thegreatdivide wrote on Feb 8^th, 2025 at 9:43am:


You are a mindless idiot.

Speaking of the egregious outcomes of the 'dismal science' practitioners, who claim there is no alternative (TINA) to their obsolete neoclassical dogma:

Driven by self-interest - but now social cohesion is increasingly at stake, as home ownership rates are falling (due to government abandoning public housing over decades), and retirees who don't own their own home are plunged into poverty due to unafordable rents in the private housing market, the mainstreamers are forced to intervene in the private market.

The solution from these mainstream clowns?

Government should increase rent assistance for pensioners - money paid for by the public which goes straight into the pockets of landlords treating housing as a private wealth-creation vehicle.

Deplorable.

Meanwhile the public reject  'The Greens' policies to build more public housing, because that will require higher taxes - politically toxic, as shown in the Prahran by-election on the weekend. 

Pathetic.

The Greens could actually make themselves useful in Parliaments by educating politicians and the public that currency-issuing governments don't need taxes  in order to fund public housing, governments need access to the resources held by (and available to) the nation's building industry. 

But The Greens - like all politicians - are more interested in the silly political circus which is a useless  competition in elections among  adversarial  parties, a competition forced on them by mainstream 'dismal science' economists. 

More on the egregious outcomes for governments of neoclassical 'dismal science' practictioners and educational institutions:

https://billmitchell.org/blog/?p=62352

Economics as politics and philosophy rather than some independent science

Last week, I wrote about – The decline of economics education at our universities (February 6, 2025). This decline has coincided and been driven by an attempt by economists to separate the discipline from its roots as part of the political debate, which includes philosophical views about humanity and nature. In her 1962 book – Economic Philosophy – Joan Robinson wrote that economics “would never have been developed except in the hope of throwing light upon questions of policy. But policy means nothing unless there is an authority to carry it out, and authorities are national” (p.117). Which places government and its capacities at the centre of the venture. Trying to sterilise the ideology and politics from the discipline, which is effectively what the New Keynesian era has tried to do, fails. The most obvious failure has been the promotion of the myth of central bank independence. A recent article in the UK Guardian (February 9, 2025) – You may not like Trump, but his power grab for the economic levers is right. Liberals, take note – is interesting because it represents a break in the tradition of economics journalism that has been sucked into the ‘independence’ myth by the economics profession.

...

Mainstream commentators ofcourse choose to remain blithely ignorant, repeating the "balanced budget" mythology as some sort of 'natural law' of economics  ad nauseam.

Ellen Brown's version of government  "money printing" to grow the economy.

https://ellenbrown.com/2025/02/11/quantitative-easing-with-chinese-characteristi...


Informative  article, concluding with these two paragraphs:

Growing Our Way Out of Debt

Rather than trying to kneecap our competitors with sanctions and tariffs, we can grow our way to prosperity by turning on the engines of production. Far more can be achieved through cooperation than through economic warfare. DeepSeek set the tone with its free, open source model. Rather than a heavily guarded secret, its source code is freely available to be shared and built upon by entrepreneurs around the world.

We can pull off our own economic miracle, funded with newly issued dollars backed by the full faith and credit of the government and the people. Contrary to popular belief, “full faith and credit” is valuable collateral, something even Bitcoin and gold do not have. It means the currency will be accepted everywhere – not just at the bank or the coin dealer’s but at the grocer’s and the gas station. If the government directs newly created dollars into new goods and services, supply will grow along with demand and the currency should retain its value. The government can print, pay for workers and materials, and produce its way into an economic renaissance.

Rather than examining how to release currency-issuing governments from dependence on taxing (hence "taxpayer money") or borrowing from the  private sector (without causing inflation), mainstream commentators are again urging inheritance taxes  as a way to reverse the growing wealth inequailty in Australia:

(AAP)

Call to bring back inheritance tax to tackle wealth gap

It is said that nothing in this world is certain, except death, taxes and scare campaigns about death taxes.

Inheritance taxes were abolished in Australia in the late '90s, even though they are proven to reduce inequality and are more efficient than other existing taxes.

Despite the media uproar that inevitably accompanies discussions around making the tax system more equitable, the government should seriously look into reinstating inheritance taxes, Anglicare Australia argues in a report released on Friday.

Australia is becoming more unfair and more unequal," said Anglicare executive director Kasy Chambers.

"Our research shows that we are one of the only countries in the OECD that doesn't tax big inheritances.

"This has turbocharged inequality, concentrating wealth among a smaller and smaller group of people."

Anglicare is calling for a tax on high-value inheritances above $2 million, not including the family home, which would avoid placing additional burden on low- and middle-class households.

