Today’s edition of The Lens is the best to date. It seems so obvious; increase supply, don’t constrain demand. You brought clarity to a critical issue, muddled by pedantic ideologues. Thanks. Cheers!
Er, is there no way to educate law-makers and the Fed that they are making a grave mistake by raising interest rates?
Are we just stuck here, doing the stupid, ineffectual thing? Looks like it.
As Professor Robert Reich says, we are trying to put out what we think is a kitchen fire when the actual fire is in the forest, completely outside the house.
I have no clout, of course, with my all-Republican representatives in Congress; they just want to cut taxes for the big dogs, their donors. Contacting them is a waste of their time and mine, regarding anything.
I guess the consolation prize is that we know what to do and not to do. It's just that we're going to ignore that information and revert to type: doing the wrong thing at the wrong time. What else can you expect from macroeconomists that reject the new data and insights that MMT provides?
I am frustrated by the media coverage which assumes that only Fed action can impact the inflation rate. How does making housing and credit more expensive mitigate a housing shortage?
It's not a mistake if the goal is to cut off any emergence of labor power. That doesn't have to be a conspiracy, it's more like they don't know how to make any other economic model work.
Ms. Kelton- Per your book Deficit Myth, you suggest a federal jobs guarantee. I couldn't agree more for a couple of reasons!
Having the Federal Reserve be responsible for both full employment and taming inflation are inherently contradictory (usually). The Fed should ONLY have to concern itself with inflation and money supply. Normally, to tame inflation means contracting the money supply and thus causing job loss!
Congress has abdicated its responsibility on the jobs front in my opinion. If Congress managed a jobs guarantee, then we would NOT see any wild swings in unemployment, thus avoid rising and falling demand as people get jobs or lose jobs. That element in the economy would be consistent and stable.
The EPI research cited is the response to many wrong-headed theories about U.S. policy being to blame for whatever ails us. Ok, but "it's a global problem, stupid."
Or rather it's about palliative reforms instead of a genuine paradigm change. One of the accomplished signatures of historical paradigm changes is...everything adapts to the paradigm change...not the other way around.
All of your critiques are accurate and your counter suggestions are good. All of MMT, Keen's Minsky's Financial Instability Hypothesis, Hudson's Financial Parasitism and his suggestion that we need Industrial capitalism as oppsed to Finance capitalism, Ellen Brown's Public Banking and Graeber's work on debt align with the idea that MONEY's effects are at the core of our economic problems. So why not integrate all of their correct reformist insights into a movement that changes the entire (presently monopolistic) pattern/paradigm of money? ...the better to both thrive and survive because money DOES make the world go 'round and a new monetary paradigm will FINALLY enable us to accomplish the Good of universal economic abundance while also enabling ecological sanity. We need to "up our game" to the paradigmatic level of analysis.
With full acknowledgement to the giant civil rights mass movement originator Rev. Dr. Martin Luther King, Jr. and the template upon which this speech is based:
I Have a Dream
When our ancestors were hunters and gatherers and then cultivators of various crops and domesticators of animals they partook of the bounty of the earth and understood and appreciated that abundance. I have a dream that mankind will return to such a mindset. A mindset that knows and appreciates the gracious bounty, the abundance and the basic goodness of Life and Living now made possible by those same natural resources and our modern ability to produce…and that balances all monetary, economic and ecological factors in a loving and rational embrace of all life and the planet we inhabit. I have a dream.
I have a dream. I have a dream that the wealthy and powerful controllers of the present economy will join hands with all businesses and all individuals and enable the additional money needed to make the economy flow abundantly to be directly distributed to individuals.
I have a dream that businesses and individuals will awaken to the common interest they share of always having sufficient actually spendable incomes in the hands of individuals so that they can continuously and fully consume the products of those businessmen.
I have a dream that politicians, in order to better serve their constituencies, will join in this gracious overall and underlying statesman like purpose by passing and enacting the policies that perfectly reflect our abundant ability to produce and distribute.
I have a dream that the scientist and the religious advocate will join hands and together celebrate the meaning of grace and its reflecting major characteristics of balance, abundance, beauty, flow, awe and enjoyment, so that those meanings may be the reality we create and experience throughout the days of our lives. I have a dream today.
I have a dream where there is more abundant profit, more generally abundant and more ultimately satisfying consumption, and much more leisure time to contemplate and enjoy Life in whatever positive and constructive purposes the individual may freely choose to do, to build and to participate in. I have a dream today.
I have a dream that man will rise up and better fulfill his actual species designation of homo sapiens, wise and discerning man. Too long have we been unconscious cogs in too small of a game called homo economicus. Man is greater than that. Man is more noble than simply that. Man deserves an economic and money system that serves him in all of his many available purposes and most especially in his ultimate purpose of self development. I have a dream today.
