The only powerful argument against helicopter drops is the one that Heise and Hamada stress – the political risk of overuse. If monetary finance is no longer prohibited, politicians might use it to curry favor with political constituencies or to over-stimulate the economy ahead of an election. Hamada oddly suggests that proponents of monetary finance ignore this risk; but in my own IMF paper, and in Bernanke’s recent blog post, it is a central concern.
History provides many examples of excessive monetary finance, from Weimar Germany to the many emerging economies where governments have pressured central banks to finance large fiscal deficits, with high inflation the inevitable result. So a valid argument can be made that the dangers of excessive monetary finance are so great that it should be prohibited entirely, even if in some circumstances it would be the best policy.
But a valid argument is not necessarily a convincing one. After all, other policies to support demand growth, or a failure to implement any policy, can be equally dangerous. It was deflation, not hyperinflation, that destroyed the Weimar Republic. Hitler’s electoral breakthrough of 1932 was achieved amid rapidly falling prices.
Category Archives: What interests us
40 million people internally displaced by conflict & violence
Highest figure ever
“Modern corruption has a white face”
But it is peanuts compared to the much bigger sums that are raked in by the lawyers, accountants and other silky advisers who base themselves in the City of London and use Britain’s network of crown dependencies and overseas territories in Jersey, Guernsey, the Caymans and the British Virgin Islands.
Until the UK stops encouraging, advising and facilitating guilty men and women looking to stow their shady cash offshore, corruption will continue to flourish.
Modern corruption is a suit in a Panamanian office, who takes that general’s billions and sends it on to a private bank account, no impertinent questions asked along the way. It is the Mayfair estate agent who sells that multimillion-pound townhouse to an oligarch. It is that accountancy firm in the City that fills out the paperwork structuring the rich man’s affairs so that the money goes through one of their far-flung branch offices to wind up in a trust in the tax-free zones of the Caymans or the British Virgin Islands.
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The Sanders effect
Monthly global temperatures from 1850-2016
Monthly global temperatures from 1850-2016.Ed Hawkins
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Thoughts on the Local Elections 2016
“When it comes to assessing Labour’s electoral fortunes, Corbyn is treated with all the due process of a 17th-century woman accused of witchcraft and dunked in a river. If she drowns she’s innocent; if she floats she’s guilty and condemned as a witch. Either way the verdict is never in her favour,” wrote Gary Younge.
It was widely predicted before the election that Labour would lose 150 plus seats in the local elections in the England, according to the polls at the time; some even went as far as 300 seats. In the end, the Labour not only lose far fewer seats – one quarter less than the Conservatives – but also hold on to the same number of councils. Labour did not just hold to key councils, such as Southampton, Harlow, Crawley, Worcester, Redditch, Derby, Hastings, Cannock Chase, Carlisle and Nuneaton where the local MPs are conservatives, but actually increased its share of the vote in the majority of them. It is true that Labour failed to gain seats in contrast to what happened in the 2012 local election under Ed Miliband, but it is more to do with Ukip. Ukip was a much less significant force in 2012; this time their performance was strong while the Conservatives were lacklustre. People did protested against the Conservative government’s incompetent rule and its austerity but not all the votes went to Labour.
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Beltwayland: The heartland of the military-industrial complex class
For them, a two-front war and Washington’s newly enlarged national-security state, much of which is hidden in plain sight, have ushered in a 21st-century gilded age only replicated in America’s few, most privileged enclaves. As Lofgren explains:
It is common knowledge that Wall Street and its inflated compensation packages have remade Manhattan into an exclusive playground for the rich, just as tech moguls have made San Francisco unaffordable for the middle class. It is less well known that the estimated $4 trillion spent since 9/11 on the war on terrorism and billions spent on political campaigns ($6 billion on the 2012 elections alone) have trickled down so extravagantly to the New Class settled around Washington’s Beltway that they have remade the landscape of our capital.
Bitcoins energy waste
Another hard thing to ignore is the amount of energy used by miners. As bitcoin has got more popular – not civilian-popular, but nerd-popular and cutting-edge-capitalist-popular – the mining process has had more and more computer power thrown at it. The process is wasteful, since most of the mining, most of the time, is by definition unsuccessful, because only one miner wins the race. As Vigna and Casey point out in Cryptocurrency, by the middle of 2014, the bitcoin network, which
was then producing 88,000 trillion hashes every second, had a computing power six thousand times the combined power of the world’s top five hundred supercomputers … And just two and a half months later, it had almost trebled to 252,000 trillion hashes. The world has seen nothing like this level of computational expansion. That’s why some doomsayers are predicting that if bitcoin continues on its present path, the planet faces an environmental catastrophe. Continue reading
Arms sale for ‘peace’
The chairman of BAE Systems has claimed his company’s weapons sales encourage peace, as he responded to questions from peace activists who infiltrated the arms maker’s shareholder meeting.
