Friday, September 30, 2016

Xinhua — Absurd presidential debate underlines deep-rooted problems facing US

A view from China. "Absurd." The wonders of democracy.

Absurd presidential debate underlines deep-rooted problems facing US
Chu Lei and Qi Zijian

Felicity Arbuthnot — The Betrayal of Syria - The US, France and Britain’s UN Ambassadors at the United Nations

The US is the current imperial power in the region while France and Britain are the former imperial powers there.

Felicity Arbuthnot: The Betrayal of Syria - The US, France and Britain’s UN Ambassadors at the United Nations

Ray McGovern — Russia-Baiting and Risks of Nuclear War

Not like the US has not done this before with almost disastrous consequence, MeGovern explains, providing a historical reminder. Now US leaders are tempting fate again.

Consortium News
Russia-Baiting and Risks of Nuclear War
Ray McGovern, 27-year career as a CIA analyst included leading CIA’s Soviet Foreign Policy Branch and later conducted morning briefings of President Reagan’s most senior national security advisers with the President’s Daily Brief

Mike Whitney — The Biggest Heist in Human History

Consequences of monetary versus fiscal policy — asset appreciation versus economic stimulus, enriching asset owners but leaving workers out in the cold. Monetarism versus Keynesianism.

The Biggest Heist in Human History
Mike Whitney

Ryan Gallagher — Europe’s Top Human Rights Court Will Consider Legality of Surveillance Exposed by Edward Snowden

The shoe drops. The US deep state will be apoplectic over this. For one thing,  guilty verdict would exonerate Snowden.
HUMAN RIGHTS GROUPS have launched a major new legal challenge over mass surveillance programs revealed by the National Security Agency whistleblower Edward Snowden.
Ten organizations – including Privacy International, the American Civil Liberties Union, and Amnesty International – are taking up the landmark case against the U.K. government in the European Court of Human Rights (pictured above). In a 115-page complaint released on Thursday, the groups allege that “blanket and indiscriminate” surveillance operations carried out by British spy agencies in collaboration with their U.S. counterparts violate privacy and freedom of expression rights.
The case represents the first time Europe’s top human rights court has been asked to consider the legality of surveillance exposed in the Snowden documents. Its judgments are legally binding and could potentially have ramifications for how surveillance is conducted within the U.K.
“Through bulk surveillance programs, the U.S. and U.K. governments intercept the private communications and data of millions of people around the world,” said Ashley Gorski, staff attorney at the ACLU National Security Project. “Not only is bulk surveillance unlawful, but it has a deeply chilling and corrosive effect on political discourse and our personal communications. We are hopeful that the European Court of Human Rights will recognize that this mass surveillance violates fundamental rights to privacy and freedom of speech, and that the court’s ruling will help put an end to these practices on a global scale.”

The Intercept
Europe’s Top Human Rights Court Will Consider Legality of Surveillance Exposed by Edward Snowden
Ryan Gallagher

TASS — Expert: Russia will have to increase volume of borrowings threefold in 2017

Luckily, Kudrin has no operational role.
Russia will have to triple the volume of loans in 2017, head of the Center for Strategic Research (CSR) and ex-Finance Minister Alexei Kudrin said in an interview with the Rossiya 24 TV channel as part of the Sochi-2016 International Investment Forum.
"It will be necessary to increase borrowings anyway, even next year we will have to take three times more than this year, but when the reserve fund becomes empty, we will have to borrow even more," Kudrin said.
At the same time he noted that "this policy can be only temporary."
"That is why it will be necessary to cut deficit and cut borrowings. But in these conditions it is necessary to take funds to solve these current issues," Kudrin said. He did not say exactly what borrowings he was talking about.
"It will be necessary to increase borrowings anyway, even next year we will have to take three times more than this year, but when the reserve fund becomes empty, we will have to borrow even more," Kudrin said.
Kudrin has suggested that certain social budget expenditures on the so-called Presidential ‘May decrees’, including the one implying a raise in wages to public sector employees, should be postponed in order to bring the budget into balance.
Neoliberal moronism.

