When cross posting, change the first title to Originally posted on The Economic Populist.
We're going to get lower ranked if you just directly copy and past posts around. And since this is economic reality 24/7 home base, that's not good for us.
I read the EPI proposals and frankly to me they are pure shit. Generated by their various special interest groups, not the most bang for the buck.
I literally became depressed to hear that Obama thinks it's just grand to do a "Stimulus" to insulate people's houses and add "double pane windows".
I don't think a single one of these people has held a real job or been out in the real business world.
If you read the AAM report, they are squeezing the nickels out of funds and it's such a superior plan that would generate advanced jobs skills, significantly help the U.S. national economy due to improved infrastructure efficiencies, upon which we rely and they acknowledge workers must be U.S. citizens/legal residents and all supplies must be domestic...
i.e. they get it, they know pouring public funds overseas isn't going to stimulate much....except those foreign nation's GDP.
Bonddad has been "right all along"? Jesus. I haven't kept a tally but it seems over and over and over again the predictions have been wrong, esp. on unemployment.
OK, here's something on EP which I think is a feature we really need to enhance....that's being very technically accurate. There seems to be some sort of personalities before facts activity going on and in my book, correct is correct, wrong is wrong.
SilverOZ was the one who inspired me to write this essay. Normally I like SilverOZ. I don't always agree with him, but he seems like he's pretty together.
But when he started quoting from the Bonddad Blog I had to make a reply. I didn't expect it to get nearly the traction that it did.
I didn't watch the jobs summit. I didn't care unless it produced something, and if it produced something I would have read about it.
in posting this over at DK after that diary by SilverOz. What really got me is Oz goes through how bad the numbers are, then suddenly squats and emits that next to last paragraph about how great this news is. And it hit the rec list. Damn, lotsa people got lotsa learning to do.
In the rest of the media and on the tubes, the slight downtock in unemployment pretty much drowned out any coverage of the jobs summit, which, from what I can see, was a farce. President Obama reportedly said that the government can do little to improve the employment outlook. This is a major marker of ideological defeat. Neo-liberal economics marches triumphantly on to our doom.
Firstly that is pure fiction. The U.S. economy simply did not have that much trade and secondly it's been proved time and time again Smoot-Hawley did not cause the Great Depression. It was well under way and the actual amount of GDP created by trade at that time was not very large.
You should look to the falling of the Austrian bank for a major event.
Secondly, on the transaction tax, maybe that's an issue but the idea is to stop hedging as well as dramatically reduce derivatives. There are various proposals. One is to have a transaction tax ONLY on critical commodities, that being oil speculation. Another idea is to only have a tax on a "sell", so you wouldn't have you double tax. Then there are thresholds on the amounts of the trades or the frequency of the trade of a particular item.
It's also fairly clear one needs a global, uniform tax else, why bother to trade on U.S. exchanges or in U.S. markets (in these shores)....
So, while you're digging up examples, I would first take a look at the proposals. It can work and it's a great idea and I find those who oppose it absurd. Of course investors should pay taxes. My God, if one can tax food, social security and employees then why not.
that said, I agree with you that it must be very fine tuned in order to not disrupt markets...
but putting a killing on some of these derivatives, esp. the CDOs and the "black box" ones where the mathematical models are flawed and also, btw, create systemic risk...
sounds like a plan.
but here on EP, there is one thing we know very well and that's trade, so trying to run that crap pushing by those wanting more bad trade agreements that are not free trade, by the theory, in any way, shape or form.....that stuff won't fly.
I seriously suggest reading Baumol and Gomory (see the Reads top link), which goes through the trade theory by layman's descriptions and a host of mathematical proofs and you can see so clearly that it's not a "win-win" game, esp. when enables the means of production to be mobile. Not by a long shot and we're seeing the results in the U.S. as we speak.
That's bad trade, and smart, multilateral trade if one looks at the mathematics of it and the implications.
and while I calculated out much of this, I took the positive side on the number, for even with all of this, due to the actual jobs available, those numbers could have been lower.
