Sep16
“Neat, Plausible, and Wrong: the deluded discipline of economics”
Blog member Robert Kahn has booked the Riverside Suite for 5-8pm. The first hour will be meet and greet; I’ll give a talk with the above title from 6pm. After questions and discussion we’ll adjourn to somewhere nearby for dinner (suggestions welcome–somewhere that has low noise levels please since I have very bad hearing courtesy of a serious case of tinnitus).
Robert has forked out $500 to make the booking, so I’d appreciate attendees making donations to him of about $20-25. With the expected number of attendees, that should spread the financial pain evenly.
I’ll put more details up later (I’m heading out for dinner now)–by 4pm New York time on Friday.
If you’d like it to be a blog entry instead Lyonwiss, let me know. I’ve been too flat out with travel and meetings to work on anything for a while–though I hope to have an entry up by the middle of next week.
“I think that Gunny57?s description of “clogging Steve’s Blog comments sections?” very typical of those that sleep 24/7 and that cannot see reality ”
Just my 2 cents PJB but I think that is a bit harsh.
I like some of your comments too but have found myself skipping over them lately because they are too long and too numerous. If you want to change peoples opinions perhaps you need to concentrate on quality and not quantity. People can always go to your blog if they want to find out more about what you believe…which I occasionally do.
The first puzzle is why has there been no real change in public policy?
My opinion? Because those making policy perceive themselves as benefiting from the status quo.
Looking forward to your post on MMT, Steve! I do hope you will talk about the “government deficits lead to private savings” concept.
@ Brett123 September 25, 2011 at 8:22 pm | #
Gunny57:
“… wouldn’t it be more beneficial to space saving and order if you get a blog yourself and start writing instead of clogging Steve’s Blog comments sections?”
Do you believe that Gunny57′s comment above is/was honest, sincere and truthful?
I certainly do not because Steve has no restriction on posting comments and therefore, I could not, cannot be guilty of “clogging Steve’s Blog comments sections?”
The fact is, that nobody else was commenting so it appears that I am the only commenter, which is correct. But it does not suggest or even imply the implication that I am “clogging” the site.
Gunny57 also suggests that I don’t have my own blog. Do I believe that he is that naive, especially when visiting his website by clicking on his handle, one finds or suspects that he is dredging for customers – er, anonymously.
I believe that my posts are qualitative and of “values”, so instead of shooting the Messenger, comment as to where I am flawed, or incorrect, er, please.
LucyLulu September 25, 2011 at 9:26 pm
You said: “The first puzzle is why has there been no real change in public policy? My opinion? Because those making policy perceive themselves as benefiting from the status quo.”
Your sweeping answer, if adequate, implies change would never occur, whereas it does sometimes. Also, you are assuming all policy makers are against change because they benefit from the status quo. In fact, many policy makers and politicians have spoken out for change. Why have they been unsuccessful?
Apart from Machiavelli’s well-known comments about the resisitance to change due to self-interested incentives, the question is really about “how”, and rather less about “why”, the status quo is maintained, given that politicians and policy makers have to respond to demands for change.
“The first puzzle is why has there been no real change in public policy?
My opinion? Because those making policy perceive themselves as benefiting from the status quo.
Looking forward to your post on MMT, Steve! I do hope you will talk about the “government deficits lead to private savings” concept.”
what did sir humphrey say, lucylu
its folly to increase ones knowledge at the expense of ones authority,
just about every financial transaction within a western economy goes in and out of a bank account. if they want to fix this mess, governments have to be prepared to stick it to the bankers.
the first thing that needs to happen is that the shareholders of the trans atlantic banking system need to have a significant devaluation of their equity position or loose their equity position altogether,
but that seems to be the last thing on the minds of regulators around the world, who seem much more focussed on internal devaluations and the auterity that comes with it.
i think september 2008 when lehmans went down was 1929, and we are at 1932. and again like then, we talking about mass unemployment, wage cuts and tax rises around the developed economies. the only piece missing is the wave of protectionism that also started to take hold, but there are still many many moons to go in this little tragedy.
oh, and yes, the yanks also threw out herbert hoover and his classical economics based advisors and voted in FDR and his emergency banking act.
we can have a debate about whether the act was mainly cosmetic in nature, but there was a political reaction at the ballet box
the banking system will be reformed, we just have to wait for the current generation of politicains to be thrown out either by the ballet box or something worse, by those who can see a gap in the market for alternative ideas and a public depserate enough to start listening.
the timings not right, but it will be.
it will be interesting to see what steve comes up with lucylu re mmt,
but i will leave you with this pre emptive quote,
“As long as Steve operates within conventional accounting traditions and is stock-flow consistent then endogenous money theory is fully captured in the horizontal dimension of modern monetary theory.”
bill mitchell.
and just incase some of us think mmt ers arent minkian,
heres randal wray
http://www.youtube.com/watch?v=gRE-IDYfi8Y
sorry my typing and spelling is terrible. i meant mynskian,
although im open to the suggestion it was a freudian slip, given the fact that mynskians probably feel about as endangered as a minky whale.
Title: Another Nail in The Coffin of Money Multiplier Theory
I’ll let the screenshot below speaks for itself. Every new quarterly data will add a new nail in the coffin. Eventually the coffin will be full of nails that they can only add nails in the corpse, just like the character in the movie Hellraiser.
Peterjbolton,
the problem, with crusaders, is always the same. They are so engrossed in their “mission from God” that they line up all the “enemies”, combatants , civilians, women, children, and , after a perfunctory request of ” convert or else !” proceed to mass slaughter everyone leaving to God himself the annoying task of sorting them with whatsoever criteria.
