Another hat in the ring? Financial analyst Warren Mosler considers U.S. Senate run
By Daniela Altimari
Feb. 26 — Mosler, a Manchester native who holds an economics degree from UConn, is currently living in the U.S. Virgin Islands. But he intends to return to Connecticut tomorrow, to start a “listening tour” as he weighs a run for the seat currently held by Chris Dodd, who is retiring.
Mosler says he was planning to run for president in 2012 but has been prodded by people in Connecticut to enter the senate race. If he runs, he’ll do it as a Democrat — joining a field that already includes Attorney General Richard Blumenthal and Mystic businessman Merrick Alpert.
“It looks more than intriguing,” Mosler said. “If it makes sense, I’ll announce…I have a specific agenda for economic development I’m pushing.”
He says he’s motivated by his conscience, adding “I know I can turn the U.S. economy around in 90 days.”
Mosler’s agenda includes three main proposals: a full payroll tax holiday, a $500 per-capita distribution from the federal government to each state and a federal jobs program that would provide an $8-an-hour position to any unemployed person willing to work. (That’s the thumbnail version of his platform. More details can be found on his website.)
Mosler, 60, grew up in Manchester in the 1950s and ’60s and worked in Hartford before leaving for a job on Wall Street. He started his own hedge fund in 1982 and turned most of it over to partners in the late 1990s. He is currently on a government-sponsored project to promote economic development in the U.S. Virgin Islands.
According to his website, Mosler recently spoke to tea party activists in Dallas. That’s not normally a place you’d expect to find a Democratic office-seeker, but he says many of his views are in line with tea party values.
“I look at the tea party and I see a lot of concerned citizens who are unhappy, who believe the government has supported the elites,” he said. “They see their tax money going to AIG and the banks while they’re getting squeezed.”
If he runs, Mosler will pour some of his own money into his campaign but he won’t exclusively self-fund. He said he views campaign contributions as a measure of support. “Broad-based support is important,” he said. “I’m not talking to hear myself talk.”
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Warren,
i would support you if you ran, but i have two suggestions:
1) run as an independent; winning the dem primary will be harder than winning the general election as an independent; of course, if you’re planning to take two bites at the apple (a strategy that works in CT apparently), be my guest;
2) please don’t say that you can turn the US economy around in 90 days; whether or not it’s true (and i think it wouldn’t be true even if you were the president, which you won’t be until Jan 20, 2013 at the earliest), it makes you sound like a nut.
Hi Warren,
I stand ready here in Cheshire CT to help you in any way. I started a new job last fall and have slowly indoctrinated my new fellow employees to our economic theory (what Bill Mitchel calls MMT). Most are starting to get it but it takes time. Every time the subject of economics comes up I expose the errors in their mainstream beliefs. So the earlier we get started with the general public the better. Let me know what and when you need assistance.
At present Blumenthal is polling well ahead of any of the Republicans. Whether you are successful or not all you will do is hand the election to a Republican. The Democrats already have a very big problem with being seen as the Big Brother government party. Your current description of the monetary system is very much an authoritarian model and does not bode well for current electoral politics. People want the banks to create the money because they see that as free enterprise. But they also want the banks to be better controlled. I see it as a problem of broken government. There is no reason why a representative government cannot control money and its creation/value. But that is not what we have. We have a disaster for a government.
Who are the nuts here. People want banks to create money because they see that as free enterprise? Where have you been lately. People see banker at about the level they see drug dealers and probably below where they see Mafiosos.
Oh, and never mind what actually works. Warren is the only person in the field saying this.
Of course, if we are to continue having a dual monetary system where both the government and banks create money, then we need banking reform. Warren has already put proposals for this out there. Have you read them? Some people are saying that it is impossible to reform private banking because they will just get around regulation, so the US government should the sole creator of money. Warren is not one of them.
Re: “…it makes you sound like a nut.”
How true. And it shows a certain lack of judgment on Mosler’s part not to realize this. He may be a good investor and economist, that does not add-up to being a statesman or effective politician.
first, i welcome the support and will be back to you as soon as I’m better organized, probably after I come back from manila on mar 7
second, i’m running as a matter of conscience which means i won’t be breaking ‘lerner’s law,’ regardless of the consequences.
