Economy Thread

[JimmyJames 12271]

30 minutes ago, Anastasis said:

It doesn’t have to be complicated. Maybe just a little less sticking our dick in other people’s mashed potatoes, and a few less cluster bombs to dictators so they don’t end up getting dropped on a school bus full of brown kids. 

Shit. I’m agreeing with you.

Time for more self reflection I guess. 

[BradInATX 9208]

Too often people confuse an alliance with friendship. It’s difficult to be someone’s friend when you’re paying them for protection. 

You should have paid them more. But thanks for sharing your experience. It explains a lot about you. Maybe Chrispy with three underscores will finally get the acceptance he seeks.

[Anastasis 23485]

10 hours ago, JimmyJames said:

Shit. I’m agreeing with you.

Time for more self reflection I guess. 

Remember when the 4th amendment was one of our loftier ideals. Yeah. Me neither. 

[David Dennison 18946]

On 12/7/2019 at 11:23 AM, Chrispy_ said:

The world is a prison yard and we’re the shot caller. At least for now. So pay up bitches. 

Payback will be unpleasant.

[Bullneck 19206]

On 11/8/2018 at 9:33 AM, Zavala said:

It's kind of central to American politics. The GOP used to be the party of the elites, now with Trump they are trying to become the party of the  now shrinking middle class. The reverse has happened with the Democrats, now they are becoming the party of the lowest and highest wealth classes of people. 

Where does everyone see the economy going in the next 5 or 10 years?

Any opinions on this video?

 

Did you really post a thread on how the US economy works and use a Russia Today video?  

[zork 629]

 

Quote

...

Across America, total personal income increased in 3,019 counties, or 97% of the total, and decreased in just 2.9%, according to estimates released by the Bureau of Economic Analysis. That includes wages, proprietors’ income, dividends, interest, rents, and government benefits by county residents.

On a per-capita income basis, which factors in the change in population, 2018 marks the largest share of counties with a positive increase since 1981, based on a Bloomberg analysis.

Widespread Growth

Per capita income grew in the greatest number of counties since 1981

...

https://www.bloomberg.com/news/articles/2019-11-29/richest-u-s-counties-getting-wealthier-from-pitkin-to-teton

... Economy Stupid ...  -Carville

[Hugo Stiglitz 23367]

Good to hear our elaborate pyramid scheme of an economy is still convincing dumb poor people that everything is going great!  

[bernorange 8363]

Quote

The World Bank has warned the largest and fastest rise in global debt in half a century could lead to another financial crisis as the world economy slows.

The 'Global Waves of Debt' report looked at the four major episodes of debt increases that have occurred in more than 100 countries since 1970 — the Latin American debt crisis of the 1980s, the Asian financial crisis of the late 1990s and the global financial crisis from 2007 to 2009.

The bank said during the fourth wave, from 2010 to 2018, the debt to GDP ratio of developing countries has risen by more than half to 168 per cent.

That was a faster increase on an annual basis than during the Latin American debt crisis.

Problematically, the rise in debt has been across both private companies and governments across the world, amplifying the risks if there is another global financial crisis.
...

More:  https://mobile.abc.net.au/news/2019-12-20/world-bank-issues-global-debt-warning/11819542

Debt doesn't matter (until it does, and then it matters a lot).

[Biff Tannen 45733]

2 minutes ago, bernorange said:

More:  https://mobile.abc.net.au/news/2019-12-20/world-bank-issues-global-debt-warning/11819542

Debt doesn't matter (until it does, and then it matters a lot).

[bernorange 8363]

[Bozo_Casanova 26549]

4 minutes ago, bernorange said:

More:  https://mobile.abc.net.au/news/2019-12-20/world-bank-issues-global-debt-warning/11819542

Debt doesn't matter (until it does, and then it matters a lot).

MMT: but not if everybody plays along, which of course they do, because we will pay them to, with money we borrow from them.

[washparkhorn 9939]

Ahh . . . the World Bank. Good read on the World Bank and the IMF (read it all):

Quote

BONNIE FAULKNER: If a country takes out an IMF loan, they’re obviously going to take it out in dollars. Why can’t they take the dollars and convert them into domestic currency to support local infrastructure costs?

MICHAEL HUDSON: You don’t need a dollar loan to do that. Now were getting in to MMT. Any country can create its own currency. There’s no reason to borrow in dollars to create your own currency. You can print it yourself or create it on your computers.

BONNIE FAULKNER:Well, exactly. So why don’t these countries simply print up their own domestic currency?

MICHAEL HUDSON: Their leaders don’t want to be assassinated. More immediately, if you look at the people in charge of foreign central banks, almost all have been educated in the United States and essentially brainwashed. It’s the mentality of foreign central bankers. The people who are promoted are those who feel personally loyal to the United States, because they that that’s how to get ahead. Essentially, they’re opportunists working against the interests of their own country. You won’t have socialist central bankers as long as central banks are dominated by the International Monetary Fund and the Bank for International Settlements.

