Saturday, January 19, 2013

Rob Urie — The Trillion Dollar Cat Shit Coin

Some fair proportion of readers are already aware of the proposal to have the U.S. Mint produce a $1 trillion face amount coin to be deposited at the Federal Reserve and credited to the account of the Treasury Department to pay Federal bills. The $1 trillion would render the ‘debt ceiling’ debate irrelevant because it wouldn’t be funded with debt. It would demonstrate the contrived nature of the austerity ‘debate’ in Washington. Most fundamentally, it would lay bare the social nature of the institutions put forward as immutable facts. The current arrangement of affairs, debt based money, is not socially ‘neutral,’ it serves the political economic interests of some to the detriment of others. By making this visible, the trillion-dollar coin idea is extremely useful. So of course, the White House has said it has no use for the idea....

Mr. Obama’s rapid dismissal of the platinum coin idea, even as a bargaining piece in ‘negotiations’ with Congressional Republicans (and Democrats), likely has two components. In the first, Mr. Obama has been a staunch proponent and defender through every policy that has come before him of the reigning plutocracy. The insight into the social nature of our institutions provided by the platinum coin idea is no doubt threatening in that it could lead to a lot of other uncomfortable questions being raised about the existing social order. Second, by removing the platinum coin as a strategic tool, Mr. Obama can allow Republican ‘austerians’ to take responsibility for cuts in social programs such as Social Security, Medicare and Medicaid that he supports but that his long-suffering political base doesn’t. But again, if the Federal government can simply create the money to pay for these programs, as it can and should, what could possibly be the motivation for hiding behind the canard of ‘fiscal discipline’ to cut them other than fealty to plutocrat control of the political economy?
 In dismissing the platinum coin idea the White House pointed to the Treasury Department’s contention it wouldn’t put the idea forward and the Federal Reserve’s claim it wouldn’t accept the coin if offered. Nonsense. The Treasury Department will do what the President tells it to do and in legal disputes with the Federal Reserve over established law the Treasury Department decides the matter. The further contention the monetary and financial systems could be called into question and / or be discredited assumes they haven’t been discredited already. Even casual readers of the business press would have noticed everyday reporting on the doings of the major banks and the Federal Reserve reads like angry missives from the radical left of decades past. Radical critique of the financial status quo is thoroughly mainstream in 2013. A former Citicorps executive to replace Timothy Geithner at Treasury? Fuck you!
Regardless of whether or not official Washington uses the idea, radical versions of the platinum coin idea should continue to be put forward. The broad frames used in political-economic debates in Western Capitols are designed to bring about outcomes in line with the interests of Western plutocrats. In fact, without effectively calling into question these frames the cognitive disjuncture needed to shift these institutions back toward the public interest won’t be found. The existing money system is at the heart of these institutions and it is not socially ‘neutral.’ And only by putting it forward as if it was does the existing order retain control of ‘the conversation.’ 
 You get the idea. Very understandable analysis and good framing. Read the whole piece.

The Trillion Dollar Cat Shit Coin
Rob Urie | Artist and Political Economist
(h/t Kevin Fathi via email)

If you haven't read it yet, also catch Joe Firestone's The Great Austerity Swindle!


Matt Franko said...

"Cat shit" is another false metaphor...

This person writes: "The current arrangement of affairs, debt based money, is not socially ‘neutral,’ it serves the political economic interests of some to the detriment of others. "

This is NOT the point.

This person just doesnt like the concept of so called "debt based money" and asserts that the fact that we currently issue UST securities somehow is creating all of the economic inequality and distributional issues....

This is just not true.

The trend of ownership of USTs is headed to where soon, all USTS will be owned by either, the federal government, foreigners, the central bank, and the non-financial corporate sector.

Then what will be his problem?

How is the form of $NFA to to be blamed for a skewed distribution of said $NFA?

This is like saying a poached egg is worse for someone with high cholesterol than a boiled egg...

The $NFA FORM has nothing to do with it.

Distribution issues of $NFA are caused by fiscal policy ie 'the law' making it so...

