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New Economic Perspectives

Is Politico or Third Way More Divorced from Reality?

William K. Black September 6, 2017     Kansas City, MO The Wall Street wing of the Democratic Party (Third Way) is relentless in trying to bring back the days in which the Democratic Party’s leaders buried the Party in Wall Street’s pocket under the label “New Democrats.”  That period led President Clinton and Vice President Gore to implement disgraceful policies that made Wall Street executives fabulously wealthy at the expense of people.  To deliver on their promises to Wall Street,...

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The Right Wing’s Fake Fake News of Hate

By William K. Black September 4, 2017      Kansas City, MO When people do awful things and know they are doing awful things and want to continue to do them they compound their awfulness by playing cute.  The cuteness demonstrates that they know that what they are doing is indefensible to moral people.  The political “dog whistle” is an example of this cutesy tactic.  Rachel Maddow’s September 4, 2017 program presented a classic example.  She showed video of a white supremacist/Neo-Nazi...

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LOW EARTH ORBIT—A Preview

By J.D. ALT I have not written any essays for NEP these last several months because I’ve been working on a longer piece. It’s now finished and available as an ebook on Amazon and ibooks. The title is “LOW EARTH ORBIT—A Novella about the Near Future.” The story imagines the circumstances under which MMT breaks through into political awareness and acceptance. The heroine is an economics professor named Stephanie Eccles. There are, of course, a few comments about what modern fiat money...

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Money and Banking Post 20: Pricing Securities

A Small Detour: Savings Account and Interest Compounding A typical way to think about interest rates is to study how a savings account works. Suppose Mr. X puts $1000 in a savings account that provides a one percent annual interest rate. In that case, X will get at the end of: Year 1: $1010 = $1000(1 + 0.01) Year 2: $1020.1 = $1010(1 + 0.01) = $1000(1.01)2 … Year 5: $1051.01 = $1000(1.01)5 Several things are worth noticing: The rate of return is fixed by the issuer of the account (1%)...

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Democrats Should Not Rely on Glenn Simpson and His Hit Piece about Trump and Putin

By William K. Black August 27, 2017     Kansas City, MO Like you, I learned recently that Glenn Simpson had given ten hours of testimony before a closed session of the Senate Judiciary Committee and produced tens of thousands of pages of documents to the committee.  Simpson founded a company (Fusion GPS) that hired a former British intelligence officer, Christopher Steele to conduct an investigation of Donald Trump’s ties with Russia.  Newsweek reports: Following Simpson’s testimony...

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Money and Banking – Part 19 (A): Financial institutions: An overview

Part A  |  Part B | Part C Erratum on Post 18: Figure 18.10 has reversed proportions: about 30 percent are issued by nonfinancial corporations. Note: As I was afraid it would happen, someone emailed me to take issue with the way I use the term promissory note. “Promissory note” has a specific meaning in the law—it is a specific type of financial instruments—but Post 18 uses the term conceptually to mean any formal promise made by someone—a synonymous to financial instrument—, which may...

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Money and Banking – Part 19 (B): Financial institutions: An overview

Part A  |  Part B | Part C Regulated Portfolio Management Companies: Mutual Funds and Others Portfolio management companies provide a wide variety of placement opportunities to economic units with spare funds who do not want to, or cannot, directly buy securities or other assets. There are three broad types of portfolio management companies: mutual funds, closed-end funds, and unit investment trusts (UITs). One of the main differences between them is the characteristics of the shares...

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