The corporate media thinks they are facing a crisis with 45, and they need us to come to their defense in their hour of need. We cannot let this opportunity to extract some payback if they want our help now.
Where were they when they gave all the coverage to 45 and none to Bernie Sanders? Where were they when they ridiculed Sanders’ programs and policies by only seeking the comment of the “experts” who disagreed with Sanders. There were plenty of “experts” who could have told you Sander’s plans were better than Clinton’s plans.
Where were they when we needed to hear the truth about Syria instead of just giving us the Clinton war mongering.
What is the chance that they will show you the YouTube video US Rep Tulsi Gabbard’s visit to Aleppo | January 2017. You may have seen some of the very beginning of this video, but I don’t think you saw, in the corporate press, the full remarks of the Catholic Priest in Aleppo.
Don’t give a free handout to the anti-liberal corporate press by running to their rescue. Make them pay for your help by demanding a promise of fair coverage in the future. Stop shiolling for the “intelligence” community by shamelessly repeating their discredited claims about Russian interference in our elections. Tell them to stop beating the drums of war before you will consider comeing to their rescue on issues of the free press. How free is that press when all they want to do is give you the propaganda of the oligarchs?
Some people, particularly conservatives, are very concerned (or pretend to be concerned) with the threat of inflation in our economy.
Those of us with even a rudimentary understanding of economics explain that under the current circumstances inflation is not a threat. Those circumstances being idle productive capacity in the country, unemployed and underemployed people, people so deeply in debt that they cannot buy much more than the basic necessities, and finally the money that is being put into the economy by the Federal Government is not being put to use buying things. The money that is not being put to use buying what the economy produces is either being given back to the Federal Government for safe keeping through purchases of government securities, or it is being put to use buying stocks in the stock market and inflating stock prices.
The above explanation wouldn’t be sufficient for me if I were one of those worried about inflation. I would ask, “So when the conditions change, and inflation threatens, what are we going to do?”
The first thing to do is obvious. If the economy doesn’t need any more money to facilitate the buying and selling of the existing goods, then the Federal Reserve Bank will stop creating more money to finance the budget deficits that will have disappeared. There is a lot of detail behind what that means that I won’t go into here. The other thing the government could do is to raise taxes (and/or cut spending) to suck excess money out of the economy. That is a politically hard thing to do because the official inflation worriers always want to cut taxes at the exact moment when they should be raised.
With our trade deficit, it has just occurred to me that the Federal Reserve Bank’s tool box is more powerful than it used to be. One of the reasons why the Federal Government has to keep pumping more money into the economy is that money is being drained from the domestic economy by the money we pay to other countries because of our trade deficit. So if just stopping putting more money into the economy might not have been powerful enough tool to use when we had a trade surplus, it is a much more powerful tool when we have a trade deficit.
The author of the obit stressed the impossibility of such systems being optimal. Contrast that emphasis with the author’s treatment of Arrow’s work on “general equilibrium.”
Professor Arrow proved that their system of equations mathematically cohere: Prices exist that bring all markets into simultaneous equilibrium (whereby every item produced at the equilibrium price would be voluntarily purchased). And market competition puts society’s resources to good use: Competitive markets are efficient, in the language of economists.
Professor Arrow’s theorems set out the precise conditions under which Adam Smith’s famous conjecture in “The Wealth of Nations” holds true: that the “invisible hand” of market competition among self-serving individuals serves society well.
That is one way to phrase it, but a more accurate, parallel way to phrase Arrow’s work on general equilibrium would be as an “impossibility theorem.” Arrow actually proved that it was impossible for general equilibrium to occur. The “precise conditions” in which economists can guarantee that a market transaction “serves society well” is the null set. There is no market that meets those “precise conditions” because they are impossible to meet.
This article introduces me to a field of study that I had not known before. I can see that I am going to have to do more reading about this area.
To further quote from the article, Black’s concludes the followin:
The ultimate failure of economics as a field is to:
worship an economic model that is criminogenic,
hide that disaster from the public by assuming “silently” an “ADM God” that contradicts the model’s express assumption,
continue to worship and proselytize that model when its silent assumption of an “ADM God” repeatedly produces criminogenic policies and epic predictive failures, and
praise your models as “rigorous,” “scientific,” and “transparent,” and
define critics as anti-scientific and demand that their critiques be excluded as heresy.
In other words, free markets only work when a godlike superior force sets strict rules to guard against criminogenic behavior. Free markets only work when they are not free.
I believe in what Steve Grumbine is saying, and I have some critiques about this particular video, but first I want to concentrate on one point that he made. Here is an excerpt from the transcript.
1:41 the second thing that is really
1:43 important is to understand that the u.s.
1:46 textbooks got the idea of reserve
1:50 lending this whole fractional reserves
1:52 they they got a completely f***ing wrong
1:54 it is the wrong forever
From what I remember of what I was taught in my first economics course at MIT, Steve Grumbine is correct. Ever since I started reading about the Modern Money Model, I have been troubled by the difference in their explanation of bank created money and the explanation I learned. I thought I finally figured out how my economics text tricked me. I went back to look at the book so I could write this post.
