Cross posted from EconoMonitor: Great Leap Forward
On the evening of October 21, 2013, there was a preview screening of the film “Money for Nothing” at the University of Missouri-Kansas City (UMKC). After the film, there was a panel discussion about the film with the filmmaker, Jim Bruce, and UMKC professors Dr. Stephanie Kelton, chair of the UMKC department of economics, economics professor Dr L. Randall Wray, and Dr. William Black, former financial regulator and associate professor of law and economics.
Here is a link for the movie: http://moneyfornothingthemovie.org/
There is a little noise from handling the recorder in the first couple minutes of the recording, but then it settles down to decent audio. Here is the link for the panel discussion:
Thanks – looking forward to listening to this!
Would poverty drop significantly if federal law made it illegal for individual or household wealth to exceed $2 million? The federal government would not tax away the excess wealth, but instead require the rich to give it away.
Gag me with a spoon! The whole assumption that we even need a central banking is sickening and indicates cognitive (soul?) capture of the above academics.
Look. Shares in Equity as private money does not even require borrowing, much less at interest. So why in the heck do we subsidize debt creation for usury with government deposit insurance and a legal tender lender of last resort to name just two things?
I need no more evidence that Mankind is Fallen than the level of commitment to a money system based on usury for stolen purchasing power, especially from the poor since they are so-called “creditworthy.”
So don’t wonder if the world ends soon since this generation cannot even comprehend “Thou shall not steal”, especially from the poor.
Your rantings are getting crazier, Beard.
Of course I see things reversed. I see people who tenaciously cling to a money system based on usury and oppression of the poor as the crazy ones. And it’s not like there’s no alternative either since common stock is an ethical form of endogenous money creation.
But if the money system is not a key part of Satan’s power structure then I’d be very greatly surprised. So since the problem is probably spiritual, I’ll offer a spiritual cure from both the Old and New Testaments:
” Shares in Equity as private money does not even require borrowing, much less at interest. So why in the heck do we subsidize debt creation for usury with government deposit insurance and a legal tender lender of last resort to name just two things?”
1. Private money can be manipulated for private interests, which may or may not be in the interests of people who do not create that currency. Limited-quantity, or commodity-currencies suffer the same problem, the creators or miners of the commodity can use their ability to create or mine the commodity the currency is based on to their benefit and our detriment, with no positive economic activity occurring: rental income at its absolute WORST.
2. Private money still has the choice to make: commodity- or fiat-currency. Let’s look at a recent development in commodity currencies: Bit-coin is a commodity-currency, and it’s got a soft limit on amount (via the exponentially increasing amounts of computing power required to produce the next bit-coin in the series) of BitCoins in existence – at any given time there’s a hard limit on available computing power to generate more coins. True, the amount of available computing power to produce BitCoins is always increasing, but the algorithm is designed in such a way as to very quickly outstrip total global computing power production. This is deliberate and is intended as a feature, not a bug. However, it leads to a huge problem:
BitCoin has the same issue as all other limited-quantity commodity-currencies but is a bit easier to see: the value of each one increases over time because population increases exponentially while the availability of more BitCoins relative to population DECREASES exponentially.
In this case where the value of the commodity-currency is steadily increasing, people who want to save money for whatever reason simply keep it in the digital equivalent of a mattress, taking those coins OUT of circulation and FURTHER increasing the relative value of all the other BitCoins, a virtuous cycle no? Let’s, for the sake of argument, say that this process (population increases & savings desires) causes the value of a BitCoin to rise at 2% a year.
Say that there is a project that would be very good and desirable in a societal sense, but only because of the external effects, say some infrastructure that allows people to communicate more effectively or deliver goods more effectively. But further, this project does not make it easy to incorporate the external effects (say that a process to do so was off-putting for some reason, say a lack of trust or excessive-seeming cost). What’s a good example of such a project? Roads. Don’t like roads? That’s fine, come up with your own, it’s an infinite universe so there’s an infinite number of such projects.
The EXTERNAL effects of roads are WONDERFUL, trucks transport goods, people transport themselves to provide services, people transport themselves to consume those goods and services, the economy as a whole benefits hugely, but it’s quite clear that we can’t easily or fairly charge for the use of the road through tolls, charging by use locks out things that are economically beneficial, but produce less value than the use of the road would cost. Maybe that’s a good thing, but more likely, it’s just a barrier to trade – SOMEONE’s going to lose out on an economic transaction that would benefit them and others because the cost of just using the road was too high. The FAIREST way to do so would be to charge by the economic benefit provided to the community,
There is a proxy, for ‘economic benefit imparted to the community by the use of roads’: income. If you make a LOT of income, then your use of the roads is, of necessity, of great economic benefit to both yourself and the community. If you make a modest amount of income, then your use of roads is producing a modest amount of benefit. You should pay fairly for access to that benefit, modest or otherwise, so a percentage of your income should go to the roads. (fiat currencies allow some interesting economic transactions that may actually reduce the need to ‘tax’ to provide infrastructure.)
Now, we’ve decoupled the USE of the roads from the COST of each individual trip and people have effectively (if not truly, remember, there’s still SOME cost in the form of the tax on our economic benefit to the community) lowered the barrier to trade. Wonderful! You can’t make a living trading things that cost you more to transport than they sell for, but still, there’s plenty of economic activity that is good that fits that bill: traveling to PURCHASE goods, for one.
But look at what happened: There was a LOCKOUT effect by using tolls.
The same thing happens when money increases in value relative to the goods and services it purchases (i.e. prices go DOWN). You lock-out projects that have a rate of return BELOW the rate of rise in the value of money.
