Regular readers will know that I have spent quite a lot of time reading the…
Japan announces a stimulus as the Right take over Bolivia
Just a short blog post today (short in research) as I devote Wednesday’s to other writing and I have to travel a lot today. More a collection of snippets that I come across over the course of a day’s work. Today, we think about Bolivia and the right-wing thugs that have overthrown a legitimate government advancing the well-being of its people. We also see senior progressive politicians falling into a myriad of lies and misconceptions about the monetary system and handing political initiative to the right wing as a consequence, even though they think they are being clever in their framing. And we think of Japan a little. And then some music offerings or two.
Japanese stimulus package
Last week, I was in Japan and I met a lot of people from across the political spectrum. After my presentation at the Diet (November 5, 2019), there was a relatively informal and private function attended by many members of the Diet including some senior politicians in the ruling party.
I spoke at length privately, with many senior members of the Japanese government and outlined my 10-point plan to them for Japan based on an MMT understanding.
We had a very free exchange (given it was private) and while I won’t disclose personal details here, several of those present indicated that they would be pressuring their Prime Minister Mr Abe in the following days to change economic policy in Japan.
On Friday, Mr Abe instructed officials in the Cabinet Office to devise a fiscal stimulus package, the first since 2016 as a means of offsetting the damage from the consumption tax hike on October 1, 2019, attenuating the risks from the global slowdown, dealing with the damage from the recent Typhoon Hagibis, and ensuring that the boost from the 2020 Tokyo Olympics is sustained.
The Cabinet Secretary told the media that:
To speed up our recovery … (from the Typhoon) … deal with risks from abroad and accelerate productivity growth, we are formulating an economic plan along the lines of a 15-month budget.
The details have to be determined which tells you that this decision was, probably, determined fairly quickly, especially given, that the politicians I spoke to had indicated to me (last Tuesday) that they were not aware of any plans for a stimulus.
Yet, on Friday, the stimulus was announced.
No causality claimed. But a great advance for Japan (depending on the specific areas and demographic cohorts that the stimulus will benefit).
The latest South American progressive government to be taken over by right-wing thugs sponsored by the US is Bolivia.
This comes just after the ousted President Evo Morales cancelled a 2018 contract with a German company to mine the nation’s lithium deposits.
He was reported to have said:
Bolivia’s lithium belongs to the Bolivian people … Not to multinational corporate cabals.
Bolivia, reportedly has 50 to 70 per cent of the world’s lithium reserves, which are essential to the development of batteries in electric cars, etc. Demand for that resources will sky-rocket in the coming decade.
Evo Morales wanted to increase the national benefits of the lithium production.
Multinational companies also harvest gas and oil resources in Bolivia.
Here is a report on that – Bolivian Coup Comes Less Than a Week After Morales Stopped Multinational Firm’s Lithium Deal (November 11, 2019).
I also saw this comparison for Bolivia:
2006 13.0 per cent
2018 2.4 per cent
2006 9.2 per cent
2018 4.1 per cent
2006 60.6 per cent
2018 34.6 per cent
2006 38.2 per cent
2018 15.2 per cent
I haven’t verified those figures but will.
Here is the tenor sax player Gato Barbieri off his great album from 1973 – Bolivia. Lonnie Liston Smith played on that album as did John Abercrombie (guitar) and Stanley Clarke (bass). I play it regularly.
We mourn the events in this nation in the last week.
And we realise that the progressive struggle goes beyond rhetoric and at times has to engage in other more aggressive ways.
Labor leader in Australia disqualifies himself from standing for higher office for lying
Last week (November 8, 2019), the Opposition leader Anthony Albanese gave a speech at the National Press Club in Canberra (Transcript) outlining his vision for the Party after its disastrous election loss in May this year.
In the Q&A time, he was asked whether the Labor Party about the future tax and spending plans of the Party (Q&A Transcript).
Labor will always be better on health and education than the Coalition. That’s true. We actually believe that education is about creating opportunity, not just entrenching privilege. And we believe that health should be accessible to anyone regardless of their income. You should get proper health care. So, that’s a given. Specific policies, we’ll work on. We obviously will work on, in terms of the funding, that will be available. If we don’t have the same level of revenue, you can’t have the same level of expenditure. That’s just a fact.
