tag:blogger.com,1999:blog-2761684730989137546.post253574778680283420..comments2024-03-28T04:13:36.779-04:00Comments on Mike Norman Economics: MMT and my videos getting under Peter Schiff's skin!mike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger96125tag:blogger.com,1999:blog-2761684730989137546.post-76348986559051945082015-01-22T18:48:18.385-05:002015-01-22T18:48:18.385-05:00The solution is land value taxation, to reduce (la...The solution is land value taxation, to reduce (land) property bubbles. You should look up Georgist MMT.<br />Land value taxation:<br />1. Fair - payment for services given (title deeds, right to exclude others from land)<br />Land values are created by the community - govt protection of private property (try buying land in Somalia) better location, schools/hospitals, etc and are a government monopoly. Fixed supply of land and landowners do not produce land (see 4.)<br />2. Impossible to avoid<br />3. Reduce housing bubbles and acts as quasi- Bank Regulation<br />4. No dead weight loss compare this to taxes on buildings/improvements, income, capital, etc<br />5. A vacant lot in a city is seen as a liability and not a asset that passively rises in value. Land cannot be hoarded.<br />Many other reasons to support Land Value Tax!Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-55196716762305652042012-11-30T13:39:03.082-05:002012-11-30T13:39:03.082-05:00On the myth of Austrian predictions of the bubble/...On the myth of Austrian predictions of the bubble/GFC, including Schiff's, see here:<br /><br />http://socialdemocracy21stcentury.blogspot.com/2011/12/austrians-predicted-housing-bubble-but.htmlLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-27181692052859965662012-11-29T20:52:11.419-05:002012-11-29T20:52:11.419-05:00Wow, Mike Norman must still be felling butthurt af...Wow, Mike Norman must still be felling butthurt after being made a fool by Peter Schiff on national television.Anonymoushttps://www.blogger.com/profile/15591978354639760240noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-56900573769887504072012-11-27T14:19:15.050-05:002012-11-27T14:19:15.050-05:00A 'Seastead' is basically just a crap tax ...<i>A 'Seastead' is basically just a crap tax haven, isn't it?</i><br /><br />Anarchism is basically utopian and idealistic. These are social experiments that I think need to be encouraged. Having participated in a few, I can report that it is very difficult to keep them pure as they become "successful" and scale up. So we'll have to wait and see how this works out.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-88666619544367856572012-11-27T08:28:57.959-05:002012-11-27T08:28:57.959-05:00A 'Seastead' is basically just a crap tax ...A 'Seastead' is basically just a crap tax haven, isn't it?yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-59898967383133183432012-11-26T22:39:53.000-05:002012-11-26T22:39:53.000-05:00Except that getting your hands on it has historica...<i>Except that getting your hands on it has historically involved eliminating any natives that get in the way, of course.</i><br /><br />Murray Rothbard's basic idea is absolute freedom of the state of nature along with the other animals, which he calls "liberty," and a couple of rules to distinguish it. These rues are 1) private property (finder's keepers), 2) non-coercion, but violence is OK in defense of private property. There is no government. This is anarcho-capitalism where "merit" rules. <br /><br />The only place this is likely to ever happen in the foreseeable future is through the Peter Theil inspired <a href="http://www.seasteading.org/" rel="nofollow">Seasteading Institute</a>. It's billed as an "experiment." <br /><br />If that project gets seriously off the ground, we'll get to see how it goes. I wish them well, and I say that in all honesty. I am a libertarian, of the left. As libertarian, I appreciate where they are coming from, but coming from the left, I think that they are on the wrong track, essentially looking backward rather than forward.<br /><br />My own view is that humanity is not yet at the stage in the development of collective consciousness where anarchism can be scaled. The genus homo has been around for several million years and has gone through profound changes. <br /><br />With luck and exertion of intelligence, it will be around for several million more years at least. Homo sapiens sapientis, the only extant species, is still in its early stages evolutionarily. "They originated in Africa, where they reached anatomical modernity about 200,000 years ago and began to exhibit full behavioral modernity around 50,000 years ago." So humans likely have not yet even reached adolescence as a species.<br /><br />So libertarian experiments will necessarily remain on a small scale. I have never lived among Libertarians so I don't know how successful they have been in creating this so far. I have lived in left libertarian communities and have been generally pleased with the result. It's doable on a small scale, and it is scaling though open source and networking. But that is another story.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-85530196345822561922012-11-26T22:10:26.087-05:002012-11-26T22:10:26.087-05:00"Between the depression and 1971, there was s..."Between the depression and 1971, there was still a gold exchange standard which acted as a limit on the amount of loans that could be made because the paper money was still convertible into gold"<br /><br />Ho ho ho. Look at the money supply during that time. Or read Rothbard who complained about the endless "pyramiding" of paper dollars. The gold exchange system also only applied to governments and central banks. <br /><br />There were no financial crises in that time because people used their brains and created a system of rules which eliminated them, without having to fix the money supply arbitrarily.