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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Will be in NYC this Saturday at 1pm

Posted by WARREN MOSLER on October 27th, 2011

I’ll be at Zuccotti Park, northeast park corner near their library area at 1pm on Saturday.

All invited to drop by!

158 Responses to “Will be in NYC this Saturday at 1pm”

  1. RyanVMarkov Says:

    Great, will be there with MMT flyers and I a sign!

    Reply

    WARREN MOSLER Reply:

    MMT
    For You
    and Me!

    Reply

    RyanVMarkov Reply:

    Nice, any suggestions for the back side of the sign?

    Reply

    Dan Kervick Reply:

    @RyanVMarkov, Here are a few:

    http://moslereconomics.com/2011/10/17/mmt-joined-ows/#comment-84011

    WARREN MOSLER Reply:

    how about

    Real Paychecks for Real People!

    WARREN MOSLER Reply:

    Or

    MMT
    Live the Dream!

    or

    Think MMT!

    or

    Don’t Vote for Anyone Who Wants to Balance the Federal Budget

    or

    The Balanced Budget Myth is Killing the 99%

    or

    All We Owe China is a Bank Statement!

    RyanVMarkov Reply:

    Thank you, new MMT sign will be produced.

    Gary Reply:

    @WARREN MOSLER,

    those are great.
    I especially like those two:

    Don’t Vote for Anyone Who Wants to Balance the Federal Budget

    or

    The Balanced Budget Myth is Killing the 99%

    beowulf Reply:

    @RyanVMarkov,
    This looks right up your alley.

    The New York City General Assembly website has a section for a recently-formed Alternative Banking group, which has started meeting on Sundays from 3:00 to 5:00 PM. You can read the notes from last week’s session here.
    http://www.nakedcapitalism.com/2011/10/occupywallstreet-alternative-banking-working-group-meeting-in-nyc-sunday-3-pm.html

    Ralph Gardner Reply:

    @RyanVMarkov,
    How about “Investigate price-fixing by US manufactures in China”

    Unforgiven Reply:

    @WARREN MOSLER,

    My fav:

    “All we owe China is a Bank Statement”

    And I’ve got the postage stamp right here!

    Reply

  2. mike norman Says:

    You need to get someone to video that.

    Reply

    WARREN MOSLER Reply:

    bring your cell phone!

    Reply

  3. Jim Baird Says:

    You need to have a sign that says something like, “1 percenters for the 99ers”.

    Reply

  4. Reph Says:

    ..And invite the Occupy Wall Street movement to attend! The press follows these guys closely.

    Reply

    WARREN MOSLER Reply:

    please do for me

    Reply

  5. Ed Rombach Says:

    Hey Warren – Are you still going to be in NYC on Monday? If so, how’d you like to do another show about OWS and your Rx on Reuters Insider?

    Ed

    Reply

    WARREN MOSLER Reply:

    9:55am flight out of JFK on Sunday, sorry!

    Reply

  6. mike norman Says:

    And if you’re there on Monday, how about doing my show at the NYSE?

    Reply

    WARREN MOSLER Reply:

    thanks, and sorry, leaving Sunday am

    Reply

    beowulf Reply:

    @WARREN MOSLER,
    You should set up a home TV studio so you can appear on shows without leaving the house.
    http://www.zdnet.com/blog/diy-it/building-a-broadcast-quality-video-studio-for-skype-in-a-109-foot-space/155

    With a green screen, it would appear to the audience you were checking in from a (take your pick) trading floor, ski resort, truck stop, Zen monastery, secret Moon base, etc.

    Reply

    Mario Reply:

    @beowulf,

    on the moon base with Snoopy too!!! ;)

    Art Reply:

    @beowulf,

    Palinesque!

    Warren should have taken the long view with his Senate campaign, i.e., “How can I turn this into rich speaking fees and a regular paying gig on Fox or MSNBC??” Such a short-sighted man. ;)

    It’s now rumored that this might be Cain’s real angle.

  7. Charles Hayden Says:

    Hey Warren,
    really hoping there’s some good video of your full appearance at Zuccotti Park on camera, so I can show the video to the folks at Occupy Dallas.

    Thanks

    Reply

  8. Rich Says:

    I wish it was more feasible for me to go there. I would love to hear you speak in a small group. I don’t think there are many people more knowledgeable than you on the the use of fractional reserve accounting. I listen to people talk about fiat currency and the government printing money and I just get frustrated. It’s so hard to explain to someone who is not an expert in math why that isn’t necessarily a bad thing. I’ll certainly be interested in seeing the video if it becomes available!

    Reply

    WARREN MOSLER Reply:

    thanks!

    Reply

  9. Trixie Says:

    Wish I could be there. Wanted to say thanks though for your continued efforts and contributions to the protests. Means a lot and very much appreciated!

    Reply

    WARREN MOSLER Reply:

    you’re welcome!

    Reply

  10. Mario Says:

    this is when I so wish I was in on the East Coast these days!!!!!!

    If you have a camera bring it and post it for us (with Warren’s permission of course)….just remember the mic on those cameras can take only so much distance.

    Warren you’re in high demand to hit the circuit mate!!!

    A green screen is super easy to do and in fact I know Michael Hudson for example (and others) simply use skype to to talk from their offices, etc.

    I am just saying fyi. I know you’re retired so this really isn’t top priority and that’s totally cool too.

    Have a blast and if I can learn to bi-locate between now and then I’ll see ya there!!!

    Reply

    WARREN MOSLER Reply:

    not retired. had hoped to be by now but maybe next year or so

    Reply

  11. hoops Says:

    Warren the filing deadline for the democratic primary is November 1. Maybe you should switch parties and primary Obama.

    Good luck n New York! Can’t wait to see the videos

    Reply

    Jared Reply:

    @hoops,

    +1
    The time could be right.

    Reply

    WARREN MOSLER Reply:

    thanks,

    pretty hard for me to join either party at the moment, however

    Reply

  12. J Kra Says:

    Warren,

    Are you giving a talk or are you just there to chat with people? Also, how long do you plan on sticking around the park to talk/chat with people?

    Reply

    WARREN MOSLER Reply:

    just there to check out the scene for an hour or two

    Reply

  13. Jim Baird Says:

    Checking with the wife, but it looks like we might be able to make it down there for a day trip!

    Reply

    WARREN MOSLER Reply:

    very good!

    Reply

  14. ESM Says:

    Warren, while you’re in NY can you stop by the NY Times and teach the authors of this article a little bit about banking and finance? Good grief these guys are clueless.

    Reply

    WARREN MOSLER Reply:

    :)

    Reply

  15. Ivan Says:

    And the radicalization of MMT continues. Want to make sure MMT is never taken seriously? Hang with this disorganized group of nuts.