BONNIE FAULKNER: So we’re back to the main point: The control is by political means, and they control the politics and the power structure in these countries so that they don’t rebel.

MICHAEL HUDSON: That’s right. When you have a dysfunctional economic theory that is destructive instead of productive, this is never an accident. It is always a result of junk economics and dependency economics being sponsored. I’ve talked to people at the U.S. Treasury and asked why they all end up following the United States. Treasury officials have told me: “We simply buy them off. They do it for the money.” So you don’t need to kill them. All you need to do is find people corrupt enough and opportunist enough to see where the money is, and you buy them off.

BONNIE FAULKNER: You write that “by following U.S. advice, countries have left themselves open to food blackmail.” What is food blackmail?

MICHAEL HUDSON: If you pursue a foreign policy that we don’t like—for instance, if you trade with Iran, which we’re trying to smash up to grab its oil—we’ll impose financial sanctions against you. We won’t sell you food, and you can starve. And because you’ve followed World Bank advice and not grown your own food, you will starve, because you’re dependent on us, the United States and our Free WorldÓallies. Canada will no longer follow its own policy independently of the United States, as it did with China in the 1950s when it sold it grain. Europe also is falling in line with U.S. policy.

BONNIE FAULKNER: You write that: “World Bank administrators demand that loan recipients pursue a policy of economic dependency above all on the United States as food supplier.” Was this done to support U.S. agriculture? Obviously it is, but were there other reasons as well?

MICHAEL HUDSON: Certainly the agricultural lobby was critical in all of this, and I’m not sure at what point this became thoroughly conscious. I knew some of the World Bank planners, and they had no anticipation that this dependency would be the result. They believed the free-trade junk economics that’s taught in the schools’ economics departments and for which Nobel prizes are awarded.

When we’re dealing with economic planners, we’re dealing with tunnel-visioned people. They stayed in the discipline despite its unreality because they sort of think that abstractly it makes sense. There’s something autistic about most economists, which is why the French had their non-autistic economic site for many years. The mentality at work is that every country should produce what it’s best at – not realizing that nations also need to be self-sufficient in essentials, because we’re in a real world of economic and military warfare.

BONNIE FAULKNER: Why does the World Bank prefer to perpetrate world poverty instead of adequate overseas capacity to feed the peoples of developing countries?

MICHAEL HUDSON: World poverty is viewed as solution, not a problem. The World Bank thinks of poverty as low-priced labor, creating a competitive advantage for countries that produce labor-intensive goods. So poverty and austerity for the World Bank and IMF is an economic solution that’s built into their models. I discuss these in my Trade, Development and Foreign Debtbook. Poverty is to them the solution, because it means low-priced labor, and that means higher profits for the companies bought out by U.S., British, and European investors. So poverty is part of the class war: profits versus poverty.

https://www.nakedcapitalism.com/2019/07/michael-hudson-discusses-the-imf-and-world-bank-partners-in-backwardness.html

 

Edited December 20, 2019 by washparkhorn

[Message Board User 12396]

On 12/8/2019 at 11:23 PM, Hugo Stiglitz said:

Good to hear our elaborate pyramid scheme of an economy is still convincing dumb poor people that everything is going great!  

Towards that end...

 

[Mrs Whiggins 13050]

Dumb question amnesty, please? Aren't 'we' currently temporarily propping things up and the deadline to continue doing so been extended? That is troubling, IMO.

When I was in 8th grade a long time ago, our school required a course titled 'Civics and Economics.' The thinking went that having an understanding of how various government and economic systems work prior to beginning more in depth studies in history, etc prepared students to examine how these systems are intertwined and evolve over time, through changes in administrations, regimes, war etc. Then, in 9th grade one took the required state history course and proceeded from there. The history course I took for my degree plan in college was not over this topic and I have been lax in improving the breadth of my knowledge base.

As I said, this was a long time ago, but for better or worse, I have some recollection of my instructor discussing the economy as it relates to the office of the President and that many Americans falsely attribute the highs and lows to the current officeholder. For the life of me, I cannot remember whose work she referenced but given my age, not surprising.  Anyone have a suggestion as to where I might find some rudimentary reading material for this subject? I don't wish to return to 8th grade, but I need a refresher course or something.

[bernorange 8363]

11 minutes ago, Mrs Whiggins said:

Dumb question amnesty, please? Aren't 'we' currently temporarily propping things up and the deadline to continue doing so been extended? ...

Oh hi there.  Would you like to talk about the Federal Reserve, our insane fiat money system, the nature of the petrodollar and how it affects our middle east foreign policy, the 2008 financial crisis and the subsequent fallout that we are still trying to mitigate?  I have been beating the drums on these issues for years.

