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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.

Fed Chairman Eccles 1933 statement

Posted by WARREN MOSLER on November 26th, 2011

“Individuals, corporations, cities, and States can not, of themselves, do anything except play according to the rules of the present money system and make their outgo balance their income, or ultimately “go broke.” Most of them are unable, much as they may desire, to give consideration to helping the general situation except as they may influence the action of the Federal Government, which is in an entirely different category, it being able to make and change therules of the game…A State, of course, is in the same financial category as corporations and individuals in that they do not have the power of issuing money or credit. The Federal Government is entirely in a different category because it controls the money system.” ~ Marriner Eccles (February 13 – 23, 1933 Senate Hearing Committe – prior to becoming Fed Chairman)

18 Responses to “Fed Chairman Eccles 1933 statement”

  1. Tom Hickey Says:

    Promote to Mandataory Readings?


    Unforgiven Reply:

    @Tom Hickey,

    I second the motion.


    Mario Reply:

    @Tom Hickey,




    good idea. need to do an eccles section when i get the time


  2. wh10 Says:

    I’ve seen lots of quotes from this guy from the MMT crowd. He seems like he was pretty sharp…



    yes, as are many in the Fed today, just not the political appointees on top.


    John O'Connell Reply:


    So, could they get together and write something that their bosses would read and learn from? Why have they no influence?


  3. Adam (ak) Says:

    Is there any chance that Mitt Romney accommodates the legacy of his distant relative? Maybe someone who doesn’t have allergy to Republicans can ask Romney about that…


    beowulf Reply:

    @Adam (ak),

    After (if?) Romney secures the nomination and Warren gets a meeting via his buddy Andy Card (he and his brother-in-law Ron Kaufman are longtime Mass. Republican allies of Romney), that family relation to Eccles definitely goes in the talking points.


  4. Roger Erickson Says:

    given we go through all this once, in 1933 – what do we have to do differently this time?

    what about 1907? 1863? 1832? 1776?
    all those were revolutions; and the good guys won each time;

    what does it take to capture a lesson learned?
    it’s not about winning another revolution; we need to up the ante, and find some way to incorporate the lesson


    PG Reply:

    @Roger Erickson,

    The following two directions of effort seem worth to pursue:

    i) To strengthen MM Theory development through a concerted use of the MMT Wiki:

    For his I mean not only a (Wikipedia-like) “encyclopedical” statement of MMT but also a forum / locus / repository / publishing hub for theoretical developments / established papers and bibliography.

    ii) To launch a (global) MMT Network

    PS: It would help to establish that


    A. An equivalent of fiat money exists at the biological / ecological domains


    B. No evidence of the existence of an equivalent of fiat money at the biological / ecological domains has been found,

    B1. Therefore one must face the possibility that money / fiat money is a completely new discovery of evolution as a means for the social coordination of a species.


    roger erickson Reply:

    @PG, No. :)


    Currency is basically information. Every organized system treats denomination of ongoing transactions as a self-denominating process, with the information thrown off as residual byproducts of the actual transactions.


    in physics, all interactions/transactions are accompanied by emission/absorption of photons or particles or kinetic energy (except for the QM anomolies equivalent to Fed interventions :) ).

    in chemistry, all molecular reactions are associated with emission/absorption of either energy and/or electrons

    in biology, all process organized processes are linked via energy transfer, with the adenosine molecule as the “currency”;
    denominated as AMP, ADP or ATP (adenosine mono/di/tri-phosphate)

    Currency is just an even more scalable method for organizing information about highly distributed transaction chains. Nothing different than goes on in physics/chem/biology – except for the scale.

    Note: all systems have self-generating bookkeeping. The “currency” units are always generated on-demand, coincidental to the real transactions (just like fiat $). You ever hear of atoms running out of photons? Chemicals running out of electrons? Biology running out of adenosine?


  5. GLH Says:

    Does this mean that Marriner Eccles was the original MMTer?



    an original. there have always been people who’ve understood monetary operations, etc., particularly inside the fed


  6. Alex the Great Says:

    and when the Federal Government is controlled by a banking cartel, the banking cartel is in another category as well, a category above the law of the land and the ability to print as money wealth as they desire as long as they keep the peasants under control and inline.


  7. macrosam Says:

    Tons of gold in the attached.


    macrosam Reply:


    Eccles also proposes a distribution to the States comparable to Warren’s in this doc.


    roger erickson Reply:

    @macrosam, see also:

    Marriner S. Eccles and the Federal Reserve Policy, 1934-1951


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