So, I guess we're "fair and balanced" now instead of those "doom and gloomers" (perhaps because it really is seriously suck ass for the U.S. middle class and has nothing to do with "negative thinking"????)
I would take much exception to many of the comments by that blogger, expecially that the present monetary system was designed to favor economic efficiency.
Instead, it was designed to favor an economic elite, and has been moved towards that direction each and every time there has been any pushback of any sort (Teddy Roosevelt in his trustbusting days, Louis Brandeis and his exposing of interlocking directorates (Other People's Money), FDR's New Deal, John F. Kennedy's moves against the insurance industry (the last president to force them to sign a Consent Decree - where they stated they would stop their price-fixing ways, back in October of 1963) and his movement, prior to his untimely death, to address inequities in the tax structure affecting employment, as well as the oil depletion allowance, etc.
Today's tax structure favors debt leveraging, leveraged buyouts and an insanely low federal income tax revenue recovery from corporations in America (read the GAO-08-957 report) -- between 1998 and 2005 two out of every three American corporations paid no fed income tax!
Further tax arbitrage with regard to securitized financial instruments based upon debt further erode the American tax base.
Far too often people confuse the spreading of wealth among people, which virtually always leads to greater progress among us humans, as an offshoot of predatory capitalism.
Not so! Those are the short blips in the long march of history. Ayn Rand confused political and economic systems, and such is still being done today.
The concentration of unearned wealth is still the primary cause of poverty.
Holding companies to hide ownership (and other nefarious purposes) and SIVs, SPEs, SPVs, SPREs to hide debt (and other money laundering and tax-avoidance purposes) --- only constant pushback by honest people will deter such behavior.
Soviet- and Chinese-style communism favors monopoly of land, capital and knowledge by the state, whereas our present predatory capitalism favors monopoly by the corporation.
Truly, it will require a serious revolution to ever bring to reality any actual form of economic democracy.
...and much thanks for keeping us current on the "Alice in Wonderland" numbers game!
The Prez urges the same lame losers, who know how to do only three things in the world of fantasy finance, to figure out how to solve the unemployment prob!
Those three things?
(1) Offshore American workers' jobs
(2) Peddle junk paper (credit derivatives and various instruments of debt -- hence all those debt-financed billionaires)
(3) Leveraged buyout "pump and dumps"
Sorry, forgot to mention the most important point of all: Froman, a top guy from Citigroup, continued to stay on as an employee while he helped President Obama put together his team of "Rubin's Rubes."
This, to my knowledge of economic and political history, is the first time a Wall Street type has continued their employment while also being employed by a presidential administration! I didn't even suspect this was allowed under federal law --- unless a national emergency was declared?
Matt Taibbi's fantastic article in the latest (December issue) Rolling Stone nails it perfectly.
Entitled, Obama's Big Sellout (although on the cover it is called Obama's Wall Street Sellout), it gives a detailed breakdown how so many members of Obama's economics team are directly related to Robert Rubin, and hence the architect (or one of the main architects) behind the Gramm-Leach-Bliley Act (deregulation of the banksters, insurance and investment companies) and the Commodity Futures Modernization Act.
Does a really formidable job of it.
(Sidebar: Can't help but mention that four of those creatures he mentions also belong to the Bretton Woods Committee -- Diana Farrell (hell spawn), David Lipton, Gene Sperling and Bob Hormats. While Jason Furman doesn't belong to it, a family relative (either his uncle or father) does.
Also, for those not familiar with the Hamilton Project by which a number are related to Rubin (his baby over at the Brookings Institute, where the chairman also happens to be the owner of one of the largest hedge funds on this planet; rated largest in existence for several years running), one of its principal aims is the privatization of social security.
So, if one wants those banksters/insurance fraudsters, etc., to have their own taxpayer-financed insurance exchanges ("Public Option") and their latest carbon derivatives securitization scam (cap-and-trade) all that's left will be funneling those trickle-down social security funds their way.
Perhaps a numerical example will elucidate my argument against the financial transaction tax. Please bear with me here..
