Could a New Monetary Program Be Coming? p1
Thom Hartmann talks Modern Monetary Theory (MMT) with Steve Keen, Professor of Economics & Finance-University of Western Sydney (AU) / Author-Debunking Economics ,Website: www.debtdeflation.com , who has some reservations.
Could a New Monetary Program Be Coming? p2
Could a new monetary program be coming? p3
(h/t clonal via email)
13 comments:
Mike i found this post. I think you will "enjoy" it.
http://blog.heritage.org/2013/02/15/krugmans-conscience-no-substitute-for-reason/ How can a Ph D. say things like?: "Financial markets connect savers to borrowers, turning excess saving into demand-boosting purchases—all miraculously without the hand of government lifting a finger.
Financial markets provide loans and equity to those who want to borrow to buy a car or a home, to businesses that want to expand or upgrade their facilities, and so forth. Where does that money come from? Former savings become current investments."
There is something wrong in american universities.
Which one do you prefer to believe? A beautiful story or the truth?
The beautiful story of course.
"Former savings become current investments."
Isn't that basically Marx's theory of Capitalism?
"Capitalists" (Marx's term) use retained earnings (ie "savings") to re-invest this "capital" into new facilities to "make even more money"?
Maybe this is just the way typical left and right libertarians look at it... both sides blind to govt authority.
The "loans create deposits" view requires one to have at least some view of govt authority delegated to banks...
rsp,
Cullen Roche has already combined the two sides into one but I guess mentioning his name here is verboten?
Cullen Roche has already combined the two sides into one but I guess mentioning his name here is verboten?
Not at all. We discuss everything relevant here. Cullen seems to think that there is a huge gap between MCT and MMT. MMT economists have said that MMT accepts the circutist view of private banking. What it adds is a deeper account of vertical and horizontal transactions between govt and non-govt, as well as the operations of Treasury and the central bank to round out the picture. It never was MMT v. MCT other than on some relatively minor points, regarding which the MMT economists didn't think that the MCT economists were understanding their position correctly and criticizing positions that MMT did not actually hold.
Cullen's "diagonalist" position is definitely more circuitist than chartalist tho, and the way I read him lately, he thinks that Mosler soft currency economics and MMT are flat wrong in major respects, whereas MR is correct. So there seems to be more space between MR and MMT than between MCT and MMT.
While the MMT and MCT economists have been working together to iron out their disagreements in order to present a united front to the opposition, including within PKE, I don't believe that MR/CR has been in on that, at least yet, but none of the them are economists, so there is no reason they would be.
Red Rock, why don't you explain Roche's amazing ideas to us.
Try doing it without using vague and meaningless catchphrases and slogans.
I would like to think that MMT, MCT, and MR, as well as other POV's, are debating in good faith to develop a common approach based on operational description along with financial, economic, and policy implications in order to present a unified front in opposition to neoliberalism as the dominant ideology that is wreaking havoc around the world. Arguing over details with each other to win points is a distraction.
@Tom Hickey
I would love to think that as well. Unfortunately, I think it's probably more like this:
https://xkcd.com/1095/
Good one, Rohan.
Well first on MR - its mostly reinventing the wheel but more from a TCM POV. I took the diagonalist thing to be humour - if that was not its intent, it doesn't make a lot of sense.
On MMT & TCM, I agree historically with both of them. MMT just brings the State into the circuit and when a central bank's authority is basically delegated by the State (rather than a private entity) then the function of money changes & that's how we get banks leveraging State money.
That's how I look at it.
"then the function of money changes"
Do you know of any historical monetary systems in which the State was not part of "the circuit"?
Under free banking banks issue their own liabilities that are not connected with the currency as unit of account. But this has been an exception to the rule since it is usually rather inefficient.
Historically , in "free banking" systems the State still issued currency, either in the form of notes or coins, with government bonds also serving as basic assets similar to currency. In England, when the BoE was privately owned, its notes were backed by government deposits, bonds, and coins. In some "free banking" systems banks were also required to hold a certain quantity of state money, and/or bullion, and/ or government bonds, as capital.
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