Economic Roundtable: Post-Keynesian Theory

Thursday, September 29, 2012, William Black, Randall Wray and Michael Hudson appeared on KCUR.org’s Central Standard. The discussion was a roundtable on all things Post-Keynesian. This link will take you to KCUR’s page where you can listen the discussion.

6 Responses to Economic Roundtable: Post-Keynesian Theory

  1. Free markets are destabilizing L. Randal Wray

    Banks are anything but free market. They enjoy:

    1) Government deposit insurance plus the lack (at least in the US) of a government provided risk-free fiat storage and transaction service.
    2) A legal tender lender of last resort.
    3) The privilege of lending to the monetary sovereign.
    4) Legal tender laws for private debts.
    5) The capital gains tax on potential usury-free money alternatives such as common stock.

    • Maybe you could expand on those a little more, eg what lending do they do to the US government and why is it necessary?

      • Lending to the US government is NOT necessary. Professor Bill Mitchell calls it “corporate welfare.” The purported purpose is to drain reserves from the so-called “private” banking system to prevent the inter-bank lending rate from falling to zero. But why the heck should the US government care about that? To prevent price inflation? But:

        1) Raising interest rates need not curb price inflation so long as asset prices are rising faster than interest rates.
        2) A fool-proof means to keep money supply increases from causing price inflation is to limit money supply increases! So why doesn’t the US Government abolish endogenous money creation by the banks or at least remove all government privileges from them?

  2. EXCELLENT.

  3. It is this lending to the monetary sovereign at high interests that is one of the real issues. This design not only causes challenges but leads to all manner of distortions. We need more of your insights on this as well as the usurious rates applied on loans to the broader public.

  4. I really wish that before talking “debt” MMT spokespeople would hasten to preface your remarks that public debt or the deficit is one thing and private debt is another, and which debts they are referring to. So when you say that the country is overloaded with debt, you’d better hope that people don’t conflate the two, because it is all too likely. Similarly, the word “free markets” is too loosely used.