Me: Don’t get me wrong, all of the heterodox reform research of Mosler, Keen, Hudson etc. is well and good, but the deepest part of the problem has not been addressed and that is discovering the single new paradigm concept and finding an efficacious way to integrate it into the economy that actually changes the nature of its entire pattern. The present paradigm for the creation and distribution of money is Debt Only. The new paradigm is Direct and Reciprocal Monetary Gifting and the most efficacious way to implement the new paradigm is with a 50% discount to consumers at retail sale every penny of which is rebated back to the merchant giving it to consumers by the FED or another monetary authority. This resolves the problems of individual monetary scarcity, systemic austerity and any possibility of inflation, and enables many more political and economic possibilities because it integrates interests and agendas on the left and the right. Again, this in no way belittles current heterodox research but rather affirms their conclusions and simply makes their stated goals a reality.

SG: MMT has always said the all the historical hyper-inflations have resulted from supply disruptions. This is what is going on, so MMT has always had an explanation. Now is the time to bring it up. Also explain that MMT is not able to predict unexpected supply disruptions. But MMT proponents should have been looking out for their occurrence when they happen. MMT should have been able to predict this inflation as soon as they saw the huge supply disruption caused by the pandemic.

Me: Hyperinflations are very rare and occur only after a series of prior disastrous circumstances like losing a war, having your productive facilities turned into rubble, being punished by the winner with onerous debts, thus making money printing a politically palatable action in an attempt to pay off such debts, and finally a private banking system leveraging up currency speculators who short the currency…and that is what makes the inflation go hyper. We don’t have to worry about hyperinflation, but we do have to worry about high inflation (basically a single digit percentage) which has many causes the most basic of which is that there really is no effective means of stopping it. Currently austerity is used to attempt to stop it, but that of course doesn’t work and brings on economic recession. The highest year on year rate of inflation the US has had in the last 100 years or so was a result of waging war in southeast Asia for a decade combined with the Arab oil embargo which increased the most important commodity, namely petroleum, by 400%…and then we only had 14% inflation. Now if we implemented my 50% discount/rebate policy at retail sale that would mean that despite the 14% inflation you’d still have (miraculously so far as orthodox economic theory is concerned) BENEFICIAL price and asset DEFLATION

Reforms are good, genuine paradigm changes are waaaay better. For instance, combine the 50% discount/rebate policy with a $1000.mo. universal dividend for everyone 18 and older and you’d not only have benefical deflation you’d also implement $24k/yr. guarnteed potential purchasing power for every adult in the nation. So what would be the need then for the payroll taxes individuals and enterprise pay for welfare, unemployment insurance and even social security??? And of course if you got a job, on your first day you’d get a 100% raise in the purchasing power of your wage.

What is required is a movement that communicates these (and other) incredibly beneficial policies to the masses. Never mind trying to change the minds of economic authorities and increasingly idiot pols. Create a mass movement that (indignantly) herds both sides of the political apparatus toward relative abundance for all.

SE: Steve Greenberg She had 6 minutes to respond to multiple complex questions. She did mention supply chain and re-opening issues as a cause. Fareed also said he wants to have her back to continue the discussion. Might be more helpful to contact Fareed directly via his Twitter thread or his GPS show to ask him to discuss how we can fix our supply chain issues. Also this is not something new, at least not for me as I have heard it mentioned multiple times before that we need to fix our supply chain issues to ensure we’re ready for the next economic and health crisis.

Me: Best way to end supply chain issues (and reduce their expensive and high carbon footprint) is to re-industrialize America by implementing a 50% discount/rebate policy at retail sale. Why? Because if you reduce price, double potential purchasing power/potential demand and resolve inflation with that single policy…why import the vast amount of goods when you can very profitably make them yourself??? The benefits of this policy are so good even export platforms like China, Germany and Japan could cut their exports tremendously and yet still have stable profitable economies. Ah, paradigm changes, always universally beneficial.

SG:

Me: That’s a good article. The “gig” economy comes to trucking and long shoring. But again, while reductionistic analysis is obviously important an informed wholistic/paradigmatic perspective is what is necessary if you really want to get immediate and continuing change

Private Finance and its monopolistic paradigm of Debt Only for the creation and distribution of money IS THE DEEPEST problem we face. It keeps all of the other problems of neo-liberal economics in suspension. Finding and bringing conscious focus on the correct concept of the new paradigm with a policy that benefits all economic agents commercial and individual (a 50% discount/rebate policy at retail sale) and expresses the new paradigm itself (Direct and Reciprocal Monetary Gifting) and communicating that to the masses in order to herd both sides of the political apparatus toward implementing it IS THE PATH, IS THE WAY TO UNITE ALL OF THE ALIGNED REFORMS like MMT, Keen’s Minsky’s Financial Instability Hypothesis, Hudson’s Financial Parasitism and Brown’s Public Banking.

Me: MMT is a good reform exactly like UBI, a job guarantee and all of the correct refutations of many of the assumptions of neo-liberal macro.