Expert: Russia will have to increase volume of borrowings threefold in 2017

SouthFront — US Defense Secretary: US to ‘Sharpen Military Edge in Asia’

The US is going to sharpen its military edge in the Asia-Pacific region in connection with growing concern about China’s military building up there, US Defense Secretary Ashton Carter said on Thursday.

“The United States will continue to sharpen our military edge so we remain the most powerful military in the region and the security partner of choice,” Carter said.
So let's add this up. The US is preparing for war with Russia and China while also engaged in the GWOT. This implies that the "defense" budget has to expand considerably.

US Defense Secretary: US to ‘Sharpen Military Edge in Asia’

Sputnik International
‘Pivot’ Prompts US to Send Newest, Best Weapons to Asia-Pacific - Carter

Riley Waggaman —This Is Not a Drill: NYT Editorial Board Lays Groundwork For War With Russia. Can't Wait!

Since the invention of assholes in 50,000 B.C.E., bleached-teethed television pundits and other social parasites have beckoned the young to die or lose limbs in pointless, illegal wars.… 
We've already established, in our lede, that assholes have been roaming the world for thousands of years. But it was Mark Twain who warned us about the New York Timesmany, many years ago:
Riley Waggaman specializes in dark humor. Today, the NYT gets the richly deserved brunt of it.

Russia Insider
This Is Not a Drill: NYT Editorial Board Lays Groundwork For War With Russia. Can't Wait!
Riley Waggaman

The Saker — The war against Syria: both sides go to “plan B”

The saker games "plan B" for the US and the Russian response. What's at stake? Only WWIII.
Please consider that before you go to vote.
Patrick Lawrence

Julia Ruiz Pozuelo, Amy Slipowitz, Guillermo Valeting — Democracy does not cause growth

Growth is the result of economic liberalism. Democracy is about social and political liberalism rather than economic liberalism.

There is a tradeoff between growth and fairness. 

Economic liberalism promotes growth, while social and political liberalism promote fairness and reciprocity.

Capitalism as an expression of economic liberalism is antithetical to democracy as the basis for social and political liberalism.

Achieving grown and fairness requires optimization of goals based on opposing values. Maximizing growth leads to a decline of fairness and reciprocity social and politically, which now goes by the term "inequality."
Democracy does not cause growth
Julia Ruiz Pozuelo, Amy Slipowitz, Guillermo Valeting
ht Mark Thoma at Economist's View

John Helmer — FOUR MH

If you are following MH17 at all, you will want to read this in full. Lots of details. Here is the lede:
You don’t need to be an expert in ground-to-air warfare, radar, missile ordnance, or forensic criminology to understand the three fundamental requirements for prosecuting people for crimes. The first is proof of intention to do what happened. The second is proof of what could not have happened amounts to proof that it didn’t happen. The third is proof beyond reasonable doubt.
These are not, repeat not, the principles of the Joint Investigation Team (JIT), a team of police, prosecutors, and spies from The Netherlands, Ukraine, Malaysia, Belgium, and Australia. They have committed themselves to proving that a chain of Russian military command intended to shoot down and was criminally responsible for the destruction of Malaysia Airlines Flight MH17 on July 17, 2014, and for the deaths of all 298 people on board. The JIT case for Russian culpability hinges on five elements occurring in sequence – that a BUK missile was launched to the east of the aircraft, and approached it head-on, before exploding on the port (left) side of the cockpit.

Pause, rewind, then reread slowly in order to identify the elements of intention, causation, and culpability: (1) the BUK missile was aimed with a target acquisition radar by operators inside a BUK vehicle at a target flying in the sky and ordered to fire; (2) they fired from their vehicle parked on the ground facing east towards the aircraft’s approach; (3) the missile flew west and upwards to a height of 10,060 metres; (4) the warhead detonated; (5) the blast and the shrapnel tore the cockpit from the main fuselage; destroyed one of the aircraft engines; and caused the aircraft to catch fire, fall to the ground in pieces, and kill everyone.

