Stooge news: New money [a joke] and a ban on swimming pools [no joke]

In stooge news, the government today announced a new form of currency to help “monetize” the rabble and balance the private, government and external sectors.

 In related news, the government’s plan to abolish swimming  pools was put on hold for a few months:

As many of you may know – especially those travelling for spring break this week – the Federal government’s new Americans with Disabilities Act (ADA) rule mandating lifts for existing hotel swimming pools was supposed to go into effect today. Fortunately, the compliance deadline has been extended. The bad news is that the rule exists at all. Indeed, it may already be impacting Americans with and without disabilities. In particular, as one might expect, some hotels are thinking about shutting down their pools rather than pay the relatively high cost of complying with the rule (according to the article linked to above, that figure is between $3,000 and $6,000).

My mouth is watering just thinking about all the lawsuits I can file for handicapped people who drown or are decapitated using the handicapper swimming pool lift mandated by these new regs.  Ain't it great having your government run by trial lawyers???

Whac-a-Mole Monetary Theory ["WA-MMT"] CAUSES unemployment

WA-MMT King Bill Mitchell explains that "THE IMPOSITION OF TAXES BY DESIGN CREATES UNEMPLOYMENT IN THE NON-GOVERNMENT SECTOR".  

Government spending provides revenue to the non-government sector which then allows them to extinguish their taxation liabilities. So the funds necessary to pay the tax liabilities are provided to the non-government sector by government spending. It follows that the imposition of the taxation liability creates a demand for the government currency in the non-government sector which allows the government to pursue its economic and social policy program.

This insight allows us to see another dimension of taxation which is lost in mainstream analysis. Given that the non-government sector requires fiat currency to pay its taxation liabilities, in the first instance, the imposition of taxes (without a concomitant injection of spending) by design creates unemployment (people seeking paid work) in the non-government sector. The unemployed or idle non-government resources can then be utilised through demand injections via government spending which amounts to a transfer of real goods and services from the non-government to the government sector. In turn, this transfer facilitates the government’s socio-economics program. While real resources are transferred from the non-government sector in the form of goods and services that are purchased by government, the motivation to supply these resources is sourced back to the need to acquire fiat currency to extinguish the tax liabilities.

Further, while real resources are transferred, the taxation provides no additional financial capacity to the government of issue. Conceptualising the relationship between the government and non-government sectors in this way makes it clear that it is government spending that provides the paid work which eliminates the unemployment created by the taxes.

THE PROBLEM OF OUR AGE: The lack of "direct engagement" with Austrian and libertarian ideas

What should be the number one concern of all lovers of freedom of liberty regarding our fight against the forces of darkness is the COMPLETE LACK OF ANY DIRECT ENGAGEMENT WITH OUR IDEAS.  It never occurs. Ever.  Lew Rockwell linked to this blog post which only concerns our problem engaging with "the right":

As Ron Paul’s campaign quietly recedes into oblivion, I am astounded by how little direct engagement has been made with his ideas by the leading voices on the Right. The vast majority of conservative commentators have chosen the short-term strategy of derision and ad hominem. He has been scorned as a conspiracy nut, a “truther,” or “the fringe.” However effective that approach may have been in the near term, it has revealed a flaw in the present conservative mindset—a flaw which I suspect gnaws away at the psyche of our leading pundits.

But this lack of engagement exists WITH ALL OF OUR OPPONENTS as does their exclusion reliance upon a "strategy of derision and ad hominem". Our opponents lack the ability to even think through our concepts on a superficial level.  This includes not only the warmonger right, but the warmonger left, the Keynesian left, the Keynesian middle and the Keynesian right.   And, or course, there are those dishonest totalitarian Whac-a-Moles, the MMTers. 

Where is the opponent who understands the simple basic concepts of private property, freedom of contact, the NAP, human exchange, Cantillon Effects or economic calculation?  I'm sorry to say that such a person does not exist.

According the MMT: The problems start WITH THE INTRODUCTION OF THE GOVERNMENT SECTOR WHICH ISSUES THE CURRENCY

The King of the MMTers tries to refute Bob Murphy.

Bill Mitchell claims to have discovered “the problem” with the basic Robinson Crusoe example.  However, if one follows the “argument” closely, the problems appear BECAUSE of the introduction of a “government sector” which issues the currency:

[W]hereas his Robinson Crusoe example was meant to “prove” that government deficits (G > T) are not required for the non-government sector surplus (in this case, the private domestic sector surplus because he assumes away the external sector), this example, clearly refutes that once a government sector is introduced (which issues the currency).

Straight from the horse's mouth, as they say. 

I have a solution. Don't have a "government sector" and, whatever you do, don't let it issue any "currency".