Consider an especially liquid interest rate future such as Dec-09 Eurodollars. This acts as a benchmark for three month US dollar deposit rates and is used as a hedging instrument by many (all?) large companies, government bodies and investors that choose to hedge their risk exposure to interest rates. Typically companies or government entities do not want exposure to interest rate fluctuations that are not central to their core business activity, but such risk naturally arises from the business cycle and funding requirements. The use of such a derivative enables companies to reduce interest rate exposure to a negligible level and manage a component of their non core business risk.
The current two way price of Eurodollars traded on Chicago Mercantile Exchange is 99.7375 offer, 99.7350 bid implying an interest rate of 0.265% to the borrower and 0.2625% to the lender of 3month USD funding. The future instrument is settled against the 3month USD Libor rate in the third week of December 2009. If a transaction tax on derivatives is imposed at 0.02% on both legs of a derivatives transaction, any market maker in Dec-09 Eurodollars would have to reduce his bid price by 0.0200 and increase his offer price by 0.0200. To incorporate the tax into his spread even the most aggressive liquidity provider (market maker) would have to adjust his price to at least as wide as 99.7575 offer, 99.7150 bid.
So the spread for this product would increase from 0.0025 (0.25 basis points) to 0.0425 (4.25 basis points), a ninefold increase in the spread.
Of course volumes would drop enormously due to the additional costs of hedging...many end users would decide not to hedge at all creating additional risks for their business, whilst market makers that currently provide liquidity would be forced to withdraw completely. In my estimate volumes would drop at least 70-95% in most derivatives in which case brokers and exchanges would also be required to increase their fees and commissions in an to attempt to compensate for lost revenues to stay in business. This in turn would cause market makers to adjust their pricing again to an even wider spread level than the theoretical 9 basis points.
In addition the theoretical tax revenue that would be generated from the tax is based on the assumption that volumes will not drop after the imposition of such a tax when the reality is that volumes would be be 5-30% of the present volumes in the derivatives markets. Possibly less, many of the products will simply not trade at all. I have not even mentioned the lost revenue to the taxpayer that would otherwise have been generated from the profits of the trading community, brokerages, exchanges and financial software support companies.
The Eurodollar example is just one picked at random, I could give countless other derivative examples, but when you compound the effects across every equity, bond, commodity derivative and the foreign exchange markets then you are creating an enormous total cost and additional risks to every business that wishes to periodically manage its financial risks. Not to mention the adverse effects on investors and savers when the effects are compounded up over each transaction during the course of the year or their investment lifetime. They key to successful investing is the compounding of small positive returns over long time periods. Negative compounding can have an equal but opposite impact on long term savers and investors that wish to actively manage their investments.
When the public or politicians hear a number like 0.02% it sounds very small but the reality is that any such tax would be devastating for global capital markets. I really don't think you can underestimate how big an impact it would have in terms of jobs lost and revenue lost to the taxpayer when volumes drop across all derivative markets to such an extent. It will be the death bed of capitalism because there will be significant reduction in capital flows, I am certain of that, and there is no doubt in my mind that it will send the US and global economy into a Depression, just as the Smoot–Hawley Tariff Act (the equivalent 'anti-trade' measure introduced in the 1930s when a similar public backlash was taking place against Wall Street) was a major cause of the Great Depression, leading up to World War II.
In my humble opinion, it really would be history repeating itself but with a different flavour. Do you and those pushing for the tax seriously want a policy measure that seems harmless at first glance but on greater inspection would risk such economic and human hardship?
Please reconsider the transaction tax in greater detail. We need support from smart economists that have looked at every aspect of the tax.
I was particularly struck by Keen's ideas on debt-deflation, the liquidity trap, and his take on oversights of classical economic thought as applied in our current situation. The last section of this article is particularly insightful.
CG, I am in CNJ - close to the New Brunswick area. I work for a national wholesale/retail chain on the retail side.
I think Bob has a way we can contact each other directly, but I don't see the instructions right now. Maybe I'm just not awake enough, yet. LOL
and instapopulist overviewing Warren's excellent article. On specific policy that's related to econ, it's perfectly ok to talk politics. I just want to stay away from generalities, such as "all Dems suck" or "tax cuts work" and some of that insanity. I'm with you on this absurdity going on though.
