Marshall Auerback —The Greek Crisis: Time to Rethink the Concept of "Money"

As for the supposed “heterodox” quality of Parenteau’s proposal it is worth noting the following irony: isn’t it peculiar how we marvel at (and handsomely reward) financial engineers on Wall Street when they create all kinds of debt instruments that get counted as “money equivalents” (as an example, consider that perpetual bonds are ruled Tier 1 capital for banks under the Basel Accord rules), and all kinds of equity that look like debt? Or even better still, how we applaud the ingenuity of financial engineers when they stitch together such Frankenstein monsters as total return swaps, exchanging one set of returns on one asset for another set of returns, while never nominally changing the ownership of an asset (these types of instruments played a critical role in the 1997-8 Asian Crisis, as well as the more recent 2008 Financial Crisis). Yet for some odd, unspeakable reason, we simultaneously refuse to entertain even the possibility of a similar level of creativity and hybridization to the realm of government finance. Or we hand wave it away, declaring it dead on arrival, simply impossible, fraught with all sorts of inconceivably difficult complications, and bound to eventually lead to general irresponsibility, outright misallocation of resources, and ultimately, the dreaded hyperinflation. This appears to be the case even with things we should know nations have done successfully before (like 5 currency types running side by side in the US in the ‘20s), but no one seems to remember, or at least no one bothers to mention this “verboten” subject. It’s time for the Greeks to give the rest of the world a reminder of what is possible.

Good history lesson, too.

INET
The Greek Crisis: Time to Rethink the Concept of "Money"
Marshall Auerback

Federal Gov't delivering millions of gallons of gasoline to NY. WTF...das Frei MarKet didn't do it????

The Department of Defense is trucking 12 million gallons of gasoline (that's a lot of gas) to New York. Until now there has been no gas. In other words, the Federal Gov't is supplying gas.

Where was the "invisible hand" of the free market? Where were the suppliers anticipating conditions as a result of listening to the perfect information supplied by the perfect, all-knowing market?

I just had to post this hysterical comment that Rob Parenteau put on my Facebook page. It's hilarious.

Wait, Mike, you mean das Frei MarKet, with its illustrious and ever innovating Invisible Hand, didn't deliver the goods already? WTF? Must be price controls or sumpin inhibiting all those entrepreneurs from buying and selling and bartering and trucking all that fuel from transnational oligopolistic oil companies into place in near perfect anticipation or at least nearly complete knowledge of future demand schedules. And now, back to Atlas Slouched.

I'm sure Libertards and conservatives will be all over this with lame excuses like it was gov't regulation or some other crap that blocked the ability of businesses and entrepreneurs to supply gas.

Yves Smith schools Brad DeLong on the "liquidity trap" that doesn't exist

The Sorrow and the Pity of Economists (Like DeLong) Not Learning from Their Mistakes

Yves shows how DeLong's notion of the liquidity trap is untenable, citing a number of MMT economists is support of her argument — Marshal Auerback, Scott Fullwiler, Stephanie Kelton, Bill Mitchell, Rob Parenteau, and Randy Wray. This post definitely elevates MMT and is worth reading for that, even for those that are already familiar with the refutation of liquidity traps.