Ralph Raico, the Bolsheviks and the MMTers

Ralph Raico is a great libertarian writer whom I have been reading for almost 40 years. I just rediscovered an old piece he wrote in 1979 about Trotsky and the Bolsheviks, but it could apply today to the Keynesians and the MMTers just as well:

"One slight obstacle was encountered, however, on the road to the abolition of the price system and the market: "Reality," as Trotsky noted, "came into increasing conflict" with the economic "system" that the Bolshevik rulers had fastened on Russia. After a few years of misery and famine for the Russian masses — there is no record of any Bolshevik leader having died of starvation in this period — the rulers thought again, and a New Economic Policy (NEP) — including elements of private ownership and allowing for market transactions — was decreed.

The significance of all this cannot be exaggerated. What we have with Trotsky and his comrades in the Great October Revolution is the spectacle of a few literary-philosophical intellectuals seizing power in a great country with the aim of overturning the whole economic system — but without the slightest idea of how an economic system works. In “State and Revolution”, written just before he took power, Lenin wrote,

“The accounting and control necessary [for the operation of a national economy] have been simplified by capitalism to the utmost, till they have become the extraordinarily simple operations of watching, recording and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic.”

With this piece of cretinism Trotsky doubtless agreed. And why wouldn't he? Lenin, Trotsky, and the rest had all their lives been professional revolutionaries, with no connection at all to the process of production and, except for Bukharin, little interest in the real workings of an economic system. Their concerns had been the strategy and tactics of revolution and the perpetual, monkish exegesis of the holy books of Marxism.

The nitty-gritty of how an economic system functions — how, in our world, men and women work, produce, exchange, and survive — was something from which they prudishly averted their eyes, as pertaining to the nether-regions. These "materialists" and "scientific socialists" lived in a mental world where understanding Hegel, Feuerbach, and the hideousness of Eugen Duehring's philosophical errors* was infinitely more important than understanding what might be the meaning of a price."[emphasis added]

*or Wynne Godley's sectoral balances?

New blog feature - the dumbest MMT statement of the day

Today, it's a tie.  Both employ the typical A.D.D. symptom of definitional Whac-a-mole.

Commenter Septeus7 wrote in response to my serious inquiry:

Quote: "Clearly, MMT depends upon the alleged truth of the Keynesian assertion that the free market fails and results in stagnation and unemployment"  

No. MMT rests on the notion that "Free Markets" can't exist (because it's a non-defined concept) and real markets do fail that results in stagnation and unemployment.   Bob, most of us here are tired of dealing with you theoclassical religious fundamentalist of all kinds. American is being crushed by fundamentalism. You don't know any economics. All you have is a religious belief in a false God called the "Free Market." I have news for you. That God doesn't exists. It never did. 

Then he outdid himself.

The Austrian school denies the existence of human beings with their apriori assumptions about human action which deny the possibility of human creativity which of course is man's most defining characteristic.  The Austrian school also denies the existence of accounting. 

Our other daily winner is L. Randall Wray, Crown Princeling of the MMTers, who completes the final smack down of the Austrians:

Q:  Austrians use a bait and switch operation—denying that what we have is capitalism and comparing it to some sort of ideal utopian capitalism.

A: Agreed. That makes it easy to blame all of real world capitalism’s problems on its deviation from utopia. It is fundamentally an anti-scientific approach. Let’s analyze what we have and try to make it better. We cannot have utopia. We’re dealing with human society, after all.

Randy Wray is Professor of Economics at the University ofMissouri-Kansas City

 

It's safe to say that no MMTer on this planet has the slightest familiarity with even basic Austrian School concepts. 

MMTers can't prove the existence of MACRO - So they accuse me of plotting murder

It's like there's just one "progressive" guy out there.  

Read his blog and he comes across as someone who's about to bomb his local federal government building. 

The response is always the same. Truly amazing.

"Lord Keynes" announces that Lord Keynes was a Chartalist!

Keynes says:

“[sc. Bendixen says that the] … old ‘metallist’ view of money is superstitious, and Dr. Bendixen trounces it with the vigour of a convert. Money is the creation of the State; it is not true to say that gold is international currency, for international contracts are never made in terms of gold, but always in terms of some national monetary unit; there is no essential or important distinction between notes and metallic money; money is the measure of value, but to regard it as having value itself is a relic of the view that the value of money is regulated by the value of the substance of which it is made, and is like confusing a theatre ticket with the performance. With the exception of the last, the only true interpretation of which is purely dialectical, these ideas are undoubtedly of the right complexion. It is probably true that the old ‘metallist’ view and the theories of regulation of note issue based on it do greatly stand in the way of currency reform, whether we are thinking of economy and elasticity or of a change in the standard; and a gospel which can be made the basis of a crusade on these lines is likely to be very useful to the world, whatever its crudities or terminology.” (Keynes 1914a: 418).

As Don Boudreaux noted:

 When Mises’s German-language book first appeared in 1912, Keynes reviewed it in the prestigious Economic Journal, dismissing it as being unoriginal.  Seems pretty damning, until we learn that Keynes himself, in his 1930 book Treatise on Money, confessed that “in German, I can only clearly understand what I already know – so that new ideas are apt to be veiled from me by the difficulties of the language.”

