The provenance of the specific proposal to use high value Platinum coins, as well as a lot of other posts proposing it is here: http://www.correntewire.com/coin_seigniorage_a_legal_alternative_and_may...
The Trillion Dollar coin is not the best proposal because it won't solve the problem of faux austerity. This will:
Jack Balking did get serious mainstream attention for this when he had the chance to put something on CNN. But others promoted it for 6 months before he got there, and Atrios doesn't have a clue about provenance and hasn't thought much about it either, as is obvious from his post.
Gee, can you imagine the insurance on it in case of natural disaster damage or theft? I think our Congress is a glorified $1 trillion Ferris Wheel since they continually take the middle class for a ride.
The only way this would be a good idea is if the platinum coin was made the size of a ferris wheel,,then we open it as a tourist attraction and charge $5 a head to ride it
When I saw this I thought the same thing. Yet, considering we have a Congress who is more than willing to throw the economy into recession over their corporate lobbyist driven agenda to destroy what is left of social safety nets, that being social security and Medicare, who knows these days? We clearly have a bought and paid for Congress, operating at the request of their corporate donor class to the point they will "shoot themselves in the head" in order to destroy social safety nets.
This will NEVER happen. The Federal Reserve (the private bank who we *BUY* our money from, WITH interest) will NEVER, EVER allow this to happen. Where do they get their money you ask? The print it out of thin air!!! Yes, and our country BUYS it from them. You really think they will let this happen? Please people, do some research and educate yourselves.
that the whole notion of a debt ceiling is bogus. The debt is what it is. It is determined by the sum total of budget related legislation and economic circumstances. The debt ceiling just tells the world that there's always a possibility that the government will default on its debts if one party wants to punish the other party. It's absurd.
Having said that, you can't just wish this absurd situation away. The possibility of printing trillion dollar coins, while being quite outside-the-box, at least addresses this absurd yet actually existing problem. I will leave it to others more informed than I to speak to the risks. Do those risks outweigh the damage to the working class from giving into Republican blackmail and slashing the safety net? I think the answer is not obvious.
Time for Congress to repeal that obscure clause. It wasn't constitutional in the first place. Congress has the power to coin money and regulate the value thereof, but NOT the power to TRANSFER that power.
All that money is printed and then disbursed through the banks. It's not coming directly in a sweet paycheck to Joe Citizen. So, part of that money is diverted into what the banks want to spend the money on. And the rest, well, it's not going to sit under Jamie Dimon's mattress. It has to go somewhere, whether that's in oil, food, aluminum, coal, natural gas, wheat, corn, and every other place imaginable. The whole point of the QE3, according to the Fed, per Bernanke, was to make people feel richer based on inflating the stock market. His view was that if people saw their stocks lifted, they would feel more confident and spend more. So per his own logic the money he was printing was going to lift stock prices not based on valuations, but based on more money chasing stocks - the epitome of money lifting prices. The same goes for everything else, they want the money printed so it can be spent, more $ spend chasing fewer goods = inflation. We are talking trillions of dollars, so unless someone is selling a few countries to one buyer for trillions, all that money will be spent in everything available. Especially given the contraction of manufacturing, fewer goods are being produced, of course that will drive prices for the remaining goods up. Now just imagine if there's a supply-shock regarding oil because of mass chaos in Egypt or Syria or Iran or Iraq or some other part of the Middle East along with all that new money floating around. Massive reductions in oil supply, massive influx of newly printed cash will make oil shortage and price hikes following Sandy look relatively mild in comparison.
I have heard it argued by progressive economists that the rising food and fuel prices are due primarily to illegal manipulation of commodities markets by speculators, which could be solved by a few strategic prosecutions of the manipulators. Of course, creating money through means like "QE1, QE2, QE3, TARP, etc." contributes to this bad situation by putting more money into the hands of the speculators. But it is not clear to me that it is simply the creation of new money that is causing the high food and fuel costs regardless of the method of creating that money.
Krugman argues that the creation of new money at a time of low consumer demand does not lead to hyperinflation or even high inflation. So far he has been proven right.
This is being recommended for a very specific purpose - to deny Republicans leverage to demand cuts to Social Security, Medicare, and Medicaid payments and other useful expenditures. Republicans are threatening to force a default on government debt by blocking an increase in the debt ceiling. What will be worse for the value of the dollar? A bunch of Tea Party nuts being able to force a default on government debt or having a simple legal way to avert that without caving to the demands to cut the safety net?
Also, would this particular method of creating money end up in the hands of "JP Morgan and other banksters so they can pad salaries and bet on derivatives" as "QE1, QE2, QE3, TARP, etc." did? (which I agree is a bad outcome.)
Issuing any form of currency without government backed bonds will inflate the value of the US dollar. The only way to protect the value is for the debt limit to be raised.