    Reply

    RyanVMarkov Reply:

    Group of nuts?! OWS-R-Us !

    Reply

    Ivan Reply:

    No they aren’t. They want somebody to pay off their student loan. They want to reject capitalism. They want to be given a home. They want…they want…they want.

    MMT is about reserve accounting and spawned by people with real jobs. Warren is in the 1% and made virtually all his money in “banking”.

    Reply

    RyanVMarkov Reply:

    History will show what it was.

    Adam2 Reply:

    @Ivan, They want to prosecute illegal fraud and make legalized fraud illegal again.

    You want to make it seem that they want handouts by not emphasizing that there was fraud.

    Gary Reply:

    @Ivan,

    smart country would educate the people instead of making education a debt trap.

    Capitalism is not a religion, you know. Reject it all you want – in order to modify the system – the laws have to be changed – and a few would deny that reforms are needed.

    Everybody wants something. Some want a better life for all, some want for better live to themselves and the expense of others.

    Regarding “real job” being a defining feature of human beings – if that is true – don’t you think people should be able to have jobs, if they want them?

    MMT is about that. It shows that people could have jobs – if government would only use its options.

    WARREN MOSLER Reply:

    more to the point, if govt would only remove the fiscal restrictions it’s been sustaining and working to increase

    WARREN MOSLER Reply:

    sounds like the old cmo group…
    ;)

    WARREN MOSLER Reply:

    that’s the plan, kill mmt on saturday so i can get back to a normal life…

    Reply

    Arthur Reply:

    @WARREN MOSLER,

    I think Ivan is right about the OWS folks. The Boston chapter occupies outside my office and from the interactions I have had these kids didn’t get much in return for their student loans. They could use a mini teach in from Warren. Then again, so could most of the folks on Wall Street or at least the ones playing Wall Streeters on tv.

    The value of MMT is that it allows the country to talk about real economic issues instead of pretending.

    If my wife lets me, I’ll be in SDNY on Saturday.

    Reply

  16. Ivan Says:

    OK. If we’re going to prosecute fraud, let’s prosecute every person that committed Bank Fraud by lying on their mortgage application as well. I’ve never seen a situation where some DOJ prosecutor or State AG missed an opportunity to make a name for himself by prosecuting a case against a high profile target. If they could build a criminal fraud case, they’d bring it. Losing money and making poor judgment calls just isn’t a crime.

    Reply

    ESM Reply:

    @Ivan,

    Damn that criminal justice system, with its rules of evidence and the right to due process. Why can’t we just throw the nameless, faceless objects of our inexplicable and inchoate rage in jail? Anybody who “earns” over $250K and doesn’t make a product that allows us to text or tweet or play music will do.

    Reply

    Adam2 Reply:

    @Ivan, So they want to change the system so this doesn’t happen. I also said make legalized fraud illegal again. But you chose to ignore that. You also ignored the fact in the first place by emphasizing your projection of OWS people. Not what they say but what you think they are saying because it comforts your worldview.

    Reply

    WARREN MOSLER Reply:

    some things don’t change…
    ;)

    Reply

    WARREN MOSLER Reply:

    “and isn’t it true, Mr. Mosler, that in 1977, while on the trading desk at Banker’s Trust, you offered $1 million gnma 8′s at 99-30 on the brokers screen, when indeed you were a buyer of that issue?”

    Reply

    beowulf Reply:

    @WARREN MOSLER,

    The statute of limitations is your friend. Unless that story ends with burying someone in your backyard, you’re in the clear.
    :o)

    Reply

    Greg Reply:

    @Ivan,

    Thats a bunch of crap Ivan. Theres this process called due diligence that financial institutions do. If someone lied on a mortgage application statement and the bank didnt check it out , its THEIR FAULT. They have ALL the tools to determine the credit worthiness of borrowers. If they choose to ignore it or fail to look, too bad.

    One side has all the power in the banking business. The banks control the money the customer wants. Blaming borrowers is weak. If the banks cant get the answers they are looking for they can simply say NO LOAN!! No customer has ever been able to successfully DEMAND money from a bank, thats called robbery.

    Reply

    ESM Reply:

    @Greg,

    Well the banks are doing their due diligence NOW on every loan, and it sucks. It’s not a surprise that the housing market is still in the crapper when every potential borrower feels like they’ve had a colonoscopy.

    Reply

    WARREN MOSLER Reply:

    right, responsible credit analysis isn’t necessarily all it’s cracked up to be.

    unless the politicians understand that less credit means taxes can be that much lower for any given size govt.

    which they not only don’t, but seem heck bent on going the other way

    Greg Reply:

    @ESM,

    Ohhhhhh so now due diligence is “cutting into bank profits” eh?

    We cant have it both ways. The over arching point is that banks control the money. Is there any disagreement with that? If you are in control of something you dont get to blame someone else when your system implodes. You cant even blame govt because youve bought them too!

    WARREN MOSLER Reply:

    Banks are govt agents, public/private partnerships regulated and supervised by govt.

    Djp Reply:

    @ESM,

    @Greg,

    If the Piggly Wiggly really wanted to stop those shoplifters, they should’ve hired more armed guards! What, store security eating into those supermarket profit margins?

    Btw, I never shop in that neighborhood, they have too many guards in the store and the prices are too high.

    ————————————————–
    The world is more efficient, and more real output is achieved when you can restrict your dealings to honest counterparties. When the price of that insurance goes up, it’s a drain on society. Trying to determine the correct level of scrutiny / due diligence is a constant battle.

    Peter D Reply:

    @ESM,

    I’d say there was a collusion between the banks and the borrowers. The banks knew very well that they were giving loans to not creditworthy customers, but they operated under the assumption that (a) while the prices are going up, the borrowers will refinance before they default(basically playing a game of musical chairs – who will be the last to be stuck with a defaulting borrower?) and (b) that they will be able to sell all or most tranches of the security. Actually even worse, not one but six degrees of separation between mortgage originator and actual investor allowed the mutual fraud to continue. But many borrowers were actually misled into taking on loans they could not afford by the sleek sales people form the banks. Overall, you need a serious bias to argue that the banks are the less guilty party here.

    ESM Reply:

    @ESM,

    @Peter:

    “I’d say there was a collusion between the banks and the borrowers.”

    First, the vast majority of the fraudulent loans were not originated by banks. They were originated by 3rd party mortgage brokers. So the banks did not have direct contact with the borrowers. All the bankers saw in these cases was a loan tape.

