Problem is the majority of Democrats are in bed with almost the same rich people/lobbyists/corporations/corrupt unions as the Republicans.

We've slipped back into a Oligarchy unseen since before Roosevelt busted up the trusts during the Great Depression. Only now, instead of monopolies, we have oligopolies.

https://en.wikipedia.org/wiki/Oligopoly#United_States

@RedSky

First, if it were up to me, you could take over as Minister of Finance in this country tomorrow. Our differences seem miniscule compared to what horrendous policies our last three MoF have pushed. The one prior, ironically, was dubbed the most dangerous man in Europe by The Sun.

We're in agreement on almost everything you mentioned in your last comment, so I'll focus on what I perceive differently.

First, I'd differentiate between fiscal stimulus and fiscal spending, the former being a situational application of the latter. As you said, fiscal stimulus during an economic crisis tends to be inadequate with regards to our macroeconomic objectives. You can neither whip out plans for major investments at a whim nor can you mobilize the neccessary resources quickly enough to make a difference and still be reasonable efficient. Not to mention that it only affects certain parts of the economy (construction, mostly), leaving others completely in the wind. So I'm with you on that one, it's a terribly inefficient and ineffective approach.

Automatic stabilizers work magnificently in this regard, but they barely take any pressure from the lower wage groups, especially if unemployment benefits come with a metric ton of strings attached, as is the case in Germany. A basic income guarantee might work, but that's an entirely different discussion.

The problem I see with merely relying on reasonable automatic stabilizers in the form of payments is that they do put a floor into demand, but do very little to tackle the problem of persistent unemployment due to a lack of jobs. As useful as training and education are, the mere number of highly educated people forced to work mundane jobs tells me that, at best, it doesn't work, and at worst pushes a systemic problem onto the individual, leading to immense pressure. Not to mention the psychological effects of being unemployed when employment is tauted as a defining attribute of a proper person -- aka the demonization of the unemployed.

It's still somewhat decent in Australia, but in Europe... it's quite a horrible experience.

Anyway, my point is that I'd rather see a lot more fiscal spending (permanent!) in the shape of public sector jobs. A lot of work cannot be valued properly by the market; should be done without the expectation of a return of investment (hospitals, anyone?); occurs in sectors of natural monopolies -- all of that should be publicly run. A job guarantee, like your fellow countryman Bill Mitchell advocates quite clearly, might be an approach worth trying out. Economy in the shit? More people on the public payroll, at rather low (but living wage!) wages. Do it at the county/city level and you can create almost any kind of job. If the private sector wants those people instead, they'd have to offer better working conditions. No more blackmail through the fear of unemployment -- you can always take a public job, even if it is at a meagre pay.

I should probably have mentioned that I don't buy into the notion of a stable market. From where I am standing, it's inherently unstable, be it through monopolies/oligopolies, dodging of laws and regulations (Uber), impossibility to price-in externalities (environmental damage most of all) or plain, old cost-cutting leading to a system-wide depression of demand. I'm fine with interfering in the market wherever it fails to deliver on our macroeconomic objectives -- which at this point in time is almost everywhere, basically.

Healthcare is all the rage these days, thanks to the primaries. I'd take the publicly-run NHS over the privately-run abomination in the US any day of the week. And that's after all the cuts and privatizations of the last two decades that did a horrible number on the NHS. Fuck ATOS, while we're at it.

Same for the railroad: the pre-privatization Bundesbahn in Germany was something to be proud of and an immeasurable boost of both the economy and the general standard of living.

In the mid/long run, the effects of automation and climate change-induced migration will put an end to the idea of full employment, but for the time being, there's still plenty of work to be done, plenty of idle resources to be employed, and just nobody to finance it. So why not finance it through the printing press until capacity is reached?

As for the Venezuela comparison: I don't think it fits in this case. Neither does Weimar Germany, which is paraded around quite regularly. Both Venezuela and Weimar Germany had massive supply-side problems. They didn't have the production capacity nor the resources to meet the demand they created by spending money into circulation. If an economy runs at or above its capacity, any additional spending, wherever it comes from, will cause inflation. But both Europe and the US are operating faaar below capacity in any measurable metric. You mentioned LRAS yourself. I think most estimates of it, as well as most estimates of NAIRU, are off quite significantly so as to not take the pressure off the wage slaves in the lowest income sector. You need mass unemployment to keep them in line.