Now, a 50% discount/rebate at retail sale is a paradigm changing policy because it is an actual action, because it mirrors the way that money is presently created albeit only as debt (accounting entries), because it is implemented at a point that is strategically, integratively and continuously a significant part of the economic process itself (retail sale) and because the policy is the very expression of the new monetary and financial paradigm, namely Direct and Reciprocal Monetary Gifting.

Finally, it resolves virtually all of the deepest problems of modern economies (individual monetary scarcity, systemic monetary austerity and price and asset inflation) and does the impossible so far as orthodox economic theory is concerned, that is it BENEFICIALLY integrates price deflation into profit making economic systems. This last comprises two of the primary signatures of historical paradigm changes, that is complete conceptual opposition and temporal universe inversion of reality.

That’s all.

GH: I want to join Craig’s crusade but form a break-away movement. I think the discount on retail sales should be 37.25 per cent not 50 per cent. Now, how do we decide who’s right?
Actually, I’m not sure how we enforce either since retailers will be able to argue about the base from which the discount functions but no doubt Craig has a solution.

Me: Well there’s a no brainer answer to that question. Retail sale is the end point of production so it’s obviously whatever their price is at that point that is reduced 50%. Now one could say that: “Well what if the retailer and/or any other business model before retail sale just bumps their price by 10-20%?

Answer: 1) part of the opting into the 50% discount/rebate policy will be that if your overall costs exceed the cost savings that the 50% discount/rebate bequeaths (payroll tax eliminations, large corporate and individual income tax cuts) read never, then you will able to raise your prices. If you don’t meet that standard then any revenue garnered from a price rise will be taxed at a rate of 100%.

2) This applies to all business models

3) Competition. If you raise your prices by a largish percentage how much market share are you likely to lose if even one of your competitors doesn’t raise their prices?

4) Even if despite the tax incentives and tax dis-incentives that would be a part of the overall program of implementing the new paradigm and its policies, if yoy inflation is still 2-3% then index the discount percentage to that percentage rate…and no harm no fuss everyone’s purchasing power is still doubled.

That also makes it the most integrative and unitary concept/experience as well.

If you want true thirdness/oneness contemplate grace in all things.

If you want paradigm change instead of reform contemplate grace.

If you want problems and solutions without conflict or puzzlement contemplate grace.

Grace: The only actual Alpha and Omega, Grace: Love…in one’s heart and in their actions.

In other words it is the unity of the personal and the temporal.

I told you it was the integrative resolution of the ultimate duality.

Me: A 50% discount/rebate policy at the point of retail sale enables a $7.35/hr. minimum wage worker to purchase goods and services as if he/she were making $14.70/hr. and immediately doubles everyone’s potential purchasing power. Don’t be like a hard headed/reality denying neo-liberal macro-economic doink. Look at the above empirical and temporal universe reality and recognize it as paradigm changing. You’re welcome…for the opportunity to see a new reality and think a new thought which is a rare occurrence in life.

• yoshinori shiozawa October 20, 2021 at 6:38 pm Reply
• Dear Craig,
  are you sure that your policy plan is based on a good theory based on evidence?
  Measurement without theory was dangerous as Koopmans argued. However, a policy without theory is much more dangerous.
  • Craig October 21, 2021 at 4:43 am
  • Yoshi, My theoretics are the very same as the heterodox thinking of MMTer’s Monetary Sovereignty, Steve Keen’s Minsky Financial Instability Hypothesis, Michael Hudson’s Financial Parasitism et al. However, as I have repeatedly stated here for years (and the afore mentioned theoreticians [unconsciously] confirm) the actual/deeper problem is the present monetary and financial paradigm which parasitically dominates and manipulates virtually all other commercial and individual agents. My contribution is recognizing the present paradigm and, by a study of historical paradigm changes, discovering the signatures of new paradigm concepts and thus the new one required in money and finance. The new paradigm fits seamlessly within the heterodox theories above and all but the most misaligned current economic structures, and in fact effectively integrates their goals into the economy while enabling many other solutions than they have considered possible.
  • yoshinori shiozawa October 21, 2021 at 1:43 pm
  • I only know that you repeatedly insisted your policy plan. Having heterodox picture and having a good heterodox theory are two different things.
  • Craig October 21, 2021 at 6:41 pm
  • Logic is logic. If the theoretics of the heterodox reformers I mentioned above conceptually align with the new paradigm of monetary grace as in gifting…then they are aligned. And, if the new paradigm resolves the problems theorists want to solve and enables even more beneficial things than those theorists currently think are possible…then they better get on the bandwagon for the new paradigm or at best they risk logical failure and at worst some hidden or unconscious agenda.

The two “heavy balls” of economic theory are retail sale and cost accounting. Don’t allow any costs post retail sale and require a forensic examination of every business’s books to discover who is arbitrarily and anti-socially raising their prices.

P: I agree with Gerald. Well expressed.

This approach – stylized theory – is the approach of science. Science has been stunningly successful. Economics is harder than physics because to match real-world concepts and relationships to the idealised concepts and relationships is more difficult. So its success is not so stunning. But it does work to some extent.

