I remember Mark Russell, the legendary comedian/satirist, reacting to Bush's "Read my lips--no new taxes." Russsell quipped: "Yeah, he'll raise the old ones."
I applaud your use of M-o-M annualized % in the analysis. Almost everything reported and discussed is Y-o-Y which mostly reflects the inflation that occurred quite a long while ago. Financial markets reacted to recent Y-o-Y decreases as if something actually happened in the last month rather than recognizing that the Y-o-Y change was predominantly reflective of dropping a high inflation value that occurred 13 months prior. Even if all future M-o-M annualized rates were at the 2% target (i.e. M-o-M rates at 0.16515 %) the reported Y-o-Y values would stay above 2% for another 6 months for CPI and another 8 months for PCE (I projected those using actual historical data).
Here's Roger Bootle - a very mainstream New Keynesian in the UK: "I don’t think the Bank can contemplate reducing rates until it is sure that pay inflation – the key guide to underlying inflation – is subsiding. This will require a significant easing in the labour market and an increase in unemployment."
It's pretty clear that mainstream thought is all about increasing the unemployment buffer stock by taxing mortgage and rent payers via interest rate rises.
Or the "Prole Tax" as it should perhaps be called.
Oh, Stephanie, there are days I just want to scream and this is one of them. I’ve been avoiding your newsletter throughout all the inflation talk, because I knew that every day would be a day I would want to not only scream, but perhaps try to kill anyone who uttered one more ridiculously false myth about inflation or economics in general.
When the Bidens went to Saint Croix for their holiday, I could not believe the missed opportunity. Saint Croix is, of course, where Warren Mosler lives, and I had this glorious fantasy of the Bidens enjoying a long, leisurely lunch at the Mosler’s. In my dream, I could see Biden’s eyes light up in that moment of comprehension – not unlike Luigi Spaventa’s did when he was the Assistant Treasury Secretary or Treasury Secretary in Italy and Warren, with a couple of questions, enabled him to see that the Italian Treasury was acting procyclical for absolutely nothing. I love that story.
But, as to the urge to scream or maim this morning … What can be done?
First, I thought of an open letter by the country’s thinking economists, but you’ve done that in support of child care relief. I haven’t followed up to see what, if any, effect that letter had or is having, but I’m certain it didn’t sway the hearts or minds of the millions of Americans who have such strong opinions about economics.
The way that misunderstood economic terms trigger reactions in the minds of the public has to be addressed. I mean nearly everyone in the entire country believes the false narratives of economics. Hell, most economists believe them. Changing people’s minds about these corruptive myths is an overwhelming endeavor. How do we do it?
When I think about this (and I think about it a lot), the only solution that keeps coming back, over and over again, is ADVERTISING. Yep, the good old American way. Too simplistic? I don’t think so; the brilliance of MMT is its simplicity, exactly as is the brilliance of Warren Mosler’s mind. Very few people have the ability to look at a thing as something that didn’t exist before and to apply pure logic to it. Warren has that kind of mind. As does advertising.
ADVERTISING is designed to cut through all preconceptions and apply a logical conclusion. The logical conclusion doesn’t even have to be the truth, as far as advertising is concerned, because in itself, advertising has no bias; it has only the parameters we assign to it, be they true or false. But when it’s good, advertising is simple and logical. It’s not easy to make it good, and acquiring converts to a macroeconomics seen through an MMT lense, will make it more difficult than usual because, well … economics.
Deeply entrenched misconceptions for the entirety of our lives. But what could be more challenging, more important, and more fun than creating that campaign? What’s the target group? Everyone? Do you create different campaigns for different target groups – age, economic status, culture, politics, etc?
Hey, the fascists have been doing it for as long as they’ve been around. Keep it simple. Capture minds. Kill everyone!
"When I think about this (and I think about it a lot), the only solution that keeps coming back, over and over again, is ADVERTISING."
You are absolutely right!
"What’s the target group? Everyone?"