As you said, the participation rate is woefully low, so there's ample space. And I'd rather overshoot and cause a short spike in inflation than remain below potential and leave millions to unneccessary misery.

Given the high level of private debt, there will be no increase in spending on that front. Corporations don't feel the need to invest, since demand is down and their own vaults are filled to the brim with cash. So if the private sector intends to net save, you either have to run a current account surplus (aka leech demand from other countries) or a fiscal deficit. Doesn't work any other way, sectoral balances always sum up to zero, by definition. If we want to reduce the dangerous levels of private debt, the government needs to run a deficit. If we don't want to further increase the federal debt, the central bank has to hand the cash over directly, without the issuance of debt through the treasury.

As for the independant central bank: you can only be independant from either the government or the private sector, not both. Actually, you can't even be truly independant from either, given that people are still involved, and people have ideologies and financial ties.

Still, if an "independant" central bank is what you prefer, Adair Turner's new book "Between Debt and the Devil" might be worth a read. He's a proponent of 100% reserve banking, and argues for the occasional use of the printing press -- though controlled by an inflation-targeting central bank. According to him, QE is pointless and in order to bring nominal demand up to the level we want, we should have a fiscal stimulus financed by central bank money. The central bank controls the amount, the government decides on what to spend it on.

Not how I would do it, but given his expertise as head of the Financial Services Authority, it's quite refreshing to hear these things from someone like him.

Nothing is good about this situation and there is no reason to think this will end in anything but Greek default.

Greece's government, elected by its citizens ran up a large and unsustainable debt which was masked by easy credit before the GFC and fraudulent accounting.

There were many contributors. Corruption, hugely wasteful state owned enterprises, joining the euro zone before they were ready to lose the ability to devalue their currency and lower interest rates, and flagrant tax evasion.

But as a country they're collectively responsible for not demanding the necessary reforms of their politicians to ensure they were not vulnerable to a credit crisis when the GFC hit and lenders began to look more scrupulously at individual European countries rather than Europe as a whole. Equally, Italy is responsible for voting Berlusconi into power for every year their economy recorded negative growth under his government. Spain is responsible for not providing sufficient oversight to bad bank lending leading a huge indebting bailout package.

Some of Syriza's reforms are reasonable. Tackling corruption and trying to break up oligopolies are worthy ideas, but they are unlikely to be easy and yield any immediate benefit. Raising the minimum wage and planning to hire back state workers as they have already promised will almost guarantee they will cease to receive EU funding/ECB assistance and later IMF funding.

The simple truth from the point of view of Germany and other austerity backing Nordic countries is if they buy their loans (and in effect transfer money to Greece) without austerity stipulations, there will be no pressure or guarantee that structural reforms that allow Greece to function independently will ever be implemented. These lender government and by extension its people have no interest in transferring wealth to Greece if it stalls its reforms.

Yes fire sales of state owned enterprises suck but the likely alternative at this point if the Troika lending is stopped is that all other lending stops and Greece defaults. At that point there would be mass loss of state sector jobs and sky-rocketing unemployment relative to what is now being experienced. It would take years of reform for the Greek government to be lend-worthy again. There is simply no trust for any alternative to austerity on the part of north Europe.

Currently Greece has reported positive growth in the past quarter and excluding debt repayments is running a budget surplus. Realistically, yes they cannot pay back the 180% of GDP. The likely way forward is after several more years of real reform they (+ Spain & Portugal) would get better terms from the EU as politically, leaders in Germany and elsewhere will be able to make the case that their objective has been achieved.

The ECB's QE package is in some ways already part of this. What I guarantee won't happen is electing Syriza to oppose bailout terms helping to secure that. Germany et al will quite rightly see that if they acquiesce to Greece they will encourage other populist parties in Spain, Portugal, Italy and France and stall reforms.

