Should there be an Official Babble Economics section?

26 posts / 0 new

Mon, 2012-11-19 20:04

Max Horkheimer Max Horkheimer's picture

Now I know that there is a Rabble economics section and you can tag babble posts under an Economics issues page, but should it not be given more priority for babble discussion? If I go to the babble page, there is no category section I can see with this heading.

Second, why I'm asking is because I do have some questions, and I would like to just read through a bunch of good points by other people in one neat little category section I can go to.

Okay so those are my general questions and I would like some feedback on that.

Next, I have some questions pertaining to economics. So I have been trying to understand the subject better, feeling its quite necessary on top of awareness of cultural and environmental problems, etc. In my search, I've found Rolling Stone's Matt Taibbi who went from not much understanding the subject of finance to being a great help in organizing and simplifying concepts made obscure or deceitful such as concerns the bank bailout and lead up of rampant fraud in the mortage securities market. I've also found Real News Network's Economy section to be engaging, especially former Savings and Loans regulator Bill Black, who explains that he constantly has to teach professionals in law the workings of finance, a subject they typically aren't formally trained on but must acquire in order to investigate fraud. Between these two there is an understanding that one can learn finance and that one can also effectively teach finance to people who aren't familiar with the field if the subject matter is simplified and explained in terms people understand.

With that said, I think rabble/babble users could afford to more formally engage in this dialogue themselves.

Next, I want to talk about Bill Black's theoretical/analytical perspective on the economy and a field of economists to which he belongs. This approach to economics is called Modern Monetary Theory (MMT) and involves from what I can tell some evaluation of sectoral balances, meaning basically graphing out the sectors of the economy into a few or even just two sides for simplicity. The economy in macroeconomics is sometimes represented in a flow formula where total GDP equals total expenditure which equals total income. When the inner dynamics of this basic equation are looked at, this equation can be further broken down such that:

Private Surplus (Savings minus Investments) = Government Deficits (Taxes minus Government expenditures) + Current Account Balance (Exports minus Imports)

What this looks like on a graph seems to suggest that Government Deficits often add equally prosperous Private Sector Surpluses. There appears to be a diametric relationship between household income for that matter and government deficits. This runs starkly counter to the ongoing austerity narrative we hear so much about.

I want to hear what people think.

Here are some graphs and links.

MMT economists dismiss inflationary concerns about any sovereign country that is ussuer of its own fiat currency (little complicated terminology that sounds more complex than it is, meaning the money is owed internally to the country and is not subject to the same interest rate loans that countries that don't produce their own currencies are subject to, and fiat basically means the currency is not pegged to any real reserves like gold, etc., so a country that uses fiat can produce as much or as little as it needs, without proportional constraints to some actual valued commodity like gold). MMT economists argue that a sovereign country that issues its own fiat currency can produce as much money as it needs to meet deficit requirements meant to flow into the private sector and household incomes. There are other finer details, and that's why I'd like feedback, maybe to enlighten me a little here, but nonetheless, some graphs.

http://fictionalbarking.blogspot.ca/2011/12/eliminating-household-sector...

The above graph is Canada's Sectoral Balance, and I saw some pretty awful ones for Greece and Italy, probably more detrimental because they are not issuers of their own currencies and are subject to harsh austerity measures under odious loan agreements for that money.

Stephanie Kelton for the MMT school did a good piece that has the graphs in the video if you watch the video through. The graphs are closer to the end of the video if you want to just fast forward to find them. Here is the link:

https://www.youtube.com/watch?v=5vQOk1VOU6k&noredirect=1

Also here are the sectoral balances for the United States, because it is at the center of some huge shifts in economic thinking.

The above image came from this link, but can be found discussed on other MMT sites:

http://mikenormaneconomics.blogspot.ca/2011/08/sectoral-balances-2nd-qua...

