Countdown to Extinction: The 2016 Presidential Election

[Madiel]

That kind of ad is directed at the local 'market' (those who vote), not to any would-be future australians. What are the chances such a poster will reach the shores of Lattaqieh or the various turkish/syrian/lybian launching places ? And finally, what makes one think they will be read by potential refugees, 5% of which (if that) understand English?

An ad in Arabic, posted in the right places will make me believe in the meaning of 'fair warning'.

The main launching places are in Indonesia, and to some extent Sri Lanka and Bangladesh, and the advertising has definitely made its way to those countries. I can't swear to translated versions.

Though Arabic would be largely irrelevant for us. They don't speak Arabic in our source countries.

[drogulus]

     In order to understand how Nordic models can run as well or badly as the U.S. model, falsifying the "socialism causes poverty and tooth decay" hypothesis, read up.

     Read, thank me profusely later:

     The Great Scandinavian Divergence

     Is what Sanders proposes Nordic "sociocapitalism"? Yes, I think so. He gets that taxes individuals and businesses pay don't determine after tax income for the same reason governments don't take dollars from the private sector when they spend. It's the net effect of what's added and removed that counts. Since the tax removes inflation and the savings burden, it reduces income less than government spending raises it. If it didn't aggregate income couldn't go up. Oh, that's why deficits, too, what they're for.

     I judge Sanders to be economically unsophisticated. That's not a crime. FDR wanted to balance the budget! You'd think if anyone thought the economy needed to be balanced more than the fukin' budget it would be him. At least he was a learner.

[Todd]

And Trump already seems to have got the idea.

There's a key difference here: Trump is bloviating about his ideas.  Australia has actually done it.  Way to lead the world, Australia!

"socialism causes poverty and tooth decay"

Socialism doesn't cause tooth decay or poverty, it causes misallocation of economic resources and infringes on private property rights.  For those two reasons, it must be resisted and, preferably, rolled back.  The US holds its own in government spending at about 39% of GDP.  If Sanders gets his way, even the French will blush at American government spending.

[Jo498]

I have trouble to think up worse misallocations than burning billions in the financial casino and seducing some of the best and brightest to waste their talents in the "financial industry" (a misnomer, if there ever was one), a branch that does not produce anything but only shifts existing wealth to the already very wealthy and tends to produce financial crises.
There is, of course, a direct relationship between too much money in the hand of a few and a bloated "financial industry". To rein in such excesses and liberate politics from the dictates of Wall Street has nothing to do with socialism.

[drogulus]

Socialism doesn't cause tooth decay or poverty, it causes misallocation of economic resources and infringes on private property rights.  For those two reasons, it must be resisted and, preferably, rolled back.  The US holds its own in government spending at about 39% of GDP.  If Sanders gets his way, even the French will blush at American government spending.

     To some extent private poverty rights are infringed upon, and that does infringe on property rights. But that's a little like complaining that regulations are bad because we include benefits with costs, which we do when we enact them. "Reformers" want to forget this and count costs. Sometimes we buy this, sometimes we don't. On balance deregulation turns out to be a mistake too often, the original benefit repealed to rid us of a cost turns out to be a bad deal, like, oh, financial deregulation since the '80s.

     Sanders has a tax/spend plan which won't blush anyone if I understand the net position. He wants to raise both sides, which nets out for all sectors roughly where we are. That's the point of the Sweden/U.S. comparison I make and you don't. But I don't want to stabilize Nordic style or U.S. style, I want to destabilize with higher spending and lower taxes to shift the economic balance in favor of the private sector. This is economic balance with a goal, to moderate the business/policy cycle in favor of higher growth. Of course an economy always balances somewhere, just like a dollar of government spending always returns as tax, it's just a question of where you want the economic balance to settle, high or low, it's going to be somewhere that you've chosen. And so it is when tax returns dollars to thin air, the question is when, not if. That's two views of the same phenomenon. The limits that guarantee that tax returns tolerably soon, but not too soon and that the economy balances within a tolerable range will always be severe recession and intolerable inflation.
If we can shrink by not doing this, and we do exactly that with "run out of dollars" fiscal policy, we can go the other way. I suggest we do. Sanders isn't exactly helping me do this with his paleo understandings.

     

misallocation of economic resources

      Once again, regulation cost/benefits are "in there", there's no unique case to be made later on the basis of interests thinly disguised as "principle". That fight played out in the process of regulating and allocating. Only substantive points matter now. Show me the money, all of it, costs and benefits, then I'll listen.

[Todd]

To rein in such excesses and liberate politics from the dictates of Wall Street has nothing to do with socialism.

