Funny, but you have to click though and read the links.
Mish quotes Austrian economist Hans Hermann-Hoppe explaining the Right Way To Debate Paul Krugman:
"It is very important in replies to people like Paul Krugman, that we don't get involved in technical details. Ask some questions almost like a child. Explain to me how increases in paper pieces can possibly make a society richer. If that were the case, explain to me why is there still poverty in the world? Isn't every central bank in the world capable of printing as much paper as they want? I am sure the guy cannot answer this type of question. Nobody can answer this type of question." Mish adds: "Krugman would respond with incomprehensible gibberish "for wonks only" as well as typical Keynesian nonsense about how paying people to dig holes and other people to fill them up would start a chain reaction of growth."ROFLMAO
"A child would see the answer was preposterous, but not a trained economist, politician, or brainwashed academic. Paul Krugman, keynesian economists in general, politicians wanting a free lunch, and most academics are all incurable."
The New York Times | The Conscience of a Liberal
Despicable Me
Paul Krugman | Professor of Economics, Princeton University
102 comments:
"Explain to me how increases in paper pieces can possibly make a society richer...."
This dope can stay focused on the "pieces of paper" (dont tell me: in contrast to gold...) ... the govt can just mark up my bank account in USDs any time it wants to and that will be just fine with me and anyone else I take these balances to for provision that is not a moron ....
"how increases in paper pieces can possibly make a society richer..."
That's because the other monetarist dopes just let them sit on the balance sheet of the govts central bank you dope...
they are not spent for public purpose or govt provision and hence no real assets are created and no balances left as savings in the non-govt sector you dummy...
Hey, if a piece of shiny rock can make people richer, then why not paper? Paper wraps rock after all...
More evidence that if you don't get $NFA, you don't have a clue.
we'd better burn all the bits of paper otherwise known as "financial assets" I guess.
I noticed that neither you guys nor Krugman answered the question "how increases in paper pieces can possibly make a society richer..."
If one person gets the new money first, he's richer and he's stolen everyone else's purchasing power. If everyone gets the same amount of new money, people will feel richer and spend more than they would have/should have otherwise spent.
Quote from Collectivist Bob Roddis:
"If one person gets the new money first, he's richer and he's stolen everyone else's purchasing power."
So I guess when a entrepreneur gets new credit to start a new business because he thinks that it will produce real profits for the economy and fails the first few times then he's a theft cause of all that purchasing power he's stolen from people who could have done it better.
Collectivist Bob Roddis wants to ban can all credit creation even for capital production and force all investment to come from savings otherwise we risk loss of purchasing power.
I prefer real life capitalism and giving folks credit on the belief that a good many folks will use their increased purchasing power creativity and productively.
Collectivist Bob believes that no one should be trusted as such and giving anyone any ability to risk the collective's purchasing power is a criminal.
Bob Roddis believes in the absolute right of the collective to a unchanging purchasing power over individual risk taking cause it might threaten the group's risk rate.
In Bob's world are ventures everyone believes won't have the possibility of decrease collective purchasing power, and therefore I can only guess that Bob believes that all ventures must approve by some kind of Austrian economics trained planning committee to protect the nation's sacred purchasing lest it be altered in an anyway.
The Austrian school= big government central planning via "purchasing power" protectionism". Murray Rothbard was a communist.
septeus7:
Society doesn't need continuous credit expansion or continuous inflation in order to grow in real terms.
Cost prices and selling prices and can gradually and continually fall over time as more goods and services are produced.
Credit can fully finance all worthwhile projects from saving and dissaving "endogenously" within the market. The total quantity of credit can be smaller, but each worthwhile project can fetch sufficient credit because cost prices and selling prices are so much lower, so each borrower only needs a modest amount of credit from other people's dissaving, and those people can receive interest instead of a consumer good.
Your stupid caricature of the Austrian school that is obviously a game of "opposites" was puerile and immature. Grow up.
"I noticed that neither you guys nor Krugman answered the question "how increases in paper pieces can possibly make a society richer..."
What is "society" thing? I thought you guys didn't believe in society.
But the real reason we didn't answer is that we are still rolling on the floor laughing that the rank stupidity of the question.
The answer on the stupiod level of the question is, so you think everyone needs to dig gold and silver out of the ground to get money or else to exchange labor or property for it?
You folks have no idea of Keynesianism, Post Keynesianism, Circuitism, or MMT. YOu have no concept of history, science, or even economics. You are cranks living in la la land. Go play with yourselves in fantasy land.
I am going to write one final thing about the so-called economic calculation problem.
First, as constructed by Mises and Hayek, the argument is against socialism with no markets and no prices, and no private property, e.g., "capital." There is only one such economy in the world today, I believe, and that is North Korea. So for all intents and purposes, the argument is irrelevant other than as of historica interest.
Secondly, there was a lot of argument over the Mises and Hayek formulated the argument, and it was by no means a slam dunk. There are serious objections to the argument even in an economy without prices, markets, or capital ownership. See the Wikipedia link above for sources, even within socialism prior to the Austrian critique.
Thirdly, the most telling argument is that mixed economies, to which some contemporary proponents of the theory wish to apply economic calculation problem, have a price structure that includes consumer and capital goods, labor, and finance, as well as developed markets and huge capital investment, all based on price discovery and marginal utility. The economic calculation problem as Mises and Hayek stated it hangs the absence of price discovery and marginal utility in state socialism. That does not apply in mixed economies, which are the rule in the world today. In fact, the economies that are the most "socialistic" rank highest on social and economic scores. One could argue that a purely capitalist economy with sound money could outperform them, but there is no evidence to suggest this.
Finally, market socialism seems to be doing very well in competition with mixed economies. Austrian economists claim that this is because of the economic calculation problem in mixed economies, that mixed economies would be far superior under laissez-faire capitalism based on "sound money." That is a belief, for which the rationale is not compelling. Most non-Austrian economists economists reject it for various reasons.
It has also been rejected at the polls in mixed economies, where parties putting forward agenda based on Austrian economics have been rejected. Austrians often write this off to the deficiency of democracy observed by Plato, that the mob given access to the Treasury will vote itself bread and circuses. So an Austrian based system is incompatible with democracy, since the majority will impose its will on the minority and demand hand outs.
In summary, Austrians put forward their views as not only ideologically correct based on their worldview but also superior to other worldviews and economic systems based on them. That is an assumption with no empirical evidence to support it, and the empirical evidence would tend to call it into question in light of history, where the powerful have always seized power and established privilege. Thus the issue is not economic but political.
Keynes and Keynesians in general don't claim that their views describe the best possible world. They look at the world we have and ask how the major issues can be managed effectively and efficiently, in that order, to meet public purpose within the existing context, which is a mixed economy, warts and all.
