Sunday, March 5, 2017

Amir Fleischmann — The Myth of the Fiscal Conservative

Austerity measures don’t actually save money. But they do disempower workers. Which is why governments pursue them in the first place.

Jacobin
The Myth of the Fiscal Conservative
Amir Fleischmann

21 comments:

Andrew Anderson said...

What dis-empowers workers is productivity gains financed with what is, in essence, because of government privileges for private credit creation, the PUBLIC's CREDIT but for private gain.

In principle, conservatives must oppose such unjust financing but who will press them in that regard? Progressives? Not that I've seen. Instead, Progressives SUPPORT such privileges!

Auburn Parks said...

Why wouldn't people support having their bank accounts protected? You do know its Deposit Insurance not Bank Insurance don't you

Dan Lynch said...

Good punch line, and true. Thanks for posting this, Tom.

Matt Franko said...

AA,

Tech start-ups are never financed with bank loans they have no assets for the collateral ... they are financed with equity...

Andrew Anderson said...

Why wouldn't people support having their bank accounts protected? AP

Because under an ethical fiat and credit system:
1) Citizens would have convenient, inherently risk-free accounts at the central bank itself.
2) All future fiat creation, beyond normal deficit spending, would be via equal fiat distributions to all adult citizens - i.e. no more welfare proportional to wealth.
3) Banks would have to pay higher real interest rates to acquire/retain bank deposits since those deposits would no longer be insured by government and since citizens would have a genuine option to using banks besides physical fiat, coins and bills.

You do know its Deposit Insurance not Bank Insurance don't you AP

Government provided deposit insurance is part of the scheme whereby the poorer are forced to lend to depository institutions to lower the borrowing costs of the richer.

Auburn Parks said...

As

Interest Rates are set by the FED not by poor people lending to Banks which is all bullshit.

I already have an inherently risk-free account thanks to my Deposit Insurance I'm perfectly satisfied thank you very much. If I want to get my money deposited at the fed I just have to buy treasury CDs. Its not complicated it's no mystery it's no secret and its very easy to do.

So as usual I've destroyed your dumb arguments showing that theyre absolutely worthless and illogical but it's fun for me so go ahead and repeat the same trash you always do.

Andrew Anderson said...

So as usual I've destroyed your dumb arguments showing that theyre absolutely worthless and illogical ... AP

Let another praise you, and not your own mouth; a stranger, and not your own lips. Proverbs 27:2

Andrew Anderson said...

Interest Rates are set by the FED AP

1) Interest rates in fiat are artificially low since citizens may not even use their Nation's fiat except for physical fiat, coins and bills.
2) In order to raise interest rates in fiat, the Fed resorts to welfare proportional to wealth, the sale of positive yielding sovereign debt and/or by paying interest on reserves (IOR).


not by poor people lending to Banks AP

Social Security recipients, for example, are forced to lend the fiat they would ordinarily receive from the US Treasury to depository institutions since they are not allowed to have fiat accounts of their own at the FED.

which is all bullshit. AP

Let the readers judge that.

Auburn Parks said...

Interest rates are determined by the fed the only thing artificial about them is when they are positive. This fact destroys your argument that poor people subsidized rates for rich people. I expect you not to repeat the same trash.

Any SS Recipient has access to bank accounts at the fed by buying treasury CDs. Why must you continue to lie and mislead leadership here?

Andrew Anderson said...

Interest rates are determined by the fed the only thing artificial about them is when they are positive. AP

Interest rates in fiat tend toward zero because the citizens are not allowed to use their Nation's fiat except for bills and coins. That constitutes an artificial reduction in the demand for fiat and thus an artificial reduction in interest rates in fiat.

Any SS Recipient has access to bank accounts at the fed by buying treasury CDs. AP

The same could be said about banks. Then why should banks need reserve accounts at the FED? Why can't the banks just use treasury CDs?

Why must you continue to lie and mislead leadership here? AP

Why do you insist on unequal protection under the law. i.e. special privileges for banks? Do you worship God or Mammon? Justice or unjust gains?

André said...

"Austerity measures don’t actually save money. But they do disempower workers. Which is why governments pursue them in the first place."

Again, the conspiracy theory. You say explicitly that the government knows that austerity disempowers workers, and that's the reason why government pursues austerity. They conspire against the workers to the benefit of their own interests.

But that's not true! People in general, including workers themselves, truly beleive that the government should not "spend more than it earns" - and that bad things will happen to the economy if this "golden rule" is not respected.

Workers themselves pressure the government be more "responsible". That's how the real world works.

We, MMTers, know that this is bullshit, but people in general, including workers and even economists that should know better, don't. They simply don't.

Auburn Parks said...

Interest rates on government IOUs are naturally zero because govt is the monopolist. It has nothing to do with any of the trash you continue to repeat.

Banks do used treasury CD so that part's wrong. Banks settle with each other using another parties I owe you because bank Ious are just about worthless to other Banks. I mean how do you talk so much about the monetary system but you don't have a clue about the settlement system. I mean just more ignorant wrong garbage from you.

