If the Democrats want to defeat Trumpism they’re going to have to come up with an agenda that is an obvious and full throated improvement not the slow slide toward sefdom that conservative and liberal orthodoxies so suavely and deceptively will guarantee. This leaves out a milk toast compromise that is ineffective, goes nowhere and so solidifies the ongoing process of contention to the point of disintegration we see looming up around us. It requires an actual synthesis/integration of truths, workabilities, applicabilities and the highest ethical considerations of opposing perspectives.

Economic theory mongering is largely a fruitless task. Macro-economics is a relatively young body of knowledge while the current monetary and financial paradigm has not changed for over 5000 years. Hence macro-economics has a very short cultural horizon viz the current monetary paradigm that has never even been objectively examined let alone shed in favor of a new one.

Private financial capitalism is IMO a huge pile of shit. Socialism may not be quite as large a pile being number two of two, but it is equally as orthodox and rigid. If we adhere to the wisdom of dialectical/logical/integrative thinking we’ll be on the right track. Discerning the new monetary and financial paradigm and discovering an integratively universal way to implement it will result in the new economics we all desire.

And that is what Wisdomics-Gracenomics does.

Steve Hummel 11/13/2018

An interesting and encouraging post to me as I’m almost the only person here who has advocated specific policies and institutional/corporate changes (ending private finance’s money creating abilities, creating a publicly administered public banking system in its place and a central monetary authority specifically mandated to distribute money/credit for the two policies of a universal dividend and a 50% discount/rebate policy at retail sale)

In my many posts about the two policies above to libertarian and conservative blogs I would always get terminally orthodox replies like, “Oh, that’s wage and price controls you idiot. They were never able to comprehend that the policy being implemented only at the precise ending point of the economic process for every consumer item at retail sale meant that it never had anything to do with price discovery or any kind of intrusiveness upon it. I’d get terminally orthodox reactions from liberals about the same policy because they accepted the quantity theory of money and the velocity of it re-circulation even though again retail sale is the terminal expression point for all forms of inflation and a 50% discount at that point would dwarf garden variety inflation and with a few intelligent regulations accompanying the policy even that could be greatly minimized thus miraculously, for the terminally orthodox at least, integrating price deflation painlessly and beneficially into profit making systems for both individual and commercial agents.

Liberals had better awaken to the efficacy of the new monetary, economic and financial paradigm of Gifting before some conservative politician recognizes just how potent and beneficial its policies actually are for everyone…..and then sweeps every liberal out of office with them. Conservative politicians are generally much smarter about grasping and utilizing power than liberals. Maybe liberals can wake up and die right for once. It would also certainly make the probability of the progressive cultural agenda much more likely.

How many times do we have to beat the dead steed of DSGE before we start crafting actually resolving policies that replace it???

Steve Hummel

Recognizing the single concept of a new paradigm is the most “outside the box” thing one can experience, and because a new paradigm is simultaneously a new pattern that the single concept fits seamlessly into the thing society can most benefit from.

Steve Hummel 11/12/2018

JC: GFC II?

The Great War only became World War I after World War II. So if there is another GFC, the first will become GFC I and the next will be GFC II. GFC I was predicted, in fact, but noone listened. This time, things could be different.

In any case, GFC II will be an exceptional opportunity for the left in general and non-classical economics in particular. Especially if it’s wider and deeper than GFC I. And that’s why I ask you all what should then be done?

GFC II could happen within two years. Which may not leave time for book publication. So perhaps social media will lead. That depends on us. In any case, we might prepare by discussing possibilities here, including how to make them happen when the time comes.

Maybe the tags are GFC II and 2020 Vision. What do you think?

Me:  Excellent question and idea. Here’s a list of ideas and actions I’m confident would help keep us from stumbling into GFC II and WW III.

Preliminaries:

1) Recognize that the paradigm of Debt and Loan Only for the sole form and vehicle for the distribution of credit/money is probably the only socio-economic, financial, political and cultural factor that hasn’t changed in the last 5000 years.