Yes! And what is the single point in the entire economic process that is universally participated in, making any policy implemented at that very point both macro-economically/aggregatively effective and relavant? Retail sale. That is why a 50% Discount/Rebate policy at retail sale is so paradigm changing all by itself. It immediately doubles everyone's purchasing power, potentially doubles the available demand for every enterprise's goods and services and as a kicker...ends the biggest present time economic problem everyone is beefed about, namely inflation...by (amazingly) implementing BENEFICIAL price and asset deflation!
And all we need to do is advertise these empirical, temporal universe, universally effecting, macro-economic facts and benefits. All we need is a platform for that paradigm change. It even implements what MMT and every other leading economic reform movement want, handle inflation while increasing fiscal deficits and increase individual demand without causing inflation. Throw in a $1000/mo. universal dividend for everyone 18 and older for life and it even satisfies conservative/libertarian agendas because if every adult is guaranteed $2000/mo. of purchasing power...what are we bothering to pay payroll taxes for welfare, unemployment insurance and social security???
Hit people directly and beneficially right in the pocket book and it's imminently real to them. Talk about the national debt as if it really doesn't matter (and as we all know here it doesn't) and you have to confront 6000 years of the acculturation of the civilization-long paradigm of Debt Only as the sole form and vehicle for the creation and distribution of new money.
Stephanie, are you reading what Alexis and I have posted here?
What can be done is find a viable Progressive for President with Bernie as VP. Great fund raising, name recognition, and inspiration for the masses without the ageism.
Good. And give them a paradigm changing policy program to run on that is the epitome of economic democracy, resolves the biggest problems of the current paradigm, is easily understood and even integrates the self interests of traditionally opposed economic and political constituencies... The better to craft an economic thriving and climate change surviving political coalition that we've needed for 50 years...and done nothing about.
You need help. And Warren Mosler is not a God but a hedge fund manager with a utopian Progressive dream. Also not to damage your fantasy, inflation is a tax on everyone that devalues all goods and labor. Wages have gone up but inflation has gone higher. Inflation is and always has been a monetary phenomena. The Teleprompter has listened to too many new age economists chasing his FDR dream.
Give it up Dave. Ad hominem is always a sign of weakness. Mosler was a hedge fund manager with a discerning monetary eye...and a better sense of ethics than probably 99% of his brethern. I'll take that over someone whose head is so far up "some long dead economic scribbler's" backside that all they can do is criticise instead of look for ways to upwardly innovate their hero's "insights".
China 3% inflation and Japan 2% while the West has much higher, with similar supply chain issues. Corporate Greed is the reason and that needs to be addressed, otherwise all us little people will continue to be crushed with these rate hikes.
I have question about how the members of the Ged feels about making these decisions. Is any thoughts ever given to the people whose life is adversely impacted by ‘slowing the economy’ or do they have to distance themselves from thinking about that; like a general ordering young soldiers to certain death.
I'd place my faith on them being mostly otherwise normal humans that have simply absorbed the long acculturated pattern in economics and the money system. Erudition is important up to the time that a paradigm change is needed and/or perceived at which time it becomes erudite duncery and a mental impediment. Presently there may or may not be "a confederacy of dunces" but again I'd lean toward it being an unconscious one. Once the new paradigm in economics and the money system becomes more widely perceived then you'll very likely have a conscious conspiracy to suppress it. That's how power corrupts after all. In the mean time because paradigms are like breathing, that is they are mostly unconscious phenomena, a conspiracy isn't even needed because an old paradigm being an unconscious operant factor and cultural reality it can exist in plain sight without perception let alone actual meaningful criticism.
Stephanie: There is worry about the House not being able to rise the debt ceiling when we near it later this year. Why can't the federal government create enough currency to pay off whatever amount of the debt is necessary to keep the total debt well below the ceiling forever? Why does the federal government need to borrow money in the first place?
