Daily Archives: December 23, 2013

Malign Confusion about Growth, Economic Growth or “Degrowth”: Which Way Forward? – Pt 1

By Michael Hoexter

[Part I] [ Part II] [Part III]

Speaking on December 4th, President Obama, tacked once again, at least in his rhetoric, this time towards claiming that he is targeting a pro-economic growth, anti-economic inequality policy in his remaining time in office.  Skepticism is warranted for a number of reasons including:  Mr. Obama, along with Congressional Republicans and Democrats, had helped strap the US economy and government to a contractionary fiscal policy and therefore to anti-growth government spending policy for the period 2010-present.  The cleverest piece of the rhetoric in the speech:  “A relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking deficit” artfully distracts listeners from Obama’s own role in spurring on deficit hysteria in much of his time in office.  The deficit hysteria he helped foment in turn has endangered exactly the economic opportunities that Mr. Obama now claims to want to encourage.  Mr. Obama is one of the chief engineers of the current framework of acceptable discourse in Washington where almost all political actors and media figures measure the government’s success or failure by how much the deficit has been cut, a metric that in 99 out of 100 economic scenarios will lead to slowing economic growth or economic contraction.

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Essays in Monetary Theory and Policy: On the Nature of Banking (2)

By  Darren Prince*

There are different views on the importance of banks in regards to what functions banks actually perform and how they interact with other aspects of an economy.  There are two main approaches to the banking industry and also within the two approaches there are different theories.  The orthodox and heterodox approaches to banking have very different views of the banking industry and the different approaches diverge at the very beginning of their theories.  To fully understand the beliefs that are the driving force behind the nature of banking in both approaches a brief description is needed to understand where the theories diverge.  The orthodox and heterodox theories diverge in their beliefs on the subject of “money” or more specifically what the origins of money are and what role does “money” play in a capitalist economy.  This brief description is needed to understand how each theory developed what they believe to be the nature of banking considering the fact that banks and financial institutions deal with money.  The overall purpose of the paper will be to describe the nature of banking within the different approaches and how these theories lead each approach to develop policies and procedures regarding the financial industry that are believed to best serve the efficiency of the United States economy.

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