If the government interjects itself into the operations of the financial industry with ever greater taxation and regulation, the effect is a degree of socialization of the financial industry.  Of course, the bailout was the socialization of private losses.  That's why big banks should be broken up, investment banking should be separated from commercial banking completely, and, perhaps at the same time, commercial banking should have higher capital requirements.  It would be possible to have a simpler regulatory regime with less of a tax burden while still making the system more stable.  (It would also be nice if the government would reduce its role in the mortgage market in the US.  Tighter lending standard contribute to fewer defaults.  But that doesn't coincide with equalitarian dreams of home ownership so precious to the American left.)  One goal should be to set up a framework where private losses remain private, and regulatory capture makes that more difficult, and regulatory capture is more common the more heavily involved the government is on a detailed level.  A simpler framework also reduces the opportunities for gaming the system (eg, Beal Bank).  This is one area where I actually do agree with Sanders, though for different reasons, and hoping for a slightly different outcome, and even then Sanders is not satisfied, as he wants to impose punitive taxes on people who dare to invest.

Sanders is about much more than taking on the devils of Wall Street, though.  (Wall Street has been a favorite target of the left for well over a century now - they must be doing something right in downtown NYC!)  He is about socializing healthcare outright.  He is about forking over billions upon billions to higher education, which in some areas has become more about increasing budgets than educating kids.  He is about reducing the work week.  He opposes trade deals.  He is anti-nuclear power.  He is about every dream the left in the US has had for generations.

[kishnevi]

If the government interjects itself into the operations of the financial industry with ever greater taxation and regulation, the effect is a degree of socialization of the financial industry.  Of course, the bailout was the socialization of private losses.  That's why big banks should be broken up, investment banking should be separated from commercial banking completely, and, perhaps at the same time, commercial banking should have higher capital requirements.  It would be possible to have a simpler regulatory regime with less of a tax burden while still making the system more stable.  (It would also be nice if the government would reduce its role in the mortgage market in the US.  Tighter lending standard contribute to fewer defaults. But that doesn't coincide with equalitarian dreams of home ownership so precious to the American left.)  One goal should be to set up a framework where private losses remain private, and regulatory capture makes that more difficult, and regulatory capture is more common the more heavily involved the government is on a detailed level.  A simpler framework also reduces the opportunities for gaming the system (eg, Beal Bank).  This is one area where I actually do agree with Sanders, though for different reasons, and hoping for a slightly different outcome, and even then Sanders is not satisfied, as he wants to impose punitive taxes on people who dare to invest.

Sanders is about much more than taking on the devils of Wall Street, though.  (Wall Street has been a favorite target of the left for well over a century now - they must be doing something right in downtown NYC!)  He is about socializing healthcare outright.  He is about forking over billions upon billions to higher education, which in some areas has become more about increasing budgets than educating kids.  He is about reducing the work week.  He opposes trade deals.  He is anti-nuclear power.  He is about every dream the left in the US has had for generations.

(bolded your pertinent phrase)
Not just the left.  It was a prominent goal of Bush 43's Compassionate Conservatism™.

[drogulus]

"He is about socializing healthcare outright."

     Let's take another look at the (heh!) "Republican alternative" to see if Bernie has a point. Oh wait......

     It's always a question of what can only be fixed by socializing, or if something short of that will work. If you think that less socializing is a possible path it can only be because the goal is something other than getting health care to everyone. We need to examine that goal a little to see if we want to follow a path that leads away from universal coverage.

     So it comes down to changing our methods to reach our goal (some amount of socializing) or changing our goal to meet a method (a kind of health care that entrenches views on who "deserves" it).

     When the social system no longer tolerates the view that health care should be segregated (gerrymandered) so that nothing can approximate everyone having it, we will seek a method that can achieve the goal. That method will be some kind of socializing, with the weak Romney version easiest to attain.

[Todd]

To some extent private poverty rights are infringed upon, and that does infringe on property rights.

Department of the Redundancy Department calling.

He wants to raise both sides, which nets out for all sectors roughly where we are.
If we can shrink by not doing this, and we do exactly that with "run out of dollars" fiscal policy, we can go the other way. I suggest we do. Sanders isn't exactly helping me
do this with his paleo understandings.

There's no "both sides".  GDP (Y) = C + I + G + (X - M).  (MMT has not rendered this obsolete.)  G = government spending.  If that goes up, other things must drop, at least initially.  Sanders wants to vastly increase taxes so he can vastly increase government spending - ie, he wants to significantly expand the role of the government in the economy, and he's been plain about that.

[kishnevi]

     Let's take another look at the (heh!) "Republican alternative" to see if Bernie has a point. Oh wait......

     It's always a question of what can only be fixed by socializing, or if something short of that will work. If you think that less socializing is a possible path it can only be because the goal is something other than getting health care to everyone. We need to examine that goal a little to see if we want to follow a path that leads away from universal coverage.

     So it comes down to changing our methods to reach our goal (some amount of socializing) or changing our goal to meet a method (a kind of health care that entrenches views on who "deserves" it).

     When the social system no longer tolerates the view that health care should be segregated (gerrymandered) so that nothing can approximate everyone having it, we will seek a method that can achieve the goal. That method will be some kind of socializing, with the weak Romney version easiest to attain.

Non sequiter.
But getting health care for everyone does not necessarily require single payer or other forms in which the government is completely dominant.

[Todd]

It was a prominent goal of Bush 43's Compassionate Conservatism™.

Yes, and look how that turned out. 