On the other hand, implementation of an Austrian-based system would require changing the existing system in ways that neither the existing power structure not the electorate supports.
While it is fine in a pluralistic country to advocate for whatever one wishes, advocating for something that has slight likelihood of success is probably going to be a waste of time and energy. I would recommend instead what some Libertarians have already decided upon, which is to start their own country somewhere from scratch.
To implement the competitive ideal everyone would have to begin with the same endowment and that would be difficult even in a small group. Forget about it in a large group that is already function on the basis of endowment and privilege.
Society doesn't need continuous credit expansion or continuous inflation in order to grow in real terms. Pete Pp.
A static or slowly growing money supply relative to real growth potential encourages risk-free money hoarding. But progress requires taking risks, not risk-free-hoarding.
I suggest you Austrians read Matthew 25:14-30.
Btw, I agree that credit extension in a government enforced or backed private money monopoly (or current system) is theft of purchasing power - from the less or non "creditworthy" to the most so-called "credit-worthy."
The solution, of course, is genuine liberty in private money creation but only after a universal bailout of the entire population with full legal tender fiat - to force the banks to accept it.
> market socialism seems to be doing very well in competition with mixed economies
Tom, what examples do you have in mind here?
To Tom Hickey @ 8:44 a.m.
1. Re: “society”. If 10%, 30%, 70% of society wishes to voluntarily engage in some collective action, there is nothing stopping them from doing so voluntarily. It is only because of a failure (or, more likely, an alleged failure) of society to engage in such a true collective action that the far worse alternative of an “election” is held where politicians can lie to the heart’s content and where a 10% plurality of voters can inexplicably bind the remaining 90% of the population.
2. The winning side in an election is now free to use the police to enforce its will on the losing side. And upon anyone else as well. Again, there is no such thing as a cause of action for a politician’s false promise or non-performance. On the other hand, a voluntary contractual relationship can be enforced against both non-performance and fraud. Private property, contracts and the rule of law protect provide a sanctuary of safety from the police, criminals and arbitrary actions of the state.
3. The “socialist calculation debate” is just one application of the basic Austrian insight into prices as essential information. Because socialism by definition depends upon the abolition of the essential protections of private property and freedom of contract, it must be arbitrary and dictatorial. By eliminating prices, it will also be impoverished. Mises wrote his big fat book “Socialism” in 1922. He precisely predicted the form of the Soviet Union, Mao’s China and the Khmer Rouge (poverty and terror) in the face of ubiquitous ridicule by the hipster “progressives” of his day.
http://mises.org/books/socialism/contents.aspx
4. The very same concept, prices as essential information, is also applied to a different set of facts, analyzing the impact of funny money dilution and fractional reserve banking upon prices. Prices get distorted and produce false information. The result is the boom/bust cycle. Whatever its cause, the boom/bust cycle exists. The Minsky explanation ignorantly assumes complete mass irrational behavior. The Austrian explanation explains exactly what happens(distorted prices producing false information) and that explanation preceded The General Theory. However, the explanation was and has always been suppressed and ignored by Keynesians, monetarist and statists of all stripes.
The assertion that there is no evidence to back up the Austrians is preposterous. The evidence of the bad results from fiat money is all around. The Keynesians also see the problems but refuse to engage the Austrian explanation. It’s time for the Keynesians to explain why the Austrian explanation is wrong. A limp claim that “you weren’t the only people to predict the housing bubble” doesn’t cut it.
5. These general Austrian/anti-state themes also explain and predict the present looting of society by the elite and it imposition of the creeping surveillance state. It’s time for the Keynesians to explain why the Austrian explanation is wrong on this too. Again, a limp claim that “you weren’t the only people to predict creeping totalitarianism” doesn’t cut it.
6. Pilkington obviously has no familiarity whatsoever with this analysis because the socialist calculation debate, the ABCT and the prediction that socialism leads to totalitarianism are all part of one series of related concepts that I first learned in 1973. In fact, until LK and his phony and dishonest analysis showed up on the scene, it never occurred to me that anyone could possibly view these as truly disparate concepts.
Cost prices and selling prices and can gradually and continually fall over time as more goods and services are produced.
Has there ever been a real world case where an economy experienced deflation as anything other than lurching from crisis to crisis until some new equilibrium of misery was reached?
Tom, what examples do you have in mind here?
Some circles of power in the US are concerned that China is poised to clean America's clock because of the unfair advantage that market socialism gives them and we had better take them out before they do.
I have some child-like questions too.
What would happen if I produced 1,000 thingamabobs and priced them at $1 dollar each expecting that entire inventory to be sold for $1,000?
And what would happen if there were only $100 available to the thingamabob purchasing public to use?
You'd have to eat most of the cost for producing thingamabobs, right?
Oh, you say that's not right? Does this mean that the stock you issued to pay for the thingamabob machine also circulates as a currency redeemable in thingabobs?
Strangely, no Austrian that I know of is willing to do such a thing.
For a rejoinder to to Hayek's The Road to Serfdom see John Kenneth Galbraith's The Good Society. While JKG was not responding to Hayek specifically, the POV he presents shows why Hayek is mistaken.
"Strangely, no Austrian that I know of is willing to do such a thing." - Alan
Alan, didn't they tell you? Austrians have magical powers that make your hypothetical perfectly do-able.
The "market" will automatically respond and produce the needed liquidity through economic calculation or something...I'm not smart enough to understand how that works...so I've been waiting for one of the Austrian gurus to explain it to me.
Apparently faith is involved because no guru has yet bothered to describe a plausible transfer mechanism or source of free (as in earned-not-borrowed) liquidity and who would dispense it.
They won't even leave a trail of bread-crumbs...probably want to keep such power a secret...with great power comes great responsibility.
So we will just have to take their word for it.
Does this mean that the stock you issued to pay for the thingamabob machine also circulates as a currency redeemable in thingabobs? Alan Avans
Funny you should mention that. My own consideration of money (strongly influenced by the Bible, both Old and New Testaments), has led me to the conclusion that common stock is an (the?) IDEAL private money form, a form that "shares" wealth and power, rather than concentrates them as a gold standard would.
But the Austrians, especially the leaders, tend to be godless, either agnostics or atheists. No wonder they ended up worshiping a shiny metal?
But the Austrians, especially the leaders, tend to be godless, either agnostics or atheists. No wonder they ended up worshiping a shiny metal?
This godless thing explains Ron Paul? It explains Tom Woods who wrote “How the Catholic Church Built Western Civilization” and “Sacred Then and Sacred Now - - The Return of the Old Latin Mass”?
