Escape from Austeratraz
Education to combat the ignorance is on-going — also "Crash Tesla Now!"
To any readers who think I am tone deaf on “inflation”,… well, I have no appropriate cusswords in fancy font for this! I’ll Hawking radiate into substack here what I wrote to the Normanator. If I am wrong about it all, go complain to the guy who invented gravity and quantum fields. But let me caveat things anyway. I know full well the source of relative price adjustments and price gouging. It comes under the thesis of “capitalism as power.” From whence that power derives is largely immaterial, it can even be fake power provided the gullible think it exists (The Mars King). Imagined power is a powerful weapon, until it isn’t. So let’s Crash Tesla Now! No one will suffer in the Tesla factories more than a Federal employee who just got sacked by the Clown King and Mars King. Too US-centric for you Kiwis?
Let me then go generalized macroeconomics for you.
The Normanator1 was ranting (correctly) on how the Deficit Myth is a mass psychosis.
@3:00 there is a far worse psychosis that only the likes of Mosler seem to comprehend, not so much Kelton, Wray, Hail and the rest of the milquetoast liberals. The far worse psychosis is fear of the inflation boogeyman. It is the baser reason why the normies fear the deficit “blowing up like a balloon.” The accounting identity here being only a number they can point at. They do not understand the source of the price level and hence inflation hysteria ensues, a number they can never point at (it is in the future).
To be blunt: hysterical and needless fear of inflation leads to mass unemployment, and 5% unemployment is crippling enough! Even 3%. Know that! The lost real goods output and untold social pathologies that result exceed in societal damage in a mere decade the real costs of all wars in human history. Just pause and think about that and ask yourself why people prefer to see unemployment than a continual rise in prices?
The problem with letting inflation rip (via the needless self-imposed constraint of bond issuance to provide offset operating factors, i.e., maintain a positive interest rate) is not economic nor financial, it is political — gets you voted out of office. But it is still false psychology and lack of awareness that the fiat currency is a gauge system. It is political in another way, the bond issuance is basic income only for people who have a lot of money,2 so suspending bond issuance by reforming the software layer rules between Tsy and FED3 is a no-brainer “gutting” of the rentiers, the cry babies. Being cry babies, they will not have a bar of it, and will demand their welfare payments. A weak government will give-in to their demands, for no good reason except Citizens United (or the equivalent in other countries, aka. donations to political parties). All political parties are anachronistic (of a bygone age when voters could not easily discover policy platforms), and are a cancer.4
MMT is not just a mere accurate understanding of state monetary operations, it reveals how a State monopoly on a currency can guarantee full employment and price stability. So just think about that! Just this education alone is likely worth a million “marxist” revolutionaries. It is a very peaceful form of activism, with massive returns on investment (if you care about that sort of thing, rather than doing what is right because it is what is right.)
TODO
* Currency is gauge. (See my previous post.)
* Floating exchange rate increases fiscal policy space.
* ZIRP increases fiscal policy space. (Obviously: it limits monetary policy, leaving more space for fiscal policy.)
* Relative market prices are not gauge, or one could say, have been gauge fixed. (The government gauges the price level, not relative prices.)
* Government controls the price level, not relative prices — whether they know it or not. Because they do not know it the price level drifts.
* The government currency monopoly is not analogous to BIPM weights and measures units, it is exactly the same. (A factory manufactured "ruler" can vary in "mm" units, but the BIPM definition is fixed by the BIPM.)
* The government definition of the currency is nevertheless wild (unlike the nerdy BIPM measures), because the governments do not understand they are the currency unit BIPM. (But without the "international".)
* Hence the government is merely the BNPM — Bureau of National Price Measures. And really only one or two prices, the price of the currency and public labour. They do not care about relative prices for other goods. (Though they should care as a matter of public interest when unfair relative prices are evident, e.g., crude oil, rents, which cause massive income disparity.)
* Every nation has a different currency unit, hence there is no international standard, hence fx rates fluctuate. This is not the same as defining the domestic price level.
* Private monopoly industries are politicians. The government can force them to take a fair market price (using gauged, not absolute price), but the government chooses not to, making the private sector monopolist one of your unelected politicians.
* Do you understand the gauge principle yet? If not, you will suffer brainworms and completely fail to understand MMT and this present substack post, no matter how much Kelton, Wray, Graeber and Keen you read. Read Mosler.
* Failure to acknowledge this is a source of brainworms and (anti)MMT cancer.