One of the links said that protestors seeking to protect Social Security suggested that the govt. should print more money and inflate the dollar, erasing the value of debts and this would be good for students, homeowners, etc. Uh, inflating the dollar so that it carries no value, increasingthe price of goods like food, heating fuel and gas for the car, rent, etc. does the exact opposite of protecting those on fixed-incomes like Social Security recipients. Even cat food becomes out of reach when hyperinflation inevitably kicks in. More dollars chasing same or fewer goods = inevitable hyperinflation. And despite supporters' claims, the Fed doesn't control inflation, it merely excludes goods that are increasing in price by excluding them as "too volatile" (like food and fuel) or pulls out the BS "substition" principle where if things go up in price, people are assumed to just switch to cheaper good. Thus, the Fed has used creative rules to eliminate inflation from ever happening again. And all that printing, where does it end up many times? Primary dealers like JP Morgan and other banksters so they can pad salaries and bet on derivatives - the very things that helped destroy us in the 1st place. QE1, QE2, QE3, TARP, etc. But now it's good?
This printing into prosperity is madness and seriously floated out there? Yes, printing your way to prosperity, absolutely, that always works out well. Simply amazing, we have people on every side of politics that want to fight wars without paying for them and without worrying about deficits, but then when it comes to helping people within our borders, suddenly deficits matters. Fed and Treasury actions are bad, unless it helps out big banks, or inflates the dollar into oblivion, or whatever side the person supports. Entitlements are bad, unless its subsidies to defense companies, big banks, pay for Congressional health and retirement benefits. There's no where to turn, it's madness on all sides.
Sure, why not. Instead of listening to people that have ethics and scruples and brains out here that know how to create jobs and balance budgets and want to work and keep our country strong (or at least get us back there), this is what jackasses actually discuss (and get away with) nowadays. People in universities and press rooms and political offices (earning millions, even in the "press" and "academia") can get away with this crap because the people with common sense and a sense of history + right and wrong have no voice anymore. Let these money-whore morons do it. Print it up. Go full Mugabe. Go full Weimar. If they print a $1 trillion bill or mint a coin, can I print a $1 quadrillion bill on my computer? They'll have the same value, but something tells me I'll get in trouble and they won't. Only the people in power can make currency worthless, apparently that's not within our power. And these people have control of our finances, our defense policy, our job "creation," our visa and outsourcing policies, etc.? Hmm, really tough to figure out why our country is being destroyed and who's to blame. It must be the people outside boardrooms and political office, yes, it must be them. It certainly can't be the people that look to wheelbarrows filled with cash as some dream, Benedict Arnold post-West Point as a hero that simply wanted to make some cash (and what's wrong with that - he was a capitalist, right?), and Mussolini as a good political leader because he was good for business, and isn't that what's good for us? Let's wrap up this circus, the idiot clowns in charge have destroyed us in less than 250 years. That's got to be some sort of record, no?
"After obtaining his BA from the Indiana University of Pennsylvania, Black obtained a Ph.D. in economics from Brown University in 1999. He has worked at the London School of Economics, the Université catholique de Louvain, the University of California, Irvine, and, most recently, Bryn Mawr College."
For it wouldn't really be in circulation per say, just a round about way of raising the debt ceiling, which has it's own problems. Officially that would be a dramatic increase in M0, but one would assume those coins would be put in a vault somewhere and hopefully later destroyed. Officially it should cause increased inflation, but since the Fed is so busy with QE, they could simply diminish QE (sell their various assets and Treasuries they have been buying and holding) to cancel out the effect.
If such a coin ever existed the real worry would be those trying to gain physical possession of it. Be a real good idea to turn around and make a $1 trillion dollar coin illegal as Roosevelt did on double Eagles, gold or something soon afterwards.
This is also the debt ceiling. the goal to reduce social security benefits and medicare benefits seems to be going under the radar with this ridiculous Congress. It's simply better to let all taxes go up than let them reduce social security benefits and raise the age for Medicare? Unbelievable considering the billions which could be saved if they would confront the for profit sector as well as prescription outrageous prices no one else in the world pays.
What a farce and we've already written many pieces that the real agenda is to destroy social safety nets at a time when most people's other retirement is long gone.
Not exactly a financial or economics expert there and to boot he has "Media Matters" one of the most biased "hit groups" out there, (their title is on the same oxymoron title as Fox put together with "News") as his top link. Just a little wee bit spin and bias and we don't like to reference the great spin machine on EP, any political flavor.
We're an economics site, lets stick with credible sources.
Please check your email for the email address you used to register here.
Where we may differ is in the motivation of the elites who presided over the past 40 years of de-industrialization in the US and other western countries. Having worked in quite a few board rooms with many corporate executives, and having met my share of multimillionaires and a few billionaires, I never got the sense in the conversations I heard that anyone was purposefully out to destroy factories, throw people out on the streets without a job, turn the middle class into the poverty class, and render the US into a third world country. The executives I know believe in capitalism fully, as the best possible economic system, especially in relation to all others. They view themselves as decent and honorable people, operating businesses in tough times where difficult decisions have to be made due to forces beyond their control. Some of them waited long after their competitors had moved operations to Mexico or China before they finally gave in to the "inevitable", as they saw it (do as the others do or your company will die, in other words). They didn't like it when they had to lay off people but they felt they were paid to make difficult decisions. To ameliorate the pain, or some would say soothe their conscience, they set up corporate out-placement programs, giving people access to counseling, administrative help, networking programs, office space, etc.