Of course there are religious libertarians and atheist libertarians. The core concept that holds them together is the idea of peace and the non-aggression principle. The core concept of “Progressives”, socialists and Keynesians is the use of the SWAT team to insure obedience to state diktats and to punish malingerers.
A “monopoly issuer of the currency” is problematic because it is prima facie criminal and thus illegitimate.
Finally, no one need use gold. They can use any type of money they want. Indeed, 60% of the population could voluntarily use funny money if that fulfilled their dreams.
You guys just refuse to grasp that non-aggression principle, don't you?
Another point that I always thought was self evident that escapes you statists regarding the "prices as information/economic calculation" issue is that only VOLUNTARY EXCHANGES give you prices that provide good information as to actual supply and demand as seen through the individual eyes and brains of a vast number of humans that make society.
If someone is forced to make a transaction, or the transaction involved fraud, the price does not tell you much about the wants, dreams, plans and desires of the actor. Prices that result from funny money dilution are thus distorted and provide bad information.
TYPO:
The previous post should have read:
as seen through the individual eyes and brains of THE vast number of humans that make UP society.
You guys just refuse to grasp that non-aggression principle, don't you? Bob R
The banking cartel has already aggressed both debtors and non-debtors but you Austrians propose no restitution. You seem to think one evil, deflation, is the remedy for another evil, unjust increases in the money supply. But deflation, besides being economically destructive, does nothing for the debtors who were driven into debt by the counterfeiting cartel but make their situation worse. Thus the Austrian solution is wicked.
"Finally, no one need use gold. They can use any type of money they want. Indeed, 60% of the population could voluntarily use funny money if that fulfilled their dreams."
We have that system now. We can use anything we chose to buy stuff…no takers however.
You still haven't explained how your non-funny-money system would expand the money supply to match production and how you would create fungibility.
As for Ron Paul, he supports a gold-backed dollar which means he is no libertarian.
And as for Tom Woods, he should actually read the Bible himself, especially the parts about collecting interest from one's fellow countrymen.
"only VOLUNTARY EXCHANGES give you prices that provide good information as to actual supply and demand as seen through the individual eyes and brains of a vast number of humans that make society."
Which of your exchanges are involuntary?
You could say US taxes are "involuntary exchanges", but then you do choose to live in the US - no one forces you to.
Bob Roddis,
Would you consider yourself an anarcho-capitalist?
If not, what differentiats your position from theirs.
thanks.
"how increases in paper pieces can possibly make a society richer..."
BOB
money is not wealth (paper or gold)
wealth is something that increases the standard of living. Cars, computers, medical service, electricity, education are all examples of wealth.
paper money/ Gold etc.. are merely financial claims on wealth, not wealth itself.
currently, we have people who want to produce wealth for bits of paper, but can't for lack of bits of paper in the right hands to buy the wealth produced. If bits of paper,(newly created) is used to produce new output that otherwise would not have been. Those created bits of paper have created wealth. And thus made society richer.
Also notice that although the financial claims on wealth have increased so has real wealth. So no "stealing purchasing power".
Austrian's must think that output (even if available) would not increase. So would does increase output ?
Do manufactures respond to increase demand (money) by increasing output?
If supply (output) increases does that have an effect on prices?
If output (wealth) increases proportionately with financial claims (money) on output. Would prices rise?
I have no formal education in economics. I have spent less time than you have on MMT and even I understand this simple concept'
The fact that you can't even grasp this , after all the time you spend here, makes me think your time might be better served collecting stamps or something similar.
"only VOLUNTARY EXCHANGES give you prices that provide good information as to actual supply and demand ."
Would food purchases be voluntary exchange? Considering if you don't eat you die. How can food ever give price information if everyone must have it?
What if you need transportation to go to work to involuntary buy food. Now would you consider transportation as involuntary.
I can't go to work naked ( I tried). I need to work to buy food. Are clothes voluntary??
All the land is in private hands.
I do have a physical body that I need to put somewhere when not working. All private land charges rent. Is rent "voluntary??
Basically Austrian economics is only applicable for trust fund babies.
What are their economic theories for the real world.?
All the land is in private hands.
Well, not all — yet. But if Rothbardians had their way, everything of economic use were privatized. Then ALL land would be private property. Life would be passing through a succession of toll booths — unless one owned one's own land and stayed on it to collect tolls.
"Cost prices and selling prices and can gradually and continually fall over time as more goods and services are produced."
SO if prices were falling why would would money flow into capital goods ( factories )etc. Why spend money and years building a production facility when your returns would diminish as time goes by. Capital goods would depreciate along with what they produce. No one would create capital goods, when you could make better returns waiting for falling prices.
Also, creating capital goods could not be done on credit. falling price means falling revenue. Not being able to pay off the high price of yesteryear's construction
Inflation is far superior for producing wealth. plants and equipment are easier to pay off in the out years. The longer you sit on money the more you lose, an incentive to produce.
Have you this thought this through at all? Or just get kiddy at the notion of sitting on your ass and watching your purchasing power increase.
Also consider the fact that wages will go down. So unless your current holding are far greater than future wages what benefit would you have? Mortgage payments would take up more of a decreasing paycheck. Not to mention house values will go down ( while mortgage is fixed). think about it a little. all mortgage holders benefit from inflation
No, this line of thinking is for oligarchs and their dupes. Who think that because sometime in the past they produced and made some money. ( or steal) their entitled to live off it for generations without doing anything else.
Well, not all
TOM
I was assuming a libertarian or feudal country. BOB's envision
millerB,
Your comments reflect a lot of my thoughts. Maybe Roddis will respond to them. I've noticed a trend: whenever he can stay abtract in his fantasy world and repeat the phrases "funny money" "economic calculation" etc. = he does. But whenever he is challenged on the real world implications of his ideas = silence.
Tom,
Is your impression that Roddis is a Rothbardian?
Your comment seems related to why I asked if Bob is an anarcho-capitalist. They trot out this 'non-agression principle' …but if everything is privatized, then I am absolutely being forced into market exchange via selling my labor (so long as I don't own means of production).
Would the air be privatized too? YIKES. Maybe the price mechanism could more adequately distribute the air? Are the wealthy currently not getting (hoarding) their deserved share of the air.
Would the air be privatized too? YIKES.
What a horrible idea! Imagine if poor people had control of the air in their houses and in their yards. That would mean that they would have a cause of action against industries polluting their air and could have such pollution enjoined. The horror!
Jk,
Bob's website is called 'Rothbardville.com'. ;)
Also, 'Capitalism' is a libertarian term itself.... Ie. created by libertarians...
