YouTube has the video Did We Abandon The Kurds?

This is an education you probably wouldn’t have gotten anywhere else. Now that Kim Iverson has done the research and made this presentation to us, it wouldn’t surprise me if other independent journalists start telling you similar stories. She starts out hyping the story, and all her hype turns out to be true. This story will change your minds about a lot of things you thought you knew.

I think the lesson is that we should never promise an ally that we will support them in anything and everything they choose to do. We should certainly not make such promises to someone who happens to align with our interests on one issue at a moment in time. Even if Donald Trump is the only one who seems to recognize that the love affair is over and we need to go our separate ways, he may turn out to be right.

Mondragon is a very large cooperative business that started in the Basque region of Spain. It is hard for me to get a really solid understanding of how it works. So I grab at opportunities to learn more. This doesn’t answer every question I can think of, but it does push my thinking in a direction that I might find will be very productive. If it does not keep pushing me in a productive direction, I will just lose interest in it. I have found that education is a process of accumulating information. This blog is one of my repositories of accumulated information.

Democracy At Work published the podcast All Things Co-op: Mondragon.

The New Republic has the article Spreading the Gospel of Modern Monetary Theory.

It is a very good article, but I want you to go into reading the article with the following caution firmly in mind.

A government that issues its own currency cannot run out of money in any real sense and needn’t rely on taxation or budget cuts to make up funding shortfalls. The true limit on spending isn’t the numbers on federal balance sheets but inflation, which MMT proponents argue can be managed by taxation and other policy mechanisms.

All the above is exactly true, but somehow the implications of the message still get lost. We need taxes to control inflation. If we spend and spend until the economy recovers to the point where we need more taxation, it will take too long to get increased taxation through Congress. That’s why now is when we need to introduce the ideas of more steeply graduated tax, fewer exemptions for the wealthy, and a wealth tax. These taxes need also to be flexible to accommodate current economic conditions. (Or maybe it is the government spending that needs to be flexible. Or both)

Modern Money Theory (MMT) is a description of how money works in a modern economy. A modern economy is one that is less than 6,000 years old. Before 6,000 years ago MMT does not claim to know how money, if there was the concept, worked.

To clarify the description, MMT introduces the concept of sector balances. The way to think about sector balances is to think of three sectors of the economy as pots of money as shown in Figure 1.

Figure 1. Three Pots representing the Sectors

Figure 1, as I have drawn it here, is a description of the situation in the USA. That is why one of the pots is labeled US Federal Government. The other two pots represent all other parts of the domestic economy and all other parts of economies in the rest of the world.

When talking about USA Treasury bonds, the MMT founders get loose with the sector balances by saying that treasury bonds are another form of money. Doing this confuses the situation that MMT is trying to explain. Let us admit that US Treasury securities (bonds) are not exactly the same as money. If they were exactly the same, why would there be two words for them? A USA treasury security is a promise to pay money, but it is not money. What makes the economy go round is money, not USA Treasury securities.

Now I can talk about money flows in the economy according to MMT, but applying a strict definition of sector balances. The pots are only accounting for deposits of money and its flow among the pots as signified by the labels on the flow arrows.

By the laws currently in effect in the USA, if the federal government wants to run a deficit, it must sell treasury securities to the non-government sectors. When this happens, money is taken from the non-government pots and flows into the the government pot. In exchange the entities that the pots represent are given Treasury Securities. When government spends the money, money flows back from the government pot into the non-government pots. When the government spends money that is called a deficit, no new net money is in the non-government pots. The money that is spent came from those pots.

If the Federal Reserve Bank (which is part of the government) buys bonds from the non-government sector, it is putting money into the non-government pots in exchange for the bonds that it has bought. If someone in the non-government sector buys bonds from someone else in a non-government sector, then no money flows from the government sector pot. The money is either just stirred around in the same non-government pot, or it flows from one non-government pot to the other non-government pot.

When the federal government spends money (except for the Federal Reserve Bank), it can only spend money it has taken in from taxes or from selling bonds. It does not create new money to put into the non-government sector. It only spends money it first took out of the non-government sector.

How does new money get into the non-government sector pots? The Federal Reserve Bank is the only entity in this economic universe that creates money. It can put the money into the non-government pots by lending it to the non-government banks, who then lend it to the people. The Federal Reserve Bank can also put money into the non-government pots by exchanging the money for USA Treasury securities owned by the non-government sectors.

The net growth of the non-government economy comes from the net amount of money flowing into (and out of) the non-government pots out of (and into) the Federal Government pot. The non-government pots have no way to tell if they contain new money or old money or what mixture of the two that they have. The technical term is that money is fungible.

With this description in mind, you can now judge whether a particular government action stimulates growth of the non-government economy or does the opposite.

Wired has published the article Why Are Rich People So Mean?

Decades of “greed is good” messaging has sought to remove a sense of shame from being a beneficiary of outrageous extremes of wealth inequality. Still, the shame lingers, because the messaging runs up against one of our species’ deepest innate values. Institutions seeking to justify a fundamentally anti-human economic system constantly rebroadcast the message that winning the money game will bring satisfaction and happiness. But we’ve got around 300,000 years of ancestral experience telling us it just isn’t so. Selfishness may be essential to civilization, but that only raises the question of whether a civilization so out of step with our evolved nature makes sense for the human beings within it.

The corruption of mind is what I believe caused people like Ayn Rand and Milton Friedman to be so blind to why poor people stay poor and rich people stay rich. Rand’s books like Atlas Shrugged and The Fountainhead completely ignored these factors. Then there is the book Capitalism and Freedom by Milton Friedman.

Friedman argues for economic freedom as a precondition for political freedom. He defines “liberal” in European Enlightenment terms, contrasting with an American usage that he believes has been corrupted since the Great Depression. His views are especially popular among American conservatives and libertarians.

Are the people struggling under crushing student debt really free? How about the people who lost their homes to corrupt mortgage lenders? Are they really free? Then there is the crushing medical bill debt. Does that make people free?