ECB Research Bulletin:

In an economy with its own fiat currency, the monetary authority and the fiscal authority can ensure that public debt denominated in the national fiat currency is non-defaultable, i.e. maturing government bonds are convertible into currency at par. With this arrangement in place, fiscal policy can focus on business cycle stabilisation when monetary policy hits the lower bound constraint. However, the fiscal authorities of the euro area countries have given up the ability to issue non-defaultable debt. As a consequence, effective macroeconomic stabilisation has been difficult to achieve.

Translation:
- all members of the eurozone effectively use a foreign currency
- they can default, because they do not and cannot issue debt in their currency
- fiscal policy has thus been completely neutered

Ergo, national parliaments have a significantly smaller policy space compared to countries with their own currency. Our parliaments intentionally surrender power to unelected technocrats, even control of the national budget, which is the primary power available to any parliament anywhere.

"Sorry, lad. We cannot pay for healthcare/pension/infrastructure/education/wages/X, we have to maintain a balanced budget to appease the market." Yet it is still illegal to call for the guillotine...

Meanwhile, Japan doesn't give a fuck. The BoJ has been vacuuming up outstanding debt like there's no tomorrow. It currently holds in excess of 40% of all government debt, effectively canceling it. It's just book-keeping. The Treasury issues the debt, the CB buys the debt. Both are part of the consolidated government sector, ergo no debt. "Hyperinflation!", they scream. Can you hear them? Except Japan has been fighting deflation for two decades, with no end in sight.

Yet the inflation-hawks are still treated as persons of authority. Flat-earthers, the lot of 'em.

And my country wants the rest of Europe to sign on to the most moronic law in German history: the "Schuldenbremse", which makes running a deficit illegal at the constitutional level (except for undefined "emergencies"). They are either a) brainwashed, b) idiots, or c) straight up evil. And I'm not sure which one I prefer.

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.

Apologies, I got carried away... wall of text incoming.

@RedSky

I agree, monetary policy at low rates has very little to offer in terms of economic stimulus. Then again, the focus almost solely on monetary policy is part of the problem. Fiscal policy can have a massive impact, both directly (government purchases of goods and services) and indirectly (increase in automatic stabilizers). But for that you either need to be in control of your central bank, so that you can engage in Overt Monetary Financing ("printing" money). Or you need the blessing of the private banks, which is particularly true for a Vollgeld system.

The budget is the core of a parliamentary democracy, and to be at the whim of the folks at Deutsche Bank, HSBC or Credit Suisse -- no, thank you very much. We saw how that played out in Greece.

Anyway, the central bank can do miraculous things: if it provides funds to the democratically elected body in charge of the budget, aka parliament/the government. Trying to "motivate" the private banks to stock up on cheap reserves to stimulate lending is just a sign of ideology.

The great Michal Kalecki, in his essay The Political Aspects of Full Employment, summarized the general issue of government spending quite clearly. The industrial leaders stand in opposition to government spending aimed at full employment for three distinct reasons: a) dislike of government interference in the problem of employment as such; b) dislike of the direction of government spending (public investment and subsidizing consumption); c) dislike of the social and political changes resulting from the maintenance of full employment.

I'd say control over your currency is too great a tool to leave it in the hands of unelected managers. Clement Attlee knew very well why he had to nationalize the Bank of England in '46.

Back to the issue of inflation, I'd like to make two points. First, how big a role should inflation really play when talking policy. Second, what's the influence of a central bank on inflation.

Where does it come from, this focus on inflation. People usually talk about government spending when discussing inflation. Private spending is rarely brought up, even though it can be just as inflationary. So let's ignore private spending for a moment and talk purely government spending: should a deficit/surplus not be judged primarily by how well it helps us achieve our macroeconomic goals? Or more clearly, why should we sacrifice full employment or our general welfare on the altar of inflation? Yes, that's over the top. But so is the angst of inflation.

I'd say let's stick with Abba Lerner's concept of functional finance and judge deficits/surpluses purely by how well they help us achieve our macroeconomic goals. Besides, the US has run massive deficits during the GFC, so much in fact, that a great number of monetarists saw hyperinflation just around the corner. Still waiting for it. Same for Japan. Massive deficits... and deflation.

As long as spending, both private and government, doesn't push the economy beyond its limits (full employment, real resources, production capacity), out-of-control inflation just doesn't materialize. Plus, suppressing inflation is actually one thing central banks can do quite well. Unlike causing inflation, which both Japan and the EU are showcases off. Draghi can dance naked on the table, monetary policy (QE, mainly) won't push inflation upwards.

Which brings me to the second point: what's inflation, what's the cause of inflation, how can central banks manipulate it.