You know from the few private communications we've had that I don't want to change the forum you have created here at EP. I'm afraid I would be the resident doomer. I have said repeatedly during the past 6 months or so that I think we are in a full scale political crisis, which is resulting from a major financial crisis.
Earlier today, I read Elizabeth Warren's article decrying the demise of the American middle class. Well, I absolutely agree with her but we all have been saying the same thing here for months! As much as I like Elizabeth Warren, Robert Reich, Paul Krugman, et al, I just keep thinking to myself...why are they being so discrete in their criticism? I mean, I voted for the O-man too, but I think he is a total fucking sellout and a worse president than GWB!! You call them like you see them, right? So why are so many others reluctant?
Anyhow, I will take your encouragement under advisement. Again, there is much I would like to say, but often I wonder if it is proper to express them in someone else's forum.
Keen can get a bit wonkish, but I think he has the most fundamental understanding of what we are facing and how we got here. He is a proponent of Hyman Minsky's theories and it would behoove us all, not in the least the policy makers in DC, to pay attention to his research. In some ways I would even go so far as to say that he is today's equivalent to the GD's Keynes and Fischer.
On a personal note, I was wondering where in the Garden State you reside? I lived for 20 wonderful years in Somerset county before cashing out. I formerly owned/operated a small, boutique import/export logistics operation in the Newark port area. You have mentioned in the past that you are involved in retail, so I would guess you are in the Secaucus area? I doubt that we know each other explicitly, but I would expect we have a few friends in common.
The big picture has all sorts of charts in one post on U.S. unemployment.
here.
Worth checking out so you can see just how bad the unemployment situation really is in comparison to the past.
My fav. is the revisions chart. Many believe this unemployment report is going to be "Revised".
The best solutions are sometimes the simplest. Hang the bankers, bulldoze the houses and start over.
When cross posting, change the first title to Originally posted on The Economic Populist.
We're going to get lower ranked if you just directly copy and past posts around. And since this is economic reality 24/7 home base, that's not good for us.
I read the EPI proposals and frankly to me they are pure shit. Generated by their various special interest groups, not the most bang for the buck.
I literally became depressed to hear that Obama thinks it's just grand to do a "Stimulus" to insulate people's houses and add "double pane windows".
I don't think a single one of these people has held a real job or been out in the real business world.
If you read the AAM report, they are squeezing the nickels out of funds and it's such a superior plan that would generate advanced jobs skills, significantly help the U.S. national economy due to improved infrastructure efficiencies, upon which we rely and they acknowledge workers must be U.S. citizens/legal residents and all supplies must be domestic...
i.e. they get it, they know pouring public funds overseas isn't going to stimulate much....except those foreign nation's GDP.
Bonddad has been "right all along"? Jesus. I haven't kept a tally but it seems over and over and over again the predictions have been wrong, esp. on unemployment.
OK, here's something on EP which I think is a feature we really need to enhance....that's being very technically accurate. There seems to be some sort of personalities before facts activity going on and in my book, correct is correct, wrong is wrong.
SilverOZ was the one who inspired me to write this essay. Normally I like SilverOZ. I don't always agree with him, but he seems like he's pretty together.
But when he started quoting from the Bonddad Blog I had to make a reply. I didn't expect it to get nearly the traction that it did.
I didn't watch the jobs summit. I didn't care unless it produced something, and if it produced something I would have read about it.
..but they won't let us open the factories, they ship them overseas!
Next time someone claims it's all good and soon there will be a chicken in every pot, show them this EPI fact sheet.
We've covered all of these statistics on EP but to see them all laid out in one small sheet makes the blood run from your face.
in posting this over at DK after that diary by SilverOz. What really got me is Oz goes through how bad the numbers are, then suddenly squats and emits that next to last paragraph about how great this news is. And it hit the rec list. Damn, lotsa people got lotsa learning to do.