The hedge fund people I've met believe fully in the nobility of their profession. They think their labor is to take faltering and weak companies, make hard decisions, and return them to health so they can once again be listed as a public company. That they might make tens of millions of dollars doing this is to them proper compensation for the enormous risks they take in this endeavor. I'm sure Mitt Romney has always felt that way about the work he has done at Bain Capital, just as I'm sure Lloyd Blankfein is sincere when he says that Goldman Sachs is doing "God's work".
I've come across a few sociopaths in the CEO world; men who are very charming, believe fully in their own genius and the right to success, and have zero emotional connection to the people around them. There has been a tendency the past 30 years for men like this to prosper, and that speaks very poorly about the fact that American business has lost its ethical groundings of the 40s and 50s, some of which came from hard lessons learned from the Depression.
What is interesting is what happens to these men when they leave the corporate world. Many of them have a transformation, and begin to look differently on the company and industry they left behind. We've seen both John Reed and Sandy Weill admit they were wrong about banking industry consolidation, and now believe the big banks should be broken up. Some of this is perhaps expressing anger at their successors who have botched up the bank they left them, but still it takes some rethinking to come out publicly and announce you were wrong about the most fundamental thing you did in your career. Similarly, some equity buyout guys who are retired now look back and see the greed that underlay their actions, and the real damage it did to people. At the time all they could think about was maximizing their investors' returns and maintaining a very high rating for their fund, year after year.
What this says is that the corporate world is filled with group think, and only until you are out of that world can you see things differently. That group think does not involve "let's move all our factories to China, enslave all of our workers, destroy all the unions, and then default on all the bonds China will buy from us." Executives were not meeting on golf courses to plot out the destruction of the middle class. They might have been plotting out with other companies how to maximize their respective profits, but that gets into illegal territory with a lot of risks for price fixing and anti-competitive behavior. And yes, some of them did engage in such behavior and we certainly do not have a government in the US anxious to bring such players to justice.
I don't want to take away from the many justifiable things you have said in your comments. There is indeed every reason for workers to feel angry, and without that anger we aren't going to get a change in attitude that will bring about a completely different political climate. As for the Dependency Class, the right has been latching on to this phrase for a year or so, and I wanted to grab hold of it before they fully owned it. To me, it represents a failure not of the people who are in this situation, but of the economic and political system that put them there. The Republicans are going to do everything possible to put the blame on the poor. Putting some more gentile word to use, such as Entitlements Class or Lower Middle Class will not stop the campaign to blame individuals for this. Similarly, such words help leftists soften the impact of what has happened. People are dependent - for their survival, not so they can sit around and watch TV all day.
I was taken aback by this article and one blogging member’s taken on his/her view that we now have a Dependency Class here in the United States.
It is not that is there was a large grain of truth to what the writer said, it was that the writer used words and framing that confuse the issue and to a very large extent play into the frames the right wing uses to distort debate in this country and the world at large, as to who is really responsible for what has gone down the last forty odd years and why it happened at all.
Why are so many millions and millions of people dying in a very real sense because they lack jobs, food, housing and medical care?
That this process of depravation is global and trans-national is just happenstance result that trans-national corporations and banks actually restrict economic development on a massive scale world which is due in large part because American élites set about looting capital out of the United States and shipped everywhere else and then invented a cover story that somehow this capital flight would raise the economic boat of the entire world.
Jesus fucking Christ is it not clear now that tale is more bogus than Santa Clause?
To describe the results of what has been inflected on the United States the last forty odd years has resulted in a dependency class without a very detailed, if short explanation, as to why this group of people has grown and how it is indeed very different from a third world countries that never had much industrial development to begin with, is to miss the point of the last forty years of history and begs the question as why are so many progressives seem to hold their punches and appear clueless and willing to let elites define the terms of the debate? Dependency is a resulting outcome, that sould not be termed that way at all.
People have been robbed on a massive scale and use short and to the point language to make the point, rather than focus on the passive reframe we are all now dependant. Its OK to get angry about all this and say so.
The ugly truth is a couple hundred CEOs at a couple of hundred major corporations in the United States set out in the 1970s to destroy the New Deal not roll it back. At first they were not sure as the way to proceed or if they could pull it off at all.
No matter the current excuse pundits of all kinds currently use to obscure the nature of why this whole global construct was shoved down the throats of millions of Americans and the rest of the world it should be pretty fucking clear this global economy is a total fraud and only serves the interest of much less than 1% of the worlds population.
The Global economy we have been told for years was only meant to rid the US of in-efficient old style blue collar industries, tell that to the millions of young Americans who will never have a shot at a decent job and then tell them they should get use to it while your at it. This strikes me a more mindless leftist sophistry.
If China and India have reaped a temporary illusion of economic development now imagine how poised off they will be when they realize the Western powers who supplied the capital for their development turn if it off and tell them to fuck off because they can, and will be forced to by the financial Armageddon climate change will heaped upon the rest of the world’s problems….
It was a given in American board rooms back in the late 1970s that the Union Movement must be destroyed as complete as possible and that it be done in an under handed way as not to start a revolt among millions of working people.
