An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Thursday, May 7, 2020
Even Brookings Institution Can't Keep Silent. — Andrei Martyanov
Brookings Institution: I fogot it existed!! They were producing good stuff 20 or 30 years ago, but I've heard nothing from them for several years. What went wrong?
Andrew: I can't see why MMT would increase the privileges of commercial banks. MMTers don't have much to say on the great full versus fractional reserve argument.
"Mosler would provided UNLIMITED deposit guarantees for FREE and unlimited, unsecured loans to banks at ZERO percent interest."
its not free they have to experience the opportunity costs associated with the 10% of consolidated assets they have to retain and make not available for sale.... otherwise they could go out and buy every asset on planet earth...
Andrew, Thanks for that. I hadn't seen that Mosler article, which I agree is nonsense, although I've long been aware of a similar Huffington article of his:
I'll be submitting the latter (with a few alterations) to a conference at Clare College, Cambridge which is taking place in September (unless they refuse to accept it on account of it having been already published at Medium). See:
... otherwise they could go out and buy every asset on planet earth... Franko
With what? Bank credit is liabilities for fiat and without government-provided deposit insurance, without a lender/asset buyer of last resort, etc., and with all citizens able to use fiat in account form, those liabilities toward the non-bank private sector would be very real and thus the threat of a system-wide bank run very real also.
In other words, 100% private banks with 100% voluntary depositors would be both capital AND reserve constrained and thus quite limited in their ability to safe create deposits/liabilities for fiat.
What else is to be expected of government privileges* for usurers other than injustice?
ReplyDeleteAnd note that the MMT school would INCREASE those privileges.
There's a difference between wisdom and mere cleverness ...
*e.g. exclusive use of the Nation's fiat in account form.
*e.g. government provided deposit guarantees.
Child hunger in America. Shades of a "shithole" country.
ReplyDeleteApologies, Tom, but I couldn't help but state the obvious :(
Brookings Institution: I fogot it existed!! They were producing good stuff 20 or 30 years ago, but I've heard nothing from them for several years. What went wrong?
ReplyDeleteAndrew: I can't see why MMT would increase the privileges of commercial banks. MMTers don't have much to say on the great full versus fractional reserve argument.
I suggest you read Warren Mosler's http://moslereconomics.com/wp-content/pdfs/Proposals.pdf, Ralph, so you'll know what you're talking about.
ReplyDeleteMosler would provided UNLIMITED deposit guarantees for FREE and unlimited, unsecured loans to banks at ZERO percent interest.
MMT would sneak in increased privileges for the banks while throwing peanuts (a minimum wage job guarantee) to their victims.
"Mosler would provided UNLIMITED deposit guarantees for FREE and unlimited, unsecured loans to banks at ZERO percent interest."
ReplyDeleteits not free they have to experience the opportunity costs associated with the 10% of consolidated assets they have to retain and make not available for sale.... otherwise they could go out and buy every asset on planet earth...
Andrew, Thanks for that. I hadn't seen that Mosler article, which I agree is nonsense, although I've long been aware of a similar Huffington article of his:
ReplyDeletehttp://www.huffingtonpost.com/warren-mosler/proposals-for-the-banking_b_432105.html
Also, you might be intersted in an article I recently put online which puts an argument for full reserve banking:
https://medium.com/@ralph_47183/the-crucial-flaw-in-the-bank-system-2b1d36b194de
I'll be submitting the latter (with a few alterations) to a conference at Clare College, Cambridge which is taking place in September (unless they refuse to accept it on account of it having been already published at Medium). See:
https://www.mmf.ac.uk/conference/2020-conference/
... otherwise they could go out and buy every asset on planet earth... Franko
ReplyDeleteWith what? Bank credit is liabilities for fiat and without government-provided deposit insurance, without a lender/asset buyer of last resort, etc., and with all citizens able to use fiat in account form, those liabilities toward the non-bank private sector would be very real and thus the threat of a system-wide bank run very real also.
In other words, 100% private banks with 100% voluntary depositors would be both capital AND reserve constrained and thus quite limited in their ability to safe create deposits/liabilities for fiat.