Mike Norman Economics

Simple stock-flow analogy using faucet, sink, and drain. Too simplistic, maybe, but it gets the fundamental point across. What this analogy focuses on is inflation and the sweet spot. But there is also not enough flow so that stock becomes low (deflation). The available policy space is between inflation and deflation. The sweet spot is optimal deployment of real sources including human resources (full employment).  This would be difficult to impossible to hit using discretionary...

Throughout the Cold War, Washington intervened multiple times in Guatemala, funded a rampaging army, ran cover for the death squads that its own security agents—like Longan—helped create, and signaled that it would turn a blind eye to genocide. Even before Ronald Reagan’s 1980 election, two retired generals with prominent roles in his campaign traveled to Central America and told Guatemalan officials that “Mr. Reagan recognizes that a good deal of dirty work has to be done” (for this quote,...

As Alistair Crooke succinctly put it last year at Strategic Culture: The US – were energy dominance to succeed – simply would control the tap to the economic development – or its lack thereof – for rivals China, and Asia. And the US could squeeze Russia’s revenues in this way, too. In short, the US could put a tourniquet on China’s and Russia’s economic development plans. Is this why JCPOA was revoked by President Trump? Here then, is the squaring of that circle (more US power, yet less...

I give Robert Murphy an "A" for at least trying to understand MMT assumptions and definitions, but it seems to me (I am not an economist) that he has not yet grasped the MMT understanding of the economic concept of saving. I use "economic concept" to distinguish it from the ordinary language meaning. They are different and also have different meanings in different contexts, e.g., economic schools. The ordinary language meaning doesn't sufficiently distinguish portfolio as financial and...

But what should interest us is how Russiagate allegations have tarnished America’s democratic reputation in Russia and thereby undermined the pro-American arguments of Russia’s liberal democrats, who were never a very potent political or electoral force and whose fortunes have already declined in recent years. Consider the following:... Not that the current US administration is essentially different from previous ones. It's just more blatant. These things don't happen overnight. The...

When I was in the FCO, the rule on recognition was very plain and very openly stated – the UK recognised the government which had “effective control of the territory”, whatever the attributes of that government. This is a very well established principle of international law. There were very rare exceptions involving continuing to support ousted governments. The pre-1939 Polish government in exile was the most obvious example, though once Nazism was defeated Britain moved to recognise the...

The numbers are from the World Bank Development Indicators up to 2016, and then I use the IMF estimates of growth (actually decline) from the World Economic Outlook database. So this is a brutal collapse, something the US government is doing, even at the price of some costs to local refineries, in order to promote regime change in Venezuela. Whatever your views on Maduro and the Chávez period, note that the US is fine with Saudi Arabia. Trump and Dems before too. And remember that Obama...

Many figures of the European establishment regard Emmanuel Macron as the saviour of the European project. Yet his response to these protests – violence, mass arrests and the reinstatement of national service for 16-year olds – would hardly be out of step with the more retrograde national populist and authoritarian regimes. If Emmanuel Macron wants to save his reputation, let alone Europe, he must start leading by example, ban the flashball, and take these protests seriously rather than...

Likewise, Ocasio-Cortez has forced elites on both sides to at least grapple with the economic tenets of modern monetary theory. MMT, as it is known, suggests that a government with its own currency does not need to raise taxes in order to increase spending. So far MMT has faced strong pushback from elites of the left and right. But its basic contention, that deficit spending isn’t as bad as you have been led to believe, is gaining support. These two propositions — that the government...

What the Davos crowd is talking about.SFGateAmong some in Davos, debate over Ocasio-Cortez's proposed 70 percent tax on rich is overHamza Shaban, The Washington Post See also NY PostHow elite financiers feel about Ocasio-Cortez's proposed wealthy tax Jaron Steinbuch