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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Wednesday, August 26, 2009
Is this blog an exercise in futility?
In light of the comment I just posted I am starting to wonder if I am not wasting an enormous amount of time and energy here and adding to the frustrations of others.
Oh, don't get me wrong...it has been incredibly gratifying to teach so many of you these concepts and watch how you've come to understand the truth in a way that now you have more knowledge and are more savvy than most of the highest economic policymakers in the world. Any of you could run Treasury or the Fed or be the main economic point person in the government and achieve full output and employment and create prosperity the likes of which we haven't seen in generations! However, it is frustrating when I think about the vast tide we are swimming against.
We cannot win. There is simply not enough time, resources and money in the entire world to change the belief system that so pervades our thinking and our policy now. For the moment I am optimistic only because a crisis of monumental proportions has forced us to temporarily suspend this belief system, but at some point when things start looking up, it will come back with a vengence and send us reeling once again.
Peter Schiff may become a U.S. Senator; Ron Paul...who knows? He ran for president and has a huge following.
And that's to say nothing of the David Walkers, Pete Petersons, Heritage Foundations and all the other deficit terrorists and gold standard zealots out there who hold enormous sway and influence over policy and the media.
These people believe that America is profligate, wasteful and off course to such a degree that she needs not only to be "corrected," but corrected in a way that will inflict a painful lesson. In their puritanical minds that is the only way that we will regain our true and proper path.
I feel afraid for my kids.
I just don't know if I can fight the fight anymore. I have spent so much time, for what?
Mike, I feel a little bit of your pain because I encounter the same brick wall you do when I try to argue these points as well. Like you have said: Cognitive dissonance. But you have admit, progress is being made. Warren's blog, your blog, the KC blog, Winterspeaks's blog, etc. The fact that Warren's name was mentioned on CNBC by Steve Leisman. The fact of the matter is, when and if a fair debate on this subject is ever undertaken in the mainstream media, we will win because we are right. The orthodox view cannot escape the math. -jcmccutcheon
ReplyDeleteThanks for the cheerleading. I needed some!
ReplyDeleteJC,
ReplyDeleteYES! I was going to mention to Mike here that Leisman mentioned Warren's approach on national CNBC TV as an example of some break through. Question for Warren: Did he ever talk to Leisman? If not then Leisman has to be reading Warrens blog!
You never know who "lurks" on the blogs but doesnt actually post/participate.
Mike, did you see that CNBC clip if not I can post a link here?
Mike also a couple of Cashin' Ins ago Tracy made a comment that she agreed with you and you said something like "you're learning" she of course denied it but I think you were right, you are "planting seeds" out there.
Please keep up the important work here! Matt
the skeptical optimist dude has some flow chart diagrams which explain the flow of the money from treasury, tax revenue, and all that showing how not very much comes from taxes.
ReplyDeletethe best thing is to create an articles of facts of the Norman Capacity Theory - something like a top ten list of invariants which can be applied to any discussion -
1. i = F(spending )
2. savings = f(i)
3. tax revenue does not pay for everything
4. credit line swaps
5. interest rates set by Fed choice and no other factor - no foreign body, no int'l bank etc
6. europe and japan are more in debt than USA
7. healthcare is not a tax payer problem, especially if people are paying for it rather than like now where it is free. it is an investment that follows i = s
8. strong dollar policy is not being followed by Obama or bush
etc
Matt, Warren mentioned it to me but I didn't see the clip. Can you post it up here?
ReplyDeleteDon't lose heart. I am fairly new to this whole thing (maybe since April 2009) and have quickly followed what you guys are saying and have become a fan.
ReplyDeleteOn a positive note look at the CBO numbers - even though the media is going ha ha ho ho about it, the fact is that there is no surplus in those projections.
Projecting to 2019 is anyway silly but the point is that its a small step (not projecting surpluses)
Mike, Here is the link. Leisman cites Warren about 3:15 into it.
ReplyDeleteMatt
Mike, I am a part of the crowd that you detest. I am a gold bug, deficit 'terrorist' etc. It is my camp that predicted this crisis coming, and our voices fell on deaf ears unfortunately. We are not the enemy here. We care about this country as much as you do, and want to see it do well. We do not crave for a 'painful' lesson. We crave for sanity, financial disclipline, free markets, sound and honest money, and prosperity for all.
ReplyDeleteWe do not think badly of america for the sake of doing so. We only point out its downfalls so that we can improve the situation and kill any bad policies. Do not think we hate this country. We are simply frustrated with the status quo because it has gotten us into so many messes...most recently the credit crisis.
I know your intentions are good. Our paths are different. But that does not warrant personal attacks on Schiff and the like, telling them to "get help" because they are disturbed and stuff.
Bob,
ReplyDeleteYour "camp" wasn't the only camp that predicted the crisis. You speak in clichés--sound money, free markets, etc--whether they apply or not. And your comments are often obscene and vulgar.
Schiff has been using his viral videos on Youtube for years to attack many people, myself included. When I asked him to speak to his followers and denounce their language and tactics he refused...said it came with the territory.
