Lately, I have been explaining that private banks do not create the same kind of money that The Federal Reserve Bank of the USA does. The Federal Reserve Bank creates what Modern Money Theory (MMT) calls “high powered money” With fractional reserve banking, private banks create a promise that when you need the money from your bank account, they will give you “high powered money”. The private bank does not hold all the money to cover all the promises of money that it has created because it knows that only a small fraction of people will want to take out more “high powered money” from the bank than other people will put into the bank.

You can simulate doing the same thing, except for you it is illegal to do. Look up the explanation of check kiting on Wikipedia.

Check kiting or cheque kiting is a form of check fraud, involving taking advantage of the float to make use of non-existent funds in a checking or other bank account. In this way, instead of being used as a negotiable instrument, checks are misused as a form of unauthorized credit.

Private banks are chartered by the government to practice fractional reserve banking. Private individuals are not so chartered. Under normal circumstances you can’t tell the difference between the private bank’s promise of money and “high powered money”. If the private bank runs out of reserves to fulfill its promise of giving you “high powered money” when you want it, The Federal Reserve Bank in the USA rides to the rescue to provide the private bank with the needed “high powered money”.

The Federal Reserve Bank is an entity within the USA federal government that is independent of other entities within the USA federal government. (See the post Who owns the Federal Reserve?)

New Economic Perspectives has the article MMT is a Political Problem: Part 1.

Developers and promoters of MMT have seen their task as a teaching problem; explaining how America’s sovereign money system works to those who still believe that money is a scarce commodity that restricts what the country can do. Their assumption has been that when more people, particularly political leaders, see that scarce money is not a true constraint, a new world of possibilities will open up for building a brighter future.

But what if those who seem impervious to the new knowledge are resisting because they see very clearly how it can lead in directions counter to their interests? Evidence that they have wanted to keep money scarce and under their control goes back at least a hundred years. (And longer if you consider the Civil War.)
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From what I have read, MMT promoters have not discussed the role of banks very much. But the number of dollars they create by making loans is many times greater than the number of new dollars the government creates by paying out more than it takes in with taxes. Banks see large government public funding operations as competitors.

A better explanation of the difference between private bank “money” and Federal Reserve Bank money is that private banks do not create money. They create promises of money. When they make a loan to you, it is a promise that if you should need real money, they will fulfill their promise. As long as you use your loan money to pay someone who deposits it in the same bank, no real money is involved. The bank only transfers its promise to you to the person you paid. They only need real money to cover the net outflow from the bank. Some of that real money comes from the Federal Reserve Bank and some of it comes from other sources in the private sector (including interest payments on their loans they made to you, and service fees, selling mortgages to investors). Because of fractional reserve banking and the fact that thee are only 6 major banks in the USA, the need for real money by the banks is very small compared to the obligations on their books.

If MMT would explain the difference between high powered money and private bank created promises of money, I think it would lift a big cloud from everybody’s minds.

The Grayzone has the article Inside the World Uyghur Congress: The US-backed right-wing regime change network seeking the ‘fall of China’.

While posing as a grassroots human rights organization, the World Uyghur Congress is a US-funded and directed separatist network that has forged alliances with far-right ethno-nationalist groups. The goal spelled out by its founders is clear: the destabilization of China and regime change in Beijing.

I must confess that I only read half of this, but it was enough. We don’t want foreign countries meddling in our elections, but we keep doing meddling that is far worse in other countries. You won’t hear this from the oligarchs’ news mafia. Whatever China may be doing, don’t put your faith in what is reported in the USA.

I wrote an email response to a friend who described to me what his ideal billionaire would do for his/her workers and society as a whole.

Something I learned in my first economics course, and I have seen it played
out over the years.

From Encyclopedia Britannica:

Gresham’s law, observation in economics that “bad money drives out
good.” More exactly, if coins containing metal of different value
have the same value as legal tender, the coins composed of the
cheaper metal will be used for payment, while those made of more
expensive metal will be hoarded or exported and thus tend to
disappear from circulation. Sir Thomas Gresham, financial agent
of Queen Elizabeth I, was not the first to recognize this monetary
principle, but his elucidation of it in 1558 prompted the economist
H.D. Macleod to suggest the term Gresham’s law in the 19th century.

Nowadays, when economists apply this to more than coins, they call
it a Gresham’s Dynamic. What I saw in the dot com bubble, was a
Gresham’s Dynamic of mutual fund managers. The one’s who could
keep their wits about them, and not succumb to the mania, were driven
out of the business by the mutual fund managers that were racking up
great performance numbers by going wild for dot com. I didn’t get
hurt at all by the bursting of the bubble, because I was adamant about
not jumping on the band wagon. As I used to say to my colleagues
who were boasting about how much money they were making ”

The goal
is not to have the highest peak theoretical wealth ever, but how much
of that wealth you still have after the bubble bursts.

I wasn’t the one to have a higher tax bill from stock options that I never got
to cash in before they became worthless.

So, in your dreams about ideal capitalists, there is a Gresham’s
dynamic going on. The ones who want to do right by their employees
and society get taken out by corporate raiders. The rules have
been rigged to reward the raiders, and leave the good capitalists
with no protection. The good capitalists either get driven out of
business, or they have to take on some of the predatory practices
just to survive. This is why we must have some entity (the
government for example) to set the rules to prevent the Gresham’s
Dynamic. So, while I love your idealism, I am aware of how things
work when everybody is set free to do whatever they want.

