Polisemiaz hitz bi, ekonomian

Subiranotasun monetarioa¹ dela eta (Warren Mosler)

(…)

Warren Mosler (WM): Before MMT the meaning of monetary sovereignty was a sovereign government that issues its own currency. But right now the meaning has been extended to include other meanings such as non-convertible currency, or no foreign debt, or food independence, or something else. So now I have no idea what they mean anymore.

(…)

WM: …But let’s say you are the Franklin University, and you’re issuing the Franklin franc, which is your tax credit of which you are the sole issuer and which the students need to pay a tax. Do you have monetary sovereignty?

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WM: … you don’t need to be a sovereign to be the sole issuer.

So, what are you trying to say when you use the word monetary sovereign? Well, you could be just referring to countries that do this or that. And some of the proponents have a list of eight things you need to have or you don’t have monetary sovereignty.

(…)

WM: … I said bank loans create bank deposits. It’s the same thing. The definition of ‘money’ is so casual that it is not constructive.

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WM: … when I say bank purchases create bank deposits, I’ve got my point across. If I say bank purchases create money, you might raise all kinds of questions and start discussing those, maybe even arguing about them.

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WM: Let’s just review the last thirty years ago quickly. Twenty-five years ago we were sitting in a Bretton Woods conference on the European Monetary Union recognizing what was going to happen this whole time, discussing what the end game would be. The Endgame would be a permanent zero rate policy. There would be a central bank guarantee of all national debt, and they would have to use the deficit as a policy tool, rather than as a constant deficit limit. So now here we are. And we also discussed that they were going to need a credible central bank guarantee which is necessary for deposit insurance. Without that the banking system is going to collapse. They are forced to have one because there’s no other way to do it. This is a point of logic.

So here we are 25 years later. I would say it’s time to declare victory and move on. They’ve got a 0% rate. Just make it permanent! They’ve got the central bank guarantee of all member nations. They’ve got the credible deposit insurance. Just put it in writing. Don’t make it a Mario Draghi policy that we are continuing.

And, as of last year, the Commission decided to change the 3% limit.

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WM: But temporary and crisis means it’s a policy tool, right? It’s a policy for a crisis. It’s a policy, temporary or permanent. So what they’ve decided is that it’s not fixed at 3%. It’s a tool to use to obtain a result: to get out of the crisis. To solve the energy crisis, the natural gas price crisis, whatever, they’ve recognized that you have to do this. Before that there was no discussion about this. We went through a lot of crises and they never changed it. They tried to enforce penalties, and then the central bank enforced the rules by letting people up from under the umbrella to let your spreads widen if you didn’t comply with what was always a hard limit. Now it’s a policy tool.

Now they can move it back if they think that’s beneficial. If they think it isn’t beneficial, they don’t have to move it back. And that’s what they’re trying to decide. Is it a trillion² and a half or isn’t it? It’s a policy tool now. Otherwise, there’s no discussion like before. Three percent, there is no discussion! Where did we get that?

Now they’ve got the correct policy tool.

What’s left is to recognize that raising rates causes inflation, in which case they will leave interest rates permanently at zero. Because why would you raise rates if you don’t want to cause inflation? Use the other policy tool. Let everybody have lower taxes or higher public services. Raising rates is a totally regressive way to regulate the economy: basic income for people who already have money. There’s nobody in favor of that! Right? Even the basic income people are against that kind of basic income.

So their economists now have data that show what this deficit limit of 11% or 6% or 3% or 20 % or whatever does. They can give the Commission a spectrum as to what their forecasts are when they put the policy tool at those levels and they can also get forecasts from private sector economists, like they already do.

Where do we want it to be next? Should we be back to 3% or not? Well, what do our forecasters say is going to happen at these various levels?

We know that with the central bank guarantee even Greek debts are at zero %. There’s no credit risk anymore. They used to have credit risk but now that’s all behind them. It’s not there for the banking sector. It’s not there for the government. The debt to GDP ratio is what it is. And with permanent zero rates, why should they sell long term securities at all? They should all just sell three months securities at zero percent. Now they have no debt service.

The tool of fiscal policy is where all the impact comes from. Use your technocrats to determine what it should be. And then the Commission would decide which one is the most appropriate for the European Union.