<br /><br /><br /> yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-69959970836021633322012-11-26T22:10:11.877-05:002012-11-26T22:10:11.877-05:00All we are saying is that at some point in the not...<i>All we are saying is that at some point in the not too distant future, the government is going to run out of stuff it has promised to give to the masses as entitlements and the sh*t will hit the fan.</i><br /><br />And that will be a failure of capitalism for preferring rent seeking over investing in capital. As Marx observed, capital deteriorates over time and must be replaced. Failure to do this reduces the rate of profit and those businesses become less profitable or even unprofitable and they do not attract investment. Then funds that would otherwise be available for capex are diverted to rent-seeking. This is a problem for the US economy now, as FIRE eats up a growing % of GDP.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-7945858613394559162012-11-26T22:01:58.798-05:002012-11-26T22:01:58.798-05:00"the voters who would vote out anyone who tri..."the voters who would vote out anyone who tried to bring the thing to a halt." <br /><br />Well that's another thing. No one actually wants your capitalism-in-a-golden-straitjacket. They want a growing economy and rising wages - without financial crises.<br /><br />In your utopia workers constantly have to accept lower nominal wages in the hope that they might keep some of the real gain they created through their higher productivity.<br /><br />Not only does Austrian economics ignore history and the reality of capitalism (capitalism doesn't like a fixed money supply), it also completely ignores political reality. <br /><br />A gold standard system works ok when shitloads of the stuff are being pulled out of the ground every day. Except that getting your hands on it has historically involved eliminating any natives that get in the way, of course.<br /> yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-60577458651748920072012-11-26T21:54:56.259-05:002012-11-26T21:54:56.259-05:00I've run into Vernengo before, He's cluel...I've run into Vernengo before, He's clueless.<br /><br />http://bobroddis.blogspot.com/2012/08/as-ive-said-for-forty-years-people-do.htmlBob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-19345075088897302242012-11-26T21:52:48.744-05:002012-11-26T21:52:48.744-05:00As you can see in between the Great Depression in ...<i>As you can see in between the Great Depression in the 1930s and the 1980s, with the begining of financial deregulation there are NO banking crisis.</i><br /><br />Between the depression and 1971, there was still a gold exchange standard which acted as a limit on the amount of loans that could be made because the paper money was still convertible into gold. It was cutting off that final link that unleashed unlimited funny money loans. You have things ass-backwards.<br /><br />The idea that there exists a "free market" that will "regulate" a fiat funny money boom is preposterous and it's your typical destruction of the English language to blame such on Ayn Rand who opposed fiat money. <br /><br />There really are monetarists like Scott Sumner who think the funny money system is the "free market", but that's nuts and that's not me or the Austrian School.Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-47918238810633728702012-11-26T21:48:10.943-05:002012-11-26T21:48:10.943-05:00Changing the current system is a different issue t...Changing the current system is a different issue than what causes the problems. Austrians know that stopping the increase in the money supply and/or cutting spending is going to cause serious dislocations in the short run. And it's probably totally impossible to explain this to the voters who would vote out anyone who tried to bring the thing to a halt. <br /><br />All we are saying is that at some point in the not too distant future, the government is going to run out of stuff it has promised to give to the masses as entitlements and the sh*t will hit the fan. <br /><br />The fact that the government can never run out of "dollars" will not fix that.Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-34223004028171606052012-11-26T21:24:03.063-05:002012-11-26T21:24:03.063-05:00How can one know in advance who a wise regulator m...<i>How can one know in advance who a wise regulator might be in such an environment? Regulation does not help.</i><br /><br />The FBI warned of massive mortgage fraud in 2005. Chief regulator Greenspan blew it off due to his Randian ideology. He "knew" the market knew best.<br /><br />See also Janet Tavakoli's <a href="http://www.amazon.com/Collateralized-Debt-Obligations-Structured-Finance/dp/0471462209/ref=sr_1_5?ie=UTF8&qid=1353982738&sr=8-5&keywords=janet+tavakoli" rel="nofollow">Collateralized Debt Obligations and Structured Finance : New Developments in Cash and Synthetic Securitization</a> (2003)<br /><br /><i>The most cutting-edge read on CDO and credit market structures<br />Collateralized Debt Obligations and Structured Finance provides a state-of-the-art look at the exploding CDO and structured credit products market. Financial expert Janet Tavakoli examines securitization topics never before seen in print, including the huge increase in the CDO arbitrage created by synthetics; the tranches most at risk from this new technology; dumping securitizations on bank balance sheets; the abuse of offshore vehicles by companies such as Enron; and securitizations made possible by new securitization techniques and the introduction of the Euro. This valuable guide comprehensively covers one of the fastest growing markets on Wall Street, predicting where new bank regulations and other developments may lead to product growth or product extinction. While providing an overview of the market and its dynamic growth, Collateralized Debt Obligations and Structured Finance explores the types of products offered, hedging techniques, and valuation and risk/return issues associated with investment in CDOs and synthetic CDOs.