Wednesday, May 11, 2016

Full out attack by the Debt Doomsday crowd on Trump

Austan Goolsbee

The entire army of slimy Debt Doomsday propagandists and corporatists are out attacking Trump now, full bore on his CORRECT claim that the U.S. can never default because it controls its own currency.

Trump is good at defending himself and beating back criticism and personal attack. In fact he usually crushes his foes, but this is not like fighting 16 stiff and charisma-challenged political hacks or, a corporate media that everybody knows is biased.

This is a slick, well-oiled machine that peddles a sick religion that they've gotten most people to believe in. Trump may not have the skills to beat this back; we can see that from some of his confusing and contradicting statements.

Here's a new attack today from Obama's former top economist, Austan Goolsbee

“Treasuries are the opposite of junk bonds,” Goolsbee said. “It’s the safest asset on the planet. Whenever anything goes wrong, money floods into Treasuries and actually our interest rates go down when there’s a crisis. To propose anything that would threaten that is, it sounds extreme... It really doesn’t make any sense.”

Here's the problem with what Goolsbee's saying.

Implied in this is that he thinks the market sets rates. It doesn't.
There's a total lack of understanding that the Fed can support its rate forever. It can buy Treasuries infinitely if it has to.

Then he goes on to say that Trump would start three trade wars. A lot of people are saying this. How do they know? Nobody knows this. The countries that Trump has informally targeted---China, Japan, Mexico--might want to make a deal.

That's what he's looking to do. It won't come to a trade war, and even if it does the intent was to create jobs in America. We can produce what we consume abroad. Maybe it would cost a little more, but if incomes rise then it's all the same.

Rich people buy from expensive stores. Why? Because the quality is better and they can afford it.



6 comments:

Simsalablunder said...

"This is a slick, well-oiled machine that peddles a sick religion that they've gotten most people to believe in."

Just in case Matt's loyalty hinders him from writing it:

"neoliberal conspiracy!"...

Andrew Anderson said...

The problem is an age old controversy over who gets to create money, government or the private sector. Each side has legitimate concerns about the other side being in control of money creation.

The proper solution (hinted at by Matthew 22:16-22) is to allow BOTH government and the private sector to create their own money with the following caveats:

1) Government shall use only government money and it shall be inexpensive fiat (eg "Caesar's image").
2) The private sector can accept or refuse government money but MUST pay taxes with government money nonetheless.

Schofield said...

"2) The private sector can accept or refuse government money but MUST pay taxes with government money nonetheless."

You're failing to do the money-flow analysis at a national and global macro level relying on an inadequate Neo-Conservative/Neo-Liberal model of just income-flow analysis probably at national non-macro level. The private sector is not in a position to refuse government money as part of the overall macro money-flow.

Bob said...

I'd like to see a discussion regarding Social Credit.

Tom Hickey said...

"This is a slick, well-oiled machine that peddles a sick religion that they've gotten most people to believe in."

Just in case Matt's loyalty hinders him from writing it:

"neoliberal conspiracy!"...


Exactly.

Also a lot of people in academia likely don't want to play that game that is imposed on them but if you are not tenured and want to retain your position and eventually get tenure, you play the game, write papers that will pass peer review in good journals. And if you are smart and think you have a shot at the top, you realize that you have to compete with other smarties for the very few spots in the best journals, getting published in which is the one qua non of getting appointments in the top tier.

Is it "neoliberal"? Neoliberalism is a political theory based on neoclassical economics that advocates for free markets, free trade, and free capital flows, which implies regulation, privatization, fiscal discipline and a central role of an independent cb. Neoclassical economics is based on assuming optimization and equilibrium, and the absence of economic rents.

Is this a "conspiracy" and is neoliberalism a "conspiracy." Sociologically speaking, yes, in the broad sense, because it is based on class structure and social networking within that class and among the subclasses that make up the upper tiers of the socio-economic system. It's conspiracy of implication and consent rather than an explicit arrangement, although there are some explicit arrangements in some subclasses. In some cases, it approaches racketeering.

"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (PDF), New York: The Macmillan Company, 1966, Chapter 7, page 324
http://ia700200.us.archive.org/17/items/TragedyAndHope_501/CarrollQuigley-TragedyAndHope.pdf

Andrew Anderson said...

The private sector is not in a position to refuse government money as part of the overall macro money-flow. Schofield

I never said it was since to the extent we pay taxes or fees to government we MUST have fiat to do so.

However, a neat philosophical division between government and private money is very useful wrt to such subjects as taxation, government-subsidies for private credit creation, reparations for the current money system, wealth redistribution, etc. The lack of such a division is clearly the root of our problems wrt the money system.