@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.

With all respect, and much consideration towards your emotional disposition to the matter, your vehemence and near maleficence on the issue is not met with similar kind, and is not respected by me as a form of open discussion.

Although I may agree that the reporter does indeed present himself as an a*****e, obviously degrading whatever planned speech or agenda this student had, it is not worth the spew which you present...

I must agree, however, that the general western population does little to nothing towards the meaningful progression of Human society.

On the other hand, what you advocate is a pipe dream, the likes of which I cannot fathom working, even with my liberal UK perspective. Though I do believe in banks being controlled, so they don't become to large to fail, as well as re-distribution of wealth from the top "1%" classes, how could one, if caring for the safety of their nation, advocate the lessening of funds towards a strong military?

I must also put into perspective, as I am guessing you are an American, what you Americans have compared to the world. You want to throw away your rights to bear arms, not considering what you would do without them. Here in London, we have no way to defend ourselves against getting mugged, many times at gunpoint(handguns are banned here, get the picture?). You want to stop giving money to your military, and ISIS just killed over a hundred people in France. You have more control over your personal freedom than anyone else, not to mention the strongest nation in the world, and you want to abandon the practices which got you there... Brilliant.

Greece accumulated debt in a foreign currency (Euro). Had they been using a free-floating currency with Greece as the sovereign issuer, it would have been much less of a problem. But that's a different discussion.

You brought up retirement benefits. These benefits have been a major talking point over here in mercantilistic Germany. Unfortunatly, a lot of inaccuracies crept into the debate over time. A closer look reveals that it's not as black and white as it is made out to be. One point at a time...

The effective retirement age, if we look at OECD stats, is basically the same for men in Greece and Germany. The age of 56 is often thrown around as the expected average retirement age for workers in Greece, but that's only for the totally messed up public sector. The average for the private sector is significantly higher, as the OECD numbers indicate.

Yet the size of retirement benefits is even more controversial. There are, in fact, some very dubious practices going on in Greece, which result in rediculous retirement benefits for a select group of people, even at very young ages. Decades of nepotism, that's what it produces. But even so, pension expenditure as a % of GDP was not significantly higher in Greece before the GFC than in Germany. When Greek GDP collapsed, expenditures as a % increased, naturally. Some have gotten absurd benefits, but the majority got a pittance. And as if that wasn't bad enough, Greece doesn't have a social safety net, unlike Germany. There is no welfare. Many people have to take early retirement at reduced benefits to have any income at all.
So I'll say it's bad in Germany. Last decade's changes to our retirement system have a metric fuckton of people (~40% of workers) heading straight into poverty when they retire. It's social security for them, and nothing else. Still, it's bliss compared to what the plebs in Greece now ended up with.

However, even all those beautiful OECD stats have to be taken with a grain of salt. Germany has a working bureaucracy. Everything is documented. Greece is a mess. Therefore, all comparisons are guesstimates at best.

Finally, as long as the Greek economy produces enough goods and services, it is for them to decide how to distribute their wealth. If they want a lavish retirement system, so be it. Our governments opted to create a true underclass of the working poor, and gutted a retirement system that made it through two world wars unscathed. If German retirees want to bitch about their benefits, it should be aimed squarely at our governments and their intentional deconstruction of our social welfare state.

If only the 1% would pass laws to distribute their wealth...

pfft, the rich have welfare, they just call it tax breaks, and they have the lobbyists to keep them.

No one wants those on foodstamps to use them for alcohol and other frivolous items. name me one non-foodstamp-using person who does? It's a strawman that the right obsessively cling to.

As with so many things, it's not about laws or bureaucracy, it's about enforcement. laws mean nothing without enforcement. I'm getting sick of seeing more and more panhandlers downtown where I live and I completely agree that handouts are not an efficient solution.

but you know what isn't a good solution either? negative reinforcement. We've been living under the conservative idea that if we just keep punishing the poor and making their lives more miserable, then obviously that will be motivation to not be poor.

IT DOESN'T WORK. maybe it works for a small percentage of people, but those people aren't poor then. so you have a group of people that are continually being punished and devalued for no good fucking reason because if they aren't motivated to not be poor under these kinds of conditions, then they never will be.

so again, we have this situation where there are two solutions that aren't really effective, but one is slightly less bad than the other. sure some people may use their foodstamps for alcohol and other shit...but many people do actually use their foodstamps for...food. shock.

Even if you had a much more equal distribution of wealth, we're still going to have poor people and people in poverty.

I think the issue is largely mired in health, physical and mental. Even with all our technology...mental health is still unreliable and some people are so physically impaired that they can't work or work well.

Despite largely claiming to be pro-life, the right would either secretly want them to die alone in an alley or make them indentured servants to some corporation if they aren't already. That, I submit, is no life, at least not a good and healthy one.