Could Germany and others in theory provide a huge cash infusion to Greece, Spain and Portugal now? Sure. And those parties would be voted out in the next election and the terms reversed. Even with the relative stinginess of current loan terms, the likes of UKIP and the National Front with their anti-EU stance, have gained political standing in the EU parliament and will likely see huge boosts in upcoming domestic elections.

Tags for this video have been changed from 'cable, oligarchy, balls' to 'cable, oligopoly, balls' - edited by xxovercastxx

If labour laws are enforced equally within borders, unions don't affect competitiveness one way or another. Internationally, yes there will be differences in application but in economics, competition usually relates to abuse of market power in oligopoly or monopoly structures rather than the converse.

More specifically, monopolies create the incentive in most industries to withhold output to levels of sub-optimal demand by raising prices. This maximises revenue for the firm but limits societal benefit derived from the good or service being produced, creating a deadweight loss of value. In a more competitive environment, competitors would increasingly put pressure on prices downwards until the optimal, larger output level was reached. Wiki has a decent summary here:

http://en.wikipedia.org/wiki/Monopoly#Monopoly_and_efficiency

Therefore while the existence of monopolies is not always harmful, say in the case of utility infrastructure owning firms, where otherwise you would have unnecessary duplication, monopolies are almost always detrimental unless sufficiently regulated.

Of course, right wing US politics portrays free market economics differently, but as you well know, the intention there is to create a false theoretical narrative for whatever special interest they are paying dues to rather than being truthful about the facts. As I said, none of this would at all be controversial in a university/academic setting.

Heading back to school for nuclear engineering myself in the next year or so, hopefully to make reactors completely self regulating.

Since no source is mentioned, I assume this to be your comment and therefore applaud and envy you. Most of my passion for a couple of things died somewhere along the way.

Questions, comments or concerns on nuclear or energy in this thread are always welcome (and encouraged!)

Meaningful questions would require a level of knowledge I do not possess, so I'll stick to the layman's reaction: a comment.

Two issues that are not exclusive to the use of nuclear technology make me a strong opponent of nuclear energy in general, aside from technology-specific problems. It's the involvement of people in every stage of the process and centralisation.

Anything run by private entities has to generate a profit. Therefore corners will be cut, regulations will be circumvented. Mistakes will be made, design flaws covered up. The cheapest material will be used by the least paid worker, supervised by a guy on his second job who just wants to go home to his family.

Case in point would be the reactors in Germany, one of the most stricly regulated and controlled markets in the world. Absurd levels of negligence and coverup after coverup have become public over the years, and that's before cost cutting measures became en vogue.

Or take the EPR Olkiluoto 3 in Finland. The reports on the construction process would be hysterically funny if it wasn't a bloody nuclear reactor they're working on.

Google some pictures of "Schachtanlage Asse" to see the reality of "due dilligence" in these matters. If people are involved, bean counters and politicians will run the show, fuck-ups and bad calls are inevitable.

Even if engineers call the shots, they'll overengineer it, they'll make it incompatible with real life conditions. We've seen it time and time again. I could tell you stories about the ICE train, for instance, that'll make your head spin. Incidently, the same company is also involved in the construction of nuclear power plants.

As for centralisation: if energy generation is focused on large scale power plants, it creates monopolies/oligopolies. If a handful corporations, or regionally even just a single corporation, controls the market for something as fundamental as energy, it turns all concepts of a market into a farce. Look at France where EDF basically owns every single plant. Or Germany, where Vattenfall, E.ON, RWE and EnBW control the grid, control the power plants, control the market, control the price, control the politics. It's madness.

Edit: Blimey! This was supposed to be a short comment, yet it turned into another incoherent rant. Sorry.

@bmacs27

I am completely on board with good legislation and I do think there is too much capital concentration in the financial sector.


Compensation wise I don't care what the banks want to compensate their employees. It's up to their boards, shareholders, and the market to decide that.

A more major concern for me is are we facing an oligopoly in banking? With smaller community banks being squeezed out that could become a real issue. At present I think most banks still have to be pretty competitive to make it, but that could change.

As I said in an earlier post, "Make the rules simple, make them fair, and enforce them effectively."

Glass Steagall, from what I understand, was a pretty good Act. It clearly divided commercial banks and security trading firms. Sounds like a good idea. That said I don't believe I'm very knowledgeable about the issue - and there seems to be a lot of debate about whether it would have prevented the collapse we experienced anyway.

