Warren Mosler: interes-tasa politikak ez du funtzionatzen

Interest-Rate Policy Is Backward, Modern Monetary Theory Pioneer Mosler Says

(https://www.bloomberg.com/news/videos/2019-05-28/interest-rate-policy-is-backward-modern-monetary-theory-pioneer-mosler-says-video)

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May 28th, 2019

Modern monetary theory pioneer Warren Mosler, author of “The Seven Deadly Innocent Frauds of Economic Policy,” discusses the debate over modern monetary theory with Bloomberg’s Joe Weisenthal and Romaine Bostick on “Bloomberg Markets: What’d You Miss?” (Source: Bloomberg)

Transcript

• 00:06 MODERN MONETARY THEORY IS HAVING A MOMENT, SPARKING DEBATE
• 00:10 ON THE IDEA. HERE IS WHAT — THE IETF.
• 00:15 HERE IS WHAT CRITICS HAVE SAID.
• 00:16 >> THE IDEA THAT DEFICITS DON’T MATTER IN THEIR OWN CURRENCY IS
• 00:21 WRONG.
• 00:22 >> YOU HAVE TO SHUT DOWN FOREIGN-EXCHANGE MARKETS.
• 00:26 HOW DO YOU? PEOPLE WILL BE TRYING TO FLY OUT
• 00:30 OF THE CURRENCY.
• 00:31 >> MONETARY THEORY WILL TAKE CARE OF THIS PROBLEM.
• 00:35 >> IT IS GARBAGE.
• 00:37 >> IF YOU CAN CREATE MONEY , VINCE OF HUAWEI AND ARGENTINA
• 00:43 WOULD BE THE BEST IN THE WORLD. WE WANT A STABLE SYSTEM, LOWER
• 00:48 TAXES, FREE TRADE, LESS REGULATION AND WANT TO NOT
• 00:52 HINDER BUSINESS IS SO THEY CAN GROW.
• 00:53 CAN YOU IMAGINE THE IDEA WE KEEP PRINTING MONEY AND SOMEHOW THAT
• 00:59 WILL CREATE GROWTH? THE FACT THAT PEOPLE ARE TAKING
• 01:03 IT SERIOUS IS DISTURBING. JOE: JOINING US WITH THE
• 01:10 OTHER SIDE OF THE DEBATE, A MODERN
• 01:11 MONETARY THEORY PIONEER, AUTHOR OF THE SEVEN DEADLY FRAUDS.
• 01:16 ONE OF THE FOUNDERS. NOT GOING TO ASK YOU WHAT YOU
• 01:22 THINK OF BECAUSE I KNOW YOU DISAGREE BUT I AM CURIOUS
• 01:26 BECAUSE YOU HAVE BEEN PROMOTING THIS IDEA OF A RETHINKING OF HOW
• 01:28 WE THINK OF DEFICITS OVER 20 YEARS.
• 01:32 HOW STRIKING IS IT THAT AT THIS MOMENT EVERYONE FEELS THEY NEED
• 01:34 TO OPINE ON IT AND FILE ON? — PILE ON?
• 01:40 >> I SEE A STATUTE OF HONOR, UP TO 24 HOURS — 25 YEARS, AND THE
• 01:46 FORCE OF LOGIC HAS GOT IT WHERE IT IS.
• 01:49 ROMAINE: I UNDERSTAND WHY PEOPLE ARE TALKING ABOUT IT.
• 01:55 IS IT SOMETHING YOU THINK COULD BE IMPLEMENTED ON A REAL LEVEL?
• 01:58 >> IT IS NOT SOMETHING YOU IMPLEMENT.
