E-posten trukaketa Robin McAlpine-rekin

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From: . <josebafelix@outlook.es>
Date: Tue, 5 Jun 2018, 09:02
Subject: Long Live Independent Scotland!
To: Shona McAlpine <shona.mcalpine@>
Cc: anna arque <anna.arque@>

Dear Shona.Here Joseba from the Basque Country, ICEC-Euskal Herria.Segida: Ikus E-posta Eskoziako Shona McAlpine-ri(…)Best regards.Long Live Independent Scotland!josebaPS: Catalonia has similar problems, apart from the big political one with Spain. This is why I’m cc-ing this email to Anna.

oooooo

Nork: Robin McAlpine <robin@>
Bidaltze-data: 2018(e)ko ekainak 14, osteguna 11:08
Nori: josebafelix@outlook.es
Cc: Shona McAlpine
Gaia: Re: Long Live Independent Scotland!

Joseba,

I don’t have a lot of time just now but just to say there are plenty of us who feel not dissimilarly about the currency decision

Robin

oooooo

Nork: . <josebafelix@outlook.es>
Bidaltze-data: 2018(e)ko ekainak 14, osteguna 11:48
Nori: Robin McAlpine
Cc: Shona McAlpine
Gaia: ER: Long Live Independent Scotland!  

Perfect, Robin.

Best.

joseba

Long Live Independent Scotland!

oooooo

Nork: . <josebafelix@outlook.es>
Bidaltze-data: 2018(e)ko ekainak 21, osteguna 08:47
Nori: Robin McAlpine
Cc: Shona McAlpine
Gaia: BB: Long Live Independent Scotland! (and Derek Henry)

Dear Robin,

Here a doubt I have:

Is Derek Henry Scottish?

It seems to me that he knows you…

His view about Scotland is a little bit different from yours.

Here what Derek Henry wrote

(1) In Bill Mitchell’s Timor-Leste – challenges for the new government – Part 2

(http://bilbo.economicoutlook.net/blog/?p=39363#more-39363) —-> comments

Derek Henry says: 

Wednesday, May 16

I had a chat with Robin Macalpine who runs the Common Weal project in Scotland over the weekend.

I gave them Trade and external finance mysteries – Part 1 and 2. Which highlights the errors of their ways.

The feedback was very positive and they are starting to get it and they are going to start publishing more material in support of the job guarentee. With an interest in the combination of a JG and a UBI as discussed within the Mosler – Keen debat. Which is a giant leap forward because in the past they have only ever supported a UBI.

Scotland is obviousley further advanced than Timor-Leste but when setting up a central bank and issuing a new currency there are similarities here.

(2) in Bill Mitchell’s Oh Scotland, don’t you dare! – Part 2:

(http://bilbo.economicoutlook.net/blog/?p=39506

(…)

Derek Henry says: 

Tuesday, June 5, 2018

My biggest concern if Scotland ever became independent is once the correct structure is in place they will hire the wrong people to manage that structure.

For me what is really important is that you need the right people in place that know how to run a central bank in the correct manner. That means not hiring from the usual pool of suspects.

It is imperative that the government of the day get MMT’rs to run the central bank and the treasury otherwise the whole thing will be doomed to fail from the start. Which means they have to hire from the Universities that produce MMT students.

It is very easy to imagine a situation where these institutions get hijacked politically as we’ve seen all over the world by the likes of a Carney or a Draghi. That will not support the nation but vested interests that will be ideologically driven.

This could happen at the start during the interview process or whenever a poltical party gains power and changes the people at the controls.

Something has to be put in place to stop these institutions from being hijacked. Which could be very difficult since the right way to do it is bring the Central bank back under control as a consolidated sector with the Treasury. Which makes the government of the day more accountable and responsible at the ballot box.

How many times have we seen neoliberals hijack these structures for their own needs. Yes, they could be voted out the next time around but the damge they can do can last for decades. It’s a huge problem nearly every country experiences.

I’m nor sure what the answer is for this in the democratic society we have today. When those who control the narrative and the media normally win.

(…)

Derek Henry says: 

Tuesday, June 5, 2018

What the world needs is the online MMT university and MMT universities producing a large pool of people who know how to….

a) Manage a floating exchange rate.

b) Manage a central bank.

c) Manage a Treasury.

d) Experts in the Sectoral balances.

