Wednesday, December 13, 2017

Jason Smith — On these 33 theses

The other day, Rethinking Economics and the New Weather Institute published "33 theses" and metaphorically nailed them to the doors of the London School of Economics. They're re-published here. I think the "Protestant Reformation" metaphor they're going for is definitely appropriate: they're aiming to replace "neoclassical economics" — the Roman Catholic dogma in this metaphor — with a a pluralistic set of different dogmas — the various dogmas of the Protestant denominations (Lutheran, Anabaptist, Calvinist, Presbyterian, etc). For example, Thesis 2 says:
2. The distribution of wealth and income are fundamental to economic reality and should be so in economic theory.
This may well be true, but a scientific approach does not assert this and instead collects empirical evidence that we find to be in favor of hypotheses about observables that are affected by the distribution of wealth. A dogmatic approach just assumes this. It is just as dogmatic as neoclassical economics assuming the market distribution is efficient.
In fact, several of the theses are dogmatic assertions of things that either have tenuous empirical evidence in their favor or are simply untested hypotheses. These theses are not things you dogmatically assert, but rather should show with evidence:
I wonder whether economics should be taught as a science, especially since conventional economists seem to think that economics is more like physics than the social sciences.

There are problems with assuming that, which I won't repeat. But to my mind, the most obvious difficulty is well-known among the public. Perhaps the most powerful argument for "science" is demonstrated not in words, or through experiment, but rather in the success of technology that everyone uses all the time to change the world.

Is there anything like this with respect to economics? Not only no, but also the opposite in many cases.

The study economics is not even a required in most business schools, because business schools have discovered that time is better spent in getting results. If it got results, business schools would be hiring the top economists. They are not.

The teaching of economics needs to be rethought in light not only of the failure of economists to deliver results but also in their making bad situations worse. The dismal handling of the aftermath of the global financial crisis is a case in point. In addition, conventional economists and policymakers have literally laid waste entire European countries and their economies.

A lot of people are likely thinking, if this science we want none of it. Monkeys throwing darts could probably do better.

And ironically, Western economists and policymakers were put to shame by the positive result that China showed using a command economy to address the issues promptly and avoid contraction. But Western economists explain this by "cheating."

Information Transfer Economics
Jason Smith

Robert Kuttner — The Man from Red Vienna [Karl Polanyi]

Robert Kuttner reviews Karl Polanyi: A Life on the Left by Gareth Dale (Columbia University Press).

The New York Review of Books
The Man from Red ViennaRobert Kuttner

Edward Harrison — Minsky’s financial instability hypothesis and the Fed’s reaction function

As the Federal Reserve meets today to decide how to communicate its messaging on future rate hikes and balance sheet reduction, financial stability will play a key role. Yesterday, I wrote about the Bank of International Settlements new warnings on financial stability. And just this morning, I read a piece from Goldman Sachs Asset Management EMEA division head Andrew Wilson, warning that the risk of overheating was real. So let’s put some framing around this issue and ask how the Fed reacts as the data come in down the line.
In the past decade on Credit Writedowns, I have had a lot of good commentary from different writers on financial stability. And most of it is based around Hyman Minsky’s Financial Instability Hypothesis. As someone who used to work in debt capital markets and do financial models for private equity investing and corporate finance for mergers and acquisition, I find the Minsky analysis a huge benefit in thinking about the macroeconomy that standard macro modelling techniques don’t incorporate. So I want to use this as the prism through which to look at the Fed’s reaction function to predict future yield curve flattening and the resulting economic impact....
Randy Wray post follows.

Credit Writedowns
Minsky’s financial instability hypothesis and the Fed’s reaction function
Edward Harrison

Reuters — Ford to base Fusion production in China, ship to U.S. - sources

As with the Focus move, the decision to build the Fusion in China also signals a shift in strategy at Ford, which is responding to dwindling U.S. consumer demand for passenger cars in favor of more expensive and more profitable trucks and SUVs.
Last week, Ford said it plans to relocate production of a future battery electric vehicle to Cuatitlan, Mexico in 2020 to free up capacity at its Flat Rock, Michigan, plant to build self-driving vehicles in 2021.

The Washington Post Editorial Board — The West must prepare for a wounded Putin to become even more aggressive

The West also should not shrink from the destabilization of Mr. Putin’s regime.
Imagine if a paper of record in Russia had published an editorial like that about destabilizing the US "regime." Oh, right, the head of the US "regime" is Donald Trump, and the New York Times are trying to remove him, or failing that, neuter him.

