Wednesday, December 30, 2015

Bill Mitchell — Bernie Sanders on the right track but need to address the main game

On December 23, 2015, the Democrat Presidential candidate Bernie Sanders published an Op Ed – Bernie Sanders: To Rein In Wall Street, Fix the Fed – which, correctly, in my view, concluded that Wall Street (taken to be the collective of banksters wherever they might be located) “is still out of control” and policy reform has done little to alter the “too big to fail” problem that was identified in the early days of the GFC as one bank after another lined up for government assistance. Larry Summers replied to the Op Ed in his blog – The Fed and Financial Reform – Reflections on Sen. Sanders op-Ed – challenging several of the proposals advanced by Sanders. The problem is that the progressive voice of Bernie Sanders labours under some basic misconceptions about how the monetary system operates and therefore plays into the hands of those who have created the mess. Conversely, Summers clearly understands basic elements of the monetary system but continues to advocate policies which avoid addressing the main issue – the power of the financial markets.…
The conception that Bernie Sanders creates is that the banks are being diverted by the US central bank from lending those reserves.
On Monday (December 28, 2015), my blog – Central bank propaganda from Minneapolis – explained how banks do not loan out reserves and are not reserve-constrained in their lending activities.
Bernie Sanders is just plain wrong here and is surprising that he has been allowed to maintain this misconception. If his persistence in maintaining incorrect ideas about how the banking system operates is his own doing (that is, ignoring sound advice from his team), then he is unfit to be President. Simple as that….
I like the way that Bernie Sanders is attempting to redefine the public policy debate and have sympathy for many of his positions and values.
But I don’t think it helps when progressive voices make simple mistakes that, ultimately, ply into the hands of those who have created the mess the world economy is now in.
Bill Mitchell – billy blog
Bernie Sanders on the right track but need to address the main game
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equversity of Newcastleity (CofFEE), at Uni, NSW, Australia

6 comments:

db68 said...

just watched the big short, wow

Matt Franko said...

And looks like Bernie watched 'It's a Wonderful Life' over the weekend again....

Random said...

Wow the establishment really hate the new Polish PM. Check out this article in the stupid Guardian propaganda rag:
http://www.theguardian.com/commentisfree/2015/dec/31/poland-leader-jaroslaw-kaczynski

Random said...

The article is very good exercise in doublethink and shows paradoxes of liberalism.

Peter Pan said...

Maybe Bernie has a guardian angel who's about to get their wings. Unfortunately, Hillary is backed by Satan's little helpers.

Butch Busselle said...

I can't say whether Sanders' various economic misunderstandings are willful or not, but taking into consideration what the other candidates offer one might want think of fitness to be president in terms of degrees. So far Sanders is by a huge measure the least unfit. Everyone else (other than Stein and O'Malley) are fairly seriously anti- democratic in their very nature. There is no other way to explain being even tolerant of TPP, let alone willing to pass it in any form.