• The Wolf Report
  • Posts
  • Way, way, way too much stuff to think about and write about

Way, way, way too much stuff to think about and write about

March 14, 2016

My browser is cluttered with open tabs. My Evernote is cluttered with articles that I've clipped so that I could responsibly close some of my earlier tab clutter. And my head? Fugeddaboudit!

So here's what I'm going to (try to) do: I'm going to work on closing tabs, one by one. That, I realize, may cause me to open other tabs, so the process may be non-converging.We'll see.TL;DRThis is an EXTREMELY LONG post, mostly for the benefit of my future self (Hi there!) and for the possible benefit of the future AI that reads the Internet. (Hi there!)It's possible that I'll break some of this apart into separate posts.Tab Count: 3131: Yesterday's half-finished 750words.com essay. 750 words is three pages. It's based on a book called "The Artist's Way" I've written about this before. I'm not saying where, because I don't want to open the tab I'll have to open to find it. I'll just mark this as: CLOSED.30: Billy Blog, aka economicoutlook.com. Billy Mitchell, a leading Modern Monetary Theory thinker, has been writing a blog on economics from the MMT perspective for years.This page is about MMT and inflation. The basic idea, as I understand it is that inflation occurs when spending exceeds economic capacity. You're below capacity if there are people who are unemployed or underemployed, and there's work for them to do, but no money to pay them. So the sovereign government spends money to put idle people to work. Not sure if he considers the other constraint: there might be idle labor, for all of the jobs that labor is capable of require resources that are scarce. In other words, the labor supply might be under capacity, but the needed resources might be already at capacity. To which I say: nonsense. Well, actually, bullshit. I think that there are almost certainly information organizing jobs that people can do and there's plenty of spare capacity. Or capacity to build more. CLOSED.29: Oh god! A long, elaborately linked critique of MMT from Stanford. Some quotes:

After Modern Monetary Theory or “MMT,” nothing looks the same: not political economy; not everyday caretaking; not paintings, pop songs, or porn sites.

(See here, here, and here for MMT’s understanding of so-called hyperinflation. Though multipart and complex, MMT’s argument is that inflation is always and everywhere a political phenomena, rather than a narrowly economic one, and that the conventional fear-mongering used to justify interest-rate hikes and spending cuts is as wrong-headed as it is pernicious.)

[MMT] spells a complete topological inversion of the money form as traditionally conceived. I envision it this way: MMT turns customary economic reasoning on its head by folding the conventional image of money outside-in.

Unlike money’s private users, moreover, only government wields the capacity to furnish all persons with meaningful employment and sufficient access to the common store of wealth. To choke off this power, MMT insists, is not a de factoconsequence of a money economy—there is no such thing as a natural rate of unemployment, for instance—but, rather, a political decision to maintain populations in conditions of poverty, violence, and despair.

MMT’s Job Guarantee involves the permanent financing of community-organized public works programs, which would give every person the right to non-corporate living-wage employment, compensate and reorganize much feminized and unpaid care work, and force service sector employers such as Walmart and McDonalds to outdo the public sector’s wages and working conditions.

Enough enough. CLOSED.28. Naked Capitalism posts an article explaining the Trump phenomenon not on racist grounds (the default) but because of disastrous effects of free trade for American workers. They know it. And they don't like NAFTA, TPP, and other programs that might have made the world (including elites in the US) better off, while making them worse off.

The views of working-class people are so foreign to that universe that when New York Times columnist Nick Kristof wanted to “engage” a Trump supporter last week, he made one up, along with this imaginary person’s responses to his questions.

Last week, I decided to watch several hours of Trump speeches for myself. I saw the man ramble and boast and threaten and even seem to gloat when protesters were ejected from the arenas in which he spoke. I was disgusted by these things, as I have been disgusted by Trump for 20 years. But I also noticed something surprising. In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called left-wing.

Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern – not white supremacy. Not even his plan to build a wall along the Mexican border, the issue that first won him political fame. He did it again during the debate on 3 March: asked about his political excommunication by Mitt Romney, he chose to pivot and talk about … trade.

