You have a charming definition of crime, which seems to boil down to "I hate this behavior, so it must be criminal"? I'm not saying I approve of Microsoft (presumably*) botching their product roll-out, but you're kind of proving my point about the hyperbole parade.

Of course, everything Microsoft does could be criminal from an antitrust perspective, but that's the risk of having a platform monopoly. From that perspective, making W10 free for most users could be seen as pro-consumer or anti-consumer with equal validity.

*~35% of Windows users appear to be using W10 - I don't know if that's above or below their current target.

The GOP never to this point kowtowed to that part of the base anyway until they decided to attempt to harness the energy of that faction to the point that this faction has a stranglehold of the party, and yet are wholly ignorant on the issues. We're talking about people who hold up signs that read "Keep your government hands off my medicare" caliber people. Or people who think Obama isn't an American. Or people who think Obama is "a complete socialized take over of health care". Stuff like that which is so obviously untrue, it's laughable.

And I want to be clear. I'm not accusing the right of having a monopoly on stupid people in their base. There's PLENTY of stupid liberals. The difference is the Democratic party is doing a far better job of keeping their idiots supporting them without enacting what those idiots want or succumbing to their idiocy.

Here's proof - how many times do you see Democratic leaders constantly say crap like George W. Bush is a war criminal for Iraq? Name a Democratic presidential candidate who actually has said over and over again that Ted Cruz isn't a US citizen? Donald Trump, the current GOP frontrunner, over and over again insists Obama isn't a US citizen, as have many many Republican Congressmen.

When the GOP signed the deal with the devil so to speak by trying to co-opt the Tea Party movement, this was the inevitable outcome. The Tea Party has been hijacked twice by my count because the people within it are so incredibly ignorant, they don't seem to realize what they stand for. It was Libertarian in the beginning both socially and economically. Then it got hijacked to become more socially conservative and economically conservative. Now, it's been hijacked by Donald Trump, who nobody actually even knows what he is socially or economically at this point overall.

Why did this happen? Because GOP support is so contaminated and dominated by so much ignorance, you can have a TV personality say a bunch of stupid crap they want to hear but is certifiably absurd, that he can become the front runner. Building a wall to keep the Mexicans out, no matter how you feel about illegal immigration as far as ideals go, is simply not a practical solution to stop illegal immigration. You can't make Mexico pay for a wall even if you built it. Obama wasn't born in Kenya. Replacing Obamacare with something "terrific" is NOT a policy proposal; it's non-specific anti-Obama BS to make people who hate Obama love you. He could replace it with "Trumpcare" which could be basically Obamacare, and that could be "something terrific" for all you know.

Trump and Cruz don't exist without the Tea Party, and the Tea Party wouldn't be a thing if the GOP didn't decide to eventually attempt to galvanize it. Well, mission accomplished, but you're never going to get the support of the growing minority segments of the population. You've forfeited the support of moderates like myself, too. And young people by enlarge are rejecting this version of the GOP big time. Women are increasingly rejecting it, too.

Your second point... Umm, big fat no.
https://www.washingtonpost.com/news/the-fix/wp/2016/03/21/the-last-presidential-candidate-who-was-as-unpopular-as-donald-trump-david-duke/

The one problem with that is that, surprisingly, none of the revealed names are from the US. My country is well represented, as is Europe, but it seems that your countrymen didn't use Mossack Fonseca. Given that Panama based its laws on Delaware, perhaps they prefer Delaware LLC's? Perhaps it's the office next to Mossack Fonseca that has a monopoly on the US shell companies?

Perhaps one day we'll find out.

That would be great "if" you could get those licenses, get insured as a transport driver, without being held to a monopoly by the people giving out those certifications. The problem is, you can't in most places.

Uber and Lyft wouldn't exist if the Taxi system wasn't horrible beyond belief. Fix the medallion/license issues and they both go out of business. Otherwise, even if both ride sharing companies go out of business, people will still create some type of app to get around the shitty monopoly that is currently in place.

As far as trained professionals with background checks, yeah, a day's worth of training is amazing (sarcasm). Also, most taxi drivers go through a minimal (if any) amount of background checking. For instance, here in Austin, Tx, it was reported that fifty-three drivers who failed background checks to become Uber drivers had been issued chauffeur’s licenses by the City of Austin.