• 02:03 WHEN YOU UNDERSTAND HOW MONETARY SITUATIONS WORK, YOU HAVE
• 02:08 DIFFERENT POLICY OPTIONS. THEY ARE NOT OFF THE LIST.
• 02:13 THAT IS WHAT IS HAPPENING. THEY ARE REALIZING POLICY
• 02:15 OPTIONS ARE THERE. JOE: I AM CURIOUS ABOUT THIS
• 02:21 BECAUSE THE IDEA OF IMPLEMENTING, I THINK WHEN
• 02:22 PEOPLE HEAR
• 02:23 MMT THERE IS A DESCRIPTION. THIS IS HOW IT WORKS IN A
• 02:29 COUNTRY THAT HAS ITS OWN CURRENCY.
• 02:32 THEN THERE IS THE PRESCRIPTION AND THAT INCLUDES A JOB
• 02:37 GUARANTEE AND THESE DAYS A LOT OF THE ADVOCATES ARE PUSHING FOR
• 02:41 A GREEN NEW DEAL. ARE THEY SEPARABLE? DOES MMT
• 02:44 JUST REFER TO THE DESCRIPTION OR HAVE TO ENCOMPASS
• 02:48 ALL OF IT?
• 02:49 >> ALL OF IT.
• 02:55 STEPHEN: YOU SAY IT IS JUST A PRESCRIPTION BUT IT ALSO SHOWS
• 02:58 YOU A BASE CASE FOR NOW. WHEN YOU ARE AT THAT, YOU CAN
• 03:00 MAKE CHANGES. YOU HAVE TO HAVE A BASE CASE.
• 03:02 WHEN IT BECOMES OBVIOUS IS WHEN YOU UNDERSTAND THE MONETARY
• 03:07 SYSTEM AND WHAT IS CALLED THE TRANSITION JOB, A BASE CASE FOR
• 03:13 ANALYSIS WHICH YOU CAN THEN CHANGE IF YOU WISH, DO IT OR
• 03:16 NOT. ROMAINE: IF YOU WERE TO GO DOWN
• 03:18 THIS ROAD, YOU ARE KIND OF SHIFTING SOME OF THE
• 03:23 RESPONSIBILITY FOR MANAGEMENT OF THE ECONOMY AWAY FROM THE
• 03:25 CENTRAL BANK AND MORE TOWARDS THE LEGISLATURES ORDERED
• 03:33 — OR THE FISCAL POLICY. WARREN: INTEREST RATE POLICY IS
• 03:40 BACKWARDS. HIGHER RATES ARE ACTUALLY
• 03:41 EXPANSIONARY AND INFLATIONARY. LOWER RATES —
• 03:44 THE GOVERNMENT IS A NET PAYER INTERESTED IN THE ECONOMY.
• 03:49 IF YOU START OFF WITH A ZERO RATE LESSEE LIKE IN JAPAN AND
• 03:51 YOU RAISE RATES IT IS LIKE BASIC INCOME FOR PEOPLE WHO ALREADY
• 03:54 HAVE MONEY. I HAVE HEARD A LOT OF ARGUMENTS
• 03:58 ON BASIC INCOME BUT I HAVE NEVER HEARD IT DESCRIBED TO PEOPLE WHO
• 04:03 ALREADY HAVE MONEY. E-GOVERNMENT IS A LARGE NET
• 04:06 PAYER OF INTERESTS. WHEN THE RATES CAME DOWN AFTER
• 04:10 2008, THE AMOUNT OF INTEREST EXPENSE THAT WAS CUT WAS $400
• 04:14 BILLION¹ A YEAR. JOE: I THINK A LOT OF THE MMT
• 04:24 PEOPLE WERE CRITICAL OF QE. THEY HAD IT SIPHONING OFF
• 04:26 INTEREST RATE, INTEREST PAYMENTS TO THE PRIVATE SECTOR WHERE IT
• 04:30 WAS HELPFUL TO ESSENTIALLY A QUASI-ARM OF THE GOVERNMENT.
• 04:34 WARREN: THE FIRST TIME I WAS CRITICAL WAS IN 1997.