That could be accomplished by simply routinely returning a significant percentage of the money used to buy treasury bonds to their buyers to either spend or re-invest...in something that was a legitimate form of debt as opposed to the money created that, presto-chango, was turned into the national "debt" in the form of treasury bonds. The national "debt" is actually just a guaranteed investment, mostly for the banks and wealthy investors, and complete ruse that dupes and demagogues can bloviate about for political advantage.
Book recommendation for all here. Edward Chancellor's "The Price of Time - The Real Story of Interest". Published last year, it is well-researched and demonstrates the following:
Credit booms, bubbles, & busts are as old as recorded history.
The root cause of them all was cheap & easy money. 2% interest rates seems to be the floor level rate where mischievous really begins.
Speculation and over-heated construction expansions are unleashed with cheap credit. Many are mal-investments that continued under cheap & easy money.
You'll learn about the plethora of central banker mistakes over the past two decades. It began with Greenspan at 9/11 and the mistakes have just compounded since.
The Fed employs more Ph.d economists than any other institution. They rely on sophisticated economic models that don't adequately understand the bigger picture. They certainly don't consider history. They engage in group-think and can't countenance that maybe, just maybe, they're missing something.
Inflation may be moderating. But higher prices remain embedded. Any tightening in energy prices will also add back to inflationary pressures.
MMT and endless money supply expansion are not modern and they are not innocuous. They're why we had CPI-U at 7% to 8%. These policies cannot continue.
The “hot” topic of the day is that the debt is a huge problem that will be the downfall of the country. And, virtually every newscaster and commentator has picked up and parrots this story. Where are the MMTers calling out this misplaced view and explaining the misconceptions behind this false scare story?
I remember Mark Russell, the legendary comedian/satirist, reacting to Bush's "Read my lips--no new taxes." Russsell quipped: "Yeah, he'll raise the old ones."
I applaud your use of M-o-M annualized % in the analysis. Almost everything reported and discussed is Y-o-Y which mostly reflects the inflation that occurred quite a long while ago. Financial markets reacted to recent Y-o-Y decreases as if something actually happened in the last month rather than recognizing that the Y-o-Y change was predominantly reflective of dropping a high inflation value that occurred 13 months prior. Even if all future M-o-M annualized rates were at the 2% target (i.e. M-o-M rates at 0.16515 %) the reported Y-o-Y values would stay above 2% for another 6 months for CPI and another 8 months for PCE (I projected those using actual historical data).
Where is that chart from?
Here's Roger Bootle - a very mainstream New Keynesian in the UK: "I don’t think the Bank can contemplate reducing rates until it is sure that pay inflation – the key guide to underlying inflation – is subsiding. This will require a significant easing in the labour market and an increase in unemployment."
It's pretty clear that mainstream thought is all about increasing the unemployment buffer stock by taxing mortgage and rent payers via interest rate rises.
Or the "Prole Tax" as it should perhaps be called.
Why is the FOMC myopically focused on wage growth, which is long overdue and deserves a long upside, instead of corporate profits/price gouging?!?!
Because corporate profits, which will fall this year, are not the root cause of inflation.
Oh, Stephanie, there are days I just want to scream and this is one of them. I’ve been avoiding your newsletter throughout all the inflation talk, because I knew that every day would be a day I would want to not only scream, but perhaps try to kill anyone who uttered one more ridiculously false myth about inflation or economics in general.
When the Bidens went to Saint Croix for their holiday, I could not believe the missed opportunity. Saint Croix is, of course, where Warren Mosler lives, and I had this glorious fantasy of the Bidens enjoying a long, leisurely lunch at the Mosler’s. In my dream, I could see Biden’s eyes light up in that moment of comprehension – not unlike Luigi Spaventa’s did when he was the Assistant Treasury Secretary or Treasury Secretary in Italy and Warren, with a couple of questions, enabled him to see that the Italian Treasury was acting procyclical for absolutely nothing. I love that story.
But, as to the urge to scream or maim this morning … What can be done?