RSP,
"Capitalism" is a Marxist term created to suggest that the marvelous system of voluntary exchange and the protections of private property and contract rights for even the most powerless are somehow sinister.
You guys have everything ass-backwards. Laissez faire keeps the elite and government thugs at bay. "Progressive" regulation was invented to provide the elite with its permanent power base.
http://tinyurl.com/avfabjb
Has there ever been a real world case where an economy experienced deflation as anything other than lurching from crisis to crisis until some new equilibrium of misery was reached?
I'm pretty sure the answer to that question is "yes".
In general, it seems to me that the problem is more either unexpected or discontinuous shifts in inflation or deflation rates or rates that are inefficiently high.
So that deflation per se is not the problem--although Austrians might have a different perspective on that.
It was interesting that no one (at first can) seemed to answer Hoppe's (and Bob's) question: how can the simple act of printing money (equivalently, digging up more gold) make society richer?
My answer is that it can't really in the long-run (for sensible values), because the nominal quantity of money is ultimately just an arbitrary value; but in the short run it can have real effects, for instance if preferences change and people want to hold a higher quantity of money, which could cause in the absence of government engineered changes a reduction in output.
I think that resolves Hoppe and Krugman's arguments, which are both sensible in their own right, but really focused on two different time-horizons: the long-run and the short-run. I also think that there's more sensible Austrian approach than is maybe suggested by Hoppe's remarks, that recognises the need for changes in the money supply to offset otherwise potentially harmful changes in money demand.
Tom, you're too intelligent to think there will be toll booths everywhere. Are there toll booths to enter a store?
General MMT criticism: I've never actual heard a refutation of the point srw makes in this footnote [http://www.interfluidity.com/#inequality_and_demand_1]. It's basically the same purchasing power point that Bob Roddis makes, and it seems correct.
Re SRW's footnote...
The MMT view of "savings" is wrt to net financial assets of the non-government, not savings deposits.
Credit leverages off of $NFA, not funds in savings accounts, which are pretty much irrelevant in this context.
Why does everyone seem to have so much trouble with the MMT view of savings?
Bob,
Haven't you seen Total Recall? :)
"Imagine if poor people had control of the air in their houses and in their yards. That would mean that they would have a cause of action against industries polluting their air and could have such pollution enjoined."
You just love your imaginary world. Own the air in your house and on your lawn?? hahaha.
Come On Bob!
All we need to do is make clean air a scarce resource and then it's ripe for privitazation. Pollute baby! Pollute!
Paul: "You still haven't explained how your non-funny-money system would expand the money supply to match production and how you would create fungibility."
True.
Their non-funny money system, as far as I can tell, is meant to be money redeemable in capital. That means, if all goes well for our Austrian friends, that in the end only capitalists will be consumers.
What burns Austrians up about MMT is MMT's understanding of our mezzanine economy. The public and private sector share a considerably overlapping base of productive capacity. The federal government looks upon this productive capacity as a tax base, and has, as custodian of We the People, senior claim upon the whole of it.
That's just too much for an Austrian to understand.
Paul: "You still haven't explained how your non-funny-money system would expand the money supply to match production and how you would create fungibility."
There is no need to expand the money supply to “match production”. What was stupid, baseless idea.
I have no idea what you mean by “create fungibility”.
Their non-funny money system, as far as I can tell, is meant to be money redeemable in capital. That means, if all goes well for our Austrian friends, that in the end only capitalists will be consumers.
Since laissez faire inhibits monopolies, there is no basis in fact, logic or history to support such a claim. See Kolko 1963:
http://tinyurl.com/avfabjb
All we need to do is make clean air a scarce resource and then it's ripe for privitazation. Pollute baby! Pollute!
Right. Meticulous and rigorous enforcement of the property rights of the poor in their bodies and homes without exception will result in no enforcement of the property rights of the poor in their bodies and homes. Just cuz, I guess, huh?
Voluntary means just that, voluntary. You guys must try to fudge that, so you do. Meticulous protection of poor and powerless from the initiation of force and fraud means just that, so you guys have to fudge that too. State action means, by definition, SWAT teams. You guys obviously find it necessary to fudge that too.
You employ those tactics because that's all you have left. And because it makes simple truths sound complicated and ambiguous for the weak-minded.
Quote from PetePeterPete: "Society doesn't need continuous credit expansion or continuous inflation in order to grow in real terms.
Cost prices and selling prices and can gradually and continually fall over time as more goods and services are produced."
Okay, when has that ever happen in history? When has there ever been growth but the money supply remained numerically constant? You have the burden of proof to show that has actually happened.
Quote: "Credit can fully finance all worthwhile projects from saving and dissaving "endogenously" within the market. The total quantity of credit can be smaller, but each worthwhile project can fetch sufficient credit because cost prices and selling prices are so much lower, so each borrower only needs a modest amount of credit from other people's dissaving, and those people can receive interest instead of a consumer good."
Protectionist Idiot Pete, if credit and the money supply is constant or shrinking then the value of savings are increasing as the total valued of money saved making larger claims against real goods produced so why would anyone want to dissave and invest in real production the price of which is falling while monetary interest is increasing?
It makes no sense. It has never happened in the entire history of mankind. As production real grows so does and credit and money supply. It always has and it always will.
If you don't understand this then you don't understand basic mathematics and I question your ability to balance your own check book.
You can never pay off debt in a deflation so people don't borrow or invest but rather save in deflation.
You are a collectivist idiot who believes in a sacred "right" to more more valuable money and a protectionist idea of "purchasing power."
The Austrian school is and never was economics. It is class based coded hate speak against the poor or as you call them "people of limited marginal productivity."
Quote from Collectivist Bob: "You guys just refuse to grasp that non-aggression principle, don't you?"
No, you are the one who can't understand that such a principle doesn't exist for any authority that such a principle could have would require it's violation in enforcement.
Quote: "Another point that I always thought was self evident that escapes you statists regarding the "prices as information/economic calculation" issue is that only VOLUNTARY EXCHANGES give you prices that provide good information as to actual supply and demand as seen through the individual eyes and brains of a vast number of humans that make society."
Bob, if one man is hunting and critically injury his prey but failed to find until several hours later whereon his he finds another man has dressed, butchered, and cooked the animal.
Who owns the food Bob?
No man "voluntarily" surrenders their claim upon the food. In this situation, as with the real world, there are NO VOLUNTARY EXCHANGES in the absolute binary sense there are only degrees of voluntariness versus degrees of compulsion.
As such there is no objective information produced to the physical utility value of based on prices whatsoever.
Prices contain NO objective INFORMATION.
No Austrian even understands the concept of information correctly. No Austrian schooler even understand the concept of aggression, or of pricing.