The short answer to your question is that the Federal Reserve is doing it's best to plug holes in a dam that is under mounting stress.  Their actions are not politically motivated to help Trump per se, they were actually quite slow to reverse course from their attempt at shrinking their balance sheet and raising rates.  But reality forced their hands eventually.

[Continental Op 3934]

Let me post some links to zerohedge, which has correctly predicted 200 of the last two recessions!

[Mrs Whiggins 13050]

Federal Reserve. That is Jerome Powell (among others), correct? I've been pleased that he/she/they seem to be holding the line despite mounting pressure from the Oval Office. I have concerns, though. As much as I have benefited from gains, I prefer rolling hills to Alps and abysses.

The (dot) gov site may be where I will spend some time reading this weekend. I noticed they have some pages that will help get me up to speed. Do you mind being a guru w/respect to any questions that may arise? I'm going to ignore the money system and the rest for a while until I can sync some of what I see in the news currently with what I relearn and discover anew.

[bernorange 8363]

Yes on Powell et al.

Happy to answer questions as I can, but I'm not a guru. 

[Bozo_Casanova 26549]

Dumb question amnesty, please? Aren't 'we' currently temporarily propping things up and the deadline to continue doing so been extended? That is troubling, IMO.

When I was in 8th grade a long time ago, our school required a course titled 'Civics and Economics.' The thinking went that having an understanding of how various government and economic systems work prior to beginning more in depth studies in history, etc prepared students to examine how these systems are intertwined and evolve over time, through changes in administrations, regimes, war etc. Then, in 9th grade one took the required state history course and proceeded from there. The history course I took for my degree plan in college was not over this topic and I have been lax in improving the breadth of my knowledge base.

As I said, this was a long time ago, but for better or worse, I have some recollection of my instructor discussing the economy as it relates to the office of the President and that many Americans falsely attribute the highs and lows to the current officeholder. For the life of me, I cannot remember whose work she referenced but given my age, not surprising.  Anyone have a suggestion as to where I might find some rudimentary reading material for this subject? I don't wish to return to 8th grade, but I need a refresher course or something.

Hi there-

1) “temporarily” is a relative term. So yes, debt funded stimulus stimulates. That’s not what it does, it’s what it IS. The question is how much and whether it pays back the future it borrows from, which it also relative. The thing about tomorrow is that it’s always a day away. That’s fine as far as it goes, but sometimes today shows up when you least expect it and whips your ass.

 

2) On the president’s role the the economy: at any given time outside the president has little to no material impact on the direction of the economy or labor market, outside of executive branch intervention during periods of crisis like 2009-10, and 1997-99 (the Committee to Save the World).

 

3) The idea that state of the labor market reflects the current president’s performance is the Big Lie of American National politics and nothing comes close. It adversely impacts and perverts not only our understanding of what Government does, but also our own lives and the world around us. An individual contributor product manager at Proctor and Gamble probably has more immediate tangible impact on job creation and destruction.

[Mrs Whiggins 13050]

45 minutes ago, bernorange said:

Yes on Powell et al.

Happy to answer questions as I can, but I'm not a guru. 

Thank you for taking questions. Perhaps not the best choice of words (guru) on my part. I'm interested in hearing/learning about these structural institutions that while I've been aware of them have not taken a more circumspect look beyond headlines and mass news since K-12 days thus having a knowledgeable person who can point out biases of which I'm unaware or structural/legal implications that make certain activities possible/impossible etc etc. It will take me awhile to work through just what I've found recently, but it has been on my mind ever since the economy trended upward and yet spending did as well. Sort of the opposite of what my parents always said: pay down your debt in good times, bad times can be just around the corner...

Then that prof at Berkely(sp), Robert Reich? I have a hard time making up my mind about him. He goes on about this has always been a part of the GOP long game: tax cut for the rich, grow the deficit, and then say we have to cut Medicare, SS, etc. He's been banging that drum a lot louder of late, especially with Trump's latest comments. While I'm not opposed to trimming a budget, or even cutting back with how we distribute entitlement programs, if he is correct regarding the first two premises, it seems like there would be very real harm done to the middle class and job stability, growth, you name it.

Trying to piece this together has revealed major gaps in what I do and do not know so thanks again.

 

[Rusty Shackelford 414]

President's influence in the economy:
Trade. tarrifs, adding/cutting regulation/cost to businesses, setting fiscal policy agenda (congress must pass)

Does not set monetary policy, but appoints Fed governors. 

I agree that the media/public give too much credit to the President.

[Mrs Whiggins 13050]

8 minutes ago, Bozo_Casanova said:

Hi there-

1) “temporarily” is a relative term. So yes, debt funded stimulus stimulates. That’s not what it does, it’s what it IS. The question is how much and whether it pays back the future it borrows from, which it also relative. The thing about tomorrow is that it’s always a day away. That’s fine as far as it goes, but sometimes today shows up when you least expect it and whips your ass.