The Washington Post — The Post's View
The West must prepare for a wounded Putin to become even more aggressiveEditorial

See also

Fred Hiatt is the editorial page editor of the Washington Post. He is a rabid neocon.
… in general, the Post responds to dangerous and complex problems with simplistic prescriptions. [Washington Post Editor Fred] Hiatt has created a foreign-policy fairy-tale land in which nasty authoritarian regimes can be magically transformed by American leadership into democratic ones. If only. And these illusions are by no means confined to the editorial page. Hiatt has hired a retinue of new columnists, including Jennifer Rubin, Robert Kagan, Michael Gerson and Marc Thiessen, who espouse a very hard line indeed. Last October, as Americans worried about the advances of the Islamic State and the spread of Ebola, Thiessen, a former Jesse Helms staffer and George W. Bush administration speechwriter, even conjured up a scenario of “Ebola terrorism” in which these “two threats converge into one.” He envisioned terrorists deliberately infecting themselves with Ebola and then traveling to the United States to use the virus as a bioweapon. It scarcely needs saying that this was a vision completely unmoored from reality.
There is no reason to think that any of this will change soon.
The National Interest (December 15, 2014)
The Washington Post: The Most Reckless Editorial Page in America
James Carden contributing editor at The National Interest served as an adviser to the U.S.-Russia Bilateral Presidential Commission at the State Department, Jacob Heilbrunn, editor of The National Interest

See also
An op-ed by the president of the right-wing human rights group Freedom House, published in the New York Times Monday (12/11/17)—later boosted by New York Times chief White House correspondent Peter Baker—warned of the menace of “commentators, trolls, bots, false news sites and propaganda,” and their negative effects on democracy. Missing from its analysis was any account of how the government that funds their organization—86 percent of Freedom House’s budget comes from the US government, primarily the State Department and USAID—uses social media to stir unrest and undermine governments worldwide.
NYT Prints Government-Funded Propaganda About Government-Funded Propaganda
Adam Johnson

Jan Oberg — Aleppo’s Liberation one year ago – Anybody ashamed today?

Remember the flurry about Aleppo and its "fall" to the regime from the "moderate opposition"?

Here is an eye-witness report from a journalist who was there that debunks it. Did any Western media report this? 
So much for the free Western media – proving excellently their place as the second M in the MIMAC – the Military-Industrial-Media-Academic Complex – that is always ready to promote violence and omit or marginalise the voices of conflict understanding and peace....
Aleppo’s Liberation one year ago – Anybody ashamed today?
Jan Oberg

Gabriel Rockhill — The U.S. is Not a Democracy, It Never Was

American history.
The Establishment and its propagandists regularly insist that a structural aristocracy is a “democracy” because the latter is defined by the guarantee of certain fundamental rights (legal definition) and the holding of regular elections (procedural definition). This is, of course, a purely formal, abstract and largely negative understanding of democracy, which says nothing whatsoever about people having real, sustained power over the governing of their lives.…
“Multivariate analysis indicates,” according to an important recent study by Martin Gilens and Benjamin I. Page, “that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination […], but not for theories of Majoritarian Electoral Democracy.”…
Indeed, if the United States is not a democracy today, it is in large part due to the fact that it never was one. Far from being a pessimistic conclusion, however, it is precisely by cracking open the hard shell of ideological encasement that we can tap into the radical forces that have been suppressed by it. These forces—not those that have been deployed to destroy them—should be the ultimate source of our pride in the power of the people.
In his rousing Gettysburg Address at the time of the Civil War, Abraham Lincoln defined "democracy" as "government of the people, by the people and for the people." The definition is correct, but Lincoln misapplied it to the United States at the time, and that remains true today. In fact, the class hierarchy is more entrenched now than ever as shown by rising inequality of income and wealth, and the asymmetry of power.

The U.S. is Not a Democracy, It Never Was
Gabriel Rockhill, Franco-American philosopher and cultural critic (public intellectual), Associate Professor of Philosophy at Villanova University, and founding Director of the Atelier de Théorie Critique at the Sorbonne

Alexander — Russia defies Western expectations; ends 2017 with minimal budget deficit, bigger reserves

The US thinks it can "bankrupt" Russia with sanctions.
Contrary to Western claims Russia in 2017 did not ‘run out of money’…
What is extraordinary is not that Russia has not run out of money. It is that supposedly serious people in the West ever thought it would.
The dismal truth is that no economic catastrophe in Russia is too farfetched to prevent some people in the West predicting it, whilst there is never any penalty for these people when regular as clockwork the predicted economic catastrophe fails to happen.
The problem for Russia is that the Russian government think that this is a possibility to be guarded against.