I stand by what I said: He is a very disturbed guy and there is a lot more that I am preparing to send his way. I will do all I can to see that he never makes it to the U.S. Senate. I am saving all the comments of his followers, like you, and will pass them along to Senator Chris Dodd to use in his campaign against Schiff if he needs to.
Feel free to use this site and educate yourself. There are many smart people here. Comment if you like, but obscene remarks will not be tolerated.
Not sure where you are getting this from. Schiff has repeatedly told his 'followers' on his radio show to not attack his critics, to not use abusive language, and to show respect and dignity. Not once or twice, but multiple multiple times. He can easily bask in his glory and spread dirt on the faces of his opponents, but he chose to act civilized.
ReplyDeleteAnd to call my comments obscene and vulgar is humorous, considering that you call other people delusional, disturbed, attack their childhood, and tell them to seek mental 'help'. Instead of simply debating the economics, you choose to conduct personal attacks. Reminds me of politics.
Mike, please continue on your crusade to educate the American people about government spending, the necessity of deficits in a fiat monetary system, and the need for government to sustain employment and output. You are the only sane voice in business media. It's gotten to a point that I can hardly stand to listen to your colleagues on Fox, especially John "Bradshaw" Layfield, Tracy Burns, Wayne Rogers and Jonathan Hoenig.
ReplyDeleteDon't give up, Mike! We need you to bring the mainstream business media and Congress "in-paradigm".
Keep up the good work!!!
Mike, you are doing the right thing and you should feel good about it. People must be ready to learn from you, but if they are not it's not your fault. There has been many outstanding people who have walked this earth, Buddha, even Christ were around but this world still is what it is.
ReplyDeleteAnybody with half a brain knows that Schiff is a lunatic who has no clue about trading or anything remotely close to riding trends up and down. He's a broken clock with a religious following.
ReplyDeleteI like your site Mike, keep up the good work even though you might at times feel frustrated.
Kbob: You use obscenities. Calling someone "disturbed" does not entail the use of obscenities. You can't see that distinction???
ReplyDeleteI did not use obsenities. And you attacked someone's childhood. Anyway I'm obviously not coming through to you so I'm not going to argue.
ReplyDeleteEventually, only time will tell who is right and who's wrong. You can wait for your 'mother of all housing shortages'. People will see for themselves who knows real economics and who doesn't.
Bob ,as Mike mentioned, Post Keynesians like both Warren Mosler and Dr Randal Wray were very accurate in predicting and analyzing economic trends and events. Warren has been spot on in analyzing the financial crisis, the banking sector, government finance etc. Goto http://www.epicoalition.org/docs/abolish_the_surplus.htm and read this paper written by Dr Wray in 1999 predicting a recession just before the .com meltdown. He correctly forecasts the budget surplus -which is the government taking money out of our pockets- as the precursor to an oncoming recession. If you take time to actually read the papers and blogs, you will gain deep insight into the inter-workings of government finance.
ReplyDeleteNothing that Peter Schiff or the gold bugs have argued has any intellectual debt or merit. Their assertions are not defensible when any kind of academic rigor is applied to them. Its all slogans like "debt is bad." "We can't afford SS." "Our money is not sound". "The inflation figures are manipulated." "All fiat currencies eventually collapse." Gold bugs/Austrians are perpetually bearish and if their ideas are ever adopted, we will see an economic and perhaps social cataclysm in this country and probably the world. I think they want this to happen. Maybe they are angry?
You know, the instances where I've seen Schiff on Kudlow's show, his strategy has been to cut off the other guest the moment he hears something he doesn't agree with and then to squelch the rebuttals to gain advantage by talking over him. Quite sleazy.
Your commentary is interesting, bubblerefuge, even though I disagree strongly. I think in time to come, we will all know that these were not mere slogans or buzzwords. If the US is not broke, why do they issue debt and pray that China/Japan buy it? Clearly they do not have the money.
ReplyDeleteMike this may help explain things.
ReplyDeletehttp://www.newsweek.com/id/213625
If the US is not broke, why do they issue debt and pray that China/Japan buy it? Clearly they do not have the money.
Bob,
Because FED uses debt to control short term interest rates. They don't "pray" for china to buy it. China wants to buy it in order to keep the Chinese currency cheap. If they were to exchange the dollars we given them for American products all of a sudden Chinese products would get very expensive and harder to export. The Chinese, and many other nations are stuck still chasing Mercantilist ideals. Bob, we could stop issuing debt altogether(which we should do) and it would make no difference. Certainly, people who think the way you do would have one less thing to be afraaaaaid of.
Bob, the mere fact that you asked that question confirms that you haven't read any of the literature on how government finance really works. You haven't read anything that mike has written. Very disappointing. Read Soft Currency Economics:
http://www.moslereconomics.com/mandatory-readings/soft-currency-economics/ to get the full picture.
Hey Kbob, is the world still flat? Clearly, people believed that. So according to you and the way you think...it must be so. Right???
ReplyDelete