What bothered me about this video and its subsequent commentary was the complete lack of reason. It is all emotion - much of it violent - about a company and a man most of the posters seem to know little about.

No mention of OPEC enforced price fixing oligopoly?

>> ^shagen454:

Yeah, yeah (I love Futurama BTW and the only way they are able to make references to what they do is because they are well aware)
But I'd rather support "penniless hippies" than corporate, lifeless twats that ruin local American economies just so they can by a John Deer lawnmower so they can waste shitloads of good water & money on their silly little golf lawns and feel "accomplished".
I really wish "Support Local Business" wasn't synonymous with "hippy" culture. It should be in everyone's interest. But, I guess the other-side of America is apathy, complacency and self-destruction - the whole "I don't care" "fuck it" mentality.
>> ^Sarzy:
>> ^shagen454:



The issue isn't "greedy corporations" you realize all corporations were once the local business in town that grew because they provided something better/cheaper. I will agree that giant mega corporations aren't all that great...but you need to understand they wouldn't exist without government subsidization (look at america's corn industry...hence the obesity levels..everything has corn syrup in it because the industry is SO heavily subsidized.)

my point is, if you're unhappy, don't complain about walmart, complain about the shit government that fucks up free markets, allowing and encouraging monopolies and oligopolies. not a single case of a monopoly within a free market exist in the history of any country.*


ps. I bet you shop at walmart.

We need some regulation, we're just doing it all wrong in the US. The story of talktalk starts with the government forcing BT to open up their last-mile copper to other providers. This allowed more competition to spring up which led to a healthier, arguably freer, market than the one which was less regulated.

More competition is always ideal for consumers.

In the US all of our regulations are in place to protect monopolies/oligopolies and stifle competition, and we wonder why we suck at damn near everything.

>> ^marbles:

[S]ince companies can gain a market advantage by piggybacking on government infrastructure and making political deals, then it leads to oligopolies where the consumers are given false choices at inflated prices in their goods and services.
I'm not sure why the words "government" or "political" are in there. Companies can gain advantage by piggybacking on some other company's infrastructure, and the infrastructure's owner can make exclusivity agreements, which then lead to oligopolies where the customers are given false choices at inflated prices.

You even provided some non-governmental examples:
>> ^marbles:
Think Verizon/AT&T, Comcast/Time Warner, Energy providers, etc.

I suppose there are public electricity generation companies, but I don't remember the US government ever having a cable TV or wireless phone company.
>> ^marbles:
The USPS is self-sufficient? The USPS has several billion dollar deficits every year. To stay in business it has to "borrow" money from the US Treasury each year.

Two things. One, it's hard to find companies who didn't have losses in the last few years, and two the USPS's finances are being artificially deflated by a policy foisted on them by Congress.

That aside, self-sufficiency in this case means that nobody's taxes go to the post office. They're getting unusually cheap debt because they can borrow money using the US government's credit rating, but that doesn't cost anyone in higher taxes.

Keep in mind, this is the USPS borrowing from the Treasury. In terms of the national debt, it's an asset, not a liability. Maybe you're right, and the USPS will run up a huge debt, and then default, but I don't think so.

As for the big rant about debt and inflation, I'm too tired to run through the economics right now, but this whole story about debt & inflation is vastly, vastly overblown. Yeah, it could be a problem, maybe in 2030, and only then if we never end the Bush tax cuts, but otherwise it's just another scare tactic to make you do something that's against your own interests.

>> ^NetRunner:

First, the Post Office has been self-sufficient since the 80's. Your paycheck has nothing to do with it, unless you buy postage from the USPS.
Second, there's a difference between "inefficiency", and mandated universal service. What you describe is the latter.
And a third point to @blankfist's gung-ho praise of private carriers, all the packages I've gotten this year from Fedex were sent by Fedex's SmartPost, where they hire the USPS to do terminal delivery for them, because they can do it more efficiently.
Ditto for DHL and UPS. It's been a while since someone other than a USPS mail carrier brought me a package.
As confrontational as all that sounds, I don't really have any particular attachment to seeing government be in the mail delivery business. I don't really see any point in the universal service requirement on snail mail anymore, either.
I'm game for upgrading to something like Finland's universal service for broadband internet, since keeping us all connected via an information network is why we had a government-subsidized post office in the first place.
If you guys sign on for that, I'm all for cutting the Post Office loose.