The obvious fact is that as currency sovereign, Russia limited in currency issuance only by the availability of real resources, which can also have an effect on the price level and exchange rate. The exchange rate is relatively meaningless, but inflation could be an issue. However, the trend has been a falling price level.

Russia needs to realize the policy space it has based on the increase in  fiscal space resulting from floating the ruble. Russia needs to increase public investment and social welfare, which would also result in stimulating the consumer economy through increased incomes....

Russia Feed
Russia defies Western expectations; ends 2017 with minimal budget deficit, bigger reserves

Reuters — U.N. expert says inmate U.S. torture continues at Guantanamo Bay

“By failing to prosecute the crime of torture in CIA custody, the U.S. is in clear violation of the Convention against Torture and is sending a dangerous message of complacency and impunity to officials in the U.S. and around the world,” [U.N. special rapporteur on torture Nil] Melzer said in the statement.…
There was no immediate comment from U.S. officials in Geneva. 
U.N. expert says inmate U.S. torture continues at Guantanamo Bay
Tom Miles


U.N. expert says torture persists at Guantanamo Bay; U.S. denies
also from RT
The US is in “clear violation” of the United Nations Convention against Torture over “gruesome” abuses committed by its agents in locations such as Guantanamo Bay, according to a UN official.
The UN's special rapporteur on torture, Nils Melzer, noted in a Wednesday statement that "perpetrators and policymakers responsible for years of gruesome abuse have not been brought to justice, and the victims have received no compensation or rehabilitation," despite a 2014 Senate Intelligence Committee report acknowledging the use of torture in US custody.
The UN rapporteur also stated that torture reportedly continues at US sites, including Guantanamo, despite former President Barack Obama ending the use of "enhanced interrogation techniques" in a 2009 executive order.
Melzer accused the US of being in "clear violation" of the UN's Convention against Torture and of sending a "dangerous message of complacency and impunity to officials in the US and around the world." …
The special rapporteur made clear that the ban on torture and ill-treatment is "absolute and allowed for no exceptions whatsoever," according to the UN release. “This is one of the most fundamental norms of international law, and its violation is listed among the most serious international crimes, including crimes against humanity and war crimes,” Melzer said.

"...I therefore now urge the US to live up to its legacy, to end its policy of impunity and to bring its own perpetrators to justice," Melzer added. He noted that a "society bruised by torture and abuse" can only heal when the "truth about secret policies and practices is fully disclosed to the public and when full reparation and rehabilitation is granted to victims."
Compare the Reuters report to the RT reporting and go figure why the US establishment hates RT.

US sends 'dangerous message' by turning blind eye to Guantanamo tortures - UN

Andrew Gelman — Yes, you can do statistical inference from nonrandom samples. Which is a good thing, considering that nonrandom samples are pretty much all we’ve got.

To put it another way: Sure, it’s fine to say that you “cannot reach external validity” from your sample alone. But in the meantime you still need to make decisions. We don’t throw away the entire polling industry just cos their response rates are below 10%; we work on doing better. Our samples are never perfect but we can make them closer to the population.
Remember the Chestertonian principle that extreme skepticism is a form of credulity.
Making assumptions is necessary. However, it is also necessary to recognize and acknowledge limitations. Formal modeling is never more accurate for the math than the assumptions permit.

Reasoning is a tool of intelligence. It is not a magic wand. Taking reasoning for a magic wand because it is highly formalized is magical thinking.

It is important to distinguish necessity from contingency. Necessity is based on logic necessity (tautology) and logical impossibility (contradiction). These are purely syntactical, that is, based on applying rules to signs. Logical necessity is probability one; contradiction is probability zero. All description is contingent on observation.

Statistics is a reasoning tool for dealing with contingency. The formal aspect of the tool does not vary, but its application is dependent on assumption and measurement. Thinking that the results will be the same owing to the invariant formal aspect is a mistake. Results can never be more precise than measurements or more accurate than assumptions permit, no matter how rigorous the formal methods applied.

Statistical Modeling, Causal Inference, and Social Science
Yes, you can do statistical inference from nonrandom samples. Which is a good thing, considering that nonrandom samples are pretty much all we’ve got.
Andrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University