On Wednesday afternoon, in the small Dutch town of Nieuwegein, two Dutchmen, one a prosecutor, one a policeman, claimed they have proof that this is what happened. For details of the proof they provided the world’s press, read this. Later the same day, in Moscow, a presentation by two Russians from the Almaz-Antei missile group, one a missile ordnance expert, the other a radar expert, presented their proof of what could not have happened. Click to watch.

The enemies of Russia accept the Dutch proof and ignore the Russian proof. As Wilbert Paulissen, the Dutch policeman, claimed during the JIT briefing, “the absence of evidence does not prove [the BUK missile] was not there.”
Paulissen may be right. To prove he’s right all he has to do is to fill in the gap between the JIT version of what happened and the Russian version of what could not have happened by answering these questions. To convince a court and jury, Paulissen’s answers to these questions must be beyond reasonable doubt.…
Dances with Bears
John Helmer

See also

Consortium News
The Official and Implausible MH-17 Scenario
Robert Parry

Christopher Colford — Toward a more durable form of globalization, beyond 'neoliberal' negligence

The World Bank approvingly notices "disruptive theory" in macroeconomics.

The World Bank
Toward a more durable form of globalization, beyond 'neoliberal' negligence
Christopher Colford | Communications Officer at The World Bank, in its Financial and Private Sector Development Network

Thursday, September 29, 2016

Radical Remaking of Economics, and What it Means — David Sloan Wilson interviews Eric Beinhocker

This year marks the 10th anniversary of Eric Beinhocker’s influential book The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. Like an earthquake tremor, Beinhocker’s book rattled the windows of the economic establishment by proposing a new foundation for the discipline that was paradigmatically different than its current foundation inspired by Newtonian physics.
Radical Remaking of Economics, and What it Means
David Sloan Wilson interviews Eric Beinhocker

Enrico Grazzini — Why Issuing Fiscal Money Could Help Exit The Italian (And Eurozone) Crisis

Along the lines that Warren Mosler proposed some time ago.

Social Europe Journal
Why Issuing Fiscal Money Could Help Exit The Italian (And Eurozone) Crisis
Enrico Grazzini

Alexander Mercouris — Joint Investigation Team on MH-17: Why the case is still open

Alexander Mercouris smells bullshit.

The Duran
Joint Investigation Team on MH-17: Why the case is still open

Sputnik — Nuclear Poker: Why the US Can't Trick Russia Into Changing Its Nuclear Doctrine

Interesting look at US and Russian military policy.

Accordingly, Alexandrov suggested that US lawmakers' proposal is based on the understanding that a nuclear war is unwinnable, and to try to trick Russia into abandoning its established doctrine.
"In essence, the US is repeating the technique of Leonid Brezhnev's Soviet Union, which unilaterally renounced the first use of nuclear weapons. This was done because at the time, the USSR had a significant superiority in conventional forces over NATO. As a result, the use of nuclear weapons was judged to be disadvantageous, since all of Western Europe could be captured without their use. In that situation, it's worth noting, NATO banked on the use of tactical nuclear weapons, which became a deterrent against possible Soviet attack."
Today, Alexandrov noted, the situation has been flipped on its head. Russia can no longer resist the combined might of NATO in a long war using only conventional weaponry. 
"Therefore, since the 1990s, our doctrine provides for the possibility of using nuclear weapons first in case of a serious threat to Russia's national security." "Thus, the Democrats' initiative is aimed at achieving strategic superiority over Russia, and possibly China," the analyst suggested. "Of course, Moscow should not give in to this kind of demagogy. Russia must continue to retain the right to use tactical nuclear weapons first," he emphasized.
Ultimately, Alexandrov noted, Russia has already taken the necessary measures to move to a new generation of nuclear weaponry, from the Iskander tactical missile complex and the Kh-101 strategic cruise missile, which has a range of 5,000 km, to new ballistic missiles capable of overcoming US missile defenses. "All of this has forced the US to maneuver in this way, and to try to outplay Russia in the nuclear field," the analyst concluded.