In recent years, Australia's taxation burden has increasingly fallen on working Australians through personal income tax while taxes on wealth, such as capital gains and land taxes, contribute a relatively small proportion, in part due to generous concessions.

That wealth can be passed on virtually tax-free, entrenching generational equality and making it harder for people without privileged upbringings to achieve financial security.

"We should be using our tax system to make Australia fairer," Ms Chambers said.

"Instead, government policies are driving inequality and making it worse."

Former Treasury secretary Ken Henry extolled the benefits of inheritance taxes in his landmark tax review under the Rudd Labor government.

"A bequest tax would be an economically efficient way of raising revenue and would allow reductions in other, less efficient taxes," his report said.

But rather than recommending its introduction, he merely suggested community discussion and consultation on the options, "given the controversial history of bequest taxation in Australia".

At the last two federal elections, Labor was assailed by scare campaigns claiming they would institute "death taxes" if elected, despite having no plans to resurrect an inheritance tax.

Australia Institute chief economist Greg Jericho says such proposals are easy to malign, despite the fact they would benefit the majority of the population, because average Australians are sold an aspirational dream.

That's evidenced in the backlash to the government's proposal to reduce tax concessions on super accounts with balances greater than $3 million.

"Most people have no idea what their super balance is," Dr Jericho told AAP.

"And so it's very easy to spread a fear campaign suggesting that that's going to hit lots of people. Whereas, in reality, it will hit 80,000, less than a per cent, of everyone with a super balance.

"That's the unfortunate thing with these types of attempts to reduce inequality. It's very easy to run a scare campaign, and it's painted as looking after average Australians, whereas, in effect, it's ensuring that the wealthiest Australians continue to get even more wealthy."

...

And so political parties (except The Greens) run a mile from a worthwhile equity proposal.


Yet:

"Money doesn't grow on rich people" : Stephanie Kelton.......meaning governments don't NEED rich people's money, governments need to control inflation -  while money does indeed "grow" in the treasuries of  currency-issuing governments.

Listen up you leftist losers: the Left can't win if you accept mainstream neoliberalism's "balanced government budget" mythology.

https://billmitchell.org/blog/?p=62361

Britain and its fiscal rule death wish

Governments that adhere to the mainstream macroeconomic mantras about fiscal rules and appeasing the amorphous financial markets have a habit of undermining their own political viability. As Australia approaches a federal election (by May 2025), the incumbent Labor government, which slaughtered the Conservative opposition in the last election, is now facing outright loss to a Trump-style Opposition leader if the latest polls are to be believed. That government has shed its political appeal as it pursued fiscal surpluses while the non-government sector, particularly the households, endured cost-of-living pressures, in no small part due to the relentless profit gouging from key corporations (energy, transport, retailing, etc). The government has not been riven with scandals or leadership instability. But its amazingly fast loss of voting support is down to its unwillingness to take on the gouging corporations and also to claim virtue in the fiscal surpluses, while the purchasing power loss among households has been significant. The same sort of death wish is arising now in the UK, although the British Labour government is at the other end of its electoral cycle which gives it some space to learn from its already mounting list of economic mistakes. The British government situation is more restrictive than the case of the Australian Labor government because the former has agreed to voluntarily constrain itself via an arbitrary fiscal rule.

Read full article via above link.

...........

Ditto for Germany, where the Leftist coalition is about to be turfed out of office next weekend.

(The Independent)

Five reasons why Germany’s economy is in the dumps

Germany hasn't seen significant economic growth in five years.

It's a stunning turnaround for Europe's biggest economy, which for much of this century had expanded exports and dominated world trade in engineered products like industrial machinery and luxury cars.

So what happened? Here are five reasons for Germany's ongoing economic slump:

1. Moscow's decision to cut off natural gas supplies to Germany in the wake of Russia's invasion of Ukraine dealt a severe blow. For years, Germany’s business model was based on cheap energy fueling production of industrial goods for export.

In 2011, then-Chancellor Angela Merkel decided to hasten the end of nuclear power use in Germany while relying on gas from Russia to bridge the gap as the country moved away from coal generation and toward renewable energy. Russia was then considered to be a reliable energy partner; warnings to the contrary from Poland and the United States were dismissed.

When Russia discontinued the flow, prices in Germany skyrocketed for gas and for electricity generated from gas, both key costs for energy-intensive industries such as steel, fertilizer, chemicals and glass. Germany had to turn to liquefied natural gas, or LNG, super-cooled and imported by ship from Qatar and the U.S. LNG costs more than pipeline gas.

