Saturday, April 12, 2014

Rebecca Rojer — The World According to Modern Monetary Theory

Looking past money to the sovereign power that makes it valuable
The New Inquiry
The World According to Modern Monetary Theory
Rebecca Rojer
(h/t Joe Firestone)

3 comments:

Matt Franko said...

"Those at the very tip of our economic pyramid understand that fiat money is unlimited,"

this is at best a rationalist assertion and at worst delusional, there is no evidence of this in fact all evidence is to the contrary.

Monetarists are running things who actually believe that govt "borrows the money" from non-govt/grandchildren/Chinese and that "banks lend out the reserves" and QE is "injecting money", they routinely assert that "we're out of money!", they continue in a "gold standard mentality", etc..

we have a bunch of morons at the controls and we can see the dreadful results...

These are the FACTS.

These are the empirical observations, if there are those out there who refuse to believe their own eyes and ears and instead rationalize some alternative reality of the "1% conspiracy" or whatever conspiracy theory wing nut libertarian delusions, then these people are not helping either....

"Knowledge is no substitute for political power."

This may or may not be true but what is for sure the truth is that WE have knowledge that THEY manifestly DO NOT POSSESS.

rsp,

Unknown said...

"there is no evidence of this in fact all evidence is to the contrary"

There's a lot of confusion about it. On the one hand people are aware that the central bank can and does "create money'. On the other hand they believe the government has to get money from taxpayers and from abroad to have "funds" that it can then spend. If you point out that the government can and does create money, so doesn't actually "need" tax revenue to spend, the automatic response is "yeah but if they do that you get inflation or hyperinflation". There's just a lot of confusion, and a lot of unquestioned so-called "common sense". People also often hold contradictory thoughts on the subject because they've never really thought about it very thoroughly.

Tom Hickey said...

People also often hold contradictory thoughts on the subject because they've never really thought about it very thoroughly.

Right, and not just money. It's how people end up being persuaded to vote against their economic interests.

But money is just too complicated and there is too much emotional baggage associated with it for most people to think it through clearly, even most economists.

Even many circuitists hold that "banks rule the roost" and government borrows credit money created by banks, with the Fed merely accommodating with rb to clear, rather than currency it issues itself. So far the MMT position is a tiny minority.