• 04:37 THESE PEOPLE WERE GOING TO POINT OUT WHY IT WAS NOT GOING TO
• 04:43 WORK. AND THERE WERE PEOPLE FROM THE
• 04:46 BANK OF ENGLAND AND EVERYONE AGREED.
• 04:48 IT IS DIFFERENT NOW BECAUSE WE HAVE HAD 30 YEARS OF SEEING IT
• 04:52 DOESN’T WORK. WE HAVE HAD 10 YEARS OF SEEING
• 04:53 IT IN EUROPE AND HERE. IT HAS GOTTEN MORE ATTENTION
• 04:59 BECAUSE IT HAS BECOME OBVIOUS INTEREST RATE POLICY DOESN’T
• 05:01 WORK. THEY ARE SAYING OUR MODELS ARE
• 05:05 BROKEN, FORECASTS AREN’T HAPPENING, WE NEED TO LOOK AT
• 05:08 MONETARY POLICY AND LEAVING OUT THE INTEREST CHANNEL.
• 05:10 ROMAINE: WHY DO YOU THINK THEY ARE GRAVITATING TO YOUR
• 05:16 PRESCRIPTION? WE AGREE THE CURRENT SYSTEM
• 05:20 ISN’T — WARREN: I AM NOT SAYING — THEY
• 05:27 NEVER HAD CONTROL. IT IS LIKE A CHILD WITH A CAR
• 05:29 SEAT AND STEERING WHEEL. WE HAVE THIS DRUNK BEHIND THE
• 05:32 WHEEL, WE WANT THIS KID THAT IS NOT CONNECTED TO ANYTHING.
• 05:35 IT OPENS YOUR EYES TO SEE WE DON’T HAVE AN OPTION.
• 05:38 CONGRESS HAS ALWAYS BEEN DRIVING OR THE AUTOMATIC STIMULATORS.
• 05:43 THE FED HAS NEVER BEEN DRIVING. JOE:
• 05:50 THIS FISCAL POLICY VERSUS MONETARY POLICY, THE MOST
• 05:52 SALIENT THING NOW IN MACRO POLICY HAS TO DO WITH TRADE.
• 05:55 WHAT YOU MAKE OF TRUMP’S
• 06:01 POLICIES ON TRADE AND IF HE GOES DOWN THIS ROAD, WHAT IS YOUR
• 06:04 RAMIFICATIONS? WARREN: HE IS UNDERMINING OUR
• 06:08 STANDARD OF LIVING AND GETTING NO PUSHBACK FROM THE PRESS.
• 06:14 IF YOU SEND SOMEONE — YOU ARE TRYING TO GET THE BEST POSSIBLE
• 06:15 PRICE. HERE WE ARE COMPLAINING ABOUT
• 06:17 CHINA, CANADA BECAUSE THEY ARE NOT CHARGING US ENOUGH FOR
• 06:23 LUMBER. THIS MAKES IT WORSE FOR US.
• 06:30 JOE: IS THERE ANY STRATEGIC ARGUMENT TO SAY YES, WE WILL NOT
• 06:33 GET AS GOOD OF A PRICE, BUT ON THE OTHER HAND THIS IS A
• 06:36 TECHNOLOGICAL ARMS RACE, AND COULD THOSE TWO PROCEEDS THE
• 06:42 SHORT OF — SORT OF SHORT-TERM DEMAND?
• 06:47 WARREN: YOU TRY TO GET THE BEST POSSIBLE CASE.
• 06:52 IF YOU ARE A GOOD SHOPPER, YOU TRY THE LOWEST POSSIBLE PRICE.
• 06:56 IF YOU KEEP A HIGH DEMAND IN THE ECONOMY, PEOPLE ARE DISPLACED,
• 07:00 THERE IS PLENTY OF OTHER PEOPLE LOOKING FOR THEM.
• 07:04 IF WE HAVE STRATEGICALLY IMPORTANT ITEMS THEY HAVE TO BE
• 07:08 ADDRESSED DIRECTLY. IF WE WANT TO MAKE SURE WE HAVE
