Monthly Archives: July 2013

The Fed is the Central Bank, and President Obama Should Treat It That Way

Posted on July 31, 2013 by Dan Kervick | 36 comments

President Obama will soon name a successor to Ben Bernanke for the position of Chair of the Federal Reserve’s Board of Governors, and Brad Delong recently offered his views on what qualifies someone as a strong candidate for that position:

To be good choices for Federal Reserve chair, candidates must pass three tests. They must have experience at a similar job: this is not something to throw somebody into and expect them to swim. They must fear high inflation as they fear a tornado, and feel in their bones the pain of the unemployed. And they must understand and properly weight the different models of how the economy might behave. Right now, this third means that a good Federal Reserve chair must give a relatively high weight to the Keynesian model, which has been so successful at describing and forecasting the economy over the last six years.

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36 Comments

Posted in Dan Kervick

What Would You Have the President Do? Part III, Doing Some Economic and Social Justice

Posted on July 30, 2013 by Joe Firestone | 46 comments

The first two Parts in this series began answering the question “what would u have him do?” It arose in the context of a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith. A commenter, objecting to the criticism of the President’s Knox College speech, issued the challenge in connection with the President’s promised effort to restore prosperity to the middle class and the poor. Continue reading →

46 Comments

Posted in Joe Firestone

Tagged $60 Trillion Coin, austerity, Control Fraud, deficit spending, fixing infrastructure, High Value Platinum Coin Seigniorage, housing crisis, HVPCS, increasing SS benefits, medicare for all, MMT, modern money theory, Social Security

What Would You Have the President Do? Part II, Getting to Full Employment

Posted on July 29, 2013 by Joe Firestone | 22 comments

Responding to a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith, a commenter, objecting to the criticism of the President’s Knox College speech, issued the challenge ”What would u have him do?” in connection with his promised effort to restore prosperity to the middle class and the poor. In this series I’m giving my answer to that question. In Part I, “Necessary First Moves,” I offered and described two of these. Ending the filibuster, and using High Value Platinum Coin Seigniorage (HVPCS) to fill the Treasury General Account (TGA) with $60 Trillion in reserves. Continue reading →

22 Comments

Posted in Joe Firestone

Tagged $60 Trillion Coin, austerity, debt and deficits, deficit spending, entitlement guarantee, fiat money, filibuster, High Value Platinum Coin Seigniorage, HVPCS, job guarantee, MMT, modern money theory, Social Security, state revenue sharing

What Would You Have the President Do? Part I, Necessary First Moves

Posted on July 28, 2013 by Joe Firestone | 37 comments

There were varying reactions to the President’s recent speech at Knox College this week. My reaction was that the speech was deeply dishonest in light of the President’s previous policies, actions, and results, and I intended to do a critique, but Michael Hudson and Yves Smith beat me to it. In a fine post at Naked Capitalism, entitled “Michael Hudson Shreds Obama’s Orwellian Speech On Middle Class Prosperity,” Michael Hudson, with occasional added comments from Yves, deconstructs the speech paragraph by paragraph, and sometimes line-by-line, pointing out disingenuous assertions and outright dishonesty. In her introduction Yves remarks on the context: Continue reading →

37 Comments

Posted in Joe Firestone

Tagged $60 Trillion Coin, austerity, debt and deficits, deficit spending, fiat money, filibuster, Hight Value Platinum Coin Seigniorage, HVPCS, MMT, modern money theory

Is it Legal Malpractice to Fail to Get Holder to Promise not to Torture your Client?

Posted on July 26, 2013 by Devin Smith | 11 comments

By William K. Black

One of the things I never expected to read was a promise by any United States official that a potential defendant in a criminal prosecution by our federal courts “will not be tortured.”

The idea that the Attorney General of the United States of America would send such a letter to the representative of a foreign government, particularly Russia under the leadership of a former KGB official, was so preposterous that I thought the first news report I read about Attorney General Holder’s letter concerning Edward Snowden was satire. The joke, however, was on me. The Obama and Bush administrations have so disgraced the reputation of the United States’ criminal justice system that we are forced to promise KGB alums that we will not torture our own citizens if Russia extradites them for prosecution.

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11 Comments

Posted in William K. Black

Tagged eric holder, snowden, torture

The Next Chair of the Federal Reserve Must be a Regulator

Posted on July 25, 2013 by Stephanie Kelton | 24 comments

By Robert E. Prasch*

If we go by the rumors circulating in the financial press, the Obama Administration is on the verge of selecting a proven failure – Lawrence Summers – to be the next Chair of the Federal Reserve System. This is the man, let us recall, whose greatest success in office was to work for the repeal of Glass-Steagall in 1999 and the nudge along the passage of the Commodity Futures Modernization Act of 2000 (which forbade any agency from regulating Credit Default Swaps). These profoundly mistaken decisions provided the nation’s largest and most irresponsible financial institutions with the bulk of the permission they needed to leverage up their balance sheets, hide the risks inherent in the mortgage-backed securities they were pushing onto unsuspecting investors, all while enabling them to become Too Big To Fail (and, as no less than the Attorney General of the United States has affirmed, Too Big To Prosecute).

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24 Comments

Posted in Guest Blogger

Tagged central banker, Federal Reserve, regulator

An MMT vs Austrian Debate Post-Mortem Part V of V: Coda

Posted on July 24, 2013 by Devin Smith | 26 comments

By Rohan Grey

[Part I] [Part II] [Part III] [Part IV] [Part V]

So there you have it. As far as I can tell, Murphy effectively conceded that the Austrian School’s economic analysis is inapplicable to contemporary policy discussions that assume as a pre-condition the basic features of our existing monetary and political system.

Instead, the substantive contribution of the Austrian school to contemporary economic debates lies in its normative critique of representative government and public law, and its attempt to provide a practical blueprint for a post-revolutionary economic system based around an absolute respect for private property rights above all other values.

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26 Comments

Posted in Guest Blogger

Tagged austrian economics, debate, MMT, Modern Monetary Theory, rohan grey

An MMT vs Austrian Debate Post-Mortem Part IV of V: The (Legal) Extension of the MMT Case

Posted on July 23, 2013 by Devin Smith | 41 comments

By Rohan Grey

[Part I] [Part II] [Part III] [Part IV] [Part V]

“Don’t be confused by surfaces; in the depths everything becomes law.”
– Rainer Maria Rilke

As noted at the end of the previous section, I found the debate engaging but ultimately frustrating, as Murphy’s critique of the coercive nature of our modern monetary system, while morally seductive, begged the question: “Ok, but what is your alternative?”

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41 Comments

Posted in Guest Blogger

Tagged austrian economics, debate, MMT, Modern Monetary Theory, rohan grey

Warren Mosler’s interview on INETeconomics

Posted on July 22, 2013 by Devin Smith | 14 comments

Marshall Auerback interviews Warren Mosler for the Institute for New Economic Thinking.

14 Comments

Posted in Marshall Auerback, warren mosler

Tagged Great Financial Crisis, MMT, warren mosler

A Plan for All the Detroits Out There

Posted on July 22, 2013 by Stephanie Kelton | 84 comments

By Marshall Auerback, Stephanie Kelton and L. Randall Wray

Should the federal government bailout Detroit? That’s the question everyone is debating. We think the discussion should be expanded well beyond this narrow question. Detroit is the canary in the coal mine, but it’s symptomatic of a bigger problem, which is the lack of jobs and decent demand in the economy.