Posted by WARREN MOSLER on September 5th, 2012
Lots of garbage, but notice the MMT parts starting to surface.
The Untold Story Of How Clinton’s Budget Destroyed The American Economy
This entry was posted on Wednesday, September 5th, 2012 at 1:22 pm and is filed under Government Spending.
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Charlie Gasparino is a clueless, right wing gasbag. The article is good, but there wasn’t any need to start by citing Gasparino’s slanted NY Post story.
Amileoj Reply:September 5th, 2012 at 3:58 pm
Indeed. Reprinting right-wing flapdoodle about how Fannie and Freddie and the Community Reinvestment Act caused the crash, without explicitly debunking those silly claims, is not the way to get across the MMT viewpoint on appropriate fiscal policy.
Inadvertently or otherwise, the article effectively winds up whitewashing a vast number of dirty hands: the orgy of financial fraud committed by Wall Street elites, the wholesale abandonment of regulatory and supervisory responsibility by George W. Bush’s administration, and the blinkered complacency of Alan Greenspan and Ben Bernanke at the Fed.
Erik V Reply:September 5th, 2012 at 4:01 pm
Well obviously Fannie and Freddie weren’t the cause of the crisis, but citing them could actually help draw right-leaning people into the modern money movement. Afterall, if it came off as a left-wing Krugman style piece, they would just ignore it.
WARREN MOSLER Reply:September 5th, 2012 at 9:28 pm
shows the context of where the ‘mmt support’ is coming from
Vincent Reply:September 6th, 2012 at 10:59 am
Weren’t mortgage backed securities at the root of the 08 meltdown? It seems to me that multiple administrations (not a single president) was responsible, in the sense that they were pressuring banks to make loans to unqualified lenders, while simultaneously giving up oversight.
Vincent Reply:September 6th, 2012 at 12:40 pm
i mean, of course, besides the problem of the narrowing deficit at the time.
WARREN MOSLER Reply:September 8th, 2012 at 3:08 pm
they melted as far down as they did largely because sales collapsed/unemployment spiked.
also a total failure of govt, in this case failure to support agg demand
Vincent Reply:September 8th, 2012 at 5:39 pm
So then lending to unqualified parties is all right except that the deficit wasn’t large enough toe supp agg demand. I can accept that. Of course the parties most responsible for pushing the loans were also the ones pushing for a reduction in the deficit circa 2006.
WARREN MOSLER Reply:September 8th, 2012 at 6:11 pm
by and large it was stockholders of the institutions in question who took the losses.
and when the financial crisis caused sales to drop a full payroll tax holiday would have
allowed people working for a living to be able to buy the goods and services of their choice
and make their mortgage payments if they wanted to. Business would have winners and losers based
on consumer choice.
what’s wrong with that?
geerussell Reply:September 8th, 2012 at 10:33 pm
@WARREN MOSLER, You don’t waste words. Your comments are clear, short and informative. You’d own twitter. Which is less trivial than it sounds.
Twitter isn’t a replacement for other channels of communication but a legitimate add-on leveraged successfully by a lot of people to broaden the reach of their communications and to engage with each other in less formal, neutral territory.
WARREN MOSLER Reply:September 9th, 2012 at 10:20 am
vincent Reply:September 9th, 2012 at 4:36 pm
Nothing wrong with that at all. Just imagine if that’s how it had played out.
But as an aside, do you see no downside to lending money to those unqualified? I’ve always seen that as mostly a disservice to the borrower.
WARREN MOSLER Reply:September 9th, 2012 at 8:10 pm
as a borrower I can’t imagine getting upset with a lender who approves my credit?
vincent Reply:September 11th, 2012 at 1:33 am
i’m thinking of the scenario where a bank loans you more money than you can actually pay back. isn’t that bad for the borrower?
WARREN MOSLER Reply:September 11th, 2012 at 7:35 am
seems a whole lot worse for the lender?
but yes, borrowers can make bad choices
ESM Reply:September 11th, 2012 at 7:33 am
“isn’t that bad for the borrower?”
You’re conflating other bad decisions the borrower makes with the original decision to borrow, e.g. blowing their windfall on cars and vacations.
True predatory lending is where the lender embeds hidden costs in the loan contract which the borrower is too unsophisticated to detect or understand. I think that was very rare during the housing bubble, and to the extent it happened, it is pretty easy for borrowers to have those predatory provisions modified or rescinded.
Lending people more money than they need or deserve is merely giving them an option. What they do with it is up to them.
Senator Ron Paul has introduced the Federal Reserve Transparency Act of 2012 ( HR459)
If you MMT people believe what you are promoting then you would all back Ron Paul’s audit The Fed act so Americans can see exactly how the Federal Reserve works.
Of course, Mosler will be proven results but the conclusion will be different.
WARREN MOSLER Reply:September 5th, 2012 at 9:27 pm
I’ve been supporting a full Fed audit for a long time.
Remember Fannie and Freddie were for-profit publicly traded companies. How much of their influence was due to making profits?
Stephanie kelton is doing a great job getting MMT noticed .. Her tweeting is also second to none .
MamMoTh Reply:September 6th, 2012 at 1:27 pm
Warren’s lack of tweeting is also second to none
WARREN MOSLER Reply:September 8th, 2012 at 3:12 pm
my thoughts seem more appropriate for this blog than for tweeting. but that’s just me
Vincent Reply:September 8th, 2012 at 5:43 pm
please please no tweeting. such a base form of communication.
MamMoTh Reply:September 8th, 2012 at 6:07 pm
I disagree, most of your comments, even cryptic, would make excellent tweets. but that’s just me.
Used cleverly Tweeter is a great platform to spread ideas
WARREN MOSLER Reply:September 8th, 2012 at 6:12 pm
feel free to tweet them thanks!
MamMoTh Reply:September 8th, 2012 at 6:09 pm
and i don’t know why i called it tweeter instead of twitter
WARREN MOSLER Reply:September 8th, 2012 at 2:56 pm
yes!!! turning economics into the tweet science
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