To Refurbish Modern Monetary Theory (MMT), One Must Admit That Lockdowns Were Indeed Harmful On Balance

Modern Monetary Theory (MMT) has been taking quite a drubbing lately.  Some say it has been thoroughly discredited since it was de facto practiced (to an extent) during the pandemic, and massive inflation resulted.  But that glib commentary misses the real root cause of the inflation:  the shortages of goods, services, and labor resulting from the massive global supply chain disruptions, which in turn resulted from the lockdowns and related restrictions. 

(And it's not entirely due to ignorance, since those naysayers actually DO admit as much about the lockdowns, but yet they still speciously put most, if not all, of the blame on MMT, because reasons.)

MMT per se was never the problem.  But to refurbish it, one must admit that lockdowns and related restrictions did very real harm, something that the pseudo-left is loath to do.  Not that MMT is flawless, by any means.  But Rodger Malcolm Mitchell's related theory, Monetary Sovereignty (MS), essentially fixes those flaws, especially when he (belatedly) jettisoned the specious idea of interest rate hikes (which only deepened the stagflationary quagmire) as an inflation-fighting tool.  A good essay about the differences between the two can be found here.

In a nutshell, when you literally shut down the broader economy in most of the world for an extended period of time (which greatly disrupts and shrinks supply), AND then try to paper over it by printing unprecedented amounts of money (which stokes demand), that WILL be inflationary.  But the money printing was NOT the root cause, and remember that if the powers that be didn't do that, there would have been a full-blown depression, if not a complete collapse of civilization as we knew it, and within a couple weeks the masses would have been furiously calling for their heads with torches and pitchforks.  Or, they could have simply adopted the "flu strategy" and NOT imposed any restrictions, and perhaps implemented a more modest (but more brief and front-loaded) stimulus package, and this whole stagflationary quagmire could have been avoided.  And as the experience of Sweden and other countries has famously shown, it would not have resulted in any more excess deaths than occurred with lockdowns.  Hindsight is quite literally 2020.

It's not that lunch cannot ever be free.  It actually can be, at least to a point.  But truly lockdowns can never be a free lunch, no matter how much money gets printed to paper over the massive holes they make.

As for the specious notion that MMT (and by extension, MS) is a "luxury belief", well, we know that the real luxury beliefs are austerity and artificial scarcity.  Not to mention lockdowns as well.

This November's Election Is For All The Marbles

With President Biden officially dropping out of the 2024 presidential race, and VP Kamala Harris the most likely candidate in his place, the 2024 election just got that much more interesting.  This is of course right on the heels of the recent (and mysterious) assassination attempt on Trump (which we condemn, of course), which has apparently elevated him to "martyr" status among his cult-like base.  

Make no mistake, this election is for ALL the marbles.  And not just because the Donald has lost his marbles (he lost them long ago), but because the stakes are even higher still this time around.  A vote for Trump (or a vote for any third party candidate, or not voting at all) is effectively a vote for Project 2025, the latest Republican agenda, which would lead America into Margaret Atwood's worst nightmare.  What they are proposing is downright horrifying to say the least!  And it is also a vote for the Trump-Putin-Xi-Kim Axis of Evil as well.  Some may say that this election is essentially a choice between World War III and Civil War 2.0, but we think that Trump winning would make it that much more likely that we will get the two-for-one special, barring a miracle of miracles.

And to those who say that their vote doesn't count because it is rigged and the outcome is predetermined, keep in mind that such a thing really only happens when the election is close, and it becomes that much HARDER to cheat when the election is not close.  We still haven't gone so far down the rabbit hole of kleptocracy that we have full banana republic sham elections--YET.  (Though if Trump wins, he could very easily make that the case in the future.)  And if everyone who was eligible to vote actually voted, Trump (and the Republicans in general) really wouldn't stand a chance.

The lesson that should have been learned in 2016:  if you make the perfect the enemy of the good, we ultimately end up with neither. Seriously. 

P.S.  To all of the young(-ish) Trump supporting men out there who are still smug about Project 2025 because of your gender, race, etc., read the fine print.  One of the things on the agenda is to bring back the military draft.  Seriously.  That means YOU too.  So maybe you might want to reconsider which candidate, and party, you are willing to support.  And to all of the Serena Joy-esque self-hating misogynists out there, who think they personally will be spared, well, remember what ultimately happens to Serena in Atwood's novel.  Don't say you haven't been warned!

Like the song "Freewill" by Rush goes, "if you choose not to decide, you still have made a choice."

Reclaim The 4th!

As John Pavlovitz notes, it is no secret that today, the Fourth of July, has become a high holy day for the MAGA movement and fascists in general.  And that truly is a shame.  They have, essentially, culturally appropriated and turned thoroughly inside-out such an otherwise wonderful holiday celebrating our nation's hard-won independence from the British Empire, and the ideals of liberty and justice for all.  

Thus we must NEVER let them have exclusive use of this day, as that is dangerous.  Instead, we must reclaim it from the fascists, lest we let them win.

So what are we waiting for?  Happy Birthday America!  And hopefully many, many more!

Hey FERAL Reserve, Cut Interest Rates NOW!

The FERAL Reserve still has yet to cut interest rates, and despite the Dow Jones recently hitting 40,000, the risk of recession is apparently growing by the day.  And after falling dramatically from its 2022 peak of 9% once the pandemic-induced (more like lockdown-induced) supply chain issues and shortages got resolved, inflation currently remains stubbornly stuck in the neighborhood of 3%.  Because Jerome Powell is too stubborn to cut rates, thus keeping us trapped in a quagmire.  Hello, stagflation!