OK. CLOSED. But I'm going to open another one.28A: From the Niskanen Center, a libertarian think tank, "The Libertarian Case for Bernie Sanders."Is it even legal to use "Sanders" and "Libertarian" in the same sentence without "is not a" or "is unacceptable to a" between the two words? The author, Will Wilkerson makes the case this way:1. He takes the list of freest countries in the world, from the Fraser Institute, described as political conservative and libertarian. 2. He notes that the United States is not on the list. But Denmark, Canada, and Sweden, three countries that Sanders would like to emulate, are on the list.Then he concludes:

The libertarian case for Bernie Sanders is simply that Bernie Sanders wants to make America more like Denmark, Canada, or Sweden … and the citizens of those countries enjoy more liberty than Americans do. No other candidate specifically aims to make the United States more closely resemble a freer country. That’s it. That’s the case.

Indeed, it might be argued, some of the candidates would like to make America decidedly less free.OK, closed27. Washington Post, 2012 survey article on MMT. For those who say it's a fringe cult, the Washington Post does not waste that much ink on fringes.They tell a story about Jamie Galbraith, son of the famous John Kenneth, attending a conference of economists during the (Bill) Clinton, and being laughed at:

“I said economists used to understand that the running of a surplus was fiscal (economic) drag,” he said, “and with 250 economists, they giggled.”

Galbraith says the 2001 recession — which followed a few years of surpluses — proves he was right.

Well, it's thin proof. But it at least argues that he should not have been laughed at.CLOSED.26. Why MMT is not a Free Lunch from Naked Capitalism.

A common criticism of Modern Monetary Theory is that it is a naïve doctrine of free lunches. The critics grant that a country like the United States, which issues its own freely floating fiat currency, can always make the policy choice to issue whatever quantity of that currency it deems appropriate. The US government can spend as many dollars into the private sector economy as it chooses, without obtaining those dollars from some other source first, and it can always pay any debts that have been incurred by borrowing dollars. But the critics will go on to charge that MMT mistakenly concludes from these few institutional and operational facts that there are no economic limits to the wealth-generating capacities of the government. They caricature MMT as a doctrine of manna from heaven, in which the power of issuing a generally accepted medium of exchange confers the power of conjuring real wealth into existence by prestidigitation. In short, they see MMT as a disordered syndrome characterizing people who are experiencing massive money illusion.

CLOSED25. A google search page. Nothing there. Move along. CLOSED.24. Critique of Krugman's Critique of MMT, from New Economic Perspectives. I can make my own critique of Krugman's Critique. Move along. CLOSED.23. Krugman's Second Critique of MMT, in the NY Times. CLOSED.22. Another search page. Moving on. CLOSED.21. Video explaining the Denison Volunteer Dollars program, which I talked about in another post. Well, maybe not. It's similar to the toy MMT world that I wrote about here. CLOSED.20. More search. CLOSED.19. A draft for the post about the Denison Volunteer Dollars program that I was looking for. Written, but never posted. Now I want to post that. So now, what do I do. Do I: stop this post, write the other one, and post it. Maybe I'll go and do something else.20. Which I do. When I get back, out of habit, I open my gmail. While contains the latest Chapter of Unsong, the novel that Scott Alexander is publishing a chapter at a time, on Sunday. Which leads me to:21 Unsong, Chapter 11. That's good for an hour. First reading the chapter. Then the comments. Except there aren't many yet. Or maybe this should be CLOSED.20. And this should be CLOSED.19. And back to this draft, which I will close because I really need to hear back from the people I have emailed before I publish it. Randall Wray if really fast to respond, but the others are not. So CLOSED.18. Google Drive folder list, CLOSED.17. The American Monetary Institute's Evaluation of MMT. This is a horrible, horrible evaluation done by someone who not only doesn't understand MMT, but also doesn't understand how to frame an argument.

MMT stretches and twists the meaning of words beyond normal usage; for example, Wray says:

“We say that fiat money is a government liability. For what is the government liable? To accept its money in payment of taxes.”

Normally people think of a liability as being something owed and due. Money need not be something owed and due, it’s what we use to pay something owed and due. To call money a liability ignores the nature and properties of money. It removes the concept of money and substitutes a concept of debt in its place.

