Sunday, December 23, 2012

Links

We Take Care Of Our Own: Joe Firestone: NEP
Forget The Fiscal Cliff: Stephanie Kelton: LA Times
Menace To Society: P O Neil: Fist Full Of Euros
Obama Only Tries To Save Republicans: Cenk Uygur: Alternet
MSM In The Tank For GOP: Beverly Mann: Angry Bear
Your Family Or Business Is Not A Government: Bill Mitchell
Debt, Deficits And Demographics: Dean Baker
Rimbaud Conservativism: Corey Robin: Crooked Timber
An Apology: Golem XVI
Get your head around this Paul and you may actually become useful to the American People: the President self identifies with the Congressional leadership of both parties, the Elite, who have achieved what they have achieved these last 30 years by serving the interests of the super rich and been profoundly rewarded for it. Invisible Bond Vigilantes are the last available cover for screwing his own voters.
Democrats Are Republicans, But Only After Elections: Rob Urie: Counter Punch

Friday, December 21, 2012

Links

Make no mistake, President Obama wants to find a way to cut Social Security and Medicare. This is not because he is evil and heartless but because he has spent his very successful career surrounded almost entirely by people who think this would be a good idea. He wants badly to do this because through the ideological prism of those he identifies with it is an unquestionably good idea. If it does not seem like an absolute good to you, you must accept that the President does not identify with you. If you think it is a bad idea, you might consider if the President has self identified with some bad folks and what incentives might exist to make that look like a good idea. The difference between money as a private claim and a public good might have something to do with it, and those he hangs with want desperately for it to be a private claim.

Selling Greece Down The River: Golem XVI
Selling America Down The River: Thomas Furguson: Naked Capitalism
Why Bad Models Dominate: Cathy O'Neil: Naked Capitalism
One Obvious Path To A New Dark Age: Rick Bookstaber
AV House: BAK Architects: archdaily

Wednesday, October 31, 2012

Links

Is An Anti Austerity Alliance Possible, Part 2: Michael Hoexter: Naked Capitalism
Private Equity: A Government Sponsored Enterprise: Yves Smith & Nanea: Naked Capitalism

And One More Time, What Is Money?

(part 1) (part 2)

In the terms of double entry book keeping money is always and everywhere a contract binding a debtor to a creditor. When I possess a dollar it is my asset and a government liability: the US Treasury is the sole issuer of the dollar and every dollar represents a Treasury liability. Every dollar held by a non-government entity is an asset for its holder backed by the full faith and credit of the US Government, for whom it is a liability. When I purchase something with that dollar my asset is converted into whatever it is I have purchased and the governments liability is passed along to whoever sold me my purchase as an asset for them. The reason dollars are used to denominate trade within the dollar denominated portion of the world economy is that everyone who produces and exchanges within that system must pay taxes with dollars and expects the US Government to enforce its tax regime.

Double entry book keeping is a tool to keep track of the assets and liabilities of individuals and institutions that participate in money denominated exchange, but it also makes clear some underlying properties of monetary systems that are not intuitively apparent. A paper dollar or a gold coin are both fairly useless objects. What gives each its value, to the extent it has one, is that others expect it to port their exchanged wealth from one transfer to the next. When viewed this way, that gold has some intrinsic value seems a much less supportable proposition than that the coercive force of the US Government makes paper dollars valuable. That it will only accept the cancellation of its own liabilities as payment of tax both defines what a dollar is and convinces me to use it. So long as there is a US Government, it will be bigger than me and expect its taxes paid. Beyond that, in extremis paper is more edible than shiny yellow metal.