    “The banks knew very well that they were giving loans to not creditworthy customers …”

    Not creditworthy? Sure. But a loan to a not creditworthy borrower can still be a good loan, if the interest rate is high enough and the collateral is good. Remember, in a normal housing market, the collateral increases in value, while over the same time the loan balance decreases. On top of that, the borrower generally increases his earnings power over time, and he puts some sweat equity into his home, even futher increasing its value. Homeownership has historically been a path to becoming a more creditworthy borrower.
    I think banks knew they were buying risky loans, but their computer models (whose parameters were based on historical performance) told them that only a small percentage would end up losing money.
    I think it dawned on most mortgage bankers only gradually that borrower fraud was rampant and that a 20-sigma event was in the works. There is a big difference between self-delusion and fraud by the way. Fraud is illegal. Self-delusion is not. The very idea of talking about a meltdown that appears to happen every 10-20 years as a 20-sigma event is an element of self-delusion in and of itself. Most financial models don’t capture tail risk very well, and although you’d think finance people would understand this by now, they still end up getting lulled into a false sense of confidence by the garbage the computer spits out.

    If you don’t believe me that mortgage bankers for the most part did not know about the fraud, then let me give you Exhibit A: private mortgage insurers.

    Mortgage insurers had no incentive whatsoever to insure loans that were fraudulent. They held/hold the risk 100%. And they had/have the wherewithal to do their own due diligence too, although for the most part they relied/rely on computer models to do most of the work. Anyway, a big chunk of their insurance portfolios turned out to be fraudulent loans, and despite the fact that they have tried to rescind the insurance on these loans, almost all of the mortgage insurers either went bankrupt or needed to be recapitalized.

    There’s no way that private mortgage insurers intentionally insured fraudulent loans. They did it because they were fooled, either by themselves or by the mortgage brokers, or by the borrowers.

    Anyway, my main point isn’t that borrowers for the most part are scumbags. They’re only human after all, as are bankers. My point is that a moral hazard was created because for the most part borrower fraud is not punished. Even people who walk away from a recourse mortgage aren’t punished. For some strange reason, this narrative has been created that a lender is an evil, conniving person and a borrower is a virtuous, innocent person, and I think this has exacerbated borrower bad behavior many-fold. I actually think that if the banks had been allowed to play hardball with mortgagors, e.g. going after other assets under recourse mortgages, and pursuing civil and criminal penalties for fraud or vandalism, then housing prices wouldn’t have fallen even half as much as they have fallen so far.

    Ivan Reply:

    A lie is a lie. A lie on a loan application is and has always been a crime. Certain lies cannot be caught in due diligence. For example, if a home buyer checks the box that the loan will be for his primary residence but it is really an investment property or vacation home, there is no way to catch that
    We don’t know the borrowers true intent. Problem is that loan is 3x more likely to default.

    Reply

    WARREN MOSLER Reply:

    right, part of what goes into the term structures of risk adjusted rates.

    Sergei Reply:

    @Ivan,

    Ivan: We don’t know the borrowers true intent

    Wow. Since when do banks care about intents? These loan crunching machines care only about collateral. That is how they grow assets, NII and bonuses to top management.

    Ivan Reply:

    @Warren

    It doesn’t matter that the govt is a monopoly issuer. The clearing
    level is determined by private parties to a transaction. If the govt wants to step
    up and pay minimum wage for some silly make work jobs program, that’s their call.

    WARREN MOSLER Reply:

    it’s about fiat currency and price anchors, which are always the case.

    right now we use an unemployed labor buffer stock as our price anchor.
    i’m saying an employed buffer stock would be a far more effective price anchor and could be a lot smaller than an unemployed buffer stock and still do a better job, drastically reduce the output gap, and substantially lower the real negative externalities of the current system

    Greg Reply:

    @Ivan,

    Thats crap too Ivan. All lies are not the same. Lying about an affair or lying about how your wife looks in that dress will not be treated with the same scorn…….. nor should they.

    Borrowers lies can be caught….. and if you have any doubt you can say NO! Banks are in the business of making loans so their incentive structure is designed to say yes. DONT BLAME THE BORROWER FOR THAT!

    The problems of the banking/financial system lie solely with the lenders, NOT the borrowers.

    ESM Reply:

    @Ivan,

    “All lies are not the same.”

    Sorry to be schoolmarmy here, but the correct way to phrase this is: “Not all lies are the same.”

    More importantly Greg you should understand that some lies are technically perjury, which makes them crimes.

    Our system would really break down (and in fact, it did!) if we couldn’t trust statements made under penalty of perjury. If every statement had to be investigated to determine its veracity, 10% of the workforce would be made up of private investigators.

    I think financial traders like Ivan and Warren and me might understand this better than the average person. It’s fascinating that you can pick up the phone and enter into a verbal contract to buy $100MM bonds and be absolutely confident your counterparty will honor his part of the deal. Yes, these days many (but by no means all) phone conversations are recorded, so there might be physical evidence of the contract, but I think the main glue holding the system together is concern for one’s reputation and the potential civil and criminal liability.

    I’d be interested to hear Warren’s take on this, but I think in the many thousands of deals I’ve made over the phone, I’ve only had two or three where we had to “go to the tape” to find out what happened, and there was only one where I felt like the counterparty screwed me (at first, unintentionally, but later intentionally to get out of paying for the damage).

    So, getting back to the topic at hand, I think a big part of the problem lies (no pun intended) with the borrowers, and the moral hazard created by treating them as victims. By treating lenders as evil and predatory, borrowers feel like they are morally entitled to lie, to strip out the plumbing from their foreclosed homes, and to walk away from recourse mortgages with the cash they took out in refis at the top of the market (and, thanks to an idiotic 2007 law, the “income” from the debt writeoff is tax-free, yippee!).

    WARREN MOSLER Reply:

    i don’t recall any problems with broken trades, but there may have been one or two small ones

    Sergei Reply:

    @Ivan,

    ESM: I think a big part of the problem lies (no pun intended) with the borrowers, and the moral hazard created by treating them as victims.

    All contracts have two signatures (or talking parties). And noone has a gun on his head. How can you say that the problem lies with borrowers? And btw, it was not bankers’ money that they gambled with.

    Greg Reply:

    @Ivan,

    ESM

    You’re being disingenuous to elevate the borrowers errors to perjury. Once again, if the banks were not sure of the veracity of the claims on applications they had an option, SAY NO! The financial institutions have ALL the control and resources at their disposal. They have set the game up and made and remade the rules as we have gone along. its not even close to an even fight. One party controls well over 90% of the knowledge in the transaction. And that that they dont control, they price in to the costs for everyone else.