Graham E. Fuller — Democracy, the “Great Debates,” and China

Graham Fuller talks some sense.

Now let’s look at the other end of the spectrum. It’s interesting that China today is actually quietly touting to the rest of the world its own evolving system. Of course we recoil from the terrible catastrophes of Chinese regimes over most of the past century. But we shouldn’t lose sight of the fact that China has been concerned with principles of good governance going back some three thousand years, including Confucian principles of the responsibility of “cultivated” or educated people to govern wisely; that was probably as good as it got in that era. More important, the state bureaucracy was selected through massive nation-wide examination systems to choose the most qualified. The system had its good periods and bad, almost on a 300 year cyclical basis—breakdown and restoration.
Today China is creeping back again, this time from the disasters of Chairman Mao towards a semblance of order and rationality in governance. It has implemented a series of often unusually effective policies that are slowly bringing an ever rising percent of the rural and urban poor into the middle class and a slightly freer life.

Now, I don’t want to live in China particularly. But consider the daunting challenges of running this country: one that was left behind in the last century or so, invaded by English and Japanese imperialists, massively misruled under fanatic communists (not all were fanatic) for fifty years, and now presides over a population approaching 1.4 billion people. China’s leaders operate on the razor’s edge: meeting pent-up demand after decades of deprivation, managing the transition of millions of peasants who want to come to the cities, feeding and housing everyone, maintaining industrial production while trying to reverse the terrible environmental damage wrought in earlier decades, to maintain stability, law and order while managing discontent that could turn violent, and to maintain the present ruling party in power to which there is no reasonable alternative as yet. That’s quite a high-wire act.
So if you were running China today, what would you advocate as the best policies and system to adopt? Chances are few of us would simply urge huge new infusions of democracy and rampant capitalism. The delicate balance of this frail recovering system needs to be guided with care. But it is basically working—as opposed to looming alternatives of chaos and poverty.

China today suggests to developing countries that China’s own model of controlled cautious light authoritarian leadership—where leaders are groomed over decades up through the ranks of the party— may be a more reliable system than, say, the bread and circuses of the US. That’s their view.
No one system has all the answers. But it’s worth observing that by now the US probably lies at one extreme of a political spectrum of bread-and-circus “democracy.” Can the system be reformed? Ever more serious questions arise about the present system’s ability to meet the challenge of this century—along multiple lines of measurements.
And, as world gets more complex, there is less room for radical individualism, whistle blowing, and dissent. Vital and complex infrastructural networks grow ever more vulnerable that can bring a state down. The state moves to protect itself. The strengthening of the state against the individual has already shifted heavily since the Global War on Terror and even more so under Obama.
I’m not suggesting that China is the model to be emulated. But we better note how it represents one rational vision of functioning governance of the future—under difficult circumstances—at one end of the spectrum. The US lies at the other. Is there anything that might lie somewhere between these two highly diverse systems of governance?

Just sayin’.
In the spirit of disclosure, this is a view that I have espoused previously so I am biased in its favor. I am happy to see someone "on the other side of the fence" putting it forward for consideration in the policy establishment.

Democracy, the “Great Debates,” and China
Graham E. Fuller, former senior CIA official

Eduard Popov — Shooting itself in the foot: US legalizes lethal weapon deliveries to Ukraine

Things you should know.
Last week, the US Congress approved the Stability and Democracy for Ukraine Act, or “STAND for Ukraine.” As the Ukrainian Embassy in the US has reported, American congressmen unanimously supported the bill.

