It’s a Wonderful Life is a staple of the holiday season in the United States, but it was once considered un-American by the government.The Atlantic
The FBI Considered 'It's a Wonderful Life' to Be Communist Propaganda
Zachary M. Seward, Dec 24, 2013
4 comments:
'It's a Wonderful Life' intentionally or no is powerful pro-bank propaganda in that it justifies creating liabilities for fiat that a bank does not have (and in this case could not borrow either) in order that families may "borrow" to buy homes, etc. and that the whole community benefits as long as confidence in the bank holds and too many people don't try to withdraw their deposits at the same time - even though those deposits are "on demand" for the full account balance.
It's a ridiculous, desperate solution to what was actually a very simple problem: Fiat was too expensive (.e.g. the Gold Standard) to keep up with population and potential economic growth so price deflation was to be expected if just fiat was used for money. So to get around the shortage of fiat, bank credit evolved whereby a little fiat could back 10 times or so in bank deposits - again as long as confidence in the bank holds and too many people don't try to withdraw their deposits at the same time - even though those deposits are "on demand" for the full account balance.
Needless to say, this ridiculous, desperate "solution" has caused untold misery for centuries to deal with a problem that should never have existed in the first place: needlessly expensive fiat.
For if banks could create enough inexpensive "bank money" to prevent price deflation then certainly the monetary sovereign could too.
Merry Christmas!
Adding that if a monetary sovereign finds nothing in the general welfare for which it should deficit spend and thus create enough fiat to prevent price deflation, it or its Central Bank should distribute enough fiat equally to all citizens to preclude price deflation via consumption and/or low interest rates lest an opportunity for the banks be created to exploit price deflation by creating deposits to buy assets on the cheap.
Notice the antagonism between fiat creation and bank credit creation? Since they both compete for real goods and services in the same marketplace? But note the former is for the common welfare while the latter is for the banks themselves and for the rich, the most so-called credit worthy?
Thus MMT advocates cannot truly be for large* amounts of fiat creation while supporting government privileges for "the banks."
*i.e. beyond that needed by the government-privileged banks themselves and to spark a boom the government-privileged banks can exploit and further.
An economy based on consumption is at the heart of the problem. Imagine - if you can - an economy based on health, the environment, etc. It's a value problem - we value the wrong things.
via consumption and/or low interest rates aa
I should have said:
"via spending and lending at lower interest rates since all spending would tend to counter price deflation, not just spending on consumption.
As for what mix there should be between deficit spending for the general welfare and/or equal fiat distributions to all citizens to spend or lend as they wish, I won't hazard, since the crucial point is that fiat should never again be so scarce, inconvenient to use, dangerous to carry, or in any other way lacking so that all citizens may use it readily and not be forced to use bank deposits instead.
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