I don't have the answer, all we can really do is point out that many of the things we've tried aren't working and will never work, and even if there are some successes, it's still largely inefficient, but what's the alternative? if you are "pro-life" then an inefficient solution is still preferable to a solution that simply doesn't work. So I call bullshit on people who like to claim they have the solution. If someone out there has the solution, they certainly haven't demonstrated it yet.

^ What Mr. Chomsky neglected to mention here was scale & production cost vs payoff.

Yes anyone can grow their own strawberries but how many could you ever hope to produce in the average back garden/greenhouse? Probably not enough to let you eat Strawberries everyday I'd bet, and you certainly would'nt pull much of a profit selling them to people at a domestic scale (the key issue here).

Pot however....... even a modest indoor backroom grow can easily net between 30-90oz when dried (alot!). And this can easily be repeated up to 3-4 times a year.

Tobbacco by comparison yields very little for the space and time taken. There's a reason basically no-one home grows tobbaco, you need a huge farm and large scale processing to produce a profitable quantity. Hence it being the preserve of big business and thus legal (plutocrats sure know how to lobby!).


For what its worth though, I do think the Hemp fiber thing was probably the bigger factor in legislation, but what Chomsky is alluding to here is also pretty valid I think.
Pot is a massive cash crop that is seemingly always in demand and relatively easy for a consumer to produce in their own garden/backroom.

There would be a profit in industrial production (always going to be plenty lazy people), but combined with the hemp industry and the effect it tends to have on people (makes you think!) I can totally see why the establishment fears it so much.
It'd be slow, but legal Pot would start eroding the very foundations of the elites power as it's much more profitable for the lower and middle class of society than the Plutocrats at the top and the scale is huge.

A more equal distribution of wealth/economic power is bad for Plutocracy!

So, the lowest quintile of 23 million households has a total wealth of 0.1% of 53 trillion, or $53 billion. That gives each household an average wealth of $2304.00.

The "ideal" distribution stands out to me as being preposterous in anything other than a "distributed wealth" system.
The top 23M would have 33% of the wealth while the bottom 23M would have 12%?
So the wealthiest individuals would have, on average, barely three times as much as the poorest individuals? There's some incentive for exceptionalism right there.
Sure, our current system is grossly out of whack, but that seems to be taking things a bit too far in the other direction.

(I feel like I've seen that "Actual Distribution of Wealth" graph before. I made this graph to back up my argument when the star levels got reorganized with VideoSift 4.0.)

I think the way I'd put it is that I disagree that "Hegelian dialectic" is being appropriately used in the video. Here is a nice concise introduction to the concept. It's an alternative method for reasoning, and therefore is about trying to reach a better understanding of truth -- it has nothing to do with psychology, politics, or trying to control people.

The triadic structure of thesis, antithesis, and synthesis can, if you squint a bit, be re-purposed as a general theory about how political and scientific progress happens. First you have a thesis (e.g. "property is the only right"), then you have an antithesis ("property is theft"), and once people realize that while both positions contain insights, neither absolute position is fully correct, and so we generate a new thesis that combines the valid insights of each -- a synthesis ("a right to property is one of many rights, and without limits can and will infringe on those other rights"). But that's not a Hegelian Dialectic, that's just a slightly stilted way at looking at how "classical" reasoning sometimes plays out in the real world.

All that said, none of this serves to support the thesis that modern conceptions of the political left and right have been invented in order to achieve some sort of nefarious synthesis. Worse, if you think it's a Hegelian Dialectical synthesis we're heading for, then not only is it not a Reichstag fire, it's a giant leap forward in humanity's understanding of itself, because we will have figured out how to simultaneously resolve the left's criticisms of society (not enough equality in wealth and power), and the right's (too many people disputing the rightful distribution of wealth and power that arises from market action), though personally I don't think the resolution of that thesis/antithesis conflict will result in synthesis, just in the right's thesis being discarded. Again.

Long story short, if this is the foundation for a conspiracy theory, it's already gone way out into left field before it's even gotten started.

In reply to this comment by enoch:
In reply to this comment by NetRunner:
The Shock Doctrine and disaster capitalism are a lot more precise concepts than this. The idea behind the Shock Doctrine isn't that all conceptions of left and right are a distraction from the so-called "real" issues, it's where you foment a series of national crises in order to subvert the mechanisms of democracy in order to implement radical policies that would only be acquiesced to when people were in a state of shock.

In the case of disaster capitalism, you actually get a nice feedback loop. Deregulate markets, newly deregulated markets crash and create an economic crisis, and new "reforms" which further deregulate markets are proposed as the solution to the crisis created by the last round of deregulation. See all economic policy proposed by Republicans since the 1980's for examples.

