Modern Monetary Theory

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Re: Modern Monetary Theory

Postby Elvis » Mon Aug 08, 2022 10:34 pm

Nice validation for L. Randall Wray and MMT.

https://www.bard.edu/news/bard-economis ... 2022-08-02

L. Randall Wray, professor of economics and senior scholar at the Levy Economics Institute of Bard College, has won the 2022 Veblen-Commons Award. This award is the highest honor given annually by the Association for Evolutionary Economics (AFEE) in recognition of significant contributions to evolutionary institutional economics. Named after the founders of institutional economics, Thorstein Veblen (1857-1929) and John R. Commons (1862–1945), and awarded since 1969, the Veblen-Commons Award is presented to scholars “on the basis of their contributions to a better understanding of both the economic process and the behavior of the major institutions that shape that process and society’s goals and values” (Trebing, 1992, 333). By recognizing significant contributions to institutional analysis, this award furthers the goal of institutional economics to make the world a better place.

Recipients of the Veblen-Commons Award have made outstanding contributions to institutional economics in the tradition of Veblen and Commons. Award recipients have focused their work on some of the most important topics confronting human society. Such topics include exploring the underlying power relations within society, the origins and implications of inequality, feminist economics, the origins of discrimination, the enabling myths of the dominant groups, the continuing conflict between rights and duties, the possibilities offered by modern technologies and the use of those possibilities for good or ill, the causes of financial crises, among others. Previous recipients include Levy scholars James Galbraith (2020), John F. Henry (2017), Jan Kregel (2011), and Hyman P. Minsky (1996).

L. Randall Wray is a senior scholar at the Levy Economics Institute and professor of economics at Bard College. He is one of the original developers of Modern Money Theory. Wray’s most recent books are Why Minsky Matters (Princeton University Press, 2016), and A Great Leap Forward (Academic Press, 2020), and Handbook of Economic Stagnation(with Flavia Dantas; Elsevier, 2022). Four new books will be published in 2022/2023: Making Money Work for Us (Polity Press, Fall 2022), Money For Beginners (with Heske Van Doornen; Polity Press, 2023), Modern Monetary Theory: Key Thinkers, Leading Insights (editor; Edward Elgar Publishing, 2022), and The Elgar Companion to Modern Money Theory (with Yeva Nersisyan; Edward Elgar Publishing, 2023).

Wray is the author of Money and Credit in Capitalist Economies (Edward Elgar Publishing, 1990), Understanding Modern Money (Edward Elgar Publishing, 1998), The Rise and Fall of Money Manager Capitalism (with É. Tymoigne; Routledge, 2013), Modern Money Theory (Palgrave Macmillan, 2012; 2nd rev. ed., 2015), and Macroeconomics (with William Mitchell and Martin Watts; Red Globe Press, 2019).

Wray previously taught at the University of Missouri–Kansas City and at the University of Denver, and has been a visiting professor at the Universities of Paris, Bologna, Bergamo and Rome, as well as UNAM in Mexico City. He holds a BA from the University of the Pacific and an MA and a Ph.D. from Washington University, where he was a student of Minsky. He has held a number of Fulbright Grants, including most recently at the Tallinn University of Technology in Estonia. He is the 2022 Veblen-Commons Award winner for contributions to Institutionalist Thought and will be the 2022-2023 Teppola Distinguished Visiting Professor at Willamette University, Salem Oregon.






Veblen-Commons Award

The Veblen-Commons Award is the highest honor given annually by the Association for Evolutionary Economics (AFEE), in recognition of significant contributions to evolutionary institutional economics. Awarded since 1969, the award is presented to scholars “on the basis of their contributions to a better understanding of both the economic process and the behavior of the major institutions that shape that process and society's goals and values” (Trebing, 1992, 333). The goal of institutional economics is to make the world a better place. In Veblen’s words, “the test to which all expenditure must be brought in an attempt to decide that point is the question whether it serves directly to enhance human life on the whole—whether it furthers the life process taken impersonally” (Veblen, [1899] 1953). As Allan Gruchy notes, “There is a very close connection between economic and ethical analysis, because economic thought is bent toward the future, when it is to be used for the purpose of finding answers to various economic problems” (Gruchy quoted in Klein, 1978, 240).

