• James Galbraith ( James K. Galbraith )
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• an essay Galbraith wrote in 2009 in the NEA Higher Education Journal, entitled "Who are these economists, anyway?"
• The End of Normal by James Galbraith
• https://www.kirkusreviews.com/book-reviews/james-k-galbraith/the-end-of-normal/
• Following the crisis of 2008, economists scrambled to “explain” the financial meltdown, variously blaming the government, banks or income inequality for the most severe setback since the Great Depression. Almost all have offered prescriptions for restoring economic health; almost all presume as normal a growth rate that, but for a blip in the 1970s, has persisted since the end of World War II. Galbraith (Government/Business Relations/Univ. of Texas; Inequality and Instability: A Study of the World Economy Just Before the Great Crisis, 2012, etc.) dissents. Throughout his discussion, he slaps around economists from the left and right, chiding them for their insularity, their reluctance to widen their perspective and their unwillingness to concede that their theoretical models rest on radically transformed ground. We face a far different future, he insists, with the world economy no longer under the financial or military control of the United States and its allies, with energy markets costly and uncertain, new technologies destroying more jobs than they create and the private financial sector no longer supercharging growth. Under these new conditions, preserving post-WWII growth rates is impossible. Instead, the most we can hope for is an era of “slow growth,” engineering the economy “to grow at a low, stable, positive rate for a long time” and adjusting ourselves “materially and psychologically to that prospect.” Some of Galbraith’s remedies are likely to draw fire—increase social services, decrease the scale of the military, increase the minimum wage—but his forceful prose and admittedly provocative suggestions invite argument. General readers may find some of his discussion a bit too insider-y, but students of economics will enjoy the robust, fearless rebuke he delivers to some of the discipline’s giants.
• increase social services, decrease the scale of the military, increase the minimum wage
• http://seekingalpha.com/article/2717925-book-review-the-end-of-normal-by-james-k-galbraith
• Galbraith believes, instead, that slow growth will be a permanent state of affairs and therefore advocates a series of palliative measures to make the adjustment tolerable. If we want to use medical analogies, Galbraith is advocating a hospice, the modern Keynesians are advocating testosterone therapy, and [Ray] Dalio is advocating rehab. I find Dalio most persuasive, but I think that a shot of testosterone in the form of fiscal and monetary stimulus is needed as well.
• http://www.amazon.com/The-End-Normal-Crisis-Future/dp/1451644922
• head wind against economic growth: (1) the cost of energy resources, (2) military spending, (3) the impact of digital technology on employment, and (4) financial fraud
• (1) the cost of energy resources - ([ very low cost energy has been subsidizing the U.S. economic growth; of course, this growth has not been distribute evenly across the economy ]),
• (2) military spending - ([ military spending generate economic activities, however part of the military products and services is an economic blackhole, the spending could be diverted (redirected) to improving quality of life, lower costs of living, and set a baseline for standard of living to a majority sector of society ]),
• (3) the impact of digital technology on employment - ([ in general, technology displaced labour at a faster rate than creating new career track positions in the economy; the most dramatic example can been seen in food & animal growing industry in the United States ]), and
• (4) financial fraud ([ yes, this is true; the case is clear ])
• see [[Hyman Minsky]]
• debt accumulation or the expansion of credit in the financial sector, beyond a certain point, tends to encourage following type of borrowers:
• insolvent debt: hedge borrowers, speculative borrowers, and Ponzi borrowers.
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• Richard Koo
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• Richard Koo - A "Balance Sheet Recession"
• https://www.youtube.com/watch?v=HaNxAzLKegU
• https://www.youtube.com/watch?v=HaNxAzLKegU
• Uploaded on Jun 8, 2010
• https://en.wikipedia.org/wiki/Balance_sheet_recession
• https://en.wikipedia.org/wiki/Kondratiev_wave
• old school : when current paradigm and mindset stop working : how would you know :
• Diagnosing the Causes of Economic Crises
• https://www.youtube.com/watch?v=E0sRFEOGDmc
• https://www.youtube.com/watch?v=E0sRFEOGDmc
• Published on Apr 10, 2013
• 33:36
• trauma toward debt, Japan is traumatize from spending
• if you tell a lies 100 times, then maybe, it might work
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• debt Tue Sep 8, 2015 6:34am EDT
BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble said on Tuesday that central bank policy could do little to help the economy when people and states take on too much debt.
"Too much growth in credit does not solve any structural problems but leads to financial and debt crises. Central banks' monetary policy measures can do little to change this in the long run," Schaeuble told the German parliament.
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Charles Murray comment about the financial meltdown :
"In fact, I am so naïve about economics that I continue to think that we have a financial meltdown because the federal government, in its infinite wisdom, has for the last two administrations aggressively pushed policies that made it possible for clever people to get rich by lending money to people who were unlikely to pay it back."
http://www.hfcmn.org/userfiles/The%20Happiness%20of%20the%20People.pdf
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• http://www.amazon.com/Other-Peoples-Money-Business-Finance/dp/1610396030
• tax and regulatory arbitrage (eg. avoiding taxes on cash held overseas but still paying dividends)
• The two global banks with the largest derivatives exposures are J.P.Morgan and Deutsche Bank - the former is at around $70k billion and the latter at $55k billion. Most of these are hedged.
• "The goose that lays golden eggs has been considered a most valuable possession. But even more profitable is the privilege of taking the golden eggs laid by somebody else's goose. The investment bankers and their associates now enjoy that privilege. They control the people through the people's own money." (From Brandeis' Other People's Money and How the Bankers Use It, 1914)
• on Pages 259-260, noting that the complexity of modern finance "has been designed, and has operated, principally to benefit financial intermediaries rather than the users of financial services."
• Epilogue, "The Emperor's Guard's New Clothes."
• http://www.nytimes.com/2015/10/11/books/review/other-peoples-money-by-john-kay.html?_r=0
• John Kay: “exchanging bits of paper cannot make profits for everyone,” it is very likely that much of finance’s profit “represents not the creation of new wealth but the sector’s appropriation of wealth created elsewhere in the economy.”
• http://www.johnkay.com/2015/06/15/other-peoples-money-introduction
• http://www.oregonlive.com/opinion/index.ssf/2015/11/dangers_of_other_peoples_money.html
• The right way forward, he argues, is to interrupt the flow of subsidy. Do that, and market forces will start to nudge finance in the right direction. This sounds straightforward enough but it has radical implications. It isn't just a matter, for instance, of requiring banks to hold more capital -- though that would be a good place to start. The problem is that, in Kay's view, the amount of capital needed to make banks safe, and hence to deny them the implicit subsidy of government protection, is probably beyond the market's capacity to provide.
• "[The] perpetual flow of information [is] part of a game that traders play which has no wider relevance, the excessive hours worked by many employees a tournament in which individuals compete to display their alpha qualities in return for large prizes. The traditional bank manager's culture of long lunches and afternoons on the golf course may have yielded more information about business than the Bloomberg terminal."
• John Kay: "Other People's Money" | Talks at Google
• https://www.youtube.com/watch?v=rkhxMdilxJE
• https://www.youtube.com/watch?v=rkhxMdilxJE
• financialization - people trading asset with each other
• 28:27
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