    The system didnt break down because of untrustworthy borrowers’ statements, it broke down because all control of bank behavior was left to the banks them selves. It was not seen as the within any outsiders purview to oversee financial institutions. It was an example of Randian/Greenspanian ideology run amok, plain and simple. It is now obvious where this type of paradigm leads.

    ” I think the main glue holding the system together is concern for one’s reputation and the potential civil and criminal liability”

    Riiiight! And its obvious now where that leads. Virtually no one associated with the vast financial crimes has been held accountable in spite of numerous examples of current law violations, noted by our own FBI.

    Sergei Reply:

    @Ivan,

    Ivan: let’s prosecute every person that committed Bank Fraud by lying on their mortgage application as well

    Lol. Conventional, even textbook “wisdom” says that those who can be given loans do not need them and those who should NOT be given loans take them. It is nice to defend banks and say that they are innocent victims of organized fraud against them. Nice try but worthless

    Reply

    WARREN MOSLER Reply:

    shows how it makes sense to make laws/rules etc. that minimize necessary enforcement costs.

    Reply

    Ivan Reply:

    Not saying the banks didn’t contribute to the mess. We had housing mania just like we
    had tulip mania. Fannie on their buy versus rent calculator only allowed home price appreciation. They wouldn’t accept zero or a negative number. Retires in Florida were flipping
    condos pre-construction. Our entire society was caught up in this. The banks were just a part of it.

    Reply

    WARREN MOSLER Reply:

    banks are govt agents, so when they contribute to the mess it’s about govt contributing to the mess

    Greg Reply:

    @Ivan,

    Warren

    The banks ARE govt agents but they have been able to purchase the illusion that they are private entities deserving of treatment like Apple or Microsoft. If banks were truly treated like private agents they would not have been bailed to the extent they were in ’08. They would have been treated more like GM where haircuts were issued. The management was changed and limits were placed on salary/bonus practices

    Sergei Reply:

    @Ivan,

    Ivan: Not saying the banks didn’t contribute to the mess

    Banks enabled this mess and kicked it off.

    Greg Reply:

    @Ivan,

    “The banks were just a part of it”

    HA! Right. They who control the entire credit system n this country were “just” a part of it.

    Our society needs money to work but it doesnt NEED banks issuing loans to everyone as THE dominant form of money. Private credit creation is the problem. Nothing happens unless the banks give their blessing and THAT is the problem. Break the tie between private credit creation, which leads to debt peonage of 90 %of the populace, and commerce and things will get much better for the average Joe. The restoration of a democratic form of money will be a great first step.

    WARREN MOSLER Reply:

    That would be, for a given size govt, taxes low enough so we could buy from income rather than debt

  17. Ivan Says:

    @Gary

    I want a job that pays me $10 million a year to do nothing. “Wanting” a job doesn’t mean you get it.

    MMT is about understanding the flow of funds, the use of real capital, and the true nature of fiat currency debt. The policies that Warren and others have suggested and the implications for the real economy are far less certain.

    I’m still a believer in free markets. MMT should be pushing hard for tax cuts to stimulate aggregate demand. Going beyond that makes MMT a political party instead of a factual understanding that we aren’t going broke!

    Reply

    Adam2 Reply:

    @Ivan, Your emphasis on just tax cuts is inherently political. You saying you are a “believer in free markets” is a political statement. Every change in the system through laws is political.

    Reply

    Neil Wilson Reply:

    @Ivan,

    “I’m still a believer in free markets.”

    My four year old believes in the tooth fairy and Santa Claus.

    They don’t exist either.

    Reply

    WARREN MOSLER Reply:

    And then there’s the confidence fairy and the inflation expectations fairy, the deficit myths, the savings myths, etc. not to mention children as expenses rather than investments,
    could make it into a book?
    ;)

    Reply

    Unforgiven Reply:

    @WARREN MOSLER,

    In the first chapter, we can have the Confidence Fairy leave a big wad of cash under Bernanke’s pillow.

    WARREN MOSLER Reply:

    or have him breathing in a cloud of fairy dust…

    Gary Reply:

    @Ivan,

    there are people that want at least minimum wage job, and still cannot find it.
    Are you telling me, that people are unemployed because they want too much?

    What do you mean by believing in free markets? How do you define free markets and why do you place such significance in them?

    I see that you believe that only those that have jobs should be able to get more money from the state (by their taxes being reduced). How is that a part of free markets belief?

    Reply

    Ivan Reply:

    Yes. The people that want a job at minimum wage and cant get it want more than the market will pay. It’s a classic example of the goverent contributing to unemployment by setting an arbitrary wage.

    Reply

    WARREN MOSLER Reply:

    and that’s also a classic example of a fallacy of composition?

    Ivan Reply:

    Warren

    How is that a fallacy of composition? If the market won’t pay $8 per hour but the govt mandates that as a minimum, the govt is preventing a clearing level from being reached.

    WARREN MOSLER Reply:

    clearing level? when the currency itself is a (govt) monopoly?

    Neil Wilson Reply:

    @Ivan,

    That clearing level being six foot under in the graveyard due to starvation or exposure?

    When there are more people than jobs, some people have to be eliminated.

    How do you propose that they are killed?

    Unforgiven Reply:

    @Ivan,

    Just how much would employers be willing to pay for basic labor when they have no customers to purchase the output?

    WARREN MOSLER Reply:

    i think you mean ‘competitive markets’

    Reply

    Ivan Reply:

    @Neil

    It’s just Darwin. Nature has its way of culling the population. We already have too many people on the planet given our available food production abilities.

    Seriously….suggesting that I’m advocating death because the minimum wage is too high?

    Reply

    Gary Reply:

    @Ivan,

    ah – so austerity ideology is nature’s law?
    So then indeed Goldman Sachs CEO was right when he said they were doing “God’s work”.
    Financiers are the new plague – just a natural way to reduce population and make financiers rich far beyond human needs in the process. Nature, in order to save itself, in its infinite wisdom is employing some humans to kill others…
    Beautiful…
    And combining that with Darwin – that means that humanity is evolving into its next form – greedy conscienceless humanoids.

    “Seriously….suggesting that I’m advocating death because the minimum wage is too high?”

    That is exactly what you are advocating.

    Greg Reply:

    @Ivan,

    Oh really?! Too many people for this planet to support? How so?

    You do realize that if we took every person on earth and gave them 1000 sq ft (33×33) we could fit EVERYONE within the borders of Texas! That leaves the rest of the ENTIRE FRICKIING PLANET to grow food and harvest resources. I dont think we have a “number of people” problem, we have a “number of empathic people problem”.

    ESM Reply:

    @Ivan,

    @Greg:

    I think Ivan was joking.

