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I should begin by telling you that as I write this I have my browser open to the website of The Guardian because, quite literally, there are updates every few minutes on the exceedingly dynamic crisis between the Eurozone (EZ) and Greece. Throughout the day, as much as possible, I will add updates at the very bottom of this diary. Finally, I (aka Arliss Bunny) am the Finance News and Monetary Policy Burrow Chief for Netroots Radio and on The After Show I have covered the topic of Greece several times in recent weeks including here and here. I also went into great detail today regarding the developments of the past week. That podcast will be posted around 8PM EST today and I will add the link here when it is available. Will McLeod covers the political side of Greece on The After Show here and here. Will combines both passion and knowledge so his podcasts are not to be missed.

Hop below the carrot-colored squiggle for background and a play-by-play round-up of events which I have named, "As the Euro Turns." It is an incredible story full of drama and suspense so join me. I do recommend taking a break right now to get a snack as it's going to be a long read.

[Speaking of "snack," I discovered this week that there is a World Carrot Museum. A CARROT museum...!!! BEST. THING. EVER.]

Poll

If I were Yanis Varoufakis, tonight I would:

13%4 votes
27%8 votes
10%3 votes
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| 29 votes | Vote | Results

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It is impossible for me to begin to write anything about the events of 9-11 without first bowing my head and taking a moment of silence in remembrance of all those who died and the grief which still lives on in the soul of our nation. Since I will be writing here about the genuinely heroic acts it took to save the economy on that day, I should mention that 74% of all civilian casualties were from the financial community. This represented not only wonderful people (I elect to think the best of them all) but of significant expertise in some of the most esoteric areas of our monetary system. In particular the staggering loss of six hundred fifty-eight employees by the largest securities interdealer broker, Cantor Fitzgerald, sent shockwaves through the industry that were and are still being felt.

I didn’t intend to write a piece about 9-11 or to devote my Thursday spot on the Netroots Radio program The After Show to this subject. In fact, I had planned to spend this week on the thrilling topic of the discount window. It was plain old curiosity that took me to the internet to find out what the Federal Reserve did on 9-11. As it turns out, it was not an easy story to unravel and between late Sunday night when I first started reading and Tuesday night when I started writing I read several hundred pages of reports as well as the tiny amount of media reporting available. Here’s the thing I didn’t know and I’ll bet you a wheelbarrow of carrots you didn’t either, on 9-11 and the days which immediately followed, a relatively small number of people did some genuinely, physically heroic things in order to keep the economy from going off the rails and none of them were named Alan Greenspan.

In order to piece this story together I read all of the 2001 Annual Reports of all twelve of the Federal Reserve Banks, congressional testimony and speeches by members of the Board of Governors, white papers by economists yawn, and a handful of accounts in the media. If you have the time grab some kale chips and kick back with the 2001 Annual Report for the Federal Reserve Bank of Chicago, it reads like a thriller and includes photographs of some of the Chicago team who made all the difference during those days of chaos and fear. The Government and Finance Division of the Congressional Research Service of the Library of Congress also produced a truly fine report prepared by Gail Makinen, The Economic Effects of 9-11: A Retrospective Assessment.

Hop below the fold for a story which is both astonishing and moving. I promise. It’s also really long but you won’t regret reading through to the end. I promise that too.

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This is the second bite-sized installment in my series on why monetary policy matters to progressives, why it’s worth your time to learn and why it isn’t as hard or as boring as you think.*

Having said that I'm going to start this diary by talking about fiscal policy. When I say “fiscal policy” one of three things will come to mind: a) the spending and taxation policy of Congress, b) that thing you vaguely remember from your macroeconomics class fifteen years ago which may or may not have to do with something-or-other or c) a really excellent abs workout. Actually, as I see it, this is a trick question because in practice none of these things are the case.