The award is named after the founders of institutional economics, Thorstein Veblen (1857-1929) and John R. Commons (1862–1945). Evolutionary institutional economics originated in the post-civil war era in the United States. Changes in technology initiated a change in society’s institutions, giving rise to corporations, a migration from farm to factory, and the emergence of a consumer society. Veblen referred to institutions as “special methods of life and of human relations.” Commons defined an institution “as collective action in control, liberation and expansion of individual action” (Commons, 1931).

Evolutionary institutional economics focuses on economic evolution, integrating culture with economics. The emphasis on culture stems from Veblen’s observation that “there was no natural way to determine how the corn should be divided” (See Mayhew, 1987). Veblen rejected the view that human beings are “lightning calculators of pleasure and pain” as conceived by mainstream economists. People are inherently social. Our sociality manifests itself in our desire to acquire the esteem of others. As Veblen observed, “the usual basis of self-respect is the respect accorded by one’s neighbors” (Veblen, [1899] 1953). Under the market economy and its associated culture, the desire for acceptance is guided by pecuniary emulation, copying the money habits of others. Copying others, consuming the goods they consume, engaging in the activities in which they engage connects economics with culture. Everywhere, in every culture, people follow each other to acquire status and save face. In Western culture, however, emulation assumes a pecuniary form. Status assumes the form of money and wealth, and those things that money can buy.

John R. Commons followed Veblen in focusing on the role of institutions. Commons realized that institutions formalized in the law resulted from the efforts of the courts to resolve conflicts, arriving at a “reasonable value.” Among his many contributions, Commons recognized that the rise of corporations initiated a change in the concept of property. The issue centered on whether government had the right to regulate business. If property refers to the actual plant, regulation is impermissible based on the 14th amendment to the US constitution, which forbid states from seizing property without due process. If property refers to expected profits, then regulation of the use of property is permissible. The conception of property changes from a thing or use value (corporeal property) to its anticipated value (intangible property) (See Commons, 1924).

Recipients of the Veblen-Commons Award have made outstanding contributions to institutional economics in the tradition of Veblen and Commons. The recipients have concerned themselves with some of the most important topics confronting human society. These topics include exploring the underlying power relations within society, the origins and implications of inequality, feminist economics, the origins of discrimination, the enabling myths of the dominant groups, the continuing conflict between rights and duties, the possibilities offered by modern technologies and the use of those possibilities for good or ill, the causes of financial crises, and so on. It is important that we continue this tradition by recognizing significant contributions to institutional analysis.

Veblen-Commons Award 2022

Previous recipients of the Veblen-Commons Award



References

Commons, John R. Legal Foundations of Capitalism. New York,: Macmillan 1924.

---. "Institutional Economics." The American Economic Review 21, 4 (1931): 648-657.

Klein, Philip A. "The Veblen-Commons Award: Rexford Guy Tugwell." Journal of Economic Issues 12, 2 (1978): 239-241.

Mayhew, Anne. "The Beginnings of Institutionalism." Journal of Economic Issues, 21,3 (1987): 971-1000.

Trebing, Harry M. "The Veblen-Commons Award: Wallace C. Peterson." Journal of Economic Issues 26, 2 (1992): 333-336.

Veblen, Thorstein. The Theory of the Leisure Class: An Economic Study of Institutions. New York: Mentor Book, [1899] 1953.

“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Most important article

Postby JackRiddler » Sat Jul 15, 2023 10:58 pm

I am going to repeat this post of a 2021 article I happened just now to reread. I find it educational, and I hope you do too.

www.currentaffairs.org ❧ Current Affairs

The Nature of Money
Calculating a poor person’s wealth is a science. For a rich person, it’s an incredibly abstract art.


M.K. Anderson
filed 23 January 2021 in ECONOMICS
https://www.currentaffairs.org/2021/01/ ... e-of-money


Even as the pandemic and financial crisis introduce us to new and grotesque ways to suffer, it seems as if the rich have been spared the worst of it. Their net worth has increased by $637,000,000,000 while poor friends of mine beg for rent money on social media. It can feel as if there are two economies, one for us and another for the rich. This is wrong, however. There is only one economy. The difference between how the wealthy and the working classes experience the same world is not just in the amount of money we have and what that can buy—it’s built into the nature of money, as I learned when I was studying to become an accountant.