First, I thought of an open letter by the country’s thinking economists, but you’ve done that in support of child care relief. I haven’t followed up to see what, if any, effect that letter had or is having, but I’m certain it didn’t sway the hearts or minds of the millions of Americans who have such strong opinions about economics.
The way that misunderstood economic terms trigger reactions in the minds of the public has to be addressed. I mean nearly everyone in the entire country believes the false narratives of economics. Hell, most economists believe them. Changing people’s minds about these corruptive myths is an overwhelming endeavor. How do we do it?
When I think about this (and I think about it a lot), the only solution that keeps coming back, over and over again, is ADVERTISING. Yep, the good old American way. Too simplistic? I don’t think so; the brilliance of MMT is its simplicity, exactly as is the brilliance of Warren Mosler’s mind. Very few people have the ability to look at a thing as something that didn’t exist before and to apply pure logic to it. Warren has that kind of mind. As does advertising.
ADVERTISING is designed to cut through all preconceptions and apply a logical conclusion. The logical conclusion doesn’t even have to be the truth, as far as advertising is concerned, because in itself, advertising has no bias; it has only the parameters we assign to it, be they true or false. But when it’s good, advertising is simple and logical. It’s not easy to make it good, and acquiring converts to a macroeconomics seen through an MMT lense, will make it more difficult than usual because, well … economics.
Deeply entrenched misconceptions for the entirety of our lives. But what could be more challenging, more important, and more fun than creating that campaign? What’s the target group? Everyone? Do you create different campaigns for different target groups – age, economic status, culture, politics, etc?
Hey, the fascists have been doing it for as long as they’ve been around. Keep it simple. Capture minds. Kill everyone!

"When I think about this (and I think about it a lot), the only solution that keeps coming back, over and over again, is ADVERTISING."
You are absolutely right!
"What’s the target group? Everyone?"
Yes! And what is the single point in the entire economic process that is universally participated in, making any policy implemented at that very point both macro-economically/aggregatively effective and relavant? Retail sale. That is why a 50% Discount/Rebate policy at retail sale is so paradigm changing all by itself. It immediately doubles everyone's purchasing power, potentially doubles the available demand for every enterprise's goods and services and as a kicker...ends the biggest present time economic problem everyone is beefed about, namely inflation...by (amazingly) implementing BENEFICIAL price and asset deflation!
And all we need to do is advertise these empirical, temporal universe, universally effecting, macro-economic facts and benefits. All we need is a platform for that paradigm change. It even implements what MMT and every other leading economic reform movement want, handle inflation while increasing fiscal deficits and increase individual demand without causing inflation. Throw in a $1000/mo. universal dividend for everyone 18 and older for life and it even satisfies conservative/libertarian agendas because if every adult is guaranteed $2000/mo. of purchasing power...what are we bothering to pay payroll taxes for welfare, unemployment insurance and social security???
Hit people directly and beneficially right in the pocket book and it's imminently real to them. Talk about the national debt as if it really doesn't matter (and as we all know here it doesn't) and you have to confront 6000 years of the acculturation of the civilization-long paradigm of Debt Only as the sole form and vehicle for the creation and distribution of new money.
Stephanie, are you reading what Alexis and I have posted here?
You’re right the national debt doesn’t matter. What does matter, is who is benefiting. And it’s not us little people!
Precisely. "Systems were made for Man, not Man for systems" Clifford Hugh Douglas.
The national debt Absolutely matters.
What can be done is find a viable Progressive for President with Bernie as VP. Great fund raising, name recognition, and inspiration for the masses without the ageism.
Good. And give them a paradigm changing policy program to run on that is the epitome of economic democracy, resolves the biggest problems of the current paradigm, is easily understood and even integrates the self interests of traditionally opposed economic and political constituencies... The better to craft an economic thriving and climate change surviving political coalition that we've needed for 50 years...and done nothing about.