A recession is probably already baked into the cake at this point, and thus is probably too late to avoid entirely.  Granted.  But the Fed can still at least delay the onset, reduce the length and severity, and promote a speedier recovery IF they would deign to cut rates yesterday.  And even just delaying the onset by a quarter or two would likely postpone it until after the November election, reducing the odds that the Donald would win again. 

Flag Day

Just pointing out that today is Flag Day. But this blog looks no different today because we display the Stars and Stripes every day.

To all the ignorant fools who burn it, remember what it is that you're really burning, and all those that fought and died for it. Those who consider themselves to be on the political left would be better served by "taking back the Flag" and waving it proudly, so it is NOT perverted into an ultra-right-wing symbol by the fascists.  Make it clear that the government policies you oppose are NOT in the national interest. And let everyone know that you can just as strongly love this country as you dislike its government. In fact, plenty of true patriots often do feel that way.

The Flag is not Republican, Democrat, liberal, conservative, or belonging to any other faction. It is the American Flag, and it belongs to all of us. 

LIVE FREE OR DIE!

Trump Is Guilty As Charged

It's official, Trump is GUILTY as charged.  On May 30, 2024, he was found guilty on all 34 counts in the hush-money trial.  That means he is now literally a convicted felon, and the first president in US history, current or former, to have ever been convicted of a felony.  That is, as he would say, "unpresidented".  He will be sentenced on July 11, and can face up to four years in prison, and also have to pay up to $5000 per count, if the judge (hopefully!) decides to give him the maximum sentence.  That's, as he would say YUUUUUGE!  Also, as he would say, Sad!

Of course, his die-hard supporters will see him as a martyr.  LOL.  But hopefully, even if he ends up avoiding prison and somehow still remains on the 2024 ballot, enough of the fence-sitters will be swayed to guarantee that he will lose the election, bigly.  

Believe me.

A Better Than Nordic-Style Social Welfare State With Less Than ALASKA Taxes

A friendly reminder to all readers:  contrary to popular opinion, it is entirely possible to have a better than Nordic-style social welfare state with less than Florida Alaska taxes.  Why?  (You really may want to sit down before reading any further.)

Because federal taxes do NOT fund federal spending, that's why!  Not the individual income tax, not the corporate income tax, not FICA, not the various excises, duties, and tariffs, not estate or gift taxes, nor any other federal tax for that matter.  It is all a Big Lie illusion to prop up the oligarchy, especially the big banks, via artificial scarcity of dollars.  As Rodger Malcolm Mitchell famously notes, and echoed by Dr. Joseph M. Firestone, the federal government is Monetarily Sovereign, that is, being the issuer of it's own currency, it by definition has infinite money.  Any money they receive, through taxes or otherwise, is effectively like bringing coals to Newcastle, in that it disappears into infinity (thus de facto destroyed).  And whenever they spend money on anything, they create each dollar on an ad hoc basis to pay as they go.  

Switching to what Dr. Firestone calls "Overt Congressional Financing (OCF)" is LONG overdue.  On August 15, 1971, the gold standard effectively ended for good, but the method of Congressional financing remains more or less stuck in the past.

Meanwhile, the so-called "National Debt" (TM) is also an illusion, in that it consists of Treasury securities that are only spuriously linked to federal spending due to arcane and archaic rules left over from the now-defunct gold standard that ended over half a century ago.  Each T-security is effectively equivalent to a CD savings account for those who choose to invest in them.  Additionally, the idea that money can only be created with interest or other "strings" attached to it is yet another part of the Big Lie as well.

(It could literally be paid off in one fell swoop at zero cost to anyone, in fact.  And it's technically not even "borrowing" at all.  Infinite money, remember?)

Ditto for the Social Security, Medicare, and other federal "trust funds", which are literally nothing more than accounting gimmicks based on artificial scarcity.  They could fund all of that and more by simply creating the money on an ad hoc basis.

As for inflation, that is generally caused by shortages of goods and services, NOT by printing too much money.  It is ultimately a supply-side problem that requires supply-side solutions, including (counterintuitively) more federal spending targeted to incentivize more production of scarce goods and services.  Thus, rationing dollars via austerity measures and/or raising interest rates to fight inflation and/or recession is like applying leeches to cure anemia.  It is a fundamental category mistake that does far more harm than good on balance.

Of course, the oligarchs want to condition We the People to accept mere crumbs from the tables of the rich.  That way they can keep widening the yawning gap between the haves and have-nots, givng the oligarchs more power to lord it over us all.

Bottom line: all of these gimmicks are completely artificial, contrived, and designed to deceive us all.  The ONLY purposes of taxes in a Monetarily Sovereign government that issues it's own currency (like the federal government, but not (yet) state and local governments) are 1) to control and regulate the economy by encouraging or discouraging various behaviors and activities, 2) to (crudely) fight inflation, 3) to create demand for the currency, and 4) to prop up and give credence to the Big Lie.  But the supposed need to raise revenue is NOT one of them at all.

Thus, with the stroke of a pen, Congress can very easily square the circle of a better than Nordic-style social welfare state with less than Alaska taxes, complete with a national version of the Alaska Permanent Fund.  They gave the FERAL Reserve its power in 1913, and they can just as easily take it away today if they chose to.  But of course, their oligarch masters would NOT want that at all!  Most Congresscritters save for a tiny few, are of course bought and paid for by the big money interests.  Thus, we need to throw the bums out, yesterday!

So what are we waiting for? PAGING DR. FIRESTONE!  NEEDED IN WASHINGTON, DC, STAT!