Dear Anthony, that is not “just a fact”. It is a neoliberal lie that you choose to perpetuate while claiming to be a progressive party.
Your advisors are clearly part of the problem and you should sack them immediately.
The Australian government issues its own currency. The revenue it raises does not fund its spending in any intrinsic way.
And, if the Labor Party think they can win against the Conservatives, by lying like this, then their track record should tell them that it is a failing strategy.
Why not show some leadership and educate the public against these neoliberal myths.
British Labour walks the neoliberal plank
And while we are talking about statements by Labour politicians that disqualify them from being suitable for office, I saw this Tweet this week from British Labour Party Shadow Chancellor John McDonnell (November 11, 2019).
So according to the framing of the British Labour Party, the super-rich in the UK are essential for funding improved public services via their income.
In other words, British people cannot do with them.
And if they eliminated them Britain would not have quality public services.
That is the sort of nonsense that Ayn Rand pushed onto us in her Right-wing bible – Atlas Shrugged – where the wealthy business men are the income generators and the rest of us a looters – living of their productivity and entrepreneurial flair.
I know this is not what John thinks. But in language and framing the two visions are comparable.
When are progressives going to realise that the ‘tax the rich’ narrative will fail.
The British government does not need to tax the rich to pay for first-class public services. It can do that any time it can muster the real resources to accomplish that aspiration. It issues its own currency.
It might want to tax the rich because they have too much power but that is quite separate from justifying such an action because the government needs their ‘money’.
Upcoming event: A Just Transition Framework for the Future, Sydney, November 23, 2019
I will be speaking at an event organised by the Modern Money Australia – NSW group on Saturday, 23 November 2019 from 14:00 to 16:30.
I will be speaking about the need for a Just Transition Framework for the Future, as a vehicle for dealing with the massive socio-economic transformations that will be needed if our societies are to effectively deal with the problem of anthropomorphically-induced climate change.
The Framework is motivated by the awareness that without consent from the people, particularly those who will be negatively impacted by these transformations in terms of their jobs and local opportunities, there is little chance of an effective policy response to the climate emergency.
The Just Transition Framework offers a radical alternative to the status-quo and stands in stark contrast with the lukewarm, neoliberal, market-based policy solutions that currently dominate the inertial climate change debate.
I will argue that action on climate change has to be radical and elevate government to the centre, rather than just seeing the government as a facilitator for better capitalism.
Such government-led solutions will exploit the currency-issuing capacity of the Australian federal government, which an MMT understanding shows us is not financially constrained in its spending.
Thus, the usual criticisms of government action that derail progressive initiatives, which can be summarised by the question “How will we pay for it?”, become irrelevant and the real questions of political legitimacy and real resource availability are elevated to the centre of the debate over a ‘Green New Deal’.
I will outline why I do not like the ‘Green New Deal’ terminology and why Australian progressives should organise under the Just Transition Framework banner.
I will also show why establishing political legitimacy requires the currency-issuing capacity of government be used to ensure, not only that essential green infrastructure is developed, but that the losers from the regulated closures of carbon-intensive sectors, are not disadvantaged in any fundamental way.
In this way, MMT crucially forms the foundation of the Just Transition Framework. A just transition is not only possible, it’s our only option. And, there’s no Just Transition without MMT.
Surry Hills Neighbourhood Centre
405 Crown Street
Surry Hills, NSW 2010
All are welcome and tickets are free. But, if you can manage it, a small donation would be much appreciated by the organisers to help them with their future activities.
Please register for a ticket, as seats are limited.
You’re welcome also to join us for drinks and a chat after the event, from about 4:30pm, at The Clock Hotel in Surry Hills.
Registration and further details – HERE
Call for financial assistance to make the MMT University project a reality
The – Foundation for Monetary Studies Inc. – aka The MMT Foundation serves as a legal vehicle to raise funds and provide financial resources for educational projects as resources permit and the need arises.
The Foundation is a non-profit corporation registered in the State of Delaware as a Section 501(c)(3) company. I am the President of the company.