CPI is often used as a measure of inflation, but I prefer the GDP deflator. CPI doesn't account for externalities that you cannot influence, whatever you do. Prime case: the price of oil. Monetary policy of the Bank of Sweden has no influence on the price of oil. The GDP inflator, however, accounts for every economic activity within your currency zone -- much more useful.

General theory says, this measure of inflation goes up when demand surpasses supply. And vice versa. The primary factor of demand is domestic purchasing power, therefore wages. If you suppress wages, you suppress inflation. If you push wages, you push inflation. More specifically, you can see a direct correlation between unit labour costs and the GDP deflator in every country at any time. Here's a general graph for multiple countries, and the St. Louis FED provides a beauty for the US.

That's why it's easy for central banks to combat inflation, but almost impossible to fight deflation.

The article linked above mentions Röpke and Eucken as champions of free market capitalism, so to speak. Ironically, Bernie Sanders is quite in line with many of Walter Eucken's core ideas. For instance, Eucken declared legal responsibility to be an absolute necessity for competition within a market economy. Meaning that under Eucken's notion of capitalism, US prisons would be filled to the brim with white collar criminals from Wall Street and just about every multinational corporation, including Volkswagen.

Ludwig Erhard, credited by many to be the main figure behind the German "Wirtschaftswunder" (nothing wonderous about it), postulated real wage growth in line with productivity and target inflation as an imperative for a working social market economy. Again, very much in line with Bernie Sanders. Maybe even to the left of Sanders. A 5% increase in productivity and a target inflation of 2% requires a wage increase of 7%, otherwise your economy will starve itself of the demand it requires to absorb its increased production. You can steal it from foreign countries, like Germany's been doing for more than a decade now, but that kind of parasitic behaviour is generally frowned upon. Minimum wage in the US according to Erhard would be what now, $25-$30? So much for Sanders' $15...

Sennholz further mentions the CDU as a counterweight to the SPD. Well, the CDU's "Ahlener Programm" in 1947 declared that both marxism and capitalism failed the German people. In fact, it put significant blame for Germany's descent into fascism at the feet of the capitalistic system and called for a complete restart with focus NOT on the pursuit of profit and power, but the well-being of the people. They called for socialism with Christian responsibility, later watered down and known as social market economy or Rhine capitalism.

As for the economic policies conducted by the occupation forces: German industry, and large corporations in particular, were shackled for the role they played during the war. If you work tens of thousands of slaves to their death, you lose your right to... well, anything. If they had stripped IG Farben, Krupp and the likes down to the very bone, nobody could have complained. No economic liberties for the suppliers behind a genocide.

Next in line, the comparison with Germany's European neighbours. Sennholz wrote that piece in '55, so you can't really blame him for it. Italy had more growth from '58 onwards, France had more growth than its devastated neighbour from '62 onwards. The third Axis power, Japan, had significantly more growth from '58 onwards.

Why did some European and Asian countries grew much more rapidly than the US? Fair Deal? Nope, Bretton-Woods. Semi-fixed exchange rates caused the Deutsche Mark and the Yen to be ridiculously undervalued compared to the Dollar, thus increasing German and Japanese competitiveness at the cost of the US. Stable trade relations created by the semi-fixed exchange rates plus the highly expansive monetary policy in the US – that's what boosted Germany's economy most of all. Sort of like China over the last two decades, except we were needed as a bulwark against the evil, evil Commies, so the US kept going full throttle.

Our glorious policians tried the same policies (Adenauer/Erhard) in East Germany after reunification, even though global conditions were vastly different, and the result is the mess we now have over there. The entire industry was burned to the ground when they set the exchange rate too high, thus completely destroying what little competitiveness remained. Two trillion DM later, still no improvement. A job well done, truly.

Anyway, if anything, Bernie Sanders' program is closer to post-war German social market economic principles than to the East-German bastard of socialism, state capitalism and planned economy imposed by an autocratic system. However, even that messed up system produced significantly less poverty, both in quality and quantity, than the current US corporatocracy. No homelessness, no starvation, proper healthcare for everyone – reality in the German Democratic Republic (East Germany). And despite the fact that they were used as cheap labour for western corporations, no less. My first Ikea shelf was produced by our oppressed brothers and sisters in the East. The Wall "protected" the West from cheap labour while letting goods pass right through – splendid membrane, that one.

PS: Since that article was written in '55, I have to mention one of my city's most famous citizens: Otto Brenner. He was elected head of the IG Metal, this country's most influential trade union, in 1956 after having shared the office since 1952. The policies he fought for, and pushed through, during his 16 years in charge of the union are very much in line with what Sanders is campaigning for.

@VoodooV: "Every one of these youtube crusaders are comfortably enjoying the perks of a system they despise."