@greatgooglymoogly

Thanks for taking the time to watch it.

Like I said in my previous comment, this talk needs to take a lot of shortcuts, otherwise its length would surpass anyone's attention span.

So, point by point.

By "balanced budget", I suppose you refer to the federal budget. A balanced budget is not neccessarily a bad thing, but it is undesirable in most case. The key reason is sectoral balances. The economy can divided into three sectors: public, private, foreign. Since one person's spending is another person's income, the sum of all spending and income of these three sectors is zero by definition.

More precisely: if the public sector runs a surplus and the private sector runs a surplus, the foreign sector needs to run a deficit of a corresponding size.

Two examples:
- the government runs a balanced budget, no surplus, no deficit
- the private sector runs a surplus (savings) of 2% of GDP
- the foreign sector must, by definition, run a deficit of 2% of GDP (your country runs a current account surplus of 2% of GDP)

- the government runs a deficit of 2% of GDP
- the foreign sector runs a surplus of 3% (your current account deficit of 3%)
- your private sector must, by definition, run a deficit of 1% of GDP, aka burn through savings or run up debt

If you intend to allow the private sector to net save, you need to run either a current account surplus or a public sector deficit, or both. Since we don't export goods to Mars just yet, not all countries can run current account surpluses, so you need to run a public sector deficit if you want your private sector to net save. No two ways about it.

Germany runs a balanced public budget, sort of, and its private sector net saves. But that comes at the cost of a current account surplus to the tune of €250B. That's 250 billion Euros worth of debt other countries have to accumulate so that both the private and public sector in Germany can avoid deficits. Parasitic is what I'd call this behaviour, and I'm German.

If you feel ambitious, you could try to have both surplus and deficit within the private sector by allowing households to net save while "forcing" corporations to run the corresponding deficits. But to any politician trying that, I'd advise to avoid air travel.

As for the "devaluation of the currency", see my previous comment.

Also, she didn't use real numbers, because a) the talk is short and numbers kill people's attention rather quickly, and b) it's a policy decision to use debt to finance a deficit. One might just as well monetise it, like I explained in my previous comment.

Helicopter money would be quite helpful these days, actually. Even monetarists like AEP say so. If fiscal policy is off the table (deficit hawkery), what else are you left with...

As for your question related to the Fed, let me quote Eric Tymoigne on why MMT views both central bank and Treasury as part of the consolidated government:

"MMT authors tend to like to work with a consolidated government because they see it as an effective strategy for policy purpose (see next section), but also because the unconsolidated case just hides under layers of institutional complexity the main point: one way or another the Fed finances the Treasury, always. This monetary financing is not an option and is not by itself inflationary."

MMT principle: the central bank needs to be under democratic control, aka be part of government. The Fed in particular can pride itself on its independance all it wants, it still cannot fulfill any of its goals without the Treasury's help. It cannot diverge from government policies too long. Unlike the ECB, which is a nightmare in its construction.

Anyway, what does he mean by "one way or another the Fed finances the Treasury, always"? Well, the simple case is debt monetisation, direct financing. However, the Fed also participates by ensuring that Primary Dealers have enough reserves to make a reasonable bid on treasuries. The Fed makes sure that auctions of treasuries will always succeed. Always. Either by providing reserves to ensure buyers can afford the treasuries, by replacing maturing treasuries or buying them outright. No chance whatsoever for bond vigilantes. Betting against treasuries is pointless, you will always lose.

But what about taxation as a means to finance the Treasury? Well, the video's Monopoly example illustrated quite nicely, you cannot collect taxes until you have spent currency into circulation. Spending comes before taxation, it does not depend on it. Until reserves are injected into the banking system, either by the Fed through asset purchases or the Treasury through spending, taxes cannot be paid. Again, monetary financing is not optional. If the Treasury borrows money from the public, it borrows back money it previously spent.

Yes, I ignored the distribution of wealth, taxation, the fixation on growth and a million other things. That's a different discussion.

Well, cheers for sticking with it anyway, I really appreciate it.

It's a one hour talk on the deficit in particular, and most of what she says is based on MMT principles that would add another 5 hours to her talk if she were to explain them. With neoclassical economics, you can sort of jump right in, given how they are taught at schools and regurgitated by talking heads and politicians, day in and day out. MMT runs contrary to many pieces of "common sense" and since you can't really give 10 hour talks everytime, this is what you end up with – bits and pieces that require previous knowledge.