The first two classes in an accounting major outline a handful of extremely basic equations, standard forms (like the balance sheet and the statement of cash flows), and the theoretical underpinnings of accounting. They are considered “washout” courses—ones so difficult a significant number of people drop the major—and it’s not because of the math. Accounting requires no more than middle school algebra. If you want to know why it’s so difficult, here is one of the very first thought problems I was presented with in one of my classes:

A hospital bought a painting to decorate its office from a then-unknown painter in the late 1800s for a dollar. Since acquiring it, its painter became very famous. The art would now sell for millions at auction. How do you record the value of the painting?

There are multiple answers. For internal figures (called managerial accounting), the painting is worth whatever management would find most useful at any given time. How that’s done, and what figures are recorded there, is unregulated. On the other hand, when preparing numbers for people outside the company, there are rules. For tax reporting purposes, the hospital (with some exceptions) needs to have it assessed and recorded at fair market value. Fair market value is a different figure—usually a more conservative one—than what you’d expect the painting to fetch at auction. For the purpose of enticing investors or seeking a loan, there’s yet another answer: it depends on what the hospital plans to do with the painting in the near future. If they’re willing to sell it in the next year or two (especially to repay a debt) then they should report it at fair market value. But if they wouldn’t part with it under any circumstances, it should be recorded at the price it was acquired for—a dollar. The painting is worth a lot of money, but if they’re not planning to make use of that value, then they can’t treat it as a resource.

To summarize, there are two correct ways to record the value of the painting, either “fair market” or “acquisition” value (i.e. the original purchase price), and neither of them are what the painting would actually “be worth” in the conventional sense. Which value the accountant chooses depends not on anything objective, but on what the business plans to do with the painting.

This example breaks the kind of people who find an accounting major attractive. We’re creatures who love objectivity and order, and accounting is not that.

The thought experiment about the painting isn’t a weird edge case—it’s a typical day on the job. I used to audit natural gas companies, and there are many whose distribution systems are bringing in tens of millions of dollars a quarter, yet their infrastructure is worth zero dollars. The first time I saw a company claiming to literally be worthless, I brought it to my boss because I swore it couldn’t be right. He said, “depreciation,” and I toddled off back to my desk.

We record the wear and tear infrastructure goes through as depreciation—we slowly reduce its value, in other words—and we do that in a standardized way. Usually this involves an evenly allocated reduction of value per year over the expected life of the asset—for example, if a new oil pipeline is expected to last 10 years, we might subtract 10 percent each year until it’s worth nothing. For other industries or assets, the rate of depreciation might be based on the number of units produced—the more widgets are made, the less the widget stamping machine is worth. The different models are used so we can compare companies apples-to-apples. We do this regardless of whether their infrastructure is still functioning or not. This isn’t a mistake: it is the right way to record the value for the purpose of comparison to other companies and for taxes.

But if I worked for that same company and wanted to sell it to a buyer, the considerations would be totally different. For example, depreciation for tax purposes is usually accelerated faster than actual wear and tear. A car with a 15 year life, for tax purposes, has to be depreciated over five years. This is the government encouraging companies to build and buy more for political reasons. Depreciation is an expense that is deducted from income to arrive at taxable profit, and so accelerating it is effectively a tax break—but one only companies that rapidly build and expand can reliably use. However, that same infrastructure, when being assessed for sale, is often worth more money than even its depreciated value. When buying or selling infrastructure, businesses take into account how much cash that infrastructure is generating regardless of its age. These differing considerations change the numbers on the page.

Therefore, a business infrastructure’s value may swing millions of dollars based on the market and the needs of a business. A 1992 Geo Metro’s value will not. That giant fluctuation is characteristic of assets which make money (like an oil pipeline or intellectual property) and assets which store value (like fine art or some kinds of real estate). The same holds true for the portfolios of rich people. The wealthy who depend primarily on their assets to sustain them (rather than wages) will have many, many large assets, and their entire net worth will swing millions of dollars simply based on their plans for the coming year.

Accounting is less of a science and more of a language with grammar, vocabulary, and ideological underpinnings. Recording something with a number, especially one with decimal places, gives a false sense of precision and objectivity to what is being quantified. Even in the “hard sciences,” which also use numbers with decimal places and high degrees of certainty, there is a subjectivity. A human being chooses what to count and what the criteria is for counting it for an intended audience. That influences what number makes it onto the page. Accounting as a field is perhaps more aware of this subjectivity than most disciplines that work with numbers. Business accounting’s grammar is set by an organization called the Financial Accounting Standards Board (FASB), which regularly publishes guidance on how to present figures for public consumption. Those standards evolve as part of an ongoing process of polling the industry and holding open discussions, along with formal appeals.