Obviously, I cannot attest to the rightness or wrongness of all economics textbooks. Here is what I found from my copy of “Economics”, by Paul Samuelson, Fifth Edition, 1961. (Remember this book was published 10 years before President Nixon took us off the gold standard and fixed exchange rates, so some of this is bound to be just out-of-date and not wrong for the time it was written. The “sleight of hand” is “wrong”.)
Paul Samuelson went into great detail in the pages of Chapter 16, “The Banking System And Deposit Creation” of keeping track of the balance sheets of banks and tracking liabilities and assets. The point is that he is very clear that for every dollar asset the banks create, there is a balancing loan liability that they created for the people who got the created money. There was no net creation of anything.
In section B. of the Summary of the chapter he states about The Federal Reserve Bank “When a contraction of the quantity of money is in order, the Federal Reserve authorities pull the brakes. Instead of pumping new reserves into the banking system, they draw off some of the reserves. We shall see that in so doing they are able to reduce the quantity of money not 1 for 1, but (as just shown) almost 5 for 1.”
This is where you might say that the sleight of hand happened and things went wrong. If all you remember or read is this summary, you forget about all the liabilities that have to get cancelled along with the money. The change of net money (assets minus liabilities) is 1 for 1.
If you click on the book page thumbnail to see the whole page, you will notice in the questions for discussion the following statement:
Banks borrow from their depositors at zero or low interest rates and invest most of the proceeds in higher-yielding loans and investments. They use the difference to pay their expenses, to provide us with low-cost mediums for monetary transactions, and to reward their stockholders for taking on the risks of earning-asset values.
I read this in the book in 2017 after I made this point to Steve Grumbine in the critique you can read in the comment to this post. I guess I learned something at MIT. Besides that, think about what would happen to the cost of bank services to you if the banks were deprived of being able to make money on their lending out of deposits.
The unlimited ability to create money is an uncontested fact for Monetarily Sovereign nations, although at any given time, economic growth, inflation, deflation, recession, depression and social factors may influence a nation’s decision to create money.
This article was published on August 13, 2010. The facts have not changed any since then. You can try to contest this fact, but that is on the same level of contesting gravity.
If you do not understand this, then you cannot talk about economic, monetary, or fiscal policy of the United States with any hope of saying something correct.
… Bernie is not our leader. He isn’t. The extent to which the establishment has sunk their talons into him proves that we can’t afford to allow him to lead us. They will use him to steer us in unwholesome directions and guide us away from our desire to destroy their sick institutions. “Bernie says” should not be received with any more authoritative weight than “Noam Chomsky says,” “Julian Assange says” or “Caitlin Johnstone says”; it should always be taken as data about someone’s opinion, never as gospel truth.
There are a number of interesting quotes from authorities about the danger of just trusting to authorities. Maybe that makes their quotes to be paradoxes, but I think they are right.
You can see in the way that Paul Ryan nods at Alan Greenspan’s answer that this is going in one ear and dribbling right out of the other. Given as Greenspan says, that the government cannot possibly run out of money to pay social security beneficiaries, and given that anything in the private sector can run out of money, then private investment accounts are obviously much less secure than federal government operated social security.
L. Randall Wray, a professor of economics at Bard College and a senior scholar at the Levy Economics Institute, discusses the U.S. national debt and inflation with Bloomberg’s Joe Weisenthal on “What’d You Miss?”
The trouble with this interview is that Wray never addresses what the government would and should do if inflation ever got out of hand. When he just says can’t happen or unlikely to happen, the skepticism is not allayed. He sounds like he is evading the question. Why can’t he just talk about how an inflation problem would be solved? There are good answers, why does he fight so hard to avoid giving them?
In my previous post Establishing The Validity Of The Modern Money Model I suggested that a direct answer to the questions of inflation would go a long way in quelling the doubts of the skeptics. If you are a skeptic, please read that previous post and tell me if it helps.
Signal is an encrypted instant messaging and voice calling application for Android and iOS. It uses the Internet to send one-to-one and group messages, which can include images and video messages, and make one-to-one voice calls.
In one of the last two posts, I believe one of the interviewees mentioned Signal as an encryption app. I think it was either Seymour Hersh or Glen Greenwald. In any case, I thought it might be good to provide the link to find out more about what they were talking about.
GLENN GREENWALD: The deep state, although there’s no precise or scientific definition, generally refers to the agencies in Washington that are permanent power factions. They stay and exercise power even as presidents who are elected come and go. They typically exercise their power in secret, in the dark, and so they’re barely subject to democratic accountability, if they’re subject to it at all. It’s agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world’s worst war crimes, atrocities and death squads. This is who not just people like Bill Kristol, but lots of Democrats are placing their faith in, are trying to empower, are cheering for as they exert power separate and apart from—in fact, in opposition to—the political officials to whom they’re supposed to be subordinate.