Dani Rodrik — The great globalisation lie

Third way evangelists presented globalisation as inevitable and advantageous to all. In reality, it is neither, and the liberal order is paying the price....
The fundamental thing to grasp is that globalisation is—and always was—the product of human agency; it can be shaped and reshaped, for good or ill. The great problem with Blair’s forceful affirmation of globalisation back in 2005 was the presumption that it is essentially one thing, immutable to the way that our societies must experience it, a wind of change which there could be no negotiating or arguing with. This misunderstanding still afflicts our political, financial and technocratic elites. Yet there was nothing preordained about the post-1990s push for hyper-globalisation, with its focus on free finance, restrictive patent rules, and special regimes for investors. 
The truth is that globalisation is consciously shaped by the rules that the authorities choose to enact: the groups they privilege, the fields of policy they tackle and those they lay off, and which markets they subject to international competition. It is possible to reclaim globalisation for society’s benefit by making the right choices here.…
A world economy in which these alternative choices are made would look very different. The distribution of gains and losses across and within nations would be dramatically altered. We would not necessarily have less globalisation: enhancing the legitimacy of world markets is likely to spur global commerce and investment rather than impede it. Such a globalisation would be more sustainable, because it would enjoy more consent. It would also be a globalisation quite unlike the one we have at present.
Longish article with lots of history. Worth reading all of.

Dani Rodrik's Weblog
The great globalisation lie
Dani Rodrik | Ford Foundation Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University

The Guardian: Rita de la Feria - There’s a simple way to stop big corporations avoiding tax. Here’s how

If multinationals had to pay their dues where they make their sales, the kind of activities revealed in the Paradise Papers would be a thing of the past

Companies can set up their headquarters in tax havens and then they become difficult to tax, also, countries end up competing with each other to offer the lowest taxes to attract companies, but in 2008 two professors suggested a solution, impose a type of sales tax on the products sold in a country related to the profit the companies make. It might put the price of products up a bit, but, hopefully, competition will bring them down again. 

In our globalised economy, where production chains are spread across the world and highly movable, it is difficult to determine under existing rules where and how the profits of big firms should be taxed. In effect, we can no longer properly identify the countries that have both the legitimacy and ability to tax those profits.

There is therefore only one long-term means of effectively taxing corporations: we must remove the incentives to corporate mobility for tax reasons. How to achieve that is the key question. For years, people have advocated the introduction of a common method of taxing corporations – but political agreement, even within Europe, has proved exceptionally difficult. The likelihood of achieving that global agreement seems extremely low.
In 2008 a paper by professors Michael Devereux at Oxford University, Alan Auerbach at the University of California, Berkeley, and Helen Simpson at Bristol University came up with a new solution: what if we taxed profits in the country where the customers are? Their idea was to tax corporations at the least movable point of the production chain, at a point that corporations could not shift or manipulate.
The most common tax avoidance techniques rely on one crucial premise: that moving your headquarters or activities will affect where profits are taxed. If your patents are located in a country with lower corporate income tax rates, then the income they generate will be taxed at lower rates; if your management activities are located in that country, most of your profits may be taxed there. What these avoidance schemes have in common is their reliance on mobility: moving can result in a lower tax bill.
If we taxed at the destination, or sales endpoint, there would be no benefit in moving headquarters or patent registrations to a lower-tax country. Because customers are relatively immobile, a destination-based tax would remove mobility from the equation. At a single stroke, we could almost completely eliminate tax competition and avoidance. Crucially, although international cooperation would make that more effective, it could still work if only one country unilaterally moved towards a destination-based corporate income tax.

April Rinne — What exactly is the sharing economy?

When I first attended Davos in January 2013, I asked everyone I met if they’d heard of the term “sharing economy.” Ninety percent of people said no, 5% assumed I was talking about barter exchange, and the remaining 5% acknowledged new technologies and peer-to-peer networks were enabling emergent business models. It was difficult to find anyone who had used Airbnb or BlaBlaCar. Later that year I co-founded the Forum’s Sharing Economy Working Group with other Young Global Leaders, with the goal of building awareness, visibility and expertise throughout the Forum’s communities.
Fast forward to 2017 and the reality is vastly different. Not only is the sharing economy in the news daily, it also has spurred a growing – and at times mind-boggling – list of related terms. To many people, the sharing economy and gig economy are the same thing. But in fact, almost nothing could be further from the truth.
Unpacking the terms
As the sharing economy has grown, it has become a victim of its own success. Some people have charged that much of today’s sharing economy is not really “sharing”, an allegation that is partly right. While on the one hand, there are many platforms that espouse the true spirit of sharing – underutilised assets and building community – on the other hand, increasingly there is “sharewashing” going on: companies latching onto the term because it makes them part of a hot trend. Who doesn’t want to conjure up notions of community and cooperation?...
So what is the sharing economy? And how should we distinguish among the various “new economy” models in the headlines? Here is a summary list that will clarify the confusion and provide guidance to companies, policymakers, individuals and investors alike:
Cutting though the BS around one of the latest buzzwords.
The sharing economy is not black and white: it is a spectrum, and it is increasingly crucial to understand its different shades. Ultimately it will become simply part of the economy, without special terminology, but we are not there yet. Entrepreneurs, journalists, governments, and (perhaps most of all) users of and participants in these new-economy platforms have a duty to be clear about whether and what we are, and are not, sharing.
Most people don't do nuance well.

