links

Reality Denial: Herman and Peterson
The Upside of Default: The Archdruid Report
An Outline of Fragility: David Korowicz
Veblen's Institutional Elaboration of Rent Theory: Michael Hudson
Liberty National Golf Club: Lindsay Newman

Links

Balance Sheet Economics: Michael Pettis
The Distribution of Assault: Crooked Timber
The Conservative Onion: Paul Krugman
Time And Interest Are Not So Interesting: Interfluidity
Michal Kalecki On The Great Moderation: Interfluidity
The Crisis In 1000 Words Or Less: Steve Keen
Plu ca change: Political Aspects Of Full Employment: Michal Kalecki (1943)
Of The Place: Olsen Kundig

Links

Is a New "Take No Prisoners" a Model for Social Change?: Yves Smith: NC
More Gresham's Ethics: Reuters
More Gresham's Ethics: Simon Johnson
The Financialization Of Accumulation: John Bellamy Foster: Monthly Review
HP Filter Validates Winnings For The Rich: Krugman
GOPatriotism: Krugman
Very Serious Irresponsibility: Krugman
Zarthustra on Chinese Money Flows (out)
Steven Rattner Remains Bullish On China, Kelptocrat to Kleptocrat
Chapel at Rio Roca Ranch: Jennings+Jennings: archdaily

Links

Brooks Blames Everyone But the Folks Who Took All the Income for Income Inequality: Helaine Olen, Forbes
Not that TED Stravaganza: Do The Math
Original Sin: Multiplier Effect
Hayek's Penchant For Pinochet and Mises Musings On Mussolini: Lord Keynes
Ideology Sucks the Ground Dry in Texas (and its unfortunate neighbors): The Daily Impact
How Today's Capitalists Bring Bad Things To Life: Douglas K.Smith co Yves Smith
Biggest Theft In History, In The States It's Legal 'Cause Mostly Rich White Guys Do It: Foreclosure Fraud Schneiderman and his Magnificent 7 (or is it 10 now) will soon restore the rule of Law at their water cooler, there will be no lawlessness in the Attorney Generals Office (unless its in a conference room)!
Still Ain't No Criminals On Wall Street: Masaccio, Fire Dog Lake This is sarcasm, but then there's this bait and switch at the NYT: The Spreading Scourge of Corporate Corruption: Eduardo Porter that loads up like Bill Black at a howitzer before the fold only to blast waffle and twaddle into the inner news space: our infallible government isn't prosecuting these things so things must be no worse than normal, right? I have a betting pool on whether the NYT will fold first or realize that corruption up and down the government and across the Fortune 500 might be a damn good way to draw readers: most of us aren't corrupt and are more than a bit peeved about it but the longer they (NYT) pretend there's nothing to see, the less point there is to read what so obviously does not correspond to the experience of most people.
Whom The Gods Would Destroy: A Fist Full Of Euros
Auckland Art Gallery, Toi O Tamaki & FJMT

Links

Growth Out: Bill Mitchell
What Really Happens When You Get Sucked Out of an Airlock: Gizmodo
Obama Kills: Congress Looks the Other Way: Tom Junod, Esquire
Hayek on the Convenience of Dictatorship: Farrant, McPhail, Berger
Gresham's Ethics: Matt Yglesias
We Don't Need No Stinking Safety Nets: Multiplier Effect
How Corruption Becomes Institutionalized: Bill Black
Whose Incentives?: Paul Krugman
Forcing Bill Gros To Lose Billions In Slow Motion Is A Crazy Way To Get To Full Employment: Chris Mealy via Slack Wire
Three Points on Workplace Coercion: RortyBomb
Dwelling after Student Debt Prision: Architectural Dispatch

Through the Brooks'ing Glass

I remember as an Austin High sophomore at the end of gym one day, after showers, several of my buddies mocking the awesome and bullet proof Oxfords our new classmates was lacing up as we tied our Adidas or pulled on our Tony Lamas. It was his first semester in what I would come to realize was a very very good public school system, one where Ivy League placements were common, information I was not yet interested in at the time. His parents though, were. Flustered and red faced, heckled by the rich kids, his then baffling response was "I can't afford cheap shoes". He was about 6'4", though he couldn't have weighed more than 140 pounds,  he was done growing and those shoes would see him through a dozen soles and the next decade of his life unless some misfortune befell them.


