An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Friday, October 21, 2016
Fabius Maximus — The real reason for America’s hostility to China
Imperialism. That's how the Chinese see it anyway.
The bipartisan foreign policy establishment is already gearing up for a return to the Bush 1 and 2 years after the Obama years during which the president was against 'doing stupid stuff." Even so, he did get suckered into some stupid stuff anyway.
HRC will be leading the charge into stupid land and is already assembling her team and laying plans for it. .
Sorry I deleted my comment because I thought my pessimism was too much. Get myself in in trouble.
But completely agree, when I think about how the domestic governance and international system of cooperation and trade could work, should work, then how the leadership are trying to subvert what the rest of the world is doing, it's crazy stupid.
New Zealand, Australia, Europe and US all have surplus dairy.
Free trade isn't free, it is strictly negotiated trade rules. Negotiated by interests to benefit themselves and protect themselves. That's why they won't let anyone know what is being negotiated.
Fabius Maximus replies: A harsh, even bruth, truth. Perhaps all Federal spending bills should begin “We consider this need so great as to warrant borrowing the funds to do it, which sums shall burden our children and their children…”
I wonder if their other opinions are this "insightful"? This statement was in reply to someone whining about the US "borrowing" from the Chinese and Arabs.
I spent some time over there awhile ago trying to educate them on MMT. The answer was that after checking it out, it seemed to be fringe, and economics not being their field, they would stick with the "experts."
It's not a stupid answer at all. Most people defer to experts, especially when there is wide-spread agreement among them.
Getting MMT across to people, even smart people, is a challenge.
That's true, Tom, but it's the certainty of their opinion that leads me to believe they might be incapable of learning. Humility is necessary to tackle a topic. The quoted statement doesn't show a hint of humility.
That's the case when dealing with experts and you are not an expert in their eyes. It might have been different if I were an economist, which I am not.
This is both an opportunity and challenge with online contact. Without it, one would have no access to such people. Now with it, it is difficult to tell the real from the bogus. Generally speaking, qualifying begins with credentials. Without credentials in what one is advocating, experts are unlikely to waste time on you. That is entirely rational and I do it myself.
Actually the first time I heard about MMT was in a comment by Ramanan somewhere I cannot now recall. My first instinct was to blow it off as fringe. But he sounded like he knew what he was talking about and provided some references. So I decided to check them out.
I provided references at FM, too, but that did not pan out the same way.
To be able to get MMT, one has to be able to think outside the box. Very few people have that ability. It's not a matter of smarts as much as openness, curiosity and persistence.
The reason I was checking out economics was as a a result of the crisis. I could see it coming and I was astounded that economists could not. So I was starting out distrustful of "experts," who had manifestly blown it. Were that not the case,I might not have discovered MMT.
I discovered MMT (although I was familiar with Abba Lerner's functional finance after reading about it in the 80s) following the crisis as well. My instincts told me that the government needed to deficit spend to counter a collapse. People (morons as it turned out) were throwing around terms like "hyperinflation" and "quantity theory of money" and "unsustainable debt" in a frantic attempt to push back at any fiscal stimulus. This led me to a very (seemingly) simple question: Where does money come from? I really didn't even realize that there was another question inside that question: What is money? I had some vague recollections of M1 and M2 and M3, also from the 80s. Anyhow, those two questions, some perseverance and a bit of humility can lead you to a great deal of knowledge and, hopefully, a fair amount of wisdom.
"Part of the magical, even divine, powers attributed to the Federal Reserve is their ability to set interest rates — both short- and long-term. Since the quantitative easing ended we have seen this taken to the logical extreme — with the Fed suppressing rates without visible action! In physics that’s quantum mechanics. In finance it is mythology.
Economists, both Left (e.g., Paul Krugman) and Right (e.g. Tyler Cowen) acknowledge that the post-crash low rates do not result from the Fed’s action. They do so for good reason."
They somehow come to the conclusion that an agent (the Federal Reserve) with an unlimited ability to buy treasury securities on the open market has no effect on the price of treasury securities.