 

2) On the president’s role the the economy: at any given time outside the president has little to no material impact on the direction of the economy or labor market, outside of executive branch intervention during periods of crisis like 2009-10, and 1997-99 (the Committee to Save the World).

 

3) The idea that state of the labor market reflects the current president’s performance is the Big Lie of American National politics and nothing comes close. It adversely impacts and perverts not only our understanding of what Government does, but also our own lives and the world around us. An individual contributor product manager at Proctor and Gamble probably has more immediate tangible impact on job creation and destruction.

You posted while I was typing. Ok, I definitely agree with the first number there. That I accidentally addressed in my reply. So that makes sense. As far as number three, that is more of what I remember from school. It does seem that the corporations who have been buying back stocks are increasing profits (correct or am I wrong?) but doing nothing for the actual production, labor, etc?

[Rusty Shackelford 414]

Buybacks - Profit stays the same but earnings per share (EPS) increases due to the number of shares decreasing.  This makes the stock price go up.  You are correct this does nothing for the GDP.

[bernorange 8363]

7 minutes ago, Mrs Whiggins said:

... Perhaps not the best choice of words (guru) on my part. I'm interested in hearing/learning about these structural institutions ...

Monetary policy (and the institutions that were built to support it, and the consequences of their actions) is not a sexy topic.  Most Americans (I would guess upwards of 99%) don't bother to educate themselves about it.

I'm happy to discuss the topics, but you should know that I have very strong views on this topic (for example:  Our Monetary System is Insane, Cashless Society and the tin foil hats). 

[Mrs Whiggins 13050]

Duly noted. Will keep that in mind; thanks for the links.

[elfenix 34332]

4 hours ago, Mrs Whiggins said:

Aren't 'we' currently temporarily propping things up and the deadline to continue doing so been extended?

if you listen to the praxers, and you shouldn't because it's nonsense, then, yes, that's what we're doing. 

 

ultimately if you go down the zerohedge/praxer/goldbug hole deep enough, you'll find the belief that there's been no economic growth since the 70s and it's all been subsumed by inflation, which doesn't get measured properly (per that belief).  again, nonsense.

Edited January 24, 2020 by elfenix

[Bozo_Casanova 26549]

Monetary policy (and the institutions that were built to support it, and the consequences of their actions) is not a sexy topic. 

Obviously I think it is and so do you, but I think you and I both know we’re in the minority.

[washparkhorn 9939]

1 hour ago, Bozo_Casanova said:

Obviously I think it is and so do you, but I think you and I both know we’re in the minority.

Since I have the sexy new thang, can i be included in your little soiree?

[washparkhorn 9939]

Nice piece of writing from Matt Stoller on what is the purpose of economics as a discipline. I would love to hear the gurus' take on the political nature of the the economics discipline.

And this brings me to the point of economics, which has taken me a long time to understand. There are many economists who focus on trying to uncover important truths about the world, and there are many economists who seek to serve concentrated capital. There are smart ones, and dumb ones. But truth or falsehood, or empirical rigor, is besides the point. The point of economics as a discipline is to create a language and methodology for governing that hides political assumptions from the public. Truly successful economists, like Summers, spend their time winning bureaucratic turf wars and placing checks on elected officials.

Let’s start with a basic question. Is it the job of economists to understand the world accurately? The answer is far from clear.

https://mattstoller.substack.com/p/what-is-the-point-of-economics

 

[David Dennison 18946]

2.1% for Q4.

2.3% for 2019.

#BestEconomyEver

[Nice Guy Eddie 13523]

On 1/23/2020 at 8:46 PM, Message Board User said:

Towards that end...

 

And yet at this point of his first term, only Harry Truman had worse approval ratings than trump.  GHWB was almost as low as trump at this point.

[Pig Bellmont 8738]

 

[washparkhorn 9939]

11 hours ago, Pig Bellmont said:

 

Repubs just admitting what economist discovered about the the debt and deficits. Not that it will matter when it comes to squealing about them when a Democrat assumes office. 

Perhaps it has all been just a big fat lie? 

https://www.forbes.com/sites/michaelfoster/2017/11/08/federal-debt-is-reaching-20-trillion-and-i-dont-care/#a2f55832ba43

The Consequences of This Explanation - https://www.nakedcapitalism.com/2018/08/explicable-mystery-national-debt.html

Quote

 

First, the U.S. “national debt” is functionally not a debt at all. It is simply a tally of the U.S. Treasury bonds which the government has issued and then traded for U.S. dollars which already existed in the private sector. These Treasury bonds are in effect interest-paying, time-deposit savings accounts for the bond holders. You personally may have traded some of your retirement dollars for one of these “savings accounts” and you know, firsthand, they definitely contain real money! The “national debt,” then, is really a “national savings account.”