There's also a burden of proof fallacy at work here. 3 cherry-picked quotes from Bush and Kerry on Iraq does not a conspiracy make. The political divide in the country in 2004 over Iraq clearly had the "stay forever" and "get out now" poles to it. That the Democratic candidate was moderate and said merely "don't stay forever", is more a sign of there being a right-wing conspiracy rigging elections and corrupting the Democratic party, not that the very idea of left and right having policy disagreements is some sort of elaborate distraction.

The thing I'm sensing in a lot of liberals these days is the sense that even when we win elections, we're still pretty much getting Republican policies rammed down our throats. We're even doing this thing where we Occupy places in protest of the 1% corrupting our political process and subverting the will of the people...


hey man,
i cant tell if you are agreeing with the video or not.
i am going to guess on the negative.
which kind of confuses me because the video is really just laying out what the hegelian dialectic is and how it can be used to be a lever of control.(sans the ron paul filler at the end).
i found it a pretty short but succinct in its intended goal to educate.

your descriptions of "shock doctrine" and "disaster capitalism" are correct but your premise seems to ignore that both utilize the hegelian dialectic to execute properly in to a society.

example:
problem (thesis)<------------------> reaction (antithesis)

but what if the institution meant to execute the reaction is the very same institution which created the problem,and hence is in the position to offer a solution? a solution which may have been the very thing they were after in the first place?

see where i am going with this?
so while in one scenario the problem is a creation,a facade, (shock doctrine) and the other (disaster capitalism) is an opportunistic leap for control,BOTH utilize the hegelian dialectic to accomplish their goals.

i am not a huge admirer of hegel (ok,i think he is a cunt) but he did understand human beings and the societies they live in because his predictions have played out quite accurately,when placed in the right context.

my thinking behind posting that video was to help people become aware of those levers of control.the philosophy behind those who wish to dominate and control the masses.
the more you know and all that jazz.

once you understand the hegelian dialectic and HOW it is used,you will see it in places and used in ways that prior you would have thought impossible.
it is used by those in power often and extremely well.

anyways.i just wanted to drop a note to you because either i misunderstood your comment or i am just a tad retarded.
in either case my friend,know that i love your commentary and i especially love your optimism.
really..keep up the optimism.my cynicism needs a dose every now and then.
peace brother.

What seems lost in translation for the left is, the "evil" corporations as well as the little guys have little choice but to ALL have lobbyists pursuing their own interests. Why?

Because government is too large and too powerful.

You can take your pick of which is the greater evil: 'greedy' corporations which can and do fail, or a permanent class/army of government bureaucrats untied to quality performance or market demand, and which has lobbyists to shame even the corporations.

I'd rather take my chances with the market.






>> ^westy:

>> ^quantumushroom:
People who get "free" stuff usually like things being "free", and a corrupt government is more than happy to seize the money from the producers to buy the votes of the ignorant. Why should the producers continue busting a$$ only to have their 'extra' hard work taken away? Socialist paradises like mexifornia have been great for Utah and Arizona, which are more than happy to receive the fleeing companies voting with their feet.
Europe is in deep sh1t because of socialism, which sooner than later always fails. Even if you could tax everyone at 98% the unlimited wants of the people would outrun any government's ability to redistribute wealth.
Capitalism works, socialism 'sort of' works until it's literally too big NOT to fail.

Europe is in deep shit because USA DEREGULATED THE MARKETS and the whole of europe and USA are all tied into the same big banks.
In reality we live in a coperate run socity and thats because for the most part its a FREE MARKET in the sense that whoever has the most money can do what the fuck they like by lobying the goverment thats what you get when you let companies and money dictate things the people with the money own and run the goverment its as close to free market as you can get and hense why everything has fallen apart for the menny and benofited the few super ritch.
also look at crime rates and quality of helth care for countries that have better distribution of wealth you will find they are among the top.

>> ^quantumushroom:

People who get "free" stuff usually like things being "free", and a corrupt government is more than happy to seize the money from the producers to buy the votes of the ignorant. Why should the producers continue busting a$$ only to have their 'extra' hard work taken away? Socialist paradises like mexifornia have been great for Utah and Arizona, which are more than happy to receive the fleeing companies voting with their feet.
Europe is in deep sh1t because of socialism, which sooner than later always fails. Even if you could tax everyone at 98% the unlimited wants of the people would outrun any government's ability to redistribute wealth.
Capitalism works, socialism 'sort of' works until it's literally too big NOT to fail.


Europe is in deep shit because USA DEREGULATED THE MARKETS and the whole of europe and USA are all tied into the same big banks.

In reality we live in a coperate run socity and thats because for the most part its a FREE MARKET in the sense that whoever has the most money can do what the fuck they like by lobying the goverment thats what you get when you let companies and money dictate things the people with the money own and run the goverment its as close to free market as you can get and hense why everything has fallen apart for the menny and benofited the few super ritch.

also look at crime rates and quality of helth care for countries that have better distribution of wealth you will find they are among the top.

