tag:blogger.com,1999:blog-582368152716771238.post2231331440923611924..comments2024-03-28T14:41:03.793-05:00Comments on The Grumpy Economist: Magical Monetary TheoryJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-582368152716771238.post-62327286564721101092020-10-21T06:25:45.199-05:002020-10-21T06:25:45.199-05:00Yes, inflation is absolutely there, except it'...Yes, inflation is absolutely there, except it's going into land values(real estate), not goods and services. Problem is economists conflate the two. Not a fan of the gold standard, but when we were on it inflation was able to direct itself at goods and services. But no longer since the 70's we've had repeated land bubbles, manifest today as mortgage crises. It's astonishing how this is so overlooked. The judges make a mistake when they speak of inequality. It's inevitable the wealthy will divert capital into real estate and it's derivatives such as stocks of monopoly corporations. They are not stupid. So there's no forced inequality, it's all a free choice of the people in general. Tens of millions of home owners with mortgages are fully complict. And are bailed out first by government of all party'sRobin Smithhttps://www.blogger.com/profile/04648517992918303543noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-11275914195191948762020-08-14T21:52:32.808-05:002020-08-14T21:52:32.808-05:00Thw hit pieces from all the conventional theory gr...Thw hit pieces from all the conventional theory grifters are coming thick and fast.<br />The same guys who've been wrong about everything for 40 years. <br />It would be laughable if you guys didn't have so much blood on your hands. ☹️John Ghttps://www.blogger.com/profile/03827664554813104625noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-597112028651637672020-08-05T16:29:39.269-05:002020-08-05T16:29:39.269-05:00TestingTestingFRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-57198970251894857832020-07-02T10:43:46.392-05:002020-07-02T10:43:46.392-05:00“Testing Theories of American Politics: Elites, In...“Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens<br />Martin Gilens and Benjamin I. Page<br />Each of four theoretical traditions in the study of American politics—which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism—offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. We report on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues. Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. “<br />https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdfPostkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-74467950803593910762020-06-09T14:52:52.687-05:002020-06-09T14:52:52.687-05:00I think guys focus to much on spending when talkin...I think guys focus to much on spending when talking about inequality.<br /><br />What, in my opinion, is more important is almost no money goes to creating businesses that employ people. GDP of US is [what?] $21TR, and only $40BN goes to VC and maybe $120BN to angel-investing.<br /><br />Since there's no wealth tax, the guys to whom all wealth accumulates can just buy muni- bonds in the secondary market and do fabulously with a 1.5% yield.<br /><br />But even creating businesses isn't ideal. More STABLE would be a giant global $10TR/yr, wealth tax-funded not-for-profit that creates millions of not-for-profits. <br /><br />Those firms stay viable even if they don't generate profits!<br /><br />If the not-for-profits suck enough workers out of the for-profit sector then wages would go up.Scott Solomonhttps://www.linkedin.com/in/scott-solomon-5a8a082/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-9667918680290748902020-06-08T23:18:00.504-05:002020-06-08T23:18:00.504-05:00It's asset price inflation, which as you said ...It's asset price inflation, which as you said isn't the same as consumer price inflation in that it's good for asset owners, but it's still a form of inflation. I think Volcker and Feldstein forgot to take into account that if the Fed money is going to wealthy people, they aren't going to spend enough of it to inflate consumer prices. But the downside is soaring inequality, and what happens if we ever try to give money to Main Street? Inflation could end up becoming a thing then. (Unless the MMT people are right, the government giving out the printed money to Main Street doesn't induce inflation because the money is used productively. My guess though is that in reality, a lot of it won't be used productively.)Jeremy Rosenhttps://www.blogger.com/profile/09408223672877513742noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-5345400834193161162020-06-08T06:38:14.748-05:002020-06-08T06:38:14.748-05:00Https://modernmoney.wordpress.com/FAQs-2
For thos...Https://modernmoney.wordpress.com/FAQs-2<br /><br />For those with a genuine interest these may helpSenexxhttps://www.blogger.com/profile/07344278873799858867noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-33583375033923157642020-06-08T05:13:07.563-05:002020-06-08T05:13:07.563-05:00Reading some (most) of the comments on here tells ...Reading some (most) of the comments on here tells me pretty much all I need to know about MMT. 'Funny Money' was what we used to call the social credit movement; its modern incarnation seems more like 'Loony Money'.Cokerhttps://www.blogger.com/profile/02631288439451432057noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-10969758126022340712020-06-08T03:18:53.423-05:002020-06-08T03:18:53.423-05:00I don't agree. I've met scores of people...I don't agree. I've met scores of people who wanted to start businesses, but they could not find funding to start the businesses.