These ideas are absolutely meaningless absent a culture to define them. You cannot apply these ideas to a culture apriori because the culture is prior to these concepts.
Quote from Tom Hickey: "First, as constructed by Mises and Hayek, the argument is against socialism with no markets and no prices, and no private property, e.g., "capital." There is only one such economy in the world today, I believe, and that is North Korea."
I'm sorry Tom, but that is wrong.
The only economy in the world today that is run by purely Austrian school principles is North Korea despite how much they claim to be Marxists .
The Austrian school believes that there should be no limits on private accumulation no matter the degree of inequality that results.
North Korea is essential a private feudal estate controlled entirely by a single family. The Kim's being good Austrian schoolers don't believe in rent controls so they collect rents to a level where all other property and profit are collected by the estate since any such profits belong to the landlord (the State/ Kim's Estate) having been derived from the land i.e. the Kims.
As Henry George once noted "whether a man owns all the land or he owns all the men on the land makes no difference to either him or them"
It doesn't matter if we called such ownership "public" or "private" or "collectivist" or "individualist" no matter how the Austrian claims these meaningless titles otherwise.
Austrianism is occult nominalism. They believe given a name "private" to property gives a right to exist, giving a price must give meaningful information, titling an exchange "voluntary" makes it right. It is magical thinking.
The issue whether or not you have a right to exploit without constraint or whether people will be constrained under a government of laws.
If you believe that men are compelled against to organize themselves against exploitation by "foreign" interest then you are a Statist.
If you believe that men are to dominated by private interest no matter how distant or foreign then you are a feudalist.
There is no anarachism, communism,no socialist, no mutalism, or anchocapitalism.
Humanity has only every faced faced two forms of government. Republicanism or Oligarchy for these are only two coherent concepts defining the possible organizations of men.
> Why does everyone seem to have so much trouble with the MMT view of savings?
Actually, I didn't want to attack that particular nonsense here.
I was simply pointing out that SRW has a reasonable explanation of why "loans create deposits" is not entirely correct in a CB world. The correct view is "The CB targets some measure. Reserves, deposits, and loans may adjust to hit that target."
I've never seen any good MMT response to this. After all, isn't "loans create deposits, end of story" one of the core ideas Of your theory? If "loans create deposits, end of story" is wrong, then savers certainly have an important role to play in money operations. Loans basically changes the distribution of purchasing power, where savers defer present consumption in return for interest (future purchasing power).
"It was interesting that no one (at first can) seemed to answer Hoppe's question"
If people want pieces of paper, and are willing to work to get them, but can't work to get them because there aren't enough of them on offer, then maybe more are needed.
You guys have everything ass-backwards. Laissez faire keeps the elite and government thugs at bay. "Progressive" regulation was invented to provide the elite with its permanent power base.
As a libertarian of the left I agree with a lot of the assumptions of the right libertarians, but not with absolute right to private property as the chief norm.
There are two separate issues involved in the overall discussion. First is the ideal in social and political philosophy, and Bob is arguing mostly on this level. These issue have been broadly debated for millennia and nothing new is being offered. It's a question of assumptions. Some claim that theirs are apriori or intuitive and others say that all such assumptions are constructed. Since there is no absolute criterion and it is not possible to conduct controlled experimentation, the argumentis either speculative or historically based if evidence is adduced.
The other issue is the good society that is achievable in the present cultural and institutional context, as John Kenneth Galbraith frames it in The Good Society. Here the argument is fundamentally between different forms of the two overarching ideologies, liberalism and conservatism.
As Galbraith observes, economically this comes down to preferences relative to the balance of employment and price stability, assuming a trade-off is required. Socially and politically it is over the distribution of power.
Hayek's The Road to Serfdom and Galbraith's The Good Society set forth the two basic POV's, neoliberalism (combo of Austrian economics, neoclassical economics and Keynesian- neoclassical synthesis) and social democracy (Old Keynesianism, Post Keynesianism). At present, however, the debate is dominated by the neoliberal frame and both Rothbard's Austrian-Libertarian approach, as well as Mises's, are marginalized, along with Old Keynesianism and Post Keynesianism. So both we and Bob and is cohort are "fringe," trying to get a toe in the door of the debate. The Tea Party has been more successful politically so far than Post Keynesians or the more radical left, but they have not cracked the economic Establishment either.
Not represented are Marxism, proponents of the commons, and posts-capitalistic economic approaches, since they are not influential in the present context in the West. Marxism is still alive and well globally however, and commons advocacy and post-capitalistic economics are emergent.
> And what would happen if there were only $100 available to the thingamabob purchasing public to use?
You're making this complicated in the wrong way.
Scenario 1: Thing creator is correct. He earns $1000.
He spends $400 on good X.
He spends $600 on good Y.
Scenario 2 (your example): Thing creator is wrong. Purchasing power falls to $100.
Thing creator cuts prices to $0.10 per thing. He earns $100.
He spends $40 on good X.
He spends $60 on good Y.
Since the prices of X and Y have *also* fallen, he can purchase the same number of X and Y units as Scenario 1. He is no worse off. This is basically what happened during the 1800s.
You need to introduce *other* complexity to get to money macro:
(1) Debt (contractual nomial repayment) + no/difficult restructuring
(2) Some communication/coordination problems, where the producer is not aware that prices are falling this way (and that he should cut).
(3) Institutional resistance to lower prices (e.g. minimum wage).
(4) Alternative options (bailout, waiting for a bailout). This is Casey Mulligan's idea.
(5) ...
Looks like septeus7 has gone off the deep end. Let me know when you hit bottom. Is it MMT all the way down?
marris: Tom, you're too intelligent to think there will be toll booths everywhere. Are there toll booths to enter a store?
Yes, but I don't think that Rothbardians are. That was satire.
But nor are neoliberals. This is what TPTEB envision for the future, only more subtly through indebtedness, and they have been very successful already in creating a society based on rent.
Has there ever been a real world case where an economy experienced deflation as anything other than lurching from crisis to crisis until some new equilibrium of misery was reached?
I'm pretty sure the answer to that question is "yes".
Historically there has almost always been a scarcity of money, which is deflationary and encourages hoarding behavior that exacerbates the situation. When the situation becomes serious enough it has led to conflict. This is pretty basic economic history.
General MMT criticism: I've never actual heard a refutation of the point srw makes in this footnote [http://www.interfluidity.com/#inequality_and_demand_1]. It's basically the same purchasing power point that Bob Roddis makes, and it seems correct.
Yes, MMT would agree. See Mosler's proposals for financial reform. Mitchell thinks that the only way to permanently fix the the banking system is to nationalize it. Basically as long as the banking system is free to control the money stock, there will be "issues."
