Inadequate Application of Common Sense: Gnomes Endlessly Pontificating About "Lack" Of The Very Demand That THEY Are Suppressing!

Commentary by Roger Erickson

The Century Foundation and New America Foundation invite you to The Inadequate Supply of Demand

Good Grief!!!

Can we just trade these bozos for Marriner Eccles, Beardsley Ruml and Warren Mosler? Today? As in, without further waste of hot air?

We're waiting on either incomprehensible stupidity, or incomprehensibly stupid mal-intent. Is there any functional difference? Do WE care which it is?

In other settings I'd recommend replacing the entire headcount ... but in this case there are no detectable brains to replace! Just idiot savants that are NOT saving anyone from the faux savant services being foisted on citizens.

Let me get this straight.

I'm "invited" to a @#$%^&*!!! "inadequate supply of demand?"

Here's my response: "No @#$%^&*!!! THANK YOU! 

 OUR aggregate demand is not THEIRS to dole out!!!

AAAAUUUUGGGHHHH! 

 @#$%^&*!!! on a  @#$%^&*!!!,  ^%&#$@,  *(+@#(  STICK!! 

Now I really am mad as hell."

"Alpert argues that we are now living a world in which labor, production, and capital far outstrip demand."

You don't say?

Any suggestion WHY that's been increasingly true, for 80+ years running?
Or WHAT the US Middle Class will be ALLOWED to do about it?
And WHEN?
And, oh yes, allowed by WHOM?

What? No comment there? You're "working on it?" On our diverted dimes? Look, I personally don't care WHAT you trolls do, on your time. Just get the @#$%^! out of OUR way, and stop getting between the citizens and their fiat ... or many, MANY people are going to get hurt, far worse than they already have been.

Remind me why I, or any US citizens, should waste time listening to these windbags spout stuff our grandparents already clearly stated, 80 years ago?

"Economists and political leaders have failed to see the cataclysmic shift in the global economy that resulted from the flood of labor and productive capacity unleashed by the end of socialist regimes."

Duh uh uhhh. Where have these trolls BEEN the last 80 years, when anyone with common sense KNEW this, and saw it, because they LIVED it?

"Alpert argues for bold new policy solutions to jump-start sluggish advanced nations—a new playbook for the new normal."

BMHOTK! Here's a bold new policy suggestion for Alpert and his little band of pork-takers too. How about you guys just get the @#$%^&*! out of the way??? Just @#$%^&*! off and @#$%^&* ? Wouldn't that be far simpler - and much faster? Instead of talking more of us to death?

Less talk, lower taxes, more investment of OUR growing fiat in OUR nation. 

There, I just summarized the situation for D-Al in ONE sentence.

Now he doesn't even need to have his stupid seminar or sell his stupid, $100 book, and we can get on to actually doing things, instead of his endless talk & endless book sales.

While D-Alpert & his Tijuana wags might CLAIM to be on the right path - which they probably read about in a FREE book somewhere, THEIR suggested TEMPO leaves OUR aggregate path lingering so long in their own, personal pocketbooks that it doesn't matter WHAT PATH we take at their suggested tempo!

D-Alp & company, if you're not part of an solution that is allowed to unfold with adequate tempo ... then get the hell out of our way, YESTERDAY?

End of suggestions. Actions needed instead.

The Toughest Task For A Mob To Solve Is Selection Of An Adaptive Leader Rather Than Just A Tyrant

Commentary by Roger Erickson

Isn't it dumbfounding that the level of policy discussion in our country, has fallen so low - from top to bottom? What we're doing now is just embarrassing compared to what our grandparents were doing in the 1930s.

Maybe any remaining of our grandparents should step in and fire literally everyone younger than 90 from gov policy? Everyone younger seems afraid to do anything of any import. Yet it's more complicated than even that. "Milton Friedman’s misfortune is that his economic policies have been tried." Apparently, a few Luddite/Libertarian billionaires liked the general misfortune, and the rest is lobby & campaign-finance history, bought & sold.

Is there any rational comparison between Marriner Eccles in the 1930s and Larry Summers today?

Why such a stark change in the type of presidents and politicians we, the mob, select? In 1938 George Marshall spoke truth to FDR, and rather than being fired, was made Army Chief of Staff, whereupon he quickly fired what, 60-80% of the DoD Flag Officers? As a necessary prerequisite in mobilizing for looming challenges? [And even that was barely enough. We came within a hair's breadth of failing then, and could easily fail now, by other means! Hoover & FDR also launched the Reconstruction Finance Corporation, & conveyed the Pecora Commission, and hired Marriner Eccles among many other, practically aggressive measures. What have either Bush or Obama done except keep the inept in office? What happened to American audacity?]