The World Economic Forum
What exactly is the sharing economy?
April Rinne, Shareable Cities

Kristin Houser — Why robots could replace teachers as soon as 2027

Many professions, including education and health care, will become increasingly automated. This won't eliminate the need for humans, however, since the social element is also a vital factor in many fields, especially education, which involves socialization.

The problem inherent in this article is difficulty thinking outside the box, in this case the traditional classroom. That model is obsolescent, and technology will soon make it obsolete. Then we will look back on it and wonder why it held on for so long in spite of the obvious limitations in addressing individualization through personalization.

Individualization and socialization need to be balanced in order to develop well-rounded people that have an optimal opportunity to develop and express their full potential as individuals, group participants ("team-players"), citizens, and authentic human beings.

World Economic Forum
Why robots could replace teachers as soon as 2027
Kristin Houser | Senior Editor at Futurism

Lars P. Syll — The DSGE quarrel

Quote by Silvia Merler/Bruegel mentioning Lars, with a shoutout to Brian Romanchuk.

Lars P. Syll’s Blog
The DSGE quarrel
Lars P. Syll | Professor, Malmo University

More from Lars

Economic history — a victim of economics imperialism

Empirical economics and statistical power

Bill Mitchell — Britain doesn’t appear to be collapsing as a result of Brexit

Do you remember back to May 2016, when the British Treasury, which is clearly full of mainstream macroeconomists who have little understanding of how the system actually operates released their ‘Brexit’ predictions? The ‘study’ (putting the best spin possible on what was a tawdry piece of propaganda) – HM Treasury analysis: the immediate economic impact of leaving the EU – was strategically released to have maximum impact on the vote, which would come just a month later. Fortunately, for Britain and its people, the attempt to provide misinformation failed. As time passes, while the British government and the EU dilly-dally about the ‘divorce’ details, we are getting a better picture of what is happening post-Brexit as the ‘market’ sorts what it can sort out. Much has been said about the destructive shifts in trade that will follow Brexit. But these scaremongers fail to grasp that Britain has been moving away from trade with the EU for some years now and that process will continue into the future. I come from a nation that was dealt a major trading shock at the other end of Britain’s ill-fated dalliance with Europe. It also made alternative plans and prospered as a result. The outcomes of Brexit will be in the hands of the domestic policies that follow. Stick to neoliberalism and there will be a disaster. But the opportunity is there for British Labour to recast itself and seize the scope for better public infrastructure, better services and stronger domestic demand. Then the nation will see why leaving the corporatist, austerity-biased failure that the EU has become was a stroke of genius....
Bill Mitchell – billy blog
Britain doesn’t appear to be collapsing as a result of Brexit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Ralph Musgrave — What’s the optimum amount of national debt?

Roger Farmer is out with an argument for the optimal level of public debt being 70% of GDP. Ralph provides the MMT answer. It is nicely succinct.

MMTers have solved this one. Others are still floundering, in particular Roger Farmer in this NIESR article on the subject, is all over the place far as I can see (1). So I’ll run thru this vexed question for the umpteenth time....
Farmer bills himself as a Keynesian. Ralph reminds us of the answer Keynes himself gave to the question of public debt optimality and how to determine it.
So, to return to the original question, i.e. what’s the optimum amount of national debt or more properly, PSNFA? The answer is “whatever brings full employment”. And that very much ties up with Keynes’s dictum: “look after unemployment, and the budget looks after itself”. 

Tuesday, December 12, 2017

Edward Harrison — As the Fed meets, expect expansion through 2018, but problems thereafter


Credit Writedowns
As the Fed meets, expect expansion through 2018, but problems thereafter
Edward Harrison

Dustin Volz — Trump signs into law U.S. government ban on Kaspersky Lab software

This sets a precedence for banning products for national security reasons. It potentially has devastating implications for US tech companies that include backdoors for US intelligence agencies. This probably won't happen immediately but it is bound to happen over time as foreign nations, especially Russia and China, develop domestic capabilities. Being shut out of Russia would not be devastating perhaps, but being shut out of China would.

Foreign countries that the US designates as adversarial are already taking steps to isolate themselves from the US control international financial system that includes dollar hegemony, to counter the Western military alliances led by the US, and to guard against internal subversion aimed at regime change by controlling communications. China and Russia are in the lead on this under the rubric of multipolarism. They view unipolarism as the attempt of the US as in imperial power to impose its will on the rest of the world using hybrid warfare that included economic warfare.