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WM: The technocrats can tell them that so they have to make the decision. They’ll tell them what the corresponding inflation rate will be. They’ll tell them what the currency will do. They’ll tell them everything.

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WM: They might. If they recognize it as a policy tool and that they’re not bound by historical limits, but by future outcomes, then the European Union could do enormously well. It could be the most prosperous Union of all time. They can figure that out. And they’re right there. They’ve already got the things in place now, which they didn’t have two years ago. I say they’re on the edge of greatness. Right?

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WM: … they have data on what the consequences are, right? They have data on what happens with 11%. They didn’t have that before. They might have been afraid that the currency would collapse, hyperinflation, etc. Well, now they know it doesn’t happen.

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WM: Trump was the price that the voters were willing to pay to keep the Clintons out of office. Now Biden’s the price voters are willing to pay to keep Trump out of office [laughs]. There isn’t anything positive about the last couple of US elections, it has all been about the lesser of two evils.

So Biden is in there in the middle of the road, finding ways to pay for things, looking for legislative compromises.

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WM: Satisfy the headline progressives; not the real progressives, the MMTers. It satisfies people like Robert Reich who say that you could tax the rich and get enough money to feed everybody. That’s what a lot of voters want to hear.

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WM: It’s just nice to see the proliferation of MMT discussions. Anybody who gets involved in the discussion can go right to the source material. My Seven Deadly Innocent Frauds book was written for readers with a third grade level. All the knowledge is there.

The interesting thing is that MMT has become a grassroots movement. We might have created our own celebrity with Stephanie Kelton, but we certainly didn’t have a celebrity promoting it in the beginning. Nor did we have any central banks promoting it.

Somehow people… just sprung up all over the world. For what? It wasn’t for say animal rights, or women’s rights, or the green movement. Who would have heard of a movement to get central banks and governments to understand that they have fiscal policy backwards, that they spend first and then tax? How is that the stuff of a grassroots movement that not only spread to millions of people but also filtered up? And none of them were senior economists, even junior economists. There were zero mainstream economists participating.

But now —there might be one or two reluctant ones— they’ve all started changing their models because they could see that they weren’t right. And MMT is now mentioned and studied at every central bank of the world and discussed in every legislature. How improbable was that!

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WM: …The US Congress has a resolution condemning a theory describing monetary operations.

When I talk to senior people at the Fed they go: “Well, yeah, of course. That’s how it works. Everybody knows that!” Then why don’t you say anything? “Well, it’s not our job”.

So it’s nothing except monetary operations. So how do you get a grassroots movement to instruct the central banks and the legislatures on monetary operations and how it’s done? How improbable is that? It is quite improbable in this channel.

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WM: …. that is not how it started. It wasn’t the unemployed who started this. It came in kind of out of nowhere, off on a tangent somewhere and filtered its way in through regular working people. It wasn’t like we started addressing the unemployed and getting them all whipped up. People we talked to were already working. And it was just me at first and my partners in ‘92 or ‘93 and then some people in the financial sector followed. I tried to introduce these ideas to the academic community in ‘96 without much success. Later Bill Mitchell, Randy Wray got involved and then we met Stephanie Kelton.

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WM: … Maybe they just resent having been wrong but they won’t even agree to realize that they were wrong. Maybe that is just how the type of people that go into that field are like and it has less to do with anything that I or anybody else did to them. They are like that towards life in general.

(…)

[… they didn’t understand … about how the currency and the system work.]

WM: That’s going to come around eventually. I’m not going to be around to see it, but history is not going to be kind to them. (…)

Nola tratatuko du historiak euskal ekonomialarien jarrera?

Zorionez, salbuespen bakarrenetariko bat:

(https://twitter.com/unai_delburgo/status/1468628022882357259)

@tobararbulu # mmt@tobararbulu

abe. 8

Txioa aipatu

Unai del Burgo@unai_delburgo

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Comprender ésto lo cambia todo #jobguarantee #MMT @ptcherneva

[Tcherneva, P. (2020). En favor del trabajo garantizado. Jaèn: Lola Books]

Unai del Burgo@unai_delburgo

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1 In Warren Mosler-i egindako elkarrizketa (eta 3).