Etc, etc, etc

We need these people coming through now in decent numbers. The next generation of MMT economists that have the skills to take up these roles when asked. Teams of people who know how to run a country.

That can accept the responsibilty and pass down the knowledge to the next generations once the original MMT’rs are enjoying their well deserved retirement.

Which again will be difficult as I would imagine alot of them not getting the chances they deserve and being lured to the bright lights of the city and the big banks.

(…)

Derek Henry says: 

Tuesday, June 5, 2018

Scott,

It’s probably more simple than that. The SNP have no idea how the monetary system operates. That is pretty clear in my opinion. Just from Nicola’s comments alone you can see she simply doesn’t get it.

The people they ask for advice are the usual Oxbridge, Ivy league economists that have been brainwashed in nonsense. The business School, banking set have their finger prints all over it.

They walked into every trap set by the Smith Comission and playing about with taxes was a huge mistake when you don’t control your own currency.

The common Weal are trying and have made huge strides over the last few years. However, we are all just falling short of winning the economic arguement.

This is a step in the right direction and we all just have to keep applying the pressure on the SNP until they get it and start listening to us. We even have certain Scottish MP’s who are now following Stephanie’s twitter feed all of which can only be a good thing.

A change of Paradigm takes time and I think we are seeing the start of that process. Then you see a change at the ballot box.

Take Italy for example. MMt’rs have been camped over there for at least 5 years now and generated huge interest with the MMT summit in Rimini. The Italians now know how to go back to the Lira the correct way and it shows at the ballot box.

These things take time.

Scotland needs a MMT summit similar to what’s what’s been going on in Italy and we just need to keep on applying the pressure.

(3) And here Bill Mitchell himself, in 

Oh Scotland, don’t you dare! – Part 2http://bilbo.economicoutlook.net/blog/?p=39506#comments

(…)

Derek Henry says: 

Tuesday, June 5, 2018

William,

Commercial banks will create the new Scottish Currency from thin air like they always do. Loans create deposits.

The key issue is what you allow the banks to do. That is back to the days of boring bolwer hat banking. You tell the banks what they can do not what they can’t because they always find a way around that.

The beauty of an newly independent nation is you set the rules from the get go. Part of that is you reign in the commercial banks. To do that your new central bank that you’ve created allows them to go bankrupt and there will be no socialising of any losses.
(…)

Derek Henry says: 

Wednesday, June 6, 2018

William,

Bank Lending and Bank Reserves

http://neweconomicperspectives.org/2014/01/bank-lending-bank-reserves.html

bill says: 

Wednesday, June 6, 2018

Dear William and others (at 2018/06/06 at 9:28 am)

Your queries are why the original MMT proponents use the term ‘net financial assets’ instead of ‘money’.

The commercial banks can create ‘money’ (liquidity) by creating loans (credit). But they cannot create new net financial assets because the asset (loan) is offset within the non-government sector by the liability (debtor).

Only transactions between the government and non-government sector can create or destroy net financial assets.

The government is also the monopoly issuer of the currency (notes and coins). The commercial banks can get access to that and distribute it (vault cash) but only by sacrificing bank reserves held at the central bank.

I hope that helps.

best wishes

bill

======o

Have a nice day.

Best wishes.

joseba

Long Live Independent Scotland!

oooooo

Nork: Robin McAlpine <robin@>
Bidaltze-data: 2018(e)ko ekainak 22, ostirala 15:11
Nori: josebafelix@outlook.es
Cc: Shona McAlpine
Gaia: Re: BB: Long Live Independent Scotland! (and Derek Henry)

Yeah, we’re not in ay kind of disagreement with Derek and we’re setting up a public event for Bill Mitchel to do a public lecture in Scotland in October and we’re very sympathetic to the broad MMT line (we’ve been doing quite a bit with Richard Murphy). I think Derek sometimes thinks we’re further behind on this than we actually are, but it’s all in exactly the same area as we are anyway…

Robin

oooooo

Nork: . <josebafelix@outlook.es>
Bidaltze-data: 2018(e)ko ekainak 22, ostirala 18:23
Nori: Robin McAlpine
Cc: Shona McAlpine
Gaia: ER: BB: Long Live Independent Scotland! (and Derek Henry)

OK, Robin.