This is, to say the least, a startling and liberating perspective. It means all the political drama and hand-wringing about how we are going to repay our “national debt” can just go away. Even better, all the haggling can be replaced with an entirely different conversation: What shall our government spend the new dollars—created by the Treasury bond auction process—to accomplish? The short list of deferred needs, recited earlier, could be a start.

The most extraordinary consequence, however, is that the explanation we’ve just outlined constructs an overarching view of the modern U.S. economy that has never been clear before:

The economy—that is to say, the creation and spending of dollars to undertake and accomplish humanly defined goals—is composed of not one, but two,money-creation processes. The first (and most commonly understood) process is the U.S. banking system: Banks “create” new dollars when they issue loans. This is the engine of American capitalism, and the new dollars sent into circulation by the banking system are specifically (and exclusively) targeted to accomplish goals associated with the generating of personal or corporate financial profits in the market economy.

The second money-creation process, as our explanation above has made clear, is the process we have been habitually calling “government borrowing.” The issuing and auctioning of U.S. Treasury bonds, as we’ve just discovered, is not “borrowing” money at all, but creating t. Most important, the dollars generated by this process, which are then spent by the U.S. government, are not spent in the pursuit of personal or corporate financial profits. They are spent to pursue the collective goals—and address the collective needs—of society at large.

The problem we are struggling with today is that while we continue to encourage the first money-creating process—the banking system—to “create” as many dollars as American enterprise and consumers can profitably spend, we have habitually constrained the second money-creating process by labeling it our “national debt” and falsely believing it is encumbering us. In doing so, we severely—and unnecessarily—limit and constrain what we undertake to accomplish for the benefit of what could be called our collective “social economy.” This is a mistake we must now stop making.

 

 

[Nice Guy Eddie 13523]

1 hour ago, washparkhorn said:

Repubs just admitting what economist discovered about the the debt and deficits. Not that it will matter when it comes to squealing about them when a Democrat assumes office. 

Perhaps it has all been just a big fat lie? 

https://www.forbes.com/sites/michaelfoster/2017/11/08/federal-debt-is-reaching-20-trillion-and-i-dont-care/#a2f55832ba43

The Consequences of This Explanation - https://www.nakedcapitalism.com/2018/08/explicable-mystery-national-debt.html

 

Reading that Forbes article, I'm not sure I buy their analysis.  The numbers may be 100% correct but the viewpoint is questionable.

First I don't fully understand that US Total Asset line in the chart above especially in how Nonprofit organizations are tied in with households. I guess that is how the data is collected and impossible to untangle.  However their basic point in this section of the article is that the average American household  has $393K in assets but only $61K in their share of national debt.

Let's tear that apart. Average means little when you have the top 5% of Americans own 62% of the wealth, and the bottom 40% have less than 1% of the wealth.  I would ask how much wealth does the median American have.  Marketwatch says that US household median wealth is $97K.  In other words, the "wealthiest" country, US, has a true net worth of 37K per household when factoring public debt.   If you drop that to households where the adults are under 35, the true net worth is negative 50K.

 

Given that public debt is growing faster than net worth, and potentially propped up at the moment at a overpriced stock market, we're moving towards being a debtor country in total net worth.

[elfenix 34332]

10 minutes ago, Nice Guy Eddie said:

US Total Asset line in the chart above especially in how Nonprofit organizations are tied in with households.

nonprofits have assets (esp churches and hospitals with land in nice parts of town) and aren't owned by shareholders (aka households). so to add up total assets you have to add up households, which includes ownership of for profit entities, and nonprofits. 

Edited January 31, 2020 by elfenix

[Nice Guy Eddie 13523]

6 minutes ago, elfenix said:

nonprofits have assets (esp churches and hospitals with land in nice parts of town) and aren't owned by shareholders (aka households). so to add up total assets you have to add up households, which includes ownership of for profit entities, and nonprofits. 

ok but I don't get the point in claiming that national debt isn't a problem because non-profits and for-profits have plenty of assets.  I suppose it makes sense if we agree that we could/should pursue confiscating their assets as needed to pay off debt.  

[elfenix 34332]

3 minutes ago, Nice Guy Eddie said:

ok but I don't get the point in claiming that national debt isn't a problem because non-profits and for-profits have plenty of assets.  I suppose it makes sense if we agree that we could/should pursue confiscating their assets as needed to pay off debt.  

i think it's just there to put the figure in context. 

[washparkhorn 9939]

12 minutes ago, Nice Guy Eddie said:

ok but I don't get the point in claiming that national debt isn't a problem because non-profits and for-profits have plenty of assets.  I suppose it makes sense if we agree that we could/should pursue confiscating their assets as needed to pay off debt.  

As elfenix said - it is there to put the debt in context.