    JCD Reply:

    @Ivan,

    An Emily Littella moment perhaps?

    http://en.wikipedia.org/wiki/Emily_Litella

    “Oh, …never mind…”

    Sergei Reply:

    @Ivan,

    Ivan: I’m still a believer in free markets. MMT should be pushing hard for tax cuts to stimulate aggregate demand. Going beyond that makes MMT a political party instead of a factual understanding that we aren’t going broke!

    Tax cuts is a political decision. And I am against it. Only bankers can recommend that as a solution.

    Reply

  18. Adam2 Says:

    MMT will be successful because it is inherently true. It gives confidence in changes in the system which can and will work. It describes the operational reality of the system. If someone from an MMT background goes to OWS and spouts nonsense like “You can have a job for doing nothing” then it is not MMT but rather wishful thinking.

    Reply

  19. Ivan Says:

    @Warren

    The same things you consider worthless endeavors is what you did best. It was a big poker game and you were quite good at playing. You made people believe you were a buyer when you were a seller and vice versa. Now, many of your followers consider that “bankster” illegal activity.

    As to tax cuts being a political decision, I see the point but don’t agree. The govt is currently taxing too much for the size of the economy. Cut taxes and then allow the markets (demand) to allocate capital to create jobs.

    Reply

    WARREN MOSLER Reply:

    Qed
    ;)

    Reply

    Gary Reply:

    @Ivan,

    I know that one of Warren’s first proposals is to eliminate FICA taxes.
    I agree that it would be fantastic if that was done vs that nothing is done.
    But according to MMT it is no different than government increasing spending by the same amount.

    The difference, as Warren says – is political.

    Reducing taxes is more in sync with free market religion – because it “reduces government involvement” (although we all know that some taxes will be collected somehow anyway).
    So reducing taxes helps those who already have work, and those who do not – just have to wait for “trickle down” effect.
    Government spending also can be differentiated by where it goes. If it goes to private corporations, then again – the rest are dependent on “trickle down”. However, if government employed the unemployed – that would be like watering the roots of the plant, instead or the top.

    I think doing both would be perfect – reducing taxes and then employing unemployed.

    Reply

    WARREN MOSLER Reply:

    not necessarily by the ‘same amount’ but until the political goal is reached

    the idea is to first select the ‘right size’ govt then tax accordingly.
    see the 7dif, thanks

    Reply

    Gary Reply:

    @WARREN MOSLER,

    By “size of government” you mean the government spending level, I assume.

    yes, I understand that: tax amount depends on government spending amount (and also on foreign sector balance, and the savings desires of private sector – but we are ignoring that when we are discussing “size of government”).
    The rule of thumb measure of required tax level is resource utilization level – which is seen by unemployment rate.
    So if we want to increase resource utilization rate (reduce unemployment) – we need to increase government spending (size of government) and/or reduce taxes.
    Which we chose to do – and also on what we chose to spend, and what we chose to tax – are a political decision. Also on what we chose to spend and what we chose to tax – affects the private sector savings rate (which we were ignoring) – so really it affects the size of government.

    Am I wrong?

    WARREN MOSLER Reply:

    I look at the size of govt as a political decision as to what we want govt to actually do, the real cost being the real resources that otherwise would have been available to the private sector.
    from there we create a tax liability which serves to create ‘unemployment’ (goods and service for sale seeking the unit of account) with those unemployed resources being employed by the govt. as per the political decision to move those resources from private to public domain.

    If the tax happens to be too high for that size govt, the evidence will be unemployment, etc.

    Gary Reply:

    @WARREN MOSLER,

    “I look at the size of govt as a political decision as to what we want govt to actually do, the real cost being the real resources that otherwise would have been available to the private sector.
    from there we create a tax liability which serves to create ‘unemployment’ (goods and service for sale seeking the unit of account) with those unemployed resources being employed by the govt. as per the political decision to move those resources from private to public domain.

    If the tax happens to be too high for that size govt, the evidence will be unemployment, etc.”

    I always thought of the size of government in terms of government spending, and not real resources. It seems to me real resources and government spending relate in this way:

    government by taxing “frees up” or “takes away” real resources from the private sector, and then government spending actually “uses it up” for the government. So – for example – now we have taxes that “took away” too many resources from the private sector – but there was not enough government spending to “use them up” by the government. So the real resources are “rotting” so to speak – for they were taken away from private sector, but not used up by government.
    I think it is government spending that defines the final size of the government, although we can express it in terms of real resources that were “used up” by government spending – but not those real resources that government “freed up” or “took away” from private sector by taxing.

    Of course government cannot calculate how many resources will be “freed up” by taxes from private sector, as many factors affect that.

    What and who and how much exactly are taxed are political decisions. Also, on what or on who spending is done – are also political decisions. They also affect the saving desires, the foreign sector interactions, the real resources that will be available after taxing, and real resources acquired by government.

    WARREN MOSLER Reply:

    Ok but seems to me what’s taken is the cost of govt and ‘in’ the govt

    Peter D Reply:

    Gary

    >>I always thought of the size of government in terms of government spending

    I think it is a very bad way to think about the size of the govt. When so much of the spending goes to transfer payments, how is it “big govt”? If the govt bought nothing of the output and only sent checks to people, would that correspond to a “big govt”? But it would correspond to large govt spending. Therefore the best way to think of the size of the govt is the real resources consumed.

    Gary Reply:

    @Peter D,

    “I think it is a very bad way to think about the size of the govt. When so much of the spending goes to transfer payments, how is it “big govt”? If the govt bought nothing of the output and only sent checks to people, would that correspond to a “big govt”? But it would correspond to large govt spending. Therefore the best way to think of the size of the govt is the real resources consumed.”

    Yes, if government sends the check – then it basically acquires real resources for those people to use. So government spending can always be converted to real resources that it buys – either for itself or people.
    For example – if government now doubles Social security payments – would you say that government stayed the same, or increased? Real resources commanded by government would definitely increase through the Social security check receivers.

    ESM Reply:

    @WARREN MOSLER,

    @Gary:

    “Real resources commanded by government would definitely increase through the Social security check receivers.”

    Gary, that’s just silly. The government has no control over social security recipients whatsoever. No government bureaucrat controls what they spend their transfer payments on, and no government bureaucrat can threaten to withhold those transfer payments for any reason.

    In the latter respect, formulaic transfer payments are very different from funding, for example, public sector jobs. The government has some measure of control if it is providing the funding for a job or actually signing paychecks. It can make the payment contingent upon meeting some bureaucrat’s demands.

    So, no, increasing social security payments does not increase the size of government. An ELR does, but not very much if the ELR wage is chosen low enough, and the work that is being done is innocuous enough, as to not impact the allocation of real resources in the private sector.