<br /><br />If you want to get into the nitty gritty, I'd rather have some rich guys endow a not-for-profit for me with $15MM, and I'd get paid off the returns of the endowment.<br /><br />I'd get paid well, I'd be answerable to no one, I couldn't get fired, I could set my own hours, and my enterprise would be unable to fail (unless I invested the endowment with someone like Madoff).<br /><br />Having to produce profits is a pain in the neck (not to mention being answerable to clients and investors).<br /><br />That's why a global wealth tax fueled $10TR/yr not for profit that funded millions of nfp's would go a long way toward solving the world's economic problems.<br /><br />Bloomberg stuffs $4BN/yr into his family office. He's not gonna hire 3 guys to listen to my business ideas. He'd rather just stuff his money into the secondary markets for bonds and equities.<br /><br />The left wing wacko Nick Hanauer sold his family's pillow business to a private equity firm (that ran it into the ground) because he was too lazy to hire five guys to run the business.Scott Solomonhttps://www.linkedin.com/in/scott-solomon-5a8a082/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-90663676444299733562020-06-08T03:10:22.522-05:002020-06-08T03:10:22.522-05:00The plutocracy maintains control by using divide &...The plutocracy maintains control by using divide & conquer.<br /><br />But divide & conquer can be used even more effectively against the plutocracy. <br /><br />Just design the global wealth tax so the banks make and extra $1.5TR+/yr from making the loans to pay the tax, then the BANK LOBBY will see to it that there's a global wealth tax.<br /><br />The most powerful lobby can be co-opted to push for the global wealth tax.<br /><br />That is THE ONLY way to get a global wealth tax.Scott Solomonhttps://www.linkedin.com/in/scott-solomon-5a8a082/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-14632807284316601742020-06-08T03:01:09.005-05:002020-06-08T03:01:09.005-05:00Stock and bond prices "inflating" aren&#...Stock and bond prices "inflating" aren't really inflation. If you own stocks & bonds and the prices "inflate," you can sell them and acquire more consumer goods.<br /><br />I think the reason we see increases in stock and bond prices is SO MUCH wealth now accumulates to such a tiny circle of economic agents, and this circle is too lazy to do anything productive with this wealth.<br /><br />So they just dump the wealth into the fixed income and equity markets so they can bring up a screen and look at how wealthy they are.<br /><br />I believe there is now $18TR in bonds with negative yields!!<br /><br />These guys live so far out on the right of Bernoulli's log-utility curve that negative 100 bps yield reduces their utility by zero.<br /><br />They'd rather lose the 100bps/yr than hire a guy to assemble an angel investing portfolio who has to take calls from 300 schlubs/week.Scott Solomonhttps://www.linkedin.com/in/scott-solomon-5a8a082/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-45929091470636190002020-06-07T22:06:17.619-05:002020-06-07T22:06:17.619-05:00This is just my hypothesis, so take it for what it...This is just my hypothesis, so take it for what it's worth, but I think we have had a lot of inflation in recent decades. Just not in consumer prices, but instead in stock and bond prices. Essentially, inflation occurs where the money goes, and QE puts the newly-printed money into the hands of wealthy investors, who then take that money and re-invest it. Specifically in stocks because with interest rates so low, stocks are where you can get a return. So what do we see in recent decades? Low consumer price inflation, high stock and bond prices, and increasing wealth inequality.Jeremy Rosenhttps://www.blogger.com/profile/09408223672877513742noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-46545732306075503792020-06-07T18:24:01.518-05:002020-06-07T18:24:01.518-05:00Well, the point is that you don't have to wait...Well, the point is that you don't have to wait around until you can make the necessary policy changes required to actually getting around to taxing rich people whose grip on the lobbying industry makes such a transformation so arduous. eghttps://www.blogger.com/profile/00785993737401518690noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-22598700595815169802020-06-07T18:21:04.789-05:002020-06-07T18:21:04.789-05:00Your assertion about what MMTers "do not do&q...Your assertion about what MMTers "do not do" will come as something of a surprise to scholars like William Mitchell who have worked with small African nations to explain how they can maximize their policy space by floating their currencies and avoiding borrowing in foreign currencies. eghttps://www.blogger.com/profile/00785993737401518690noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-92117821838347407882020-06-07T12:20:00.192-05:002020-06-07T12:20:00.192-05:00You are talking about MMT as a policy option. MMT ...You are talking about MMT as a policy option. MMT doesn't "work" for anyone, but rather is a framework for understanding economics. Monetary sovereignty is not available to all nations in all circumstances. MMT recognizes this fact. Reserve currency status is a benefit to sovereignty as it creates foreign demand in addition to domestic demand for the currency.Anonymoushttps://www.blogger.com/profile/05835546751295196837noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-47639002514275568992020-06-07T11:52:42.936-05:002020-06-07T11:52:42.936-05:00Whether or not a tax has a demand-reducing effect ...Whether or not a tax has a demand-reducing effect depends on who is taxed and what is being done with the tax revenues.