Fiscal policy is supposed to be the macroeconomic (I’ll explain this term below) effect on the economy of the taxing and spending policies of Congress and technically this is the case. Practically, however, no fuzzy dice. This would be because the word “policy” implies that Congress is making spending and taxation decisions based upon something other than how it effects their individual re-election campaigns and the associated campaign coffers. I’m not talking about the infamous Bridge to Nowhere or, my personal favorite, the Teapot Museum. I’m talking about reducing the funding for Head Start and unemployment benefits in favor of funding a missile system which the Pentagon has specifically said it does not need or want.

In Congress, in accordance with the Constitution, spending bills must originate in the House. This is called “the power of the purse” and by that the current House means the power of the purse to beat you down until they can wipe you off the bottom of their shoe on the nearest patch of grass. This is also called the “Paul Ryan Budget” and the clear objective is to destroy the middle class and the poor while pouring money down the throats of the top 1% until they choke our economy to death.

Congress is supposed to be using the power of the purse to spend money into the economy when it is needed and pull it out, via taxation, when the economy starts to overheat. THAT would be "fiscal policy" and there are two essential things you need to know about it.

1. Congress does not need to tax ANYONE on order to have money to spend. Congress owns this thing called a printing press and can direct the Treasury to put that press to work any time it likes. (I will cover this in much greater detail in a later installment.)

2. Inflation is not a threat when unemployment and underemployment are high and while Republicans and many elected Dems cannot understand this the concept will make perfect sense to you if you take a kale break and think about it. Inflation happens when demand exceeds supply and more can be charged for things that are suddenly in short supply. (Think Cabbage Patch dolls in 1983 or the gold iPhone 5s.) For that to be the case an economy would have to be working at full capacity both in industrial capacity and, more importantly, in labor capacity. Does anyone, anywhere on this planet think there is any way this economy is in danger of inflation? Ok, I’ll grant you, Alan Greenspan and Michelle Bachman, but I’m talking about people who might actually be in touch with reality. Anyone...anyone? Yeah, I thought not.

Congress is supposed to be thinking about the whole vegetable garden when they are making their spending and taxation decisions but they are not so the result is that annual spending, while continuing to have macroeconomic effect, is much more correctly seen as having microeconomic effect in that it is directed at specific individuals (the 1%), specific businesses (big business not Main Street) and specific (conservative) social agendas. If you want to understand the single biggest reason why the economy is still soft, this is it. The House has abrogated their fiscal responsibility completely. Period. Ffft!

It is worth saying that while “austerity” and “fix the debt” sound like macroeconomic policy they are tissue-paper thin lies used to disguise moving the wealth of the economy from the pockets of the many into the greedy hands of a few. Again, later in this series I will describe this process and how we can put an end to it so stick with me, baby. It’s going to be fun and besides, we rabbit Americans really know how to party.

Hop below the fold for more....

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Having just returned from NN14 I have confirmed something I always knew down deep in my heart. If you want to watch the life go out of the eyes of all but a handful of very wonky progressives you say two simple words, “monetary policy”. I would be standing in a clump of progressive activists and someone would ask, “So, what do you do?” I would respond, “I write on monetary policy.” People would step away. Getting another cookie in the Netroots lounge would suddenly become an urgent priority. As they were fading into the sunset I would say, “but I try to be accessible and funny!” No matter. They were long gone.

There you have it, the problem in a nutshell. Changing the understanding of monetary policy could do more to make the progressive social and environmental agenda possible than anything else but it remains the ugly stepchild. Maybe it is because we, as liberals, are so immersed in the philosophy that money isn’t what is important in our lives. Maybe it is that we think it will be too hard to understand (it’s not) or impossible to change (it’s not). Regardless, we have never developed a vocabulary for talking about it and we generally don’t have the underpinnings of a foundation to understand it. Until we get there we will be stuck allowing the ultra-conservative right and big business define the economy in ways that best suit them no matter how destructive and inaccurate.

Of course the thing about change is that it takes work and effort. Here are the small things I am doing as a start and if any of you are also working in this area I would love to connect to you if I have not already done so.