The point of the analysis is this and this is difficult for anyone to wrap their brains around because of our conditioning to treat the public debt like household debt -

The U.S. “national debt” is functionally not a debt at all. It is simply a tally of the U.S. Treasury bonds which the government has issued and then traded for U.S. dollars which already existed in the private sector. These Treasury bonds are in effect interest-paying, time-deposit savings accounts for the bond holders. You personally may have traded some of your retirement dollars for one of these “savings accounts” and you know, firsthand, they definitely contain real money! The “national debt,” then, is really a “national savings account.”

Let that sit in your thought process for a moment or longer. It is the basis of where economics has moved in our post-Keynesian world. And then read the rest of the second article I cited - https://www.nakedcapitalism.com/2018/08/explicable-mystery-national-debt.html

MMT is not the only theory out there trying to explain the phenomenon that crashed Keynesian theory. 

And remember this principle (which I think we all agree) - deflation is the biggest risk to the economy as a whole and it brings down everyone.

[Mrs Whiggins 13050]

Okay Mr. @bernorange you're up: your take on this? I'm still wading through your three suggestion threads but this cropped up. Good, bad, ugly? WaPo has a paywall and I'm not a subscriber, but I've put a link to another story and most of its content below the tweet.

WSJ: https://www.wsj.com/articles/fed-nominee-faces-questions-over-iconoclastic-views-and-loyalty-to-trump-11580985000

President Trump’s bid to install economist Judy Shelton on the Federal Reserve’s board of governors could turn on how she explains to lawmakers her heterodox views on policy issues including central-bank independence, interest rates and the gold standard.

The president last week formally nominated Ms. Shelton, a former U.S. envoy to the European Bank for Reconstruction and Development, and St. Louis Fed economist Christopher Waller to the Fed board. The Senate Banking Committee has scheduled their confirmation hearing for next week.

Ms. Shelton, an informal adviser to Mr. Trump’s 2016 campaign, is an unconventional choice because she has advocated returning to a type of gold standard, which could limit the Fed’s ability to respond to U.S. inflation and employment. She also has recently expressed indifference toward the Fed’s traditional independence from the executive branch and defended Mr. Trump’s call for lower interest rates, reversing her years of calls for higher rates.

“Even leaving aside her fondness for the gold standard, which makes a lot of senators uneasy, many Republican senators take Fed independence seriously. That issue will be difficult for Shelton,” said Ian Katz, a financial policy analyst at Capital Alpha Partners.

Such comments have made her a “magnet for controversy,” he said.

White House economic adviser Lawrence Kudlow said he expected she would swiftly win Senate confirmation. “This is an experienced, savvy, professional woman who will add enormous value to the Federal Reserve Board,” he said in an interview. He said Mr. Trump chose her because she doesn’t believe faster growth and low unemployment cause inflation.

Mr. Trump has repeatedly rebuked the Fed for keeping interest rates higher than he would like, which he says makes the dollar too strong. The Fed cut its benchmark rate three times last year after the trade war with China fueled fears of an economic downturn.

Ms. Shelton was confirmed by the Senate in 2018 for her EBRD post, which she resigned after Mr. Trump announced his intention to nominate her to the Fed last July.

Republicans control 53 of 100 seats in the Senate. Her confirmation would face a setback if she doesn’t win unanimous support from Republicans on the banking committee, where the GOP has a one-vote majority.

Sen. Elizabeth Warren (D., Mass.), in a six-page letter last week, asked Ms. Shelton to explain a “history of statements and actions” that call into question her expertise and an alleged “inability to make economic judgments divorced of political calculations.”

Sen. Richard Shelby (R., Ala.) said last month he supported Ms. Shelton’s candidacy. Another senior GOP senator on the panel, Pat Toomey of Pennsylvania, said he wanted to meet with her first before making a judgment. “I just don’t know her,” he said last month. Sen. Kevin Cramer (R., N.D.), who last year helped scuttle Mr. Trump’s plan to nominate former GOP presidential candidate Herman Cain to the board, said Tuesday he would support the latest nominees after he met with them.

Ms. Shelton repeatedly opposed the Fed’s moves to hold interest rates low earlier in the past decade, when Barack Obama was president and the U.S. economy was weaker, arguing that the central bank was favoring wealthy investors over small-time savers. In opinion columns, she warned the Fed’s policies were fueling financial bubbles and it was paying too much attention to asset prices.

In recent months, however, she called on the Fed to pay more attention to markets in setting rates, taking positions more aligned with Mr. Trump’s.

After years of supporting a gold standard, “she’s now in favor of loose monetary policy,” said Tony Fratto, who served in the White House and Treasury under President George W. Bush. “It now appears that Shelton had a conversion on the road to the White House.”

Last year, Mr. Trump announced plans to nominate two allies, conservative pundit Stephen Moore and Mr. Cain, for the Fed board. But both men withdrew from consideration after Republican senators expressed opposition to their nominations.