* Nevertheless, government has power to prevent unfair relative price fluctuations or departures, via antitrust law enforcement, and fees and fines. Neoliberals simply choose not to exercise this power — which is ideological death-drive, not "sound finance".
* Hellsbells, I know the plutocrats are running the show. But we have more power than they do. We are all Scotty Cyclops Summer's too scared to use our eye-beams when facing fascists. The Neoliberals were already half-fascist, and we should've used our eye-beams (aka. union and strike action, school education, rent strikes, student debt strikes, guerilla infiltration of the political parties — all of them — and all the rest) back then.
* You can only be strong enough collectively to, say, strike on student debt if you understand the government did not need the revenue. If you got in-debt to a private university then good riddance to you. (This is not too harsh.)
* Political parties are anachronistic and a cancer. We should infiltrate all of them (repeat for emphasis).
* Neolib 'sound finance' is objectively anti-'sound finance'.
* Neoclassical "sound finance" is oxymoronic or Orwellian, it is unsound finance, instability and precarity (for the proverbial Ninety Nine Percent).I was going to expand each point, but why? (a) I am not paid to write this (which is a good thing of course). (b) It is superior education praxis to allow the students to figure it out. So can I leave it at this TODO note for this article?
Seriously, the fact no one seems to truly understand the government is a monopoly currency issuer, and all that this entails, and that the governments operate a gauge system, and all of the policy space implications this entails drives me totally nuts. If you are not seeing “all that this entails” then you will misunderstand my rants. You will misunderstand fiscal policy. You will misunderstand trade policy. You will become a de facto geopolitics “great gamer” idiot, regardless of how much learning credentials you have gained. We are not talking about simple state monetary operations here, we are talking about life & death. I am at Joaquin Phoenix The Joker levels of laughter these days. (See my next short post.)
It is only some cold comfort to retreat to the introverted world of theoretical physics from time to time. At least banging my head against that wall does not have risk of hopelessness for near term humanity. And I am an optimist, we will plow through these dark days of neoliberalism & plutocracy (hand-in hand those two, on to the altar of working class destruction). That doesn’t mean I have to like the darkness.
I mean to say, I am itching to get back to writing a seminal paper on topological 4-geon theory, it is brain damaging to have to point out the obvious in macroeconomics in my precious spare time, it lowers my sense of hope in humanity to think so many people have so many things so backwards in macroeconomics. And I haven’t even touched the stupidity of Ai Singularity hype this month! But there is all-pervading anti-austerity in Ai hype stupidity to fight some day, exceeding crypto-token nuttery? It is inflating the currency of brainworms.
Unfortunately, unlike actual currency (I.O.U. of the issuer) these brainworm debits do not have an equal intelligence credit anywhere.
If you have a fetish for imposing austerity, then I plead you to fight the mental inflation in the Ai hype, UBI booster, and crypto-hype spaces. They even gave an Academy Award recently to a film where a robot is grown-up to think they are human. They only found out when forced to use a Captcha. Guys and Gals: the idea robots can be conscious is complete postmodernist ultra-liberal-sensibility brainworms and another cancer.5 It boils down to utter ignorance about physical laws. But that’s a big topic for some other say. Suffice to say, consciousness cannot “emerge” from any physical process. The thing to fear is the control of technology in the hands of a few. Not the robots.
Every factory robot automating a job our comrades might otherwise have to perform is a benefit to humanity. Paying the worker a pittance to supervise the robot is crippling and disgusting needless austerity and class warfare. Turn the factory ownership over to the workers by Law. The private owner-boss had no right to own the means of production just because they put up the initial capital. They’d not make a single sale without the workers, whom the boss did not immaculately create. They have a natural right (since they took some risks) to some share of the sales. That is all.
Never the most progressive fellow you’ll find at a gymnasium.
… and in proportion to how much money they already have!
Sorry, US-centric. Their FED is our RBNZ. There is no operational difference! The “Zionist globalists”🤣 can own as many shares in the FED as they like, the FOMC still take marching orders from US Congress. Same for our RBNZ.
Yeah, that’s right nerds. Agent Smith had it wrong, he was over-generalizing. Humans are not a cancer nor a plague, we are beautiful. But a very tiny few ruin it for the many. These tiny few need not exist. One crude measure of “progress” is vanishing these few. (I do not advocate the Thanos method. Thanos was simply not a good enough educator.)
The “cancer” I refer to is an exact metaphor (if there is such a thing) — spreads wildly and uncontrolled, even after death of the organism. See the immortal Henrietta Lacks, for one of the more fascinating accounts of the science of cancer cells, and there’s a nice Radiolab epsiode here.