<br />Janet M. Tavakoli, MBA (Chicago, IL), has over eighteen years of experience trading, structuring, and marketing derivatives and structured products with major financial institutions in New York and London. She is also the author of Credit Derivatives and Synthetic Structures</i><br /><br />This was well-known among professionals pretty early on.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-44412665224690794632012-11-26T21:19:53.458-05:002012-11-26T21:19:53.458-05:00And as Vernego says:
"As you can see in betw...And as Vernego says:<br /><br />"As you can see in between the Great Depression in the 1930s and the 1980s, with the begining of financial deregulation there are NO banking crisis. As Taylor (p. 2) notes: "none [banking crises] at all occurred from World War 2 until the 1970s." That's how effective the regulation of the 1930s and the capital controls of the Bretton Woods era were.<br /><br />PS: Any similarity with the graph on income inequality, that decreases after the Great Depression and grows after Reagan too, is NOT a coincidence."<br /><br />http://nakedkeynesianism.blogspot.co.uk/2012/10/graph-of-day-frequency-of-banking-crises.html<br /><br /><br />We have two options being discussed here. Your idea is that we should impose a fixed gold specie money supply and thereby permanently crush the economy.<br /><br />The other option is to go back to the banking and capital controls that demonstrably eliminated ALL financial crises whilst they were in place.yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-40966203632421966602012-11-26T21:14:27.395-05:002012-11-26T21:14:27.395-05:00Throughout, there was either fractional reserve le...<i>Throughout, there was either fractional reserve lending in excess of real savings and deposits or private fiat funny money loans. They both cause trouble.</i><br /><br />Changing the monetary system now amounts to changing the global monetary system and global finance. The trend is now already away from national currencies to digital currency and there is push for an internationally administered reserve currency for the global economy.<br /><br />Given the current trends, the world is not going to adopt real numeraire like gold or sliver in the foreseeable future. The disadvantages outweigh the advantages in that this process is controlled by the world's bankers and their business is rent-seeking rather than sound finance. It is probably not even possible to reduce the cronyism and corruption very much, let alone eliminate it. <br /><br />For example, the UK runs on finance and it really has no choice but to give the City a free rein or the business will move elsewhere, which would be disastrous for the British economy.<br />The bankers know they have the leverage over govt.<br /><br />I doubt there will be much impetus for reform until the next crisis hits, let alone a drastic change like resetting the monetary system.<br /><br />MMT presents a practical alternative to the present neoliberal policy that could be implemented without rocking the boat too much. It is doable.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-57584366041346869592012-11-26T21:08:56.226-05:002012-11-26T21:08:56.226-05:00"there was either fractional reserve lending ..."there was either fractional reserve lending in excess of real savings and deposits or private fiat funny money loans. They both cause trouble."<br /><br />Yes but that is capitalism in action.<br /><br />You say the that the way to stop capitalism being capitalism is to impose a fixed money supply, pure gold specie system. And yes, you would have to impose it because 'the market' demonstrably doesn't settle on that spontaneously.<br /><br />But imposing a fixed gold specie system would force the economy into permanent deflation, which means permanent depression. Deflation is only tolerable for very brief periods - history shows that yet again - it is not the 'natural' state of a capitalist economy. <br /><br />Deflation brought about by a contraction in the money supply always has bad consequences, as Hayek acknowledged:<br /><br />"It is agreed that hording money, whether in cash or in idle balances, is deflationary in its effects. No one thinks that deflation is in itself desirable."<br /><br />http://butnowyouknow.net/those-who-fail-to-learn-from-history/hayeks-1932-letter-on-the-great-depression/<br /><br /><br /> yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-10043106653790076362012-11-26T21:06:57.172-05:002012-11-26T21:06:57.172-05:00Lenders were extending loans on dodgy collateral w...<i>Lenders were extending loans on dodgy collateral with interest only loans for two years. Many people thought it was foolish not to join the party. Several of my friends did and got out before the crash, booking big profits.