That was around 1978 and his folks were among the last non-college educated Americans who saw any real benefit from working hard and learning on the job. Reread that. For just another few years their wages would continue to grow at the same rate as their productivity, but then they stopped. Permanently. The opportunity gap cracked open and with each conservative "reform" it has gaped wider. They made the effort for their son and I hope he has achieved dreams beyond all of theirs for him. But that path, the rout where caring parents working hard could struggle to get their kid in the best classes (that happen to be in public schools) which would offer him a vastly different future has been under sustained pressure ever since.

Links

Bloomberg Envisions Student Debt Prison: NYT
Certainty of Debt and Taxes: Warren Mosler
The State of Climate Denialism: Michael Mann ABC
Rules of American Justice: Glenn Greenwald NC
Lethal Presidency of Barack Obama: Tom Junod NC
Cascading Creek House, Bercy Chen Studio: ArchDaily

Links

Best Prediction in Last 20 Years: Randal Wray
Interest Rates and (In)elastic Expectations: JW Mason
What is a bank loan?: Steve Randy Waldman
The Mathematics of Biodiversity 1: John Baez
The Mathematics of Biodiversity 2: John Baez
The Mathematics of Biodiversity 3: John Baez
The Mathematics of Biodiversity 4: John Baez
The Mathematics of Biodiversity 5: John Baez
The Mathematics of Biodiversity 6: John Baez
This looked like a banking crisis the minute it was conceived: Johnson Burgee

Bad Debt is the result of Prior Bad Underwriting

In the run up to the GFC Spain and Ireland were paragons of "sound banking" running surpluses, they imagined I suppose as a sort of rainy day fund for when the markets clouded over. As the booms boomed this seemed a prudent "leakage" from the pro cyclicality of demand in overstimulated financial markets. This "rainy day fund", however, conceptually failed to account for the consequences of a private debt bubble beyond the carrying capacity of Spanish or Irish central-ish banks. Lacking the monetary sovereignty to actually salvage the solvent, these semi-central banks let themselves be swamped with rancid private bank obligations.


Almost universally suppressed in the dominant mythology of the GFC is that for bad debts to first perk their putrid buds through the dung spread topsoil of finance there was by definition a prior failure of underwriting. Bad debts come from underwriters ignoring risk, thinking to cover themselves by tuning up returns, jacking up rates. Such underwriters, inured to what Minsky called "hedge phase finance" have no understanding of the inherent in-stability of the following "speculative" phase, nor the joys of "Ponzi" behavior where Chuck Prince's "musical chairs"establish the final resting place of what little underlying real wealth there actually is in a bubble. And the ECB is constitutionally blind to Minsky dynamics, committed to a doctrinaire Mellonist liquidation to cure all ills in the name of "sound money", so the sole institution that could manage the mess refuses.

Links

What Is Financial Reform In China?: Michael Pettis
If only they were operating in the tradition of Minsky: Bill Mitchell
Open Data-The Democratic Imperative: Crooked Timber: Beth Noveck
Why Arts Organizations Love New Buildings: Felix Salmon
LIBOR Banking Scandal Deepens: Matt Tiabbi
Defense Department Minskyites: Michael Stephens
Mixed Economy Manifesto Part 5 : Michael Hoexter
Romania Unravels the Rule of Law: Kim Scheppele: Paul Krugman
Demand Leakages: Warren Mosler
Bamboo Architecture: Cagayan do Oro

Links

End This Rotten Culture: Will Hutton
The Global Slowdown Will Accelerate: Comstock: CreditWritedowns 
Just Gotta Love that NRA: Escaton
We're All Minskians Now: Randal Wray
What Did the EU Summit Accomplish: Krugman
Our Austerian Future: Kevin Cyr