In the rest of the media and on the tubes, the slight downtock in unemployment pretty much drowned out any coverage of the jobs summit, which, from what I can see, was a farce. President Obama reportedly said that the government can do little to improve the employment outlook. This is a major marker of ideological defeat. Neo-liberal economics marches triumphantly on to our doom.
Firstly that is pure fiction. The U.S. economy simply did not have that much trade and secondly it's been proved time and time again Smoot-Hawley did not cause the Great Depression. It was well under way and the actual amount of GDP created by trade at that time was not very large.
You should look to the falling of the Austrian bank for a major event.
Secondly, on the transaction tax, maybe that's an issue but the idea is to stop hedging as well as dramatically reduce derivatives. There are various proposals. One is to have a transaction tax ONLY on critical commodities, that being oil speculation. Another idea is to only have a tax on a "sell", so you wouldn't have you double tax. Then there are thresholds on the amounts of the trades or the frequency of the trade of a particular item.
It's also fairly clear one needs a global, uniform tax else, why bother to trade on U.S. exchanges or in U.S. markets (in these shores)....
So, while you're digging up examples, I would first take a look at the proposals. It can work and it's a great idea and I find those who oppose it absurd. Of course investors should pay taxes. My God, if one can tax food, social security and employees then why not.
that said, I agree with you that it must be very fine tuned in order to not disrupt markets...
but putting a killing on some of these derivatives, esp. the CDOs and the "black box" ones where the mathematical models are flawed and also, btw, create systemic risk...
sounds like a plan.
but here on EP, there is one thing we know very well and that's trade, so trying to run that crap pushing by those wanting more bad trade agreements that are not free trade, by the theory, in any way, shape or form.....that stuff won't fly.
I seriously suggest reading Baumol and Gomory (see the Reads top link), which goes through the trade theory by layman's descriptions and a host of mathematical proofs and you can see so clearly that it's not a "win-win" game, esp. when enables the means of production to be mobile. Not by a long shot and we're seeing the results in the U.S. as we speak.
That's bad trade, and smart, multilateral trade if one looks at the mathematics of it and the implications.
and while I calculated out much of this, I took the positive side on the number, for even with all of this, due to the actual jobs available, those numbers could have been lower.
So, I guess we're "fair and balanced" now instead of those "doom and gloomers" (perhaps because it really is seriously suck ass for the U.S. middle class and has nothing to do with "negative thinking"????)
If you want to overview the Article and put it in an instapopulist, that would be great.
I've been writing as such and I try to refrain on making blanket political statements.
I would take much exception to many of the comments by that blogger, expecially that the present monetary system was designed to favor economic efficiency.
Instead, it was designed to favor an economic elite, and has been moved towards that direction each and every time there has been any pushback of any sort (Teddy Roosevelt in his trustbusting days, Louis Brandeis and his exposing of interlocking directorates (Other People's Money), FDR's New Deal, John F. Kennedy's moves against the insurance industry (the last president to force them to sign a Consent Decree - where they stated they would stop their price-fixing ways, back in October of 1963) and his movement, prior to his untimely death, to address inequities in the tax structure affecting employment, as well as the oil depletion allowance, etc.
Today's tax structure favors debt leveraging, leveraged buyouts and an insanely low federal income tax revenue recovery from corporations in America (read the GAO-08-957 report) -- between 1998 and 2005 two out of every three American corporations paid no fed income tax!
Further tax arbitrage with regard to securitized financial instruments based upon debt further erode the American tax base.
I would recommend the following two web sites for further education: one regarding economic democracy and the other a further background on this matter.
Far too often people confuse the spreading of wealth among people, which virtually always leads to greater progress among us humans, as an offshoot of predatory capitalism.
Not so! Those are the short blips in the long march of history. Ayn Rand confused political and economic systems, and such is still being done today.
The concentration of unearned wealth is still the primary cause of poverty.
Holding companies to hide ownership (and other nefarious purposes) and SIVs, SPEs, SPVs, SPREs to hide debt (and other money laundering and tax-avoidance purposes) --- only constant pushback by honest people will deter such behavior.
Soviet- and Chinese-style communism favors monopoly of land, capital and knowledge by the state, whereas our present predatory capitalism favors monopoly by the corporation.