</i><br /><br />Thank you for proving my point. The funny money loans induce even people who know better to take silly risks because there really are profits to be made from the price distortions but most likely, people will get burned. <br /><br />As I recall, it was mostly Austrians (and a few Keynesians here and there) who were warning about the bubble. In the video above, one such person was Peter Schiff who was mocked by Mike Norman. <br /><br />How can one know in advance who a wise regulator might be in such an environment? Regulation does not help. The entire crew of the anti-Schiff "experts" on the above video failed to predict the housing crash.Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-5035017045470660722012-11-26T20:52:00.211-05:002012-11-26T20:52:00.211-05:00I fail to see the relevance of the "graph&quo...I fail to see the relevance of the "graph". Throughout, there was either fractional reserve lending in excess of real savings and deposits or private fiat funny money loans. They both cause trouble.<br /><br />As we know from Mike Norman, a 2% increase in the money supply may or may not result in CPI inflation of 2%. Are you talking about a 2% increase in the funny money supply or a 2% increase in the CPI? If the latter, what caused the increase in the CPI? A drought? If there was a 2% increase in the funny money supply, into what line[s] of production, investment and/or speculation did it go into?<br /><br />Further, since it causes nothing but trouble, why bother purposefully having 2% inflation, whatever it might be you mean by that.Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-58392616013368444382012-11-26T20:48:53.820-05:002012-11-26T20:48:53.820-05:00Why else do people borrow money to buy quickly-app...<i>Why else do people borrow money to buy quickly-appreciating houses than to hold them as a store of increasing value or to sell them soon and make a profit? </i><br /><br />Lenders were extending loans on dodgy collateral with interest only loans for two years. Many people thought it was foolish not to join the party. Several of my friends did and got out before the crash, booking big profits.<br /><br />Why are people buying gold on margin now when it is very likely in a bubble?<br /><br />This is how markets work. See Charles Kindleberger, <a href="http://www.google.com/books?id=nBb-xYi9O-sC&printsec=frontcover#v=onepage&q&f=false" rel="nofollow">Manias, Panics and Crashes: A History of Financial Crises</a><br /><br /><br /><i>Manias, Panics and Crashes: A History of Financial Crises</i><br /><br /><i>What allowed and induced the prices to rise to such unsustainable levels?</i><br /><br />Criminogenic environment, documented by Bill Black, Janet Tavakoli, etc.<br /><br /><br /><i><i>What allowed and induced the prices to rise to such unsustainable levels?</i></i><br /><br />Financial crisis reduced effective demand.<br /><br /><i>Where do your precious government bureaucrats/commissars obtain better information about those problems than the actors themselves?</i><br /><br />Government was compromised by neoliberal ideology, crony capitalism and corruption.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12130104537087609562012-11-26T20:45:15.818-05:002012-11-26T20:45:15.818-05:00During the 19th century's Long Depression, tri...During the 19th century's Long Depression, triggered by a massive financial crisis, US unemployment peaked at 14%. No central bank. yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-47271555978327641432012-11-26T20:37:10.687-05:002012-11-26T20:37:10.687-05:00And once reality has slapped you in the face pleas...And once reality has slapped you in the face please explain how 2% CPI inflation "fatally impairs economic calculation".yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-40253419760904645132012-11-26T20:34:07.358-05:002012-11-26T20:34:07.358-05:00Look at the graph Bob and stop talking gibberish.Look at the graph Bob and stop talking gibberish.yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-10635777851959368082012-11-26T20:27:42.735-05:002012-11-26T20:27:42.735-05:00Most economists including MMT economists think tha...<i>Most economists including MMT economists think that it was more complicated than your simplistic explanation.</i><br /><br />All Keynesians without exception ignore my "simplistic" explanation. Like the Minsky-ites who declare it just inexplicably happens. Why else do people borrow money to buy quickly-appreciating houses than to hold them as a store of increasing value or to sell them soon and make a profit? What allowed and induced the prices to rise to such unsustainable levels? What induced businesses to make more final goods than can be profitably purchased? Where do your precious government bureaucrats/commissars obtain better information about those problems than the actors themselves?<br /><br />You just long for a totalitarian society so any answer that does not include commissars with SWAT teams is ignored.Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-27449904041690111202012-11-26T20:25:59.107-05:002012-11-26T20:25:59.107-05:00No need to go back to pure gold specie and the dar...No need to go back to pure gold specie and the dark ages Bob. yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-5654724938426218202012-11-26T20:24:53.379-05:002012-11-26T20:24:53.379-05:00Bob, look at this graph:
http://nakedkeynesianism...Bob, look at this graph:<br /><br />http://nakedkeynesianism.blogspot.co.uk/2012/10/graph-of-day-frequency-of-banking-crises.html<br /><br /><br />How do you explain reality, when it completely destroys your theories?<br />yhttps://www.blogger.com/profile/03233997168975370006noreply@blogger.com