Mr. Fratto said he was frustrated Republican senators hadn’t signaled to the White House similar misgivings about Ms. Shelton. “If they tried to stop the nomination, it’s disappointing they failed. They should have tried harder,” he said.

In public remarks, Ms. Shelton has defended her recent call for lower U.S. interest rates by saying that foreign central banks have lowered theirs in a “race to the bottom” to stimulate economic growth through exchange-rate depreciation.

“I’m sympathetic to the members on the [Fed] board who feel the U.S. should take the high road and refuse to participate…but you can’t be virtuous in a vacuum,” she said in an interview last October with the investment bank UBS Group AG .

The Fed “has to have a credible answer to Congress with regard to how it’s responding or not responding to the perceived currency impacts of other central banks in the world that affect the trade relationship,” she said.

Stanford University economist John Taylor, who was critical of the Fed’s policies last decade, said Ms. Shelton’s “strong emphasis on rules-based monetary policy will reinforce a positive trend in that direction” at the Fed. Global economic stability would be bolstered further if other central banks followed the Fed, he said.

Ms. Shelton has taken other positions that could provide fodder for senators’ questions. She has questioned the need for bank deposit insurance, and she has supported closer trade, migration and monetary ties between the U.S., Canada and Mexico, floating a proposal early this century for a currency union between the North American nations.

The Fed’s interest-rate decisions are made by a committee of up to 12 officials—the seven Fed governors and five reserve bank presidents.

The nominations could take on extra significance because if Mr. Trump wins reelection this year, he could tap a sitting governor to succeed Fed Chairman Jerome Powell when his four-year term expires in early 2022. Mr. Powell and his two predecessors had served on the Fed’s board before becoming its chair."

[bernorange 8363]

4 minutes ago, Mrs Whiggins said:

Okay Mr. @bernorange you're up: your take on this? ...

...

President Trump’s bid to install economist Judy Shelton on the Federal Reserve’s board of governors ...

When Trump was elected, there were some people who thought he was serious when he said he was going to "drain the swamp".  Some thought he was serious about considering a gold standard based upon some comments he made years ago.

My opinion?  It's all bullshit.  Trump just wants loyalists who will do as he asks.

The current Fed chair, Jerome Powell, was Trump's first appointee to the Fed board.  Powell was banker/swamp approved and he hasn't toed the line for Trump at all times.  I think that pissed Trump off and he's not going to make the same mistake again.

Hence, prior to nominating Judy Shelton, Trump considered/nominated several other candidates including:

*  Marvin Goodfriend - academic from Carnegie Mellon who was the "genius" that  delivered a speech to a Federal Reserve conference in 2016 called The Case for Unencumbering Interest Rate Policy at the Zero Bound.  It was a blueprint for charging people to exchange money at the bank as a mechanism for penalizing people who use cash so central banks can impose negative interest rates.  It is an odious. idea.  Senators eventually let it be known that he didn't have enough thumbs up, so he withdrew from the nomination (and passed away last December).

* Steven Moore - Trump campaign advisor, member of the Heritage Club.  I don't know a lot about him, but these guys seem to (from a Reuters report in March, 2019):

Quote

“Trust me, Steve knows absolutely nothing about the Federal Reserve or monetary policy,” Bruce Bartlett, a supply-side economist who served in the Republican administrations of Ronald Reagan and George H.W. Bush, said on Twitter.

“Stephen Moore is unfit to serve on the Fed board,” monetary economist George Selgin, director of the libertarian Cato Institute’s Center for Monetary and Financial Alternatives said on Twitter.

  * Herman Cain - 999.  Pizzas.  Yeah, that guy.

Cain and Moore both ended up withdrawing after the Senate expressed, and I'm using some creative license here, "hell no".

The last two nominees before Shelton were political yes men with no foundation in monetary policy.  Shelton is grounded in monetary theories.  She isn't a lightweight, "yes man" political nomination.  She also isn't a conventional choice from the banking cabal.  Her history of published works indicate she leans more towards the Austrian school of thought on monetary policy, but most recent statements/news indicates she is pliable to Trump's wishes.  Is it a ploy to garner favor from the President to get the appointment or indicative of a real shift in her thoughts on monetary policy?  I don't know.  I'm hopeful that if she is approved by the Senate, she can bring an important viewpoint to their (The Fed's) table.

 

[Mrs Whiggins 13050]

Thanks for the insight. I'm glad you're hopeful. I am suspicious (admittedly without due diligence because I trust few of Trump's people) but I defer to your expertise. I already think he is (or someone in his administration) is taking advantage of the market so I have concerns that he sees a female (his traditional view) as a pushover and the recent news seem to indicate that she may be. So what are his end goals here? What would he ask of her w/respect to the Fed if she is a loyalist?

He has the Administration, the DOJ, the Courts, the Senate, has neutered and spayed Congress, and is going for the $$ to do what exactly?

