Readers, this is actually a very neat bit of extension of the Functional Finance/Keynesian body of theory. Within a fiat monetary system that is controlled by a sovereign government in the interest of the whole economy as a sustainable process in the interests of the entire population, not a narrow profile of interests, taxation is solely about controlling and reducing excess wealth. Taxation upon the middle and lower income classes over fairly taxing wealth among the already wealthy is a deliberate priority in favor of wealth concentration.

At the close of an emergency Sunday meeting of financial ministers from the 27-member European Union (EU) that lasted until the early hours of Monday, May 10, 2010, the exhausted attendees emerged to announce a startling nearly 750 billion euro (US$1 trillion) financial stabilization package for EU member states with sovereign debt problems and the European Monetary Union (EMU) to restore market confidence in the euro, its common currency for the 16-country eurozone.

Germany had held the key to an orderly resolution of the European Union's sovereign debt crisis. Yet Chancellor Angela Merkel's government faced hostile questioning in the Bundestag, the German parliament, and even a legal challenge in the constitutional court, before it managed to sign off on the rescue package by Friday, April 30. Bundestag members were incensed over the government's lack of transparency in negotiating the deal and the rumored size of German commitment in the rescue package.

Readers, This is a relatively long article, however Henry C.K. Liu writing are generally very good. He is an institutional economist with a strong interest in history and international political economy. He pretty much backs up the same sort of assessments which have been presented here. This article will be followed by another of his articles related to this topic though examining the politics. One other detail he seems to be self educated. Tadit Anderson

Readers, Part of the story here is between the lines. Economic analysts and journalists were actually fully complicit in the run up to the 2007 blow-out. In other words the "economic journalists were a major part of the problem and acted as cheerleaders to the Free Market fantasy. They of course are beholden to the corporate profit takers for their jobs, which become very much a revolving door if they don't produce in the interest of their owners.

Spain plays high-stakes poker game with Germany as borrowing costs surge Spain has upped the ante in a high-stakes poker game with Germany, pushing for the release of EU stress test results for major banks in a move that risks precipitiating a dramatic escalation of Europe's financial crisis.

"We're not afraid of transparency," said the Spanish Banking Association (AEB), saying the full truth would put an end to rumours battering Spain's instutitions. El Pais reported that the government backs the initiative, putting it on a collision course with Germany which insists on secrecy.

We have found ourselves wondering why President Obama is being 'red-baited' by the political Right. Any reasonable person looking at the policies of this administration could never come to the conclusion that it is anything close to socialist in nature. While there have been certain progressive initiatives taken by the administration, the pro-corporate orientation would be evident to a ship in a fog.

http://delong.typepad.com/sdj/2010/06/we-need-bigger-deficits-now.html

As the disappointing May job numbers confirm, this is still an exceptional time—a time in which many of the normal rules of the Dismal Science are changed and transformed. It is a time for not normal economics but rather “depression economics.” The terms on which the U.S. government can borrow now are exceptionally advantageous. And because of high unemployment the benefits of boosting government purchases and cutting taxes right now are exceptionally large.

Forget about a smooth recovery. Finance ministers and central bank governors of the G-20, met this weekend in Busan, South Korea and decided to substitute "tried and true" expansionary fiscal policies for their own strange brew of belt-tightening and austerity measures. The EU members are eager to restore the illusory "confidence of the markets", something that will surely be lost when the eurozone slides back into recession and the hobbled banking sector begins hemorrhaging red ink.

Dear President Obama:

I'm not entirely sure how to put this, so I guess I'll just come right out and say it. During the last presidential campaign and in the context of John McCain's admission that he didn't understand economics very well, you let us know that you thought you had a very good understanding of it. Well, Mr. President, I'm here to let you know that you don't understand it, don't know what you're doing, and are now preparing to do exactly the wrong things. And, I've got lots of evidence for thinking that. What's my evidence?