I am a philosopher by training, my dissertation was the logic of ordinary language. I focus here on analysis of arguments, philosophy of science, and social and political thought. I give special attention to ethical issues like conflict of interest and corruption, propaganda and persuasion (rhetoric versus logic), and non-violent v. violence in conflict resolution.
Having served in operations while on active duty in the military, I have some experience in that area but I am not an expert in it by any means. But I can explain the basics of what is happening for those who have little knowledge of the field of policy, strategy and tactics in a global setting.
If the editor is a financial guy, you would have to think he understands accounting and balance sheets. Perhaps he hasn't bothered to think everything all the way through? I suspect Matt's analysis is correct: he's a rote learner.
I don't think that most financial people understand money & banking or central banking. Bill Gross, "the bond king," was and still is a case in point.
I suspect it is matter of world view, tacit knowledge, and ideology, which all contribute to group think, getting in the way of being open to learning.
This comment has been removed by the author.
ReplyDeleteThe bipartisan foreign policy establishment is already gearing up for a return to the Bush 1 and 2 years after the Obama years during which the president was against 'doing stupid stuff." Even so, he did get suckered into some stupid stuff anyway.
ReplyDeleteHRC will be leading the charge into stupid land and is already assembling her team and laying plans for it.
.
Sorry I deleted my comment because I thought my pessimism was too much. Get myself in in trouble.
ReplyDeleteBut completely agree, when I think about how the domestic governance and international system of cooperation and trade could work, should work, then how the leadership are trying to subvert what the rest of the world is doing, it's crazy stupid.
Ryan here US drowning in butter inventory:
ReplyDeletehttps://twitter.com/Blimling/status/789545043484827648
Meanwhile Korea is out of butter:
https://twitter.com/Blimling/status/789542782511747072
Meawhile USD zombie Korea is sitting on $90B surplus USDs:
http://ticdata.treasury.gov/Publish/mfh.txt
so much for "free markets!"
Good example, Matt.
ReplyDeleteNew Zealand, Australia, Europe and US all have surplus dairy.
Free trade isn't free, it is strictly negotiated trade rules. Negotiated by interests to benefit themselves and protect themselves. That's why they won't let anyone know what is being negotiated.
Fabius Maximus on government spending:
ReplyDeleteFabius Maximus replies: A harsh, even bruth, truth. Perhaps all Federal spending bills should begin “We consider this need so great as to warrant borrowing the funds to do it, which sums shall burden our children and their children…”
I wonder if their other opinions are this "insightful"? This statement was in reply to someone whining about the US "borrowing" from the Chinese and Arabs.
I spent some time over there awhile ago trying to educate them on MMT. The answer was that after checking it out, it seemed to be fringe, and economics not being their field, they would stick with the "experts."
ReplyDeleteIt's not a stupid answer at all. Most people defer to experts, especially when there is wide-spread agreement among them.
Getting MMT across to people, even smart people, is a challenge.
That's true, Tom, but it's the certainty of their opinion that leads me to believe they might be incapable of learning. Humility is necessary to tackle a topic. The quoted statement doesn't show a hint of humility.
ReplyDeleteThat's the case when dealing with experts and you are not an expert in their eyes. It might have been different if I were an economist, which I am not.
ReplyDeleteThis is both an opportunity and challenge with online contact. Without it, one would have no access to such people. Now with it, it is difficult to tell the real from the bogus. Generally speaking, qualifying begins with credentials. Without credentials in what one is advocating, experts are unlikely to waste time on you. That is entirely rational and I do it myself.
Actually the first time I heard about MMT was in a comment by Ramanan somewhere I cannot now recall. My first instinct was to blow it off as fringe. But he sounded like he knew what he was talking about and provided some references. So I decided to check them out.
I provided references at FM, too, but that did not pan out the same way.
To be able to get MMT, one has to be able to think outside the box. Very few people have that ability. It's not a matter of smarts as much as openness, curiosity and persistence.