Its legal structure allows people can make donations without their identity being revealed publicly.
The first project it will support is – MMTed (aka MMT University) – which will provide formal courses to students in all nations to advance their understanding of Modern Monetary Theory.
At present this is the priority and we need some solid financial commitments to make this project possible and sustainable.
Some sponsors have already offered their generous assistance.
We need significantly more funds to get the operations off the ground.
In order for FMS to solicit tax-exempt donations while our application to the IRS is being processed, the Modern Money Network, Ltd. (“MMN”) has agreed to serve as a fiscal sponsor, and to receive funds on FMS’s behalf.
MMN is a non-profit corporation registered in the State of Delaware, and is a federal tax-exempt public charity under Section 501(c)(3) of the Internal Revenue Code.
Donations made to MMN on behalf of FMS are not disclosed to the public.
Furthermore, all donations made to MMN on behalf of FMS will be used exclusively for FMS projects.
Please help if you can.
We cannot make the MMTed project viable without funding support.
Some Philly soul for today
Here is Curtis singing the magnificient song – Be Thankful for What You Got – written and sung by – William DeVaughn.
It first appeared on William DeVaughn’s 1974 self-financed #1 Billboard hit record of the same name.
Backing musicians included the Philadelphia-based studio band – MFSB – comprising on this track, Norman Harris (guitar); Bobby Eli (guitar), John Davis (keyboards), Vince Montana (vibes), Vince Montana (percussion), and Earl Young (drums).
The backing players were key parts of the so-called Philly soul scene in the 1970s. Norman Harris died at the age of 39 from heart disease but as you can hear from this track was a master guitar player and one of my favourites of that era.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.
This Post Has 13 Comments
Great job in Japan, Bill.
Yes, well done Bill, that’s very good news for the people of Japan.
The (Just Transition) Framework is motivated by the awareness that without consent from the people, particularly those who will be negatively impacted by these transformations in terms of their jobs and local opportunities, there is little chance of an effective policy response to the climate emergency.” Truer words were never spoken, and the environmental movement had better heed them. Closing down coal mines, for example, without alternative (preferably better and healthier) jobs being offered to the miners, may work here and there, but on a society-wide basis, it’s the recipe for disaster. As Bill constantly reminds us, people, including working people with families to support, are also part of creation, which we must work to restore and protect in its entirety by “massive socio-economic transformations.” And when there are no lesser options left, we must think big and bold, there being “no Just Transition without MMT.”
I’m afraid John McDonnell is playing it the only way he can in the present climate. We have a media that is 100% hostile to Labour. The BBC appear to prefer Johnson and Farage and MMT means the Magic Money Tree. Governments run just like households and IFS and the Resolution Foundation are grounded in neoliberalism. The only reason the McDonnell survives is because the Tories are also promising increased government spending. McDonnell is aiming to make the manifesto fully costed as in 2017. I would love a grown up debate about MMT but the country is not ready for it. Chris Williamson has been deselected and half the Labour Party wants Tony Blair to ride up on a white charger. Yes, it’s truly desperate but at least Corbyn and McDonnell have moved the Overton Window so that serious things are being debated. I don’t see an awful lot of talent in our parliament but I do some some honest caring people. If most people had been subjected to the ad hominem attacks directed at Jeremy they would have just walked away. I’m sorry but this country is a joke that isn’t funny and it’s going to get a lot worse.
Resources and markets are catnip for capital and finance, they stimulate and focus like nothing else. If you look at the various coups/wars we have seen over the entire history of exploitative behavior by big business, they are usually motivated by desires to access more of each, if not merely to punish or decimate the working classes, whenever they try to promote any motion toward greater equality. Bolivia today is no exception.
The just transition would be ideal, but it’s difficult to see how it will happen in a world were we still have unfolding coups like Bolivia, and Venezuela, well supported by faux corporatist s posing as Liberal progressives, with only weak if any opposition from Green or Social Democratic directions throughout so much of the developed world.
Most folks don’t seem to get that the right ideologues who preach that all kinds of doom and gloom will ensue should anything happen to displace private capital as the pilot in economies are only speaking from their own perspective and not the greater community.