2) Recognize that history shows us that civilizations rarely if ever remedy their disintegration and fall and those that do so on a limited basis address the disintegration via one off debt jubilees and other palliative economic reforms.

3) Recognize that leaders who are unconscious of the above and/or believe it is inevitable like Trump and Bannon may appear to be erudite but are actually conscious or unconscious merchants of chaos AND NOT SAVIORS. Integration is the answer not apathy, “fiddling while Rome burns”, delusionally believing that disintegration is the answer and that god and a coterie of intellectually unastute populist politicians will sort it all out afterward.

4) Recognize that the very process of Wisdom and its fruits of discernment and appropriate and effective action is the integration of only the truths, only the most effective workabilities, only the deepest applicabilities and only highest ethical considerations OF OPPOSING PERSPECTIVES. Wisdom/Integration is the antithesis of orthodoxy. (By the way this process and an actually new and integrative socio-economic, monetary and financial contract is what democrats need to end the disintegrativeness of Trumpism. It has to be starkly and unmistakably better and more beneficial to large constituencies of both parties otherwise it’s onward and downward.)

Actions:

1) All new paradigms are in significant ways conceptually oppositional to old/current ones, thus Monetary Gifting is the new paradigm in opposition to Debt-Burden Only, and monetary, economic and financial policies aligning with the new paradigm are necessary.

2) Policy suggestions that reflect this new paradigm have already been floated before and for some time recently (debt jubilees, UBI, government deficits etc.) and more conscious perception of the natural philosophical concept of the new paradigm (gifting) and the concept behind even it (grace) will give intellectuals the fodder for more integrative ways (recognizing the digital natures of the pricing, monetary and accounting systems) to rapidly implement policies to effect the new paradigm.

3) Take the above insights and social contract policies directly to the individual with social media and a grass roots movement.

4) Broadcast the positive changes resulting from the above to other nations and their business communities and beware any covert or unconscious actions that may make war an easier possibility.

KZ:  Jonathan and Craig, there are lots of books and plans out there for “remaking” the US economy. Robert Reich makes sensible and doable proposals. Political economist Gar Alperovitz, co-founder of the Democracy Collaborative makes detailed suggestions. Another source is the Institute for New Economic Thinking. The same for PopularResistence.org. All these have the same problems, however. As things stand today, they will never be considered by any American political party, even by Bernie Sanders. Mainstream economists reject these notions. The reasons for rejection? All these proposals reject industrial and financial capitalism in favor of “economic democracy.” Economic decisions would follow the same path as other democratic decisions we make. Or, as activists put it, the economy becomes as it ought to be, “our” economy. This is certainly disruptive and clearly is socialist. As I see it, it’s the only “remaking” that can save both American democracy and the American economy. There are, however sizable segments of the American population not interested in saving either.

Me:  Direct and Reciprocal Monetary Distributism is the necessary integration of the sane aspects of capitalism and socialism and a grass roots movement utilizing viral cyber means to communicate its obvious benefits directly to the large constituencies of debt ridden students and recent grads, the dwindling but still enormous middle class and the equally large small to medium sized business community is the fastest route to paradigm change.

Me:  John and Ken,

This is a macro-economic blog. Why don’t we discuss the the macro-economic insights to be garnered from double entry bookkeeping regarding the scarcity ratio between total available to spend individual incomes and total systemic costs and hence prices? Also, the macro-economic and policy significances to be gathered from the fact that the money, pricing and accounting systems are all digital in nature, that is, equal amounts of debits and credits, prices and money and money and debt sum to zero?

John, you are apparently a cost accountant. Are you aware of the cost accounting convention that all costs must go into price?

KZ: Craig, macroeconomics is something a group or groups of people invent. Follow the inventions. Craig, “all costs my go to price.” Is that average price, marginal price, or transitive price. Got to pick one. And then you’ll have to defend your choice.