Behavior scarcely conducive to winning any earth and/or mind, and in the end, deeply counterproductive for the crusade’s objective.
I admit at being naive, as I was following this debate on an I-Pad at night , and didn’t discover the existence of your blog until few minutes ago..
Moreover, you choose, in your supremely effronted way, to ignore the little comment I was enjoying some of your comments and was just observing they were a bit inflationed, opinion partially shared by Steve…and proceeded to build up a complete fantasy on who I am , and what my “scopes” would certainly be, without having even a solitary clue on who I really am.
Getting personal on something of no relevance.
About the “dredging for customers”…All the fellow bloggers here can see by themselves the absolute fantasy of that accusation, just going to see my post history, and also due to the fact that single persons do not have access of what I do, if not through institutions strictly in New Zealand, and “dredging” here would be impossible and a marketing puerile mistake.
I came here to learn, from Steve, understand more of the reality out there, from him, and support him, also financially, as much as I could, to help him to hammer some reason in the head of elected officials or electing the ones that might have reasons to understand.
As simple as that.
And that also lines up with the fact that I try to do my job in the most ethical way possible, considering the fiduciary duty to my customers well prevailing to any other consideration, and trying to help them to conserve their savings understanding and explaining them what reality is out there…also reading and spreading Steve’s knowledge.
That is that..and since I do not want to disturb further this space,unless for relevant comments that could contribute to the specific post topic, I will decline to further reply to any follow up of this you may chose to post.
I just wish to warn you, that swishing that huge crusader’s sword left and right blindly, you may end up cutting a mate, or even hurt yourself…certainly, the cause you are crusading for.
Cheers
@ Gunny57 September 26, 2011 at 10:14 am | #
Thanks Gunny: A lot of widely ranged assumption in that rant. No problem as it is hearty.
Allow me then to bring you some light – not new light; just some old forgotten light.
I have oft stated that:
“All that needs to be said, has been said”
To support that statement of a Crusading “Missionary from God” which BTW I do not consider myself: Perhaps you have mistaken me with Lloyd C. Blankfein?
http://londonbanker.blogspot.com/2011/09/testimony-of-marriner-eccles-to.html
Written history tells us that the ancient Egyptians had to fix ancient Greece’s Economic mismanagement at least twice and from more or less exactly the same liquidity imbalances that plague the World today and I would hazard a guess that the words of Eccles Testimony are an echo of the ancient past. This begs the question, will we ever learn or do we prefer to be masochistically wiped out on a regular basis?
The answer is, probably not but if we do desire to move forward and evolve towards sustainable governance, we must all become involved with that governance (which is merely just true democracy ie of the people, by the people, for the people) and we must become involved at the educational level where Economics is linked directly to governance as schooling course work which should begin at Primary school.
I propose that we rid ourselves of this Statolatry disease completely.
Law trumped Reason
Power trumped Law
Only Ethics can trump Power.
I thank you for your honest commentary which I accept at face.
Same here…
“Law trumped Reason
Power trumped Law
Only Ethics can trump Power.”
Oh so true…!
Cheers mate!
Hi Steve,
Congratulations on the funding from the institute for New Economic Thinking.
B.M.
A fuller working paper version of the Cecchetti et al paper ‘The Real Effects of Debt’ has been published here http://www.bis.org/publ/work352.pdf
The key section from my perspective is the one headed ‘why debt matters’
‘For a macroeconomist working to construct a theoretical structure for understanding the economy as a whole, debt is either trivial or intractable. Trivial because (in a closed economy) it is net zero – the liabilities of all borrowers always exactly match the assets of all lenders. Intractable because a full understanding of debt means grappling with a world in which the choice between debt and equity matters in some fundamental way. That means
confronting, among other things, the intrinsic differences between borrowers and lenders;…
As modern macroeconomics developed over the last half-century, most people either ignored or finessed the issue of debt. With few exceptions, the focus was on a real economic system in which nominal variables – prices or wages, and sometimes both – were costly to adjust…Money, both in the form of the
monetary base controlled by the central bank and as the liabilities of the banking system, is a passive by-product. With no active role for money, integrating credit in the mainstream framework has proven to be difficult.
Yet, as the mainstream was building and embracing the New Keynesian orthodoxy, there was a nagging concern that something had been missing from the models. On the fringe were theoretical papers in which debt plays a key role, and empirical papers concluding that the quantity of debt makes a difference.
The latest crisis has revealed the deficiencies of the mainstream approach and the value of joining those once seen as inhabiting the margin.
In response to the challenge, macroeconomists are now working feverishly to put financial stability policy on the same theoretical footing that exists for conventional monetary policy. They are working not only to understand the sources of systemic risk, but also on how to working (sic) through the implications.
Like a cancer victim who cannot wait for scientists to find a cure, policymakers cannot wait for academics to deliver the synthesis that will ultimately come. Instead, authorities must do the best they can with the knowledge they have.’
It is odd then they decide to treat debt purely empirically when the answer – that it is to do with the endogenous creation of money – is staring them in the face. as they note ‘the basic form of debt has remained
remarkably constant both over history and across countries, empires and legal systems. ‘
A question: I read Harry Dent’s latest at Steves suggeston. Harry points out that the
‘financial sector’ has the largest indebtedness of the sectors in the US at 17 trillion. Having studied Steve’s Credit Cavaliers post and assuming banks are the financial sector I now am left wondering why banks need to ‘borrow’ money and who they borrow it from? I think I
misunderstand something fundamental here. Help. yankeejim