[Steve_American]

The Guardian agrees with my MMT guru that Central Banks should not have increased interest rates to fight our current inflation, which is being caused over 90% by supply shortages and corporate profiteering. The rate of wage increases is well below the rate of inflation, so it can't be pushing prices up.

In the article it pints out my point, that unemployment is not efficient, in that it wastes the labor hours of many people, which can never be recovered in the future.

https://www.theguardian.com/commentisfr ... -160575247

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[BlutoSays]

Consumer Price Index for All Urban Consumers: Purchasing Power of the Consumer Dollar in U.S. City Average




From the St. Louis Federal Reserve: myf.red/g/XCq6

Money-printing destroys the purchasing power of all currencies.

[Puffer Fish]

The Guardian agrees with my MMT guru that Central Banks should not have increased interest rates to fight our current inflation,

You do realise that when Central Banks "have increased interest rates", what that almost always means is Central Banks are not spending money to continue to keep interest rates down.

Central Banks don't magically "set" interest rates, rather they have to loan out lots of money at a below-market-rate. And where do they get this money? They have to make it.
Subsidising interest rates for borrowers ends up contributing to inflation.

Most people don't seem to understand this.

[Puffer Fish]

In the article it pints out my point, that unemployment is not efficient, in that it wastes the labor hours of many people, which can never be recovered in the future.

The claim that there exists some inherent trade-off between inflation numbers and unemployment has often been repeated (or insinuated), but is it actually true? I'm rather skeptical about that.

Besides, trying to lower interest rates seems like an awfully inefficient and wasteful strategy to go about trying to reduce unemployment.

[Steve_American]

You do realise that when Central Banks "have increased interest rates", what that almost always means is Central Banks are not spending money to continue to keep interest rates down.

Central Banks don't magically "set" interest rates, rather they have to loan out lots of money at a below-market-rate. And where do they get this money? They have to make it.
Subsidising interest rates for borrowers ends up contributing to inflation.

Most people don't seem to understand this.

Maybe, but has it been proved with only true premises?

Anyway, most of the increase in the money supply comes from banks creating dollars with every loan they make. Somehow, economists ignore the effect of bank loans on the money supply, and its supposed effect on consumer prices. This likely because their theories were set in concrete before 1971 and the end of the gold standard. And, their theory falsely asserts that banks collect deposits from savers and then loan out that money to borrowers. So, banks are just middlemen.

Link to 2014 article that proves that banks create money when they make loans.
https://www.sciencedirect.com/science/a ... 1914001070

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[Puffer Fish]

Maybe, but has it been proved with only true premises?

I think by this you mean that you do not agree that printing more money causes inflation.

That seems to be what your MMT theory says.

To me, however, that sounds like you are trying to get something for nothing, to "have your free lunch", as economics would put it.

If you don't believe printing money causes inflation, then it would hardly be that surprising that you would oppose allowing interest rates to rise to try to help fight inflation.

So far, so good? Tell me if I am wrong about any of this.

[Steve_American]

I think by this you mean that you do not agree that printing more money causes inflation.

That seems to be what your MMT theory says.

To me, however, that sounds like you are trying to get something for nothing, to "have your free lunch", as economics would put it.

If you don't believe printing money causes inflation, then it would hardly be that surprising that you would oppose allowing interest rates to rise to try to help fight inflation.

So far, so good? Tell me if I am wrong about any of this.

Basically, yes that is what MMT asserts.
MMTers point to Japan as their example that it is not true that what you want to call 'printing money' will always in every case lead to inflation.
MMters don't call it printing money because it factually isn't done that way any more. Now it is done by crediting bank accounts directly with more money. Sometimes by sending a check through the mail.

However, I take exception to your "something for nothing" worry. Somehow, mainstream economists don't seem to worry about the rich getting money for nothing. It is only when it is the working class getting it do they worry. So, they can increase the defense spending with abandon for example.

MMT controls inflation with its automatic system that includes the Job Guarantee Program. The JGP will increase the wages that must be paid by corps which will reduce their profits. But, IMHO profits are insane now. No economy can increase profits every year for 100 years. OTOH, the JGP will add to demand which businesses with deficit spent money and corps can take it out of the economy increasing their sales. MMT would also breakup the monopolistic corps. I would have a graduated corporate revenue tax that is very steep at some point to keep corps from getting too large. I myself would tax revenue because they can't hide revenue, overseas for example. For example if Amazon had to pay 20% of its revenue in tax off the top, smaller corps could charge less and take its business away. 20% may be too much or not enough. I am not sure what is right. Also, it might be on revenue less wages paid to hourly American workers.
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[ckaihatsu]

Money-printing destroys the purchasing power of all currencies.

Yeah, try *avoiding* it, in the context of international commerce -- the evidence is two world wars.