There are competing approaches to fix this and I have not settle on one yet. As a libertarian, I don't think that giving government all the power is good solution and as a libertarian of the left, I don't think that giving the financial sector all the power is a good solution either. The resolution seems to be to create a system in which there is a balance of power between the government and the private sector.
But this also has to be an achievable solution barring a collapse that would prompt a complete reset. It seems to be that many of the solutions proposed are not achievable politically in the present context even though they may work.
So I think that the task is to propose an ideal solution and an achievable solution if the ideal solution is not practically achievable at present due to context.
If we think about money in terms of money demand, then we have a nominal quantity of money and a price level that satisfies it, or vice versa.
At any point in time, everyone would like more of it, but we can still have either inflation or deflation if the quantity of money is changing, or preferences are changing or whatever.
In other words, it's not scarcity per se, but whether a scarce resource is becoming more or less scarce. In the US in the post war era, inflation has been around a 3% trend. From the point of view of scarcity, this implies that money has become less scarce over this period.
I don't have time to go digging for historical data, but gold standard era US had (very) mild deflation and pretty decent levels of growth and unemployment. (A quick google did turn up some charts in Selgin's "Has the Fed been a failure?"--look at, e.g., table 1 at the back of the paper.)
Deflation in and of itself shouldn't really be any more of a problem than inflation is currently, as long as everyone knows what to expect and gets it. Then future changes in the price level can be baked into the production and exchange process today.
"This is basically what happened during the 1800s."
During the deflations there were mass bankruptcies and high unemployment (14% peak during the long depression), stagnant or falling real wages. Not to mention poverty, exploitation, huge increases in inequality, and the consolidation of wealth and power.
You get the masses to accept wage cuts by breaking them through mass unemployment. Ideally you force worker's wages to fall faster than prices - Rothbard's wet dream.
"Laissez faire keeps the elite and government thugs at bay."
The large private/corporate powers which went on to corrupt/try to corrupt government arose during the laissez-faire era.
"My answer is that it can't really in the long-run (for sensible values), because the nominal quantity of money is ultimately just an arbitrary value"
You make the unfounded neoclassical assumption that the economy tends to full employment and optimal equilibrium in the long run.
Isn't the long run just a series of short runs?
Why does everyone seem to have so much trouble with the MMT view of savings?
Basically due to the identity S = I, as well as ordinary language ambiguity regarding "savivng" and "savings." JKH explains this in his I = S + (S - I) piece. But that is probably also going to confuse people who are already confused about this.
Without reducing this explanation specifically to $NFA terms, using different symbols for different signification, it's likely to remain confusing in terms of "saving."
I've never seen any good MMT response to this. After all, isn't "loans create deposits, end of story" one of the core ideas Of your theory? If "loans create deposits, end of story" is wrong, then savers certainly have an important role to play in money operations. Loans basically changes the distribution of purchasing power, where savers defer present consumption in return for interest (future purchasing power)
The MMT claim is that savings are not loaned out. Savings in deposit accounts is one way that banks fund themselves but lending are not a function of saving. Lending is partially a function of the interest rate in that this is a cost. But lending is chiefly a function of qualified demand at an interest rate that is profitable to lenders.
Banks make a profit on leveraging their capital and limting their expenses through making profitable loans and charging fees for service in excess of costs including loan losses.
The large private/corporate powers which went on to corrupt/try to corrupt government arose during the laissez-faire era.
It was the court system allowing “Progressive” legislation in the first place that allowed for the type of power seizure that you admit occurred. The effect of our proposal would be to METICULOUSLY PROHIBIT such a power seizure as there would be no power to seize. As Hayek said in “The Road to Serfdom”, the provision of power to the government to make arbitrary decisions as to who is to get what from whom must be dictatorial. Blaming me for the corporate takeover of the government (due to its very existence as a big powerful government) is like blaming me for air pollution when I propose that air pollution be strictly prohibited.
You create a power center and the tendency is for it to be taken over by sociopaths.
Big corporations corrupt government therefore we should get rid of government and let big corporations control everything.
"I propose that air pollution be strictly prohibited."
No you propose that people be allowed to pollute as much as they want so long as they can afford it. People can defend themselves from this only if they are wealthy enough to do so.
During the deflations there were mass bankruptcies and high unemployment (14% peak during the long depression), stagnant or falling real wages. Not to mention poverty, exploitation, huge increases in inequality, and the consolidation of wealth and power.
The deflation episodes and depressions were all the result of previous artificial credit expansions. Rothbard gives you detailed theory and history. This is always the Austrian position and it’s not complicated. WHY IS OUR EXPLANATION ALWAYS IGNORED WHILE AT THE SAME TIME YOU VICIOUSLY ATTACK OUR EXPLANATION? WHAT PHENOMENON DO YOU CLAIM CANNOT BE EXPLAINED BY ARTIFICIAL CREDIT EXPANSIONS DISTORTING PRICES WHICH ENCOURAGE INVESTMENT OF CAPITAL AND LABOR INTO LINES OF PRODUCTION THAT ARE NOT SUSTAINABLE BUT ONLY APPEAR SO DUE TO THE PRICE DISTORTIONS?
http://mises.org/document/695/The-Panic-of-1819-Reactions-and-Policies
http://mises.org/document/1022
WHAT PHENOMENON DO YOU CLAIM CANNOT BE EXPLAINED BY ARTIFICIAL CREDIT EXPANSIONS DISTORTING PRICES WHICH ENCOURAGE INVESTMENT OF CAPITAL AND LABOR INTO LINES OF PRODUCTION THAT ARE NOT SUSTAINABLE BUT ONLY APPEAR SO DUE TO THE PRICE DISTORTIONS?
Bob R
The problem with money lent into existence is that it must be repaid. Thus the boom-bust cycle. Usury makes it even worse.
But with money spent into existence (e.g. government fiat, common stock) without borrowing there should be no boom-bust cycles.
But the Austrians are opposed to fiat and have never to my knowledge ever advocated common stock as private money, instead preferring a money form (gold) that requires lending and usury to generate a return or worse risk-free hoarding via a government enforced money monopoly.
There is no "money lent into existence" in a voluntary system unless there is fraud. The lender must own or control something that has value prior to lending it or there would be no point to the loan. And your "money lent into existence" nonsense does not address the Austrian explanation.
Really? Try paying your debts (measured in nominal units) with a shrinking money supply.
And btw, the Austrians have never to my knowledge advocated that debt be measured in real, not nominal terms.
Ya see, the workers are expected to take wage cuts in a deflation but not the bankers! No, they are supposed to profit from deflation in real terms!
