It is a weird world of neoclassical economics. Nothing matters: neither debt nor taxes. Everything is irrelevant. The world is frictionless and costless. No taxes (Modigliani-Miller) means debt and equity are equivalent. Borrowing rate and lending rate are the same (CAPM) so banks don’t exist (or have no right to exist). It is all a gross misunderstanding of Newton’s first law of motion, which if true on planet earth, there is no energy problem, no global warming problem, no food problem and no problem at all. In principle, there is no need for economics, because there is no scarcity of resources. In other words, neoclassical economics, is a self-contradiction! Neoclassical economics has simply defined economics out of existence! Finance and economics need to move to Newton’s second law. As Einstein said: “everything should be made as simple as possible, but no simpler”.

The idea of the information portal sounds good to me.
What about a wikipedia-like model regarding financing and sourcing?

Maybe with a stronger emphasis on a collective control of editors. Something like wikileaks more than crickey.

The only problem is that the news will not be “real time” since the information has to be digested by authors – it will always be second hand. However this is not a problem as long as you are not interested in using this news site to make short-term investments decisions. A good source of independent commentary coming from different angles is very much needed.

If this movement becomes “vertical” to the current political parties and can exercise some rational influence from the near outside of the system then it may make a difference. Otherwise I’m afraid it will be immediately bogged down in horse-trading or will be hijacked by existing interest groups.

Just one more thing – you might not be aware that there is a lot of information about global events which are only marginally mentioned in English-speaking media – even unofficial. So having people speaking multiple languages on board would be a benefit.

For example the sombre tone of Polish media is dramatically different than anything available locally in Australia – even if the crisis is not as bad in Poland as in some other European countries. The funny thing is that I read about events happening in the US in Polish and only then when I know what to look for I can find the original story on an American website.

My French-speaking colleague said exactly the same about the French media. Their tone is absolutely different than what’s available in the “Anglophone” zone.

yes – putting raw organic (unadulterated and accurate) information in front of people and making it easily accessible by ACTIVELY PROMOTING THE ONLINE DESTINATION is the key to building a genuine check and balance to mainstream media. We see this happening online in some forms already but each time it comes across as slightly ‘conspiratorial’ or the skewed views of extremists since although truthful it’s marginal information because of the simple fact that it’s not promoted in a mainstream channel like a newspaper or on Tv news. And who knows of these sites anyway? Not your neighbour I’d bet. Or mine. Promotion becomes a key factor as well. But before that,the big question is one of Sourcing:

Where do you get the information and how do you prove it to be unbiased and truthful?

The other top points on the Propaganda Model made by Herman and Chomsky would also need to be addressed:

Funding and Ownership.

The information portal (if that’s what it is to be) would have to be independent of busines influence and funding sources. That’s kind of the easy bit. The first hard bit is sourcing – not getting the info, but proving it to be the truth against a tide of mass media dis-information. The second hard bit is getting the masses interested and engaged. I figure if you know how the media machine works, particularly the digital one, then you can do that…

One way I can see to do this is to begin slowly – first by simply revealing strategy behind news articles; revealing government strategy for what it is for example while demystifying / translating economic and potitical terminology for the public. The public don’t know what ‘Quantitiative Easing’ is or ‘Debt Deflation’ for that matter and it bores them. A website devoted to telling people why they showed this news article above that and what the President talked about and why – in plain language with an entetaining spin, could be a start. Like the Gruen Transfer but about NEWS. The end goal of this is to get people QUESTIONING THE MOTIVES OF EVERY NEWS ARTICLE THEY READ AND EVERY NEWS STORY THEY SEE. Who wants me to see that or read that? And why? People need to realise that the news isn’t always the news, its an agenda. It’s what someone rich or powerful wants you to hear or see. Once the questioning begins then people will look for hard for answers. A new Movement might be what they find.

the problem is becoming one of information saturation. with so many sources of information, how does a person know which one(s) to rely on and which to discount?

One way is put a lot of effort into reading the information source and carefully balance the views found within it against other sources, but this takes time, effort and no small amount of analytical skill.

Naturally, people without the time (or inclination) to go to this effort will turn to larger news sources (like the MSM) because they are considered credible.

My expertise is in ICT and business, though politics and economics are what concern me now.