It’s been great to hear that the MMT perspectives are gaining the attention of power in at least one region. Let’s hope the result is something positive and a movement grows from there.
Bill Mitchell visits Japan, and talks to some key people there. Then a stimulus package is announced.
“No causality claimed”. 🙂
You either played a blinder, or perhaps were pushing at an already open door. Either way, it seems good for Japan, as others have said.
As for McDonnell and Labour, well, as I feared, they have been caught off-guard by Johnson spending money like a member of the Bullingdon Club on a good night out, and are running to catch up, having preached fiscal responsibility for the last few years, instead of trying to educate the public with the knowledge of MMT principles. They should have learned from Chris Williamson instead of kicking him out for spurious reasons.
Now they have this ridiculous policy of taxing the super-rich to pay for their additional spending. People will soon work out that this does not add up, and interpret it probably as meaning increased taxes for everyone before long. This policy may well play well in Corbynista circles, but it won’t in the wider country, especially when it has been reinterpreted by the right-wing press.
Coincidence??? Who can say?
Bad times now await the Bolivian people now that such a repellent group of thieves, con men, human rights abusers and religious extremists have siezed power. It looks like Morales has received payback for his honest UN speech in the presence of Pompeo and Trump and for daring to spend money on the welfare of the Bolivian people. At least the people will now see who delivers better for them.
It looks like the only hope for Latin America is if their perpetual tormentor reforms under a Bernie Sanders presidency.
Well done Bill for increasing the chance for a stimulus in Japan. This will improve the lives of millions of Japanese citizens and maybe good fiscal and employment policy will become the norm?
@ Andreas Bimba:-
“…a repellent group of thieves, con men, human rights abusers and religious extremists have siezed power”.
Your comprehensively-damning assessment has (as I feared would happen) demolished the hope I have been feebly clinging-to – ie that the opposition to Morales *might possibly* have some (however few) redeeming features.
Accepting fairly uncritically all the claims made for his period in office because the evidence appears to support all or most of them – making due allowance for political rhetoric – was he *really* justified in seeking a fourth term in defiance of the constitution? I can’t help but doubt that.
I appreciate of course that that’s applying the norms (or what pass for norms) in what we like to think of as “western democracy” and that applying those to the situation in Bolivia might be a bit crass – given the totally-nefarious activities of the USA throughout the region (Chile, Argentina, Venezuela, San Salvador, Panama, ,…).
But it would be interesting to have your – much better-informed than my own – opinion as to whether the issues in regard to Bolivia are quite as “black-and-white” and simplistic as they’re being represented-as by the European Left. (IMHO they haven’t been in relation to Venezuela for example – though you may think otherwise).
A good start is this short but insightful piece on Jacobin by historian Grandin with the title “A Few Tips on How to Understand Latin American Coups”:
(Link to be displayed at Bills discretion:)
These 2 of the 6 bullet points might be the best suited to provide guidance in this messy situation:
Point 1 of 6:
“1. There has never been a coup in Latin America where the president being overthrown wasn’t considered “problematic.” (Yes, not even Allende.)”
And Point 6 of 6:
“6. When assessing comparable negatives of the contending sides vying for power – always a good exercise when you want virtue signal your “nuanced” position distinct from evil rightists and ideological leftists – don’t forget to weigh the future in your deliberations. For instance, a few years ago in Brazil, a number of leftists pointed out that the Workers Party (PT) was indeed corrupt and cut off from its base. Now, as we hurtle toward the climate apocalypse and see the nature of Bolosonaro, perhaps we’d assign a few more points to the PT side of that conflict.”
In regards to the identities and track records of those involved in the coup, I find this piece by investigative journalists (the old scholl kind) Max Blumenthal and Ben Norton on “TheGreyZone.com” to be the most detailed one.