There's a simple, stark question here. If, in 1938, we could once euthanize over half the DoD brass on a moment's notice, why don't we have an electorate able to select a Pres & Congress ... who have the wit and courage to recognize and hire competent people ... who can euthanize rentier industries which are more trouble than they're worth?

There's a very ancient & well known formula for productively mobilizing adaptive evolution of a mob or a nation, and we're actively avoiding it.

In fact, we're quite actively putting the crooked & inept in charge of keeping themselves out of jail. This could easily destroy the USA. It may have done so already, even if we don't know it yet.

The more I read about Hoover & FDR, the more it seems that they should be viewed as individuals separate from the bureaucracies they fought. Hoover started many things that FDR enlarged and added to. Luckily, they both did what they did ... over the nearly unanimous objection of both of both party bureaucracies. Their most stellar talent was listening to and hiring the few, most vocal, critics who actually made sense. That's a mark of wit, focus and composure.

It's alarming to consider how close the entire USA came to failing by 1932, and what might have happened subsequently if we had.

It's even more alarming to consider how close we are to failing by other means today, and how little, if anything, we're doing about it.

It seems that the toughest task for a mob to solve is selection of an adaptive leader rather than just a tyrant. That rarely happens. Our mob just in the USA today has nearly 3x the population of 1932. Is our group intelligence growing fast enough to keep selecting adaptive leaders from our rapidly growing mob? Not yet, obviously. Mob growth rate alone makes such selection harder every year. The quality of our selection methods is degrading, not accelerating.

And we're not even focused on that as our biggest task!!! Why is our entire government distracted to eavesdropping on trivia? Why aren't citizens eavesdropping on the level of policy discussion among themselves and those they elect to evaluate as leaders? Whatever our school systems are doing, they are not producing citizens who even ask the right questions. Because of that, we're in critically serious trouble.

We Are Stupidly Rescinding the Fiscal/Monetary Constitution Written Largely by Marriner Eccles

Commentary by Roger Erickson

Between 1776 & 1787 we distilled a brilliantly terse prescriptive, not descriptive, approach to solving any emerging task, and called those "methods" the US Constitution. Our Constitution is a prescription for how to approach problems, not endlessly descriptive rules or recipes for exactly how to do anything in particular ... except preserve our agility in improving the quality of distributed decision-making.

Similary, way back in 1938, Marriner Eccles explained prescriptive, not descriptive methods for solving any emerging fiscal/monetary task - essentially a Fiat Currency Constitution. So what on Earth happened to us since? We actually rescinded our fiscal/monetary Constitution, and are half-way through rescinding key elements of our original Constitution.

Why do grandchildren have to re-learn lessons their grandparents learned the hard way, and their parents either forgot or never learned? What citizenry sends their offspring out the door unprepared for the entire range of things that are coming down the pike?

Our biggest hurdles involve retaining our own, distributed common sense - our ability to maintain and grow our quality of distributed decision-making - NOT the complexity of the tasks we face.

"On September 8, 1938, – Marriner S. Eccles – the former Chairman of the Board of Governors of the US Federal Reserve System (1934-1948) presented a speech – Address Responding to Criticisms Leveled by Orval Adams – ... which was a response to an earlier Speech made in May 1938 by Orval W. Adams, who was then the President of the American Bankers Association.

Marriner Eccles was a central banker who ... understood that fiscal ratios should not be the targets for policy. Rather, policy should concentrate on maximising real output and prosperity. Again, the the polar opposite to the policy positions taken today."

Kudos to Thorvald Moe of Norway for dredging up this particular speech, and to Bill Mitchell for further disseminating the link.

Ongoing Feud Between the FiatFields and Decoys

commentary by Roger Erickson

Hidden Agenda behind America’s War on Africa: Containing China by “Fighting Al-Qaeda”

Smart people have been lamenting this for a decade.

Policy dimwits with limited imagination have been pushing it for 2 decades!

It's also the only barely sane reason given for invading Afghanistan (or Iraq, or any other theater in the Great Game).

We're in a battle between OUR merchant-class and THEIR merchant-class, waged by both using their respective pawns/serfs/lower-classes ... whatever. They're the aristocracy, we're the stock.

How many aristacrooks does it take to screw the 99%?

About 1%!

This is an age old feud, between the FiatFields and Decoys. The FiatFields are brilliant at selecting those 1% optimal for solving every task that crops up. Those Decoys, paradoxically, always try to stay in power long after their moment of adaptive utility is up. In culture, Darwin jokingly called it classic, phrenotypic obstinence of swelled heads. :(

If not adequately and promptly tuned out, the constant 1% cultural pain quickly spreads to the neck, and then to the ass.