In short, accounting is an ever-evolving language that records the day-to-day workings of a life or a business. It is designed to describe the flow of assets, assess it, and make arguments about what should be done. It’s not objective because it can’t be. All I can do as an accountant is be clear about the purpose of why I am presenting specific numbers, what assumptions I am making, which set of accounting standards I’m using, and how closely I hew to those standards.

What Money Reveals (and What It Obscures)
We know shockingly little about the mega rich. Lists like the Forbes 400 are the only available resources we have on who is wealthy because governments don’t really track individual wealth, and the wealthy themselves don’t advertise. The first Forbes 400 was an immense feat of journalism, digging through public property records in order to compile estimates. But roughly half of wealth is either privately held or in cash—not a matter of public record, and so unavailable to journalists. Even the public record is easy to evade. The rich routinely use shell corporations and trusts and elaborate tax evasion schemes. We gained a small window into that complex web of financial entities the wealthy use to evade taxes through the Panama Papers. That leak, which comprised millions of documents, detailed many billions of dollars of schemes (legal and not) from only one law firm. One estimate says about eight percent of the world’s wealth is in offshore tax havens, and 80 percent is untaxed. Because of the sheer complexity of where the wealthy keep their money and how it’s accounted for, it can be literally impossible for a rich person to quantify what they themselves are worth. The richest person on earth may have no idea they are the richest person on earth. The wealthier someone is, the more the relationship between value and currency breaks down, and so the title “wealthiest person on earth” may actually be meaningless.

On the scale we workers live, money seems very precise because it is precise. For young accountants, that’s the appeal. They come into adulthood with some experience of money. A Coke costs $1.75. If they’ve ever filed taxes before arriving at school, the accounting was very straightforward. It was either correct or not correct, with an accuracy to the dollar. But all that lovely order and certainty falls apart outside the realm of small personal finance.This precision in the micro and lack of it in the macro comes down to the function of money.

The purpose of money is to establish an exchange rate between labor and finished goods. It allows capitalists—not us, we are not the primary “users” of the tool—to compare worker to worker, good to good, investment to investment, and translate between them. It does a pretty good job of describing the lives of wage earners because that’s what it’s designed to do. Our hours worked, productivity, and consumer habits are all numbers in a spreadsheet. But any attempt to turn it back on capitalists is like an amoeba trying to look at a human being with a microscope—the lens doesn’t go both ways. A poor person’s tax liability can be calculated to the cent. But when a wealthy person does their taxes, there are a number of arguments to be made about how much they own, how much they made, and how much they lost. Your net worth is a number. A capitalist’s worth is a conversation.

That difference has material outcomes. Among the capitalist class, fraud is rampant. In 2001, Enron—an energy and commodities trading company from Texas—committed fraud on such a large scale (and more importantly, so undermined the credibility of the entire industry’s figures) that it prompted a reform of accounting practices. The Sarbanes-Oxley Act greatly tightened the standards on how figures must be reported outside of a company. The “language” of accounting became more standardized. Financial statements presented to investors must now be audited by independent, outside accountants. And while these reforms seem necessary given the stakes, I can’t find firm figures either way on whether they helped at all.

I am not a fraud investigator myself, but as an auditor I was privy to how several fraud investigations turned out. Without exception, my experience is that whether law enforcement is called is a matter of how much money was stolen. Petty theft is always prosecuted. But if someone embezzles $10 million, a company tends to prefer to keep that person employed with them and treat it like a loan. Someone in a position to steal that much money has connections.

One white-collar criminal who comes to mind—I personally had some contact with him—was in a niche industry. He was a deal broker for commodities, and his customers would only deal with him. Ten million dollars is a lot of money, but in relation to his commission, it was not that much. His placement in the industry, his relationship to labor, was what made him wealthy, not merely the dollar amount of his salary and his assets. He himself didn’t work to produce a product, or really provide a service. He maintained a set of relationships with business owners (who also didn’t make anything with their own hands—they had employees for that) and acted as a gatekeeper of information about who needed what. Within the very specific parameters of his work, he was trusted. Of course his embezzlement wasn’t brought to the police. Focusing on the numbers rather than seeing their movement as descriptive of something, as pointing towards his relationships, is the same kind of mistake a dog makes when you point at the moon and he sniffs your finger.