Trump signs into law U.S. government ban on Kaspersky Lab software
Dustin Volz


Just think what they are worth now? This video is from 2013 but he must still be suffering.

If someone told you you just threw away over $6 million worth of bitcoins, well you wouldn't be too happy. You can imagine how James Howells from Wales felt when he discovered that he had thrown away his hardrive containing over 7,000 bitcoins. The value of Bitcoins has reached an all time high so now Mr Howells is frantically searching his local tip in the hope of retrieving his fortune

RICARDO VAZ - Yemen: a western-sponsored genocide

We soon intervened is Yugoslavia with our air force to take out the bad guys and put the war criminals on trail. The Western media cheered on Clinton and Blair for 'sending in the cavalry' and saving the innocents, but now Yemen is getting constantly bombed and millions might stave to death the western media under reports the tragedy. Why haven't we put sanctions on Saudi Arabia if we are the 'good guys' always intervening around the world to get the 'bad guys'? We got Saddam and Qaddafi -  although we had to kill hundreds of thousands before we rooted them out, and millions more have died since - and we nearly got Assad, although just as many innocent people died in the process, but there's only ever a brief mention about the 'wicked' crown prince Mohammad bin Salman

Almost three years have passed since Saudi Arabia announced it was intervening militarily, with its allies, in Yemen, to remove the Houthis (officially called Ansar Allah) from power after they had taken over the capital. Western analysts saw it as a bold move from recently-empowered (deputy) crown prince Mohammad bin Salman (MbS), weapons manufacturers and their political representatives were delighted. But what had been predicted as a swift military operation has turned into a humiliating stalemate. Unable to impose its will by force, Saudi Arabia and its bold prince have resorted to war crimes and collective punishment, imposing a humanitarian catastrophe on the Yemeni people.

The lack of media interest makes it seem like a crisis unfolding in slow motion. But that is only because outrage and compassion are now meant to be weaponised when they can be useful in justifying imperialist interventions. For the Yemeni people the agony is real and there is no escaping it. In what was already the poorest country in the region, the Saudi-led bombings of infrastructure and the blockade imposed on Yemeni ports have left millions on the brink.
According to UN estimates, 17 million Yemenis, more than 60% of the population, are in urgent need of food. Out of these, 7 million are facing famine. The destruction of infrastructure has also left 15 million without any access to healthcare and generated an unprecedented cholera outbreak, with 900.000 cases and thousands dead already. 50.000 Yemeni children have died in 2017 as a result of disease and starvation. There is no hyperbole needed, this is a humanitarian disaster that is beyond words. Only it is not a natural catastrophe. More than something that is being allowed to happen, it is something that is being deliberately imposed on the Yemeni people.

But the West wants to restore democracy in Yemen. 

In the beginning of the war we often heard that the war was about restoring Yemen’s legitimate, democratically-elected government. Dozens of journalists wrote that the backward kingdom of Saudi Arabia was launching a war to restore democracy without sensing that something was off. The articles usually mentioned that Yemen was emerging from decades of dictatorship under Ali Abdullah Saleh. Saleh had ruled Yemen with an iron fist, and had been a useful ally both for Saudi Arabia and the US, which has been drone-bombing everything in the vicinity of a cellphone that once belonged to an alleged terror suspect (3).
When massive protests starting in 2011 forced Saleh out, the US and the Saudis scrambled to salvage the situation. In the end they managed to get all parties, including the Houthis, to agree to a political transition. This included an election in which Abdrabbuh Mansour Hadi ran as the only candidate. So he is the legitimate president to be restored, but the media never mention that he had been vice-dictator for 20 years. One election with no other candidates and voilà, you get all the stamps you need from the western press.
What the articles also forget to mention is that Hadi’s term was supposed to finish in late 2014, and it was only after he did not deliver on political and economic measures that the Houthis seized power. Now, after almost three years of a Saudi war imposing death and misery on the Yemeni people on his behalf, who can refer to Hadi as being internationally recognised? What is that recognition even worth? And to add insult to injury, it seems Hadi is now allegedly under house arrest.
The Saudis latest gamble involved getting their former friend Saleh to turn against the Houthis (4). Given their long history of oppression at the hands of Saleh and the fact that there had been previous armed uprisings, this alliance was always going to be fragile. Saleh thought there was an opening, and Saudi air cover, for him to make a move and restore normal subservience to the northern neighbour. But the move backfired, Saleh ended up killed and, according to reports, the Houthis regained full control of the capital. Otherwise the media rehabilitation of Saleh as the man who restored Yemeni democracy would be in full-swing by now.