Nice to know about all that.

Hope you will do your best, of course!

We Basques are with you, as you know.

Best wishes.

joseba

PS: Long Live Independent Scotland!!

Robin McAlpine Bilbon egon da.

Goian ikusi dugunaz hitz egin al da? Zergatik?

Noiz arte horrela?

PS:

Derek Henry eskoziarrak Eskoziaz, Eskoziako independentziaz eta SNP delakoaz aipatzen duena, nik neuk horixe eta askoz gehiago esaten dut Euskal Herriaz, balediko Euskal Herri independenteaz eta hemengo alderdi politiko abertzale eta sindikatu abertzale guztiez.

Hemen ere, hauxe esan behar: The Basque Country needs a MMT summit

Iruzkinak (2)

  • joseba

    Why Scotland should reject the Sterlingisation option and instead create its own currency
    (https://bellacaledonia.org.uk/2018/06/07/why-scotland-should-reject-the-sterlingisation-option-and-instead-create-its-own-currency/)
    By Cameron Archibald
    The Sustainable Growth Commission’s report is out and opens up a platform for healthy debate around Scottish independence. The report argues that Scotland is best to stay within an unofficial currency union with the rest of the UK, also labelled Sterlingisation. This gives Scotland’s monetary sovereignty to the Bank of England, which is effectively controlled by Westminster.
    From the view of a Modern Monetary Theorist this makes very little sense. Therefore I would like to make the case as to why Scotland should reject the Sterlingisation option and instead create its own currency.
    If Scotland were to become a monetary sovereign nation then it cannot go bankrupt in regards to its own currency. How can they when they are the monopoly supplier and own most of their debt? The debt and deficit are irrelevant to the issuer’s ability to service that debt, provided it is denominated in its own currency. For monetary sovereign countries we do not see many investors increasing yields to compensate that specific risk.
    Take the example of Japan. Japan’s debt stands at one quadrillion Yen, yet because it owns most of the debt it has low interest rates, low yields, low inflation, increasing employment and healthy demand for bonds. The ability to control interest rates and the money supply is absolutely vital. It means we can better tackle debt interest payment and control inflation.
    By giving up monetary sovereignty to the rUK post-independence we open ourselves to real bankruptcy and a liquidity crisis. That sort of scenario is what will push investors to increase yields, whilst others may be hesitant to purchase government bonds.
    The Growth Commissions also recommends that Scotland follows the EU’s Growth and Stability Pact, which limits government deficits at 3% of GDP and debt at 50% of GDP. But there is no need to follow this rule, because it is in fact not enforced for non-Euro countries. It is a recommendation. Countries outside the Eurozone who break the pact face little to no backlash. The UK has broken the Growth and Stability Pact numerous times.
    So why limit ourselves to only a 3% deficit spending and 50% debt levels to GDP? The real constraint for a monetary sovereign country is the real economy. We can’t spend beyond our labour or resources, because then we create real inflation.
    What if Scotland has a large trade deficit? If we have a trade deficit above 3% of GDP or supply is greater than demand then we need to have increased levels of government spending to make up for the shortfall. This is to make up for the outflow of our currency or to get consumers spending.
    If we do not have the fiscal flexibility to spend, in order to balance the real economy, then consumers will begin to build up levels of private debt. Individuals cannot own their own debt the same way governments can. Increasing private debt leads to recessions.
    If an independent Scotland does not have an independent central bank then it will struggle to join the EU, which is made clear in Chapter 17 of the Aquis Communinitaire. For new EU members it states “economic and monetary policy contains specific rules requiring the independence of central banks in Member States”. Sterlingisation also means we cannot use monetary levers for price stability, since we are not a monetary sovereign country. Scotland could ask the BoE to negotiate on our behalf. But the BoE is essentially owned by the UK Government. The UK is just leaving the EU. This lacks credibility ane makes joining the EU politically tricky.
    But Scotland have its own central bank with a floating exchange rate, as suggested by Nobel Prize winning economist Joseph Stiglitz. The fluctuations within the UK economy can be damaging to Scotland, but floating our currency will reflect our productivity and domestic costs, whilst giving us the central bank we need.
    Many point out that mortgages/liabilities are held in sterling, therefore Sterlingisation makes more sense. But legislation is already in place to deal with these difficulties, such as the EU Mortgage Credit Directive. Under this legislation mortgage lenders would have to offer mechanisms to protect borrowers against exchange rate risk up to (and including) giving them the right to redenominate a foreign currency mortgage into the currency of their country of residence or of their income.
    The EU Mortgage Credit Directive is baked into UK law, and would presumably be carried into Scots Law. Scottish residents would have the right to have their mortgages converted into the new currency for an independent Scotland or some other forex risk protection would be applied.
    The Growth Commission puts forward the question “Would a separate currency meet the on-going needs of Scottish residents and businesses for stability and continuity of their financial arrangements and command wide support?”
    The answer is yes.
    Various forms of tax, that need to be paid in a new currency, create demand as businesses and households must accumulate the new currency. You can also use a Job Guarantee programme to maximise idle resources and labour, increasing our productivity and the value of the economy.
    What about foreign exchange reserves? This really depends on how large we want out reserves to be. If we want to copy the UK at around 5% of GDP then we could take our fair share of the UK’s foreign reserves (£11-14bn). That covers the £10bn cost. Unionists would struggle to complain; after all they do see Scotland as a mini-UK, right? (…)
    If we wish to move away from the UK neoliberal paradigm, with increasing levels of private debt within a credit bubble, then certainly there is an even greater case for Scotland to be a monetary sovereign country.

