Read it at Angry Bear
It's the Private Debt, Stupid
Posted by Steve Roth
(h/t Kevin Fathi via email)
Go figure.
When really smart people like Ben Bernanke constantly ignore an elegant, simple, even obvious explanation that's been lying on the ground, ready to pick up, for at least 75 years, you gotta figure they've got some incentive -- whether they're conscious of it or not.Must read.
I wish Steve Roth (Asymptosis) all the best in trying to convert the crowd at the Angry Bear. I do not think that the effort will succeed. Most of the crowd there, even though left wing, are out of MMT paradigm, and unwilling to consider alternatives to the economic doctrines they were brain washed in their graduate education. I stopped posting there many years ago.
ReplyDeleteGood article by Steve Roth, but he doesn’t really get to the root of the problem, namely where does all that extra money come from that private banks lend out and which in turn expands private debt? Well it comes from nowhere: private banks create money out of thin air, and lend it out.
ReplyDeleteWhy do we allow private banks the right to engage in seignorage? This should be the sole preserve of the state or central bank, and Abraham Lincoln, Milton Freidman and numerous other household names have advocated.
@ Ralph
ReplyDeleteExactly.
Activists on the left and right know this, which accounts for agreement that the Fed is the problem. They may not have the details right, but they have grasped the general outline that the foxes have been put in charge of the henhouse. So far it is largely the left that has zeroed in on the collusion between politicians and the robber barons. though.
The public-private partnership model has been stretched so severely it has broken. The whole system is in need of a complete overhaul to meet current and future needs instead of serving a morbid status quo.