Debt, Theft, and Other Money Problems
This gets at what David Graeber was talking about when he outlined the origin of money in his book Debt: The First 5000 Years. Before the wide use of currency for everyday transactions (which only became common in the 1800s), poor workers relied on credit almost exclusively. Credit in this sense meant “trust.” People did not directly barter (e.g. eight eggs for one shoe), they kept track of what they owed one another over time and paid as they could. These were relationships built on trust. The switch to currency-only transactions had to be imposed by state force. For example, in the very early days of industrial capitalism in England, shipyards were routinely a year or two behind on wages, so workers took tools and food and other things they could barter to pay their rent and their grocery bills. This wasn’t a sign of economic collapse—this was the economy. In order to force a switch to currency, the government criminalized taking tools and goods from the shipyards (previously it was not just legal, but precisely how compensation worked), and the shipyards instituted whippings for this now-theft. Samuel Bentham, an architect, redesigned ship yards with a new central surveillance tower to curb this new kind of theft, an idea lifted by his brother, the architect Jeremy Bentham, for the now infamous prison panopticon.

Before that, in medieval Europe, the legal penalties for defaulting on a debt were harsh and involved mutilation or death. However, they were almost never used. Debt was considered a private matter between two individuals, worked out between them in whatever units of barter and timeframes suited them. As Graeber put it, capitalism is “the story of how an economy of credit was converted into an economy of interest; of the gradual transformation of moral networks by the intrusion of the impersonal—and often vindictive—power of the state.” Relationships have always been the fundamental underpinning of money: the thing money reflects for the wealthy and destroys for the poor. In a way, the wealthy fraudster I met is a throwback to an older, kinder, more personal concept of money—one most of us will never experience.

Today, prosecution rates for white collar crime are the lowest they’ve ever been and trending downwards. Theft itself becomes a conversation, rather than just a crime, when a wealthy person does it. When one capitalist robs another, my experience is that they tend to discuss among themselves how to restore the thief to good standing without destroying anyone’s life, livelihood, or privacy. There are of course exceptions. Bernie Madoff and his $50 billion investment Ponzi scheme springs to mind. But Madoff’s position was dependent on resources and connections that turned out to be fictional. He had no realistic means to ever repay the investors he scammed (or even to return their initial investment), and so he went to prison. But for those that genuinely are well connected and do have the means to repay the people they rip off, the wealthy already have the restorative justice prison abolitionists fight for.

Petty theft, on the other hand, is prosecuted mercilessly. I find this especially strange given how much more of a problem fraud is than theft. The FBI estimates that burglary and petty theft cost Americans about $3.4 billion in property losses. White collar crime costs between $426 billion and $1.7 trillion annually. This kleptocratic culture isn’t harmless. Enron was a natural gas company whose entire business was propped up by fraud. When they were no longer able to continue to hide the extent of their debt, they both crashed that industry and spurred massive reforms in accounting practices and fraud controls. Perhaps those reforms worked, but I doubt fraud has dropped at the rate fraud prosecution has.

Personally, I wonder if the lesson companies learned was about keeping a lid on scandal rather than about curbing white collar crime. They preserve the social relations that money points to at risk to everyone else. And I guess it’s easy to see why—it seems on the surface short-sighted to protect thieves who can crash an entire economy, but the fraudsters and their wealthy connections aren’t the ones who suffer in a crash. They still have the power which underpins money, which their money merely gestures towards. The figures in a spreadsheet are shadows cast by power, and during financial crises their power preserves them. The wealthy are so completely insulated from the consequences of what they do, good or bad, it’s very hard for me to understand what motivates them at all.The future itself feels obscure. Here, the lack of imagination that makes me a good accountant makes me a poor visionary: I’m not sure what to do about money beyond believing something should be done. Depending on the study, between eight and 26 people own half of the world’s wealth, and if money isn’t a good means to describe them, then that is a failure to describe the world as it is. Marx advocated abolishing money, as do some foundational anarchists. There are also thinkers on the left (like Pierre-Joseph Proudhon and David Graeber) who believe public ownership of the means of production is more important than exactly how we account for it, and so are fine with markets and currency, albeit in forms that would be nigh unrecognizable. A full survey of left thought on money and a weighing of the pros and cons of each approach is beyond the scope of a single article. However, on the road to a better society, we will have to grapple with money as it exists. As of now, it’s a tool used to describe workers with the goal of extracting wealth and labor from them. It is an incredibly poor tool for holding the wealthy accountable, and so we will have to come up with other methods.
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Re: Modern Monetary Theory

Postby Grizzly » Thu Jul 20, 2023 1:19 am

“The more we do to you, the less you seem to believe we are doing it.”

