Recent comments by Matt Russo

• Two Dollar Fallacies

  "Exporting countries are not holding the american dollar as a reserve currency but as a means to maintaining their competitive advantage as exporters."
  
  This is tantamount to stating that the USD does not in fact function as a "reserve currency". Was that the intention?
  

• The Promise of Abenomics

  "Abe likens this approach to holding three arrows – taken alone, each can be bent; taken together, none can."
  
  Perhaps this is an old Japanese kotowaza, or Abe perhaps lifted this from Akira Kurosawa's 'Ran', but it forgets that in the latter film, the hero, Saburo (the "third son"), then took this proposed lesson from his father in the form of 3 actual arrows, and then broke all three together over his knee. End of "lesson"!
  
  

• No More Growth Miracles

  @Anton Martin Agreed, and thanks for filling in with some of the real historical economic details in re E. Europe.
  
  Always left unmentioned is both the remaining 4-5 billion in developing countries, and the ~1 billion in the "developed" (or as I prefer, "undeveloping") countries. It is inevitable that capitalism applied to an underdeveloped country will raise the living standards of a variable %age of the population, depending on the internal political regime and the countries' leverage in the world market. Unlike feudalism, etc. - and I would add, unlike the "hybrid" system that existed in E. Europe/USSR that, having features of both, was neither capitalist nor socialist as a whole and was therefore fundamentally incoherent as a system - capitalism is a dynamic system that by definition must expand simply to remain in existence.
  
  And for a capitalist political regime to survive, it has to ensure that a sufficient amount of the fruits of development are accessible to enough of a minority to sufficiently lend support to the regime and the policy (hence the science is properly called *political* economy, not the scientistic "economics"). But even 25% won't be good enough over the longer run. And we know that the other 75% aren't waiting in line to join the 25% - the line doesn't exist. Or are we to believe that the countries of E.E., ex-USSR and China, with long experience with state intervention in the economy (even before 1945), simply tossed it over the fence to the "magic" of Ronald Reagan's marketplace? Poland still has state-provided health care for all last I checked
  
  And then there are the ~1 billion in the "undeveloping" world. Now all modern countries contain "socialistic" economic elements embedded of necessity in their capitalist systems. When a US right winger says Social Security, Medicare, trains (yes, just ask George Will!) are "socialist" - they are right (and the first two are very popular, the third sadly unknown outside the NE Corridor). But the capitalist political regimes in those countries have been "salami-slicing" away at these socialistic elements for the last 30 years, gradually undermining them in the hope that they will lose popularity, though it looks like they are about to take a sledgehammer to them now. And over that same period the "middle class" in those countries have experienced stagnant to declining living standards, since 2000 an absolute decline. Shouldn't that tell us something like more capitalism = less middle class in W. Europe, USA and Japan?

• Economics in Denial

  @mark pitts:
  
  And the other ~4 billion? How are they making out under capitalism? Don't see how 25% makes a viable political base of support for capitalism over the long run.
  
  And what of the ~1 billion in the "advanced" countries, whose real incomes have been stagnant or declining since the 1970s, and have been in absolute decline since 2000? Doesn't that suggest that when a country reaches a certain level of development, capitalism outlives its usefulness? That sticking with it causes development to stall and stagnate?
  
  Wasn't that Karl Marx's essential point?
  
  As for mainstream economics, when it is not silent it claims that certain things are simply "unknowable". This is theology, not science. It is a confession of failure.