Me: All of the attendees would be much better off discussing the new paradigm of direct and reciprocal monetary gifting because its depth of insight and resolution of the primary problems of modern economies renders all other reforms, good as they may be, to mere “epicycles”. This new paradigm is the subject of my soon to be published book entitled: Wisdomics-Gracenomics: The New Integrative theory of The New Monetary Paradigm.
R: “Banks do not create money out of thin air. If they could, why would we need to bail them out?”
Me: “Banks do not create money out of thin air. If they could, why would we need to bail them out?”
Well, that’s precisely the point. They can and did do exactly that….it’s just that they needed to make it appear as if they required the complicity of the central banks and governments. Otherwise their complete dominance of every other business model and probably 99% of the general populace….would become utterly transparent. Yes, the sheep-like and hypnotized complicity of governments in Finance’s dominance and in their inability to perceive what the new monetary paradigm is….is damnable as well. But let’s not allow Finance’s “blue smoke and mirrors” to hide their power, blur the fact that the system effectively has no control over them and for 5000 years and ANOTHER day we remain unconscious of the new paradigm that will finally re-balance modern economies.
In regard to money creation what we require is a third authority with specific, mandated and un-impeachably beneficial policies for individuals and commercial agents so that such money power is ethically distributed, and that integrates the particles of integrity of the private banks and the government while also being a force for objectivity about their untruths and tendencies toward usurpation of that awesome power. Wisdomics-Gracenomics has the philosophical concept behind the new paradigm, its necessary policies and this third structural bulwark against corruption and folly.
The problem in all discussions of Banking, lending, reserves and payments is no one is stepping completely through the looking glass of the paradigm of Debt…and into the new primary (but not Only) paradigm of Direct and Reciprocal Monetary Gifting. Hence they are forced to play on the home field of the current paradigm of Debt ONLY and miss the potency and vision of the new paradigm. So it is and always has been problematic with consciousness raising and paradigm perception….even as economists suggest partial and one off policies like QE for the people and “a modern debt jubilee” both of which are completely aligned with and reflective OF the new paradigm. Steve Keen, who I have numerous times said is worthy of the Nobel Prize for his de-bunking of neo-liberal DSGE, has macro-economically re-discovered what C. H. Douglas discovered via cost accounting and calculus almost a century ago. But even Douglas and his remaining advocates still have the stench of general equilibrium and scant abundance (there’s an oxymoron for you) and so still have not completely stepped through the looking glass either. My Wisdomics-Gracenomics does step through because it identifies and does an exegesis of the natural philosophical concept even behind the new paradigm and so more thoroughly and innovatively understands the nature of necessary policy and the importance of integrating the macro perspective of Keen and the micro-foundational one of Douglas.
All you have to do is tie monetary Gifting inextricably, sufficiently and saturatedly to the pricing system…and the entire monopolistic paradigm of Debt Only is forced to step down off its throne by what I refer to as “the higher and free flowing disequilibrium” that then awakens and enlightens economic thinking.
And I would add that, historically, new paradigms have always been considered absurd….right up until they are recognized as the new Gordian Knot cutting and deepest problem resolving insight.
If you tie monetary policy reciprocally to every point of “retail” product sale, that is from one business model to the next within and throughout the entire economic/productive process with a high percentage discount policy to their “consumer” and that a monetary authority rebates back to the business granting the discount you could beneficially integrate price deflation into profit making systems, instantaneously increase individual purchasing power by a large percent and hence tremendously stabilize the actually productive economy.
As for the FIRE economy, even with a new paradigm, you’d need to stand up on your own hind legs and “grow a couple”, that is a couple of new ethical neurons and firmly regulate things like collusive financial kickbacks to home building firms for them inflating their prices to consumers. The high percentage discount policy would go a long way toward nixing that, but again, you’ll need to attack the host of economically de-stabilizing profit wriggling that goes on in the Finance, Insurance and Real Estate economies.
Legal tender laws are actually all a nation really needs to justify its currency and money system. That it requires taxation is one of the weaker tenets of MMT. Re-distributive taxation is mostly captured by old paradigm thinking. With a sufficiently abundant universal dividend to everyone 18 and older and the discount policy above one could immediately render transfer taxation for welfare, unemployment insurance and quite quickly even social security redundant and eliminate them, therefore benefiting both the individual and enterprise. Taxation could then be free to be used for one of its few legitimate purposes discouragement of individual, commercial-ecological and systemic vices, and at times when the nexus of speculative greed and DSGE fallacy like the derivative mania that lead up to the GFC was in its infancy.
R: ” haven’t we all gotten tired of the “whirlwind” graphs that lacks any economic intuition? ”
Me: Yes we’ve gotten tired of them, but if they also prove that we’re stuck between a rock and a hard place because the paradigms of Debt, Loan and For Production Only enforce that “stuckness” ….then we’d better actually look at and come up with a new paradigm pronto.
R: “DSGE models are stock-flow consistent”
Me: The alleged absolute importance of Stock-flow consistency as well as the economic validity of certain accounting identities….are rendered irrelevant to the solution….when one recognizes the new monetary paradigm of Direct and Reciprocal Gifting, and one also recognizes that the costing/pricing system, payment system and the money system are all digital and hence a discount policy to the consumer implemented at the point of sale throughout the entire economic/productive process that was rebated back to those enterprises by a monetary authority specifically mandated to do so…..was significant. Why? Because it would enable immediate and potentially very large increases in individual purchasing power via what, up until one sees it, is considered impossible, namely the painless and BENEFICIAL integration of price deflation into profit making systems.
Keen and probably every other macro-economist are undoubtedly very bright. What they lack is the integrative habit that aids in paradigm perception and an unfortunate habituation to abstraction. Hence they’re generally off in some theoretical and/or mathematical fugue….instead of doing the equivalent of zen meditation on the moment to moment commercial operations that take place in the economy continually….and then integrating the economic insights to be found there into their macro policy solutions.