He who oppresses the poor to make more for himself or who gives to the rich, will only come to poverty. Proverbs 22:16
There is no "money lent into existence" in a voluntary system unless there is fraud. The lender must own or control something that has value prior to lending it or there would be no point to the loan. Bob R
I agree.
So you should ask yourself why anyone would borrow your shiny metal unless it was accepted by government for taxes or otherwise privileged?
Ok, somebody help me out here. I don't understand how borrowing at all could exist, unless it was interest free loans, in a world of a fixed money supply.
If there is a fixed money supply, and people lend money at interest, where does the money come from to pay for the interest?
This seems to have cascading-bankuptsy written all over it. And who collects the assets, the collateral, when these inevitable bankrupties occur? ~> the people that lent out the money, right? Otherwise known as the people already with most of the money.
Welcome to Fascism. Wouldn't this laissez faire system, over time, lead to the accumulation of ownership by a privatized plutocracy? Otherwise known as Fascism?
What am I missing? How can lending + interest occur without a growing money supply?
Or would it be more accurate to call it something like Neo-Feudalism, not Fascism?
Or would it be more accurate to call it something like Neo-Feudalism, not Fascism?
Please explain how a system where the initiation of force and fraud are strictly prohibited and where government power centers of the type that are captured by corporations under fascist systems are strictly forbidden relates to, compares to or approaches a feudal or fascist system which are based upon the initiation of force.
Bob, did you read the line you just responded to… "Or would it be more accurate to call it something like Neo-Feudalism…?
What I'm referring to is where a minority over time accumulates, i.e. owns, the majority of land and capital.
How about you respond to my inquiry about how loans + interest could exist with a fixed money supply, without it leading to waves of bankruptcies in which the lenders continually accumulate ownership, pooling into fewer and fewer hands.
MMT suggests injection of NFAs alleviates that situation.
MMT suggests injection of NFAs alleviates that situation. JK
The Austrians believe that raping the Amazon and other places for gold and reburying it in bank vaults is the solution to that problem. Or would they be in favor of a world-wide ban on gold mining to protect their returns via deflation, hoarding and usury?
What I'm referring to is where a minority over time accumulates, i.e. owns, the majority of land and capital.
Read "The Triumph of Conservatism" which I linked to above for about 15th time. Laissez faire does not lead to monopoly, big government does.
How about you respond to my inquiry about how loans + interest could exist with a fixed money supply, without it leading to waves of bankruptcies in which the lenders continually accumulate ownership, pooling into fewer and fewer hands.
MMT suggests injection of NFAs alleviates that situation.
The parties will determine the rate of interest based upon their view of the situation. Ultimately, what the lender is paid back comes from the increase in wealth generated by the activities of the borrower. If the borrower is unable to create new wealth enough to earn a profit for himself and to pay back the loan, people won't lend to him.
The cost of the loan (interest) will be determined by the parties' agreement. If money is constantly increasing in value, a "decreased cost of living" index could easily be included in the contract to determine the amount to be paid back in the future. That's an easily solvable problem for the parties to the contract.
This simply is not a problem for society. The boom/bust cycle and depressions caused by funny money are real problems. Your solution is the problem and it's a solution to a problem that does not exist.
Murder, rape, pillage, theft and genocide are the major problems facing mankind which are precluded by property and contract rights. "Progressive" evisceration of property and contract protections opens the floodgates for the actual problems of murder and theft to inflict themselves on humanity. "Lack of aggregate demand" is a garbage concept and not a problem to anyone. To the extent it ever sorta appears is because price distortions caused by funny money made it appear that there were more buyers for goods than was actually the case. Reality ulitmately rears its head. So the "trend line" was false. The solution is to allow prices to readjust while keeping in mind that the prior distortionary problem was the funny money that caused the false prices which led to the malinvestments in the first place.
If money is constantly increasing in value, a "decreased cost of living" index could easily be included in the contract to determine the amount to be paid back in the future. Bob R
Why would anyone take the risk of lending if they could gain purchasing power risk-free by money hoarding?
Everyone will be sitting on their money hoards expecting someone else to make them more valueable with genuine, risky investment.
Austrians clearly understand that once the CB has embarked upon a policy of inflation, it will draw labor and investments into lines of production that will only continue to be profitable due to further inflation. Once the inflation stops, the bust and liquidation will begin. Thus, we understand that "stimulus" does indeed "stimulate". It is just that what it stimulates is unsustainable. Further, we understand that when the injections of new "net financial assets" (as you call them) stop, the bust and liquidation will begin.
I heard Hayek say this on TV in 1975:
[T]he present difficulty is not due to a deficiency of aggregate demand. It is due to the fact that without continued inflation, you cannot maintain the people in the new employments in which they have been drawn by the inflation of the past.
******
[T]he dangers of inflation are very different ones. They are exactly the kind of unemployment which is now arising. In the usual discussion, there is quite a wrong emphasis. There are many bad effects of inflation, but the worst is that it draws labor* into employments where they can be kept employed only by an accelerating inflation. And the point inevitably arises where inflation cannot be accelerated sufficiently fast to keep them in that [employment].
http://mises.org/media/2773
http://mises.org/daily/3311
*and capital
JK If there is a fixed money supply, and people lend money at interest, where does the money come from to pay for the interest?
This seems to have cascading-bankuptsy written all over it. And who collects the assets, the collateral, when these inevitable bankrupties occur? ~> the people that lent out the money, right? Otherwise known as the people already with most of the money.
This is how it worked historically, which why debt jubilees were mandated in ancient times as a reset.
Everyone will be sitting on their money hoards expecting someone else to make them more valueable with genuine, risky investment.
You have no evidence that this has ever or will ever be a problem. Gazing at your navel is no excuse to unleash the SWAT teams on society. People will earn significantly more money from investments than from hoarding. Plus, you are the guys who say that the money supply will be set in stone. I didn't say that. And I see nothing wrong in the wealth of society being spread to everyone via an increased value of money.
You are obsessed with the idea the average people are too stupid to take care of themselves without your guiding hand and SWAT teams to solve these alleged "macro" problems that do not even exist.
Fascism is corporate statism. it is neo-feudalism in the sense that capital investment replaces land, or incorporates land, as the means of production controlled by the oligarchy.
Once the inflation stops, the bust and liquidation will begin. Bob R
Because money supply growth is necessary for a healthy economy. Which is why money should be spent, not lent into existence.
ou have no evidence that this has ever or will ever be a problem.
Coming from Mr. Apriori, that is hilarious. Evidence is apparently only required from those that oppose the apriori assertions (assumptions).
And I see nothing wrong in the wealth of society being spread to everyone via an increased value of money. Bob R
Only those with money would benefit. Everyone else would have to compete for a shrinking pie relative to real economic growth potential/population.
