Export-Import Bank? Instead, How About A MiddleClass Consume-What-You-Produce Bank? What? That's Called A Treasury Dept? So Just Lower All Taxes On Labor?

   (Commentary posted by Roger Erickson)





We could make this simple, and thereby make things better for all people.

But no. The US Chamber of Commerce has a more complicated idea, and crows that:

Ex-Im Has Financed $2Billion Worth Of Exports From Indiana Companies Since 2007

Huh? We're supposed to be impressed? We're LOANING our own fiat, to foreigners, so that they can buy what we produce ... and won't let ourselves consume? Anyone see a contradiction here? How do we grow if we export too much of what we produce?

If we'd just lower taxes on the Middle Class, then WE could buy what we're shipping to foreigners! Why export? Why give excessively to others when we could give to ourselves?

Ever see that little message on airplanes? "In case of an emergency, fasten your own oxygen mask before trying to help others." It's there for a good reason, as was our Middle Class. If we don't maintain our Middle Class, our nation won't be here TO help anyone.

[So why DO we export so much? Answer: The same old why. Exports are still used primarily as a way to take resources from poor people in exporting countries and give it to rich people in importing countries. Plus, we divert & lose that amount of our own fiat that is skimmed off at every step, by rich people in rich countries - through the miraculous evil of FINANCIERS impounding most of OUR fiat - which they then tell us we're out of, and must borrow back from them. How dumb do they think we are?]

Let's get this straight. If we have a fiat currency system ... then why on earth do we reserve most of our own fiat units for hoarding by the mere bean-counting clerks that track OUR fiat units FOR US? Ever seen a dog with 90% of its assets tied up in it's tail? They don't last long, and their last days are not pretty, as the cancerous tail kills it's host.

[Fiat] Taxes for [Fiat] Revenue Are Obsolete

Until every citizen in the USA learns that simple fact in highschool, or before, we will NEVER have sane, adaptive policy in this country. Every subsequent topic is just noise still distracting us from fundamental context.

Nevertheless, the Aiken Standard newspaper of South Carolina is on board with the bullshit, to serve the usual cast of characters.

[Propaganda]: Export-Import Bank is vital to state’s economy

How many people know who owns the Aiken Standard?

Worst yet, this cast of characters has nearly every labor union convinced that lowering Middle Class real incomes and expanding wealth disparity is in the self-interest of labor unions. Doh!

This is sad. Most Labor Unions are actually tied up arguing over which foot to shoot. That's pathetic, and they don't even know it.

Citizens don't let citizens operate ignorantly?

Electorates don't let Labor Unions swallow hooks, lines & sinkers?

What's worse than a drunk behind the wheel? A NeoLiberal in a policy office?

Elegant Fixes Desperately Needed, To Stem Our Increasing Flood of Critical Social Bugs

Commentary by Roger Erickson

One wag just wrote to say (paraphrased) that: [I just read an article by Warren Mosler on Demand Leakages, and of course I totally agree with the concept, but I can still see the objection that many will raise. If people "save" by buying bonds, their currency has gone to the government or to another bond seller, who is presumably planning to spend it. Meanwhile, investments in the stock market send currency to the stock sellers, who also spend it into the economy. No one has really saved currency. They've only bought bonds or stocks. The supposed savers have only purchased something. That's what the gold-bugs mean when they say we need more saving so that we can have more investment. I agree that the gold-bugs are wrong, but I don't know how to respond to their argument in a way that quickly gets more citizens to understand this important issue.]

This is a fascinating question, which shows how far we have to go to achieve adequate Situational Awareness or Context Awareness in this country, and how many levels of understanding there are between here and that Desired Outcome state.

First off, the key presumption about net "sellers" spending all or even most currency back into the economy is plain incorrect. One of our chief problems is that the net sellers are NOT spending the increasing amounts of currency which they accumulate.

That, by definition, is what happens when a financial income and wealth disparity develops.

[This raises the question, of course, of how a subgroup of any society becomes a net seller of any assets, year after year. Shady "acquisition" semantics are, of course, a pre-requisite - but that is a topic for the likes of Bill Black. It would make this post minimally 10x longer.]

There are many issues which cascade from this point made by Keynes, as well as many before him. It boils down to a Sectoral Imbalance, when the Middle Class or bulk of a population do not receive enough social credit to actually consume what they are capable of producing. Most skip over the links between produce/consume/grow.

The key presumption of most graduates of our current school system seems to be that all sellers of stock are equally likely to spend any received liquidity units back into the real economy. As noted, most people gloss over this point, no matter how often it's stated, and go blithely on their way.

Granted, it's a slightly subtle "system" point, so there's no one liner that exposes it for everyone. However, here's a sequence I've found to be pretty portable. It works on most audiences. It's all in the delivery. :)

Social Bug Fix #3000 (8 "lines" of social code)

1) What if some "honeypot" agents simply scavenge vast amounts of currency, and take it out of EFFECTIVE circulation? Could that happen? 

   # So far, all I've encountered agree that this is possible.

2) Do ANY such honeypots actually exist in our market. # Most will readily admit "Yes."
 # Even Warren Buffet constantly says he sits on huge piles of currency, and that it's getting harder to find things worth buying with it! He's been saying that for decades. He's not alone, by any stretch of the imagination.

3) What happens to our effective currency supply if growing proportions of national currency - supposedly in circulation - are actually not FUNCTIONALLY in circulation? Our theoretical assessment of adequate currency supply is therefore increasingly bigger than what's available in practice, right? 

 # It's Ye Olde problem: the difference between theory & practice is always bigger in practice than in theory. :( 

4) Do some of our existing "honeypots" use their unused currency hoards as a Sword of Damocles, held over policy deliberations? 

 # Many people already answer "Yes," hopefully more every day, until we have a majority catching on, and insisting upon campaign finance reform - plus other responses.
5) Thereby the accumulation of significant currency hoards becomes a differentiating and distorting tactic available only to a select few, right?
6) So how long can those honeypots resist the awful temptation to use their rare bargaining chips to circumvent the very democratic process that got us, and them, this far?
 # Only until one of them doesn't practice restraint? Then the others have to act too, or else cede the game, like the rest of us.
7) Do we have any choice except to act - or succumb? Whenever a bug appears in any system - honeypot or other - it MUST be fixed, or it WILL eventually be used.

8) The only question is how artful and elegant our social bug fix can be. Right? :)
That sequence usually gets people on board. However, even then, most people are unwilling to actually act. They'll go back to saying that all politicians, political parties and campaign finances are broken ... EXCEPT theirs, of course. :(

American Ingenuity not circulating.

Apparently, some other - unnamed - types of honeypots are also hoarding most of the American ingenuity and audacity that we used to have. We may or may not be issuing as much to our kids, but whatever ingenuity  we still have, less of it appears to be active circulation each year. Seems our Group Cognition Leakages are the enduring causality behind our Demand Leakages. :(

Please let me know if anyone comes up with a shorter or more elegant "fix" for this particular "social bug". This particular, 8-line, fix typically takes 2 beers, or a whole pot of tea, or one good glass of Port, etc, etc. It's portable (no pun intended), but nevertheless, few will take the time to sit through it. People seem too rushed to actually think about their unemployment. :(

Introducing:

The #Unholy_Economic_Trinity of a aristocrat-spawned orthodox economic religion.

The #Control_Fraud_Leakages

the   #Group_Cognition_Leakages

and the (missing)  #Social_Bug_Fixes.

The Fix, the Fraud & the Missing Bug Fixes ?