John Lounsbury, at GEI, calls attention to:
The Commercial Banking Firm: A Simple Model
(James Tobin, Scandinavian Journal of Economics, 1982)
Hat tip to Steve Keen.
'Thirty years ago Tobin wrote about the "money out of thin air" process for banks which counters the loanable funds theory.'
Oh .. my .. God!
Was this not all laid out, operationally, in the 1930s - published, documented ... even permanently implemented nationwide?
By "monetary mystic" Marriner Eccles and a host of other, pragmatic people?
Yet 30 and 50 years later ... James Tobin notices it ..... in 1963 and 1982!!!
Gosh, what tipped him off?
But wait, there's more!
Tobin dismisses banks as mere intermediaries who help monetarist economists "control" the "money" supply - or at least don't hinder them. He thereby gives all later economists permission to do likewise, with feigned impunity - explaining all the SNAFUS every since. Shades of Gold Plutocrats, Batman! We have batty economists still trying to wag the currency operations! There's even a Nobel prize committee at the intersection of tail and dog? What purpose do you suppose that committee serves?
Today, we have arrogant people declaring that shadow is substance, and that substance is mere shadow to be controlled by the "real" shadow. And, we're told, that's "as true now as ever." And we wonder why Wall St owns Washington DC.
Next, Steve Keen ... himself ... discovers, in 2012 ... wait for it ... "JAMES TOBIN!!!" (how droll; is that the sound of one head banging itself on the keyboard?)
We have GOT to be joking! Anticlimactic to the point of despair?
Oh .. my .. God!
Was this not all laid out, operationally, in the 1930s - published, documented ... even permanently implemented nationwide?
By "monetary mystic" Marriner Eccles and a host of other, pragmatic people?
Yet 30 and 50 years later ... James Tobin notices it ..... in 1963 and 1982!!!
Gosh, what tipped him off?
But wait, there's more!
Tobin dismisses banks as mere intermediaries who help monetarist economists "control" the "money" supply - or at least don't hinder them. He thereby gives all later economists permission to do likewise, with feigned impunity - explaining all the SNAFUS every since. Shades of Gold Plutocrats, Batman! We have batty economists still trying to wag the currency operations! There's even a Nobel prize committee at the intersection of tail and dog? What purpose do you suppose that committee serves?
Today, we have arrogant people declaring that shadow is substance, and that substance is mere shadow to be controlled by the "real" shadow. And, we're told, that's "as true now as ever." And we wonder why Wall St owns Washington DC.
Next, Steve Keen ... himself ... discovers, in 2012 ... wait for it ... "JAMES TOBIN!!!" (how droll; is that the sound of one head banging itself on the keyboard?)
We have GOT to be joking! Anticlimactic to the point of despair?
This is equivalent - quite literally - to a 2nd scientist noticing, in 1982, the Theory of Relativity (E=MC2) ... ~32 years AFTER the atomic bomb unleashed atomic "initiative" on Nagasaki ... and then having a scientist in 2012 - outcast by the orthodox - noticing, .... NOTICING .... that 2nd scientist.
Please ... God ... tell me that this is a bad dream. (And yes, I'm agnostic, and nearly completely atheist. At this point, I'm willing to gamble on the most improbable of events. Even in Las Vegas.)
Is the whole, pathetic world of orthodox economics insane? And is the whole REAL WORLD insane, for paying attention to those escaped inmates? Well, yes, and YES!
Can I get a witness? And a sanity check? I'd simply emigrate - in a heartbeat - if there were only someplace to go where people were still capable of the simple act of thinking. [Watch - someone in the comments is gonna ask me for a reference to this strange concept called "thinking."]
Don't cry for Argentina. Weep for the USA, and the Luddites, economist SHAMANS it believes in. (Plus, give the 3rd world another decade - or 8 - and they'll want to replicate Larry Summers. :( What? Just throw a clueless, high-IQ clown into this chicanery? That'll fix it! Ok, don't go there. Let's just not.)
Is the whole, pathetic world of orthodox economics insane? And is the whole REAL WORLD insane, for paying attention to those escaped inmates? Well, yes, and YES!
