Relevant and even prescient commentary on news, politics and the economy.

On Golden Idols

On Golden Idols

 IN Exodus it is reported that while Moses spent time on Mount Sinai receiving the Ten Commandments from Yahweh, the people of Israel down below got tired of waiting for him and so constructed at least one, maybe more than one, as silver is mentioned along with gold, statue to be worshipped, with the golden idol, usually claimed to be of a calf, the most notorious.  When Moses returned with the Commandments he was wroth with anger and denounced them for this perfidy, and Exodus reports that Yahweh destroyed this idol, turning its gold into “dust” or other kinds of small particles depending on the translation, and then a part not usually discussed forced the people who had worshipped this golden idol to drink a liquid containing this dust. Of course one of the first commandments forbade the making of “graven images,” with this golden calf or whatever and any silver idol being clear and prime examples of what was clearly forbidden.

Has Elon Musk Damaged His Portfolio By Buying Bitcoin?

Has Elon Musk Damaged His Portfolio By Buying Bitcoin?

 After tweeting repeatedly for some time about bitcoin and the originally satirical degecoin, both of which have gone up massively in the past year, on Feb. 8 Elon Musk put his money where his mouth had been and had his Tesla EV company buy about $1.5 billion in bitcoin.  The immediate aftermath of this was a substantial surge of the crypto from somewhat over $40,000 to somewhat over $50,000.  This seems to have inspired several other major established corporations and entities to also announce they would be holding bitcoin as part of the asset portfolios, along with renewed discussions of more official cryptocurrencies possibly being issued by various central banks (commercial banks have for some years used XRP for transactions amongst themselves, but somehow it has not increased nearly as much as bitcoin or some of the other top cryptocurrencies for reasons I do not understand).

Anyway, it may be that instead of being a brilliant move that establishes the legitimacy and long term value of bitcoin once and for all, despite the massive amounts of electricity used in the mining of it, way more than for other leading cryptocurrencies, it is not out of the question that this may prove to have been its peak.  Bitcoin has been noticeably sliding in recent days, although it is still just above $50,000, which might prove to be a new floor, given all the corporate backers it seems to have picked up.

Is China Committing Genocide In Xinjiang?

 On the last day it could, the Trump State Department officially declared that the Peoples’ Republic of China is committing “genocide” in Xinjiang Province against the mostly Sunni Muslin Uighr minority, the previously dominant group in the province. New SecState Antony Blinken has publicly stated that he agrees with this judgment.  However, reportedly the State Department is reviewing this decision, as it is doing with many other parts of US foreign policy, including such things thought to be fairly straightforward such as rejoining the JCPOA nuclear agreement with Iran that Biden ran on rejoining and should. So whether or not this last minute action by Pompeo at State remains official or not is up in the air at the moment.

There is no question that the PRC’s policy towards the Uighurs is simply awful, not remotely defensible.  Ir involves having large numbers of people in reeducation camps as well as lots of torture. This is combined with the more general program of simply having Han people fully dominating the province, which parallels a similar program in Tibet, although somehow currently the central government is not engaging in quite as unpleasant programs regarding the native ethnic Tibetan population as is happening regarding the Uighurs.

Normalizing Foreign Trade Relations

 The Biden admin has not yet made moves to undo elements of Trump’s trade war, and some parts of it may not get undone, perhaps especially some directed at China.  But at least one move towards normalization with the rest of the world has just happened as the Biden admin has agreed to let the individual nominated to lead the World Trade Organization (WTO) take office. This is Ngosi Okunjo-Iweala, not only a woman, but a former Finance Minister from Nigeria.  She had previously been blocked by the Trump admin, with Trade rep Robert Lighthizer claiming she had “no experience in trade relatrions at all.” The Trumpers supported a former South Korean trade minister who negotiated a trade agreement with the US in 2018, but others did not do so.  The Trump admin had also blocked appointments of new judges to adjudicate trade disputes at the WTO, a more general move to essentially declare the WTO to be useless and no good in pursuit of an “America First” policy.

Fucking With The Football

That would be the nuclear football, the one that a President of the United States can use to destroy all human life on the planet with by pushing some buttons.  It turns out there is a second one, a backup, one that is kept near the backup President. That would be the Vice President.

So CNN has put out a report that Tyler Cowen has picked up on and put as one of his daily news stories on Marginal Revolution, although barely commented on and not getting much attention on most media. The story in fact sort of does not quite play up how serious it is.  It focused on how people at DOD did not know how serious the situation was, without in fact playing up how serious it was.

The problem is that while there has been a lot of attention paid to how former President Trump continued to tweet negatively about his own VP, Mike Pence, even after hearing that Pence had been evacuated from the Senate chambers with a mob having entered the Capitol.  Trump’s concern was how Pence had let him down by not engaging in an unconstitutional act to try not to recognize the certified state electoral college vote results. This tweet was read to the crowd outside, and the mob chanted over and over “Hang Mike Pence!”  We have now all seen this.

But probably the most dangerous part of this whole episode, I mean even probably worse than that Trump might have overturned the election and turned the US into a lifetime dictatorship run by him, is that when the mob was within 100 feet of Pence, the backup nuclear football was with him, carried by a Secret Service agent.