This conclusion came about because the early to mid 1970s saw almost as many labor strikes as the 1930s as millions of working Americans exercised their right to strike and recap earnings that were being lost to inflation largely due to the fact no sitting president had raised taxes to pay for the twenty year insane war in Indo-China against the Communist hordes.
In the late 1970s CEOs of American based big business could have gone the same route used in many third world countries and used death squads and a slow motion version of what so many working people were subjected to in countries like those in South America and Latin America in the 1950s and 1960s.
But for reasons that would be obvious to an astute observer, they knew that had they to proceeded with caution or it would have become obvious what they were up to, and millions of Americans would have resisted. That is why this policy was a forty year project; it only needed a good cover story.
So they evolved the great con job ever told, a cover story, of what and the why of what they were really doing. This cover story was one called free trade and rising new global economy that would replace a functioning global economy that had been in place all along.
This new global economy we were told had new operating principles, needed new trade laws and would usher in a new global age of trade and prosperity.
It should be obvious by now this whole rush to create this shinning new global economy it utter rat rubbish whose only real driving principle was at first to destroy unionized industry here in the U.S.A. and unions and Social Democracy in Western Europe in those countries where the ruling class was just as greedy and driven as their American counter parts.
That after the first ten years or so the de-industrialization in the U.S. took on a life of its own and became a head long rush driven by hedge funds and other economic parasites is the single most important reason the United States is broke, so to speak, beyond the fact that thousands of the elite very rich park their money in tax havens and utterly refuse to support civilization of any kind. The big clue here is they refuse to support even the defense spending from which so trans-national companies draw their life blood . . . .
Authors like Nicholas Shaxson who had written a book titled Treasure Islands exposes that at least twenty trillion, maybe as much as thirty trillion dollars is hidden in off shore accounts by corporations and the world’s 1%.
Other authors have pointed out a mere ½ of one cent tax on derivatives could put most of Western Europe and the United States governments in the black and erase with in a matter of years all debate on whether we are “broke”.
The sad truth is far too many even liberal people and progressives have bought into this hogwash of the global economy and the language which it has fostered and the bogus ideas that it has brought to life, like dependency is a given fact of life or worst we should not try to bring back some form of industry and how this might be done.
There has always been a global trading system and global trade, what was different was the reason why the CEO class of American corporations decided to de-invest in the United States.
Short of an open declared war on organized labor there was no other way to destroy the union movement in the United States and the political power it had, and by virtue of historical accident, the political power the Democratic Party enjoyed as a result.
Hence with allies in Wall Street; the happenstance appearance of early forms of Hedge Funds willing to supply the means, and the fluke of history computers had made capital mobile one way or another thousand of factories across the United States were closed for good and those industries interested still in continued production were moved overseas to any country where workers rights are just a cruel joke.
WTF, do any remember here that the un-employment rate in the US was already approaching a permanent 6% before 9/11 reared its ugly head?
If I wanted to be to be even more of a pain in the ass, I would venture that un-employment in the US has been a constant 6% from the late 1970s through the goldn years of Clinton and only got worst when thirty years of de-investment played out under the weight of two wars and banksters getting wishes granted by both Clinton, Bush and a congress of paid off whores.....
It is bad enough that what was just done to Hostess Twinkie workers is basically old as the hills and what the CEO class has been doing now for more than forty years in plain sight.
But if one really thinks the resulting un-employment has created a Dependency Class and then just leave it at that --- is even doing justice to what has been shoved down the throats of the world the last forty years one might as well then just call all social programs entitlements, and then agree with right wing nuts Hitler was a socialist, and Stalin did indeed kill 60 million Russians before Hitler invaded, (not 5 to 8 million realistic estimates that still do not excuse these crimes), and that the there are indeed dead aliens in a bunker somewhere the shadow government refuses to bring to a UFO conventions.
What I ma trying, most likely in vain, to get across is that people tend to latch on to the first ideas that come along without much forethought and it was my duty to try to snip in the bud that the language of a Dependency Class not become common usage in what might be loosely termed progressive, or the 9% movement, or even, gasp, left wing circles because if there is an dependency at all that should be rooted out ---- it is the one where the thousands of dissenters do the ruling elites a huge favor and adopt language that only makes their work in progress easier to pull off.
Go buy a Twinkie and then ponder the reality of our situation, de-industrialization and the outright fraud and theft of American wealth from every family in this country except a very few, should be the starting point of all discussion and to be very frank pounded into the heads of every progressive, populist or “lefty” who is trying to de-construct and explain what has gone down the last forty years, let alone the fact that the recent melt down of the market and the debt crisis we hear from the media all trace back to a global economic system which is house of lies built on sand because of the willingness of so much of the MSM to slack off.
It comes down to knowing the two phrases that were the watch words that infuse, enliven and bring into clear relief so much awful history of the last century:
Die Gedanken sind frei
and
Arbeit macht frei.
And then knowing who said what and why to whom. Words and framing are important because they presage the actions that take life from the words, and mostly because so many words are used to obscure what is really going down.
The provenance of the specific proposal to use high value Platinum coins, as well as a lot of other posts proposing it is here: http://www.correntewire.com/coin_seigniorage_a_legal_alternative_and_may...