I'd offer talks by other MMT proponents such as William Mitchell (UNSW), Randy Wray (UMKC) or Michael Hudson (UMKC), but they are even less comprehensible. Sorry. Eric Tymoigne provided a wonderful primer on banking over at NEP, but it's long and dry.

Since I'm significantly worse at explaining the basics of MMT, I'm not even going to try to "weave a narrative" and instead I'll just work my way through it, point by point.

@notarobot

"Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations."

You don't have to take on debt. The US as the sole legal issuer of the Dollar can always "print more". That's what the short Greenspan clip was all about. Of course, you don't actually print Federal Reserve Notes to pay for federal expenses. It's the digital age, after all.

If the federal government were to acquire, say, ten more KC-46 from Boeing, some minion at the Treasury would give some minion at the Fed a call and say "We need $2 billion, could you arrange the transfer?" The Fed minion then proceeds to debit $2B from the Treasury's account at the Fed (Treasury General Account, TGA) and credits $2B to Boeing's account at Bank X. Plain accounting.

If TGA runs negative, there are two options. The Treasury could sell bonds, take on new debt. Or it could monetise debt by selling those bonds straight to the Fed – think Overt Monetary Financing.

The second option is the interesting one: a swap of public debt for account credits. Any interest on this debt would be transfered straight back in the TGA. It's all left pocket, right pocket, really. Both the Fed and the Treasury are part of the consolidated government.

However, running a deficit amounts to a new injection of reserves. This puts a downward pressure on the overnight interest rate (Fed Funds Rate in the US, FFR) unless it is offset by an increase in outstanding debt by the Treasury (or a draw-down of the TT&Ls, but that's minor in this case). So the sale of t-bonds is not a neccessity, it's how the Treasury supports the Fed's monetary policy by raising the FFR. If the target FFR is 0%, there's no need for the Treasury to drain reserves by selling bonds.

Additionally, you might want to sell t-bonds to provide the private sector with the ability to earn interest on a safe asset (pension funds, etc). Treasury bonds are as solid as it gets, unlike municipal bonds of Detroit or stocks of Deutsche Bank.

To quote Randy Wray: "And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed."

Point is: for a government that uses its own sovereign, free-floating currency, it is a political decision to take on debt to finance its deficit, not an economic neccessity.

"Weimar Republic"

I'm rather glad that you went with Weimar Germany and not Zimbabwe, because I know a lot more about the former than the latter. The very, very short version: the economy of 1920's Germany was in ruins and its vastly reduced supply capacity couldn't match the increase in nominal spending. In an economy at maximum capacity, spending increases are a bad idea, especially if meant to pay reparations.

Let's try a longer version. Your point, I assume, is that an increase in the money supply leads to (hyper-)inflation. That's Quantity Theory of Monetary 101, MV=PY. Amount of money in circulation times velocity of circulation equals average prices times real output. However, QTM works on two assumptions that are quite... questionable.

First, it assumes full employment (max output, Y is constant). Or in other terms, an economy running at full capacity. Does anyone know any economy today that is running at full capacity? I don't. In fact, I was born in '83 and in my lifetime, we haven't had full employment in any major country. Some people refer to 3% unemployment as "full employment", even though 3% unemployment in the '60s would have been referred to as "mass unemployment".

Second, it assumes a constant velocity of circulation (V is constant). That's how many times a Dollar has been "used" over a year. However, velocity was proven to be rather volatile by countless studies.

If both Y and V are constant, any increase in the money supply M would mean an increase in prices P. The only way for an economy at full capacity to compensate for increased spending would be a rationing of said spending through higher prices. Inflation goes up when demand outpaces supply, right?

But like I said, neither Y nor V are constant, so the application of this theory in this form is misleading to say the least. There's a lot of slack in every economy in the world, especially the US economy. Any increase in purchases will be met by corporations with excess capacity. They will, generally speaking, increase their market share rather than hike prices. Monopolies might not, but that's a different issue altogether.

Again, the short version: additional spending leads to increased inflation only if it cannot be met with unused capacity. Only in an economy at or near full capacity will it lead to significant inflation. And even then, excess private demand can easily be curbed: taxation.