And finally, here are a few additional sources, discussing the subject matter,

https://www.youtube.com/watch?v=mKpvJhcnAU0&feature=relmfu
(This guy Marshall Aurbach has a good piece comparing Ontario and Quebec to Spain and Portugal at 26:00 mins in, but because of fiscal sovereignty issues, Greece suffers under a false union that doesn't help its member states fairly).

https://www.youtube.com/watch?v=Yd6rGbO-ruU
Above link is Stephanie Kelton)

https://www.youtube.com/watch?v=JZQqrxHGcoQ
(This economist is Michael Hudson)

https://www.youtube.com/watch?v=utOGgyTMJKE&feature=relmfu
(This piece is by Bill Black, and Real News has tons by him, title here should actually read "How To Steal Ten Billion Euro")

And here's some non video stuff, just material to read on MMT:

http://pragcap.com/paul-krugman-sort-of-does-sectoral-balances

http://ralphanomics.blogspot.ca/2012/02/alternative-sectoral-balance-equ...

http://heteconomist.com/sectoral-balances-and-keynesian-causation/

http://www.levyinstitute.org/pubs/conf_june10/Conceicao_2.pdf

Hey Thanks for giving me your time, and please please lets consider formally organizing our economics section better,

Issues Pages:

Economy

Mon, 2012-11-19 20:12

Max Horkheimer Max Horkheimer's picture

I said Greece in the above after mid sentence talking about Spain and Prtugal. Greece should read Spain aor Portugal, but in actuality Greece and Ireland and Italy could also have been included here in the comparison model. Sorry if it read weird. :P

Mon, 2012-11-19 21:41

Unionist

What about stock tips?

Mon, 2012-11-19 22:00

Max Horkheimer Max Horkheimer's picture

In reference to any of material in a general babble economics section, sure, you can ask about stocks and tips even, I see no reason necessarily why not. Keep in mind that this is what pension fund managers are doing all the time, etc. I have on another post suggested that more active public awareness of the financial side of things could help with a public understanding of how the economy works, what companies are involved, etc, which would enable people to make better public decisions about where they would like Canada to head into the future.

Separately though, I would still like to get some feedback on the MMT stuff.

Tue, 2012-11-20 00:04

Catchfire

I thought economics is already categorized under babble banter. And evidently, so did you!

Tue, 2012-11-20 01:01

Max Horkheimer Max Horkheimer's picture

But the way it is organized in the bable section is merely as tags, its not really organized. There's no good overview of the kinds of argumentation employed, and I think to some extent that is because of the scattered nature of the babble section of Rabble. There could afford to be an Economics title heading on the babble page is what I'm referring to. And on a general note, more economic analysis needs to be given, ie in terms of macroeconomics, finance etc.

Tue, 2012-11-20 01:04

Max Horkheimer Max Horkheimer's picture

Also what do you think about these economists analysis? What are your opinions on MMT?

Tue, 2012-11-20 03:40

bagkitty

Unionist wrote:

What about stock tips?

Oh I have so been waiting to add this... (I used to work in financial printing, an adjunct industry to the whole sorry mess that is "The Market" - we had to take secrecy oaths and all sort of crap)

Friend(s) of bagkitty: "Hey, you probably have inside information, got any stock tips for me?"

Bagkitty: "Why yes, strangely enough I do. Never invest in the stock market. Invest in drugs - the drug business is much more honest... on a basic level both the drug seller and drug purchaser are getting what they want (respectively, money and drugs), you can look your kids in the eye and tell them you are providing a real service. At the end of the day, if you have even a trace of a conscience, you will feel much better knowing you have taken the high road and gotten into the drug trade rather than sullying yourself in "The Market".

Tue, 2012-11-20 06:05

Left Turn

Isn't it standard practise to post threads about economic theory to the labour and consuption forum, to ensure that such discussions maintain a pro-worker bias?

As for economic news, this has been easily covered in one of the two natonal forums, the international forum, or one of the regional forums, as apropriate.

A stand alone economics forum would be a step backwards given the level of political consciousness on babble, and as such I'm opposed to the idea.

Tue, 2012-11-20 08:39

#10

ygtbk

Max Horkheimer wrote:

Separately though, I would still like to get some feedback on the MMT stuff.

The book at the link:

http://books.google.ca/books/about/Understanding_modern_money.html?id=9Q...