Me: Ken, The answer is final retail price because that is the terminal end of ALL costs, of the entire legitimate economic process and hence the terminal expression point for all forms of inflation. The ending point for any process is also an ultimately powerful point for policy expression and effect, and that is when and where the paradigm changing policy of the discount/rebate is implemented. Whatever occurs before it is largely irrelevant so far as policy effect is concerned.

It is of course also true that accounting is complex and can be gamed…..that’s why the new growth area in the new paradigm will be forensic accounting in order to ferret it out and hence increasingly stabilize the incredibly stabilized system wrought by the philosophy and policies of Wisdomics-Gracenomics.

Thank god, you’ll pardon the expression, for guys like you and Bill Black.

KZ:  Craig, an old saying amongst haberdashers, “never pay retail.” Aside from the dealing in prices that goes on constantly, making retail price a fluid value, often political or social position can change the price one pays for any commodity. Pricing, and all the process of buying and selling, are pragmatic, rather than paradigmatic. Usually the result of cultural rules of thumb and prejudices more than any “rational” computation. Accounting is complex, but that’s not why it can be “gamed.” It can be gamed and is gamed because it is a human creation, full of inconsistencies and uncertainties. Like all other aspects of culture, buying and selling is made stable “after the fact.” Human buy/sell based on shortcuts and estimates and then give the process policy and paradigmatic stability after the deal is closed. Look at all the big mergers over the last five years to see this process in action. You might call the rough-cut rules and guesses used by humans in buying and selling wisdom. But I would not.

Me:  The economic system ending point of retail sale and the abundantly high percentage of the discount/rebate policy render all that you have said in your last post….irrelevant. Why? Because no enterprise can withstand opting out of the policy because to do so is to commit economic suicide due to the fact that net profit margins are almost exclusively of single digit size. Put that together with the fact that doubling everyone’s earned income means doubling every enterprise’s potential sales and you’ve got not only “an offer/policy that no one can rationally refuse”, but also the better and problem resolving alternative to raising prices in a monetarily austere system.

Oh, yeah, yeah you’ll need to craft rules and regulations to accompany the dividend and discount/rebate policies just like every other system that has ever been put together because not everyone is rational and ethical, but if they align with the concept behind the new paradigm the result will be mutually beneficial and more ethically effective than the present system that is based on the tawdry ethics of power, profit and domination.

Philosophy and direct observation are lacking in economics. It’s time they were applied.

FS: The whole of this blog can be abstracted into its describing the failure of economists to understand the difference between concrete and abstract relationships.

Econometrics only produces and only ever will produce concrete relationships.

Abstract relationships are derivable from first principles analysis. These are the only possible examples of valid theoretical understanding. I fail to understand why this appears never to be recognised by economists. Possibly it is the wish to conflate decision making which is not necessarily predictable with the predictable results in the physical world of decisions implemented.

Me: Frank,  I perceive that you think I’m a crackpot, but we are very close in actual fact. Economists are like Marley’s ghost they are “forced” to be loaded down by the chains of their own thinking and and they are condemned to remain so by their inability to identify the concept of the new paradigm and the concept behind even it.

So far as first principles are concerned, if the scientific, quantum mechanical and electro-magnetic reality of the cosmos is most accurately and honestly described as a dynamic, interactive and graceful flow then why are we not aligning economic theory and policy with that best analysis? If the adding of space and time enable a certain randomness to this ultimate reality should we just ignore the more basic reality, or align policy and regulation with it so that their effects approximate it instead?

Even though our temporal reality is not the ultimate one, If we want to be accurate, honest and knowledgeable about the exchanges that take place in the economy and be able to know where we can best align it with our intentions of profitability and general flow why do we not analyze it using one of mankind’s greatest inventions double entry bookkeeping?

Why don’t we follow its conventions like the cost accounting convention that “all costs must ultimately go into price”?

Why don’t we recognize that the ending, summing and ultimate expression point for significant economic factors like price, the entire economic process and inflation is retail sale and so recognize that a policy at that point and time might have significant effects?

And just to sure we’re being practical about our temporal reality why don’t we utilize the fact that the pricing, money and accounting systems are all digital in nature and so craft a digital monetary policy that will benefit all agents and enable it to approximate the graceful flow of ultimate reality?