Currency war, also known as competitive devaluations, is a condition in international affairs where countries seek to gain a trade advantage over other countries by causing the exchange rate of their currency to fall in relation to other currencies. As the exchange rate of a country's currency falls, exports become more competitive in other countries, and imports into the country become more and more expensive.

https://en.wikipedia.org//wiki/Currency_war

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Historically:

Effect of the Plaza Accord

In 1985, a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$ in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar. After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$ in December 1992. In April 1995, the yen hit a peak of under 80 yen/US$, temporarily making Japan's economy nearly the size of that of the US.[21]

Post-bubble years

The yen declined during the Japanese asset price bubble and continued to do so afterwards, reaching a low of ¥134 to US$ in February 2002. The Bank of Japan's policy of zero interest rates has discouraged yen investments, with the carry trade of investors borrowing yen and investing in better-paying currencies (thus further pushing down the yen) estimated to be as large as $1 trillion.[22] In February 2007, The Economist estimated that the yen was 15% undervalued against the dollar, and as much as 40% undervalued against the euro.[23]

https://en.wikipedia.org/wiki/Japanese_ ... bble_years

[ckaihatsu]

the Job Guarantee Program. The JGP will increase the wages that must be paid by corps which will reduce their profits.

Why *continue* to be so co-dependently (vicious-loop) *reliant* on the economic mechanism of profit-making when it's now lending itself to *profiteering*, in the energy sector:

On 29 September 2022, Germany presented a €200 billion plan to support industry and households.[81] German Economy Minister Robert Habeck complained that the United States and other "friendly" gas supplier nations were profiting from the Ukraine war with "astronomical prices". He called for more solidarity by the U.S. to assist energy-pressed allies in Europe.[82] French President Emmanuel Macron criticized the United States, Norway and other "friendly" natural gas supplier states for the extremely high prices of their supplies, saying that Europeans are "paying four times more than the price you sell to your industry. That is not exactly the meaning of friendship."[83][84] For most of the time over the past ten years, the German spot price for electricity has been below €40 per MWh. Spot prices have increased to over €200 on average in 2022.[85][86]

https://en.wikipedia.org/wiki/2021%E2%8 ... rgy_crisis

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Back-story:

The last nuclear power plant will shut down in 2022;[2] all existing coal-fired generation will be retired by 2038.[3]

A controversial part of the program was the phasing out of Germany's nuclear reactors, to be complete by 2022,[6][7] with the aim of reaching a 100% renewable energy system. This process is mostly completed, with three reactors remaining connected to the grid (as of January 2022). Germany's overall energy mix still has high CO2 intensity due to large share of coal and fossil gas.[8]

https://en.wikipedia.org/wiki/Energiewende

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material-economic exploitation

Spoiler: show

Spoiler: show

[11] Labor & Capital, Wages & Dividends

Spoiler: show

[BlutoSays]

Yeah, try *avoiding* it, in the context of international commerce -- the evidence is two world wars.

---

Historically:

Are you telling me that if we don't print and spend like a drunkard today, we'll have a world war? BS

We do not have to go overboard and double the spending every f'n time we turn around.

It's a ridiculous premise that this shit can go on forever before we hit a wall.

[ckaihatsu]

Are you telling me that if we don't print and spend like a drunkard today, we'll have a world war? BS

We do not have to go overboard and double the spending every f'n time we turn around.

It's a ridiculous premise that this shit can go on forever before we hit a wall.

I'm saying that not all money-printing is for domestic, *Keynesian* reasons -- see 'competitive devaluations' in the prior excerpt, on international affairs.

Also, your Trumpian domestic monetarism / insularism has been proven a non-starter (Trump's initial tax cut for the rich), and this thread is all about the *opposite* to all of that the-sky-is-falling nonsense.

Here's what capital does *outside* of U.S. national borders:

Summary

In the Prefaces to the essay, Lenin said the First World War (1914–1918) was "an annexationist, predatory, plunderous war"[3] among empires, whose historical and economic background must be studied "to understand and appraise modern war and modern politics".[4] That for capitalism to generate greater profits than the home market can yield, the merging of banks and industrial cartels produces finance capitalism, and the exportation and investment of capital to countries with undeveloped and underdeveloped economies. In turn, that financial behaviour divides the world among monopolist business companies. In colonizing undeveloped countries, business and government will engage in geopolitical conflict over the exploitation of labour of most of the population of the world. Therefore, imperialism is the highest (advanced) stage of capitalism, requiring monopolies to exploit labour and natural resources, and the exportation of finance capital, rather than manufactured goods, to sustain colonialism, which is an integral function of imperialism. Moreover, in the capitalist homeland, the super-profits yielded by the colonial exploitation of a people and their economy permit businessmen to bribe native politicians, labour leaders and the labour aristocracy (upper stratum of the working class) to politically thwart worker revolt (labour strike) and placate the working class.[5][6]

https://en.wikipedia.org/wiki/Imperiali ... Capitalism

[BlutoSays]

I'm saying that not all money-printing is for domestic, *Keynesian* reasons -- see 'competitive devaluations' in the prior excerpt, on international affairs.

Also, your Trumpian domestic monetarism / insularism has been proven a non-starter (Trump's initial tax cut for the rich), and this thread is all about the *opposite* to all of that the-sky-is-falling nonsense.

