics
Why Credit Money Matters - by Steve Keen
Ben Bernanke and two other Neoclassicals were awarded the "Nobel" Prize in economics for their work on banking. Their work assumed the validity of the "loanable funds" model of how banks operateâas Bernanke said in his biographical note on the Nobel website, "banks and other lenders are themselves borrowers, since they must raise funds from deposits or in capital markets in order to lend".52F
And yet that model had been flatly contradicted years earlier by the Bank of England (McLeay, Radia, and Thomas 2014) and the Bundesbank (Deutsche Bundesbank 2017).
https://profstevekeen.substack.com/p/why-credit-money-matters-3b2
The Federal Trade Commission banned 'non-compete' agreements, to take effect in August. But it was only a 3-2 vote, and business groups are going to sue to maintain their ability to have employees sign non-compete contracts.
According to the article, business groups say non-compete agreements "protect trade secrets" and "promote competitiveness," while the FTC says banning non-competes would "increase worker earnings by up to $488 billion over the next decade and will lead to the creation of more than 8,500 new businesses each year."
I wonder if that $488 billion can be realized over the next decade with artificial intelligence, not mentioned in the article, advancing so fast. Creation of 8,500 new businesses? The trend for decades is few businesses and more people working for large companies than small companies. I suppose you could blame non-compete agreements for that, in which case the claim that eliminating non-compete agreement creating new businesses would be true. Also when I hear "trade secrets," I think advanced technology, but the article claims Democrats claim non-compete agreements are used "even in lower-paying service industries such as fast food and retail."
US bans worker 'noncompete' agreements as business groups vow to sue - Reuters
Why not Keynes? - by Branko Milanovic
#economics #inequality #redistribution
Even a very cursory look at the fundamental equation which is A (aggregate supply) = C + I + G shows that if C (aggregate consumption) is a function of income distribution an obvious way to rebalance supply and demand is to âimproveâ income distribution, that is to transfer purchasing power from the rich to the poor. If $1 is transferred from a rich person who normally consumes only 50 cents, to a poor person who would consume 95 cents, aggregate consumption will increase. One can then fine-tune it until it closes the gap between the aggregate supply and the effective/aggregate demand. There is no need to introduce government spending, G.
The question is then, why was such an obvious path out of insufficient demand not taken by Keynes? He had in front of him two possibilities: one was to increase government spending; the second was to redistribute income towards the poor. The latter is an easier solution and entirely within the logic of the model itself, including within the logic of a new concept of âpropensity to consumeâ which Keynes has introduced. But if income distribution is assumed unchanged or unchangeable, or if one does not want to touch income distribution for political reasons, then the only way out is the one taken by Keynes: increased government spending.
Many #American #Conservatives might like to critique the #UK as being too #Socialist, many of those critiques may be valid, however, the #USA is not a #Capitalist economic system any more than the UK is, with the #GDP of both nations being comprised of around 40% #government spending.
The USA has been for decades a mixed Capitalist/Socialist economic system. What's most sad about both the UK and #US is that the kind of #Socialism being deployed is actually #corporate Socialism, wherein #taxes are forcibly redistributed to #corporations and the most wealthy. The worst aspects of both systems.
#corporatesocialism #redistribution #angloamerican #economics
Among the many false claims made by various #government media, #corporate media and social #media commentators, such as the UK being a "Liberal Democracy," we are also told how terrible the #capitalist #system in the #UK is and how we need more #Socialism to save us.
While I do agree that crony capitalism and #monopoly capitalism are indeed terrible, we don't actually live in a capitalist economic system, we live in a mixed Capitalist/Socialist #economy, where for the last two sociological generations or more, government spending has comprised more than 40% of all economic activity in the UK.