I have a dream that all men will look at and actually see the importance, the necessity, the beauty and the Goodness of this vision…and then make it their purpose as well. Let us open our hearts and our minds to the idea, the policies, and so better, the experience of Grace. Let us have a philosophy of Grace and its Goodness that blesses every individual who embraces it, and a policy of Grace that penetrates the entirety of the economy and reaches all the way to every individual with our abundant ability to produce. Let the freedom, the abundance and the balance of Grace ring throughout the land.
And let us say, "We cannot stop, we will not stop, and we will go forward and make this dream our own and the earthly reality for all!" Then is when we can all join together and sing in a paraphrase of the words of the old negroe spiritual, “Free at last! Free at last! Thank God Almighty….we are spiritually and economically free at last!
I still don't understand why the powers that be are so blind to this logic. Usually, in gov't. I look for how the deciders are profitting off bad policy, but I'm baffled in this case. Can you explain it?
So what's their motivation? Are they just misguided from wrong education or is the coordinated effort you speak of benefit the elite by raising rates? Can you enumerate what these benefits might be??
Undoubtedly a variety of reasons, the top two being career self interest and capture by the current orthodoxy. Orthodoxy is the death of actual thinking and the beginning of mere calculation.
If the # of jobs restored is now where employment was prior to the pandemic how can that be “created” jobs when the employment is only back where it was 2 1/2 years ago ? The Biden administration (and you) are wrong when you say 22 million jobs have been created. They have only been “restored” not created.
“Our” inflation has been caused an explosion of M2 money supply and reckless tax and spend fiscal programs. Milton Friedman would agree with me!
Milton Freidman, like nearly every other right wing economist took a particle of truth and made a fetish out of it. The two deepest reasons we have inflation are 1) there is no system or current policy that effectively prevents it. We currently live in a system of alternately goose and strangled financial chaos. "Free" market theorists have actually confused chaos for freedom because in the temporal/human universe there is only freedom amongst known barriers. That's why you can't walk into a theater and yell "Fire!" Which leads us to number 2) We've allowed the current paradigms for intellectual inquiry (science and math only) to blinker us when what is required is science, math and the integrative mindset of wisdom which favors solutions over orthodoxies and ethics over mere self interest.
What we should be concerned with is not so much free markets, but a prosperous free flowing economy that solves problems, is guided by the highest ethical considerations possible and is aligned with ecological and human survival.
Oh, and by the way a 50% Discount/Rebate policy at retail sale would enable all of the intentions of that last paragraph. Why? Because it (along with the rest of the paradigmatic program I advocate) is the very expression at the most efficacious point in the economic process of the new monetary and economic paradigm of Direct and Reciprocal Monetary Gifting. Google Wisdomics-Gracenomics: The Monetary Paradigm and Its Policies on Amazon if you want your children and grand children to thrive and survive.
Actually neither as I am a retired nurse and small business owner who is just intellectually curious. I'm a student of Steve Keen, Michael Hudson, MMT and David Graeber since the great finnancial crisis hit in 2008. I was also privileged to be introduced to Social Credit during this period which almost no one remembers was a world movement between the two world wars started by a man named C. H. Douglas. Douglas was a very clear thinking individual who (I believe) originated the idea of a UBI/universal dividend, recognized that money was most basically accounting way before Steve Keen and MMT did and came up with a policy he called the compensated retail discount which was enlightened except he envisioned it as a way to create a statistical general economic equilibrium (in other words a smallish percentage discount that would add purchasing power to the individual and reverse inflation) when a higher percentage rate discount which I have innovated the policy with can literally be a paradigm change in a single policy. Social Credit has become much too associated with the right and an orthodox Christian perspective for my tastes, but it still is the progenitor of much of what is cutting edge economic theory today.
Once again, believing abstractions such as money are more real than material productivity. The absolute mandarin delusion of doing things that keep warehouses and industry from outputting stuff because it’s believed the imaginary money is tight when the money was only ever supposed to be a scorecard for said output. It gets reality totally back to front.
Your take makes sense, Ms Kelton. Some part of me also lacks confidence in any Trump appointee. Mango Mussolini had a remarkable knack for choosing the very worst people for every job & situation ...
Some hikes? yes...why? Banks are getting more return from their loans, more willing to lend to more risky agents. Loans growth is accelerating, and imho this is a consequence of the rate hikes, this is pro growth/"inflationary", can also make banks willing to lend to some projects (supply) that they wouldn't before. (and in this sense I believe ECB made a move they should have done much before, but should not go much higher)
Problem? This is not what the FED wants, and will make them go further, until something breaks hard, and I believe they will go well past "benefical" rate hikes into "destructive" mode.
Today’s edition of The Lens is the best to date. It seems so obvious; increase supply, don’t constrain demand. You brought clarity to a critical issue, muddled by pedantic ideologues. Thanks. Cheers!