And furthermore I noticed how you just conveniently ignored the ramifications to your belief system of the reality that every person in America or the world has access to guaranteed account at the central bank via TSY CDs. So you can't acknowledge that people can buy treasury CDs and thus have access to guaranteed Accounts at the Fed. While at the same time bitching and moaning that citizens don't have access to account at the fed. So here you're either incredibly stupid or dishonest.

There is equal protection under the law all people who have bank accounts are protected equally up to $250,000. That's why it's called Deposit Insurance not Bank Insurance you fucking moron

Dan Lynch said...

@Andre, it's not a conspiracy theory if it's true.

The Euro was designed to disempower workers

"It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."

the Obama administration invented the budget sequester to force cuts to social programs:

The idea that the sequester was to force both sides to go back to try at a big or grand bargain with a mix of entitlements and revenues was part of the DNA of the thing from the start.

What the masses want is contradictory. Yes, the masses want to reduce the deficit, but they consider that a low priority, and they oppose cuts to just about everything other than foreign aid. No leader has ever explained deficit spending to the masses. Democracy only works if voters are informed. Instead, voters have been deliberately misinformed.

Andrew Anderson said...

So you can't acknowledge that people can buy treasury CDs and thus have access to guaranteed Accounts at the Fed. AP

Then what need for the government insurance of private liabilities, including privately created liabilities, if treasury CD accounts are just as convenient as government insured private bank accounts?

That's why it's called Deposit Insurance not Bank Insurance you fucking moron AP

It's the government insurance of private liabilities, including privately created liabilities ("loans create deposits").

Auburn Parks said...

I never said treasury CDs are just as convenient as Bank deposits that's just you saying that with your dishonesty. Your original and oft-repeated claim was that citizens do not have access to fiat accounts at the Fed. Which is wrong like almost all of your other claims and statements.

It's the government guarantee and protection of individual servings in money It has nothing to do with protecting Bank liabilities It's about protecting personal assets of citizens

André said...

Robert Mundell and other right-wingers truly believe that the world would be a better place if the government didn't interfere in what they call technical decisions. The Taylor rule is a example of "technical decision" they should not intervene.

They truly believe that government interference causes inflation, slow economic growth, and so on.

They do not see themselves as the bad guys. And they do not think "let's conspire to disempower workers with our austerity measures" as explicitly said.

They, of course, don't know about MMT and how the government finances really works. They frame things in the rational expectations model, where inflation, economic growth and everything else is heavly influenced by expextations, which in turn are influenced by "technical decisons" that the government shoudn't interfere.

No conspiracy there. They just don't know what they are doing. And they are unware of their limitations. It's as simple as that.

Andrew Anderson said...

It's the government guarantee and protection of individual servings in money It has nothing to do with protecting Bank liabilities It's about protecting personal assets of citizens AP

Try to get it through your thick head that there'd be NO NEED AT ALL for government insurance of private liabilities IF citizens were allowed inherently risk-free DEMAND accounts at the central bank - same as the banks are allowed.

Thus it is obvious that government provided deposit insurance is FOR THE BENEFIT OF THE BANKS, not for the benefit of the citizens.

Am I going too fast for you? How many times must it be explained to you?

Dan Lynch said...

@Andre, and yet there is always money for war.

The elites may sincerely believe that they are doing the right thing, because it is human nature to believe in an ideology that promotes your self-interest. That doesn't change the fact that their agenda is deliberate class war.

Another data point that does not mince words, from a speech by Lammont Dupont to the National Association of Manufacturers in 1943. Dupont was a card-carrying fascist.

"The way to view the issue is this: Are there common denominators for winning the war and the peace? If there are, then, we should deal with both in 1943. What are they? We will win the war by reducing taxes on corporations, high income brackets, and increasing taxes on lower incomes, by removing unions from any power to tell industry how to produce, how to deal with their employees or anything else, by destroying any and all government agencies that stand in the way of free enterprise."

It doesn't get much more deliberate than that.

André said...

"
The elites may sincerely believe that they are doing the right thing, because it is human nature to believe in an ideology that promotes your self-interest. That doesn't change the fact that their agenda is deliberate class war."

Agreed, except for the word "deliberate".

In their concepts, they are not conspiring to win a class war. They are following what they believe is the right path in their biased ideology. There is no conspiracy in that.

And there's a difference. You fight intellectual dishonesty and conspiracies with one kind of weapon. You fight ignorance and self delusions with other kind of weapon.

Dan Lynch said...

@Andre, the people who are pushing austerity are psychopaths. It's not ignorance. It's not "innocent fraud."

I'm sure that Hitler and Pol Pot were following what they believed was the right path, too.

Tom Hickey said...

The elites in modern capitalist societies believe that a rising tide lifts all boats, that is, trickle down. The reality is that economic rent extracted through application of power gushes up. I don't think that they are naïve about this.