Government intervention in lending policies has its current roots in ECOA and the Federal Fair Housing Act, and various other laws, amendments, and changes implemented from time to time.  (It started as part of the New Deal with the FHA, of course.)  From an enforcement standpoint, the "disparate impact" standard can be used to, if not force, then encourage a lender to make sure that even neutral policies end up being changed to make sure that no one is "denied" a loan.

[Karl Henning]

Rubio won Puerto Rico.

[Todd]

Rubio won Puerto Rico.

He's still got a chance! 

[drogulus]

     

If that goes up, other things must drop, at least initially.

     Absolutely, for a fixed value of Y. If an economy really was zero sum, though, capitalism would be zero sum for the same reason. If GDP was fixed, profits, on the same principle, would cause the economy to cycle down just like the thrift paradox causes. I mean they're both savings, so.... What is it that doesn't allow this? The injection of sufficient new money to cover savings and facilitate growth is what. Government spending adds, and guess what, prepare yourself, it's taxation that removes! So net spending, where it's set, is what's doing the equalizing if its run to approximate a zero sum, and permits a growing GDP if it isn't. Understanding the difference between a static representation the equation shows and the dynamic balance of a positive sum money system (like the only ones we know) clears up the confusion.

[drogulus]

Non sequiter.

     I don't understand what non sequiter refers to in my comment.

But getting health care for everyone does not necessarily require single payer or other forms in which the government is completely dominant.

      Is this an empirical determination? If not, why would I care about something as unlikely as a tornado in a junkyard producing a B2 bomber?

   

[Todd]

Understanding the difference between a static representation the equation shows and the dynamic balance of a positive sum money system (like the only ones we know) clears up the confusion.

I am fully aware of the difference between static formulae and dynamic growth.  This does not alter the fact that Sanders wants to significantly increase the government role in the economy (G goes up) at the direct expense of other portions of the economy (C and I go down).  He wants that to be a permanent change.  This is what he says literally all the time.  Nor does it alter the fact that you are advocating something (permanent debt monetization, essentially) that no responsible person advocates, and with good reason. 

[drogulus]

I am fully aware of the difference between static formulae and dynamic growth.

     Not on the evidence of your comments, you don't.

     Why would C and I go down in theory if they don't in practice? This looks exactly like you don't understand a positive sum money system. Your GDP is fixed so if one factor goes up you have to lower another to get the same Y. Economies never get the same Y because even conservatives know better than to shrink an economy to prove it's possible. When they want to pray to their god and make people not like them suffer they invoke "shrink to grow" shit (your static Y) then even they can't stand what they've done and remember how to grow with whatever new money is needed. How they manage to keep their dumb ideas and the recovery ideas straight baffles me. It must be exhausting!

     To sum up, you can run the economy zero sum and keep Y constant (for a while anyway) but nothing tells you to do that, it's just describing a state, not its change or rate of change. The expansion factor is net new financial assets from government spending, assets for the deposit holder recorded as liabilities, the national financial savings/debt that grows C, I, and Y just like the GDP equation says. This is money/monetization or debt/debtization, whatever. It's how the system works. It's why nobody in their right mind would think we should claw back trillions in private sector savings. That savings/debt is a functional property of the money system expanding with the economy to facilitate that expansion, not people behaving badly or a $19T accident.

[Todd]

Why would C and I go down in theory if they don't in practice?

To sum up, you can run the economy zero sum and keep Y constant (for a while anyway)

I'd swear you knew exactly what I meant when looking at these two sentences.  Attempting to obfuscate how standard models are used with clumsy language does not hide the fact that Sanders wants a whole lot more government and less private sector activity as a proportion of GDP now and forever.  It's not just an economic choice, but an ideological one.  And your clumsy language doesn't mask the fact that you ignore the risks of permanent debt monetization.

[drogulus]

     

Sanders wants a whole lot more government and less private sector activity as a proportion of GDP

     Well if the Swedes can't keep the private sector from growing along with the public sector Sanders probably won't either. All he might achieve is a bigger slice of a growing pie, and I'm sure he does want that, both bigger slice and bigger pie. I'm with the MMT-ers in thinking the growth of the pie for everyone should use as must government sector as it needs but not more, which will be well short of what Bernie wants.

      I'm not trying to obfuscate the dumbth in standard model interpretation, just reveal it. No one should get away with saying the government gets dollars from the private sector to spend, so no one should imagine that taxes add to private sector spending. We're trying to be consistent right, spending subtracts, taxes add, correct? Ah no, not correct, something else is. Spending adds, taxes subtract dollars from the private sector. Government spends and taxes the excess, it doesn't tax to get dollars, or there wouldn't be any dollars to tax. The $19T in net financial savings is the confirmation of this. As Warren Mosler puts it in his typical banking /finance way, first you have to do the add then you can do the drain.

[Todd]

All he might achieve is a bigger slice of a growing pie, and I'm sure he does want

Yes, his ideology drives him to expand the role of the state.  That much is plain and clear.

The $19T in net financial savings is the confirmation of this.

It might make sense for you to audit a course on public finance at a local community college.