(Link to be displayed at Bill’s discretion:)
It appears to be an amalgam of reactionary military, moderate conservatives and outright christo-facists, international capital (particularily the mining sector) and support out of Washington by both the OAS (remember Haiti in 2000?) and the CIA. The latter’s support might be only indirect, since a handful of the coup front figures are graduates of the “Western Hemisphere Institute for Cooperation (WHINSEC)” formerly known as “The school of the Americas”, where Latin American Elites and Military have been trained in “counter insurgency” and “low intensity warfare” for decades. Others have served as so called “military attachés” in DC, one of them being the coup’s top honcho Gen. Kaliman (back in 2013). Pompeo was pretty fast in recognizing the “interim president” so it was at least a welcome sight to Washington.
Noam Chomsky once refered to foreign policy of the US as being straight out of “the godfather’s playbook”. Insurrection and insubordinance have to be punished before “the contagion” might spread. Simply claiming Morales is an ineffective leader won’t fly because his record would make “serious” leader blush: GDP has risen to approx. 300% the value it had when he came into office while poverty and extreme poverty were reduced quite effectively (42% and 60% according to “The Nation”). Hence the “electoral fraud” shtick.
The reclamations of fraud by the OAS are taken under scrutiny by journalist Mark Weisbrod in “The Nation” and found to be lacking in substance. The claim is that the fast count system was briefly interrupted and that when it resumed Morales had regained a suspicious amount of traction. This accusation falls rather flat since:
1. The system itself is not official and was only introduced at the behest of the OAS themselves. While the system did experience an interruption, the official count did not and was available during the downtime of the “fast count”. Every change in the count is therefore accounted for.
2. The claim of suspicion of the fast rise in Morales favour towards the latter stages of the count is facetious at best, since the results in the rural areas that heavily favor Morales where some of the last to be accounted for. Hence, a sharp correction was expected.
3. The final results fell well within the margin of error predicted before the election and (if I remember correctly) even ended up costing MAS (Evo’s party) some seats in parliament. If this was a rig, it was one of the most ineffective in recent memory.
(Again, the link to Weisbrod’s article to b displayed at Bill’s discretion:)
Finally, an maybe most importantly, given the recent turn towards electrification in the car industry, the demand for lithium is expected to rise (even more) sharply and Bolivia happens to be sitting on some of the greatest, some even say the greatest, reserves of the metal on earth in the “Salar de Uyuni” region. Morales has repeatedly proclaimed that any deal for exploitation would have to be conducted in cooperation with the state company “Yacimientos de Litio Bolivianos” (YLB). A joint venture with a German enterprise, ACI Systems, started last year but was cancelled recently by Morales (though I don’t know if this took place before or after the recent election) with a Chinese company, Xinjiang TBEA Group, set to take over (remember that mafia/godfather bit –> old school turf war!). This piece of information I got from Yahoo News, so it should be readily available online.
I don’t know if this was the main reason or merely the drop that spilled the glass, but an at least important motive behind the coup is to enforce a private-exploitation-friendly government akin to Macri’s in Argentina. Over there, lithium production increased by around 60% between 2015 and 2016 when the neoliberal Macri removed currency and capital controls as well as taxes introduced by his predecessors, which led a lot of foreign companies to consider opportunities in Argentina’s lithium mining industry. This went so well, that the IMF moved in to make a killing. Yet again.
I lack the time, knowledge and patience to go over the hundreds of years of colonialism/imperialism that yielded the current makeup of Bolivian society and how these ethnic and socioeconomic tensions fuel the conflict, but suffice it to say the european vs. indigenous divide correlates pretty well with the rich vs. poor angle and that it is kinda important.
Well, that’s the shortest version of this mess I can provide 🙂
In my rage about yet another regime change in Latin America, I forgot to extend my congratulations to Bill for his part in increasing the chances of stimulus in Japan.
Now do Germany/EU, please! 🙂
Thank you for the links, Hermann.
A really good summary of the Bolivian coup Hermann. Much more informative than my limited knowledge would have allowed.
Maybe a view to the future of politics in the liberal ‘democracies’ where the US acts as the enforcer for the global hard right fundamentalist Christian wealthy oligarchy and democracy becomes just a charade.
The insurrection to oust Maduro in Venezuela looks very similar. Under Maduro the Venezuelan economy is not performing well due to hyperinflation, poor self sufficiency, crippling sanctions and corruption but elections are the preferred method to select governments.