I haven’t yet had time to post Michael Hudson’s talk at Customs House–hopefully I’ll manage that this weekend–but in the meantime here is the talk I gave a couple of days earlier at Per Capita‘s Policy Exchange 2009 Conference in Canberra on October 21st 2009. The good folk at SlowTV put this together, and this is the link to the video on their site.
I open this talk by referring to the first presentation at the conference (after Julia Gillard’s opening speech) by Professor Joshua Gans, in which he began by describing both Milton Friedman and Hyman Minsky as “Keynesians”. Had one of the students in my History of Economic Thought subject at UWS made such an observation, he/she would have been well on the way to a fail grade. I was hoping that SlowTV might have also posted Joshua’s talk so that you could make your own minds up on this, but that doesn’t seem to have occurred. Those curious about his approach to economics should check this link to his home page and a blog he established called Core Economics.
Hi Namke,
I’m happy to leave the discussion there to. It is a pleasure to debate such a gentleman. Thank you.
Don’t concern yourself about taking up space though. The ideas you raise and many similar are perfect for discussing on this blog IMHO.
Some thoughts on Obama’s visit to China:
The Chinese naturally want to protect their trillions in dollars in the States. Preserving face is also very important.
Obama says he wants to commit more troops to Afghanistan in Jan. This time, “we’ll have a definite plan on how much it will cost. How long it will take.” And so on.
Sound familiar?
This means that the Chinese are paying for much of this war. Economically, what’s in it for China for the States to stay in Afghanistan? The U.S. is paying various Taliban not to attack contractors. Then when they deliver their goods it’s now ok to kill them (thanks very much).
In the States, the real unemployment rate is almost 20% nationally. Locally it can go as high as 35%. If you’re the Chinese govt., how long would you protect your investment?
They (and other govts.) continue to stock up on gold. The buy-gold-now pundits keep screaming to buy more. I’m going to go the other way and say it won’t reach $5,000 an oz.
Why? Because it’s in nobody’s best interest. If the dollar goes down, the Chinese pull out. If they do, it’s a domino effect worldwide. What does that acoomplish? Nothing.
The Ron Paul types are still screaming for auditing the Fed. But the truth is it’s not going to happen. All of the key economic people are ex Wall Street types. And it’s clear that Obama won’t do anything to replace them. Because if he does politically he apprears to be weak (according to the well-paid Democratic “campaign strategists”).
Another FYI point: many key Congress people are making millions in defense corporation investments. Ex: John Kerry (almost $40 million this past year). Which means while he talks a mean game about “rethinking our Afghanistan strategy”, notice how he never says we should just pull out.
Obama doesn’t have the nerve to stand up to the military industrial complex. Yet he has the nerve to continue to use vets with PTSD as a political football. If you’re a vet and diagnosed with PTSD, under Tri-Care (the military universal care), treatment is free. If you’re a civilian and you get single person coverage AND you’re diagnosed and start treatment six months prior, then it’s covered. If you don’t, then it’s not.
10% of the Stateside population has some form of PTSD. How come that’s not a “national emergency” that warrants an Executive Order implementing single payer health care? Because if Obama did that the anti-single-payer lobby would roast him alive. And then his career’s over.
The hypocracy in this is mind-boggling.
soho44,
I agree with the most of your post except for one sentence:
“If the dollar goes down, the Chinese pull out. If they do, it’s a domino effect worldwide. What does that accomplish? Nothing.”
I believe that this would in fact be the only thing which would save the America. Just look at the Argentinian crisis and how quickly they recovered. It is the real economy what matters.
The real war is not in Afghanistan – this is a fake war. The real war is a trade ware between the American workers and the mercantilist Chinese state. Guess who is winning?
I think that it might be interesting to see the comments made by he guy called “Panda@War” to the article written by AEP which I have already mentioned:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6575883/China-has-now-become-the-biggest-risk-to-the-world-economy.html
Check out all his/her comments – he/she sounds like a new overlord, doesn’t he/she?
http://my.telegraph.co.uk/bambooeater
It is probably good time to ditch all the rubbish about the “US bankruptcy” – the arguments why this is impossible unless the US Government actually wants it are there:
http://bilbo.economicoutlook.net/blog/?p=6169
But the American government and the American people in general are still constrained in the way they are thinking. They probably know they can print USD without wrecking the real economy but they will do nothing to solve the unemployment problem unless they have to. For the Government playing the geo-strategic game with Iran and North Korea seems to be more important – and they need both Russia and China on their side.
Don’t be fooled – the Chinese are printing their money in the name of sterilization. This is how the infamous peg is implemented. They don’t care what the “markets” will say. They don’t care what the concerned economist say about the straw man of hyperinflation. Just look at the data there (I am not saying that I agree with the conclusions)
http://www.essex.ac.uk/economics/eesj/AU08/woodford368.pdf
Removing the dollar peg won’t rebalance the trade instantly but at least American workers will have a chance to compete.