Keynes’s influential dismissal of Mises’s work was based not on anything as lofty as informed disagreement; it was based instead on incomprehension.

It certainly does not hurt my feelings to learn that the entire and elaborate Keynesian hoax relies upon something as preposterous as the “state theory of money”.  Go for it.

Murders at government prison schools caused by Reagan and deregulation

This article is astonishing.  An epidemic of shootings occurs among increasingly depressed PUBLIC SCHOOL children.  These children are FORCED by the government to attend these schools and associate with these other toxic children.  And their parents are FORCED to pay for it. We are now facing an epidemic of nanny-statism and an economic collapse brought about by the “progressive” interventionist Keynesian theory.  So what does Salon.com blame for these depressed and miserable children?  CAPITALISM AND DEREGULATION.    The opponents ("progressives") of truth and justice (me) cannot even begin to present a fair argument for their side. They must destroy all clear thinking by promoting anti-concepts such that compulsory government schooling and the all encompassing government economic controls are called "deregulation". 

We’re doomed.

MMTers wilt before the Truth of Kolko

Almost 50 years ago, Gabriel Kolko's "The Triumph of Conservatism" demonstrated EMPIRICALLY that the “progressive” reforms during the "robber baron era" were put in place by the very elite from whom the public allegedly needed protection.

Prior to the “progressive” reforms, as Kolko states, "There was more competition, and profits, if anything, declined. Most contemporary economists and many smaller businessmen failed to appreciate this fact, and historians have probably failed to recognize it altogether"
The stage thus set by the failure of the merger movement, Kolko moves on to the myth that Progressive Era reforms were uniformly or even predominantly opposed by their affected industries. The key is to realize that, economic strategies like corporate consolidation having failed, companies turned to political strategies to freeze the status quo or to gain new competitive advantages. As Kolko states, "the essential purpose and goal of any measure of importance in the Progressive Era was not merely endorsed by key representatives of businesses involved; rather such bills were first proposed by them."

This is what results from granting the government plenary economic power in a “democracy”. Voters simply do not and never will have sufficient information to make informed choices and the all-powerful state will be easy pickings for the rich elite. Just like today.

MMTers have typical leftist naiveté about the nature of government and their purposeful historical ignorance is simply amazing.

The inept MMTer response:

Government is a fact of life in the modern world. Any country that would go without government and national defense would last about a minute. Moreover, pure laissez-faire is not a "free market" but a market that would soon be controlled by the strongest who would seize control by force, i.e., the Mafia.

And then there was this:

Wait, what? Don't be absurd. Big business always inclines to monopoly/oligopoly, to the detriment of consumers and citizens. Giant piles of money generate their own gravity wells, distorting the space around them and bending governments and law to their will. Wall Street views this as a feature, not a bug. 

Did they read the book?

MMT's basic "insight" is based upon fraud

MMT is based upon such preposterous foundations and its adherents are so morally challenged that average people will probably not believe what it is that is actually being proposed. 

Dan Kervick, a blogger at New Economics Perspectives, points to an article by Gavyn Davis today in the Financial Times as "Further evidence that core insights of MMT are penetrating the mainstream".

The "money quote" from Davis:

It is now widely recognised that a central bank cannot become insolvent in the same way that a private company can. Even if it incurs losses on its assets which more than completely eliminate its equity, it can never find itself in a position where it is unable to settle its debts, at least in its own domestic currency. Most of the liabilities of a central bank come in one of two forms: banknotes, and commercial banks’ deposits at the central bank. It is impossible for the private sector to force the central bank to exchange these assets for any other asset (like gold, for instance), and in any event the central bank can create more of each of them at will. Hence it can never become illiquid.

It cannot become illiquid because it can keep printing funny money to "repay" its debts without really repaying its debts.  Austrians have been complaining for decades that the fiat money system allows (and basically mandates) this type of fraud in the form of a hidden default through repayment of debt with diluted funny money.  To the mind of the morally challenged MMTer, this is cause for celebration and it is this wondrous feature of our modern world which no one but them understands. 

Hut Tax Monetary Theory - these MMTers cannot be serious, can they?

Winterspeak speaks:

The government mustn't "facilitate the wealth accumulation process by providing the net financial assets to help the private sector monetize this real wealth". It must correctly fund the private sector's demand for net financial assets (equity) so as to maintain full voluntary employment, without politically unacceptable levels of inflation.

Except that the market does not require the government to maintain full voluntary employment.  Inflation in the form of fiat money and credit creation distorts the price, investment and capital structure and distorts the process of economic calculation.  It is the government's use of fiat money and credit creation that causes the distortions that lead to unemployment and poverty.  The MMTers "solution" is the cause of the problem.  They are proudly oblivious to this analysis