Electricity now costs industrial users in Germany an average of 20.3 euro cents per kilowatt hour, according to a study the research firm Prognos AG prepared for the Bavarian Industry Association. In the U.S. and China, where many competitors of German companies are located, the cost is the equivalent of 8.4 euro cents.

Renewable sources of energy haven't scaled up fast enough to fill the gap. Homeowner and regional resistance to turbines slowed wind energy growth. Infrastructure to transport hydrogen as a replacement fuel for steel furnaces remains mostly on the drawing board.

2. China: From customer to competitor

For years, Germany benefited from China's entry into the global economy - even as other developed countries lost jobs to China. German companies found a massive new market for industrial machinery, chemicals and vehicles. Through the early and mid 2010s, Mercedes-Benz, Volkswagen and BMW reaped fat profits selling into what became the world's largest car market.

At the time, Chinese companies produced items like furniture and consumer electronics that didn't compete with Germany's core strengths. Then, manufacturers in China started making the same things that Germans did.

State-subsidized Chinese solar panels wiped out Germany's makers. In 2010, Chinese panel makers depended on imported German equipment; today, global solar panel production relies on equipment from China. The government in Beijing has ramped up efforts to promote and subsidize manufacturing for export. The resulting goods — steel, machinery, solar panels, electric vehicles and EV batteries — now compete with German goods on export markets.

Germany, the most auto-centric of the European Union economies, had the most to lose from China's export-oriented industrial policy. In 2020, China was not a net exporter of vehicles; by 2024, it was exporting 5 million a year. Germany's net exports fell by half over the same period, to 1.2 million cars. Chinese factory capacity is estimated at 50 million vehicles a year, roughly half of global demand.

(cont)


 

And more on crypto 'funny money'; Milei comes a cropper as he tries to emulate Trump:

(FXStreet)

Argentina’s President Milei under investigation for LIBRA crypto scandal

Argentina’s President Javier Milei faces an investigation after endorsing LIBRA, a crypto token that surged and crashed, sparking fraud accusations and impeachment calls.

Argentina’s President Javier Milei is under investigation after promoting the little-known cryptocurrency LIBRA. His endorsement caused a brief surge in the token’s value before it crashed, leading to accusations of fraud. Critics claim this was a pump-and-dump scheme, and some are calling for his impeachment. The government has formed a task force to determine if Milei or others committed illegal acts.

On February 14, Milei promoted LIBRA on X, suggesting it could boost Argentina’s economy and support small businesses. This caused the token’s market cap to jump beyond $4 billion, with insiders cashing out over $100 million in profits. However, the surge was short-lived. LIBRA lacked a structured financial model, its website was set up only hours before launch, and over $87 million was withdrawn within the first three hours. The token’s value collapsed soon after, showing clear signs of a pump-and-dump.

According to The Kobeissi Letter, large holders quickly liquidated their assets, some making $4 million or more as the market cap peaked at $4.6 billion. At 5:40 PM ET, when the price hit its highest point, LIBRA’s value plummeted. In response to public backlash, Milei deleted his promotional post and claimed he had not fully understood the project. Later, he explained that after learning more, he decided to stop promoting it.

Argentina’s presidential office tried to downplay the issue, calling it a standard blockchain-related promotion. However, officials admitted that Milei had met with Hayden Mark Davis, a figure connected to LIBRA’s infrastructure through KIP Protocol. The government has now launched an official probe to examine whether any officials, including Milei, acted improperly. Investigators will also scrutinize KIP Protocol for possible legal violations.

To contain the damage, Milei ordered the creation of a special Investigation Task Unit (UTI), consisting of financial, crypto, and anti-money laundering specialists. This unit will analyze LIBRA’s launch and those involved. The government stated that all findings will be turned over to the courts to determine if any crimes were committed.

Beyond cryptocurrency, the controversy has triggered a political crisis. Critics argue that Milei’s reckless endorsement of a speculative asset led to financial losses for investors. Argentine lawmaker Gabriela Estevez accused him of engaging in a classic pump-and-dump scheme, where token creators buy at a low price, hype it up, and sell at a peak, leaving others with losses.

The scandal has even led to impeachment threats. A political faction has officially started proceedings, calling the incident unprecedented in Argentina’s history. Buenos Aires Governor Axel Kicillof called it a large-scale financial fraud, warning that both local and international investors had been misled. He compared the situation to a cryptocurrency pyramid scheme.

This case highlights the dangers of political figures endorsing meme coins, a trend that has grown since U.S. President Donald Trump launched his own token. Ethereum co-founder Vitalik Buterin had already warned that such political meme coins could damage the crypto market’s credibility. Since Trump’s involvement, scammers have launched fake tokens based on political figures, with LIBRA being the latest example of these risks.