• 07:12 DOMESTIC PRODUCTION OF STEEL, WE SHOULD SOURCE ALL OF IT
• 07:14 DOMESTICALLY. WE CAN SOURCE THE STRATEGICALLY
• 07:18 IMPORTANT ITEMS WITHOUT WORRYING ABOUT GETTING THE BEST PRICES
• 07:24 FOR EVERYONE ELSE. ROMAINE: TALK TO ME ABOUT
• 07:29 INFLATION CONNECTS IN THIS. WARREN: WE RECOGNIZE THE
• 07:33 CURRENCY AS A PUBLIC MONOPOLY. IT IS A LITTLE TECHNICAL BUT THE
• 07:37 PRICE LEVEL IS A FUNCTION OF PRICES PAID BY THE GOVERNMENT
• 07:40 WHEN IT SPENDS. WHEN THE GOVERNMENT SPENDS, IT
• 07:44 IS NOT CREATING INFLATION UNTIL IT PAYS MORE FOR THE SAME THING.
• 07:48 THAT WILL HAPPEN IF YOU BOUGHT SO MUCH THAT YOU BROUGHT UP
• 07:55 PRODUCTIVE CAPACITY FOR SALE AND THEN YOU ARE GOING INTO
• 07:59 INFLATION. LET ME SAY EXIT SPENDING FROM
• 08:03 COST INFLATION AND I COULD DO IT IF YOU PUT ME IN CHARGE, I COULD
• 08:07 SPEND A LOT. RANKING AND FINANCING
• 08:10 SINCE 2073?, I HAVE NEVER YET SEEN
• 08:13 INFLATION CAUSED BY OVERSPENDING.
• 08:15 IT IS ALWAYS CAUSED BY SOMETHING ELSE. TURKEY HAS 25% INFLATION
• 08:21 WITH 10% UNEMPLOYMENT. IT IS NOT OVERSPENDING.
• 08:24 JOE: LET’S TALK ABOUT THE GREEN
• 08:31 NEW DEAL. GREEN NEW DEALERS SAY WE CAN DO
• 08:37 MORE BECAUSE OF FISCAL — IT LOOKS LIKE WE COULD RUN UP TO
• 08:42 HARD RESOURCE CONSTRAINTS PARTICULARLY FOR THINGS LIKE
• 08:45 LABOR COSTS OF RETROFITTING BUILDINGS AND OTHER SORT OF
• 08:50 INFRASTRUCTURE DEMANDS. HOW DO YOU BUILD IN SAFEGUARDS
• 08:55 TO THE LAW SO YOU DON’T RUN INTO INFLATION OR IF WE DO, WE
• 09:01 MITIGATE THEM IN REAL-TIME?
• 09:03 >> WE HAVE TO HAVE THIS BASED ON INFLATIONARY APPLICATIONS ARE
• 09:08 NOT THE SIZE OF THE FEDERAL DEFICIT. IT DOESN’T MATTER.
• 09:12 WE WILL DO MEDICARE FOR ALL, HOW DO YOU SCORE IT?
• 09:19 IT WILL BE INFLATION REDUCTION. JOE: YOU THINK ECONOMISTS AND
• 09:24 THE CBO ARE ABLE TO COME UP WITH DOLLAR PREDICTIONS ON THE IMPACT
• 09:30 OF A POLICY, RETROFITTING, THE IMPACT? WARREN: YOU
• 09:38 GIVE THEM SPECIFICS, THEY HAVE THE RESOURCES, I HAVE
• 09:39 NO REASON TO THINK THEY CAN’T. 2% FOR 30 YEARS.
• 09:43 THAT IS WITHOUT CHANGING ANY OF THE REQUIREMENTS, LEAVING
• 09:49 EVERYTHING IN PLACE. IT CAN’T BE OVERSPENDING IF THE
• 09:50 INFLATION FORECAST IS 2%.

Gogoratzekoa:

Politika monetarioa eta fiskala (W. Mosler tartean)