Truly, it will require a serious revolution to ever bring to reality any actual form of economic democracy.
...and much thanks for keeping us current on the "Alice in Wonderland" numbers game!
The Prez urges the same lame losers, who know how to do only three things in the world of fantasy finance, to figure out how to solve the unemployment prob!
Those three things?
(1) Offshore American workers' jobs
(2) Peddle junk paper (credit derivatives and various instruments of debt -- hence all those debt-financed billionaires)
(3) Leveraged buyout "pump and dumps"
Sorry, forgot to mention the most important point of all: Froman, a top guy from Citigroup, continued to stay on as an employee while he helped President Obama put together his team of "Rubin's Rubes."
This, to my knowledge of economic and political history, is the first time a Wall Street type has continued their employment while also being employed by a presidential administration! I didn't even suspect this was allowed under federal law --- unless a national emergency was declared?
Matt Taibbi's fantastic article in the latest (December issue) Rolling Stone nails it perfectly.
Entitled, Obama's Big Sellout (although on the cover it is called Obama's Wall Street Sellout), it gives a detailed breakdown how so many members of Obama's economics team are directly related to Robert Rubin, and hence the architect (or one of the main architects) behind the Gramm-Leach-Bliley Act (deregulation of the banksters, insurance and investment companies) and the Commodity Futures Modernization Act.
Does a really formidable job of it.
(Sidebar: Can't help but mention that four of those creatures he mentions also belong to the Bretton Woods Committee -- Diana Farrell (hell spawn), David Lipton, Gene Sperling and Bob Hormats. While Jason Furman doesn't belong to it, a family relative (either his uncle or father) does.
Also, for those not familiar with the Hamilton Project by which a number are related to Rubin (his baby over at the Brookings Institute, where the chairman also happens to be the owner of one of the largest hedge funds on this planet; rated largest in existence for several years running), one of its principal aims is the privatization of social security.
So, if one wants those banksters/insurance fraudsters, etc., to have their own taxpayer-financed insurance exchanges ("Public Option") and their latest carbon derivatives securitization scam (cap-and-trade) all that's left will be funneling those trickle-down social security funds their way.
Dear Robert
Perhaps a numerical example will elucidate my argument against the financial transaction tax. Please bear with me here..
Consider an especially liquid interest rate future such as Dec-09 Eurodollars. This acts as a benchmark for three month US dollar deposit rates and is used as a hedging instrument by many (all?) large companies, government bodies and investors that choose to hedge their risk exposure to interest rates. Typically companies or government entities do not want exposure to interest rate fluctuations that are not central to their core business activity, but such risk naturally arises from the business cycle and funding requirements. The use of such a derivative enables companies to reduce interest rate exposure to a negligible level and manage a component of their non core business risk.
The current two way price of Eurodollars traded on Chicago Mercantile Exchange is 99.7375 offer, 99.7350 bid implying an interest rate of 0.265% to the borrower and 0.2625% to the lender of 3month USD funding. The future instrument is settled against the 3month USD Libor rate in the third week of December 2009. If a transaction tax on derivatives is imposed at 0.02% on both legs of a derivatives transaction, any market maker in Dec-09 Eurodollars would have to reduce his bid price by 0.0200 and increase his offer price by 0.0200. To incorporate the tax into his spread even the most aggressive liquidity provider (market maker) would have to adjust his price to at least as wide as 99.7575 offer, 99.7150 bid.
So the spread for this product would increase from 0.0025 (0.25 basis points) to 0.0425 (4.25 basis points), a ninefold increase in the spread.
Of course volumes would drop enormously due to the additional costs of hedging...many end users would decide not to hedge at all creating additional risks for their business, whilst market makers that currently provide liquidity would be forced to withdraw completely. In my estimate volumes would drop at least 70-95% in most derivatives in which case brokers and exchanges would also be required to increase their fees and commissions in an to attempt to compensate for lost revenues to stay in business. This in turn would cause market makers to adjust their pricing again to an even wider spread level than the theoretical 9 basis points.