(which I suspect you can find as a free download somewhere) describes MMT pretty clearly. I don't buy the full theory, but the acronym TWINTOPT (That Which Is Necessary TO Pay Taxes) nicely captures a good chunk of the theory.

Tue, 2012-11-20 09:53

#11

6079_Smith_W

I don't see a section on stock tips and investment strategies as appropriate.There are enough places on the internet that specialize in that already. And while it may be useful, it is not specifically progressive. Though I think there are progressive ways of approaching it, and realistically it is going to be part of our economies for some time to come, it is part of a system which is particularly un-progressive.

Something on the economy as a whole? Or investment and other economic means of supporting progressive ventures? Sure. But that is more like a subject for one thread rather than an entire section. I'd say it fits nicely into labour and consumption (perhaps there is a reason for it after all), or canadian or international affairs.

Tue, 2012-11-20 10:14

#12

6079_Smith_W

But if you want a hot stock tip, here's something that has been a moneymaker for us Saskatchewan investors... I mean residents:

http://www.thestarphoenix.com/business/Sale+could+Sask+120M/7572647/stor...

http://www2.canada.com/saskatoonstarphoenix/news/local/story.html?id=601...

And there was a great interview with Brad Wall last week. When someone pressed him on why he wasn't going to sell off existing liquor stores you could actually hear him gritting his teeth when he responded , "because we said we wouldn't".

Tue, 2012-11-20 12:12

#13

Max Horkheimer Max Horkheimer's picture

Okay, now I would perhaps say that stock tips in and of themselves with no reference point to the ethical value of those stocks may in fact pose a problem. I understand that there are a great many things in the world which can make someone some cash, but are not necessarily ethical ventures. I would say that understanding stocks perhaps has more of an importance in the way of understanding their relation to the actual world. I would like to see a public more savvy about knowing why some bad things make money than to know separately that bad things happen in the economy and that one can also make some money. The interrelation between the deed and the profited greed would be useful to have drawn out for a number of stocks, securities, derivatives, etc, all that crazy terminological stuff that could be simplified if we tried.

Now as to where to put an Economics section and to say that it is best fitted in the Labour section or the NAtional or International gets right to my point, even in these replies there is a variety of possibly places to fit an Economics section into, but there is still a vague nature about where it should be is because economics is bigger than any of these said fields, and we should want to make it more readily able to be found. Not everyone understands that economics is a labour issue and then therefore is housed within labour. Would it not be more wise to have a separate Economics section under this page http://rabble.ca/babble and then in that section explain the connections to labour instead of having people grasp at straws when labour brings up economics?

Besides, already in this post there are a few different suggestions for where the subject apparently exists, but in actuality its all over the place sporatically on babble, you can do a search for economics and economic related issues, but this requires a reader who already knows what they are looking for somewhat, instead of providing outreach for people who aren't as clued into the importance of the subject. That of course is not the only reason, having a solid separate page under the general babble section would also foster a better hub for discussion on the topic. Are you honestly telling me with movments like Occupy that people aren't interested in getting more serious and organized when it comes to the very central issue of economic matters, and that it shouldn't deserve its own section to help encourage a more engaging discussion?

Finally, stocks should be given context, and in actuality from y perspective, I'm probably a lot more interested in being critical of these businesses, for we produce a lot of awful environmentally damaging stuff to begin with, and some of what causes that like some mining activities make a hefty sum, so context important but more important to critically approach stocks than to list your favorite ones.

Tue, 2012-11-20 12:19

#14

Max Horkheimer Max Horkheimer's picture

Thanks again ygbtk,

I really appreciate your suggestion of reading Wrandall Wray's "Understanding Modern Money." I've seen the book and thought about purchasing it. I'm pretty sure I saw it suggested on http://neweconomicperspectives.org/ and it would probably help a lot. I'll do what you recommend and grab it.

Tue, 2012-11-20 12:25

#15

Max Horkheimer Max Horkheimer's picture

My problem with the money motive in Finance can be illustrated if you are looking into Socially Responsible Investments (SRIs). I looked into these and found very seemingly lax standards, ie: investing 2% in community development, such as Meritas does, which also considers itself environmentally responsible but yet invests hugely in Enbridge, hmm. I found David Suzuki's website sourcing Meritas as an ethical environmental investment fund option but saw what a shotty deceit this was.