Any significant right-wing (“get rid of the Chinese import”) or left-wing (“work for all”) political movement may save the day in the US. But I am pessimistic because people are buying the official propaganda which is self-contradictory (“our overconsumption is good but this is the debt we have to pay, property right are sacred, globalisation is good”).
Unemployed people should just go to the streets and demand jobs, forget about all the monetarist pseudo-science related to hyperinflation, forget about the public debt. Take whatever Milton Friedman said – and do the opposite. The rest is irrelevant in the long run in my opinion.
AK
I am certainly not disagreeing with you, it sounds like a revolution is needed from the people to make the Govt wake up as to whom they represent. What do we call Bastille Day 10 days after Independence Day? 4th July to 14 th July?
Think of a name and the Americans will banner it and fight for it.
Gaday,
It’s needed. But sadly what’s also needed is for more people to be affected by this. Sounds bizarre. But somehow that seems to be the “American Way” (whatever that means).
Namke, Your idea has merit. I think what you are describing is a system where all taxpayers are automatically members of a “credit union”. The state and it’s assets/liabilities are “depositor owned” and extending this to include the right to a cash account and draw your share of anything “borrowed” in your name. Yes the current system is wrong in that the taxpayer is subsidizing the banking system. The problem with your system is that when the Government borrows they want to spend it on stuff they want to spend it on and wouldn’t trust individuals to spend the money dropped on them from above wisely.
But here’s a halfway house, and it can be done now that we have the internet. Instead of guaranteeing bank deposits, the Government gives every taxpayer the option of opening a “reserve account” 100% guaranteed by the fiat paper that they are at liberty to print. It’s an internet banking only account and hooked up to the ATM system so you can draw out money (paying the bank charges of course). To deposit money the Government simply signs up agents (banks, city councils – anyone with POS terminals) to accept deposits, or you use internet banking to transfer the money into the account.
Money in these accounts is therefore not subject to the fractional reserve money multiplier effect, interest can be paid (but less than the market rate for a bank). Move your money out of one of these accounts to a bank or any other investment and it’s a case of “buyer beware”. The banks won’t like this idea, but it seems to me to one path available to exit the bank deposit guarantee which is a bit of a trap at present.
Just checked out the BBC’s site re: recent stuff on climate change. It seems that their World Have Your Say programme can’t get enough debate on this.
I suggested a BBC contest to find the best solution for global warming. It must meet 3 criteria:
It must be economically feasible.
No scientists working for the anti-global-warming lobby are allowed to do “in-depth studies” on this.
And, this must be approved by Her Majesty the Queen before being implemented. Because she’s the Queen, that’s why.
Or maybe, the ABC could run it’s own contest as well. The more the merrier.
Just read some new comments by Jim Rogers re: investing in silver and other commodities (instead of gold).
His reasoning: when 99.9% of the crowd goes one way, consider the opposite. But other than that, is anybody seeing any other signs to go with other commodities?
(1) China’s economy continues to grow. Their bailouts have worked much better than other countries.
(2)Historically, hasn’t silver always lagged behind gold?
(3)In every bubble, there’s always a limit to the hype.
(4)A finite amount (vs. the “infinite” appeal of gold). Ex: oil. The oil producing countries and corporations area naurally all saying no worries. We have LOTS of new fields to develop.
If that’s true, the how come Saidi Arabia was talking about the West paying them a fee for reducing demand? Is that just capitalistic arrogance? Or, a sign that yes supplies are going down?
(5) Global warming. How come Copenhagen won’t produce an agreement? Because there’s no rational debate about it using actual facts. Instead, it’s scientists (corporate employees) who are paid to put out propaganda. In one aspect, it’s like little kids arguing. Which means, you’ll never have a solution.
If it is a lie, then why would these world class scientists throw their careers away? Does this also mean that Al Gore has THAT MUCH POWER worlwide? I don’t think so.
I once saw a CBC-TV documentary on this. They spoke to scientists all over the world. Who was leading the anti-global warming crowd? Neocon “pollster” Frank Luntz. Then, at the end when he was in Toronto, he actually said on-camera, “in the States, I get paid really well to put this out. But, I know it’s all crap.”
Maybe this is Roger’s strongest hunch right now?
The brutal truth about our migration policy (apart from the reluctance to accept illegal migrants even if they are true refugees) is that the population of Australia has to grow even if this means damaging the environment – or else we will be settled without our consent when the environmental or political crisis in the region kicks in. You cannot get enough high quality migrants from Europe or Latin America
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