If only we could pivot to our own public-health management - cultural and economic - we wouldn't be sitting on our obese asses using drones to bomb obsolete static assets! If we invested in our own, dynamic assets, we'd leave the statists in our dynamic dust.

Our real question is how to finally exit this ari-stock-crazy market. Back to peer-to-peer, open source barter with infinite quantities of on-demand fiat? Why should we even need Amazon? We ARE the cloud, if we only allow ourselves to connect.

If fiat = distributed liquidity, then the only costs of fiat are constraints on the quality of distributed decision-making? All we need is earlier, and more, practice at distributing our own cultural agility?

Why not instantly fuse our public Highway and Internet and Telecom and Education services into one agency, task it with ramping up quality of all services 100x/year, and guaranteeing full, free access for all citizens? Then challenge all citizens to craft policy that uses public taxes and incentives to select for the volume-x-quality of emerging dynamic value, not depreciating static value.

We need a DCO, not DHS. (Dept. of Cultural Options)

How to "Pay" for What We Need

commentary by Roger Erickson

Congress could create money, as it did during the Civil War, funding public projects that shock the economy back to life (American Scholar journal).

It's comical to keep seeing how much "novel" information was once common.

As an example, it was once common, over 100 years ago, that sensible farmers understood liquidity, yet now that topic is considered a part of specialized & esoteric "economic" knowledge that is too hard for most citizens to understand! Go figure. What caused sense to become so uncommon?  The data didn't go away, but people's practice at utilizing that data did.  Didn't Walter Shewhart say that "Data is meaningless without context?"

The American Scholar journal is confusing liquidity with static value, but it's at least a start.

Is the following a good starting point for re-introducing commons sense? A Fiat Currency Issuer is market-maker for all participants in all REAL transactions among currency users - i.e., the issuer allows unlimited distribution of re-buyers & re-sellers into infinitely flexible transaction patterns. What's so difficult about that concept? It just separates bookkeeping credits from physical barter or clumsy ledger books, and guarantees agility and reliability of the bookkeeping.  That concept, which economists and bankers call liquidity, is what allows the quality (including agility) of distributed decision-making that military officer training programs say is crucial for the success of any organized system.

Hat tip to Stephanie Kelton

Superfluous Statistics Used to Manage Our Country's Wellbeing Are Largely Irrelevant

commentary by Roger Erickson

A comment from reader "OldWizard" at SeekingAlpha raises a bit of hope. OldWizard is confused by all the superfluous metrics used to excuse politically-driven policies, and instead goes straight to core inflation as a useful management variable. He's right, even if still a bit confused about other metrics, issues and policies. Overuse of uperfluous, distracting metrics causes more harm than good to any organization.  If we did completely re-set our group-management metrics, here's what I'd suggest at least considering.

First, defining a useful term: RoC = return-on-coordination.

RoC ==> fiat (aka, public initiative)
fiat ==> fiat currency
fiat currency ==> liquidity notation
liquidity notation ==> conclusion that industrious, thinking "people" can organize any productive transaction-chains (aka, logistics) that they want.

Unlimited liquidity? ==> an agile electorate can achieve any goals it sets for itself.

Ergo, all the USA lacks is setting goals big enough to absorb our expanding capabilities.

With those metrics in mind, everything else reduces to simply avoiding hyper-inflation or hyper-deflation, which, historically, isn't that hard.

In simple terms, success tracks the quality (including tempo) of distributed decision-making (ask the USMC).

Distributed decision-making requires distributed liquidity.

Distributed liquidity requires adequately distributed "currency income" and "currency savings" AND adequately distributed education and training, PLUS ... constant group practice at setting, orienting and moblizing to achieve national goals.

In short, we have to let our electorate consume what they're capable of producing (plus whatever others are willing to send us). We've known that forever. It's implicit in small groups, but gets lost as rapid population growth and diversification further dissociates the citizens in a supra-tribal nation state.

Most of the confusion stems from conflating the static buying power of hoarded fiat currency vs pursuing the dynamic production power of increasing return-on-coordination. The latter always dwarfs the former, but we never seem to trust our own historical record.

Reality is that there's nothing we hoard today that has much relevance 50 years later. Invest in your kids, like we've always done, then get out of their way fast enough to not do them any harm by constraining their future options - which are beyond our current imagination.

Austerity? That's just starving the kids & grandkids, so we can sit on our butts more comfortably. That's not how to win an Adaptive Rate race.