The Trillion Dollar coin is not the best proposal because it won't solve the problem of faux austerity. This will:
http://www.correntewire.com/beyond_debtdeficit_politics_the_60_trillion_...
Jack Balking did get serious mainstream attention for this when he had the chance to put something on CNN. But others promoted it for 6 months before he got there, and Atrios doesn't have a clue about provenance and hasn't thought much about it either, as is obvious from his post.
Gee, can you imagine the insurance on it in case of natural disaster damage or theft? I think our Congress is a glorified $1 trillion Ferris Wheel since they continually take the middle class for a ride.
The only way this would be a good idea is if the platinum coin was made the size of a ferris wheel,,then we open it as a tourist attraction and charge $5 a head to ride it
When I saw this I thought the same thing. Yet, considering we have a Congress who is more than willing to throw the economy into recession over their corporate lobbyist driven agenda to destroy what is left of social safety nets, that being social security and Medicare, who knows these days? We clearly have a bought and paid for Congress, operating at the request of their corporate donor class to the point they will "shoot themselves in the head" in order to destroy social safety nets.
This will NEVER happen. The Federal Reserve (the private bank who we *BUY* our money from, WITH interest) will NEVER, EVER allow this to happen. Where do they get their money you ask? The print it out of thin air!!! Yes, and our country BUYS it from them. You really think they will let this happen? Please people, do some research and educate yourselves.
that the whole notion of a debt ceiling is bogus. The debt is what it is. It is determined by the sum total of budget related legislation and economic circumstances. The debt ceiling just tells the world that there's always a possibility that the government will default on its debts if one party wants to punish the other party. It's absurd.
Having said that, you can't just wish this absurd situation away. The possibility of printing trillion dollar coins, while being quite outside-the-box, at least addresses this absurd yet actually existing problem. I will leave it to others more informed than I to speak to the risks. Do those risks outweigh the damage to the working class from giving into Republican blackmail and slashing the safety net? I think the answer is not obvious.
Time for Congress to repeal that obscure clause. It wasn't constitutional in the first place. Congress has the power to coin money and regulate the value thereof, but NOT the power to TRANSFER that power.
All that money is printed and then disbursed through the banks. It's not coming directly in a sweet paycheck to Joe Citizen. So, part of that money is diverted into what the banks want to spend the money on. And the rest, well, it's not going to sit under Jamie Dimon's mattress. It has to go somewhere, whether that's in oil, food, aluminum, coal, natural gas, wheat, corn, and every other place imaginable. The whole point of the QE3, according to the Fed, per Bernanke, was to make people feel richer based on inflating the stock market. His view was that if people saw their stocks lifted, they would feel more confident and spend more. So per his own logic the money he was printing was going to lift stock prices not based on valuations, but based on more money chasing stocks - the epitome of money lifting prices. The same goes for everything else, they want the money printed so it can be spent, more $ spend chasing fewer goods = inflation. We are talking trillions of dollars, so unless someone is selling a few countries to one buyer for trillions, all that money will be spent in everything available. Especially given the contraction of manufacturing, fewer goods are being produced, of course that will drive prices for the remaining goods up. Now just imagine if there's a supply-shock regarding oil because of mass chaos in Egypt or Syria or Iran or Iraq or some other part of the Middle East along with all that new money floating around. Massive reductions in oil supply, massive influx of newly printed cash will make oil shortage and price hikes following Sandy look relatively mild in comparison.
I have heard it argued by progressive economists that the rising food and fuel prices are due primarily to illegal manipulation of commodities markets by speculators, which could be solved by a few strategic prosecutions of the manipulators. Of course, creating money through means like "QE1, QE2, QE3, TARP, etc." contributes to this bad situation by putting more money into the hands of the speculators. But it is not clear to me that it is simply the creation of new money that is causing the high food and fuel costs regardless of the method of creating that money.
Krugman argues that the creation of new money at a time of low consumer demand does not lead to hyperinflation or even high inflation. So far he has been proven right.
This is being recommended for a very specific purpose - to deny Republicans leverage to demand cuts to Social Security, Medicare, and Medicaid payments and other useful expenditures. Republicans are threatening to force a default on government debt by blocking an increase in the debt ceiling. What will be worse for the value of the dollar? A bunch of Tea Party nuts being able to force a default on government debt or having a simple legal way to avert that without caving to the demands to cut the safety net?
Also, would this particular method of creating money end up in the hands of "JP Morgan and other banksters so they can pad salaries and bet on derivatives" as "QE1, QE2, QE3, TARP, etc." did? (which I agree is a bad outcome.)
Issuing any form of currency without government backed bonds will inflate the value of the US dollar. The only way to protect the value is for the debt limit to be raised.
