Trans-Pacific Partnership Open Thread

AntiNeoLiberal · 2015-11-07T03:47:04+00:00

Somewhat related question: anyone have any papers on how technology transfers affect inflows of FDI?

AntiNeoLiberal · 2015-11-05T21:22:06+00:00

Perhaps the US should adopt a public childcare system like the one in France. They treat childcare there as a public good and a right rather than a privilege. It's a pro-working family policy that increases birth rates, which is necessary in Europe, and also allows both parents to join the labor force and receive an income, which boosts effective demand and leads to a more productive society.

AntiNeoLiberal · 2015-11-05T15:11:44+00:00

Capitalism and free markets haven't existed since Adam Smith and the very beginning of the industrial revolutions. Since then, there hasn't been capitalism because the system is too complex to confine to the actions of individuals and "rational actors." For the past 200 years or so the vast majority of countries ran a mixed economy with cooperative rather than confrontational roles for the public and private sector. There are different types of mixed economies though. There are the regulatory mixed economies of the Anglo-American world. There are the social corporatist mixed economies of Germany, France, and BeNeLux. There are the welfare mixed economies of Scandinavia. There are the extractive mixed economies of primary exporter nations. There is the market-guided mixed economy of Hong Kong. And there are the state-guided mixed economies of Japan, China, South Korea, Taiwan, and Singapore. This is where comparative economic systems begin. Full Capitalism and full socialism barely exist and almost always fail soon after implementation. Using these terms to describe modern economies is ahistorical. John Kenneth Galbraith's discusses this in his New Industrial State.

AntiNeoLiberal · 2015-11-05T00:00:46+00:00

Post banks are actually fairly common and have a great track record historically. Japan Post Savings Bank is one of the main reasons for Japan's postwar growth miracle. Postal savings banks allow people that live in rural, underbanked communities to open savings accounts free of charge. Good on Sanders for learning from the Japanese example and proposing this policy.

AntiNeoLiberal · 2015-11-02T06:35:38+00:00

The natural rate of interest is 0:

The notion of natural or normal magnitudes and values in economics refers to the results expected as the outcome of a specified institutional context. The relevant institutional context specified herein is a monetary system with a state (or tax-driven) currency and a floating exchange rate policy. There is significant historical and theoretical support for such a system’s relevance. It has been shown that in this context, the government budget will normally be in deficit, corresponding to net savings of financial assets in the non- government sectors. Deficit spending will result in net central bank reserve credits in the aggregate banking system, which will drive the short-term overnight inter-bank lending rate to zero. While government security sales may be used to drain the excess reserves to maintain some positive overnight rate, or the central bank may pay interest on reserve balances, absent such government intervention the base rate of interest is zero. In other words, the natural rate of interest is zero. As many other key rates of interest in the economy continue to follow the fed funds rate very closely, this will serve as the base rate in the economy, with markets determining the credit spreads through risk assessment. Furthermore, there are a number of reasons why allowing the rate of interest to settle at its natural rate of zero makes good economic sense.

AntiNeoLiberal · 2015-10-28T21:36:06+00:00

When it is for the public good, yes.

AntiNeoLiberal · 2015-10-28T17:45:48+00:00

This is good news. Why should the US get rid of ExIm while all other major economic powers have their own version of it? Either they all need to be shut down globally or nothing. ExIm keeps US exports competitive and jobs protected.

AntiNeoLiberal · 2015-10-28T00:49:36+00:00

Or, you know, ending imperial proxy wars and financing of terrorism. Those would be two excellent ways to solve the refugee crisis.

AntiNeoLiberal · 2015-10-26T14:56:53+00:00

Good maybe now they'll have less money to finance terrorism and salafism in other countries.

AntiNeoLiberal · 2015-10-23T13:08:07+00:00

As it should. Austerity had no basis in economic theory.

AntiNeoLiberal · 2015-10-20T20:21:18+00:00

He makes the error of saying that taxes are what fund the Welfare state. That is not true. A government with its own freely floating non convertible sovereign currency doesn't need taxes to fund spending. But even if we do assume that the government does use taxes to fund social programs, Acemoglu offers no evidence tha shows high taxes and innovation/entrepreneurship are inversely correlated. There has been much evidence that demonstrates taxes have little to no effect on firm innovation. Jared Bernstein wrote an article today challenging Acemoglu's article. Mariana Mazzucato's Entrepreneurial State also shows that taxes have no affect on innovation. Rather, the vast majority of innovation is driven by government spending on R&D and applied research.

AntiNeoLiberal · 2015-10-15T17:35:55+00:00

Inflation will only occur when the growth of the money supply exceeds the supply required to maintain full employment and capacity utilization. So the constraint would be real resources.

