Guest Author: James D. Hamilton is Professor of Economics at the University of California, San Diego — Vita. This post originally appeared December 6 at Econbrowser.

I have been looking into the claim recently made by any number of internet sites (for example, here's one of the many hundreds, if you insist on a link) that the Federal Reserve made $7.77 trillion in secret loans to banks. The claim is outrageously inaccurate, as I explain below.

Let me begin with some accounting basics. Suppose that at the start of January I make a 3-month loan of $100 to person A and a 1-month loan of $100 to person B. At the start of February, person B rolls it over into a new 1-month loan, and does so again at the beginning of March. On the first day of April, person A and person B both repay me the original $100. So, students, here's your question: how much did I lend to person A, and how much did I lend to person B?

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by Guest Author Lambert Strether, an old school blogger at Corrente who occasionally guest posts at Naked Capitalism

The Boston Phoenix cuts to the fascist heart of Judge McIntyre's anti-Occupy Boston decision. It's one sentence:

“Little in the way of expression is outlawed under the United States Constitution, but an act which incites a lawful forceful response is unlikely to pass as expressive speech.”

So, that which the police suppress violently is unlikely to be protected by the First Amendment?

Then click through for the pictures of "not free speech" in Birmingham; there's a lot of linky goodness, there, too. (As usual, the scrappy weeklies are doing the work of journalists.)

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by Marshall Auerback, New Economic Perspectives

Editor’s Note: This was written December 5 before the latest Eurozone summit. Readers will find not much has changed as a result of the new agreement reached at that meeting.

Another week to go before the euro blows up, or so we’re told again for the thousandth time. More likely is that the ECB does barely enough to keep the show on the road, fiscal austerity continues and riots intensify on the streets of Madrid, Athens, Rome and Paris. Like the film, “there will be blood” before there is any likely change toward a sensible. growth oriented policy in the euro zone.

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by Frank Li

Last Friday (December 2), the top business news was this: “Unemployment Slips to 8.6% as Private Sector Adds Jobs.” I found it misleading and here is why:

(1) It is my understanding that we must create 125,000 jobs per month just to keep up with the population growth in the workforce. In November, the private sector created 120,000 non-farm jobs, which means that the real unemployment rate should have gone up, especially given the rise of new weekly jobless claims above 400,000!

(2) It is also my understanding that the current method of calculating the unemployment rate is severely flawed (“Q&A: A look behind the drop in the jobless rate“). But still it should not have been so imprecise as to be off by about 0.4%, or about 500,000 jobs! Have all those some 500,000 unemployed people stopped looking? If so, shouldn’t that be the top news story?

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by Michael Hudson, New Economic Perspectives

This article was first published by Frankfurter Allgemeine Zeitung, Dec. 3, 2011, as “Der Krieg der Banken gegen das Volk.”

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