First principles. They ARE important.

JV:  If reality is indeed a process, something we both agree on, then Y=C+I in time cannot be real. In other words, Keynesian economics is fiction. And Keynes’ famous dictum about Hayak and his ending up in bedlam, I’m afraid is no more than a case of the pot calling the kettle black. Instead, C=I with the intermediary of Y over time has at least the possibility of representing reality. Unfortunately this potential point of departure would require a rewrite of the entire economics oeuvre. That this is too monumental a task for a single person to undertake ought to be clear.

Me:  Remedy the problems surrounding Y = C + I, the presently obvious monopoly paradigm of Debt Only and the equally historically obvious scarcity of aggregate free and available individual income that has attended it….with a universal dividend and 50% discount/rebate policies I have suggested here implemented specifically at the point of retail sale….and every other economic factor can align with and adapt to the new paradigm….exactly as has happened with every other paradigm change.

The 50% discount/rebate policy is effective for every consumer product at final retail sale. A discount/rebate policy is also necessary at significant points like commodities markets, at the creation of mortgage notes,  to businesses for government contracts, for real estate fees, insurance premiums/drug prices and speculative activities (the national bank will be very strict and effectively regulatory regarding what is to be legitimate speculation as well as what it will allow leveraging for at all, for instance no domestic or foreign shorting of the currency will be allowed, and all attempts at it will be identified as illegitimate and “null and void”).

If an economic theory or political system wants to survive and thrive they must form a satisfactory contract that obviously benefits both sets of agents, namely the individual and commercial enterprise.

1) Insuring everyone’s economic security for life with a $1000/mo universal dividend,

2) that is doubled by a 50% discount/rebate policy at the point of retail sale and

3) the latter policy also doubles both everyone’s earned purchasing power and

4) the potential actually available business revenue of every enterprise….

would seem to fit that bill rather nicely. Of course the kickers are that

5) the 50% discount/rebate policy taking effect at the terminal summing point for all costs (including the costs of capital goods and profits) and so total price for every consumer item in the economy eliminates any possibility of inflation (garden variety inflation is restrained by competition and potential loss of market share and hyper-inflations require specific disastrous conditions to occur) …because the end of the entire economic process is consumption and that means you own it and no commercial agent can enforce additional costs upon the individual. You get to eat it, wear it, drive it around, etc. etc. etc. and

6) the new paradigm of Direct and Reciprocal Monetary Gifting effectively breaks up Finance’s monopoly paradigm of Debt and Loan Only…which is the deepest, most underlying and largely unperceived problem in economics.

So I’d suggest we start there and then, because the world is not an altogether rational place, come up with regulations and sanctions aligned with the concept behind even Gifting…just for the sake of logic, pragmatism and philosophical continuity.

“What is often needed is both a good attitude and good mathematics.”

This is most definitely true because it is the integrative perspective.

However, it’s always the intuitors and paradigm perceivers who are first to see the truth and the whole…and sometimes the scientists and mathematicians come to the integrative and basic truth later. This is also why heterodox economists can advocate one off and once removed palliative policies that reflect the new paradigm concept (Gifting) like debt jubilees, government deficits etc. and yet because they have no real consciousness of the even larger and powerful concept behind even the concept of the new paradigm (grace) they miss the integrative bigger picture.

[ (Science/Fragmentation x Wisdom/Integration/Wholeness) = The Pinnacle Reality of Grace ]

God/the cosmos is grace as in flow, and Money’s Power is godlike. Recession/depression is not inevitable. At least not in monetary economic systems. If there is intention, more individual income than costs, means of production, regulations and sanctions aligned with grace/the cosmos and awareness of the power of a digital monetary policy at the ending point of the economic/productive process other than some incidental disaster, enterprise will continue.

Hence philosophically and monetarily/economically speaking grace/money as in an abundance ratio of individual income to costs is analogous to God’s/the cosmos’ omnipotent grace as in a loving flow of action.