Can I get a witness? And a sanity check? I'd simply emigrate - in a heartbeat - if there were only someplace to go where people were still capable of the simple act of thinking. [Watch - someone in the comments is gonna ask me for a reference to this strange concept called "thinking."]
Don't cry for Argentina. Weep for the USA, and the Luddites, economist SHAMANS it believes in. (Plus, give the 3rd world another decade - or 8 - and they'll want to replicate Larry Summers. :( What? Just throw a clueless, high-IQ clown into this chicanery? That'll fix it! Ok, don't go there. Let's just not.)
6 comments:
too late
"How many total F-ups does it take to get a country FUBAR?"
Zero. They only need any random ideology, plus the confidence fairy!
Ok, maybe 0.1% - 1%, depending upon the SNAFU Multiplier
Or, Robert Rubin and the 6 Acolytes would do it, for sure! All by themselves!*
*Greedspan doesn't count. He's just a stuffed shirt for hire.
You want proof that Summers doesn't even understand banking?
"Summers was also a major advocate of new requirements that banks hold more emergency funds in reserve — a position he had been pushing years before the crisis.
Such higher capital requirements can restrain excessive speculation and bubbles — which Obama has said must be an important goal of the next Fed chairman.
People familiar with Summers’s thinking say that maintaining adequate capital would be a key element of his approach to bank oversight as Fed chairman."
http://www.washingtonpost.com/business/economy/why-obama-might-tap-summers-for-fed-despite-harsh-criticism-from-left/2013/09/04/0b96510a-11ee-11e3-b4cb-fd7ce041d814_print.html
this is just unacceptable,
we have complete incompetents in charge of fiscal and monetary policy;
the disconnect between orthodox economics and fiat currency operations is complete
AND ... Obama's gonna appoint a guy who's basic understanding of currency is the gold std!
Making Larry Summers Fed Chief will fix all this, right? (Sob!)
[no pun originally intended, but noted]
So why don't more bankers & businessmen & university administrations speak up?
there are telling articles in the Washington Post the last 2 days, about the people who have final say on who gets to be Fed chief;
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/30/why-larry-summers-was-always-the-favorite-for-fed/
Why Obama might tap Summers for Fed despite harsh criticism
http://www.washingtonpost.com/business/economy/why-obama-might-tap-summers-for-fed-despite-harsh-criticism-from-left/2013/09/04/0b96510a-11ee-11e3-b4cb-fd7ce041d814_story.html?hpid=z5
They're all Robert Rubin proteges!
Why aren't they all regional employers, regional public managers, and representatives of regional populations (as in decades prior to 1970)? That would keep the Fed and all banks, large & small, SERVING rather than RULING regional populations.
After all, who owns this country?
The residents, or their accountants and other groundskeepers?
We need all citizens to grasp the fact that fiat currency is simply meta-data for REAL COMMERCE.
Eccles understood because he was — a banker! James Tobin took the time to understand what banks actually do. Most economist still think that money is a neutral veil since banks just intermediate between savers and borrowers so that bank operations don't affect real variables in the economy. "Banks aren't special."
This is the raging debate in the blogosphere since Cullen Roche confronted Krugman on this and Krugman responded with Tobin-Brainard (1963) over what T-B and how it relates to Tobin (1982).
This is a replay of a dispute of the MMT folks and Krugman in April 2012 in which Krugman cited Tobin-Brainard 1963 against the MMT position and Scott Fullwiler replied at NEP and Naked Capitalism with Krugman’s Flashing Neon Sign, to which Krugman did not deign to respond.
It's ridiculous. Krugman thinks he understands and most economists think that it's irrelevant so why bother to understand it. In their view, banking is for finance people, who deal with money, not economists, who deal with the real economy, which money only serves to price at nominal while it's real that counts.
And if you read Robert Eisnerr, who understood national accounting, it's even worse. The whole national accounting process is so FUBAR that economists are not even dealing with the right data in figuring fiscal balances.
Yes, we are so screwed.
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