What Happens If Bitcoin Succeeds?

Naked Capitalism has the post What Happens If Bitcoin Succeeds?

As the price of bitcoin continues to rise, this column argues that most of us would not want to live in a society where bitcoin succeeds. Fortunately, the internal contradictions and perverse consequences of cryptocurrencies’ success mean that they are destined for failure. Until then, it might make sense for speculators to ride the cryptocurrency bubble, so long as they get out in time.

Since I know that I am a procrastinator, I know that I won’t be able to get out in time. I will miss the ride up and the crash down.

Think More Deeply About Modern Money Theory   Recently updated !

I have come to think about a nuance of MMT that I don’t hear being discussed by the proponents of the theory. They talk about doing sector balances to come up with some basic truths of MMT. The sectors are Federal Government sector and other sectors that are not the Federal Government. They show that the only way the other sectors can get a surplus of USA money is for the Federal Government to have a net outflow of USA money.

The fly in this ointment concerns Treasury securities that the USA treasury sells to the other sectors. When you buy a Treasury security, you own something of value, but you are letting the Federal Government hold your money for you. Your money that the Federal Government gave you by spending money into the non-government sectors, is not available to you to spend as long as you hold Treasury Securities instead of the money. In fact, during WW II, one of the means of controlling inflation was to encourage you to lend your earnings back to the Federal Government by buying war bonds.

If you wanted to spend an equivalent sum of money to what the Federal Government was holding for you, you had to sell your bond to someone else in the non-Federal government sector. Now the Fed was holding onto someone else’s money instead of yours, but it still was not outside the Federal government sector.

The sector balances may still be true if you are measuring wealth ownership, but is not so true if you are talking about spendable wealth. It seems to me, if you are assessing the stimulative effect of what we traditionally call Federal Government deficit spending, this effect is largely diminished by selling treasury securities in the amount of the deficit. The stimulative effect can come from where the government spends the money that it does not leave to you to spend. The Federal Reserve bank undoes some of the damage of Treasury security sales, when the Fed buys these securities on the open market and pays the money into the non-Federal Government sectors. If the Fed were allowed to just give the money to the Treasury without the necessity of the Treasury selling securities, the stimulative effect would be even higher.

The Radical Imagination | Imagining the Economic Winds of Change Under Biden   Recently updated !

This started out for me with a post by Naked Capitalism Michael Hudson Discusses the Economic Winds of [Non] Change Under Biden on Radical Imagination.

Yves here. Michael Hudson describes the fealty of Biden and the Democratic party to neoliberal policies and how, as Biden himself said, nothing fundamental will change. Hudson agrees nothing much will improve for ordinary citizens as long as the current Democratic party is calling the shots. He lays out a way to tackle rentierism by promoting building of moderate-priced homes and setting strict terms for FHA mortgages.

Here is the video of the interview from The Radical Imagination | Imagining the Economic Winds of Change Under Biden.

This is a new high for Michael Hudson in telling us what he has been holding back for so long. He has been trying to tell us this for years with a certain amount of tact and diplomacy. Ether he has gotten tired of putting on the semii-happy mask, or this interviewer and this not very well known medum has finally set him free.

Recovery Bonds – The very opposite of what is needed.

The Gower Initiative for Modern Money Studies has the article Recovery Bonds – The very opposite of what is needed.

As the economist John Maynard Keynes made clear at the time, the money the government removed from circulation through offering War Bonds did not go anywhere and did not fund the war. Furthermore, with the present-day economy in a depressed state, which is likely to continue for some time to come, maybe years as our experience with the GFC showed, and made worse by economically illiterate years of austerity, this is not the moment to encourage saving. We need the exact opposite to recover and grow.

Frequently I find myself repeating what John Maynard Keynes explained. I get the feeling that people just don’t believe it when I say it. Some people may be impressed by seeing it in print from another source on the web.

Is Now the Time for a Federal Jobs Guarantee?

The Gower Initiative for Modern Money Studies featured the interview Is Now the Time for a Federal Jobs Guarantee?. For those who do not have Facebook access, here is a link to the interview on SoundCloud.

On this episode Mark talks with economist Pavlina Tcherneva about a policy proposal that’s bubbling under in the US policy debate: the creation of a federal jobs guarantee. Pavlina is an Assistant Professor of Economics at Bard College and author of ‘The Case for a Job Guarantee.’ As Pavlina describes it, a federal jobs guarantee isn’t just a good idea; in the face of our economic, environmental, and epidemiological crises, it may be a necessary one.

The interviewer still doesn’t get MMT even though Pavlina tried to move his misconceptions a few times. It’s not a question of whether or not we have an MMT economy. MMT is just a description of the economy we have. The economy we have is what it is and was, long before MMT came along to explain it.