  • joseba

    Won’t Scotland be just like Zimbabwe?
    (https://bellacaledonia.org.uk/2018/06/15/wont-scotland-be-just-like-zimbabwe/)
    By Cameron Archibald
    Last week on Bella I argued that Scotland should reject the Sterlingisation model and instead opt for its own currency (‘Why Scotland should reject the Sterlingisation option and instead create its own currency’). Most of the feedback was positive, but unsurprisingly there came a fair amount of criticism. Some of the critics included economist Richard Marsh from 4 Consulting, Sam Taylor from These Islands and even good old Blair McDougall. I welcome most of these comments, despite some of the more patronising remarks. So this response is not for hardcore unionists, but instead for those undecided who read their responses and take it as the truth.
    1) Won’t Scotland just be like Zimbabwe?
    No. There is a myth that the reason hyperinflation occurred in Zimbabwe was because the country started printing money. The printing of money alone does not cause inflation, it is when a government attempts to spend beyond the real economy (labour and resources) it becomes a problem. Any suggestion that money in isolation is inflationary is incorrect. Are we seriously lead to believe Zimbabwe was fine until one day it just decided to print money and everything went to hell?
    In Zimbabwe hyperinflation preceded printing money. The reason hyperinflation occurred was due to over 70% of its farming productive capacity collapsing. When demand for food remains high but supply has collapsed the end result is, you guessed it, hyperinflation. If you wish to read more on the issues faced by Zimbabwe then you can read the work of economist Professor Bill Mitchell by clicking here. The Cato Institute have also done their own analysis on the causes of hyperinflation. They looked at every single case of hyperinflation in recorded history and found it mostly occurs from “under extreme conditions: war, political mismanagement, and the transition from a command to market-based economy.” You can read their full report by clicking here. 
    2) Are you seriously saying Scotland could never go bankrupt? 
    No, I never stated that in my original article. I stated that Scotland cannot go bankrupt “in regards to its own currency.” An independent Scotland could still go bankrupt if it borrowed in a foreign currency and built up too much foreign debt. That’s a risk all countries could face. But Scotland cannot go bankrupt with its own currency, because we essentially have an infinite amount to supply.
    Many people are frightened by such an idea. Yet it is a simple fact. I am not saying we can simply spend an infinite amount of money without consequence. In my original article I stated we cannot spend beyond our labour and resources. But a monetary sovereign government can always make their payments, spending is not operationally constrained by revenues
    3) You can’t use Japan as an example because they are unique and also have lots of problems. 
    In my original article I used Japan as an example of a country that owns most of its debt, another benefit of being a monetary sovereign country. Criticism was raised by both Sam Taylor and Richard Marsh, but both lack a deeper understanding on how the Japanese economy works.
    Richard Marsh argued “The debt is not a significant problem at the moment due to low interest rates. The government can gobble up its own debt as the risk of pushing up inflation isn’t as fierce (now) because of persistent deflation. Not the case with Scotland.” That makes no sense. What does he mean by “get away with” when Japan control their own interest rates? Because the Japanese government control interest rates in the short term they effectively control them in the long term. The government have kept interest rates low as a deliberate export strategy to suppress the currency and remain competitive. Does Richard honestly believe that one day Japan will wake up and suddenly inflation is magically going to be 50%? Of course not. The ability to control interest rates is another reason why it is important to be a monetary sovereign country.
