I think John Stewart has just added a phrase to the American lexicon.
You know what, I’m worried. I’m really worried about the Republicans. Their inability to wean themselves off of military intervention. They have a culture of defendency, if you will. And I believe it’s turned them all into warfare queens. And I think we need to cut them off for their own good.
“Defendency” isn’t a bad addition either.
Neil deGrasse Tyson has posted the video, A Conversation with Dr. Neil deGrasse Tyson – SXSW Interactive 2014 (Full Session) on his Facebook page.
How many of you were able to watch this video and stop after 5 minutes? I wasn’t able to.
The title for this blog post comes from the title that Tyson put on his Facebook post. So don’t blame me for figuring out how to lure you into watching this.
Naked Capitalism has the article Why Banks Must Be Allowed to Create Money by Yves Smith.
Ann Pettifor has penned an effective rebuttal of the Chicago Plan, which has been taken up in the UK as “Positive Money”. Its advocates call for private banks to have their ability to create money taken from them, and put in the hands of a committee, independent of the state, that would decide on the level of money creation. Banks would be restricted to lending money that they already have on deposit.
Pettifor explains how the enthusiasm for the Chicago Plan rests on a fundamental misunderstanding of the nature of money and confusion about its relationship to credit. While readers may not like the notion that credit, and therefore money creation, is best left in the hands of banks, the problem is much like the one that Churchill articulated about democracy: it looks like the worst possible system until you consider the alternatives.
Pettifor points out that banks’ ability to create money out of thin air dates from 1694 in England. In addition to helping lower the cost of financing wars, an objective was to reduce interest rates to help facilitate commerce and end usury. If you read the works of early economists, one of their favorite topics was the need to end usurious lending, since businesses could not afford to borrow at those rates and survive, and so the money typically went to the most unproductive activities imaginable, namely, financing gambling by aristocrats.
I like the comment by lolcar.
People don’t fail to grasp the modern monetary system because it’s so complicated and opaque. They fail to grasp it because they are repeatedly told simplistic fairytales by competing propagandists. It’s the rare person who doesn’t have to be dragged kicked and screaming to a new understanding when told something that conflicts with everything they thought they knew, even if what they thought they knew was only passively absorbed listening to media talking heads bloviating about the economy.
New Economic Perspectives has the article MODERN MONEY THEORY: THE BASICS by L. Randall Wray. This is not a reprint of any earlier article, but a retelling of the story. When I need to learn something complicated, I find that the more times I read about it, the better I understand it, even if the reading goes over much of the material I have read before. Given this style of learning, I do not fret too much about reading the first article I read on a subject and trying to study it in such depth that I understand it all. That is not the way depth of understanding comes to me. Of course your style of learning is almost certainly different from mine in some aspect. We all learn in different ways.
Here are some quotes to whet your appetite.
The problem is not the “thin air” nature of the creation, but rather the quantities of “money” created and the purposes for which it was created. Government spending for the public purpose is beneficial, at least up to the point of full employment of the nation’s resources. Bank lending for public and private purposes that are beneficial publicly and privately is also generally desirable.
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While our governments are large, they are not big enough to provide all the monetary IOUs we need for the scale of economic activity we desire. And we—at least we Americans—are skeptical of putting all monetized economic activity in the hands of a much bigger government. I cannot see any possibility of running a modern, monetized, capitalist economy without private financial institutions that create the monetary IOUs needed to initiate economic activity.
Apparently, even Paul Krugman is having trouble digesting this, and he already has his Nobel Prize in Economics. I am lucky enough to know that my understanding is limited, so I do not insist that new ideas conform to everything I think I already know.
Now here is a commercial worth watching.
Verizon is working with Makers.com and the Verizon Foundation to #InspireHerMind and encourage more girls to get involved with high-tech STEM fields.
Here is the direct view of the album.
New Economic Perspectives has published the amazing article Keeping It Real: Law, Coercion, & The Frontiers of Public Finance by Raúl Carrillo.
When we recognize that federal taxation and borrowing are functionally separate from expenditure, the moral landscape changes. We can go deeper and deeper. If the federal government has excess funds and there is no threat of inflation, what is the compelling argument against a right to the minimum level of purchasing power necessary to ensure a secure livelihood? If the federal government doesn’t need the money to fund other programs, what is the compelling justification for why working people should suffer from regressive taxes like the payroll tax? At the very least, Modern Money breathes new life into legal arguments against socioeconomic discrimination.