The bill’s list of means for supporting democracy in Ukraine includes the supply of lethal defensive weapons systems. The legislation will come into force following a vote in the Senate and its signing by the US President. From that point on, Washington will be able to officially supply lethal weapons to Ukraine.
Fort Russ
Shooting itself in the foot: US legalizes lethal weapon deliveries to Ukraine
Eduard Popov for Fort Russ - translated by J. Arnoldski


Ukrainian shelling disrupts ceasefire, "disappoints" OSCE

Simon Wren-Lewis — Why was austerity once so popular?

A pretty good one. It argues indirectly for the need to educate voters that the currency issuer is the mirror image of the currency users, so their accounting statements are complementary rather than similar. Government deficits are non-government income and government debt is non-government net financial wealth in aggregate.

Mainly Macro
Why was austerity once so popular?
Simon Wren-Lewis | Professor of Economics, Oxford University

Greg Mankiew — Trumponomics

Greg Mankiw betrays his astonishing ignorance of monetary economics and the institutional structure of international finance. He thinks that the capital markets set US interest rates and determine the yield curve, so a shrinking trade deficit would reduce buyers of US Treasuries, driving up interest rates across the yield curve.
Their analysis of trade deficits, starting on page 18, boils down to the following: We know that GDP=C+I+G+NX. NX is negative (the trade deficit). Therefore, if we somehow renegotiate trade deals and make NX rise to zero, GDP goes up! They calculate this will bring in $1.74 trillion in tax revenue over a decade.
But of course you can't model an economy just using the national income accounts identity. Even a freshman at the end of ec 10 knows that trade deficits go hand in hand with capital inflows. So an end to the trade deficit means an end to the capital inflow, which would affect interest rates, which in turn influence consumption and investment.
As Professor Mankiw observes, this is a freshman error, and is he the one making it! Apparently he cannot distinguish between a model with simplifying assumptions and the real world. The good professor is describing a the world as he would like it to be, not the way it actually is at present.

The Fed sets the interest rate and the yield curve is a projection of the interest and expectations about future Fed rate policy. There is never a lack of USD existing as settlement balances to purchase Treasury securities because the amount of Treasury securities offered is equal to the reserves injected into the settlement system by government spending. Treasury security issuance simply serves to drain the excess reserves created by government spending from the settlement system as reserve accounts at the Fed into Treasuries, which are transferable time deposits held at the Fed.*

Furthermore, the Fed has the capacity to manage the amount of settlement balances in the settlement system so that all transactions clear. When the Fed is not paying IOR and doesn't choose to set the rate to zero, then it sets its target and lets quantity float, by using open market operations, for example.

There is nothing wrong with Professor Mankiw's model as an economic model. However, it is not representational model of way the real world works. While it might have relevance as a teaching gadget, students would be given the wrong idea if they were lead to conclude that the world works like that.

Greg Mankiw's Blog
Greg Mankiw | Robert M. Beren Professor of Economics at Harvard University

* L. Randall Wray, Modern Money Theory: The Basics, at New Economic Perspectives

Robert Parry — The Official and Implausible MH-17 Scenario

As far as I can see, there is no entirely plausible scenario on the table this far. There is also no scenario that has a plausible account of both motive and execution of a plan. However, the situation is complicated by several factors. All the evidence available has not been revealed publicly for examination and likely will not "for security reasons." Secondly, the investigation was compromised by a party to events with a stake in the outcome of the investigation being included as a member of the investigative body.

Robert Parry suggests why the recent report is more disinformation in the ongoing information war. There are more reasons that Parry lists.

Consortium News
The Official and Implausible MH-17 Scenario
Robert Parry

Michael Brenner — US Foreign Policy Elite vs. the Evil One

There are four guiding principles:
—It is legitimate, even imperative, for the threatened democratic world, led by Washington, to use its power to forestall assaults on them.
–Traditional concepts of state sovereignty do not constitute an acceptable legal or political barrier to efforts at imposing that solution.
–The United States, therefore, is not a “global Leviathan” that advances its selfish interests at the expense of others. It is, rather, the benign producer of public goods.
–The privilege of partial exception from the international norms, including the right to act unilaterally, is earned by an historical record of selfless performance.
Consortium News
US Foreign Policy Elite vs. the Evil One
Michael Brenner | Professor of International Affairs at the University of Pittsburgh and a Senior Fellow at the Center for Transatlantic Relations, SAIS-Johns Hopkins, Washington, D.C.