    Gary Reply:

    @ESM,

    “So, no, increasing social security payments does not increase the size of government. ”

    OK, let’s consider and extreme example: let’s say government sent each social security recipient 10 million dollars. Would that require taxes to be increased in order to keep the monetary system stable?
    I would guess that – yes it would – otherwise there would be a major inflation threat.
    Would you say that this moves resources out of private sector into government sector? Or not?

    I guess it boils down to this: who do you think “employs” (so to speak) Social security beneficiaries? Private sector?
    Who “employs” unemployment payments recipients? Private sector?

    Another example. Let’s say government cut its employment in half, but makes sure that spending on the rest of people employed plus unemployment payments to newly unemployed (former government employees) would come out to the same.
    Would you say that size of government changed? Employment was cut in half, but spending is the same. So the resources used by people that receive government spending is the same in total. Although people in direct government control were reduced in half…

    Peter D Reply:

    Gary, the total govt deficit spending, which more or less coincides with our total govt debt, is, as Warren likes to say, the equity in the credit structure. As such it is largely determined by the private sector’s savings desires. Therefore it is a bad way to think of it as the “size of the govt” – you’d have to inject NFAs into the private sector one way or another. The size of the govt is the real resources commandeered for the govt – not those commandeered by the beneficiaries of govt spending.

    MamMoTh Reply:

    Gary, I’d say the size of government is the number of real resources it buys and total government spending defines the value of the currency.

    WARREN MOSLER Reply:

    Before I define something I think of the further purpose of the definition

    Gary Reply:

    @Peter D,

    @MamMoThD,

    yes, I agree. It is not the best way to think of the size of government by the level of spending.

    For example – let’s say government only kept one employee – let’s say Obama, and paid him whole government budget.
    Would he be able to consume all resources that current government does? Only if he rehired all people that government hired and acquired all resources that government did.
    So it does boil down to what we want government to do.
    Then government taxes resources away from private sector, and acquires by spending.
    It should acquire all that it taxed away – otherwise some resources will be unused – unemployed.
    If it tries to acquire more than it taxed away – it will cause some inflation – for it will compete with private sector.

    It is not about deficit spending. It is impossible to estimate level of taxes needed to make private sector release needed level of resources (depends on many things: demand for resources, savings desires etc). However – it is possible to vary the level of spending to acquire what was taxed away – and if taxes were not sufficient to free up needed amount – to compete with private sector for needed resources by increasing inflation.

    So spending will have to vary, or – if government is willing to wait for resources – then it can set the price and wait for private sector to be taxed enough to submit the resources. Most likely though government will not be in position to wait – so will have to compete.

    So to sum up: government size is defined by its functions. Real resources needed to accomplish the functions are acquired by taxing them away from private sector and then acquiring them by spending. Spending may vary greatly, unless government is willing to wait for the resources – but that then defeats the definition of size of government – which we defined by what we want it to do – for it will not be able to do what we want it to do without resources.

    Gary Reply:

    @ESM,

    Social security payments and unemployment insurance is part of what we want government to “do”. So it does require additional taxation of private sector to free up resources for the beneficiaries of government payments to acquire. So it is part of size of government.

    Gary Reply:

    @ESM,

    by the way – it is telling that Social security payments have to be adjusted to make sure the elderly can acquire what we want them to acquire. So in terms of size of government – it is not measured in terms of spending, but what we want government to provide to the elderly.

    ESM Reply:

    @WARREN MOSLER,

    @Gary:

    Of course big government includes the distortionary impact of taxation. So to the extent that taxes are increased, that means larger government.

    Also, I agree that to the extent transfer payments to a favored subset of the population causes inflation, necessitates an increase in taxes, or prevents a decrease in taxes or a distribution of transfers to other people, such transfer payments cause a distortion which is an element of big government.

    However, to the extent that social security is a transfer payment system that everybody benefits from eventually (since there is only an age requirement), then it is less onerous than, for example, just giving money to green energy companies.

    I would prefer every US resident receive a check under a transfer system created to increase aggregate demand. I am not advocating increasing checks to only seniors. But that would be less bad than more targeted transfer programs.

    That said, I am not against targeted transfer programs to alleviate poverty and provide a standard of living floor. But I wouldn’t increase those payments just for the sake of juicing up aggregate demand.

    MamMoTh Reply:

    Gary, I think we must distinguish between government and public sector.

    People on unemployment or social security benefits can be considered part of the public sector but not really part of government.

    One of the counter-arguments to the fact that the JG increases the public sector is that the unemployed are already part of it.

    Gary Reply:

    @ESM,

    “However, to the extent that social security is a transfer payment system that everybody benefits from eventually (since there is only an age requirement), then it is less onerous than, for example, just giving money to green energy companies.”

    What we want government to do is to provide for elderly some minimal support. That is what government payment is for. What actual support it provides – depends on how much resources were freed up by government taxes and by the size of payment. So it varies. What the elderly are able to acquire for it also varies. But public ensures that the size of payment and taxes would balance out to some concrete material support to the elderly (not too much and not too little).
    If we want the government to support green companies – it will do so. How much real support it will be again will depend on size of payment and level of taxes.
    In summary: government support will be real only if the payments that it gives enable the recipients to acquire the resources – and those are freed up by taxing.

    @MamMoTh
    if government sends the check – then government attempts to transfer real resources to recipients.
    Where public comes in – is in attempting to control the government and direct the resources where they are needed.
    The difference between JG and unemployment payment is that JG would actually make people do something (presumably increasing real resources), and that it would be offered to everybody, and at fixed rate, and for unlimited time.
    But both JG and unemployment insurance require taxes to free up resources that government payment would let recipients acquire real resources.

    I know how it all sounds. It sounds like government is the oppressor that takes real resources away from the hardworking private sector and gives to the lazy “favored subset of the population”. This can really be abused – but usually by those with influence and power, and not the elderly, the unemployed and the poor.
    We should consider what would happen if government was eliminated to eliminate the taxation. No government. Society would collapse. So government is a necessary institution. Providing for the elderly, poor, sick – it is necessary things that we actually WANT government to do. Taxation and payments is a way to do it.
    The problem comes in when that is not used correctly and real resources are wasted. Or when government is captured by some powerful interests and use it for their own gain, and not what public would like government to be used for.

    Gary Reply:

    So Warrens saying that “we are overtaxed for the current size of government”, could also be rephrased as:
    “our government does not do enough for current level of taxes” or
    “our government does not use the resources that we provide it with”

    Mario Reply:

    @WARREN MOSLER,

    So Warrens saying that “we are overtaxed for the current size of government”, could also be rephrased as:
    “our government does not do enough for current level of taxes” or
    “our government does not use the resources that we provide it with”

    yes. great way to put it.