One of the links said that protestors seeking to protect Social Security suggested that the govt. should print more money and inflate the dollar, erasing the value of debts and this would be good for students, homeowners, etc. Uh, inflating the dollar so that it carries no value, increasingthe price of goods like food, heating fuel and gas for the car, rent, etc. does the exact opposite of protecting those on fixed-incomes like Social Security recipients. Even cat food becomes out of reach when hyperinflation inevitably kicks in. More dollars chasing same or fewer goods = inevitable hyperinflation. And despite supporters' claims, the Fed doesn't control inflation, it merely excludes goods that are increasing in price by excluding them as "too volatile" (like food and fuel) or pulls out the BS "substition" principle where if things go up in price, people are assumed to just switch to cheaper good. Thus, the Fed has used creative rules to eliminate inflation from ever happening again. And all that printing, where does it end up many times? Primary dealers like JP Morgan and other banksters so they can pad salaries and bet on derivatives - the very things that helped destroy us in the 1st place. QE1, QE2, QE3, TARP, etc. But now it's good?
This printing into prosperity is madness and seriously floated out there? Yes, printing your way to prosperity, absolutely, that always works out well. Simply amazing, we have people on every side of politics that want to fight wars without paying for them and without worrying about deficits, but then when it comes to helping people within our borders, suddenly deficits matters. Fed and Treasury actions are bad, unless it helps out big banks, or inflates the dollar into oblivion, or whatever side the person supports. Entitlements are bad, unless its subsidies to defense companies, big banks, pay for Congressional health and retirement benefits. There's no where to turn, it's madness on all sides.
Also, I agree with you about the real agenda to destroy the social safety nets.
Sure, why not. Instead of listening to people that have ethics and scruples and brains out here that know how to create jobs and balance budgets and want to work and keep our country strong (or at least get us back there), this is what jackasses actually discuss (and get away with) nowadays. People in universities and press rooms and political offices (earning millions, even in the "press" and "academia") can get away with this crap because the people with common sense and a sense of history + right and wrong have no voice anymore. Let these money-whore morons do it. Print it up. Go full Mugabe. Go full Weimar. If they print a $1 trillion bill or mint a coin, can I print a $1 quadrillion bill on my computer? They'll have the same value, but something tells me I'll get in trouble and they won't. Only the people in power can make currency worthless, apparently that's not within our power. And these people have control of our finances, our defense policy, our job "creation," our visa and outsourcing policies, etc.? Hmm, really tough to figure out why our country is being destroyed and who's to blame. It must be the people outside boardrooms and political office, yes, it must be them. It certainly can't be the people that look to wheelbarrows filled with cash as some dream, Benedict Arnold post-West Point as a hero that simply wanted to make some cash (and what's wrong with that - he was a capitalist, right?), and Mussolini as a good political leader because he was good for business, and isn't that what's good for us? Let's wrap up this circus, the idiot clowns in charge have destroyed us in less than 250 years. That's got to be some sort of record, no?
FYI, from his wikipedia page:
"After obtaining his BA from the Indiana University of Pennsylvania, Black obtained a Ph.D. in economics from Brown University in 1999. He has worked at the London School of Economics, the Université catholique de Louvain, the University of California, Irvine, and, most recently, Bryn Mawr College."
For it wouldn't really be in circulation per say, just a round about way of raising the debt ceiling, which has it's own problems. Officially that would be a dramatic increase in M0, but one would assume those coins would be put in a vault somewhere and hopefully later destroyed. Officially it should cause increased inflation, but since the Fed is so busy with QE, they could simply diminish QE (sell their various assets and Treasuries they have been buying and holding) to cancel out the effect.
If such a coin ever existed the real worry would be those trying to gain physical possession of it. Be a real good idea to turn around and make a $1 trillion dollar coin illegal as Roosevelt did on double Eagles, gold or something soon afterwards.
This is also the debt ceiling. the goal to reduce social security benefits and medicare benefits seems to be going under the radar with this ridiculous Congress. It's simply better to let all taxes go up than let them reduce social security benefits and raise the age for Medicare? Unbelievable considering the billions which could be saved if they would confront the for profit sector as well as prescription outrageous prices no one else in the world pays.
What a farce and we've already written many pieces that the real agenda is to destroy social safety nets at a time when most people's other retirement is long gone.
Not exactly a financial or economics expert there and to boot he has "Media Matters" one of the most biased "hit groups" out there, (their title is on the same oxymoron title as Fox put together with "News") as his top link. Just a little wee bit spin and bias and we don't like to reference the great spin machine on EP, any political flavor.
We're an economics site, lets stick with credible sources.
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Could a such a devaluation of the dollar not be a good thing right now in terms of trade balance and lowering unemployment?
Where we may differ is in the motivation of the elites who presided over the past 40 years of de-industrialization in the US and other western countries. Having worked in quite a few board rooms with many corporate executives, and having met my share of multimillionaires and a few billionaires, I never got the sense in the conversations I heard that anyone was purposefully out to destroy factories, throw people out on the streets without a job, turn the middle class into the poverty class, and render the US into a third world country. The executives I know believe in capitalism fully, as the best possible economic system, especially in relation to all others. They view themselves as decent and honorable people, operating businesses in tough times where difficult decisions have to be made due to forces beyond their control. Some of them waited long after their competitors had moved operations to Mexico or China before they finally gave in to the "inevitable", as they saw it (do as the others do or your company will die, in other words). They didn't like it when they had to lay off people but they felt they were paid to make difficult decisions. To ameliorate the pain, or some would say soothe their conscience, they set up corporate out-placement programs, giving people access to counseling, administrative help, networking programs, office space, etc.
