Personal Quote

Finance capitalism and Marxism are both way passe’. Direct and Reciprocal Monetary Distributism intelligently and strategically implemented is the thirdness greater oneness of that obsessively contentious duality.                     Steve Hummel 02/02/2020

Response To A Poster Who Slams Me Despite The Fact That We Appear To Agree On Nearly Everything

MC:  The flaw in your geology as an exemplar Geoff is that for decades Alfred Wegner’s theory of Continental Drift was ignored despite the overwhelming evidence in it’s favor. So science alone, facts and even evidence alone, doesn’t even sway the institutional and historical inertia of a given culture’s scientists. Specifically the American response and it’s intransigence compared to European response.
Science cannot solve the value crisis the roots of which are historical and rooted in political power and cultural predjudices and out-right ignorance.
Without a certain degree of moral and ethical (and ethics is philosophy, after all) maturity level within a culture science cannot really flourish. When respect for truth dies, when post-truth alt-fact comes to hold equal footing with sound science, a civilizational decline is inevitable. Another dark ages is a very real possibility.
Just look at the United States right now for proof that decline of culture, historical awareness , morality, and philosophy of ethics.

Me:   What the hell are you always slamming me for. You completely agree with the philosophy I’ve been advocating here for years. Yes, I am evangelical about what I consider the new monetary and financial paradigm, but not without good empirical and philosophical reason. Hence I’m confident, not arrogant, impatient, yes, because there is a rational end to patience especially when survival may be in the balance.

What do you think the concept of a new monetary and financial paradigm might be. I’ve asked this question of the group several times, but no one ever takes up the challenge. They just squirrel off into their palliative reforms, personal agendas, complain about complexities and/or re-iterate the same heterodox critiques we’ve all come to agree upon. Give it a shot. After a while you come to accept the invalidation or unresponsiveness. It doesn’t kill you.

MC:  I am sorry if you feel the comment somehow relates to you. It doesn’t.

Me:  If you’re referring to me it certainly does express much of the same philosophy I advocate. I wasn’t assuming it was even addressed to me. I was just wondering why and how you could have been so aggressively critical of me despite thinking so much in the same terms.

Not willing to take a dive into conjecturing about the new monetary and financial paradigm, huh?

MC:   In my view you are an evangelical with religious zeal. I wish you well, but I don’t agree with your one size fits all solutions. Gerald asked reasonable questions and your response was less than reasonable. So I simply cannot see any value in engaging in dialogue, this is my last comment.
Me:  Well,…thanks for the reply. However, it’s actually everyone else here who has the one size (heterodoxy) fits most everything (except the breakthrough conceptual insight/new tool/monopoly busting phenomenon known as a paradigm change) not me. I’m behind 99% of heterodoxy myself because that is how science ploddingly advances as Kuhn observed. Too bad Kuhn looked only at science instead of paradigms themselves, their actual operations and their accomplished signatures. Paradigms and “Paradigmology” being the quintessential integrative phenomenon and study is exactly what science needs.Reread the thread, Gerald asked me questions designed to invalidate and I gave him solid mathematical and philosophical answers.

We’re right where we need to be, we just have to stand in the light of the obvious. When all of the leading heterodox reforms are about money and finance that’s a glaring indicator that what economics needs is to find the paradigm there.


KZ:  “Our approach to causation needs to change. Causation is not a thing. It is a story. A story that explains within the framework of a specific culture how events or actors relate to one another, and how both relate to human culture and society.”

Me:  Yes, parables/stories are the tool of wisdom which is precisely what we need in economics and in the entirety of our lives.

KZ:  “A believable story we can share. But this “believable” story is still part of complex events. Complexity makes identifying causality in a predictive way impossible.”

Me:  Time and space will always make PERFECT predictability impossible, but the wisdom of grace as in the integration of the discern-able truths in opposites is pretty damned predictive, and undoes any obsessive need for perfection. Perhaps god or the computer programmer who created the cosmos set it up this way….so we wouldn’t become so titanic-ally bored by perfect predictability.