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There is no doubt that many wealthy individuals need to be taxed and disciplined in the interest of democracy, but we need not make social spending dependent on those taxes. It’s functionally unnecessary. To quote Johnson again, “the sheer amount of new federal money provided to states under the stimulus, and the conditions attached to some of these federal funds, raise questions about the federal government’s expanding power to shape, through spending, a broad set of institutional arrangements at the state and local levels.” Considering it’s all new federal money, that statement is even more important than Johnson seems to indicate. The scope of our discussion about public finance needs to be magnified.For example, although at the end of the day, poverty is relative, there is now much we can do to end absolute indignities, given sufficient knowledge of the legal-financial matrix. As Emma Coleman Jordan has stated, what passes as rational conversation about economic policy choices these days is “devoid of all understanding and empathy for the choices of people who have no choice.” I’d add it is also devoid of institutional perspective and accuracy regarding modern money, functional finance, and national accounting. In the words of a recently deceased human rights activist, Yuri Kochiyama, consciousness is power, and with a revamped economic education, social justice advocates can build tomorrow’s world.
But these are my normative opinions. The chief point is that we need to have an honest conversation based on a shared mechanical understanding of the nuts and bolts of the economy, as well as its legal framework. Having subscribed to that, we can debate about what we want. As Justice Oliver Wendell Holmes once protested in another era of rampant inequality and mythmaking, the 14th Amendment did not enact Herbert Spencer’s Social Statics. The Constitution shouldn’t be read as reliant upon an outdated and unsound doctrine of public finance either. We need to plug into reality, and then we can discuss what we want to do to change it, if anything. Beyond the myths about money, beyond the intellectually impotent and incoherent conceptions of government intervention, deregulation, and redistribution, we can have that real talk about who gets what, when, where, how, and why.
There will be those who protest this article simply because they just know that what is said here just cannot be. If you are willing to ask yourself why exactly it is that you know this cannot be, then you are ready to think deep thoughts.
Just remember this quote from my quotes page.
New Economic Perspectives has the article Obama’s Latest Betrayal of America and Americans in Favor of the Big Banks: TISA by William K. Black. Naked Capitalism has an edited version that they claim is more readable titled Bill Black: Obama’s Latest Betrayal in Favor of the Big Banks: TISA.
The first paradox is that Obama, who cannot claim that he does not know better given the unanimous findings of his own FCIC appointees who investigated the causes of the crisis, is trying to recreate those causes, spur a race to the bottom among financial regulators, and make the causes of the past crisis global (rather than primarily limited to the U.S. and the EU). Obama, in the TISA draft, proposes to do everything that his own FCIC experts, white-collar criminologists, the top economists on the subject of criminogenic environments, and effective regulators with a track record of success have been telling Obama not to do for his entire term in office.
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The demand for classified treatment makes it inescapable that the bankers and government officials involved in drafting TISA are trying to hide something they believe would outrage the public. The paradox is that the bankers’ and politicians’ rabid fear of disclosure to the public and Congress of TISA’s assault on regulation confirms beyond any reasonable doubt that subparagraph 2 of Article 17 and Article 20 combine to make TISA a grave threat to the global economy, workers, and honest bankers by making the financial world even more criminogenic.
For a long time, I have been wondering what makes Obama do some of the things he does. He is so far from the candidate that I voted for twice, that I refuse to give his causes any more financial support. Sometimes, I don’t even want to hear what he has to say.
The Berkshire Eagle has the story Gubernatorial Candidate Donald M. Berwick would implement single-payer health care
I think Don Berwick might have the management skills to make this work. If he had been in more control of the web site development, he might have managed it much better.
If he works to build a consensus around single-payer, it could be enacted without all the opposition that tried their best to ruin ACA (just so that they could prove to you that government doesn’t work). For all ACA’s faults, the privately run system wasn’t working any better.
As the son of a pharmacist who ran his business with many welfare customers, I know that if the single payer system is not adequately funded, it will be the small business people in the health care field that will bear the burden of slow payments and tons of paper-work. When I was around to watch my father’s business, this was before the days of the dominance of the huge private insurance companies trying to control their costs. I don’t know if working with them was any better than the days of working with the city run welfare system
We need to go into this with eyes wide open to make sure we do it right. We as citizens need to understand the pitfalls to make sure our legislators don’t cow-tow to the special interests making the system work well only for them.
The Daily show has the video Mess O’Potamia – Sad Dick Cheney Is Sad.
Michael Che reports on Dick Cheney mournfully lamenting his role in the Iraq War.
These revelations are almost too good to be true. Oh wait, they are!