The hedge fund people I've met believe fully in the nobility of their profession. They think their labor is to take faltering and weak companies, make hard decisions, and return them to health so they can once again be listed as a public company. That they might make tens of millions of dollars doing this is to them proper compensation for the enormous risks they take in this endeavor. I'm sure Mitt Romney has always felt that way about the work he has done at Bain Capital, just as I'm sure Lloyd Blankfein is sincere when he says that Goldman Sachs is doing "God's work".
I've come across a few sociopaths in the CEO world; men who are very charming, believe fully in their own genius and the right to success, and have zero emotional connection to the people around them. There has been a tendency the past 30 years for men like this to prosper, and that speaks very poorly about the fact that American business has lost its ethical groundings of the 40s and 50s, some of which came from hard lessons learned from the Depression.
What is interesting is what happens to these men when they leave the corporate world. Many of them have a transformation, and begin to look differently on the company and industry they left behind. We've seen both John Reed and Sandy Weill admit they were wrong about banking industry consolidation, and now believe the big banks should be broken up. Some of this is perhaps expressing anger at their successors who have botched up the bank they left them, but still it takes some rethinking to come out publicly and announce you were wrong about the most fundamental thing you did in your career. Similarly, some equity buyout guys who are retired now look back and see the greed that underlay their actions, and the real damage it did to people. At the time all they could think about was maximizing their investors' returns and maintaining a very high rating for their fund, year after year.
What this says is that the corporate world is filled with group think, and only until you are out of that world can you see things differently. That group think does not involve "let's move all our factories to China, enslave all of our workers, destroy all the unions, and then default on all the bonds China will buy from us." Executives were not meeting on golf courses to plot out the destruction of the middle class. They might have been plotting out with other companies how to maximize their respective profits, but that gets into illegal territory with a lot of risks for price fixing and anti-competitive behavior. And yes, some of them did engage in such behavior and we certainly do not have a government in the US anxious to bring such players to justice.
I don't want to take away from the many justifiable things you have said in your comments. There is indeed every reason for workers to feel angry, and without that anger we aren't going to get a change in attitude that will bring about a completely different political climate. As for the Dependency Class, the right has been latching on to this phrase for a year or so, and I wanted to grab hold of it before they fully owned it. To me, it represents a failure not of the people who are in this situation, but of the economic and political system that put them there. The Republicans are going to do everything possible to put the blame on the poor. Putting some more gentile word to use, such as Entitlements Class or Lower Middle Class will not stop the campaign to blame individuals for this. Similarly, such words help leftists soften the impact of what has happened. People are dependent - for their survival, not so they can sit around and watch TV all day.
I was taken aback by this article and one blogging member’s taken on his/her view that we now have a Dependency Class here in the United States.
It is not that is there was a large grain of truth to what the writer said, it was that the writer used words and framing that confuse the issue and to a very large extent play into the frames the right wing uses to distort debate in this country and the world at large, as to who is really responsible for what has gone down the last forty odd years and why it happened at all.
Why are so many millions and millions of people dying in a very real sense because they lack jobs, food, housing and medical care?
That this process of depravation is global and trans-national is just happenstance result that trans-national corporations and banks actually restrict economic development on a massive scale world which is due in large part because American élites set about looting capital out of the United States and shipped everywhere else and then invented a cover story that somehow this capital flight would raise the economic boat of the entire world.
Jesus fucking Christ is it not clear now that tale is more bogus than Santa Clause?
To describe the results of what has been inflected on the United States the last forty odd years has resulted in a dependency class without a very detailed, if short explanation, as to why this group of people has grown and how it is indeed very different from a third world countries that never had much industrial development to begin with, is to miss the point of the last forty years of history and begs the question as why are so many progressives seem to hold their punches and appear clueless and willing to let elites define the terms of the debate? Dependency is a resulting outcome, that sould not be termed that way at all.
People have been robbed on a massive scale and use short and to the point language to make the point, rather than focus on the passive reframe we are all now dependant. Its OK to get angry about all this and say so.
The ugly truth is a couple hundred CEOs at a couple of hundred major corporations in the United States set out in the 1970s to destroy the New Deal not roll it back. At first they were not sure as the way to proceed or if they could pull it off at all.
No matter the current excuse pundits of all kinds currently use to obscure the nature of why this whole global construct was shoved down the throats of millions of Americans and the rest of the world it should be pretty fucking clear this global economy is a total fraud and only serves the interest of much less than 1% of the worlds population.
The Global economy we have been told for years was only meant to rid the US of in-efficient old style blue collar industries, tell that to the millions of young Americans who will never have a shot at a decent job and then tell them they should get use to it while your at it. This strikes me a more mindless leftist sophistry.
If China and India have reaped a temporary illusion of economic development now imagine how poised off they will be when they realize the Western powers who supplied the capital for their development turn if it off and tell them to fuck off because they can, and will be forced to by the financial Armageddon climate change will heaped upon the rest of the world’s problems….