Posts to Ellen Brown’s Forum Regarding Mexico’s Public Bank Initiative and How It Is Still Inadequate

Me:  Public banks that require PRIVATE collateralization are public/private entities and so remain within the neo-classical “loanable funds”mindset. That mindset is a ruse because private banks loan first and look for reserves later and are always backed by the central bank in a pinch anyway. In other words the central bank is the handmaiden of the private banks. Only when we have a publicly administered national banking system, the central bank and government are harmonized with the public interest as the goal and private capitalization requires good business plans to prevent the Chinese “throw money at it and put the malinvestment in the central bank’s safe” sloppy process.


Me:  That is a bold effort. Obrador had best watch his back.  However it still assumes that money is the primary cause of “monetary” inflation when it’s real causes are the smallish cost inflationary nature of the economy and the lack a well crafted alternative to systemic austerity. Why is the latter not there? Because it lacks the insight of the reality inverting/paradigm changing effect of a high percentage discount/rebate price and monetary policy at the point of retail sale. That insight is (and reflects) the simple yet powerful reality inversion of the positions of the earth and the sun of the Copernican Cosmological paradigm change….applied to economics.

JR:  Can’t let you get away with that, mate!

You appear never to have heard of a Credit Authority to determine the size of the “gap”.  Data to do that don’t exist at present, when GDP is derived from GNI.

EB:  Interesting. How DO you determine the size of the gap?

Me:  Ellen, The size of the gap numerically….is irrelevant. To attempt to precisely quantify it and then simply fill it shows that one is stuck in the mindset of dynamic stochastic (statistical) general equilibrium…which Steve Keen amongst others have invalidated. Why do all heterodox economists still fear inflation? Because they haven’t recognized the ending/summing/turning point that is retail sale, and the fact that a high percentage discount/rebate price and monetary policy at that point could totally invert creeping inflation into beneficial deflation and simultaneously resolve individual income scarcity and systemic austerity as well. Heterodox economists want and recognize that you have to have deficit/disequilibrium spending or the economy goes into recession. They just haven’t glimpsed the new paradigm and its most significant and strategic policy.

The 50% discount/rebate policy at retail sale is the the telescope, the ellipse and, reflectively, the inversion of the earth and the sun of the new monetary, financial and so economic paradigm.

JR:  Steve, too much money chasing too few goods is an exceedingly dangerous risk and if we went silly and caused it, that would damn monetary reforn for ever.

Pointing out, as I and others have done many times, that it is unlikely that it occurs in our present tight system doexn’t mean the sky is the limit.

The ability to lend by banks is controlled by their ability to gain “willing borrowers”. We, and I expect many other nations, do have demand inflation in the housing field, where need and scarcity forces people to be more “willing”.

Me:  John,

Explain to me how you can have too much money chasing too few goods….when whenever a purchase occurs of any consumer product or service only half of the money it took yesterday to purchase it is needed as a result of the 50% discount. Indeed, with the 50% discount/rebate policy you can inject incredible amounts of money strategically into the economy to the individual, to enterprise and for infrastructure, and with minimal regulations that yet have “teeth” like I outline in my book…you’ll never have inflation.
Explain to me how we are ever going to have inflation when in the last 100 years (in America) the highest yearly inflation rate we’ve ever had was just short of 15% and that was a result of the costs of the Vietnam war and the cost of nearly a 400% rise in the most important commodity of modern economies, namely petroleum, as a result of the Arab oil embargo. Neither of which were caused by “monetary” inflation. Normal garden variety inflation is almost always otherwise in the 1-4% range and even if that rate of inflation continues despite the regulations referred to above, all you’d have to do is make the discount/rebate percentage 51-54% and everyone’s dividend and earned income purchasing power still doubles.
A home is the retail product of a home building corporation and demand/speculative inflation even of the bubble kind is not near 50% month to month. Virtually every enterprise with a retail product would “have to” opt into the 50% discount/rebate policy and its regulations or they’d have to get 100% of their best competitive price while their competition would only need to get 50% from their consumers. The 50% discount/rebate policy has such incredible leveraging power. You just have to keep looking at it until you see it.
EB:  I don’t understand why that is. If the government picks up half the tab, won’t manufacturers just charge twice as much? That’s what happened with student loans: the government guaranteed cheap credit and the universities just jacked up their tuitions.