Digital communication can offer alternative forms of information that bypass the usual corporate consensus. In fact, we have access to too much information. In Australia, information is not hidden and can be accessed easily, whether in libraries or over the Internet. The problem is sifting through a great deal of it to find information that we consider accurate and timely.

We are all familiar with the concept of authoritarian states omitting and manipulating information for their interests against the public. In Western liberal democracies, such as Australia, the state doesn’t do this to the extent found outside of the West. But the problem of information in our society is that of the institutions who create and sell information: the mass media, marketing, advertising, and public relations industries. Do they have an incentive to manipulate information?

In short, the best explanation as to why the mass mainstream media don’t play the role that they claim of being a check and balance that I’ve found is the Propaganda Model. http://en.wikipedia.org/wiki/Propaganda_model

The other industries of marketing, advertising and public relations are dedicated to undermining consumers and the public. Just look at the enormous amount of dis- and mis-information that people are bombarded with in order to promote the disease of consumerism (as opposed to typical consumption) and to present corporations with an unblemished image.

It is unfortunate that economists do not denounce this mass information asymmetry, but the reason is obvious: big business is doing it so by definition it is correct and representative of how markets work.

“Rather than provide information, professionals design much advertising to do nothing more than to delude and to confuse people in order to get an edge on their competitors without serving consumers’ needs in any way. True, some advertising is ‘constructive,’ but surely most is merely ‘combative,’ having nothing to do with conveying information. In fact, we could do better treating such activities as disinformation.” (p. 16)

Perelman, Michael. 1999. Class Warfare In The Information Age (New York: St. Martin’s Press)

Thank you for your in depth description of the issues facing our current system and taking the time to respond in at such length to my post. You described the systemic problems in more forensic detail than I did and expanded on the subject but I can see your sentiment is the same as mine…Maybe your expertise is related to Politics? Mine is the dark arts of Media and Communications Strategy…with a strong focus on digital technology. (So in some ways Bullturnedbear was right about my position in his imaginary Aussie government!! ?…NOTE: the smiley face indicates the tonal intent of this comment and continues the tradition of approaching these blogs with a sense of humour)

You talked about Control (by the Business Class and Economic Intelligentsia) through the Manipulation of Information. In the past this was commonly achieved through ownership of media assets such as newspapers and radios and TV stations. Now, EVERYONE with internet access is a potential media mogul. Although democracy has been distorted and changed beyond recognition, this point in time also happens to be a moment when the people enmasse can begin using the strength of the Internet to restore the balance of power in an unprecedented way. If society does this it will again act as the ultimate check and balance to government policy decision-making, rectifying imbalances brought about by minority influences and interests. As connected individuals without boundaries our capacity to elicit positive change is more dramatic than ever before. The Internet and other digital mediums like mobile phones have not leveled the democratic playing field they’ve tipped it to the advantage of the people. Those concerned with the health of democracy need to not only let everyone on the team know they have a huge advantage playing on this field, but lead them onto the field and encourage them to play.

Lyonwiss – Mentioned that he agrees with my assessment of the POWER of the internet as a democratic tool. He said ‘…your idea of creating a movement to “keep the bastards honest” may now be more feasible and effective than before because of technology…’ I would boldly take that further and say it WILL be more feasible and effective. We have the means to end this – as Rookess called it – ‘Crisis of Democracy ‘ and I will continue to promote action and organization around this to enable effective social, political, economic and environmental activism that results in positive and fundamental change in our society. Thanks to all for feedback, much appreciated.

there is a new information tool that has just been released which is good at showing all kinds of stats as well as graphing them. Take this example search of GDP and Debt for example:

http://www61.wolframalpha.com/input/?i=gdp+debt

I have yet to fiddle with it in detail (as it only just debuted on the weekend), but I think that it may yet be useful.

The dilemma also goes far deeper than his proposition that all we need is security to back loans and everything will be OK. The problem is that this accepts the valuation of assets as accurate–but that will fall down when bank credit is itself used to buy assets.

He also proposes changes to regulation as the cure. My point from Minsky’s point of view is that if these regulations did succeed for a while, they would be undermined by later “regulatory reform”, which is how the similar Depression-era regulations were unwound.

I’ll take a quick look at Denninger.