TASS — Every second citizen favors amending Russia’s Constitution — poll

More than half of Russians (52%) believe certain amendments should be introduced to the country’s Constitution, a survey conducted by the Russian Public Opinion Research Center showed on Tuesday.
"Every second Russian (52%) believes it is necessary to amend the country’s Constitution. Among the top issues, which, according to citizens, should be reflected in the Constitution, are wages, pensions, free health care and education," the pollster said....
The poll was conducted on December 8-9, 2017, with 1,200 Russians aged 18 and above interviewed over the phone. The maximum margin of error does not exceed 3.5% with a probability of 95%....
Every second citizen favors amending Russia’s Constitution — poll

Pat Lang — Robin Wright Admits the Borg Has Lost In Syria

US establishment refuses to accept reality.

Sic Semper Tyrannis
Robin Wright Admits the Borg Has Lost In Syria
Col. W. Patrick Lang, US Army (ret.)

At the Defense Intelligence Agency, Lang was the Defense Intelligence Officer (DIO) for the Middle East, South Asia and counter-terrorism, and later, the first Director of the Defense Humint Service. At the DIA, he was a member of the Defense Senior Executive Service. He participated in the drafting of National Intelligence Estimates. From 1992 to 1994, all the U.S. military attachés worldwide reported to him. During that period, he also briefed President George H. W. Bush at the White House, as he had during Operation Desert Storm.

He was also the head of intelligence analysis for the Middle East for seven or eight years at that institution. He was the head of all the Middle East and South Asia analysis in DIA for counter-terrorism for seven years. For his service in the DIA, Lang received the Presidential Rank Award of Distinguished Executive. — Wikipedia

See also

Fills in some detail that Col Lang omits.

Moon of Alabama
U.S. Surrenders On Syria - Resistance Turns Eyes On Israel

Thomas Piketty — Trump, Macron: same fight

It is customary to contrast Trump and Macron: on one hand the vulgar American businessman with his xenophobic tweets and global warming scepticism; and on the other, the well-educated, enlightened European with his concern for dialogue between different cultures and sustainable development. All this is not entirely false and rather pleasing to French ears. But if we take a closer look at the policies being implemented, one is struck by the similarities.
In particular, Trump, like Macron, has just had very similar tax reforms adopted. In both cases, these constitute an incredible flight in the direction of fiscal dumping in favour of the richest and most mobile.
Le Monde — Le blog de Thomas Piketty
Trump, Macron: same fight
Thomas Piketty | professor (directeur d'études) at the École des hautes études en sciences sociales (EHESS), associate chair at the Paris School of Economics, and Centennial professor at the International Inequalities Institute, which is part of the London School of Economics (LSE)

Diane Coyle — Management as a productive resource

The economic theory of "the firm" (representative firm) assumes homogeneity that may not be there, which widely differing results in output and productivity suggests in the case.
I’ve been browsing through Edith Penrose’s Theory of the Growth of the Firm, having read the biography by Angela Penrose, No Ordinary Woman. Published in 1959, it is an interesting narrative approach to the dynamics of individual firms, with plentiful examples from case studies. One can see that it was heading in a very different direction methodologically from mainstream economics, and hence why Penrose was taken up by business schools instead.… 
All of this reminded me very much of the recent World Management Survey work by Nick Bloom, John Van Reenen and colleagues looking at the importance of management quality for firm productivity. They write: “Economists have long puzzled over the astounding differences in productivity between firms and countries. In this paper, we present evidence on a possible explanation for persistent differences in productivity at the firm and the national level — namely, that such differences largely reflect variations in management practices.” Maybe Penrose was less puzzled than many.
The Enlightened Economist
Management as a productive resource
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Lars P. Syll — On the non-applicability of statistical models

Math is purely formal, involving the relation of signs based on formation and transformation rules. Signs are given significance based on definitions. Math is applicable to the world through science to the degree that the definitions are amenable to measurement and the model assumptions approximate real world conditions (objects in relation to others) and events (patterned changes in these relations). Methodological choices determine the scope and scale of the model, which in turn determines the fitness of formal modeling for explanation of real world conditions and events.

Contemporary science is chiefly about applying formal modeling to theoretical explanation that covers a wide enough range of phenomena worth explaining to be of interest. The scientific project is about designing useful models for explaining phenomena and also designing experiments to test the model against observation. This involves measurement.

A further challenge is identifying parameters that can be measured to produce data and constructing models based on assumptions of how parameters are related with respect to states and how they change over time.

