A Comfortable Betrayal – J.D. ALT
It would be a shocking scandal if it came to light that the professions of medical science had, for decades, known about an easy to treat, underlying cause of cancer — but conspired to obfuscate and suppress the information to protect their participation in a medical industry raking in hundreds of billions a year to treat the disease. Professional standings, tenures, licenses would be in tatters. Lawsuits would abound. And outrage would march on every city hospital and medical college in the nation — would it not?
Such a betrayal, of course, is not humanly possible. Right? Yet is it not the case that the professions of economics, journalism and politics are guilty of something very like this kind of betrayal? Doesn’t it strike you as odd that, for more than five decades now, the U.S. government has been issuing and spending trillions of dollars of U.S. FIAT currency, and not once has a mainstream economist, journalist, or political leader found it worthy of consideration to even try to explain —
from the perspective of what economic policy is all about — what a sovereign fiat currency actually is, and how it functions? While U.S. democracy labours under the false belief its government is broke, deeply in debt, and cannot afford to pay for a humane and effective safety net for those who the corporate economy cannot profitably employ — while tens of millions of U.S. citizens, in other words, struggle to get enough food to eat, desperately search for affordable housing, agonize over how to obtain essential health-care, and scramble to pay for the care and education of their children.
While, furthermore, the nation’s vast infrastructures crumble and fall into obsolescence, while we struggle to rebuild after the catastrophic storms and wild-fires of climate change, while we fail to clean up the pollution that threatens our drinking water, our breathable air, our food supplies and fisheries — while all this great struggle debilitates the national prospect like a cancer, the professions of economics, journalism, and politics obfuscate and suppress the underlying possibility of an actual cure: The understanding of what sovereign fiat-currency is and how we can use it.
There are, of course, cogent voices in the wilderness: the UMKC economists (Professors Stephanie Kelton, Randy Wray, Pavlina Tcherneva etc.) now scattered to Stonybrook, Bard College and the Levy Economics Institute; also there’s Prof Bill Mitchell expounding reason from the Australian hinterland; there’s economist and hedge-fund founder Warren Mosler who, apparently, was the first person to discover the world is using fiat money.
There’s the continuous twitter conversations trying to come to grips with our malaise and why an apparent cure is being suppressed and withheld. But the mainstream voices guiding democracy refuse to listen, refuse to even acknowledge, or discuss, the existence of Sovereign Fiat Money. What is it? How is it created? How do citizens and businesses get their hands on it? Why does sovereign fiat money make it possible for us to collectively undertake and accomplish things we otherwise believe are not “affordable?”
No. The mainstream voices do not want this topic, these words, these questions on their tongues. For them, “money” is something that simply exists, and the only question is who should get to have it to spend? The government — to pursue collective goals? Corporate entrepreneurs — to generate profits?
The single mom who can’t find full-time employment — to feed, house and get health-care for her family?
The mainstream voices — the economists and journalists and political leaders — thrive on this question of how to divvy up the pot of “money” that the nation, by some inexplicable process, has been allocated to have. Staking out positions in this allocation argument is their career and sustenance. To take their argument away (by suggesting the pot of “money” is, in fact, expandable — as needed — by the direct sovereign spending of fiat-currency) threatens to leave them marginalized and irrelevant; even worse: possibly unemployed?
There are people in the mainstream voices, I’m sure, who genuinely don’t have a clue. There are many others, however, who understand all this very well — but who refuse to risk the comfortable and lucrative positions they’ve staked out in the false debate of the mainstream narrative. While these economic, journalistic, and political leaders bask in the celebrity-comfort — and pay-scale — of their argumentative positions, the nation’s precious democracy struggles with what it is told is its abject poverty, indebtedness, and helplessness. The magnitude of this betrayal, when you consider its consequences, is staggering.
I won’t be naming names here. But I think we should start calling them out.
Source: New Economic Perspectives http://neweconomicperspectives.org/2018/02/a-comfortable-betrayal.html#more-11219
This essay was first posted at https://www.realprogressivesusa.com/
Graham Paterson Thank you J D, it is not before time that this message needs to be spread, not only in the US, but on a world- wide basis. I think it was Warren Mosler who said, “Anyone who doesn’t understand the difference between monetary sovereign- ty and monetary non-sovereignty, doesn’t understand economics”. Australia applied it back in 1911 when they created the CBA (Commonwealth Bank of Australia) as the
Government owned people’s bank, largely from the persistence of your US compatriot, King O’Malley, who became an Australian politician. The Bank was effectively destroy- ed in 1923 by the Tory Government of Stanley Bruce, but the Bank got us through WWl without horrendous debt. Ellen Brown has just published and excellent article on China’s financial system, “Why China Is Running Circles Around America”, which is based on China’s control and use of their money system for the betterment of the nation.
Adam Eran Oddly enough, Marcia Angell, former New England Journal of Medicine editor, biochemist Colin Campbell, and Dr. John McDougall have been saying exactly this about the medical profession, too. The toxicity of conventional medicine is rampant.
Steven Hummel You’re exactly right that it borders on criminal that economists and politicians have been so confused and/or complicit with vested interests and private finance to deny/obscure the mechanics of sovereign money. Now all that MMT needs to supercharge the significance of same is to recognize the incredibly powerful effects of tying fiscal and monetary policy directly to the point of retail sale with a discount/rebate scheme. This recognition is not just some data point, it is a summing point and ending point for total costs and so total prices for every consumer product or service including all capital costs. Pair that insight with the fact that both the pricing system and the money system are both digital and a 50% discount
to consumers at that point that is rebated back to the merchant giving it by a monetary authority specifically mandated to do so and you’ve immediately doubled everyone’s potential purchasing power, created the possibility of enterprise to double their sales, eliminated the possibility of price and mortgage asset inflation and done what has been considered impossible, namely the integration of price deflation painlessly and beneficially into profit making systems. This single policy would so stabilize the economy and make for a great employment and investment climate that it would be recogniz- ed as a virtual paradigm change in econom- ics and money systems, and in fact it would dramatize the very expression of the new paradigm of direct and reciprocal monetary gifting.
Editor’s comment Notwithstanding that some social creditors like Steven Hummel can identify with MMT to the extent that they recognize the need for sovereign money and presumably understand the mechanics of its creation, we do not believe that the application of their favourite prescriptions – of the retail discount and the national dividend – would suffice on their own to address what is required for national infrastructure repair and development, environmental repair, sustainable energy systems, affordable education and health care, also affordable housing, and meaningful ongoing work for everyone who desires to have a paid job.
In our view, only targeted fiscal policy can adequately achieve these outcomes.