Now, if the mob had been a bit faster and caught Pence, certainly that Secret Service agent would have resisted vigorously, probably to the extent of giving up his life. But if the mob had succeeded in obtaining that nuclear football, well, maybe there are limits on the ability of a random person getting that object that keep them from destroying all human life on this planet.  But even short of that, there is no doubt that one of these people could have brought about very serious trouble.  This story needs more reporting, not how mean Trump was not to stand up for his VP who was following the law to certify the electoral college votes that would bring about the end of Trujmp’s presidency.

Barkley Rosser

Is Bitcoin Really Real Money? Ontological and Epistemological Questions

Is Bitcoin Really Real Money? Ontological and Epistemological Questions

 The movement to make Bitcoin into a de facto form of money has taken a step forward when Elon Musk declared that he would be purchasing over a billion btc.  Some are claiming that Musk did this to pump up an alternative asset because Tesla stock is overpriced and may fall hard soon.  But who knows? Anyway, although btc fell today, it has reached dramatic new highs well over $40,000, with various people calling for it to go to $100,000. Many respectable financial advisers seem to be changing their tune, shifting to maybe one should hold a percent or two of btc along with gold in the non-income-earning part of their portfolios. Gold has remained flat just above $1800, and btc is the “new gold.  But is it (or any other cryptocurrency) really real money?  That is the ontological question of money.

Normalizing Foreign Trade Relations

Normalizing Foreign Trade Relations

 The Biden admin has not yet made moves to undo elements of Trump’s trade war, and some parts of it may not get undone, perhaps especially some directed at China.  But at least one move towards normalization with the rest of the world has just happened as the Biden admin has agreed to let the individual nominated to lead the World Trade Organization (WTO) take office. This is Ngosi Okunjo-Iweala, not only a woman, but a former Finance Minister from Nigeria.  She had previously been blocked by the Trump admin, with Trade rep Robert Lighthizer claiming she had “no experience in trade relatrions at all.” The Trumpers supported a former South Korean trade minister who negotiated a trade agreement with the US in 2018, but others did not do so.  The Trump admin had also blocked appointments of new judges to adjudicate trade disputes at the WTO, a more general move to essentially declare the WTO to be useless and no good in pursuit of an “America First” policy.

As it is, Okunjo-Iweala has a PhD in economics from MIT and long experience in negotiating several trade agreements along with having had a record of combating corruption in Nigeria as Finance Minister.  Aside from obvious possible sexism and racism in opposing her, according to the WaPo story on this the real reason for Lighthizer’s opposition to her was based on her supposedly being too close to former US Trade rep Robert Zoellick of the Obama admin, a pretty petty reason in the end.

Is Bitcoin Really Real Money?

Is Bitcoin Really Real Money? Ontological and Epistemological Questions

 The movement to make Bitcoin into a de facto form of money has taken a step forward when Elon Musk declared that he would be purchasing over a billion btc.  Some are claiming that Musk did this to pump up an alternative asset because Tesla stock is overpriced and may fall hard soon.  But who knows? Anyway, although btc fell today, it has reached dramatic new highs well over $40,000, with various people calling for it to go to $100,000. Many respectable financial advisers seem to be changing their tune, shifting to maybe one should hold a percent or two of btc along with gold in the non-income-earning part of their portfolios. Gold has remained flat just above $1800, and btc is the “new gold.  But is it (or any other cryptocurrency) really real money?  That is the ontological question of money.

So what is the ontological nature of money?  We know there are debates over which of the standard textbook functions is the most important, with use as a means of exchange, a unit of account, and a store of value the standard list. Some emphasize one over another. MMT advocates emphasize the unit of account function, especially when that unit of account is used to pay taxes.  In that view this is the ontological foundation is the declaration by a government that something must be used to pay taxes, with this also resolving the epistemological issue assuming the government has sufficient existing credibility and communications skills as well as enforcement capability to enforce making its citizens actually pay their taxes using the established form of money.

Pushing Back For Democracy Around The World

Pushing Back For Democracy Around The World

 Given the massive impetus the presidency of Donald Trump gave to authoritarian and anti-democratic forces around the world, it is worth seeing that his defeat in a democratic election, despite his efforts to illegally overturn it, seems to have been followed by some outbursts of pro-democratic demonstrations in parts of the world, even as we saw a major setback for democracy in Myanmar with the military coup there.

Indeed, one of those pushbacks has been in Myanmar, where various groups have gone into the streets to protest this coup. I fear they will not succeed in reversing it, at least not immediately. But the generals have not gotten away with doing this without pushback and clearly will have their hands full hanging on to power.

RIP Michael Perelman

RIP Michael Perelman

 I have just learned that old friend Michael Perelman has “passed quietly in his sleep” (not reported of what) on September 21, 2020, having been born on October 1, 1939, so just shy of his 81st birthday.  I knew Michael for a long time and considered him a personal friend, although it has been some time since I have seen him in person.  He long had an active internet list and was officially signed on as one of the people who could post here on Econospeak when it started, and I remember him in fact posting a few times in the early days, but then stopped.  He was always insightful.

Michael received his PhD from the Agricultural Economics and Natural Resources Department at UC-Berkeley in 1971, where his major prof was George Kuznets, younger brother of Nobelist Simon Kuznets. Michael then taught for 47 years at Chico State University in California where he was widely praised as an excellent teacher.  Among his students was Mark Thoma who apparently was strongly influenced by Michael and who would later run the widely respected and busy blog, Economists View, no longer functioning unfortunately.