Mike Norman Economics

Arms race watch. It's on.CNNChina Could Overwhelm US Military In Asia In Hours Brad Lendon

The domestic outsourcing of jobs in the United States is fast becoming a dominant explanation for the destruction of the social contract of work, a historic concept in which norms of fairness and solidarity between firms and their employees played a major role in wage setting and workplace standards for some U.S. workers—though of course many others such as African American workers were consistently more marginalized. The destruction of this social contract, detailed in Brandeis University...

This is important but may be too wonkish for those who are not intimately familiar with econometrics. So let me try to simplify it and universalize it. The basic idea in logical reasoning is that an argument is sound if and only if the premises are true and the logical form is valid.  Then the conclusion follows as necessarily true. This is the basis of scientific reasoning. In modeling, a set of assumptions, both substantive and procedural, is stipulated, that is, assumed to be...

Only a short blog post today – in terms of actual researched content. Plenty of announcements and news though, a cartoon, and some great music. I have been meaning to write about the household income and wealth data that the ABS released in July, which showed that real income and wealth growth over a significant period for low income families has been close to zero, while the top 20 per cent have enjoyed rather massive gains. These trends are unsustainable. A nation cannot continually be...

Max Blumenthal is so direct here. An official says that Obama considered Venezuela to be a security threat to the US, but Max asks for evidence, for which there is none. A Guaido official says Venezuela supports terrorists, like Al Quada, but Max asks again for the evidence, and then says that we know that the US arms ISIS in Syria. [embedded content]

Payroll tax was a good idea, now scrapped.

Another reversal of position, but this time definitive, coming from the Oval Office.Unfortunately, the Democratic Establishment will probably paint this as 1) an attack on Social Security, which is "funded" by the payroll tax, and 2) a further "blowing out" of the deficit, both of which are nonsense in terms of MMT. Actually, a payroll tax cut would be redistributive, which would bolster the president's support among the middle class, and it would increase the purchasing power of all...

Abstract: Using historical sources, we attempt to unravel and elucidate the economic worldview held by the United States Treasury Department during World War II. We analyze the Treasury’s view of taxation, bond sales, and interest rates. We consider whether and in what ways this worldview is compatible with Modern Monetary Theory, finding that, in most regards, the two align closely, the differences being primarily attributable to the peculiarities of war finance. Finding a less clear view...

In 2017 when a nurse pointed out that her wages had not increased for several years, then-prime minister Theresa May quipped: “There is no magic money tree.” Well, maybe Mrs May was wrong. I believe there is a magic money tree and it is coming to western economies very soon. I am talking about MMT. And strangely, MMT doesn’t stand for “magic money tree”; it’s Modern Monetary Theory.... The question, "Can we trust politicians," is really a question about the viability of democracy. The...

I’d been stewing for a few months in the melange of blogs and YouTube videos and white papers that make up much of the M.M.T. world. Some intricacies lay beyond me—a hazy blur of literature about floating exchange rates and reserve currencies addled my brain. But the basic principle of M.M.T. is seductively simple: governments don’t have to budget like households, worrying about debt, because, unlike households, they can simply print their own money.... This illustrates a major difficulty...