If this person is a libertarian and/or anti-federalist, (which it seems like he is) he will seek to focus blame on some sort of characteristic rather than the real cause which is his fellow libertarian/anti-federalist humans who have obtained positions of authority in our civil govt who REFUSE to recognize the absolute fiscal authority of this same civil government...

This article attempts to run cover for the real issue... it is diversionary... hence the false metaphor shows up... it always does in these situations.

The core issue here, our current dilemma, which the coin issue illustrates very well; is whether we have a plurality in this country that believes our civil govt has absolute fiscal authority or not...

We need a 'referendum' on THAT.

Not whether we issue USTs or not...


Matt Franko said...

Here's more:

"Regardless of whether or not official Washington uses the idea, radical versions of the platinum coin idea should continue to be put forward. "


this guy is some sort of libertarian/anarchist/anti-federalist or something ...

Hey Urie: What does THE LAW say????

Answer: THE LAW says the coin can ONLY be made of PLATINUM... that is the only form.

This guy is COMPLETELY BLIND TO THE LAW ... hence spew the false metaphor...

This phenom comes out from both the political right and left... it is at core 'lawlessness'...


Matt Franko said...

"radical versions of the platinum coin IDEA..."

It's NOT an "IDEA", it is THE LAW moron.

beowulf said...

Ha ha, tell me about it Matt. If you have a tool that's legal right now, there's really no value added for going with another tool that's not legal.

If I have another person write me to suggest we should advocate using US Notes instead going with the TDC, I am going to find them and I am going to pepper spray them. Unless they have the votes lined up in Congress to change the law (and they most assuredly do not), what's the point?

Clonal said...


I have laid out the nexus of the three laws - 1864 , 1917 and 1933 that got us into this sticky situation time and time again for people, and then point out that the platinum coin law allows us to get around those laws. But the arguments go right over their heads. They always come back with - if that is so why don't we just repeal those laws instead of going down "Penny Lane"

Matt Franko said...


What in your view is the nexus of those laws?

Is it a gold/silver/copper issue?

Then with the '96 law platinum was allowed in without regard/specification as to the characteristic of physical mass?

So our laws on other metals require certain mass but our law on platinum does not specify mass of any sort?

That would make 'the coin' true nomisma imo as it's value would be established NOT by nature but rather solely by LAW (nomos)... we would finally be getting back to the way it was/should be here in the west...


Clonal said...

1864 - Congress put a limit of $250 million on the amount of US Notes (Greenbacks) that the Treasury could issue. Was later upped to $450 million, and then cut back to $350 million, where it now stands. Thus only the Fed can issue "paper" money - and digital counts as paper money. There were no limitations on coinage that could be issued by the Treasury (remember coinage was copper, nickel, silver or gold with tight specifications.

1917 - deficits have to be funded by debt, subject to a ceiling. Reaffirmed in 1933 - A not unreasonable law when on a gold standard.

1933 - Gold coinage outlawed

1964 - Coinage law got changed, allowing for metal content other than silver in the "silver"

1996 - Platinum coin law passed allowing for "unlimited value" for platinum coins.

I see that as a step in the continuing move towards a pure "Fiat" currency, with periodic roadblocks from the "metallist" crowd.

Tom Hickey said...

I'm a both-and kinda guy instead of either-or. I think that we need to keep pushing on the TDC as the already legal work-around AND also explain that it is work-around obsolete laws appropriate for a convertible fixed rate system like the gold standard under which the world used to run but not for a modern monetary system that uses non-convertible floating rate currencies.

This for two reason. First, social change ordinarily comes slowly through education and we need something quicker. We already have it in "the coin." Secondly, social change sometimes breaks fast, as it a crisis, which is how we got off the gold standard.

We should have a more ideal "radical" plan on the table so that it can be picked up when the time is ripe. The obvious way is instituting Treasury notes.

There are some matters that are less obvious, like bond issuance, the status of the cb and monetary policy, etc. that are now being debated around the blogosphere. This conversation has already begun in earnest.