Me:  Ellen,

If university A jacks up their tuition by 25% and a competitive university B doesn’t, how many more students are going to go to university B and how many less are going to matriculate at university A? If they both jack their prices up arbitrarily that’s collusion, in restraint of trade and legally actionable.
Of course there are additional regulations I relate in my book regarding punitive taxation for arbitrary price increases and rewarding taxation for abiding by the rules and philosophy of the new paradigm, and a new government department called the Department of Business Ethics, Boycotting and the Bully Pulpit (BBBP) that will exhort innovation, healthy competition and actions that reinforce the new universally beneficial social contract…and (correctly) scorn attempts to de-stabilize it.  Imagine a government department able to provide the EMPIRICAL price data from month to month and can declare that: “Corporations so and so have inflated their prices as they never have before in an apparent attempt to greedily gain and erode the more than 100% increase in your purchasing power the new paradigm policies have given you. Now what are you going to do about it?”  Especially in view of what has just happened in the senate, it’s time to get our noses out of our cell phones and back on the street protesting and boycotting unethical corporate behavior.
The beauty of the 50% discount/rebate policy is both its tremendous benefits to all agents individual and commercial which makes it a proposition enterprise “cannot (logically and profitably) refuse”. Instead of the lawless, largely chaotic and power obsessed system we currently have it enables us to begin to acculturate a genuine respect for the rule of law, rational and ethical planning and the unitary natural philosophical concept of grace to the economic system.  The concept of grace is the pinnacle concept of all of the world’s major wisdom traditions that unites the truths in opposites….like benevolence and sovereign power. Better to have the problems and stresses of attaining and maintaining ethics than the problems of the lack thereof.
EB:  Sellers set their prices according to what the market will bear. When interest rates dropped, housing prices shot up because people could now afford more, or thought they could. Prices may go up slowly — if you see others are charging more you’ll raise your prices too — but they’ll go up. Personal example: all the dentists in L.A. who do holistic dentistry of the sort I was told I needed would have charged $30-60K for the work. I got it in Colombia for $10K. All the latest equipment etc. — it was just a poorer market.

Me:  As I stated before even in the inflationary housing bubble in the run up before 2008 never came close to be 50% per annum. The discount policy and tax regime to discourage inflation, tax incentives to encourage competition and as a last resort if enterprise refuses to abide by the beneficial rules and new policy regime, loss of their rebate privileges are good and effective regulations. “Sellers set their prices according to what the market will bear” doesn’t cut it ethically or if we’re serious about economic health and stability. Isn’t that the proper attitude for reformers, or should the libertarian irrational market worshipping generalization be allowed to plague us for another 5000 years?  And what markets? We have confused chaos for freedom, and lawlessness consequently rules.

New paradigms change both minds and the nature and efficaciousness of entire temperal patterns. You just have to discern the right single concept that will do both of those things. When Public BANKING, Modern MONETARY Theory, Minsky’s FINANCIAL Instability Hypothesis and Hudson’s FINANCIAL Parasitism are the leading reforms it’s a real good indicator that the problem lies in the monetary and financial paradigm. If Debt Only is the sole monopolistic present paradigm for the creation and distribution of credit/money, and two of the signatures of all historical paradigm changes are conceptual opposition and inversion of old paradigm realities….then ABUNDANT Direct and Reciprocal Monetary GIFTING should at the very least be a leading candidate for the new one.

JR:   And, Steve, the rise in debt required to fill almost all of the “gap”  seldom got above  5 to 7% of GDP.

If it was 50%, the economy would collapse every two to three years!