As for the Angry Birds analogy: yeah, I'm not a fan either. But all the other talks on this topic are even worse, unfortunatly. There's only a handful of MMT economists doing these kinds of public talks and I haven't yet spotted a Neil deGrasse Tyson among them, if you know what I mean.

3:00 "do you think this conversation is happening in any other country?"

FFS, does anyone really think that the US has a monopoly on political conversation?

The same conversation (well, a less retarded version of it anyway) is happening in the UK, Ireland, Australia, New Zealand and Canada. And that's just in English. There are political debates in Germany, France, Switzerland, Spain, Italy, Portugal. Hell, I bet no talks about anything ELSE in Greece!

Don't hate the player. Hate the game.
The drug costs $0.10 in India but, thanks to the prohibitive restrictions imposed by the FDA on the manufacture of more generic medicines like Deraprim, it's unavailable to Americans for less than $750. It's true that there are likely to be quality issues with Indian generics, but Pyrimethamine is widely available in Europe and an approval elsewhere ought to translate with reciprocal approval here. It used to cost $1 million to bring a generic to market; now it costs $10 million and that's the direct result of big pharmaceutical companies lobbying the FDA to make it cost prohibitive to bring competitive generics to the market. This is the consequence of government-created monopolies, so this is not so much a issue of "price gouging" and "CEO greed" as it is about government greed and its pursuit of an ever increasing expansion of its political power. But haters gonna hate based on preconceived biases and there's no reasoning or common sense among irrational people.

@RedSky

First, if it were up to me, you could take over as Minister of Finance in this country tomorrow. Our differences seem miniscule compared to what horrendous policies our last three MoF have pushed. The one prior, ironically, was dubbed the most dangerous man in Europe by The Sun.

We're in agreement on almost everything you mentioned in your last comment, so I'll focus on what I perceive differently.

First, I'd differentiate between fiscal stimulus and fiscal spending, the former being a situational application of the latter. As you said, fiscal stimulus during an economic crisis tends to be inadequate with regards to our macroeconomic objectives. You can neither whip out plans for major investments at a whim nor can you mobilize the neccessary resources quickly enough to make a difference and still be reasonable efficient. Not to mention that it only affects certain parts of the economy (construction, mostly), leaving others completely in the wind. So I'm with you on that one, it's a terribly inefficient and ineffective approach.

Automatic stabilizers work magnificently in this regard, but they barely take any pressure from the lower wage groups, especially if unemployment benefits come with a metric ton of strings attached, as is the case in Germany. A basic income guarantee might work, but that's an entirely different discussion.

The problem I see with merely relying on reasonable automatic stabilizers in the form of payments is that they do put a floor into demand, but do very little to tackle the problem of persistent unemployment due to a lack of jobs. As useful as training and education are, the mere number of highly educated people forced to work mundane jobs tells me that, at best, it doesn't work, and at worst pushes a systemic problem onto the individual, leading to immense pressure. Not to mention the psychological effects of being unemployed when employment is tauted as a defining attribute of a proper person -- aka the demonization of the unemployed.

It's still somewhat decent in Australia, but in Europe... it's quite a horrible experience.

Anyway, my point is that I'd rather see a lot more fiscal spending (permanent!) in the shape of public sector jobs. A lot of work cannot be valued properly by the market; should be done without the expectation of a return of investment (hospitals, anyone?); occurs in sectors of natural monopolies -- all of that should be publicly run. A job guarantee, like your fellow countryman Bill Mitchell advocates quite clearly, might be an approach worth trying out. Economy in the shit? More people on the public payroll, at rather low (but living wage!) wages. Do it at the county/city level and you can create almost any kind of job. If the private sector wants those people instead, they'd have to offer better working conditions. No more blackmail through the fear of unemployment -- you can always take a public job, even if it is at a meagre pay.

I should probably have mentioned that I don't buy into the notion of a stable market. From where I am standing, it's inherently unstable, be it through monopolies/oligopolies, dodging of laws and regulations (Uber), impossibility to price-in externalities (environmental damage most of all) or plain, old cost-cutting leading to a system-wide depression of demand. I'm fine with interfering in the market wherever it fails to deliver on our macroeconomic objectives -- which at this point in time is almost everywhere, basically.

