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"Now stupid and crude questionings refuse, being aware that they are generating fightings." 2 Tim 2:23Resp,
It's not even a contest is it?Can someone have a quiet word with CR?
Tom,Have you seen this?http://www.ft.com/intl/cms/s/0/ab2ac432-92ea-11e1-b6e2-00144feab49a.htmlRon Paul "Our central bankers are intellectually bankrupt"
Thanks, Ramanan. Promoted to a post.
If MMT changed the word "monopolist" to "powerful facilitator", guess what? They are still going to propose the JG. And lately it's problematic for MMT because Warren has said "banks create their own reserves". Game changer! When it's nothing more than the really, really obvious implication of "banks aren't reserve constrained", that the Fed supplies unlimited reserves as banks need them, but *for a price*. This has been repeated by MMT ad nauseam. So yeah, said another way, "banks create their own reserves" supplied at a price set and controlled by...oh never mind.For all of MMR's ability to "connect dots", I wish they'd connect the most obvious ones instead of ones that don't exist. Also, why hasn't my water company offered me a job yet? Dot connection!
Have anyone actually read Wray's work on this subject?He is clear:"Much confusion is generated by using the term “money” to indicate a money “thing” used to satisfy one of the functions of money. I will be careful to use the term “money” to refer to the unit of account or money as an institution, and “money thing” to refer to something denominated in the money of account—whether that is currency, a bank deposit, or other money-denominated liability."http://www.moslereconomics.com/wp-content/graphs/2009/07/money.docWhether we agree with Wray's use of the term or not makes absolutely no difference to whether the JG or other MMT policies are a good idea. Cullen Roche's argument - that 'money is not a government monopoly because banks issue credit, therefore there is no rationale for the JG because that depends on money being a monopoly' is simply purely nonsensical. It is utter garbage. It's such a transparently muddled and irrelevant argument that it really is extremely difficult to see why anyone would treat it with anything other than total derision.
The following quotes should help to clear up any residual 'MMR' confusion regarding Pavlina Tcherneva's stance on the issue:"the State is the “money monopolist” of what it demands for payment of taxes"Ok?"the government is the single monopoly supplier of currency,and as such it has the power to set taxes and prices exogenously. Furthermore, there is anoption open to the State that can eliminate the problems of unemployment and providemeaningful price stability as well."Understood?http://www.epicoalition.org/docs/Pavlina_2007.pdf
(I'm commenter Studentee over at MR)What do you guys think of my argument that the gov't can be considered a monopolist but is not acting like one. Thus employment, inflation, etc. How does this mesh with the MMT literature? This is basically how I interpreted Understanding Modern Money.
As long as it's defined, I am completely indifferent to "monopolist" vs. "powerful facilitator". And as far as I can tell, those definitions look virtually identical. MMT in no way underplays or denies the fact that banks create credit. Much effort has been spent on those operations and its impact on the economy.Here's what I think it's about:http://www.youtube.com/watch?v=Y4K8z1_y_pg(Shrugs)
As I have pointed out over there, a monopolist remains a monopolist regardless of the degree to which monopoly power is exercised, and the monopolist is in the position to change positioning without giving notice, as Nixon did when he unilaterally shut the gold window overnight and shifted the global economy from a convertible fixed rate system at the international level to a non-convertible floating rate one.As I have also pointed out the US Constitution, Article 1, Section 8 and 10, give the legislature the sole power to issue currency, as interpreted subsequently by the courts. The legislature is also given sole power to levy taxes. That equals state money. The use of the state's unit of account by financial institutions is at the discretion of the state and in the US the legislature determines if and how that exclusive power is delegated. For example, banks have access to the payments system administered by the central bank through the Federal Reserve Act of 1913, as amended from time to time, and they are thereby enabled to create deposits denominated in the state's unit of account and to settle accounts in the currency as needed after netting.
The state CAN kill everyone, drop nukes on your house, chop your head off, provide full employment and price stability, rape your grandma, tax everyone 100% - but there's no reason why it SHOULD.There is something wrong with Cullen Roche's brain.
Roche's confusion over this subject seems to spring from his apparent misreading of certain texts regarding price setting and monopoly.The following quote from Paul Davidson's 'Full Employment and Price Stability' (http://moslereconomics.com/mandatory-readings/full-employment-and-price-stability/) should help to clear up some of Cullen's confusion:"The government has the same pricing options with its money of any monopoly supplier of an absolute necessity. An analogy can be drawn, for example, with an electric utility monopoly although taxes give the currency monopolist a tool to regulate demand that the electric utility monopolist does not have.How does the monopolist price his product? There are two options:1.Set price, p, and let quantity, q, float, or2.Set q and let p float.The first option is generally preferred, with a gold standard or the proposed ELR program two examples of using the first option.However, the government is currently employing the second option. It sets a budget that determines q (spending), and lets the market determine p (price level) as all purchases are made at market prices. If the monopolist decides to set q, and let the market decide p, it must constrain q so that demand exceeds q, or, for all practical purposes, the price of its product will fall towards 0. Government constraint of q to control p means using continuous unemployment and excess capacity to maintain price stability. Surely this would never be considered a viable option in running an electric utility monopoly, for example.......The ELR proposal uses the option of setting one price, the ELR wage, paying market prices for other purchases, and letting the total quantity of government spending be market determined.With a gold standard, gold can always be considered fully employed as gold can always be sold to the government at the fixed price. Likewise, with an ELR policy, labor can always find a buyer."
"The state CAN kill everyone, drop nukes on your house, chop your head off, provide full employment and price stability, rape your grandma, tax everyone 100% - but there's no reason why it SHOULD.There is something wrong with Cullen Roche's brain."Kettle, meet pot.
"Kettle, meet pot."Brevity need not always be the soul of wit.Cullen was clearly making a strawman argument.
When someone starts implying that there might be some similarity between mass murder, mass incarceration, nazism, and the JG, you have to start wondering whether they're not suffering from some form of mental ill health (paranoia?).
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