#cronycapitalism #monopolycapitalism #economics #economicactivity #gdp
https://www.economicshelp.org/blog/5326/economics/government-spending
Cory Doctorow: Capitalists Hate Capitalism
Cory Doctorow Podcast, Episode 465, 2024-04-14 18:59
It's a reading of this. https://locusmag.com/2024/03/cory-doctorow-capitalists-hate-capitalism/
Cory Doctorow Podcast feed https://craphound.com/feed/
#economy #economists #economics #capitalist #capitalists #capitalism #audio #mp3 #cory #cory-doctorow #podcast #cory-doctorow-podcast #locus-magazine
Power: Our emphasis on the virtues of free, competitive markets and exogenous technical change can distract us from the importance of power in setting prices and wages, in choosing the direction of technical change, and in influencing politics to change the rules of the game. Without an analysis of power, it is hard to understand inequality or much else in modern capitalism. Philosophy and ethics: In contrast to economists from Adam Smith and Karl Marx through John Maynard Keynes, Friedrich Hayek, and even Milton Friedman, we have largely stopped thinking about ethics and about what constitutes human well-being. We are technocrats who focus on efficiency. We get little training about the ends of economics, on the meaning of well-beingâwelfare economics has long since vanished from the curriculumâor on what philosophers say about equality. When pressed, we usually fall back on an income-based utilitarianism. We often equate well-being with money or consumption, missing much of what matters to people. In current economic thinking, individuals matter much more than relationships between people in families or in communities.
Efficiency is important, but we valorize it over other ends. Many subscribe to Lionel Robbinsâ definition of economics as the allocation of scarce resources among competing ends or to the stronger version that says that economists should focus on efficiency and leave equity to others, to politicians or administrators. But the others regularly fail to materialize, so that when efficiency comes with upward redistributionâfrequently though not inevitablyâour recommendations become little more than a license for plunder. Keynes wrote that the problem of economics is to reconcile economic efficiency, social justice, and individual liberty. We are good at the first, and the libertarian streak in economics constantly pushes the last, but social justice can be an afterthought. After economists on the left bought into the Chicago Schoolâs deference to marketsââwe are all Friedmanites nowââsocial justice became subservient to markets, and a concern with distribution was overruled by attention to the average, often nonsensically described as the ânational interest.â
Empirical methods: The credibility revolution in econometrics was an understandable reaction to the identification of causal mechanisms by assertion, often controversial and sometimes incredible. But the currently approved methods, randomized controlled trials, differences in differences, or regression discontinuity designs, have the effect of focusing attention on local effects, and away from potentially important but slow-acting mechanisms that operate with long and variable lags. Historians, who understand about contingency and about multiple and multidirectional causality, often do a better job than economists of identifying important mechanisms that are plausible, interesting, and worth thinking about, even if they do not meet the inferential standards of contemporary applied economics.
Humility: We are often too sure that we are right. Economics has powerful tools that can provide clear-cut answers, but that require assumptions that are not valid under all circumstances. It would be good to recognize that there are almost always competing accounts and learn how to choose between them.
He got many good points. It could almost seem like he tilt toward the austrian school of economics which emphasizes individual human action, subjective values, and dynamic processes in the economy. Economists tend to not see the world, only numbers, thus get divorced from reality sometimes. This guy has changed his mindset for the better.
#Economics
Rethinking Economics or Rethinking My Economics by Angus Deaton
"Mama Bear" Gail Dudak knew stock shit didn't add up back when Louis Rukeyser was still alive and fired her from his show. That's how long the "new paradigm" has been unsustainable. Clue: stock value propped up by buy-backs.
That's like selling Amway and you are your own best customer.
Ⲡunusual_whales - 2024-03-28 12:18:40 GMT
Stock valuations mirror the extremes of 1929 and the market is at risk of a steep crash, investor John Hussman has said per BI."Investors are presently enjoying the double-top of the most extreme speculative bubble in US financial history," Hussman wrote.
Profit Maximization in the Real World - by Steve Keen
It's pretty well-known that macroeconomics is completely bunk. But textbook microeconomics is no better!
https://profstevekeen.substack.com/p/profit-maximization-in-the-real-world-aa6
300,000 more #UK #children fell into absolute #poverty at height of #CostOfLivingCrisis | Poverty | The Guardian
#UK #Politics Tories #Economics
The Anything Goes Market Demand Curve - by Steve Keen
#politics #economics #ideology
Macro-economics is a pseudo science, new episode.
This resultânow known as the Sonnenschein-Mantel Debreu Theoremâshowed that, not only can macroeconomics not be derived from microeconomics, but that even microeconomics itselfâthe analysis of demand for a single marketâcannot be derived from microeconomicsâthe theory of the consumption behaviour of an individual.
https://profstevekeen.substack.com/p/the-anything-goes-market-demand-curve-015
Using system dynamics with Minsky to prove the core tenets of MMT
https://profstevekeen.substack.com/p/using-system-dynamics-with-minsky
How America Destroyed the German Economy
#geopolitics #economics #imperialism
Don't worry, they're playing the drums of war to stimulate the economy!