Hi Warren,
I noticed you avoid using the term ‘debt’ when talking about your economic policies in public. This seems like a very good choice given the negative connotation of the word and the inapplicability of the concept for the currency issuer. I think MMT has some serious framing hurdles to pass for it to challenge conventional wisdom on a broad scale. I’m sure you are aware of this problem, your careful wording is proof of that, but I thought I’d raise the issue for all here to think about. Maybe MMT needs to become more aggressive and create some new terms to describe what’s going on instead of only circumventing the issues by using common analogies (such as TSYs being akin to a savings account at the Fed)? How about ‘saving subsidies’ or ‘retention privileges’ instead of debt (I’m improvising here)? Just my 2 NFAs…
More on the subject of framing by George Lakoff:
http://fora.tv/2009/08/03/Politics_of_Language_George_Lakoff
Anyway, I wish you the best of luck on your State and Federal quests! I’m counting on you even if I can’t vote for you.
Regards from Switzerland, Oliver
I see Tom Hickey beat me to the Lakoff reference in the David Walker thread coments. Apologies…
Oliver, thanks for the FORA.tv link to the Lakoff talk. I hadn’t seen that.
I completely agree that the entire framing has to be shifted. Right now, the prevailing universe of political/economic discourse is based on the frame of the false household-government budgetary analogy. The false analogy works both rationally and emotionally because dissimilar concepts are framed using the same terms, and this conflation creates confusion that leads to the perpetuation of costly ignorance.
The only way to shift public perspective effectively is to change the terminology in order to make it reflect operational reality. Warren and the other MMT’ers have done yeoman’s work in demonstrating the operational reality. The next step is crafting operational definitions and suitable terminology to express it. which the public can understand and relate to in terms of metaphors based on their experience.
It is a mistake to think that the public needs to be educated about operational reality without taking into consideration the brain functioning involved in the public’s thinking about financial matters in terms of familiar memes. Those memes are the real target, otherwise the effort to educate the public is going to come across as an exercise in wonkiness and just get lost.
Political genius involves taking complex concepts and reducing them to simple slogans (memes) that construct a new way of viewing a situation in terms of a different framework (memeplex). The way to undermine the false household-government budgetary analogy is to replace it with more suitable metaphors.
The reduce-taxes, shrink-government, trickle-down (distribute upward) conservative memeplex has been discredited by the crisis, but it has not yet been replaced by a credible alternative. Democrats are still working within that frame and their rationales come across as wonky compromises with in it.
A new vision for America and the world is required, and it has to be something that people can both understand and empathize with. To be both credible and practical it must be based on an operationally sound economic model and policy derived from it. This is the task before us, and with the challenges the US and world are facing, time is of the essence.
In his speeches, Warren would do well to “appeal to authority” by citing historical figures that had similar (or compatible) economic views. Generally politicians only quote from people that everyone in a general audience would have heard of… typically that means Shakespeare, Lincoln or Churchill. Not sure about Churchill’s monetary views (other than he later regretted his foolish return to the gold standard). Lincoln of course created the Greenbacks, but there are so many bogus Lincoln quotes on the internet (and even in books) I’d tread lightly. As for Shakespeare, he wrote so much, you can find a line to suit any possible opinion, but nothing really on point, the closest I can think of is :
Profitless usurer, why dost thou use
So great a sum of sums yet cannot live?
For having traffic with thyself alone,
Thou of thyself thy sweet self doth deceive.
Then how when Nature calls thee to be gone,
What acceptable audit canst thou leave?
http://reason.com/archives/1997/03/01/the-merchant-of-avon/print
One quote (an entire speech really) that stands out in my memory is Thomas Edison talking in 1921 about the pointlessness of the government creating debt when it can simply create money (its a legit quote, I’ve linked to a NY Times account, “Ford Sees Wealth In Muscle Shoals”).
http://query.nytimes.com/mem/archive-free/pdf?_r=4&res=9C04E0D7103EEE3ABC4E53DFB467838A639EDE
“That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.
“Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
“But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent, whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.
” … if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscles Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.
“It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious values of gold.
“Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
Mr Mosler,
I have learned a great deal about economic reality through your posts. The fundamentals of debit / credit balance sheet transactions as it relates to taxation and budget balancing was a enlightening concept for me. Your years of real world experience, having been through a number of financial cycles and the best of intentions in trying something new to get unemployment back to reasonable levels makes you an excellent candidate for Senator Chris Dodd’s seat. I hope that one day soon you will be involved directly in influencing policy to create economic prosperity through short term increased spending and decreased taxation. Please let me know if there is anything I can do to help with your campaign.
Andrew ODell