Sir Roger Carr was forced on the defensive by a salvo of questions probing BAE’s dealings with Saudi Arabia, which is currently at war in Yemen. According to a UN panel, Saudi forces have conducted “widespread and systematic” attacks on civilian targets. Continue reading
The great PFI swindle
In 2011, the independent researchers Jim and Margaret Cuthbert showed the
scale of the returns to investors when they analysed three hospital contracts
for Hereford Hospital, the Edinburgh Royal Infirmary, and Hairmyres in East
Kilbride.2 Shareholders are predicted to make truly astronomical gains. Equity
of just £100 invested in rebuilding Hairmyres Hospital is projected to
earn £89 million in dividends over 30 years, while half a million pounds of
equity in the new Edinburgh Royal Infirmary is expected to win dividends
of £168m and a £1,000 equity in Hereford will yield £555.7m. These high
rewards are contractually protected and underwritten by government. The
Cuthberts’ analysis of internal financial projections for six PFI schemes show
investors are expecting to recoup 12 times more than they invested. The UK
Government has ignored these findings and there has been no major enquiry.Using investors’ own projections, the Cuthberts calculated how much profit
was predicted from the six schemes and found that £42m of “subordinate debt”
invested by the companies building the six schemes was predicted to yield £517m. The profits on the £717,297 put in as equity by shareholders were projected to reach £350m.
Click to access TJF_2015_11-1.pdf
Click to access c_invest-JimandMargaretCuthbertsubmission1.pdf
Tax Justice Focus – The Corruption Issue
As Guest Editor David Whyte (How Corrupt is Britain?) comments in his editorial:
“We are overwhelmed by the scale, frequency and variety of corruption cases in Britain, from police manipulation of evidence, to over-charging in out-sourced public contracts, by way of cash-for-access scandals involving prominent politicians and price fixing, market manipulation and fraud in key sectors of the economy.”
TJN has long held the view that Britain is at the forefront of the global supply side of corruption. Ten years ago TJN’s director John Christensen slammed the Transparency International Corruption Perceptions Index for corrupting perceptions of corruption, arguing that:
“The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and licit economies.”
The Arms Trade Treaty won’t stop controversial arms deals
The Arms Trade Treaty won’t mean an immediate end to controversial arms deals like Canada’s $15 billion sale of light armoured vehicles to Saudi Arabia, says the United Nations disarmament chief.
Kim Won-soo, the UN’s High Representative on Disarmament Affairs, offered that assessment in an exclusive interview with The Canadian Press following his Monday meeting with Foreign Affairs Minister Stephane Dion. Continue reading
Anti-China TPP rhetoric is wrong
“As we speak, China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk.”
Actually this is not the way the economy works. If China reduces trade barriers with other countries in Asia, allowing the region to grow more rapidly, then it should also make the United States more prosperous. The region would be a bigger source of demand for U.S. exports and a more efficient provider of goods and services to the United States. That was exactly the logic of the Marshall Plan that helped to rebuild West Europe after World War II. Greater economic integration in the region, even if engineered in part by China, is something that the United States should applaud, not fear. Continue reading
Flatpack democracy
What is Neoliberalism?
I know what I mean when I (occasionally) use the term neoliberal. Neoliberalism is a political movement or ideology that hates ‘big’ government, dislikes any form of market interference by the state, favours business interests and opposes organised labour. The obvious response to this is why ‘neo’. In the European tradition we could perhaps define that collection as being the beliefs of a (market) liberal (although that would be misleading for reasons I give below). The main problem here is that in US discourse in particular the word ‘liberal’ has a very different meaning. As Corey Robin writes, neoliberals
would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.” Continue reading
$40 billion military aid to Israel
President Obama has proposed granting Israel the largest package of military aid ever provided by the United States to another nation, but he and Prime Minister Benjamin Netanyahu remain deeply at odds over a figure for the assistance despite months of negotiations.
Health expenditure per capita, PPP (constant 2011 international $)
The conservatives
What most interested Nixon strategists, who were looking for ways to win by recovering the American center, was the idea that the electorate could be viewed along what Free and Cantril labelled the “ideological spectrum” and the “operational spectrum.” The voices of strongly ideological conservatives had been heard for decades, expressing antipathy toward modern times in general and to what were seen as the “encroachments” of the welfare state. At the same time, they wanted to keep in place encroachments like Social Security and Medicare. Operational conservatives, though, had moved from simple hostility and suspicion to a wish to abolish such popular programs. Yet a “startling fact” emerged: four of ten of those who qualified as conservatives on the ideological spectrum counted as liberal on the operational spectrum. That pointed to a big problem with the Goldwater campaign, where the operational conservatives were in charge.
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London a city of renters
One of Britain’s most respected thinktanks, the Resolution Foundation, has been digging through the government’s own figures and given me exclusive access to its analysis for the capital. Perhaps its single biggest finding is this: the proportion of Londoners who own a home with a mortgage has been sliding since the early 90s – and has now dipped below the number who rent privately. In John Major’s time, less than 20% of all Londoners rented privately, now that is in the mid-30s, and marching up to 40%.
In other words, the idea that Generation Rent is the one with the problem is for the birds: London is becoming a city of renters. Nor is that trend likely to reverse. The consultancy PricewaterhouseCoopers predicts that, in less than 10 years, 60% of the capital will be renting from a private landlord or a housing association. Continue reading
“The brains and blood” of F-35s is not ‘critical’/working
Last summer, F-35 program officer Lt. Gen. Christopher Bogdan said the F-35’s logistics system was “the brains and blood of operating this weapons system.”
Despite many fixes, the aircraft’s Autonomic Logistics Information System (ALIS) is so flawed that government auditors believe the computer system may not be deployable. These problems may also delay the Air Force’s declaration of Initial Operational Capability. And now, in a surprising twist, Bogdan is saying ALIS is not really critical after all, insisting the F-35 can fly without it for 30 days. Continue reading
Tipping Point North South 