See also

Consortium News
How the US Armed-up Syrian Jihadists
Alastair Crooke

Compare and contrast US police with China's police.

Andrew Batson's Blog
Daring to sympathize with China’s unhappy police

Lars P. Syll — My philosophy of economics

A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative to the failing mainstream theory, I shouldn’t expect people to pay attention.
This is however to totally and utterly misunderstand the role of philosophy and methodology of economics!
As John Locke wrote in An Essay Concerning Human Understanding….
Science is a competition of ideas in an arena where evidence is the final arbiter.

Lars P. Syll’s Blog
My philosophy of economics
Lars P. Syll | Professor, Malmo University

"Inflation!" Sighting

Yeah but oil..... was.... at... $140... oh never mind.

MEPS - North American Steel Price Recovery is Brought to a Halt

Fed will interpret as "dove-ish!".

The recent North American steel price recovery has proved short-lived as regional values continued their downward trajectory, this month. 
The sustainability of the recent price rises, in the US, hinged upon supply-side considerations. The introduction of import barriers on a number of flat products initially supported the domestic producers. 
However, steel imports, into the US, are steadily rising, month-by-month, from countries not covered by the trade cases. The restrictions are unlikely to be strong enough to reverse the negative price tendency that exists currently.

Positive Earnings Guidance a bit above average for Q3

Data from FactSet. Should not be surprising.

MH17 Inquiry: “To Whose Benefit?”

As the findings of the Dutch “investigation” are released today, we present the concluding part of MH17 Inquiry’s video series.

Wednesday, September 28, 2016

Anatoly Karlin — A Couple of Things on MH17

I don't wish to draw any conclusions from the recently released report about the shoot down of MH17. First, the report proves no actual evidence but only refers to evidence. That evidence was proved by the Ukrainian government from military and intelligence sources. Secondly, Ukraine was a participant in the investigation even though it was a party involved.

However, Karlin offers a plausible account based on facts that are known and filing in some details. 

An account has to provide a motive. There is no plausible motive for either Ukrainian rebels or Russian personnel deliberately targeting a civilian aircraft.
Now consider the following two facts: 
First, MH17 was diverted to fly over contested airspace.
Second, it is known that MH17 was being trailed by two Ukrainian Su-25′s. (Some conspiracy theories allege that they were actually the ones who shot it down).
An alternate possibility, however, is that the Su-25 escorts and possibly the diversions were an intentional Ukrainian policy to increase the chances of an AA missile fired by an inexperienced rebel crew bringing down a civilian airliner. After drawing out the missiles, the Ukrainian fighters would engage their counter-measures and fly off, while the missiles would autonomously home in on the target with the much bigger radar signature – that is, MH17 itself. The resulting fallout would hopefully pressure Russia into withdrawing support for the rebellion.
Frankly this is the theory I consider most likely because it is more or less the only one that explains all aspects of the case.
It explains why the Americans have no released their intelligence. If it was to show the Su-25′s were directly or almost directly below MH17 then questions would be asked.
It explain why we have not seen a consistent or credible alternate theory from Russia.
Because there is none. While if it where to push this theory it would then have to admit that at the it is to some extent culpable.