― Joseph mengele
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Re: Modern Monetary Theory

Postby Elvis » Fri Jul 21, 2023 11:18 pm

JackRiddler wrote:The Nature of Money
Calculating a poor person’s wealth is a science. For a rich person, it’s an incredibly abstract art.


Thanks, very interesting.

Awhile back I posted something above in this thread, about monks seeing accounting as an inquiry into the 'mystery of value.'
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Re: Modern Monetary Theory

Postby Elvis » Fri Jul 21, 2023 11:54 pm

In May 2020, the definition of M1 changed to include savings accounts.

https://fred.stlouisfed.org/series/M1SL

Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions.

Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.

For more information on the H.6 release changes and the regulatory amendment that led to the creation of the other liquid deposits component and its inclusion in the M1 monetary aggregate, see the H.6 announcements and Technical Q&As posted on December 17, 2020.
Suggested Citation:

Board of Governors of the Federal Reserve System (US), M1 [M1SL], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/M1SL, July 21, 2023.


FRED M1 May 2023.png


:?:
The use of this chart had to be discontinued in May of 2020 because the US Federal Reserve stimulated the economy so much that charting the money supply became pornographic.
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Explain this to me Elvis...

Postby JackRiddler » Sat Jul 22, 2023 3:02 pm

So M1 was the sum of three components, as I've now learned. (I'm sure I knew it once and forgot.) These are a) free-floating cash, but not cash in institutional vaults, b) consumer/business deposits at commercial banks, and c) "other checkable deposits" (OCDs).

1. After May 2020, the first two of these remain the same, yes?

2. Besides OCDs the third component now adds deposits in money-market accounts, so not just "checkable" but also "liquid" deposits in general. Correct?

3. The immediate effect of this is a massive increase in measured M1, yes?

4. It doesn't necessarily drive an actual increase (or decrease) in any of the 3 components of M1, yes? It's just saying money-market deposits are now M1, which they weren't before, yes?

5. It might have an effect on the 3 components themselves, since changes in how key statistics, and market reactions to them, often have real-world impacts (the trinity of GDP, CPI and unemployment rate are the obvious ones). But maybe you should tell me how, if you know, so that I understand it better.

6. In what way does the change in how M1 is measured directly stimulate the economy? Or is that just part of the penis joke?

7. I notice M1 been dropping again from its sudden statistically-induced high (helps to round out the penis). Is that in any way an aftereffect of the change in how M1 is measured, or, is it more a product of, um, the rise in interest rates?

8. If you haven't already made it clear, I suppose I should ask for the tl;dr. Why is this important? Why did they do it? What's its impact or intent? (Should I also ask, cui bono?)

Sorry for giving you so much homework, professor. If you can answer any of the above, you will be teaching me something, and I will be grateful.

.
We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

To Justice my maker from on high did incline:
I am by virtue of its might divine,
The highest Wisdom and the first Love.

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Re: Modern Monetary Theory

Postby Elvis » Sun Jul 23, 2023 3:58 pm

For those still thinking that "all that government spending caused this inflation!"—it didn't. Best estimates are that federal spending contributed between 0.3% and 0.5% to the inflation rate.

Isabelle Weber was ridiculed and reviled by the same poeple who now acknowledge that she's been right all along. It's price gouging.


Taking Aim at Sellers' Inflation
Jul 13, 2023 |
Isabella M. Weber

Economists and political leaders at multilateral and European institutions have finally accepted that corporate profits are a primary driver of inflation today. But getting the analysis right is only the first step; now we need a fundamental change in how we address the problem.

Key officials have acknowledged that profits have been a major source of inflation in Europe – a realistic position informed by facts, rather than by the economics of the 1970s. Now that they have embraced a new analysis of what’s driving inflation, the policy response should change, too.

In recent months, the European Central Bank, the OECD, the Bank for International Settlements (BIS), and the European Commission have all published studies showing that profits have accounted for a large share of inflation.