Don't necesarily want to trash all of Suzuki, but here I think there is a point to be made about his sound mutual fund options.

Tue, 2012-11-20 12:28

#16

Max Horkheimer Max Horkheimer's picture

I realize Suzuki did a lot to draw attention to environmental destruction so I'm not an idiot here, I just couldn't invest in Meritas though he says its a fine idea. You get that right?

Tue, 2012-11-20 13:04

#17

Max Horkheimer Max Horkheimer's picture

I think another disctinction between talking about economic matters like how budget cuts affect teachers, etc are important, and that kind of is what goes on in some of the labour discussion posts, but there does seem to be lacking a macroeconomic approach in a lot of these cases. In a separate Economics section there would be more space and organization within which to discuss macroeconomics, which goes a long way for placing school finance problems and teacher strikes for example into a greater picture or worldview.

Macroeconomics is the tie that binds, the keystone, and the linchpin when employed in a neoliberal manner.

Tue, 2012-11-20 13:26

#18

Max Horkheimer Max Horkheimer's picture

Smith_W said:

But if you want a hot stock tip, here's something that has been a moneymaker for us Saskatchewan investors... I mean residents:

http://www.thestarphoenix.com/business/Sale+could+Sask+120M/7572647/stor...

The link iteslf explains:

REGINA -- In what will be its first privatization of a Crown corporation, the Saskatchewan Party government is planning to sell off 60 per cent of Information Services Corp. (ISC) to its 300 employees, Saskatchewan residents and private investors for up to $120 million.
ISC, which was created by the former NDP government in 2000 to automate the land titles system, was a chronic money loser in its early days, but has become profitable in recent years, posting profits of more than $22 million in 2007 and 2008, more than $15 million in 2009 and 2010, and $17.2 million in 2011.
In addition to the land titles registry, ISC has taken over personal property and corporations registry functions from the Ministry of Justice, vital statistics from Health and other functions from Finance, Workers' Compensation Board and other government agencies. But the Crown corporation was never able to market its expertise for developing and managing automated registry systems outside the province.
Don McMorris, minister responsible for ISC, said the government contracted RBC Capital Markets to review the market potential of ISC and provide a valuation of the corporation as a publicly traded company. Based on an estimated total market value of $180 million to $210 million, RBC said the province could generate $90 million to $120 million from the sale of 60 per cent of ISC.

This I guess would be an example of a stock option that has wrested public profit for private. Lots of functions this corporation partakes in. The value of the immediate up front cash taht the government can use for other projects, or cutting the deficit. But I'd want to know more background to the nature of these agreements, if deficit policy is at the core of it, which could be a problem worth looking more closely at.

Thanks,

Tue, 2012-11-20 14:53

#19

Caissa

Is this a monologue?

Tue, 2012-11-20 15:30

#20

6079_Smith_W

Max,

It was a joke. Dark humour, actually, since I favour public ownership and am not all that interested in seeing our crown corporations - particularly profitable ones - sold off. If the Saskatchewan government felt the need to generate more revenue they might think twice about the firesale royalty rates they are charging - yet another way that private investors are making money off our common resources.

Look. I don't think investment is entirely a dirty word. As someone who is self-employed and has no pension I had better be doing something if I don't want to be earning a living with a tin cup when I am no longer working. So yes, I have a few investments.

But to say we need an economics and investment section is rather like saying we need a military and armaments section. Yes it is something which progressive politics touches on, and one could say that it is something even progressive states need to survive in our current climate.

But giving it its own section might give some the impression that it is a progressive force. It is not. If anything, it is a major part of the problem. Want another example?

http://www.wdm.org.uk/stop-bankers-betting-food/barclays-profiting-hunger

Tue, 2012-11-20 16:38

#21

Catchfire

Just for the record, Max. babble has a labour section instead of an economics section. We won't be changing that, since it dovetails with the main site too. Would you like me to move your thread there?

I can't speak to the detail you've offered here, since I don't know anything about it.