Why would anyone EVER invest in a project that gives an anticipated rate of return of, say, 1.5% when you know that just by holding on to your money and not trusting in the competence of your partner, you can get a 2% return!?
ALL Commodity-currencies have this problem.
Fiat-currencies do not. The currency issuer just flat-out purchases the good or service that has a rate of return lower than the rate of change of the value of the currency (up in the case of limited-quantity or commodity-currencies, usually down in the case of unlimited-quantity or fiat currencies), providing an economic benefit to everyone at a cost to… nobody. They don’t borrow money, they just issue it. There are an infinite number of ways to do this and we currently use a Central Banking/Bond Sales format to do so. Is it the most efficient? No, especially considering the fact that Congress, who controls expenditures, has decoupled expenditures from the ability of the Central Bank’s and the Treasury’s ability to create more money in the form of a ‘Contribution Ceiling’ or ‘Debt Limit’ to meet those expenditures. We are not, however, talking about the most efficient way to be an issuer of currency, just whether or not there’s a good reason to be one in the first place and it seems as if there is: The lockout of low-rate-of-return projects that happens with limited-quantity currencies.
1. Private money can be manipulated for private interests, which may or may not be in the interests of people who do not create that currency. Rodger
1) No one need accept common stock money (CSM) or any other private money since the government’s fiat is an ESSENTIAL part of any true free market in private money creation since NO private money or money form should ever be accepted for debts to government.
2) Those who do accept a CSM become co-owners of the issuing corporation and thus have a say in further issuance.
Great, and now you’ve just ground the economy to a screeching halt because every time someone wants to make a trade, they first have to go to an Exchange to convert one color of money to another color of money so that they can make exchanges with people who, for whatever reason, prefer one over the other.
So, there’s a time inefficiency AND a fiscal inefficiency (the Exchange isn’t going to be FREE you know) that just simply does not exist when you use a single currency, either limited-quantity commodity currencies or infinite-quantity fiat currencies.
People would be free to use fiat for ALL debts, not just private ones. And unless fiat was mismanaged by, say, lending it to banks, most people would so choose to use fiat for all debts.
As for practical difficulties, computers and modern communications make private currencies eminently doable.
But the burden of proof should be on those who support a government-backed counterfeiting cartel for the benefit of the rich and other so-called creditworthies. THAT you may have to explain before God since He takes a very dim view of exploiting and oppressing the poor not to mention the 50-65 million killed by the bankers in WWII.
“Those who do accept a CSM become co-owners of the issuing corporation and thus have a say in further issuance.”
So, you’re not against fiat currencies per se just against ones where people who aren’t owners of businesses have a say in their issuance.
Do you understand how authoritarian-like that comes across as?
Government fiat would still exist and unless it was mismanaged by, say, bailing out the banks it would still be widely used for ALL debts, not just those to government.
BTW, I am trying to save fiat by disallowing the banks from encroaching on the monetary sovereign’s ability to deficit spend without price inflation. Just wait until the economy is definitely on the mend and see if the cowardly banks don’t jump in to blow another bubble.
So who is MMT really for? The people and their government or the accursed banks?
Do you support the following?: http://prorevnews.blogspot.com/2013/10/dennis-kucinich-and-john-conyers-had.html.
I would not ban fractional reserves permanently but only temporarily while the banks are completely deprivileged.
Also, where is the call for restitution for the entire population since the entire population, except for the rich, have been cheated by the counterfeiting cartel?
Still, it is not a bad attempt and I won’t oppose it.
2. Private money still has the choice to make: commodity- or fiat-currency. Rodger
No. Common stock is neither a commodity nor may it be used to extinguish tax liabilities. Instead, common stock is a “share” in the Equity of a common stock company.
Nor is the amount of common stock limited as BitCoin is so deflation is not built-in.
No, common stock is a perfectly acceptable form of private money and often is used as such. So the question in my mind is: Why are Progressives against sharing? Because they and only they must run the show? Conceited, no?
“common stock is a perfectly acceptable form of private money and often is used as such”
No, it isn’t “often used as such”.
Sure it is used as private money, just not at the consumer level. Businesses often pay top employees with stock or stock options and often purchase other businesses with new stock.
Occasionally paying executives with stock, or shareholders swapping stocks, are not examples of stock “often being used as money”. Your nonsensical argument is “businesses sometimes engage in these sorts of swaps, so why doesn’t everyone just use stock to to pay for everything!?!??” It’s dumb beyond belief.
No. My argument is that common stock can be and is used as private money and thus there is NO EXCUSE for a government backed counterfeiting cartel.
But if you prefer government-enabled theft to honest sharing then I would not want to be you on Judgement Day or actually ANY day.
No, your argument is just dumb, this is obvious to everyone but yourself. Hence you are the only person I know of making your dumb argument.
I haven’t seen the movie, but what I can say is that it was a pleasure to listen to Stephanie, Randy and Bill work as a team to explain their perspective on the economy, the financial system, what went wrong and what we should be doing…and to respond to questions from someone who seemed at least sincere in wanting to understand it. You guys should take that show on the road (and I’m serious)!!
This was a great interview/panel/talk, whatever it was. I really appreciate that Kelton, Wray, and Black are willing to repeat all the things I’ve heard them say before but, obviously, go over my head. They explain them a different way each time, underscoring how I didn’t understand fully when I heard them say it the first time.
It’s great that they did the discussion session but from what I heard there are still some classic misunderstandings being promoted. So in the end is it a good thing or a bad thing that they made this movie?
So where’s the movie that shows the MMT version of the crisis? Is there a Hollywood producer that understands MMT? It could be a gripping story of crime and intrigue, evil bankers plundering the economy and compromising the integrity of the regulators and Congress.