Me:  John,

The 50% discount/rebate policy is a GIFT of money designed to free the individual FROM debt. And my second 50% discount at the point of note signing for big ticket items and green consumer items would reduce those things to 25% of their original price. With buying power like that it won’t be the state that will wither away as Marx envisioned, but the necessity of having to sign a death contract with private financiers in order to have an upper middle class lifestyle.
I’m also considering a policy that will make savings (which in the new paradigm are already doubled in purchasing power at the point of retail sale) doubled again with an additional 50% discount if it is proved that those savings were at least 6 months old. So if you saved $5k over 6 months and decided to purchase a $40k auto discounted to $20k by the retail discount and reduced another 50% by the 6 month rule to $10k….you just bought a new auto with further doubling your $5k savings and so bought a $40k auto without having to take on any debt at all. Such a savings encouraging policy might also tend to keep real commodity throughput at lower levels than it might otherwise be without it.
The point again, is these policies free everyone from debt not burden them with more.
EB:  I’m totally in favor of a national dividend to fill the gap. I just don’t see that a price rebate is going to prevent over-filling it. We need to know what the gap is.
Me:  The 50% discount/rebate policy is paradigm changing because it is the very expression of the new paradigm of Abundantly Direct and Reciprocal Monetary Gifting which deals with the real underlying problem of the paradigm of Debt Only. Merely filling the gap is, again, only a reform that will be easily gamed by finance so that they and their above paradigm still rule. The mindset of statistical and general equilibrium has been invalidated and paradigms are permanently progressive phenomena that invert old paradigm realities.
JR:  Steve, what we need is hard facts and critical reasoning.

Me:  Not even if the policies I suggest EMPIRICALLY deliver social credit theory’s aspirations, and transform a great theory into a paradigm change, huh?
And that’s not just me saying it, it’s the math and the regulatory regime saying it.

Relevant Posts To RWER Regarding The Consciousness Aspect of Paradigms and The Difficulties That Presents To Analyists

Me:  An accurate recitation of the idiotic, excessive and deluded DSGE facts. The only thing left out is the most underlying factor of all, namely the debt deflation that inevitably occurs when the scarcity ratio of costs and individual incomes manifests itself. That’s the Minsky/Keen re-discovered conclusion that has spawned a zillion theories and a handful of palliative reforms like Modern MONETARY Theory, FINANCIAL parasitism, Public BANKING, QE for the people and FINANCIAL Instability all abstractly dancing about and at least once removed from the temporal universe and individual solution, i.e. the new paradigm of Direct and Reciprocal Monetary Gifting.

Me:  “What we haven’t imagined, we can’t know.”

Precisely. Paradigms are both temporal patterns and human mindsets. If one never shows an awareness of the need to analyse on the integrative level of the paradigm let alone attempt to do so outside of the current paradigm (which itself most people are unconscious of) then their awareness will remain blunted and blinded.

Unconsciousness and unwillingness to look are the first and most essential barriers to overcome in both psychoanalysis and the temporal pattern/human mindset phenomenon AKA paradigms.

An Awakening In Economics?

Me:  An awakening is necessary to right economics alright. But awakenings don’t occur unless you discover and analyze the aspect of the economy that holds all of the de-stabilizing emergent qualities of economics in place. And that of course is the money system and its paradigm of Debt Only.

Don’t take my word for it, take the words of Steve Keen who said that the reason neo-classicals won’t recognize that its a monetary economy not a veil over barter is “because if they did they’d have to admit that the money system destabilizes the economy.” And that’s just one small but utterly important insight short of locating the essence of the real problem which is the monopolistic monetary and financial paradigm of Debt ONLY. That crashing realization is the inversion of the positions of the earth and the sun….of economics.


It’s The Monetary and Financial Paradigm, Stupid!

RL:  No paradigm has been established in economics, even its just simplification, without merit.

Me:  In the first place the necessary new paradigm is in money and finance. This blog hasn’t even isolated that fact, that rather obvious fact, despite the fact that supposed contributors here like Steve Keen, Michael Hudson, Edward Fullbrook, Warren Mosler and Randall Wray etc. have shown that Minsky’s FINANCIAL Instability Hypothesis, FINANCIAL Parasitism and Modern MONETARY Theory are the major and most relevant aspects of the ECONOMIC problem.

Only when the new tool/new insight that resolves the problematic areas in the old/current paradigm is discovered, honestly confronted and accepted will that new single concept ….clearly be the change necessary in economics.

The inverse of the old buddhist saying still applies: The 5000 year old journey ends with the CORRECT final step.