In addition the theoretical tax revenue that would be generated from the tax is based on the assumption that volumes will not drop after the imposition of such a tax when the reality is that volumes would be be 5-30% of the present volumes in the derivatives markets. Possibly less, many of the products will simply not trade at all. I have not even mentioned the lost revenue to the taxpayer that would otherwise have been generated from the profits of the trading community, brokerages, exchanges and financial software support companies.
The Eurodollar example is just one picked at random, I could give countless other derivative examples, but when you compound the effects across every equity, bond, commodity derivative and the foreign exchange markets then you are creating an enormous total cost and additional risks to every business that wishes to periodically manage its financial risks. Not to mention the adverse effects on investors and savers when the effects are compounded up over each transaction during the course of the year or their investment lifetime. They key to successful investing is the compounding of small positive returns over long time periods. Negative compounding can have an equal but opposite impact on long term savers and investors that wish to actively manage their investments.
When the public or politicians hear a number like 0.02% it sounds very small but the reality is that any such tax would be devastating for global capital markets. I really don't think you can underestimate how big an impact it would have in terms of jobs lost and revenue lost to the taxpayer when volumes drop across all derivative markets to such an extent. It will be the death bed of capitalism because there will be significant reduction in capital flows, I am certain of that, and there is no doubt in my mind that it will send the US and global economy into a Depression, just as the Smoot–Hawley Tariff Act (the equivalent 'anti-trade' measure introduced in the 1930s when a similar public backlash was taking place against Wall Street) was a major cause of the Great Depression, leading up to World War II.
In my humble opinion, it really would be history repeating itself but with a different flavour. Do you and those pushing for the tax seriously want a policy measure that seems harmless at first glance but on greater inspection would risk such economic and human hardship?
Please reconsider the transaction tax in greater detail. We need support from smart economists that have looked at every aspect of the tax.
Respectfully,
Ben W
click on user id, then click on "contact" for private email...
although I hope people to talk about econ use the comments so others can see the discussion.
I was particularly struck by Keen's ideas on debt-deflation, the liquidity trap, and his take on oversights of classical economic thought as applied in our current situation. The last section of this article is particularly insightful.
CG, I am in CNJ - close to the New Brunswick area. I work for a national wholesale/retail chain on the retail side.
I think Bob has a way we can contact each other directly, but I don't see the instructions right now. Maybe I'm just not awake enough, yet. LOL
and instapopulist overviewing Warren's excellent article. On specific policy that's related to econ, it's perfectly ok to talk politics. I just want to stay away from generalities, such as "all Dems suck" or "tax cuts work" and some of that insanity. I'm with you on this absurdity going on though.
You know from the few private communications we've had that I don't want to change the forum you have created here at EP. I'm afraid I would be the resident doomer. I have said repeatedly during the past 6 months or so that I think we are in a full scale political crisis, which is resulting from a major financial crisis.
Earlier today, I read Elizabeth Warren's article decrying the demise of the American middle class. Well, I absolutely agree with her but we all have been saying the same thing here for months! As much as I like Elizabeth Warren, Robert Reich, Paul Krugman, et al, I just keep thinking to myself...why are they being so discrete in their criticism? I mean, I voted for the O-man too, but I think he is a total fucking sellout and a worse president than GWB!! You call them like you see them, right? So why are so many others reluctant?
Anyhow, I will take your encouragement under advisement. Again, there is much I would like to say, but often I wonder if it is proper to express them in someone else's forum.
Keen can get a bit wonkish, but I think he has the most fundamental understanding of what we are facing and how we got here. He is a proponent of Hyman Minsky's theories and it would behoove us all, not in the least the policy makers in DC, to pay attention to his research. In some ways I would even go so far as to say that he is today's equivalent to the GD's Keynes and Fischer.
On a personal note, I was wondering where in the Garden State you reside? I lived for 20 wonderful years in Somerset county before cashing out. I formerly owned/operated a small, boutique import/export logistics operation in the Newark port area. You have mentioned in the past that you are involved in retail, so I would guess you are in the Secaucus area? I doubt that we know each other explicitly, but I would expect we have a few friends in common.
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