Friday, March 29, 2013

Les Leopold — Why Is Socialism Doing So Darn Well in Deep-Red North Dakota?

North Dakota is the very definition of a red state. It voted 58 percent to 39 percent for Romney over Obama, and its statehouse and senate have a total of 104 Republicans and only 47 Democrats. The Republican super-majority is so conservative it recently passed the nation's most severe anti-abortion resolution – a measure that declares a fertilized human egg has the same right to life as a fully formed person 

But North Dakota is also red in another sense: it fully supports its state-owned Bank of North Dakota (BND), a socialist relic that exists nowhere else in America. Why is financial socialism still alive in North Dakota? Why haven't the North Dakotan free-market crusaders slain it dead?
Because it works.
Why Is Socialism Doing So Darn Well in Deep-Red North Dakota?
Les Leopold

Good article in general, but with a few lapses, like "Banks are supposed to serve as intermediaries that turn our savings and checking deposits into productive loans to businesses and consumers." It also promotes the  Public Bank Institute at the end, and the folks at PBI don't still don't get monetary economics even though it has been explained to them in detail.


wilwon32 said...

Is it that

"It also promotes the Public Bank Institute at the end, and the folks at PBI don't still don't get monetary economics even though it has been explained to them in detail"?

Or is it possible that the PBI supporters have doubts about the current banking system which controls the US governmental decision makers to such an extent that it will not allow the fraudulent banking institutions to fail?

A related question:
"Why to most of the main/minor-stream economists around the world seem to ignore MMT?"
Is it because:

1. They haven't read the MMT literature;

2. They have read and understood the MMT arguments/theory (in its' present state), but don't think it is accurate or workable;

3. Some have read and understood most of the MMT literature, agree that its' tenants, arguments, etc. are reasonable and could work in a an "ideal" world, but suspect that

(a) such an "ideal" world does not exist or
(b) the real world of ponzi schemes, crony capitalism, government officials who are either inept or refuse to enforce the laws is preferable or
(c) obfuscation and chaos is too enjoyable.

Perhaps, others can offer additional insights wrt the indifference of the decision-makers and/or
those who act in advisory roles continue to ignore the insights which MMT advocaters promote..

Tom Hickey said...

@ wilwon32

The basic misunderstanding can usually be traced to the idea that banking is about banks taking deposits from savers and then loaning them out to borrowers, leveraging up deposits in extending credit, aka fractional reserve banking.

wilwon32 said...

I got the impression from Ellen Brown's article to which MNE is linked today (3/30/2013):

and which is further linked to Ives Smith earlier blog which goes on to mention the likelyhood that FDIC insurance could become ineffective if future events related to an appropriate banking crisis which cannot be exactly predicted with certainty.

While these sorts of speculation may be considered alarmist by insiders (Ben Bernake), it would appear that Ellen and several other bloggers consider these sorts of possibilities to be worth an effort to at least pay attention. I assume that you also thought this sort of information is news-worthy.

By the way, such speculation is unrelated to the Ellen Brown's comprehension of either MMT or the way the banking system should/could or currently does operate. It seems that there are so many bits of information floating around the blog-osphere that prospects of banking failure upset many who live in the US, though, from a MMT perspective such worries may be allayed because those in charge have in mind only the best interests of the average American citizen.