Not true. Venture capital is not necessary for businesses to exist. How do I know? Many businesses began without investments of the size that require venture capitalists. Parents give their children money to start businesses, or people find work to do that others want done and save and re-invest. Before capitalism, just about every business started without capital investment.

And yes I do believe that. I'm not at all in favour of redistribution of wealth. I'm in favour of fair distribution of wealth. To me, that means people earning whatever they can within the law, and not using their wealth to create legal conditions that favour their making money at the expense of those without as much money. Such a system keeps the rich rich, and makes it nearly impossible for the lower and middle classes to become rich. In fact, it erodes the middle class because doing more work than before only keeps you level, not going higher. It used to be that a household only needed one breadwinner. You'd think with all our new time-saving technology we'd need even less labour, but no, it now takes two breadwinners.>> ^quantumushroom:

Without investors (and capital) laborers have nothing to build or create. Without biz leaders, laborers build products no one wants and go out of business.
And the rich who earn their money honestly and keep it without manipulating Congress etc. are entitled to enjoy it, in my books.
You don't really believe this.

>> ^messenger:
You mean that all profits should go to the labourers (literally, the productive), and that those who have lived off the riches created by labour merely by being investors should die?
That's a startling new stance for you QM, and I'm starting to warm to your philosophy, but I don't think lazy rich should die. And the rich who earn their money honestly and keep it without manipulating Congress etc. are entitled to enjoy it, in my books.>> ^quantumushroom:
Death to parasites, wealth to the productive who created it.

I agree with or accept everything you say here except I'm not clear on your meaning re: socialism vs. fascism. I'm not sure where your reference to fascism comes from. Are you saying that the Western countries are fascist, or that Libya will become a fascist state now that Gaddafi's gone? Also, do you consider ruling as a dictator and militarily crushing dissent more like socialism or fascism? You can't have fascist democracy, so I'm not sure where you're going with this. And as I said before, the country is still oil-rich, and may choose to continue to distribute the wealth in the form of free health care and so on as before.

I have little respect for the UN myself, and don't support their intervention in this case, so no, I wouldn't be OK with getting the UN to militarily support reel groups in the US.>> ^marbles:
It's called imperialism. Wall Street-London oligarchs run the world. They use mafia tactics to take and do what they want. And if a country's leader doesn't fall in line, then they are taken out.
Is that what this is, self-determination of the Libyan people? No, it's the determination of NATO using violent ideological extremist groups cultivated over the last 30 years by US and British intelligence in the eastern cities of Darnah and Benghazi.
Nothing about this benefits "the West". It benefits big oil interests, defense contractors, and megabanks.
If you don't understand how socialism is better than fascism, then this is a wasted conversation.
I don't put a lot of stock in anything the UN does or says. Nor do I think it has the authority to decide what one country can do to another. But this is were NATO supposedly got their authority to terror bomb and back the rebels in their "civil war". (Even though it violates the UN charter) Basically picking and choosing what international laws to follow when it suites your agenda is what the UN is for.
Using the US and NATO's rationale, China or some other country has the authority to bomb the US governmnet and support dissenting groups here. Are you ok with that?

@raverman: "The inequality of distribution of wealth has to be fixed INSIDE the corporations remuneration for effort."

If I found a corporation, and never go public, why should you have any right to the profits of the corporation, other than the normal payment of taxes?

What, will you forcefully nationalize my corporation and take it away from me, to give it to the workers? There's a name for that.

@jmzero: "As such, it's perfectly possible to think of the "poor getting poorer" if their relative income isn't growing as fast as others' incomes... the gap in income can still have social consequences."

How? If all the poor suddenly earned $60k a year in constant dollars and could afford all the health care, food, and whatever else they wanted, do you think there's going to be "social consequences" because Warren Buffet and his friends made an extra billion that year?

No, there wouldn't be.

You have to both look at the percentage of the pie each income quintile is taking, but also the size of the pie. Economics is not a zero-sum game, which is a mistake most of the people make when talking about income inequality.

Tax is not the point here. Sure taxing the rich assumes redistribution - but we all know any money that goes into the govt at this point vaporizes into national debt. The poor won't see a cent.

It's ambulance at the bottom of the cliff anyway - The point is the graph.

The hole in the system is:

- Consumers can control the market by which products / services they purchase
- But they can't control how profits are distributed internally. The ceo's - all on each other's boards - reward each other with a fatter and fatter cut of the pie.

Outside corporations the market is a democracy. But INSIDE corporations the class structure is a clear oligarchy with no checks or balances and a totally powerless workforce.

The inequality of distribution of wealth has to be fixed INSIDE the corporations remuneration for effort. It cannot be fixed by funneling money back through the government machinery.

Tags for this video have been changed from 'disttibution of wealth, united states, 1955' to 'distribution of wealth, united states, 1955' - edited by DerHasisttot