[bernorange 8363]

4 minutes ago, Mrs Whiggins said:

... What would he ask of her w/respect to the Fed if she is a loyalist? ...

Easy, easy money for nothin'

Trump has already made many comments about wanting negative interest rates.  I suspect he's quite happy with the Fed's expansion of the balance sheets which is goosing the stock markets currently (it's "bubblicious").

[Mrs Whiggins 13050]

He ain't getting his chicks for free. At least I hope not.

Yes, I've noticed his comments about the interest rates as well, I was curious as to whether there was anything more of which I would be unaware.

[washparkhorn 9939]

Shelton was an opponent to fiat money, but has now moved on to fiat money for the banks, as needed (which has been constant since 2008 to keep the banks from triggering yet another recession). 

I think the best explanation of where she believes we are at is: an asset bubble created by the Fed + a liquidity trap. I am not sure Shelton understands it well - or perhaps she does and has been tasked by Trump to keep the money flowing to the banks/investors and, thereby, keep the asset bubble growing. 

Essentially, the Fed is using MMT for the top .01%. Major investment banks push MMT for their interests - it is part of the Goldman Sachs playbook now. MMT is agnostic on where the money goes. It merely explains why massive creation of fiat money does not create runaway inflation (up to a tipping point that is far, far away). MMT for banks has become an orthodox view. MMT for Main Street sends bankers into a tizzy.

Shelton's views are inconsistent. Gold Standard - to - MMT for banks. That's fair game. I expect she is studying up on how this became an orthodox view. The answer lies in the fact we have hoarding at the top, which doesn't trigger "gold bugs" and their worry about debt. For the dying Keynesian oracles, she represents a threat to the established order of yore - who fear the possible opening up MMT for the masses will displace their power as lords over the many (not a Trump policy at this time, but they fear the next President might use this as precedent to break from trickle down). 

The final view on Shelton will be from those who get their news on Facebook - "Shelton wants to get rid of the FDIC." That's the low information voter red herring. 

I will say this about Shelton - she is willing to change directions at the Fed. That to me is a positive, as the nation teeters on deflation/recession/depression since 2008. I don't, however, expect Trump to do anything other than what he has done - told his voters one thing and then sends his billionaire buddies trillions.  

[Dbeasy 15091]

As elfenix said - it is there to put the debt in context.
The point of the analysis is this and this is difficult for anyone to wrap their brains around because of our conditioning to treat the public debt like household debt -
The U.S. “national debt” is functionally not a debt at all. It is simply a tally of the U.S. Treasury bonds which the government has issued and then traded for U.S. dollars which already existed in the private sector. These Treasury bonds are in effect interest-paying, time-deposit savings accounts for the bond holders. You personally may have traded some of your retirement dollars for one of these “savings accounts” and you know, firsthand, they definitely contain real money! The “national debt,” then, is really a “national savings account.”
Let that sit in your thought process for a moment or longer. It is the basis of where economics has moved in our post-Keynesian world. And then read the rest of the second article I cited - https://www.nakedcapitalism.com/2018/08/explicable-mystery-national-debt.html
MMT is not the only theory out there trying to explain the phenomenon that crashed Keynesian theory. 
And remember this principle (which I think we all agree) - deflation is the biggest risk to the economy as a whole and it brings down everyone.

Nothing like obfuscation to hide serious issues. Our budget deficits are currently tagging every household in this country with $7500 per year of “savings” debt. This whole perspective is nonsense. Complete and utter bullshit.

[Mrs Whiggins 13050]

How does deflation work in this way? Currently we are below the Fed's target for inflation % correct or not correct? They are holding off on more cuts through the end of the year but watching to see if the virus has an effect, correct? What would trigger a deflation?

[Incredulity 11683]

5 minutes ago, Mrs Whiggins said:

How does deflation work in this way? Currently we are below the Fed's target for inflation % correct or not correct? They are holding off on more cuts through the end of the year but watching to see if the virus has an effect, correct? What would trigger a deflation?

A massive global economic slump would be deflationary.

[Mrs Whiggins 13050]

8 minutes ago, Incredulity said:

A massive global economic slump would be deflationary.

Globally, the economy is growing very slowly, correct? Does a lot of  a slump depend upon how quickly China is able to get back up and running?

[workswithseed 2110]

With China in a spot of bother as it is and no stopping, how much longer till the markets reflect?

 

[Incredulity 11683]

Just now, Mrs Whiggins said:

Globally, the economy is growing very slowly, correct? Does a lot of  a slump depend upon how quickly China is able to get back up and running?

IMPO, and frankly anyone who would tell you they know the exact recipe is full of shit, Coronavirus certainly could be the catalyst to a global economic slump.  Realistically it takes some sort of collapse in an asset bubble, a major multi-country war or pandemic.   The first being the most likely and most debated.