    It puts a more appropriate and workable definition to the term “fiscal responsibility” imho. ;)

    Considering the level of taxation, our government owes us certain amenities and opportunities and savings.

    ESM Reply:

    @WARREN MOSLER,

    @Gary:

    “our government does not use the resources that we provide it with”

    I disagree with this one. The government is not actually being provided with real resources that it is then hoarding.

    “our government does not do enough for current level of taxes”

    This one I agree is logically equivalent to Warren’s statement.

    Although I think that when the government had an opportunity to do “more” for us in 2009-2011, it dropped the ball. Most of the spending portion of the stimulus package was doled out without a clear plan. In my opinion we’ve reached the point of diminishing returns in the size of government. If Congress realizes it could spend an additional $500B/yr without raising taxes, I think after it was finished with doling out pork, it would just increase budgets at existing departments for unelected bureaucrats to do with as they see fit.

    Gary Reply:

    @ESM,

    “I disagree with this one. The government is not actually being provided with real resources that it is then hoarding.”

    How about:
    “our government does not fully use the resources that it takes from us”

    It is critical that government would employ the unemployed and give states some money so they would not have to fire employees.
    Universal healthcare and childcare, and guaranteed social security would help matters too, IMO. And don’t forget making education affordable. Student debts are a way to seriously injure society in the long run.

  20. Awakened Sheep Says:

    A good OWS forum that appears to be well organized to get involved with:
    main site: https://sites.google.com/site/the99percentdeclaration/
    forum: http://the99delegation.forumotion.com/t456-debt-free-money#2970

    I’m “Post Gold Standard” over there. Come join the conversation.

    Reply

    WARREN MOSLER Reply:

    thanks,

    when money is harder than it needs to be,
    life for the 99% is a lot harder than it needs to be.

    Reply

  21. wh10 Says:

    Well, I was going to Philly that weekend, and already bought a bus ticket, but prices are pretty reasonable to reroute with a flight to NYC…

    Warren, do you think you’ll have a bit of time to chat MMT and related things?

    Reply

    WARREN MOSLER Reply:

    definitely!

    Reply

    wh10 Reply:

    @WARREN MOSLER,

    Can’t make it work, so don’t hold out for me :\

    Reply

  22. joe Says:

    Go get ‘em. Understanding how money works and how it relates to productivity is key, absolutely fundamental to having a decently run society. Dispel the myths that are destroying us. Godspeed!

    Reply

  23. Ivan Says:

    My main concern with MMT is that while it is functionally correct, many of the more subjective policies that Warren and others have suggested are completely out of touch with mainstream America. In order for MMT to get a fair hearing, you can’t be considered radical. Going to visit the OWS protesters is a bad idea. Suggesting jobs for everyone at $8 per hour is a bad idea if the goal is to be taken seriously. I focus on tax cuts because you can get some well respected mainstream economists to agree that they’re needed. MMT will not be adopted as science in its entirety. It will be piece by piece. Start with tax cuts.

    Reply

    Peter D Reply:

    @Ivan,

    Oh, Vanya, who exactly appointed you a speaker for “mainstream America”? I am calling bullshit on this. From where I sit there is nothing too extreme about $8/hr jobs.

    Reply

    Ivan Reply:

    Ok Peter. You really think the country is ready to embrace a big government jobs program???

    Reply

    Gary Reply:

    @Ivan,

    @Ivan,

    it depends what you mean by “country”.

    According to poll results that Bill Mitchell wrote about today – over 60% of respondents stated that creating jobs is the highest priority.

    However, for “free market” ideologists it would be a sacrilege. So most of media and at least half of Congress would probably have seizures if they heard something like that.

    Peter D Reply:

    @Ivan,

    First, apologies for the tone of the original comment – I got upset and got carried away.
    About the govt program – it really depends on how you market it. Call it something like “work for welfare” or, I don’t know, hire some good marketeers, and explain that this is instead of people sitting on their butts getting money in unemployment for doing nothing, you’d actually make them work for the benefit of the society. People don’t like then others get money for nothing, but most also understand that you cannot just cut people loose in the current environment. So, this is a win-win, if you know how to market it.

    Trixie Reply:

    @Ivan,

    No, this country does not have an appetite for a large government jobs program. Surely, we are all aware of the rumors regarding the socialist/marxist in the White House? The existence of FOX news? The hyperventilation about the massive debt and deficits? That the majority of the population was not in favor of raising the debt ceiling because it was handing Obama a $2.4B blank check? That current GOP candidates STILL use this as a talking point and no one calls them out on their blatant display of ignorance regarding the basics of how our government works?

    But Peter is right. Dems need to learn how to “message” things. I mean, I couldn’t even tell you the name of Obama’s health care plan. Affordable Healthcare Reform Progress Act? I don’t KNOW. So what do we get? Obamacare. On every bumper sticker. This is where the GOP excels. And reversing their momentum will no doubt be an uphill battle.

    beowulf Reply:

    @Ivan,
    I agree with Peter D, a jobs guarantee should be framed as a replacement for welfare. Conservative writer Peter Ferrera has proposed just such a system. I’ll note Ferrera is amazingly out of paradigm on everything else. His new book is called “”America’s Ticking Bankruptcy Bomb” and has back cover blurbs from Newt Gingrich, Grover Norquist and the inevitable Art Laffer.

    suppose all aid to the able bodied was in the form of an offer to work. Report to your local welfare office before 9 am and you are guaranteed a work assignment somewhere paying the minimum wage for a day’s work. A private job assignment would be the top priority. If you need more money come back tomorrow. If you have children with no one to care for them, bring them with you and they will receive free day care… If you work a minimum number of hours you get a Medicaid voucher that will purchase basic private health insurance. If you work for a continued period establishing a regular work history, you would be eligible for new housing assistance focused on help in purchasing your own home… These workers would continue to receive the EITC and child tax credits…
    The government could even reduce administrative costs to a minimum under this system. There would be no need to maintain and investigate eligibility requirements. If Warren Buffett wants to show up for a work assignment before 9 am, no big deal. Most importantly, this new system would effectively eliminate real poverty in America. Everyone would have a place to go where they could get an assured job and an assured income of $25,000 to $30,000 per year
    [once you tally up value of minimum wage, EITC, daycare, health insurance, housing assistance].
    http://webcache.googleusercontent.com/search?q=cache:_u3bpvp8t5sJ:www.ipi.org/IPI%255CIPIPublications.nsf/PublicationLookupFullTextPDF

    Trixie Reply:

    @IBeowulf,

    Cool. We should do a test run! Say oh, I don’t know…off the top of my head…large-scale infrastructure programs! You know, take the unemployed construction worker (with a zero bid private sector price tag on his head) receiving welfare benefits and put him to work on our country’s crumbling infrastructure. Maybe even be proactive with some high-speed rail initiatives. Just for fun.