First of all, I am working on a series of books that are short, accessible, possibly funny, and illustrated covering both the most basic elements of monetary policy and how our government spends money. [I am not covering what we spend money on (fiscal policy) as that is its own huge litterbox of a mess. I am covering the process of spending so that we can each best figure out where we can generate pressure.] My first short e-book can be found on Amazon, “The Smart Bunny’s Guide to Debt, Deficit and Austerity.” The second, “The Smart Bunny’s Guide to Government Spending” will be out near the end of September followed closely by the page-turner, “The Smart Bunny’s Guide to the Federal Reserve”. After those I will take a break and then move on to banking reform and then the IMF and the World Bank (because who wouldn’t want to spend their late nights researching the IMF?)

In the meantime I will be joining Justice Putnam on Netroots Radio “The After Show” every Thursday starting at 11:30AM EDT this Thursday, 31 July. I’ll take about fifteen minutes to cover one bite-sized morsel of information so that those who follow “The After Show” will develop a vocabulary and understanding over time. [In case you don’t know, “The After Show” streams live on Netroots Radio and is also available in podcast on Stitcher and iTunes.]

In case you are both interested in monetary policy and ready to wade in, I recommend the amazing website: New Economic Perspectives. It is run by the incredible Dr. Stephanie Kelton, Associate Professor of Economics at the University of Missouri-Kansas City, Research Scholar at The Levy Economics Institute and Director of Graduate Student Research at the Center for Full Employment and Price Stability. [Take a second to imagine her business card.] For those of you who met Dr. Kelton at NN14 you know she is on fire on this subject and her ability to describe the real world of monetary policy to the uninitiated is surpassed by no one.

Anyway, we all do what we can. Stephanie and her associates do what they can, I do what I can. Together, we can do more.

Carrots!

Recommend List!  Thank you everyone. I'm raising my carrot juice in a toast to you.

Poll

Monetary policy is:

4%14 votes
4%16 votes
1%5 votes
12%42 votes
59%209 votes
18%63 votes

| 349 votes | Vote | Results

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I am driving up to Netroots 14 leaving early on Wednesday and returning late on Sunday. I have a Honda Element and it will comfortably take three additional people. Chipping in for gas is not a requirement as I would just be happy to have the company. I will be leaving from a little town about 45 minutes southwest of downtown Cincinnati so, for example, someone coming from Louisville could easily hop up here, leave their car in my very safe backyard and relax while I do the rest of the driving. If you are interested contact me at ArlissBunny@gmail.com.

Carrots!

Discuss

My recent post, "Obamacare Small Business Goldmine", somehow reached the notice of The Alan Colmes Show, on Fox News Radio, and they have invited me on. I don't listen to Fox so I looked them up on-line. I know we have members of the dKos community who are media experts. If any one of you can advise me, I would be truly appreciative.

***UPDATE: Due to your responses, I have accepted the invitation. I will be on The Alan Colmes Show, on Fox News Radio, tomorrow (Wednesday, 19 February) at 7:06PM Eastern. I am taking the very kindly given recommendations regarding how to best present myself so thank you to all who took your time to write.

Discuss

Sun Feb 16, 2014 at 06:32 PM PST

Obamacare Small Business Goldmine

by bunnygirl60

For progressives it is no new story that astonishingly malnourished messaging by the Obama administration compounded by egregiously misrepresentative coverage by the mainstream media has allowed an unending flow of air to feed the anti-ACA (Obamacare) gluttons. Personal, anecdotal stories, many against and a few supporting the ACA have been around for months. What has been lacking are the “it worked for my small business” stories so I thought I would throw this onto the table for general consumption.

I own a small manufacturing business and we have always provided health insurance to our employees. This has come at great expense to our firm as the cost of our policy increased by double-digit percentages every year. In recent years, much to our shame, we could no longer survive the full cost of the insurance so we had to pass twenty percent on to all participating employees. That percentage was, in turn, enough to cause several employees to have to drop coverage entirely. We were horrified and crushed but no amount of shopping around seemed to get us close enough to be able to overcome the huge mountain of cost. Ultimately, we ended up covering seven employees for a cost of, brace yourselves, $6570.58 per month!!! Please forgive me my scoff when I hear people complain about the high cost of their coverage under the ACA. Quality insurance has, for many years, cost an obscene amount and anyone who doesn’t know that wasn’t really paying attention to all the details.

