There are regular interventions from commentators over time who repeat the same thing over and over – usually some prophesy that a currency (for example, the Yen or the USD) will collapse soon, and life goes on until they come out with the same predictions, which never turn out. The mainstream media loves to give these characters a platform because the headlines are sensational and I guess that sells ‘units’ for the companies. The latest I saw was from Mr. Roubini in the Financial Times, who has been predicting the collapse of the USD regularly. Time to give him a miss I think. A related topic of hysteria that ordinary folks seem to get agitated about but clearly don’t understand even the first principles involved is the old canard – central bank losses. This gets a little more abstract for most relative to the Roubini-type currency collapse headlines but the mainstream press still manage to whip up a doom scenario that somehow the central bank is about to go broke and governments will have to bail them out and taxes and debt will rise, and, somehow, ultimately, our grandchildren will find themselves in penury trying to pay back the debts our current governments ran up. A recent Bank of International Settlements Bulletin article (No. 68)- Why are central banks reporting losses? Does it matter? (released February 7, 2023) – bears on this issue. Conclusion: nothing to see here....Bill Mitchell – billy blog
Central banks accounting losses are rising but are of no importance to anything important
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
18 comments:
“ These are just manifestations of accounting conventions.”
Why does Bill use the word “just” here?
As if to devalue understanding of Accounting Science?
As if Liberal Art Economics is more important?
Meanwhile Liberal Art Economics people continuously demonstrate a lack of understanding and reify the Accounting abstractions and think they are real and we can run out of them…
The Accounting Science is more important to understand than the Art degree economics.,.
And another thing they are not Accounting “conventions” they are Accounting abstractions,,, just like any other abstractions of Science …
Bill must be a product of liberal Art equivalent of the Australia academe…
Bill,
George Harrison: “still my guitar gently weeps”
Do you think there is saline solution seeping out of the seems of his guitar?
Probably 90% of Economics people flunked out of Accounting…
“ that the central bank is part of government and currency-issuing capacity always likes in the government, which can move currency numbers around internal accounting structures”
Nobody is moving anything around anywhere…
Bill 100% caught up in the same reification error as the rest of the Art degree monetarist morons.,.it’s the Art education… can’t help it… sad…
https://www.researchgate.net/publication/289148872_Maintaining_conventions_and_constraining_abstractions
“ Conventions play an important communicative role in mathematics. Likely due to the complex relationship between conventions and school mathematics, few education researchers have questioned or investigated the consequences of instruction and curricula that primarily, if not unquestionably, maintain conventions. Drawing on Piagetian notions of abstraction and our work with students and teachers, we argue that students’ repeated experiences with instruction and curricula that maintain conventions likely constrain students’ learning opportunities. We hypothesize that by ‘breaking’ conventions, educators could better support students in differentiating those aspects of their activity essential to a concept from those that are unessential. We characterize student work on two tasks to illustrate potential relationships between the nature of students’ abstractions and what we perceive to be conventions.”
Maybe read this paper…
I was never educated via conventions … 100% educated via abstractions… Science Degree from a Land Grant …
https://medium.com/not-zero/number-ccabb87ee52a
“A number is essentially an abstraction. It is the concept of a given quantity. It presupposes the cognitive ability to analyze our experience of the world, recognizing similarities and differences of all kinds, “
Unqualified Liberal Art people: Ahhh … no… numbers are REAL and we can run out of them….
Have to agree with you here Matt. There are such things as accounting conventions, which are arbitrary and could be otherwise, just as if the number 3 might have been written backwards. But people are wont to call things accounting conventions which are more what Plato was trying to get at with his forms or Aristotle, Kant and Hegel continued with categories and their logic and reasoning based thereon.
It's not clear to me what Bill is calling a convention and if not saying false things, he is coming close. Many accounting so-called "conventions" - Wray makes this point sometimes - are things that nobody has ever been able to think about otherwise, conceptual relations and words that everyone uses and bases everything else on and can only pretend to not be using. Whole schools of philosophy are based on calling only some batch of words as good, while deeming some other batch meaningless. While using the "meaningless" words with wild abandon, like everyone else, to explain the philosophy... :-)
Conventional current versus electron current. Makes no difference in circuit analysis.
The point is, you cannot run out of an abstraction, and central banks are proving that to everyone on a daily basis. Yet policy everywhere is consumed by tye belief that you can.
“It’s just neurosurgery!”….
In the Science side we are trained to employ abstractions to represent the real… we use diagrams (an Accounting balance sheet is a diagram) functional equations (NPV = f(PV, I, P), units of measure (USD, GBP), etc..
In liberal Art side they are trained to employ the figurative to represent the literal… figures of speech, paintings, fiction, etc…
I would never look at a motion picture e.g. and say “it’s just a movie”… unless the person I was talking to thought the movie was literal… like a young child watching a zombie movie and having nightmares…
So I as a Science person would use “just” in reference to an Art production but only to try to correct a reification error by a young child who is reifying a zombie movie…
But Bill is using “just” here in the context of disrespect for the Accounting discipline…
If my “just” didn’t work, I would take the child onto zombie movie sets and perhaps apply costume and makeup to the child to make them a zombie character and have them act in a zombie movie so the child could experience the figurative activity first hand and then I’d think they would fully understand figurative zombies were not literal…
So maybe this is what Bill is trying to get at with his “just” here but it’s not working… and is instead indicative of disrespect for fellow people who are also products of the academe..
I don’t know if Bill understands human cognition and our tendency to reify… it’s also rampant in Theology… if he does he doesn’t point this specific failure out…
It comes across as condescending…
I could see smug SOB Larry Summers also saying “it’s just accounting!” in the same context as Bill here…
As if his reification errors are somehow more important than proper understanding of the accounting abstractions…
There are movies that turn out to be documentaries... just takes a bit of hindsight.
Paul to Roman’s: “vain were they made in their dialogues”…
If you are trained under dialogic method you end up biased towards vanity…
When you train under Science you are forced to endure the pain of failure so many times you become numb to it… you become immune to the prospect of failure and how that might make you look…
Philosophy is a battle against the bewitchment of our intelligence by means of our language.
Ludwig Wittgenstein, Philosophical Investigations, § 109
Here LW is talking about what he thinks philosophy should be about rather than the history of philosophy, most of which he would call "nonsense."
Philosophy aims at the logical clarification of thoughts. Philosophy is not a body of doctrine but an activity. A philosophical work consists essentially of elucidations. Philosophy does not result in 'philosophical propositions', but rather in the clarification of propositions. Without philosophy thoughts are, as it were, cloudy and indistinct: its task is to make them clear and to give them sharp boundaries.
Tractatus Logico-Philosophicus, 4.112
Well Tom It’s philo sopher which is “fond of knowledge”…
Paul self identified as a “didactic teacher of knowledge and truth”…
So I don’t think there is anything wrong with being fond of knowledge or fond for knowledge… but how is that knowledge taught?
The dialogic method (Liberal Arts) manifestly is not working in the discipline (Economics) that produces the most people ending up in the positions of administration and management of our material systems.,,
We have top leading people in that discipline not understanding the most rudimentary of abstractions….
It’s the core problem…
Bill shouldn’t be so dismissive of the Accounting discipline it’s the discipline that these people are having the most trouble understanding….
There’s a triple scripture I think it was in Isaiah then Iirc Jesus repeated it then Paul repeated it goes like:
“In observing they will be observing but not perceiving
In hearing they will be hearing but not understanding “
These people are mere observers and listeners… they haven’t reached more mature levels of perception and understanding…
They think the abstractions are real.., they’re like elementary school kids… extremely immature for their positions..
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