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Archive for 2011

Modern Monetary Theory: Are We Overtaxed?

Posted on: December 30th, 2011 by Mike Sax 1 Comment

     Until I got into MMT I would have thought this was a Right wing question. I mean what seems obvious is that we-or at least some of us-are undertaxed. It seems that Bush's tax cuts were what put us into huge deficits that are now being used as an excuse to cut spending even further.     Yet I think I'm beginning to understand the MMT line. We are overtaxed relative to government spending. Of course by "we" I mean the non-rich. So it is doubly ironic that we have had such regressive tax proposals out of the Republican candidates this year.    I would agree that non-rich Americans-the 99%-are overtaxed based on what we get for our dollars. The non-rich need a tax cut. However this tax cut can come in the form of lower taxes and/or more government spending that benefits the non-rich.    According to MMT theory in a fiat money system...

Bill Maher’s Sharp Tebows

Posted on: December 29th, 2011 by Mike Sax No Comments

       Clearly his tweet about Tebow over the weekend has been received as "controversial."        "Comedian Bill Maher drew the ire of Tim Tebow fans and Christians over the weekend after a profane tweet reveling in the Broncos' blowout loss to the Buffalo Bills."  Here is the offending tweet:        "Wow, Jesus just f***ed #TimTebow bad! And on Xmas Eve! Somewhere ... Satan is tebowing, saying to Hitler "Hey, Buffalo's killing them," Maher tweeted.        Ok, this is still a free country though right? I mean it's not like anything can be done to Maher because of his impiety? Maher is not a bad bullshit detector. like the time he got fired for calling 9-11 passengers...

Arthur Laffler Endorses Newt

Posted on: December 29th, 2011 by Mike Sax No Comments

     We can also say, exposes him, for obviously you have to have a pretty regressive tax plan to get Laffler's vote.       Laffler really likes Newt's 15% flat tax-with a 12.5% corporate tax rate. And you have to love flat taxes-they are very simple; simple to understand, even more they are simply awful.       “The purpose of economic policy is growth, jobs, and prosperity,” supply-side founder Art Laffer told me Wednesday. As such, Laffer has endorsed Newt Gingrich and the Gingrich 15 percent flat-tax plan, which includes the 12.5 percent corporate-tax reform. “It’s nothing against the other candidates,” Laffer said. “But Newt’s plan is right, and therefore endorsing him is the right thing to do.”        Sure Laffler says that now, but would this plan be the...

Reading FDR

Posted on: December 29th, 2011 by Mike Sax No Comments

      I'm currently reading a very good biography on FDR by Ted Morgan. I've been on an FDR jaunt lately, having already read a few anti-FDR books-for me you must always listen to detractors too.       As we are currently going through the worst economic downturn since the Great Depression, many liberals who are disappointed in Obama wonder why we can't have an FDR today.        I do think this can be a little misleading. To an extent great Presidents in US history were also made by their time-from a liberal stand point I would argue that the two greatest Presidents were FDR and Lincoln. Both men had many superior qualities but the age made them as well before they remade their age. FDR resided in a more progressive age, though he was progressive by instinct and temperament. He deserves personal credit but we must also remember context. At the present we are still living in what in what has been...

The GOP Primary: A Traffic Accident

Posted on: December 29th, 2011 by Mike Sax No Comments

      Yet you can't avert your eyes. I mean what's next? In Iowa we suddenly have a new candidate who "is not Mitt Romney", Rick Santorium whose numbers are suddenly in double digits. Ron Paul has been leading here for the last few weeks.       Meanwhile, the Gingrich surge we saw just two weeks ago, seems like another lifetime. Since then he has dropped 19 points in Iowa and has a new public humiliation-at least on the level of when his campaign quit on him last summer or when he and Santorium were the only ones to agree to the Trump debate-he failed to get on the Virginia ballot. Yeah this guy is a serious candidate all right.      Now we have the story of Michelle Bachman's major campaign leader and Iowa state senator, Ken Sorenson jilting her for Ron Paul, who some now call "a dangerous man."    ...

Obama’s Approval Numbers Rise: Is It the Economy?