Then, there are also presumptions that are not stated. For example, it is presumed that science is consilient and therefore, any theoretical explanation that violates the conservation laws is ruled out automatically.

Beyond that philosophical foundations relating to metaphysics, epistemology, ethics, social and political philosophy, philosophy of science, the philosophy of the particular discipline, etc., also come into play.

Quite evidently, there is a lot of room for mistake and slip-ups in the process of "doing science."

Formalization and data are not magic wands, and assuming they are leads to magical thinking. Formalization is only rigorous — necessary based on application off rules — with respect to models. How models relate to what is modeled is contingent and depends on data. Data is dependent on observation and measurement.

All this is difficult enough in the natural sciences, but more difficult in the life sciences and much so in the social sciences.

The philosophy of economics, or foundations of economics if one prefers, needs to take all this into consideration and there needs to be lively debate about it. Is there?

Lars P. Syll’s Blog
On the non-applicability of statistical models
Lars P. Syll | Professor, Malmo University

Monday, December 11, 2017

Bill Mitchell — US labour market steady but low wage bias continues

On December 8, 2017, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – November 2017 – which showed that total non-farm employment from the payroll survey rose by 228,000 in November, slightly less than the October net increase. While the payroll data showed a fairly strong employment outcome, the Labour Force Survey data estimated a weaker rise in employment (57 thousand) in November. The labour force was estimated to have risen by 148 thousand after October’s results showing a sharp contraction. The BLS thus estimated that unemployment rose by 90 thousand and the official unemployment rate rose slightly from 4.07 to 4.12 per cent. There is still a large jobs deficit remaining and other indicators suggest the labour market is still below where it was prior to the crisis. I also update my ‘low-wage jobs bias’ to November 2017 and conclude that in the recovery, there has been a bias towards low wage and below-average wage job creation.
Bill Mitchell – billy blog
US labour market steady but low wage bias continues
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Nicholas Wilson - Mt Ethical - Whistleblower Takes On The Dirtiest Bank In The World (Full Interview)

Nicholas Wilson is a British solicitor who became aware of financial irregularities at HSBC bank worth hundreds of millions of pounds. He fought a 13 year legal battle to get justice and compensation for HSBC customers that the bank had overcharged. Eventually HSBC got a £4 million fine, in other words, they got away scot-free. But Nicolas Wilson also uncovered massive fraud, more financial irregularities, and money laundering rackets going on at HSBC and this video shows how the baby faced David Cameron, the British and American governments, and the BBC were also involved in the cover-up - 'too big to fail, too big to jail.'

This video and Nicholas Wilson site called, Mr Ethical, seems shows that a significant section the British ruling elite are steeped in this sort of crime and that capitalism is not how they made most of their money. The sordid world of £Billions of arms sales to Saudi Arabia, the BBC and British newspaper cover-ups, the British financial regulators and the British justice system complicity - well, it's all here. But also, how the UK Guardian was involved in the massive cover-up as well because the HSBC is its biggest advertising customer. And the Guardian's top left wing reporter, Owen Jones - who supported Jeremy Corbyn for a while then spectacularly turned against him - was also found covering up for HSBC bank.

Amber Rudd shuts down Nicholas Wilson's speech about HSBC and Saudi Arabia

At a hustings in Rye on 3 June, where I was standing as an independent anti-corruption parliamentary candidate, a question was asked about law & order. Home Secretary Amber Rudd, in answering it referred to the Manchester terrorist attack. I took up the theme and referred to HSBC business in Saudi Arabia. It is widely thought she was censoring me for discussing arms sales to Saudi. But if you watch carefully she starts to move to write her note at my mention of HSBC and before I have mentioned Saudi Arabia.

Nicholas Wilson: Mr Ethical - Whistle-blower and anti-corruption campaigner

Zero Hedge — China Unveils Plan To Combat Trump Tax Reform: “We’ll Have Tough Battles"

China needs a quick injection of MMT. Follow Russia's lead and float that sucker.

Zero Hedge
China Unveils Plan To Combat Trump Tax Reform: “We’ll Have Tough Battles"
Tyler Durden

China Daily — High-quality growth will be key word in top economic meeting, say experts

The GDP growth target for next year might be set at 6.5 percent amid China's transition from high-speed growth to high-quality growth, Securities Daily reported Monday, citing a partner with Ruihua Certified Public Accountants....

Jiang Chao, chief economist with Haitong Securities, said that high-quality growth means that high-speed growth will not be a goal anymore and the target for economic growth rate in 2018 will still be downplayed and the country will not go back to investment-driven growth.

High-quality growth will be key word in top economic meeting, say experts
China Daily