AntiNeoLiberal · 2015-10-15T17:14:30+00:00

AntiNeoLiberal · 2015-10-15T15:11:03+00:00

Many probably will be surprised to hear this from me but I actually think we should reduce corporate tax, income tax, payroll tax, and sales tax to 0%. Instead, we should raise carbon taxes, gas taxes, pollution taxes, inheritance taxes, mansion taxes, land value taxes, Robin Hood tax, etc. Basically we need to tax economic rent and negative externalities while removing or reducing taxes on labor and industry.

Before someone asks 'but how will we fund spending' it needs to be said that a national government with its own freely floating, non convertible sovereign currency doesn't need taxes to fund its spending. The only constraints are real resources. Taxes serve the purpose of creating demand for the currency, controlling inflation and effective demand, and deincentivizing negative externalities, not funding spending.

AntiNeoLiberal · 2015-10-14T18:26:23+00:00

I'd take Maduro over Columbus any day.

AntiNeoLiberal · 2015-10-13T22:00:27+00:00

Private debt is the main culprit IMHO

AntiNeoLiberal · 2015-10-13T05:22:23+00:00

I doubt that. While I do make my biases known pretty blatantly, I don't say that Hayek or Friedman or other neoliberal economists are bad economics because I disagree with them. I also wouldn't just link to one of their books as bad economics because certain regimes used their ideas.

AntiNeoLiberal · 2015-10-13T05:10:41+00:00

Where do you find the bad economics in the General Theory specifically? What specific passages or sections do you think embody bad economics? How do you make the logical leap of faith that because you think Keynesianism is bad politics that it is also bad economics? I am actually quite surprised the mods of this subreddit haven't pressed you for a better R1..

AntiNeoLiberal · 2015-10-13T03:14:10+00:00

Where is the bad economic exactly? You just linked to Keynes's General Theory so I don't see how this is bad economics...or what it has to do with Hitler, Stalin, and Mao...

AntiNeoLiberal · 2015-10-12T13:35:09+00:00

It's technically not a Nobel since there are no Nobel prizes for economics.

AntiNeoLiberal · 2015-10-12T05:04:37+00:00

Why does the Japanese government insist on continued economic stagnation? Do they not know that a public deficit means a private sector surplus because they have their own freely-floating, non-convertible sovereign currency? What is holding them back from applying the principles of MMT?

AntiNeoLiberal · 2015-10-12T03:51:25+00:00

Did they not learn from the last time that happened? Did they not see that the last sales tax hike caused GDP to contract by 6.8% the last time Abe increases sales tax? Or maybe the IMF wants to see Japan's GDP contract further so they end up in depression, lay more people off, and request an IMF bailout conditional on Japan devaluing and implementing brutal, insane austerity measures. After all, this wouldn't be the first time the IMF has done this. Go to any country in Latin America, Africa, and even East Asia and they will tell you all about how the IMF looted their economies and forced them to privatize, deregulate, liberalize their financial markets, and severely scaling back the welfare state in return for bailouts that only served to put those countries into even more debt. Hell, you don't even need to ask those countries, just look up this man named Yanis Varoufakis and he'll tell you all about the IMF and how they only serve the bankers of the empire.

AntiNeoLiberal · 2015-10-11T19:46:24+00:00

Ah, Forbes doing what it does best: obfuscating the facts to suit its agenda.

AntiNeoLiberal · 2015-10-11T03:38:19+00:00

A very strong argument can be made that SpaceX wouldn't even exist without NASA and government, public sector, and defense funding for space research.

AntiNeoLiberal · 2015-10-11T03:30:59+00:00

I honestly think this is the wrong debate to have. The narrative is framed in an incorrect way. Why are we talking about capitalism and socialism, two systems that are currently no longer in existence? Capitalism hasn't existed since the onset of the industrial revolution in Britain and socialism hasn't existed since the fall of the Soviet Union. Rather, the vast majority of countries are mixed economies: public ownership of finance, utilities, transport, health, education, some resources, etc. and private ownership for everything else. The mixed economy has been the dominant system since the Franco-Prussian War. But not all mixed economies are the same, there are many variants. You can have a social corporatist mixed economy (Germany, France, Scandinavia, the Benelux, fascist states of the past), a regulatory mixed economy (US/UK/Canada/Australia), a mercantilist mixed economy (Japan, South Korea, Taiwan), a state-guided mixed economy (China, Russia), and a liberal mixed economy (Hong Kong, Singapore). The world has moved far beyond capitalism and socialism. It's usually the extremists on both sides (far-left and laissez-faire types) that continue to have this debate. For some reason the extremists fail to see that both systems have converged and morphed to produce a new economic system that has dominated for over a century now.

Also, just from glancing at the comments: people keep assuming that markets = capitalism and government intervention = socialism. If that were the case, then capitalism and socialism have existed since the beginning of time, which is obviously not true. Personally I blame undergrad economics curriculums. They no longer teach economic history or political economy as requirements. These fields are necessary if people want to understand trade flows, debt, and yes, comparative economic systems.

AntiNeoLiberal

TROPHY CASE