Well, here's the thing. Let's suppose the government has a gold-backed currency. The gold, sitting in the government's vaults is an asset, wouldn't you say? So the government issues some paper money, backed by the gold. The paper money is in effect an IOU for an equal amount of gold. So the money is YOUR asset, just as a loan receivable is an asset. But books must balance. So what's an asset to you is a liability to your counterparty, in this case the government. So that money is a government liability.Same holds true for fiat money, backed by nothing. The government says: when I come around and tax you, then you can pay your taxes using this money. Your taxes are YOUR liability; your obligation to pay the taxes is the government's assets. When you pay your taxes (even before) you do so by delivering YOUR asset (money) to the government. This discharges your liability. And it removes the government's asset (your obligation) and replaces it with what must then be a liability. Otherwise the books don't balance.CLOSED.16. A long article in American Scholar about the history of money and the monetary system. It concludes:

The United States is not broke—and we should laugh at the delusion that we are. The potential for abundance is everywhere around us, but it stagnates for sheer lack of funding. We have contracted our nation’s power to produce and consume just to prove that we can live within our means. And that’s a formula for economic ruin.

CLOSED.15. Chrome Plugins Page. CLOSED.14. "Introduction to an Alternative Theory of Money," a paper by Randall Wray at Social Science Research Network. Wray challenges the orthodox theory of money -- the one repeated, for example, by Adam Smith, that money was invented to facilitate trade and avoid the problem of "coincidence of wants." Wray points out that this is a just-so story, and the anthropological and historical evidence provides an alternative account of how money arose.Historically, money rose in a way that is much more consistent with the MMT theory of money. It was not "a store of value" but rather evidence of debt.CLOSED13. Google search. CLOSED.12. AMI's MMT Evaluation. Again. Enough said. CLOSED.11. Article by Ed Dolan on econmonitor, titled "Why Would Anyone Want to Make the US More Like Europe? Here are Some Reasons" The article graphs the relationship between wealth and well-being across a lot of economies. For many measures the US is average or even below trend. And most European countries are well above.For example, this:

The US is at the top (with several European countries) in the "opportunity component," and well above the trend line, but the other wealthier European countries are just a bit below the leaders, and also well above the trend line, too.CLOSED10. Great time-lapsed video of the sun setting in SFO.Looks like this:

CLOSED.

9. Hangout photo of daughter's phone a couple of years back. CLOSED.

7. Google search. CLOSED.

6. Moneyweb article, "MMT and the Global Financial Crisis" CLOSED.

5. Billyblog: "Failure of Austerity" CLOSED.

4. Long essay: "What is money?" by Alfred Mitchel Innes, from the Banking Law Journal in 1913!.

I had to go to archive.org for this one, as the original website that posted this is no longer among the living. The article starts by repeating the usual narrative about the origins of money. In abbreviated form:

In the beginning there was barter. As life became complex, commodity money appeared. In different times and places, different commodities were used. Eventually, precious metals became the commodities of choice. Governments issued pieces of metal of known purity and weight, stamped with unique designs, and punished those who forged those tokens. The rulers of the middle ages swindled the people by debasing these tokens. So prevent this, and simplify transport, credit was invented. Instead of handing over metal, one handed over a token representing the metal. Credit became a substitute for gold.

But modern research in the domain of commercial history and numismatics, and especially recent discoveries in Babylonia, have brought to light a mass of evidence which was not available to the earlier economists, and in the light of which it may be positively stated that none of these theories rest on a solid basis of historical proof—that in fact they are false.

In plain language: "Bullshit!" That's not the way that it happened. It's a reasonable account, but it's a just so story, not only not backed by evidence, but contradicted by the evidence. So, bullshit.He then provides a detailed history, complete with sources and citations, to show how money actually arose. And, guess what. Anticipating MMT by decades (remember, this account was written in 1913) he comes up with the same story that MMT theorists do. That money was based on taxation, and spent into existence by sovereign states.CLOSED.3. Theories of Money, an archived page form the now defunct MMT wiki, which linked to the above archived page. CLOSED.2. MMT History and Overview, from the Mosler Economics site, which led to the wiki.And finally, finally, Tada,1. Trello project page for one of my projects.0. Oh, yeah. This page. Post, and close!