Tuesday, August 28, 2012

Eric Shinseki has Intrinsic Grasp of Monetary Operations

commentary by Roger Erickson

The retired General & current VA Secretary is my kind of guy.

Shinseki Defends Claims Backlog: 'Let it Grow'

The VA secretary said he doesn't regret opening the opportunity to issue disability claims to nearly a million veterans of wars going back more than 60 years. He only wishes the decision had been made sooner to give the VA a head start.

"It was the right thing to do … And we will do it again whenever the opportunity to better serve veterans presents itself," he said. "Let's not back away from such decisions, either because we're afraid of, or don't want the backlog to grow – let it grow. We'll work on it. We'll get it down. But let's keep our priorities straight here. It's about taking care of veterans."
In the cases of Vietnam and Gulf war illnesses, the VA is dealing with claims now because "we didn't take care of business when we should have," he said.

Amen.  Can we have this guy run for President?


Dan Kervick said...

What does this issue have to do with monetary operations.

Roger Erickson said...

That he has his head screwed on straight, and is dead set on mission first & fiat budget second.

Surprised I have to explain that to you, Dan. Couldn't be more obvious. And, that outlook is the key causality behind why we spend so much time discussing what's wrong with monetary operations.

If policy staff had this simple outlook, like we did during much of the FDR administration, during WWII, & during Marriner Eccles Fed tenure ... we wouldn't even be discussing MMT, just living it, incidentally.

Dan Kervick said...

Roger, whether people have the right priorities in the production and distribution of real national output often doesn't have that much to do with what they believe about the nature and function of the monetary system. It's entirely possible that Shinseki is just a regular liberal, with conventional views about budgets and budgetary constraints, who happens to think that using our resources for the care of vets is a higher national priority than other things we might employ those resources to accomplish, and who is also willing to accept that the government should command and distribute a higher proportion of those resources than would be acceptable to conservatives who think decisions over economic production and distribution should remain in the hands of the private sector.

It's true that we should never conclude that we are out of resources, or that we shouldn't employ resources, because we are "out of money" - since money is just a tool government can manufacture in whatever quantities it wants. But we also shouldn't mistakenly conclude that just because we have potentially unlimited supplies of money we have potentially unlimited supplies of resources.

The whole point of MMT, as I see it, is to see through the bewitching mythologies of money to the fundamental questions about employment, production, distribution and social organization that lie beneath them. The point is not to create a new form of money illusion that suggests there are no limits and hard choices simply because our society uses fiat money.

We don't care for vets with money. We care for them with people, medicines, machines and buildings, the existence and production of which are inherently limited. Even if every man woman or child in America had a totally clear understanding of the monetary system, they would still argue incessantly about what the government should do and what the government shouldn't do; what should be socialized and what should not be privatized; what proportion of our national wealth should be employed for the care and support of veterans, the retired, the sick and the aged, and what proportion should be employed in the pursuit of other satisfactions and social values.

Roger Erickson said...


Agreed, & mostly quite obvious, Dan, to those who see. Shinseki seems to see.

Except when you resort to saying that the existence & production of products & services are inherently limited. That's true only if we limit ourselves.

If we set a goal, we either achieve it or not. Our capabilities have never been limited unless we stop reaching. Been that way for ~3.5 billion years.

We don't know what we're capable of until we try, which is what Shinseki is saying. He's also saying that - as a given - if we risk people's lives & health, then we have enough capabilities to deal with the consequences. There's no easier way to link MMT & regulation of Control Fraud.

Roger Erickson said...


Here's the quote I was thinking of paraphrasing:

"[never tell people that they're out of resources], tell them what to [achieve] and let them surprise you with their results."
George S. Patton