So, what have we done under the ACA?

Well, we dropped our former policy, the group coverage, for our employees...and they are thrilled.

Yeah - stop screaming and follow me below the fold.

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It's your fault, DailyKos. It started here. I was just reading blog posts and minding my own business. I was normal*. Then I saw the "Live at 9AM" daily blog and I got curious. I downloaded the Stitcher app and started to listen to David Waldman ("KagroX" here in the Kosverse) every day. The next thing I knew I had done a search on Stitcher and was listening to Kagro in the Morning, The Majority Report with Sam Seder and The David Pakman Show five days a week. Shows available bi-weekly and weekly were added including (but not limited to) The Professional Left, The LEFT Show, The Matthew Filipowicz Show, and Kicking Ass. In between I listened to Netroots Radio live. It's a lot, I know, but I work long days and it's good company. I was happy to become a paying member of all the shows which requested support. (I am, in fact, a "Certified Bad Ass".) About six months in, things went off the rails.

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Over the past couple of weeks the debate around platinum coin seigniorage (PCS) has been raging and that is good. In fact, it is great. Like carrot subsidies, PCS is something we should have been talking about years ago. As a rabbit American, I support both but like LetsGetItDone (LGID) who has been writing incredibly knowledgable and quite brillent posts on PCS at both The Daily Kos and the New Economic Perspectives sites, I am hoping it will be possible to leverage the current discussion into a much larger one about crating policy space.

For more hop below the fold.

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Tue Jan 08, 2013 at 03:00 AM PST

Mint the Coin vs the Debt Ceiling

by bunnygirl60

Memes are a strange thing. One never can really predict what will catch on and what will die with a mingy wimper. Still, economist Stephanie Kelton has to be pretty thrilled that #MintTheCoin has gained traction. She, and the entire rest of the Modern Monetary Theory (MMT) community of economists, have certainly been waiting long enough. #MintTheCoin is Dr. Kelton's (@deficitowl) current contribution to Twitter and it's an important one but I'll bet you don't know why.

Hint: the answer isn't "debt ceiling."

Hop below the fold for more.

Poll

Rabbits are excellent commentators on:

26%4 votes
6%1 votes
0%0 votes
66%10 votes

| 15 votes | Vote | Results

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I am raising my voice to join with others (thank you LetsGetItDone) in an attempt to describe, in simple terms, Modern Monetary Theory (MMT) and its place in the current national conversation.  I fully accept that rational thought will play absolutely no part in the negotiated agreement currently being hashed out in Washington, DC. Honestly, as a House Rabbit American, I couldn't care less about the so-called fiscal cliff because my every whim will be met regardless. I sense however, that not all of you are in a similar position. I know my staff thinks they have cause for concern. In terms of what lawmakers may decide to do, my staff is right. In terms of actual economics, they are wrong. Allow me to explain.

In making my most critical, essential and earth-shattering point, I will try to be as subtle as I can. The Federal deficit is not big ENOUGH.

Hop below the fold for more....

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No one (except the Marketing Department at CNN) ever said that Rick Sanchez was the brightest bulb in the marquee and I have to go with the majority on that. I did, however, find Rick interesting and well... you remember those wind-up toys you had when you were small? You would turn the key and then they would go until they bashed into a wall - over and over and over again. Rick was like that. On one topic he would be asking piercing, passionate questions and on the next I would be thumping at the television and thinking, "I could be doing a better interview and I'm a RABBIT!!!" Still, I don't think the recent meltdown was all Rick's fault. Okay, I can hear you screeching already and yes, biting the hand that feeds you, never a good plan, however, it's not my actual point. Walter Cronkite could not have survived the 24-hour news cycle. Mission control, we have a problem.

I'm not done with you yet. Hop below the fold.

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