<br /><br />If you're taxing those to whom all wealth accumulates who are just dumping their wealth into the secondary markets for bonds and equities (i.e., deploying capital that does absolutely NOTHING productive), then taking the tax revenues and starting (say) a $2TR/yr angel-investment fund or a $10TR/yr not for profit that employs millions of people, then that tax would increase demand (not decrease demand).Scott Solomonhttps://www.linkedin.com/in/scott-solomon-5a8a082/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-74252766726565299012020-06-07T11:41:21.089-05:002020-06-07T11:41:21.089-05:00V approaching zero. David Hume in his essay "...V approaching zero. David Hume in his essay "Of Money" said something to the effect that coin that is locked up in chests has the same effect on prices as if it were annihilated.Creigh Gordonhttps://www.blogger.com/profile/05267728698204033199noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-49433166770907987142020-06-07T11:35:32.323-05:002020-06-07T11:35:32.323-05:00GDP is the measure of a nation's productive (i...GDP is the measure of a nation's productive (ie., production-and-consumption) economy. GDP is the sum of household, business and government spending (and likewise the income of those sectors equals that spending, because all spending is another’s income). The economy depends on household spending (2/3 of GDP). That spending is limited by household income (which comes only from those three sectors). Business provides that income to the extent demand (ie., business opportunity) exists, and government provides the rest. All that’s important to the economy is maintaining this flow, and with a fiat currency (whose value, by definition, depends only on currency-users perception), there are no limits other than that perception.<br /><br />The household spending in GDP includes everything that the public buys to consume — food, housing, transportation, healthcare, entertainment, etc. The income side of GDP includes neither Federal borrowing nor personal or corporate income taxes - so they do not (and never have) paid for (or funded) that spending. QED. What <i>lorerrn</i> says above is truth!edzimmerhttps://www.blogger.com/profile/02585904152433355121noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-33525860492184857042020-06-07T11:28:57.712-05:002020-06-07T11:28:57.712-05:00The concept of reserve currency is not a big deal ...The concept of reserve currency is not a big deal for MMT. MMT asserts that US dollars are valuable because of the US Government's ability to demand US dollars as payment of US taxes. The value of the US dollar to someone who doesn't have to pay US taxes depends simply on the dollar's usability as a medium of exchange, and that in turn is really just a function of the relative size of the US economy. <br /><br />As far as MMT working for a poor small nation, MMT recognizes that the constraints on what a government can buy with the currency it issues are determined by what is offered for sale in that currency; that is, what labor, materials, and technology is offered for sale in that currency. These constraints are different for every country, and are liable to be more constrictive for small and poor economies. This doesn't mean MMT "won't work" for small economies, it just means the real constraints are different.Creigh Gordonhttps://www.blogger.com/profile/05267728698204033199noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-54558056356627310552020-06-07T11:17:10.400-05:002020-06-07T11:17:10.400-05:00++1*++1*edzimmerhttps://www.blogger.com/profile/02585904152433355121noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-11953001483645152342020-06-07T11:14:03.169-05:002020-06-07T11:14:03.169-05:00Scott S: Most people cannot start businesses NOT b...Scott S: Most people cannot start businesses NOT because they lack capital, but because they lack (prospective) customers. Capital has become the big deal its become only in the past 30 years (to the detriment of entrepreneurs and society).edzimmerhttps://www.blogger.com/profile/02585904152433355121noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-73135214718767430522020-06-07T11:09:40.731-05:002020-06-07T11:09:40.731-05:00The reality I described above is obscured by the f...The reality I described above is obscured by the fact that much of the money the government creates and spends is in the form of Treasury bonds, which are simply "future money" which in practice is easily swapped for current money at a small discount.Creigh Gordonhttps://www.blogger.com/profile/05267728698204033199noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51869633773863144442020-06-07T11:03:58.132-05:002020-06-07T11:03:58.132-05:00GDP is NOT a measure of wealth. It is a measure of...GDP is NOT a measure of wealth. It is a measure of currency flow.<br />edzimmerhttps://www.blogger.com/profile/02585904152433355121noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-61576557964104673162020-06-07T10:32:38.379-05:002020-06-07T10:32:38.379-05:00Thanks. I'll pass, need real money and not MMT...Thanks. I'll pass, need real money and not MMT. RgdsMPAhttps://www.blogger.com/profile/05204223669169160577noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51985524497270570872020-06-07T09:43:54.491-05:002020-06-07T09:43:54.491-05:00. V, we were taught, is exogenous and basically co.... V, we were taught, is exogenous and basically constant.<br /><br />V is not fixed as an examination of the char will readily show. V has been dropping for ten or more years.Matt Younghttps://www.blogger.com/profile/08404998406161097199noreply@blogger.com