    Sam Taylor argued that Scotland should not be exactly like Japan because GDP has fallen and wages have stagnated. Which is true, but such a criticism is irrelevant. I’m not arguing Scotland should be exactly like Japan and the issues raised were not caused by Japan owning most of their debt. The reason Japan has suffered from falling GDP is due to brain drain, companies moving manufacturing overseas and an aging population. For example by 2020 Japan will be losing 600,000 a year. These are challenges faced by the Japanese economy, but ones not created by the point I raised.
    Taylor went on to argue “The structure of Japan’s economy is radically different to Scotland. The same goes for demographics and culture.” This is actually a counter argument to his original point. For example the main reason Japanese wages are stagnating is due to unions refusing significant pay rises, not because the economy is doing poorly. Most workers prefer to negotiate more preferable working conditions like lower work hours and holidays rather than nominal raises. Japan is very much a collectivist culture that would seek prosperity for society over individualist thinking.Taylor should also not be so quick to dismiss Japan’s economy. Their investment spending is growing. There is growing contributions to growth. Consumer and business confidence is rising. Real wages are growing steadily. GDP per head is also growing. Japan’s billionaires only own 3% of the total wealth. The reality is, despite the many challenges they face, Japan is doing well. You can read more on Japanese data by clicking here.
    4) You can’t name other examples of countries that managed high deficits, and if you can it doesn’t count because it was under the Bretton Woods system.
    I faced further criticism from Sam Taylor when I cited the UK and US as countries that successfully managed high deficits post-WW2 (for example the US ran deficits of up to 27% of GDP during the war). He argued “You’re just embarrassing yourself now. Post WW2 USA and UK were operating under the Bretton Woods system, which is the complete antithesis of MMT. To claim that period is an example of the successful application of MMT is laughable.”
    Let’s help Sam out here. First, Bretton Woods was essentially a dollar standard. Gold constraint was not binding at the time. We suspended domestic conversion in 1933, which actually saw large gold inflows from other countries buying weapons and war machines from the US. So this was much less of an issue. Secondly, there is a difference between a fiscal constraint and a limiting factor at any given moment. On a gold standard, the government has to take steps to protect its gold supply. But if the gold supply is not currently in serious danger then the government has more flexibility than usual. Look at China today: they fix to the dollar but they have accumulated an enormous amount of dollars. Is anybody seriously thinking they are on the verge of running out? They can run larger deficits than they might otherwise be able to. Sam is wrong to view it like a light switch from fixed exchange rate to floating. It’s a spectrum. You can read more on the Bretton Woods system by clicking here.
    5) What about the fiscal transfer? Doesn’t Scotland need to find the money to cover it if we become independent?
    It’s an odd critique, because it would seem obvious why this isn’t a major issue with MMT. If we are using our own currency then why “find money”? You don’t need to raise taxes to raise revenue, tax can primarily be used to tackle inflation. In the case of an independent Scotland the question “Where would Scotland, that has monetary sovereign government, get the money from?” is a lazy one. What we should be asking ourselves is “Does Scotland have the labour and resources to maintain decent deficit spending?” If there are not enough workers, factories, cars, clothes, food, fuel and so on, then the money is junk. Yet if we do have those things, and they are not being used, then the money needed to put them to work can always be created.
    I welcome the criticism that has come my way. It has allowed me to write more on my position as a Modern Monetary Theory and also have a better understanding of the worries people may have. Yet one can see why hardcore unionists hate the MMT argument. When you suddenly turn the deficit argument upside down it creates a positive case for independence.

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