Here's what capital does *outside* of U.S. national borders:

I'll repeat.

Are you telling me that if we don't print and spend like a drunkard today, we'll have a world war? BS

We do not have to go overboard and double the spending every f'n time we turn around.

It's a ridiculous premise that this shit can go on forever before we hit a wall.

[ckaihatsu]

Solidarity contribution

Power generation companies and companies operating in the fossil fuel sector have enjoyed windfall profits due to the current European market situation, which has led the European Commission to impose mandatory contributions on these companies as a temporary measure to limit the impact of the crisis.[112]

The special temporary tax will be calculated on taxable profits during the year 2022 and at the rate of no less than 33% of excess profits in the oil, gas, coal, and refining sectors. These solidarity contributions will help alleviate the severity of the current crisis. These contributions will be redistributed to all European consumers, including low-income families in the Member States, SMEs, and energy-intensive companies.[113]

https://en.wikipedia.org/wiki/2021%E2%8 ... ntribution

[Steve_American]

Why *continue* to be so co-dependently (vicious-loop) *reliant* on the economic mechanism of profit-making when it's now lending itself to *profiteering*, in the energy sector:

You ask why retain capitalism and just reform it?

Because right now we have to fight climate change and hopefully the rich will fight less hard on this issue than they would fight to retain most of their wealth.

MMT lets most nations spend more to fight climate change.

The world did this in WWII. The US planned the economy to use all the resources it could get its hands on and all the labor it had to fight the war and help its allies. The US used a lot of deficit spending to fund the war effort. It also used rationing, which is why I keep suggesting we also use rationing.
After the war the economy was not ruined by all the deficit spending during the war.

.






---


Back-story:









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material-economic exploitation

Spoiler: show

Spoiler: show

[11] Labor & Capital, Wages & Dividends

Spoiler: show

[Steve_American]

@Puffer Fish,
Are you going to reply to my reply to your questions?

.

[ckaihatsu]

You ask why retain capitalism and just reform it?

Because right now we have to fight climate change and hopefully the rich will fight less hard on this issue than they would fight to retain most of their wealth.

MMT lets most nations spend more to fight climate change.

The world did this in WWII. The US planned the economy to use all the resources it could get its hands on and all the labor it had to fight the war and help its allies. The US used a lot of deficit spending to fund the war effort. It also used rationing, which is why I keep suggesting we also use rationing.
After the war the economy was not ruined by all the deficit spending during the war.

.

The U.S. is currently *benefitting* -- solely -- from cannabalizing Europe over energy prices, due to the U.S. sanctions regime worldwide. This is *hardly* comparable to the 'Allies' or the Marshall Plan of the last century.

[T]he United States and other "friendly" gas supplier nations were profiting from the Ukraine war with "astronomical prices".

viewtopic.php?p=15262006#p15262006

Also please note that Merkel took Germany off of nuclear power, which necessitated more *coal* usage, which is *bad* for the environment.

Germany's overall energy mix still has high CO2 intensity due to large share of coal and fossil gas.[8]

viewtopic.php?p=15262006#p15262006

[late]

The U.S. is currently *benefiting* -- solely -- from cannabalizing Europe over energy prices, due to the U.S. sanctions regime worldwide. This is *hardly* comparable to the 'Allies' or the Marshall Plan of the last century.

You're ignoring the fact that the opposition to Putin is a team effort.

We are also doing a lot for Ukraine, which Europe sees as a benefit for them.

[ckaihatsu]

You're ignoring the fact that the opposition to Putin is a team effort.

'Team' -- ?

Which 'team' is that, and where's the Peace Dividend from 1992 -- ?

[late]

Which 'team' is that

Are you a man or a troll.

You need to pick one and stick with it.

[ckaihatsu]

Are you a man or a troll.

You need to pick one and stick with it.

Back on-topic....

Peace dividend

Peace dividend was a political slogan popularized by US President George H. W. Bush[1] and UK Prime Minister Margaret Thatcher in the light of the 1988–1991 dissolution of the Soviet Union, that described the economic benefit of a decrease in defense spending. The term was frequently used at the end of the Cold War, when many Western nations significantly cut military spending such as Britain's 1990 Options for Change defence review. It is now used primarily in discussions relating to the guns versus butter theory.

Validity

While economies do undergo a recession after the end of a major conflict as the economy is forced to adjust and retool, a "peace dividend" refers to a potential long-term benefit as budgets for defense spending are assumed to be at least partially redirected to social programs and/or a decrease in taxation rates. The existence of a peace dividend in real economies is still debated, but some research points to its reality.[2]

A political discussion about the peace dividend resulting from the end of the Cold War involves a debate about which countries have actually scaled back military spending and which have not. The scale back in defense spending was mainly noticeable in Western Europe and in the Russian Federation. The United States, whose military spending was rapidly reducing between 1985 and 1993 and remained flat between 1993 and 1999,[3] has dramatically increased it after September 11, 2001, to fund conflicts like the War on Terror, the War in Afghanistan and the War in Iraq.

https://en.wikipedia.org/wiki/Peace_dividend