The reason I was checking out economics was as a a result of the crisis. I could see it coming and I was astounded that economists could not. So I was starting out distrustful of "experts," who had manifestly blown it. Were that not the case,I might not have discovered MMT.
I discovered MMT (although I was familiar with Abba Lerner's functional finance after reading about it in the 80s) following the crisis as well. My instincts told me that the government needed to deficit spend to counter a collapse. People (morons as it turned out) were throwing around terms like "hyperinflation" and "quantity theory of money" and "unsustainable debt" in a frantic attempt to push back at any fiscal stimulus. This led me to a very (seemingly) simple question: Where does money come from? I really didn't even realize that there was another question inside that question: What is money? I had some vague recollections of M1 and M2 and M3, also from the 80s. Anyhow, those two questions, some perseverance and a bit of humility can lead you to a great deal of knowledge and, hopefully, a fair amount of wisdom.
ReplyDeleteWho are the experts at this blog? Where are their credentials?
ReplyDeleteTom they are capable of learning via rote methods....
ReplyDeleteYou don't get MMT via rote...
More rote fantasy from the Fabius guy:
ReplyDelete"Part of the magical, even divine, powers attributed to the Federal Reserve is their ability to set interest rates — both short- and long-term. Since the quantitative easing ended we have seen this taken to the logical extreme — with the Fed suppressing rates without visible action! In physics that’s quantum mechanics. In finance it is mythology.
Economists, both Left (e.g., Paul Krugman) and Right (e.g. Tyler Cowen) acknowledge that the post-crash low rates do not result from the Fed’s action. They do so for good reason."
They should stick to geopolitics... they are 'unqualified' to comment on anything else.
ReplyDeleteThey somehow come to the conclusion that an agent (the Federal Reserve) with an unlimited ability to buy treasury securities on the open market has no effect on the price of treasury securities.
ReplyDeleteHere this moron says this:
ReplyDelete"with the Fed suppressing rates without visible action!"
Hey douche wtf is going on here:
https://apps.newyorkfed.org/markets/autorates/tomo-results-display?SHOWMORE=TRUE&startDate=01/01/2000&enddate=01/01/2000
Who are the experts at this blog? Where are their credentials?
ReplyDeleteUh, it's in the name of the blog, Mike Norman Economics.
http://mikenormaneconomics.blogspot.com/p/about-mike-norman.html
I am a philosopher by training, my dissertation was the logic of ordinary language. I focus here on analysis of arguments, philosophy of science, and social and political thought. I give special attention to ethical issues like conflict of interest and corruption, propaganda and persuasion (rhetoric versus logic), and non-violent v. violence in conflict resolution.
Having served in operations while on active duty in the military, I have some experience in that area but I am not an expert in it by any means. But I can explain the basics of what is happening for those who have little knowledge of the field of policy, strategy and tactics in a global setting.
Thanks, that is helpful, but I was referring to the blog in question, Fabius Maximus.
ReplyDeleteThey're ex-army guys, not economists.
Right, FM is comparable to Sic Semper Tyrannis. Both are expert in foreign and military policy, strategy and tactics.
ReplyDeleteEconomics, not so much.
The editor is not ex-military ... Or at least the bio doesn't indicate that... looks like a financial services guy...
ReplyDeleteShould have added rote trained FS guy...
ReplyDeleteThere are seven authors listed. Six have military, intel, or foreign policy backgrounds. The editor alone is a financial guy.
ReplyDeleteIf the editor is a financial guy, you would have to think he understands accounting and balance sheets. Perhaps he hasn't bothered to think everything all the way through? I suspect Matt's analysis is correct: he's a rote learner.
ReplyDeleteIt's one thing if they regurgitate what economics 'experts' are saying, but they appear to have gone into full belief mode.
ReplyDeleteI don't think that most financial people understand money & banking or central banking. Bill Gross, "the bond king," was and still is a case in point.
ReplyDeleteI suspect it is matter of world view, tacit knowledge, and ideology, which all contribute to group think, getting in the way of being open to learning.