Healthcare is all the rage these days, thanks to the primaries. I'd take the publicly-run NHS over the privately-run abomination in the US any day of the week. And that's after all the cuts and privatizations of the last two decades that did a horrible number on the NHS. Fuck ATOS, while we're at it.

Same for the railroad: the pre-privatization Bundesbahn in Germany was something to be proud of and an immeasurable boost of both the economy and the general standard of living.

In the mid/long run, the effects of automation and climate change-induced migration will put an end to the idea of full employment, but for the time being, there's still plenty of work to be done, plenty of idle resources to be employed, and just nobody to finance it. So why not finance it through the printing press until capacity is reached?

As for the Venezuela comparison: I don't think it fits in this case. Neither does Weimar Germany, which is paraded around quite regularly. Both Venezuela and Weimar Germany had massive supply-side problems. They didn't have the production capacity nor the resources to meet the demand they created by spending money into circulation. If an economy runs at or above its capacity, any additional spending, wherever it comes from, will cause inflation. But both Europe and the US are operating faaar below capacity in any measurable metric. You mentioned LRAS yourself. I think most estimates of it, as well as most estimates of NAIRU, are off quite significantly so as to not take the pressure off the wage slaves in the lowest income sector. You need mass unemployment to keep them in line.

As you said, the participation rate is woefully low, so there's ample space. And I'd rather overshoot and cause a short spike in inflation than remain below potential and leave millions to unneccessary misery.

Given the high level of private debt, there will be no increase in spending on that front. Corporations don't feel the need to invest, since demand is down and their own vaults are filled to the brim with cash. So if the private sector intends to net save, you either have to run a current account surplus (aka leech demand from other countries) or a fiscal deficit. Doesn't work any other way, sectoral balances always sum up to zero, by definition. If we want to reduce the dangerous levels of private debt, the government needs to run a deficit. If we don't want to further increase the federal debt, the central bank has to hand the cash over directly, without the issuance of debt through the treasury.

As for the independant central bank: you can only be independant from either the government or the private sector, not both. Actually, you can't even be truly independant from either, given that people are still involved, and people have ideologies and financial ties.

Still, if an "independant" central bank is what you prefer, Adair Turner's new book "Between Debt and the Devil" might be worth a read. He's a proponent of 100% reserve banking, and argues for the occasional use of the printing press -- though controlled by an inflation-targeting central bank. According to him, QE is pointless and in order to bring nominal demand up to the level we want, we should have a fiscal stimulus financed by central bank money. The central bank controls the amount, the government decides on what to spend it on.

Not how I would do it, but given his expertise as head of the Financial Services Authority, it's quite refreshing to hear these things from someone like him.

I agree with everything else you said, but I have to take issue with this.

The two are not comparable at all. A cop is not an abusive spouse, they are the people who society grants a monopoly on force to. Their explicit purpose is enforce the law. If a cop issues a lawful request and you do not comply with it, they are BY DEFINITION, allowed to use force.

Now, I'm not saying that all police do this correctly, or that there aren't serious issues with racial bias.

But it comes down to rights and responsibilities.
An abuser has no right to abuse their spouse/children and their victims have no responsibility to capitulate or be perfect.
Whereas again, a cop explicitly has the right to use force and a citizen has the responsibility to obey a lawfully issued command from a police officer.

Needs to be a change in how we vote....the instant runoff vote seems like the best solution for all....except for the two major parties because they would lose their monopoly.

http://videosift.com/video/The-Alternative-Vote-Explained

Is it typical for insurance adjusters to be determining fault in auto accidents like this one? I always that my part of Canada was an anomaly that way because we have a government mandated monopoly on auto insurance. I had thought the rest of the world saw these things go through some kind of civil court where both sides tried to sue one another for damages and the insurance companies ended up picking up the pieces resulting from that. How else do things get resolved when driver 1 is represented by company A and driver 2 has company B?

I think you missed his point.
Religion/faith healing repeatedly CLAIMS credit for 'miracle healing' (which is any healing their non-medically trained mind can't explain), sometimes for ANY healing, including most healing of the blind. Before now, they have had a near monopoly on 'healing the blind' (although it should be said that it's never been done with a verified incurable 'blind' person, or even as a 'blind test'...pun intended.)
I thought he was refuting those repeated assertions.