Tue, 2012-11-20 18:46

#22

Max Horkheimer Max Horkheimer's picture

As to Catchfire, who wrote,

In response I would say, sure move it there and lets see if the discussion builds up more steam, from there I will continue my inquiries into macroeconomic analysis and it deserving its own focus.

I just feel economic policy has been not receiving its fair share of attention amidst stories about disappearing bike lanes, seminar programs for burnt out activists, and whatever else rabble/babble goes on about sometimes. RIght now fav foods and swears post and others of that calibur are a little too irrelevant in that fluff news content regard, you catch what I'm saying about something more serious to discuss that merits a little bit more of public's awareness than burried in some page about fave foods?

Maybe putting this in Labour is a step in the right direction, but farther it should go.

If you can Catchfire, please go ahead and move this whole thread there.

Thanks!

Tue, 2012-11-20 18:48

#23

Max Horkheimer Max Horkheimer's picture

Also Caissa, I don't really want this to be a monologue, that's why I'm asking for more attention and input from others!

Tue, 2012-11-20 18:49

#24

Max Horkheimer Max Horkheimer's picture

6079_Smith_W,

I think you are making a good point about the necessity of some investments perhaps, but its not my emphasis and from what I can tell not yours either. But to say that investment is not necessarily a dirty word and then to go one sentence or two later saying to give economics its own section is to give the impression that it is a progressive force when it is not, sounds like backtracking on what you just stated.

There are many different economic arrangements, from capitalist to socialist to communist with lots of variations within. To say that economics is not a progressive force is like saying trade is intrinsically not a progressive force or something like that. It is like food, we need it to live, but we can change our diets -- its like saying food is intrinsically bad rather than certain diets, etc, you see my point.

Marx studied economics, to talk about austerity is to talk about economics whether one is dancing around the issue or not.

And about the military and armaments section, the answer is definitively yes, we need that section too, its called foreign affairs. Its what Noam Chomsky focuses on, without being a pro gun nut pre-emptive war hawk, he just helps break down the evil for people. Yves Engler does his own military and armaments studies for Canada's foregn affairs -- and he provides a lot of insight, so I would disagree with you suggesting people opt out of studying the military and armaments on that note.

In the same way, lets approach economics like this.

Wed, 2012-11-21 15:12

#25

Catchfire

Actually, Max, perhaps you had better just post a new thread there about your MMT proposals. The question in the OP has been asked and answered. This way you can begin your conversation on a more specific note.

Thu, 2012-11-22 01:43

#26

Max Horkheimer Max Horkheimer's picture

Thanks, Catchfire, I think I will do just that, and again, thanks for not heckling, disagreeing on points but still being agreeable and encouraging dialogue. I realize there are a lot of different perspectives on economics after all, and I am only a novice, simply parroting some good sounding points I've heard from credible progressive individuals and organizations.

I'll start a new thread, try and engage with the public anew, and see if it doesn't end up dissapointingly like people just talking past each other, ridicululing the other without addressing the specifics of the other person's points.. its somewhat happened here, and its I gather what people are referring to when they talk about the fragmented left, and something I've witnissed in the past participating in one Marxinst group at a protest only to find that group being attacked and shouted at by another Marxist group, I think Bolshevik idealists actually, but whatever, the bloodthirsty antagonism left me feeling viscerally disappointed of this sort of bias, bigotry and bullying. You know, just on this note, I would like to say thanks to those who have spoken like civil people, being decent and encouraging others to learn through positive reinforcement not the negative kind (ie: disagreeing with me but trying to win me over reasonably and not attack me with blind anger, which generally stunts people's interest in whatever the f#@k you might have been talking about). This is something Chomsky has encouraged the progressive left to consider when they were constantly insulting the Tea Party, that there's something unhealthy and anti-social in approaching people like they are free to kick around and insult and it doesn't affect things, that your point is better and will win the day if the "other side" sways to agree with your side or not. In actuality, winning with reason is the only way, its less fireworks sometimes, but its solid foundational stuff, unlike insults.

Just something to consider, and yes thanks again for your time Catchfire,

I'll start a new post shortly.