Despite the interviewer’s inability to understand MMT, this is a good discussion of the Jobs Guarantee. Another failure at the end is the discussion of the cost of the Jobs Guarantee. Pavlina fails to point out that when we pay for employing people, we actually get useful production from that employment.

Dr. Fadhel Kaboub: MMT Insights for the Biden Administration

YouTube has the video Dr. Fadhel Kaboub: MMT Insights for the Biden Administration.

While most policymakers believe that the federal government’s spending capacity is limited by tax revenues and borrowing capacity, MMT argues that our spending capacity is much larger than that (but it’s not unlimited). Professor Kaboub explains that the Biden administration can significantly expand its current spending plans without causing inflation, but only if we strategically invest in key sectors (healthcare, housing, energy, transportation, and higher education), if we tax and regulate abusive market power, tackle corruption, and enforce the democratic principles of a Government of, by, and for the People.

I have watched this entire video. It is an excellent presentation. Kaboub is one of the most effective proponents and explainers of Modern Money Theory. Kaboub has his own way of explaining MMT which you might find easier to understand than some of the other explanations I have posted.

The lecture part of this presentation is under 45 minutes. The there is a long Q & A session. The Q & A session is also very worth while to hear, but if you don’t have the time you could just do the first part and leave with many of your personal questions unanswered. It’s a matter of your personal priorities.

I only caught two of the web sites he mentioned – ReImagine Appalachia, and ESGX.

Reimagine Appalachia was born out of a broad recognition that the economy has not been working for most people and places in the Ohio River Valley. In response, a diverse set of economic, environmental and community leaders, and grassroots organizations, came together to find common ground and build the future we want to see — a 21st century economy that’s good for workers, communities, and the environment.

Except from ESGX.

ESGX is the community ​for information and education that inspires collaboration and action to help build a better, more resilient and more inclusive society.

Michael Hudson – Changes in Super Imperialism

Naked Capitalism has the post with transcript of the lecture Michael Hudson – Changes in Super Imperialism

This is another meaty talk with Michael Hudson, this time focusing on his classic Super Imperialism. Hudson has an updated and expanded version set to go to print soon.

I didn’t expect this video to be as enlightening as it is. I foolishly thought that I knew most of what Michael Hudson has explained over the years. There is just so much history that he knows (and participated in) that I have not heard before. He also talked about the history making work that he is now doing. On both ends of the history spectrum, he clarifies so much that I didn’t realize of how we got where we are and how the rest of the world will move on without us.

Monetizing Internet Content – Rokfin

I just heard about Rokfin as another example of an implementation of my idea for monetizing internet content.


Justify a subscription to more people at a higher price point and get paid for retaining other channel’s subscribers.

By pooling efforts with other relevant media companies, you’ll be able to reach a deeper audience with a broader package and keep your subscription base engaged during your “off-season.”

Maximize monetization of your content with tips and a subscription model. It is a way to opt out of the current system. More people join and tip because it’s one subscription for ALL premium content. Tips monetizes free live content.

Here are some examples that use Rokfin.

In searching for “monitiz” on my blog, I found more examples that I had forgotten about.

Economic Update: The Economics Lesson Taught by the Pandemic

Democracy At Work has the last episode of Economic Update: The Economics Lesson Taught by the Pandemic

On this week’s show, Professor Wolff explains where the government is respected and empowered, nations have effectively contained the Covid-19 pandemic. He gives examples including New Zealand, Taiwan, South Korea, Cuba, Vietnam, and China. Alternately, where the government is demonized, disrespected, distrusted, the pandemic has been devastating. Examples of this include the UK and the US. Wolff argues that a rational economy includes both less and more government-regulated private enterprises plus state-owned and operated enterprises according to which performs best to meet society’s needs. No fundamentalist “either/or” arguments are justified. Finally, he says how private and government enterprises are internally organized – hierarchical or alternatively democratic worker-co-op – is equally important.

My goodness, I think Richard Wolff is a closet “what worksist”. This is the closest I have seen him come to admitting that a mixed economy is probably best. Of course that doesn’t stop him from promoting his latest book “The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself” where he demonizes capitalism. He also has to end by touting his panacea of democracy at work. I like it best when he talks about “what worksism”. That gives you the freedom to think about what will actually work and how a system should evolve and adapt to circumstances.

When we were facing WW II, we needed to get strictly organized to fight a war. After the war, it wasn’t useful to maintain those strict organizing controls. When facing a pandemic there are some drastic actions we need to take that are not appropriate when we are not facing a pandemic.

When we are ideologically wedded to one “ism” or another, it hinders our ability to adapt to changing circumstances.

Short Selling

I found this excellent explanation of short selling on Facebook. This is from Michael J. Roberts.

Dhoty Selling explanation

As I like to explain, private banks do not create money, they create promises of money. Likewise, stock brokerages don’t create stocks, they create promises of stocks.

It is a heck of a lot easier to create the promise of something than it is to create the actual thing.