    Or not.

    Why these programs are not already in place, I will never understand. ELR? Not a chance without significantly reshaping the debates.

    WARREN MOSLER Reply:

    Right
    The problem is they all believe the deficit myths

    beowulf Reply:

    @Trixie,
    Two different animals, large scale infrastructure projects are bid out by state DOTs or the Army Corps of Engineers to contractors who hire their own workforce. They’re capital intensive projects that don’t employ all that many people for the money involved and since Davis-Bacon law requires them to pay union scale, they never have any trouble hiring experienced craftsmen. An ELR program would be less capital intensive and would have to accommodate workers of varied work experience and skills. In New Deal terms, its the difference between Public Works Administration (PWA) and Works Progress Administration (WPA). And yes, they could have chosen less confusing agency names. :o)
    The PWA should not be confused with its great rival the Works Progress Administration (WPA), though both were part of the New Deal. The WPA, headed by Harry Hopkins, engaged in smaller projects in close cooperation with local governments–such as building a city hall or sewers or sidewalks. The PWA projects were much larger in scope, such as giant dams. The WPA hired only people on relief who were paid directly by the federal government. The PWA gave contracts to private firms who did all the hiring on the private sector job market. The WPA also had youth programs (the NYA), projects for women, and arts projects that the PWA did not have.
    http://en.wikipedia.org/wiki/Public_Works_Administration#Contrast_with_WPA

    Trixie Reply:

    @Beowulf,

    This ELR? MMT aside, how do you pay for it? Remember, in the real world, the prevailing sentiment is that we’re broke.

    WARREN MOSLER Reply:

    Won’t happen until mmt is undertood

    WARREN MOSLER Reply:

    My $8 hr transition job proposal would need fewer people than an unemployed buffer stock

    Art Reply:

    @Ivan,

    Ned Phelps is hardly a Democrat, let alone a radical socialist:

    http://www.amazon.com/Rewarding-Work-Participation-Self-Support-Enterprise/dp/0674094964

    And the WPA, CCC and other New Deal employment programs *worked*. WW2 was the ultimate full-employment program (unfortunately).

    What’s radical is the widespread and unexamined belief that full employment should not be a fundamental objective of a democratic, capitalist system.

    Reply

  24. Joe L. Says:

    In Stabilizing an Unstable Economy, as I recall, Hyman Minsky postulates that capitalist markets in a closed domestic economy do not clear because prices of goods and services are marked up over the wage bill. In aggregate if workers save from wages and must be paid less than the price of output they produce, so the markup can support profits and payments on debt, then the only way workers can clear the market is to borrow. In aggregate then the behavior of capitalists in a market economy will leave people and other resources unemployed. If the government is roughly the same size as the investment sector then it may be possible to develop automatic stabilizers, using spend and tax policies, to stabilize the unstable economy and operate closer to full employment. The problem is that fiscal policy with automatic stabilizers is more of a technical control system problem that needs to be recognized politically, develop some experimental solutions that generate experience on the matter, and then keep politics out of the operation if a workable solution emerges. It is much easier to see that Fed should control the Fed funds rate rather than Congress due to the political problem interfering with a technical solution, then it is for Congress to authorize automatic fiscal operations, and the design of proper fiscal operations is harder than setting interest rates because too much spending at full employment will cause inflation and too little spending or too much taxes will cause unemployment.

    Reply

  25. Djp Says:

    @ Warren

    From Ivan:

    How is that a fallacy of composition? If the market won’t pay $8 per hour but the govt mandates that as a minimum, the govt is preventing a clearing level from being reached.

    WARREN MOSLER Reply:

    clearing level? when the currency itself is a (govt) monopoly?

    —————————————————————–
    I really don’t understand this argument. I think that in a simplified gov, where perhaps all that gov did was to have a tax (and you might even need a flat tax for the argument) on income and provided a fixed wage for menial inane labor (say, carrying bricks back and forth) the conclusion would be that the value of the dollar is tied to an hour of labor – and so it would be incorrect to say that the labor markets can’t clear because the min wage is too high.

    But in our world, it is not at all clear that the value of the dollar is being set by the minimum wage. The gov is far too involved in other markets. I’ll go back to an earlier toy example. Imagine a world of 100,000 people. The gov employs 30,000 at some specific wage, and offers a minimum wage job as well that employs 10. Which wage matters as to setting the value of the dollar? I would claim it’s likely not the minimum wage – if the natural ratio of the value of the two jobs is different than the ratio of the wages, then it’s quite possible that the labor market isn’t clearing properly.

    What am I missing?

    Reply

    WARREN MOSLER Reply:

    You are missing the difference between spending on a price constrained basis vs a quantity constrained basis

    Reply

  26. Senexx Says:

    Inspired by above comments:

    Change the Game
    Change the Frame
    Think MMT

    Reply

  27. Gary Says:

    Planned to go to NYC to see OWS and Warren, but the weather is forecasted to be really bad. Cannot risk the trip, unfortunately. Next time, I hope.

    Reply

    WARREN MOSLER Reply:

    It was seriously negative weather!

    Reply

    RyanVMarkov Reply:

    The weather was brutal! :-(

    Reply

  28. MikeC Says:

    Was heading in to NYC despite weather, but LIRR cancelled my train. Next time also.

    Reply

  29. Peter D Says:

    Myself + wife + two daughters actually braved the weather! It started not too bad – just some snow, but by the time we parked downtown it was nasty. Yet, we actually made it to the park, all wet and cold, having come that far. Did not find Warren, as we already suspected would be the case. But it turned all for the better – by the time we got back home in the Bronx, our street had numerous fallen trees and huge branches, including one where our car used to be parked.
    Apparently the fact that the snow arrived so early when the trees are still full of leaves is what caused the problem – the snow weight on the leaves is too much for the branches to bear. The branches kept falling while we ducked our way into the house!! Crazy..

    Reply

  30. Jim Baird Says:

    We came down the day before – my wife loves going to the city anyway, so it wasn’t a wasted trip. I just missed Warren at the park, and we hightailed it out of there – had a pretty harrowing drive back to Boston, but made it in one piece. Crazy, crazy weather.

    Reply

    RyanVMarkov Reply:

    You missed Warren maybe by 3 minutes only. :-(

    Reply

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