Posted on: December 28th, 2011 by Mike Sax No Comments

     So asks a CNBC post. Maybe the somewhat improving economy has helped.            I also think what is helping him is similar to what helped Bill Clitnion during the impeachment fiasco during the 90s-he is simply a lot more likable than his enemies.      Maybe his numbers going up are simply Americans having seeing the alternative of what they could have with the GOP candidates-more vicious budget cuts, no stimulus for the economy other than supply side tax cuts and the absurd idea that we currently suffer from over regulation and uncertainty.     I mean the Republicans aren't exactly giving us much to choose from this year. Rick Perry who was as is par for the course in this primary and early leader but then a dud, someone who suggested a deeply regressive tax cuts. is a religious fundamentalist, and shows a...

Market Monetarism: Frontline of Revisionism?

Posted on: December 28th, 2011 by Mike Sax No Comments

     This whole question of market monetarism, NGDP targeting, etc. I have puzzled out. While the idea on it's face seems like it could do some good, some of the positions the market monetarists take in the "real economy" are not reassuring,      I have recently read quite a bit of Lars Chistensen's Market Monetarist blog. In many ways he provides more of a systematic presentation of MM views than you find even at Sumner-evidently, while Sumner is perhaps the best well known, Christensen evidently coined the MM term.     Yet it seems to me that many of the Right wing attempts at revisionism are applied too by the MMs. You have Sumner claiming,     "Krugman has zero credibility on this issue, as he has an agenda and his past assertions about F&F have been shown to be factually inaccurate. I have always favored abolishing F&F, “privatization” does no good when our Congress is this corrupt. Maybe it...

Signs of Life in Italy’s Bond Market?

Posted on: December 28th, 2011 by Mike Sax No Comments

      Certainly don't want to get too out in front over this but today's Italian short term bond auction saw yields havled from what they fetched just a month ago.       "Analysts warned market nerves could easily reignite and pointed to a tougher test on Thursday when Italy will sell up to 8.5 billion euros ($11.1 bln) of longer-term bonds, including three- and ten-year paper."      "But the lowest six-month auction yield and strongest bid-to-cover ratio since September added to a sense that some of the tension around the countries now at the center of Europe's debt problems had eased for a moment."      Perhaps the recent injections the ECB has put into European banks has helped for now.      "Since then the ECB has flooded euro zone banks with almost 500 billion euros of longer-term liquidity and the Rome government has overcome internal opposition to a radical...

Sumner, Krugman and Credibility

Posted on: December 28th, 2011 by Mike Sax No Comments

      In his most recent post, Sumner claimed in the comments section that Krugman has "zero credibility" on the issue of Fannie and Freddie and their impact on the fianancial crisis.       The reason for such a dismissal is because here Krugman has had an agenda. Ok, and Sumner thinks he has no agenda?        No one has more of an agenda than him and is fellow market monetarists, which by the way is not a point against them. I mena why would you listen to someone who has no agenda? Such a fellow is not very interesting.       But Sumner it seems to be is not always os cirumspect about what his agenda is. He wants to write not only for the Right but to the liberals as well, but is his agenda in the interest of the liberals?       To the extent that he is...

The Agenda of Scott Sumner’s NGDP

Posted on: December 27th, 2011 by Mike Sax No Comments

     Morgan Warstler took it upon himself to answer this for Scott the other day. Sumner has not commented on Morgan-a resident Right wing knuckle dragger over at The Money Illusion. But if Morgan means to help Scott, he should maybe just be quiet. Here is his attempt at helping Sumner explain his position.     "Remember this, liberal softies, Scott’s real agenda is JUST AS BRUTAL on public employees as I am."     "Under a level target (4% is much preferable to 4.5%), every time the government deficits spends, that creates calorie-less NGDP growth, and the FED swoops in a raises rates on the real private sector business economy."     "Under Scott, every single year is Bill Clinton buckling to Alana Greenspan in 1993."      I sent a comment to Morgan wondering how much he is really helping Scott. He answered me thus:     "I want you to understand that level targeted NGDP is...

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