But the coup de grâce for doubters came on June 26, when the International Monetary Fund tweeted: “Rising corporate profits were the largest contributor to Europe’s inflation over the past two years as companies increased prices by more than the spiking costs of imported energy.”

...

Link: https://www.project-syndicate.org/comme ... er-2023-07

Archive/no paywall: https://archive.ph/R9FWn


And yet the Fed is expected to hike the interest rate again! Insanity.
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Re: Modern Monetary Theory

Postby Elvis » Thu Oct 12, 2023 10:37 pm

What's wrong with this picture?


SAVERS bank intermediary.jpg






Anyone?
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“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby Elvis » Tue Jan 02, 2024 5:06 pm

banks public vs private.jpg



ss solvency phony.jpg



pay off natl debt.jpg



bush card clinton surplus.jpg



perfect time to raise prices.jpg
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“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby JackRiddler » Tue Jan 23, 2024 2:38 pm

Elvis » Thu Oct 12, 2023 9:37 pm wrote:What's wrong with this picture?


[ovesize graphic]


Anyone?


Jesus fuck, everything? It's so dopey it makes fractional reserve theory look good.
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Re: Modern Monetary Theory

Postby alloneword » Tue Jan 23, 2024 3:19 pm

They could have saved some ink and just drawn widgets. :thumbsup
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Re: Modern Monetary Theory

Postby Elvis » Wed Jan 24, 2024 8:01 pm

alloneword » Tue Jan 23, 2024 12:19 pm wrote:They could have saved some ink and just drawn widgets. :thumbsup


Yes, and, the old GM film and the graphic I posted ealier share the same analytical shortcoming: both emphasize the real or imagined role of money in markets, but fail to account for the existence of money.


P.S. — I downloaded the GM film, with the idea of rewriting the narration. :mrgreen:
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby Elvis » Wed Feb 07, 2024 5:32 am

Too long to post the whole article, but worth a read. Conservatives love to name Thomas Sowell as their "favorite economist"; they expect this to confound liberals & leftists by implying that, "You're not going to disagree with a black economist are you?!" Surprise.

https://www.currentaffairs.org/2023/09/ ... opagandist

Is Thomas Sowell a Legendary “Maverick” Intellectual or a Pseudo-Scholarly Propagandist?

Economist Thomas Sowell portrays himself (and is portrayed by others) as a fearless defender of Cold Hard Fact against leftist idealogues. His work is a pseudoscholarly sham, and he peddles mindless, factually unreliable free market dogma.

by Nathan J. Robinson

[...] Sowell is not given much attention by mainstream scholars in the academy, and few of his books are reviewed by major liberal-leaning publications. Riley is correct that Sowell is mostly ignored by the intelligentsia. In fact, I’ve seen a firsthand example. Back when I was a freelancer, I pitched a magazine on the idea of writing a profile of Sowell and responding to his work. The editor in chief replied that he liked my writing, but “Who takes Sowell seriously enough to bother?” In fact, many people take Sowell seriously, as reading the thousands of Amazon customer reviews of his books can show. But certainly, nobody in the editor’s social circles did.

I disagreed with the editor’s attitude at the time and still do. Failing to engage with Sowell’s arguments makes them appear more credible. Part of the story that Sowell tells is that Intellectuals ignore Sowell because they can’t handle his devastating truth bombs. He has been on the margins of American intellectual life, as he and others tell it, because he questions orthodoxy and prefers hard fact to liberal dogma. “You can’t win an argument with Thomas Sowell, so they just ignore what he’s written,” said conservative economist Walter Williams. Political scientist William Allen says “they dismiss Tom without consideration, in general, so one cannot make a great deal out of that other than the fact that they are unwilling to enter into the risks.”

Is this true? Is it fear that Sowell might be right that drives the lack of mainstream scholarly interest in his work? Is Thomas Sowell a great overlooked thinker whose contributions go unappreciated because they make liberals uncomfortable? Or is his work not taken seriously because it is not very good, and simply puts an academic gloss on easily-disproven conservative talking points, without making any effort to engage with the serious scholarly literature on a given topic? To see which story is true, it is necessary to evaluate the Sowell canon.


full article

“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby Elvis » Tue Feb 27, 2024 11:17 pm

emperor bonds nitwit.jpg
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Re: Modern Monetary Theory

Postby Elvis » Tue Feb 27, 2024 11:23 pm

dollars treasuries debt.jpg
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