Elizabeth Warren has told us that she is a capitalist to her bones. Here is her biggest test. Will she act like a true capitalist and sell her endorsement for President to the highest bidder? She has also told us that she believes in markets. Will she use her market power in this situation to extract the highest price she can?

This would be a perfect demonstration, sort of a textbook example, of what it means to be a capitalist with near monopoly power. There couldn’t be a better example of what the 99% are up against in this class war.

The pièce de résistance to her little scheme would be to announce her decisions on the Sunday morning talk shows on March 15.

I woke up early this morning with the driving desire to write this piece before someone like Jimmy Dore does a comedy routine with these ideas. I tried this idea out on a sample audience. Perhaps this reference to the ides of March is a bit too cerebral.

Writing this post reminds me of my Bridge playing days, when the winner of the auction would play a trump card, and as the second player, I would decide to play my ace, and think what could possibly go wrong. Well, here goes the ace. Maybe that is too cerebral, also.

At a meeting of Bernie supporters this evening, I was castigated for expressing ideas like this from Jimmy Dore. (I hadn’t seen this video before I went to the meeting.) The one good thing I heard at the meeting was the question from Steev, “What do exit polls mean when Bernie Sanders’ supporters voted early?” It never dawned on me that the trick to early voting was to skew the exit polls.

If Bernie is Mr. Nice Guy, good for him. He has no control over his supporters, which should be obvious when some of us defy what he suggests. I support Bernie, not just because I like him. I support Bernie because I think he espouses the formula for saving the country. Saving the country is too important to sacrifice because you want to play nice.

If Elizabeth Warren wants to sell us out to advance her career, then I cannot support her anymore. I rue the many days I worked to get her elected. #RecallWarren. Should we keep it a secret from Warren that some of her former supporters would like to see her recalled? Or should we tell her this while she still has a chance to redeem herself?

RT (Russia Today) has the story Biden treated Ukraine ‘as his private property’, says purged prosecutor Shokin on Burisma scandal – UkraineGate documentary.

Former top Ukrainian prosecutor Viktor Shokin says he was pushed out under pressure from US Vice President Joe Biden, after he seized the assets of the oligarch behind Burisma, the gas company that employed Biden’s son.

I have been aware of this side of the story for some time, but there don’t seem to be many who have any idea about this. Somebody is lying to us about this whole affair. I don’t purport to know who. I never could understand why the Democrats wanted to make such a big issue of this, if Biden is the one who is lying. I do have to ask myself what happened to the Burisma case after Biden got the Prosecutor General of the Ukraine fired. The case that Biden claims he wanted prosecuted more vigorously seems to have died in silence after Biden got his way. Does that even raise any suspicions in your mind?

I can understand some people dismissing the source, RT. However, doesn’t my question above give you even a moment’s pause?

What does this say about our purported dislike of Russia interfering in USA elections? If we don’t like that, why do we foment trouble for Russia in the Ukraine? Is that not interfering in other country’s affairs? If we don’t like it, we should stop doing it.

In my career, I tried to avoid demanding that people do things my way. I preferred to do things my way as a model for what good comes from doing things my way. Some people did adopt some of my techniques.

Here is the story on Bernie Sanders’ remarks about Fidel Castro according to Steve Greenberg. If the oligarchs in Cuba or in the USA insist on taking all the benefits of the economy for themselves, and don’t share those benefits with the rest of the people, eventually a bloody revolution will ensue. The leaders of that revolution will gain the support of the people by sharing some of the economic benefits with the people. If our oligarchs like that result, they can keep on doing what they are doing. If they want to avoid a bloody revolution, they need to stop hoarding all the benefits to themselves.

Time after time in history this scenario has played out. Except for FDR (and maybe some other examples) the oligarchs never learn in time how to prevent a bloody popular uprising. Bernie Sanders is telling us how to prevent that uprising, but the chances that the oligarchs will get the message are very slim.

I think too few current day oligarchs have any knowledge of the song Brother, Can you Spare A Dime?

The Brunswick Crosby recording made on October 25[. 1932] with Lennie Hayton and his Orchestra became the best-selling record of its period, and came to be viewed as an anthem to the shattered dreams of the era.

In an interview, Joseph Stiglitz was asked:

Ana Kasparian

In a few sentences explain democratic socialism.

Joseph Stiglitz

So all that Democratic Socialism is – let me say it’s not socialism as it was understood, until, say, 1980. Socialism was the ownership of the means of production … No one is talking about that. No one says that is the direction we are going. What Democratic Socialism is actually very close to what in Europe is called Social Democracy. …

You might look on the internet to find a definition of social democracy. Here is a wordy explanation that I am not sure captures it all, but it is a start. This is from the Wikipedia definition of Social Democracy.

Social democracy is a political, social and economic philosophy that supports economic and social interventions to promote social justice within the framework of a liberal democratic polity and a capitalist-oriented economy.

For instance, Bernie Sanders is advocating that government pays for health care. If you buy a car from General Motors, I hope you don’t think you own the means of production for building cars.

If you are “white”, you may have a tough time understanding what is so wrong with Sop-and-Frisk policies. On The Daily Show, Trevor Noah tries to explain in the video clip Bloomberg and The Legacy of Stop-and-Frisk – Between the Scenes.