FedEx and UPS will fly USPS mail from point A to point B. USPS will deliver the last leg of Fedex and UPS parcels in certain areas. It works both ways. They all touch each other's junk.
But the enforced monopoly on private mail creates an oligopoly in the package delivery market. This is the greater evil of government enforced monopolies. Monopolies don't lead to ingenuity, resourcefulness, or efficiency. So markets, that are seemingly free, will emerge around the government controlled one. And since companies can gain a market advantage by piggybacking on government infrastructure and making political deals, then it leads to oligopolies where the consumers are given false choices at inflated prices in their goods and services. Think Verizon/AT&T, Comcast/Time Warner, Energy providers, etc.

The USPS is self-sufficient? The USPS has several billion dollar deficits every year. To stay in business it has to "borrow" money from the US Treasury each year. ("Borrow" because it'll get paid back right?) So... where does the Treasury get it's money from? *cough* ... Taxes?!?! Ok, so technically it isn't using tax money because really that money was spent a looong time ago with how the government has it's own deficits (in the trillions!).
Basically when the USPS brags that they don't get tax payer money, it's at best a misnomer. It's actually far worse. The USPS has to "borrow" money from the US treasury, who has to "borrow" money from the Federal Reserve. And since the Federal Reserve doesn't actually have any "reserves", it magically creates the money, which debases the currency, which causes inflation. So everyone does end up paying for the deficit, only it's with an invisible tax of lost purchasing power of their money, i.e. prices go up. Yet the "debt" holder still collects interest from the tax payers and can even demand payment in full which would probably lead to confiscation of public assets and/or selling of public assets to private companies. So the reality is the USPS does cost the tax payer. The tax payer pays the deficit. Twice. Plus interest. That's why public debt is such a dangerous matter. And also why most of the debt in the world is illegitimate.

^Profit from it? I think what this video is trying to do is be what the media should be, a watch dog. Granted, this is chop full of sensationalism and glances over things that are important, but it is at least making an effort to look out for "the man" and serve the interests of "the little guy". It seems like people who call shenanigans now are attacked with "loon" or "conspiracy nut" kind of ad hominem attacks.

While it isn't formal education, it is at least something to break the cycle of thought one normally is exposed to. A break from status que thinking that you would get at...say your local library. Established educational academia has a vested interests to not look "cooky" as it could detract from their attendance pool. They have a vested interest in not deviating from what you would expect. Being edgy or insightful goes against established academia and it is why a lot of real revolutionary thought comes from outside the university system.

Even well educated people on economics don't have any transparency into the fed. It is only partly a government organization, the business conducted in them is not a matter of public record. Recent attempts to make it so have been blocked and that is what the video is pointing out in the first 50mins or so. That massive cronyism and misconduct was and still is being conducted to rob the people of their savings to benefit a very small number of firms that generate no wealth.

I don't see why you would find it odd that the rich would conspire with other rich to protect their wealth and power. The history on this; mercantilism, cartels, feudalism, oligopolies, is just to clear to ignore. I think this video did a good job in capturing where these potential men in black coats could be, and if they are, offer a very interesting perspective into possible goals and means to archive those goals. I love war gaming. What I mean is to take a situation and map it out to its ends. Most people get ridiculed when they do this out in open air, which is a shame.

>> ^Trancecoach:
Yes, bye bye telco's. Unless they're restricted to data carrying (they have good infrastructure for that), they'll be replaced.


Yes, of course they will be replaced. Just like how we've gotten rid of the MPAA and the RIAA since they started illegal practices 10 years ago. Wait, we haven't? Ahh, crap.

Telco will never disappear because they will always be viewed as essential. They have one of the best business positions to be in (an oligopoly that has a start up cost, but virtually zero operating costs for each client) and they still serve an essential function that they can't be cut out for. Deathcow's right. Go improve BitTorrent algorithms because you're dead wrong, Bram.