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from Ken Zimmerman (originally a comment) Nixon initiated the regime of free-floating currencies that continues to this day by ending US commitment to the international gold standard. The immediate effect of Nixon’s unlinking the dollar was to cause the price of gold to skyrocket; it hit a peak of $600 an ounce in 1980. This of course had the effect of causing U.S. gold reserves to increase dramatically in value. The value of the dollar, as denominated in gold, plummeted. The result was a...

from Lars Syll And then there’s Paul Krugman who … has stumbled on folk economics. And I’ll give him credit, since the “folk” he refers to “needn’t be members of the working class. They can be, and often are, members of the elite: plutocrats, powerful politicians and influential pundits.” Absolutely! … But then he reverts to classic Krugman: mainstream economists get it mostly right, and all they really need is the “IS-LM model” to analyze economic crises (such as the 2007-08 crash) and...

Bloomberg News reports an outbreak in Kentucky and Virginia after initial outbreak discovered at Indiana facility last week. Avian flu is nothing new, and as we continue to keep large quantities of poultry in ever increasing numbers in concentrated operations around the poultry processors, the occurrences are likely to become more severe and often. This is mostly because commercial poultry operations look like this: The amount of birds grown...

from David Ruccio James Ensor, “The Intrigue” (1890)Mainstream economists have, it seems, discovered the existence of economic ideas outside the official discipline of economics. It took them long enough! But, unfortunately, they don’t treat the topic particularly seriously —certainly not in the way the scholars who pioneered the project of the New Economic Criticism, starting in the mid-1990s, set out to conduct their theoretical and empirical work. No, for mainstream economists it’s...

That’s the self-explanatory headline for my latest piece in The Conversation. Read there, comment here.I should mention that The Conversation edits quite vigorously, including adding material. So, while I stand by the argument in the piece, not every turn of phrase is exactly what I would have written. Share this:Like this:Like Loading...

American exceptionalism is the most dangerous doctrine in the world, and it has been on full display in the current Ukraine crisis. Worse yet, the loudest advocates have been America’s elite liberal class. The doctrine of exceptionalism holds that the US is inherently different from and superior to other nations. That superiority means the US […]

In general the price system does not reveal all the information about “the true value” of the risky asset … The only way informed traders can earn a return on their activity of information gathering, is if they can use their information to take positions in the market which are “better” than the positions of uninformed traders. “Efficient Markets” theorists have claimed that “at any time prices fully reflect all available information” … If this were so then informed traders could not earn...

from Lars Syll  So what is the MMT solution to dealing with inflation ex post—i.e. once the problem is here? There isn’t one. And I’d suggest running fast and far from anyone who offers you a quick and easy prescription for dealing with any and all inflation. Mainstream economists, of course, offer just such a solution. The Federal Reserve will fix it! After all, it’s already their job (dual mandate), and they can act quickly and “independently,” tightening policy without fear of any...