And I see nothing wrong in the wealth of society being spread to everyone via an increased value of money. Bob R
Only those with money would benefit. Everyone else would have to compete for a shrinking pie relative to real economic growth potential/population.
You are obsessed with the idea the average people are too stupid to take care of themselves without your guiding hand and SWAT teams to solve these alleged "macro" problems that do not even exist. Bob R
In your ignorance, you accuse falsely. I DO believe in genuine private currencies but THAT requires that government money ONLY be inexpensive fiat.
Only those with money would benefit. Everyone else would have to compete for a shrinking pie relative to real economic growth potential/population.
There is no basis in fact to believe that. You can't send out the SWAT team dogs based upon such preposterous and baseless speculation.
Bob: "If money is constantly increasing in value, a "decreased cost of living" index could easily be included in the contract to determine the amount to be paid back in the future. That's an easily solvable problem for the parties to the contract."
Can you explain what that would look like? Maybe give a hypothetical example of a loan between me and you with a built in 'decreased cost of living' index? I don't understand what you mean.
Maybe give a hypothetical example of a loan between me and you with a built in 'decreased cost of living' index?
In Michigan, a civil judgment earns interest at a rate calculated at 6-month intervals from the date of filing the complaint at a rate of interest which is equal to 1% plus the average interest rate paid at auctions of 5-year United States treasury notes during the 6 months immediately preceding July 1 and January 1, as certified by the state treasurer, and compounded annually, pursuant to this section.
http://www.michigan.gov/treasury/0,4679,7-121-44402_44404-107013--,00.html
If the value of money in the future is a concern, the reverse type of provision could be included in loan agreements. It would require a very simple arithmetic problem. I fail to understand the concern about the problem at all or the ability of parties to calculate these amounts.
I like Dan's term 'Public Enterprise'.
"We're going to the moon, get the hell out of the way or get run over!"
RSP,
I guess we're at loggerheads. Austrians say that the MMT solution is the basis of the entire economic problem. MMTers say that the Austrian solution is the basis of the entire economic problem.
However, since the present regime is at least 90% close to the perfect MMT solution..............
Your appreciating money supply implies that people have no choice but to use it. Otherwise, people with real capital (including talent and skills) would use other money money supplies rather than rent yours, since yours encourages economic stagnation.
But by all means we should have liberty in private money creation* so you deflation lovers can learn the (painful) lesson of Matthew 25:14-30.
*After a universal bailout of the entire population with full legal tender fiat to force the counterfeiting cartel, the banks, to accept it.
Your appreciating money supply
Everyone is free to use whatever money they choose to use. If 10%, 30%, 80% [whatever] of the population wants to use a voluntary form of funny money, it's none of my business. Stop misrepresenting my positions.
Fine. Then concede that to have true liberty in private money creation then government money (legal tender for government debts only*) must ONLY be inexpensive fiat else some private interest is profiting off the taxation authority and power of government.
*After a universal bailout with full legal tender fiat so as to force the banks to accept it.
I guess we're at loggerheads. Austrians say that the MMT solution is the basis of the entire economic problem. MMTers say that the Austrian solution is the basis of the entire economic problem.
I don't see that as being the case. The chief influences in formulating economic policy over the past several decades, during both GOP and Democratic presidential administrations and congresses, have been neoclassical economics and neoliberal ideology dominated by Reaganism, i. e., "Government is the problem, not the solution."
Well, let's face it. FDR did not save capitalism; he saved the banking cartel and gave the victims of it meager compensation or crummy make-work.
hi bob, bought this mirror for you as a present:
http://www.youtube.com/watch?v=D_jxtIb9ouI
^^^
video form of article
herr hermann-hoppe explaining to people how he has succeeded in polluting the term "austrians" for the folks who live next to the swiss
"Laissez faire does not lead to monopoly"
Except that, in the real world - not Bob's imaginary world on which he bases all his arguments - monopolies and oligopolies HAVE arisen within laissez-faire economies.
Let's just recap Bob's argument.
1. Invent an imaginary economy in which there is no government.
2. Assert that this imaginary economy is perfect. Assert that there are no economic problems in this imaginary economy, like poverty, unemployment, financial crises, recessions, depressions, etc. No evidence is required, just assert that this is the case because you say so.
3. Argue that any government involvement in this imaginary economy necessarily only makes things worse, by "distorting" it away from this perfection.
4. Conclude that government is to blame for all economic problems, as in this imaginary economy there are no problems because you say so.
5. Deny the existence of reality and the facts of history. Blame everything on government. If it's not possible to blame something on government, just make something up. Re-define non-fraud as fraud, voluntary as non-voluntary, etc. Maybe blame unions or workers. Blame everything and anything you can, but always insist that your imaginary economy is necessarily perfect, because you say so.
6. Shout angry insults at everyone who doesn't believe in your imaginary economy. Describe opposing views as "garbage" because they don't start from a belief in your imaginary economy.
7. Pretend that "average people" believe in your imaginary economy and want to live in your imaginary economy, when in fact only you and a handful of other demented fanatics believe in your imaginary economy and want to live there.
8. Become bitter and twisted because the real world refuses to behave like your imaginary economy and no one gives a shit about your stupid, deluded and ignorant opinions.
This is the dumbest thread that has ever been written here, and it all started with this dumb post:
If one person gets the new money first, he's richer and he's stolen everyone else's purchasing power. If everyone gets the same amount of new money, people will feel richer and spend more than they would have/should have otherwise spent.
Dumb, but a widespread myth. See Randy's latest:
http://www.economonitor.com/lrwray/2013/02/06/lord-turner-lets-the-cat-out-of-the-bag-print-money-to-fund-spending/
Chris Giles, Economics Editor, Financial Times:
Lord Turner, the departing chairman of the Financial Services Authority has defended financing government spending by printing money arguing that, within limits, it “absolutely, definitively [does] not” lead to inflation. Speaking before a farewell speech in London on Wednesday, Lord Turner, who applied unsuccessfully to be the next Bank of England governor, called for “intellectual clarity” in economic policy, including breaking a taboo that permanently printing money to pay for government services is always bad.
"If one person gets the new money first, he's richer and he's stolen everyone else's purchasing power."
I agree but that is an unavoidable consequence of money creation UNLESS the money creation rate is less than or equal to the real economic growth rate and who knows how to correctly measure that? But if the money creation rate is less than the real economic growth rate then money hoarders are rewarded for doing NOTHING and that is not good for the economy. And if the money creation rate is negative as it can easily be since credit repayment destroys deposits then existing money owners and creditors steal the purchasing power of and perhaps the collateral of debtors.
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