Er, is there no way to educate law-makers and the Fed that they are making a grave mistake by raising interest rates?
Are we just stuck here, doing the stupid, ineffectual thing? Looks like it.
As Professor Robert Reich says, we are trying to put out what we think is a kitchen fire when the actual fire is in the forest, completely outside the house.
I have no clout, of course, with my all-Republican representatives in Congress; they just want to cut taxes for the big dogs, their donors. Contacting them is a waste of their time and mine, regarding anything.
I guess the consolation prize is that we know what to do and not to do. It's just that we're going to ignore that information and revert to type: doing the wrong thing at the wrong time. What else can you expect from macroeconomists that reject the new data and insights that MMT provides?
I am frustrated by the media coverage which assumes that only Fed action can impact the inflation rate. How does making housing and credit more expensive mitigate a housing shortage?
It's not a mistake if the goal is to cut off any emergence of labor power. That doesn't have to be a conspiracy, it's more like they don't know how to make any other economic model work.
Ms. Kelton- Per your book Deficit Myth, you suggest a federal jobs guarantee. I couldn't agree more for a couple of reasons!
Having the Federal Reserve be responsible for both full employment and taming inflation are inherently contradictory (usually). The Fed should ONLY have to concern itself with inflation and money supply. Normally, to tame inflation means contracting the money supply and thus causing job loss!
Congress has abdicated its responsibility on the jobs front in my opinion. If Congress managed a jobs guarantee, then we would NOT see any wild swings in unemployment, thus avoid rising and falling demand as people get jobs or lose jobs. That element in the economy would be consistent and stable.
The EPI research cited is the response to many wrong-headed theories about U.S. policy being to blame for whatever ails us. Ok, but "it's a global problem, stupid."
Or rather it's about palliative reforms instead of a genuine paradigm change. One of the accomplished signatures of historical paradigm changes is...everything adapts to the paradigm change...not the other way around.
This piece seems to validate many of the assertions from Supply Side economists. Therefore I'm in agreement
All of your critiques are accurate and your counter suggestions are good. All of MMT, Keen's Minsky's Financial Instability Hypothesis, Hudson's Financial Parasitism and his suggestion that we need Industrial capitalism as oppsed to Finance capitalism, Ellen Brown's Public Banking and Graeber's work on debt align with the idea that MONEY's effects are at the core of our economic problems. So why not integrate all of their correct reformist insights into a movement that changes the entire (presently monopolistic) pattern/paradigm of money? ...the better to both thrive and survive because money DOES make the world go 'round and a new monetary paradigm will FINALLY enable us to accomplish the Good of universal economic abundance while also enabling ecological sanity. We need to "up our game" to the paradigmatic level of analysis.
With full acknowledgement to the giant civil rights mass movement originator Rev. Dr. Martin Luther King, Jr. and the template upon which this speech is based:
I Have a Dream
When our ancestors were hunters and gatherers and then cultivators of various crops and domesticators of animals they partook of the bounty of the earth and understood and appreciated that abundance. I have a dream that mankind will return to such a mindset. A mindset that knows and appreciates the gracious bounty, the abundance and the basic goodness of Life and Living now made possible by those same natural resources and our modern ability to produce…and that balances all monetary, economic and ecological factors in a loving and rational embrace of all life and the planet we inhabit. I have a dream.
I have a dream. I have a dream that the wealthy and powerful controllers of the present economy will join hands with all businesses and all individuals and enable the additional money needed to make the economy flow abundantly to be directly distributed to individuals.
I have a dream that businesses and individuals will awaken to the common interest they share of always having sufficient actually spendable incomes in the hands of individuals so that they can continuously and fully consume the products of those businessmen.
I have a dream that politicians, in order to better serve their constituencies, will join in this gracious overall and underlying statesman like purpose by passing and enacting the policies that perfectly reflect our abundant ability to produce and distribute.
I have a dream that the scientist and the religious advocate will join hands and together celebrate the meaning of grace and its reflecting major characteristics of balance, abundance, beauty, flow, awe and enjoyment, so that those meanings may be the reality we create and experience throughout the days of our lives. I have a dream today.
I have a dream where there is more abundant profit, more generally abundant and more ultimately satisfying consumption, and much more leisure time to contemplate and enjoy Life in whatever positive and constructive purposes the individual may freely choose to do, to build and to participate in. I have a dream today.
I have a dream that man will rise up and better fulfill his actual species designation of homo sapiens, wise and discerning man. Too long have we been unconscious cogs in too small of a game called homo economicus. Man is greater than that. Man is more noble than simply that. Man deserves an economic and money system that serves him in all of his many available purposes and most especially in his ultimate purpose of self development. I have a dream today.
