Keen is my pick for the best economist on the planet. His work de-bunking DSGE is excellent and identifies the theory’s major problems.
His only problem? He talked about a new paradigm, but even though he pointed directly at the problems (money, private debt and banks) he didn’t recognize the current problematic paradigm, apparently doesn’t have a knowledge of the signatures of historical paradigm changes and so didn’t know how to formulate the new paradigm concept.
He even had another brush with cognition about the means of implementing that new paradigm when he correctly stated that economists could get their Phd.s in economics without so much as taking an elementary course in accounting.
So astute, so close, but close only counts in horse shoes, while new cognition is everything with paradigms.
What we need is a monetary Reformation. The present situation where private banks own a virtual monopoly paradigm to create our money ONLY AS DEBT is exactly analogous to the Catholic church owning a monopoly on the entrance to heaven only via THIER sacraments. Monopolies and even more powerfully, paradigmatic monopolies are anti-freedom. If we were to gift a 50% discount to consumers at retail sale all of which was rebated back to the merchant giving it to the consumer by the monetary authority we could immediately double everyone’s purchasing power and eliminate inflation at the same time. In fact (magically, if you are an orthodox economist) we would be beneficially integrating price and asset DE-flation into profit making economic systems…with that single policy. Temporal universe inversions of reality are a primary signature of historical paradigm changes. Get the policies of the new monetary paradigm here: https://www.amazon.com/dp/B07PLNJLRN/ref=sr_1_1?keywords=wisdomics-Gracenomics&qid=1552358772&s=books&sr=1-1-catcorr
A few decades from now when the human race is facing the fact that it is probably not going to survive because of climate change just how stupid are they going to feel when they passed on the one policy that would have enabled the greening of the economy necessary to avoid that fate?
My sincere sympathies. I don’t doubt his good intentions, but it is my observation that Austrians cannot think outside of the present monetary paradigm even if doing so would enable them to accomplish their highest goal of price and asset deflation. A clear sign that they are blinded by orthodoxy. And libertarians? Again their intentions are virtuous, but economically they believe in an idealized/fetishized idea of liberty/freedom/free markets instead of realizing that integrating monetary gifting into the economy would mimic and create an economy that operated like the gracefully dynamic and in fact unstoppable free flow of time and space…that they themselves desire.
And that is the natural philosophical concept behind every historical paradigm change.
And that concept is grace.
And grace by the way is also the next new zeitgeist, which the new monetary and financial paradigm of monetary grace as in Gifting will do more to enable as a reality than any other policy action/reality because zeitgeists are new mental/self actualized realities…and the repetitive and continuous nature of a gracious monetary gift at retail sale will do more to enable us to consciously realize the goodness, the gratitudiness, the problem solving practicalityand the wisdom of the natural philosophical concept of grace/graciousness.
Just think about what the continuous experience of gratitude for a gift whenever you bought something, would be like…and could lead to.
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.
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.
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.
Social Credit/Wisdomics/Gracenomics/ Gracientialism 