Warren B speaks at lunch time during an economic conference.
Completely unedited.
Warren Mosler speaks at PK conference, Part I
Warren Mosler speaks at PK conference, Part II
Warren Mosler speaks at PK conference, Part III
Warren Mosler speaks at PK conference, Part IV
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Great presentation for the ELR.
The Argentina decision to discontinue the ELR should be analyzed. It seems there is a strong political contingent against monetary transfers (fiscal grants) to the unemployed. Likely the Argentine experiment failed due to political non-participation (why?) by the unemployed parties that benefited from the policy. Connected political participants resent the ‘easy’ access provided to those that are ‘unwilling’ (unable?) to participate in the political process.
I’ve proposed replacing government ‘grants’ with government ‘loans’. For instance, there is much less political resistance to student loans than there is to student grants. The battle for acceptance of fiscal solvency as a nonissue is an important step for both options.
Past and present financial crises are case studies of the political acceptability of funneling government resources through loans rather than grants.
Point – which is more likely to be achievable?
To find the political support to create government grants to target the unemployed worker?
To find the political support to create government loans to target the unemployed entrepreneur?
Yes, we already have banks to create loans but we also already have government spending to create grants. Neither works very well for the nonpolitical, unemployed.
The theorists can certainly tangle things up a bit! Thank you for making these issues more palatable (and keeping the topic on ‘actionable’).
Excellent videos. Sorry I had to leave before that, but glad I get to see what I missed!
By the way, Tom missed the point. You said very clearly that ELR “with a non-disruptive wage” is what we’re talking about. His SA rising inflation scenario assumed the wage would be set such that agg demand would outpace productive capacity. We’ve always argued that if you set the ELR wage too high you would get inflation–so . . . beyond changing the paradigm, we also need economists to LISTEN more carefully so they don’t misinterpret our proposals.
right, thanks!
Nice. thanks for share.
The video was posted in July 2008, but was that the time that the lunch occurred?
Don’t exactly recall how much before that it was
I read “The 7 Deadly Innocent Frauds” and agree with most of it, even changing some long-held opinions I had on some issues. I hope more people will read it, understand the facts and write to their congressmen about it. But one thing that is not clear to me is how you can control inflation if we begin to have a growing middleclass due to money being accessible to more people. You said by government refusing to pay for anything they buy more than what they paid the previous year the government can stop inflation. But how realistic is it? Do you know any nation that has managed to stop inflation accordingly? What about people walking around with excess money and buying things at any price like the way Japanese began buying US real estate in the 1980s? You mean that will be only temporary and when government begin to stop paying it would trickle down?
yes, it’s not realistic, but it’s a fact none the less and part of the understanding of how a monopoly works.
and also shows how what they try to do is often backwards etc.
also, with medical costs, though a far from perfect example, you saw increases slow as govt price increases slowed.
yes, I realize with govt allowing ‘inflation’ elsewhere it just squeezes providers, etc. but it does show how monopsony pricing works.
yes, spending from savings can cause ‘one time’ price increases as prices reflect relative value.
that’s different from ‘inflation’ as an economist would define it.
@Andrew Weeraratne, Andrew: Remember, when we “…have a growing middleclass due to money being accessible to more people,” as you mentioned, this money is accessible due to the production of REAL goods and services. If the money were simply handed out (via check), rising prices would result due to demand exceeding the current supply level. But, by people working and EARNING new income (by producing real goods and services) the supply is also increasing. Therefore, overall the economy will be expanding on all fronts. More production. More consumption. Prices can be stable.
Kyle, What you are saying make more sense theoretically than anything else that I have heard lately. However, I am not sure this is practically possible under the corrupt system we have. That is possible only in an efficient and an uncorrupted economy. I think nations in Scandinavia are applying something similar to what you are advocating, hence have such strong economies.
I just began reading “The economics of innocent fraud: Truth for our time” by John Kenneth Galbraith. If I remember right, in one of Galbraith’s books, he mentioned that some incidences took place since world began to implement Keynesian (that definitely saved the world from depression) demonstrated Keynesian not having an adequate solution to counter inflation (I could be wrong). Actually I feel it is mostly due to governments implementing only one side of Keynesian formula (the stimulus side) and ignoring the tightening side such as not increasing taxes and cutting down government expenditure even when the times are good (plus government corruption) that cause inflation.
That said, I feel, “T7DIF” has the best package solution of any economic book that I have read to tackle the current global economic crisis. It is a pity that this book and the whole MTM team cannot get the coverage(along with the Nobel Prize) the University of Chicago team got and still getting in our Media, even after their experiment in Chile under a dictatorship—thus with no opposition—failed miserably. No other economic theory got such a carte-blanche to test it out.
Watching our establishment economist on TV has always been painful, but since I read “T7DIF” It has become unbearable to withhold the urge to throw anything I am holding at the TV when they come on. Especially it has become excruciating to watch CNBC peddling budget cuts, except corporate welfare, 24/7. I hope you will organize meetings in universities since only the young generation will be able to change the system. As I have read somewhere, old people won’t change their opinions regardless how facts stack high against their beliefs (almost like religious fanatics). So the only hope is to see them die off paving the way for a new generation to change the system.