I have a dream that all men will look at and actually see the importance, the necessity, the beauty and the Goodness of this vision…and then make it their purpose as well. Let us open our hearts and our minds to the idea, the policies, and so better, the experience of Grace. Let us have a philosophy of Grace and its Goodness that blesses every individual who embraces it, and a policy of Grace that penetrates the entirety of the economy and reaches all the way to every individual with our abundant ability to produce. Let the freedom, the abundance and the balance of Grace ring throughout the land.
And let us say, "We cannot stop, we will not stop, and we will go forward and make this dream our own and the earthly reality for all!" Then is when we can all join together and sing in a paraphrase of the words of the old negroe spiritual, “Free at last! Free at last! Thank God Almighty….we are spiritually and economically free at last!
I still don't understand why the powers that be are so blind to this logic. Usually, in gov't. I look for how the deciders are profitting off bad policy, but I'm baffled in this case. Can you explain it?
So what's their motivation? Are they just misguided from wrong education or is the coordinated effort you speak of benefit the elite by raising rates? Can you enumerate what these benefits might be??
Undoubtedly a variety of reasons, the top two being career self interest and capture by the current orthodoxy. Orthodoxy is the death of actual thinking and the beginning of mere calculation.
If the # of jobs restored is now where employment was prior to the pandemic how can that be “created” jobs when the employment is only back where it was 2 1/2 years ago ? The Biden administration (and you) are wrong when you say 22 million jobs have been created. They have only been “restored” not created.
“Our” inflation has been caused an explosion of M2 money supply and reckless tax and spend fiscal programs. Milton Friedman would agree with me!
Milton Freidman, like nearly every other right wing economist took a particle of truth and made a fetish out of it. The two deepest reasons we have inflation are 1) there is no system or current policy that effectively prevents it. We currently live in a system of alternately goose and strangled financial chaos. "Free" market theorists have actually confused chaos for freedom because in the temporal/human universe there is only freedom amongst known barriers. That's why you can't walk into a theater and yell "Fire!" Which leads us to number 2) We've allowed the current paradigms for intellectual inquiry (science and math only) to blinker us when what is required is science, math and the integrative mindset of wisdom which favors solutions over orthodoxies and ethics over mere self interest.
What we should be concerned with is not so much free markets, but a prosperous free flowing economy that solves problems, is guided by the highest ethical considerations possible and is aligned with ecological and human survival.
Oh, and by the way a 50% Discount/Rebate policy at retail sale would enable all of the intentions of that last paragraph. Why? Because it (along with the rest of the paradigmatic program I advocate) is the very expression at the most efficacious point in the economic process of the new monetary and economic paradigm of Direct and Reciprocal Monetary Gifting. Google Wisdomics-Gracenomics: The Monetary Paradigm and Its Policies on Amazon if you want your children and grand children to thrive and survive.
Steve,
Do you work in the private sector? Or do you work in academia?
Actually neither as I am a retired nurse and small business owner who is just intellectually curious. I'm a student of Steve Keen, Michael Hudson, MMT and David Graeber since the great finnancial crisis hit in 2008. I was also privileged to be introduced to Social Credit during this period which almost no one remembers was a world movement between the two world wars started by a man named C. H. Douglas. Douglas was a very clear thinking individual who (I believe) originated the idea of a UBI/universal dividend, recognized that money was most basically accounting way before Steve Keen and MMT did and came up with a policy he called the compensated retail discount which was enlightened except he envisioned it as a way to create a statistical general economic equilibrium (in other words a smallish percentage discount that would add purchasing power to the individual and reverse inflation) when a higher percentage rate discount which I have innovated the policy with can literally be a paradigm change in a single policy. Social Credit has become much too associated with the right and an orthodox Christian perspective for my tastes, but it still is the progenitor of much of what is cutting edge economic theory today.
Once again, believing abstractions such as money are more real than material productivity. The absolute mandarin delusion of doing things that keep warehouses and industry from outputting stuff because it’s believed the imaginary money is tight when the money was only ever supposed to be a scorecard for said output. It gets reality totally back to front.
Your take makes sense, Ms Kelton. Some part of me also lacks confidence in any Trump appointee. Mango Mussolini had a remarkable knack for choosing the very worst people for every job & situation ...
I know you write for a predominantly white audience but “blacks” is offensive and outdated. We left that in the ‘90s.
No one says whites, they say white people. Afford us the same respect so I can get past the first sentence.
Indiscriminate hikes that hurt demand? no.
Some hikes? yes...why? Banks are getting more return from their loans, more willing to lend to more risky agents. Loans growth is accelerating, and imho this is a consequence of the rate hikes, this is pro growth/"inflationary", can also make banks willing to lend to some projects (supply) that they wouldn't before. (and in this sense I believe ECB made a move they should have done much before, but should not go much higher)
Problem? This is not what the FED wants, and will make them go further, until something breaks hard, and I believe they will go well past "benefical" rate hikes into "destructive" mode.