Daily Archives: March 8, 2015

McCloskey Wants to Change the Title and the Substance of Her Article on Corruption

By William K. Black
Quito: March 8, 2015

Deirdre McCloskey has responded with two comments (to date) to my series of articles critiquing her book review in the Wall Street Journal of two new books about corruption. We welcome her to the pages of New Economic Perspectives and invite her to provide an article or series of articles presenting her views on elite white-collar crimes such as fraud and corruption of whatever length she thinks best. The harm done by these crimes is so severe that these topics well warrant extended discussion and debate. NEP is one of the rare economic blogs that devotes considerable space to these topics.

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Why Understanding Money Matters in Greece

By Robert W. Parenteau
March 06, 2015

As Greece staggers under the weight of a depression exceeding that of the 1930s in the US, it appears difficult to see a way forward from what is becoming increasingly a Ponzi financed, extend and pretend, “bailout” scheme. In fact, there are much more creative and effective ways to solve some of the macrofinancial dilemmas that Greece is facing, and without Greece having to exit the euro. But these solutions challenge many existing economic paradigms, including the concept of “money” itself.

At the Levy Economics Institute conference held in Athens in November 2013, I proposed tax anticipation notes, or “TANs”, as a way for Greece to exit austerity without having to exit the euro (see “Get a TAN, Yanis!” published here last month, for an updated version of that policy proposal). This proposal is based on a deeper understanding of what money actually is, and the many roles that it plays in the economies we inhabit. In this regard, Abba Lerner captured the essence of modern fiat currencies, which are created out of thin air by modern states with sovereign currency arrangements. Lerner’s essential insight is contained in the following passage from over half a century ago (and, you will note, Lerner’s view informs much of the neo-chartalist view espoused by advocates of what is called Modern Monetary Theory):

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