You need help. And Warren Mosler is not a God but a hedge fund manager with a utopian Progressive dream. Also not to damage your fantasy, inflation is a tax on everyone that devalues all goods and labor. Wages have gone up but inflation has gone higher. Inflation is and always has been a monetary phenomena. The Teleprompter has listened to too many new age economists chasing his FDR dream.
Give it up Dave. Ad hominem is always a sign of weakness. Mosler was a hedge fund manager with a discerning monetary eye...and a better sense of ethics than probably 99% of his brethern. I'll take that over someone whose head is so far up "some long dead economic scribbler's" backside that all they can do is criticise instead of look for ways to upwardly innovate their hero's "insights".
China 3% inflation and Japan 2% while the West has much higher, with similar supply chain issues. Corporate Greed is the reason and that needs to be addressed, otherwise all us little people will continue to be crushed with these rate hikes.
Good morning,
I have question about how the members of the Ged feels about making these decisions. Is any thoughts ever given to the people whose life is adversely impacted by ‘slowing the economy’ or do they have to distance themselves from thinking about that; like a general ordering young soldiers to certain death.
I'd place my faith on them being mostly otherwise normal humans that have simply absorbed the long acculturated pattern in economics and the money system. Erudition is important up to the time that a paradigm change is needed and/or perceived at which time it becomes erudite duncery and a mental impediment. Presently there may or may not be "a confederacy of dunces" but again I'd lean toward it being an unconscious one. Once the new paradigm in economics and the money system becomes more widely perceived then you'll very likely have a conscious conspiracy to suppress it. That's how power corrupts after all. In the mean time because paradigms are like breathing, that is they are mostly unconscious phenomena, a conspiracy isn't even needed because an old paradigm being an unconscious operant factor and cultural reality it can exist in plain sight without perception let alone actual meaningful criticism.
Stephanie: There is worry about the House not being able to rise the debt ceiling when we near it later this year. Why can't the federal government create enough currency to pay off whatever amount of the debt is necessary to keep the total debt well below the ceiling forever? Why does the federal government need to borrow money in the first place?
That could be accomplished by simply routinely returning a significant percentage of the money used to buy treasury bonds to their buyers to either spend or re-invest...in something that was a legitimate form of debt as opposed to the money created that, presto-chango, was turned into the national "debt" in the form of treasury bonds. The national "debt" is actually just a guaranteed investment, mostly for the banks and wealthy investors, and complete ruse that dupes and demagogues can bloviate about for political advantage.
Book recommendation for all here. Edward Chancellor's "The Price of Time - The Real Story of Interest". Published last year, it is well-researched and demonstrates the following:
Credit booms, bubbles, & busts are as old as recorded history.
The root cause of them all was cheap & easy money. 2% interest rates seems to be the floor level rate where mischievous really begins.
Speculation and over-heated construction expansions are unleashed with cheap credit. Many are mal-investments that continued under cheap & easy money.
You'll learn about the plethora of central banker mistakes over the past two decades. It began with Greenspan at 9/11 and the mistakes have just compounded since.
The Fed employs more Ph.d economists than any other institution. They rely on sophisticated economic models that don't adequately understand the bigger picture. They certainly don't consider history. They engage in group-think and can't countenance that maybe, just maybe, they're missing something.
Inflation may be moderating. But higher prices remain embedded. Any tightening in energy prices will also add back to inflationary pressures.
MMT and endless money supply expansion are not modern and they are not innocuous. They're why we had CPI-U at 7% to 8%. These policies cannot continue.
Corporate profits, which are at an all-time high, ARE the primary cause of inflation: www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
Eggs now $7 / dozen and in short supply in some areas.
https://news.yahoo.com/7-dozen-why-california-eggs-130037452.html
Love the subtitle: ”Fed officials pledge to stay higher for longer.“
Where are you?
The “hot” topic of the day is that the debt is a huge problem that will be the downfall of the country. And, virtually every newscaster and commentator has picked up and parrots this story. Where are the MMTers calling out this misplaced view and explaining the misconceptions behind this false scare story?