Compare with the other social sciences which do not do the stylized theorising. They have nothing. No body of theory. Perhaps the fields of law and linguistics are partial exceptions but elsewhere in social science (psychology, sociology, anthropology, political science): zilch. Scholars in those fields do not have the sort of conversation that takes place in economics. They cannot.

So I think that economists should be glad to have a winning approach and that to attack the basic method is misguided. I say it is not the method but the premises which need attention. The basic premise of self-interest is not wrong but is incomplete. It seems to me that for economics to advance, working out stylized theoretical relationships premised on other social assumptions is necessary.

Altruism, for example, is as genuine a human motivator as self-interest. Economics ignores it. Yet it exists and has economic consequences. So the task would be to theorise altruism in the stylised way. I think that until this happens economics will not break out of its theoretical stasis.

Me: Precisely. And what is a more altruistic concept than Monetary Grace as in Gifting? The real problem isn’t just the fallacious theoretical assumptions of neo-liberal economics it’s the current problematic monopolistic monetary and financial paradigm concept that hasn’t changed for the entire course of human civilization.

Neo-liberal economist’s models are flawed alright, but so are libertarian’s models. They ‘re both afflicted by the same thing that Ptolemaic cosmologists were perplexed about before helio-centrism was found to be the actual reality. In other words all of their calculations were inaccurate because they operated within the current paradigm…instead of recognizing and confronting the new one.

Economists and economic pundits on both/all sides have to be willing to drop their orthodoxies, be willing to integrate certain of their beliefs with those of their critics and be willing to embrace the third-ness aspect of the dialectic. That’s because conceptual opposition is the hallmark of imminent paradigm change and the willingness to integrate is the hallmark of accomplished paradigm changes.

To resolve economics’ major problems change the current monopolistic monetary and financial paradigm of Debt Only to Debt and Strategically Direct and Reciprocal Monetary Gifting at the point of retail sale. That would enable both greater individual and commercial monetary abundance while simultaneously implementing the impossible so far as orthodox theory is concerned, that is beneficial price and asset deflation.

“Economists assumed that the economic process happens in an abstract, no-space and no-time historical void.”

Real world temporal universe fact: Retail sale is the terminal ending point of the economic process, that is, it is where production exits the economy and becomes consumption. That economists have missed this shows how overly abstract and theoretical they have become. It also explains why they have not recognized the incredibly powerful potential for policy at that point. Thirdly, it explains how they have failed to see how private for profit money creation is a wholly exterior, parasitical, incredibly expensive POST retail sale set of costs and hence logically not a legitimate business model.

Empirical fact: Up to 97% of our money is created by accounting entries, i.e debits and credits. As Steve Keen has correctly bemoaned, “Economists can get their PhD in economics without taking so much as an elementary course in accounting.” This shows how ignorant they are of the most significant fact about money creation, namely it is most BASICALLY accounting

Given these facts, it is not surprising that economists and economic pundits are missing the temporal universe problem resolving and efficacious accounting implementation reality of a 50% Discount/Rebate policy at the point of retail sale.

Economists and economic pundits can run from/refuse to confront, confirm or engage these facts, but they cannot hide from them.

$0-1,000,000                                                     50%

$1,000,001-2,000,000                                      40%

$2,000,001-3,000,000                                      30%

$3,000,001-4,000,000                                      20%

$4,000,001-5,000,000                                      10%

$5,000,001- 6,000,000                                       5 %

$6,000,001-and up                                              0%

Me: I have dropped Graeber’s name here numerous times. Why? Because the problem in economics is money, private debt and banking. In other words everything surrounding finance. That is the paradigm that hasn’t changed since Sumeria and is begging us to consciously awaken to. What is a debt jubilee? Monetary Gifting. What is a UBI? Monetary Gifting. What are (or should be) fiscal deficits? Monetary Gifting. What is a 50% discount/rebate policy at retail sale? A completely integrated, direct, continuous and virtually universally beneficial Monetary Gift that utilizes and perfectly mimics the debit/credit accounting process of money creation. Direct and Reciprocal Monetary Gifting, the policy essence of the new paradigm that will enable us to rejuvenate economics and effectively confront climate change.

T: As with my post above, what happens when fiat currency ends up being exchanged for real assets like mined minerals and fiat’s value is diminished by piles of it in the hands of the miners outside of the fiat issuing country and the recipient can find no party to accept? Then the hard assets end up in the hands of the financiers/rentiers. Then what? It seems like we end up with the same results that happened with The Enclosure?

Me: The obvious answer here is to create a true publicly administered national bank which, aligned with the new monetary and financial paradigm, is free to distribute credit in a socially beneficial way. Private money creation is a monopolistic, problematic business model which is the only business model allowed to extract costs post retail sale thus violating the consumer sanctity of retail sale. A public bank would innovate private money creation out of existence and it would make private money creation the shite picker upper occupation after the creation of the internal combustion engine.