It was a given in American board rooms back in the late 1970s that the Union Movement must be destroyed as complete as possible and that it be done in an under handed way as not to start a revolt among millions of working people.
This conclusion came about because the early to mid 1970s saw almost as many labor strikes as the 1930s as millions of working Americans exercised their right to strike and recap earnings that were being lost to inflation largely due to the fact no sitting president had raised taxes to pay for the twenty year insane war in Indo-China against the Communist hordes.
In the late 1970s CEOs of American based big business could have gone the same route used in many third world countries and used death squads and a slow motion version of what so many working people were subjected to in countries like those in South America and Latin America in the 1950s and 1960s.
But for reasons that would be obvious to an astute observer, they knew that had they to proceeded with caution or it would have become obvious what they were up to, and millions of Americans would have resisted. That is why this policy was a forty year project; it only needed a good cover story.
So they evolved the great con job ever told, a cover story, of what and the why of what they were really doing. This cover story was one called free trade and rising new global economy that would replace a functioning global economy that had been in place all along.
This new global economy we were told had new operating principles, needed new trade laws and would usher in a new global age of trade and prosperity.
It should be obvious by now this whole rush to create this shinning new global economy it utter rat rubbish whose only real driving principle was at first to destroy unionized industry here in the U.S.A. and unions and Social Democracy in Western Europe in those countries where the ruling class was just as greedy and driven as their American counter parts.
That after the first ten years or so the de-industrialization in the U.S. took on a life of its own and became a head long rush driven by hedge funds and other economic parasites is the single most important reason the United States is broke, so to speak, beyond the fact that thousands of the elite very rich park their money in tax havens and utterly refuse to support civilization of any kind. The big clue here is they refuse to support even the defense spending from which so trans-national companies draw their life blood . . . .
Authors like Nicholas Shaxson who had written a book titled Treasure Islands exposes that at least twenty trillion, maybe as much as thirty trillion dollars is hidden in off shore accounts by corporations and the world’s 1%.
Other authors have pointed out a mere ½ of one cent tax on derivatives could put most of Western Europe and the United States governments in the black and erase with in a matter of years all debate on whether we are “broke”.
The sad truth is far too many even liberal people and progressives have bought into this hogwash of the global economy and the language which it has fostered and the bogus ideas that it has brought to life, like dependency is a given fact of life or worst we should not try to bring back some form of industry and how this might be done.
There has always been a global trading system and global trade, what was different was the reason why the CEO class of American corporations decided to de-invest in the United States.
Short of an open declared war on organized labor there was no other way to destroy the union movement in the United States and the political power it had, and by virtue of historical accident, the political power the Democratic Party enjoyed as a result.
Hence with allies in Wall Street; the happenstance appearance of early forms of Hedge Funds willing to supply the means, and the fluke of history computers had made capital mobile one way or another thousand of factories across the United States were closed for good and those industries interested still in continued production were moved overseas to any country where workers rights are just a cruel joke.
WTF, do any remember here that the un-employment rate in the US was already approaching a permanent 6% before 9/11 reared its ugly head?
If I wanted to be to be even more of a pain in the ass, I would venture that un-employment in the US has been a constant 6% from the late 1970s through the goldn years of Clinton and only got worst when thirty years of de-investment played out under the weight of two wars and banksters getting wishes granted by both Clinton, Bush and a congress of paid off whores.....
It is bad enough that what was just done to Hostess Twinkie workers is basically old as the hills and what the CEO class has been doing now for more than forty years in plain sight.
But if one really thinks the resulting un-employment has created a Dependency Class and then just leave it at that --- is even doing justice to what has been shoved down the throats of the world the last forty years one might as well then just call all social programs entitlements, and then agree with right wing nuts Hitler was a socialist, and Stalin did indeed kill 60 million Russians before Hitler invaded, (not 5 to 8 million realistic estimates that still do not excuse these crimes), and that the there are indeed dead aliens in a bunker somewhere the shadow government refuses to bring to a UFO conventions.
What I ma trying, most likely in vain, to get across is that people tend to latch on to the first ideas that come along without much forethought and it was my duty to try to snip in the bud that the language of a Dependency Class not become common usage in what might be loosely termed progressive, or the 9% movement, or even, gasp, left wing circles because if there is an dependency at all that should be rooted out ---- it is the one where the thousands of dissenters do the ruling elites a huge favor and adopt language that only makes their work in progress easier to pull off.
Go buy a Twinkie and then ponder the reality of our situation, de-industrialization and the outright fraud and theft of American wealth from every family in this country except a very few, should be the starting point of all discussion and to be very frank pounded into the heads of every progressive, populist or “lefty” who is trying to de-construct and explain what has gone down the last forty years, let alone the fact that the recent melt down of the market and the debt crisis we hear from the media all trace back to a global economic system which is house of lies built on sand because of the willingness of so much of the MSM to slack off.
It comes down to knowing the two phrases that were the watch words that infuse, enliven and bring into clear relief so much awful history of the last century:
Die Gedanken sind frei
and
Arbeit macht frei.
And then knowing who said what and why to whom. Words and framing are important because they presage the actions that take life from the words, and mostly because so many words are used to obscure what is really going down.
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