And it would also explain the findings of the Dutch report. It might well be just true. But…

Nor would it in any case qualify as an act of terrorism.
It cannot qualify as an act of terrorism because as phone conversations between the rebels in the immediate aftermath prove, and as the US itself has admitted, the shooting down of MH17 if done by the rebels was based on the mistaken impression that it was a legitimate military target.
The Unz Review


The lawyer for the victims families reminds that Ukraine was responsible for its air space, and it knowingly diverted the aircraft into a conflict zone on its territory.
“Our argument is that the Ukrainian government was completely aware of what happened on the ground, that there was a separatist movement. They obviously knew about the equipment they had. That the equipment could reach higher altitudes, because the government closed the airspace two days before the downing of MH17. It closed the airspace after the level of 6,600 meters which is not enough because given the size of the danger the whole airspace should have been closed,” Elmar Giemulla, the victim’s lawyer and leading expert on air law told RT.
When asked by RT correspondent Paula Slier if Ukraine “could be to blame” for the MH17 tragedy, Giemulla emphasized that “whoever shot or pushed the button of the missile – this is not relevant for my case,” because the aim of the lawsuit is to create a strong precedent in international civil aviation making government responsible for sky safety over its territory, the lawyer said, adding that “of course” the relatives of the victims want to find the responsible party as well.
Giemulla’s comments come the same day as a Dutch-led Joint Investigation Team (JIT) report concluded that the Buk missile that was allegedly used by the rebels in Ukraine to take down the Boeing was taken to Ukraine from Russian territory.
‘Ukraine fully responsible for security of its own airspace’ – MH17 victims’ lawyer to RT

Paul Craig Roberts and Michael Hudson — Can Russia Learn From Brazil’s Fate?

… Brazil’s financial openness made Brazil an easy target to attack. One might hope that Vladimir Putin would take note of the cost of “economic openness.” Putin is a careful and thoughtful leader of Russia, but he is not an economist. He has confidence in neoliberal Elvira Nabiulina, Washington’s choice to head the Russian central bank. Nabiulina is unfamiliar with Modern Monetary Theory, and her commitment to “economic openness” leaves the Russian economy as exposed as Brazil’s to Washington destabilization. Nabiuina believes that the assault on the ruble is due to impersonal “global market forces,” not to Washington’s financial clout.

Nabiulina, an indoctrinated and propagandized neoliberal, is essentially a servant of Washington, not that she is aware of her role as “useful idiot.” She delights in the applause she receives from the Washington Consensus for leaving the Russian economy open to Washington’s manipulation. Being a neoliberal, she does not understand that Russia’s central bank can create at zero cost the money with which to finance productive projects in Russia. Instead, she thinks that the money entering the economy from the central bank is inflationary, but the money entering the economy from foreign sources is not.
Money is money regardless of whether it is made available by the central bank or by foreign creditors. As long as the money, whatever its source, is used productively, the money is not inflationary.

There is a huge difference between the money created by the central bank and the money created by foreign creditors. Money lent by foreign banks in the form or US dollars or euros must be repaid with interest in the foreign exchange in which the money was lent. Money created by the central bank to finance public infrastructure projects does not have to be repaid at all, much less with interest and in foreign exchange earned by exports….
Paul Craig Roberts
Can Russia Learn From Brazil’s Fate?
Paul Craig Roberts and Michael Hudson

Hans-Werner Sinn — Secular Stagnation or Self-Inflicted Malaise?

Hans-Werner Sinn calls for "creative destruction."
The only way out of the trap is a hefty dose of creative destruction, which in Europe would have to be accompanied by debt relief and exits from the eurozone, with subsequent currency devaluations. The shock would be painful for the incumbent wealth owners, but, after a rapid decline in the dollar values of asset prices, including land and real estate, new businesses and investment projects would soon have room to grow, and new jobs would be created. The natural return on investment would again be high, meaning that the economy could expand once again at normal interest rates. The sooner this purge is allowed to take place, the milder it will be, and the sooner Europeans and others will be able to breathe easy again.
Creative destruction = liquidation. As Sinn recognizes, it would blow up the EZ. Well, that one way to do it.

Project Syndicate
Secular Stagnation or Self-Inflicted Malaise?
Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich, was President of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council