What perks? Like roads and firemen? You know, it's not like we couldn't have those things without government. And those kinds of services are only a small portion of the federal budget. In fact, from all the excise taxes collected on gasoline, tobacco and alcohol, they'd cover the roads completely, which costs around $60 billion annually. In fact, things like the EPA, Dept. of Trans, NASA, Dept. of Edu, all cost less than the revenue the federal government categorizes as "other." Look it up: http://www.whitehouse.gov/omb/budget/historicals

So what about all the wars and militarism? Is that, too, a perk? And the prison industrial complex that locks up 1% of our population? What are these perks you speak of?

Even Ayn Rand took gov't assistance.

I love it when statists bring this up. I personally am not an Objectivist, and find lots of flaws with their ideology, but this is a cheap blow. Obviously it shows the economic illiteracy of most statists. For one, she's forced to pay into social security, so therefore why shouldn't she receive some of it back? And second, if you spend more than a couple seconds reading about U.S. monetary policy, you'd know that the purchasing power of the dollar is reduced over time due to inflation, and hence savings are always impacted. This should alarm you instead of excite you.

The whole thing is infested with logical fallacies: false equivalencies, ad homs, strawmen, and even a no true scotsman thrown in for shits and giggles.

By all means don't take any time to point out which things he said were these things. No, that'd be helpful, and we wouldn't want to cloudy any appeals to emotion with pesky things like fact and well thought out rebuttals.

they spend all this time criticizing the problems of gov't and NEVER ONCE demonstrate how it would work without these systems.

I think there are plenty who do. It's just that statists don't accept those answers, or any answers that don't emulate the current status quo systems they're accustomed to. I'm not interested in replacing public schools with another bureaucracy.

Comment hidden because you are ignoring dag. (show it anyway)

She's asking for expert opinions about criminal charges - these guys are bean counters - not the experts on criminal code. They could give personal opinions, which seems like what she wants, but you could see why they wouldn't do that, unless they want the Attorney General opining on monetary policy..

Nice of you to tell us you're ignorant of monetary policy right up front.

Arm yourself with knowledge, people, or succomb to ignorance found in conspiracies..

Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publically-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board. In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed.

Facts: No foreigners own any part of the Fed. Each Federal Reserve bank is owned exclusively by the participating commercial banks and S&Ls operating within the Federal Reserve bank's district. Individuals and non-bank firms, be they foreign or domestic, are not permitted by law to own any shares of a Federal Reserve bank. Moreover, monetary policy is controlled by the publically-appointed Board of Governors, not by the Federal Reserve banks.

Fact: Independent accounting firms conduct full financial audits of the Federal Reserve banks and the Board of Governors every year. The Fed is also subject to certain types of audits from the Government Accounting Office.

Facts: The Federal Reserve rebates its net earnings to the Treasury every year. Consequently, the interest the Treasury pays to the Fed is returned, so the money borrowed from the Fed has no net interest obligation for the Treasury. The government could print its own currency independent of the Fed, but there would be no effective safeguards against abuse of this power for political gain.

Facts: The Federal Reserve banks have only a small share of the total national debt (about 7%). Therefore, only a small share of the interest on the debt goes to the Fed. Regardless, the Fed rebates that interest to the Treasury every year, so the debt held by the Fed carries no net interest obligation for the government. In addition, it is Congress, not the Federal Reserve, who is responsible for the federal budget and the national debt.

Facts: Kennedy wrote E.O. 11,110 to phase out silver certificate currency, not to issue more of it. Records show Kennedy and the Federal Reserve were almost always in agreement on policy matters. He even signed legislation to give the Fed more authority to issue currency.

Facts: McFadden was incorrect regarding the Fed costing the government money. However, later economic analysis agrees with him that Federal Reserve policy blunders had a substantial role in causing the Depression. However, his implication that this was done deliberately has no basis in fact. Moreover, for a dozen years prior to his rant, McFadden had been the chairman of the House subcommittee that oversaw the Federal Reserve. Why didn't he do anything to reform or abolish the Fed while he had the chance?

Facts: The banking system is indeed able to create money with a mere computer keystroke. However, a bank's ability to create money is tied directly to the amount of reserves customers have deposited there. A bank must pay a competitive interest rate on those deposits to keep them from leaving to other banks. This interest expense alone is a substantial portion of a bank's operating costs and is de facto proof a bank cannot costlessly create money.

Fact: The term 'lawful money' does not refer to gold or silver coin, but to types of money which the government would permit banks to use when tabulating their reserves. These types of money included, but were not limited to, gold and silver coin.

If you're on a gold standard, you have to guarantee your money is convertible to gold. That means your central bank sets its interest rates according to how much gold is on hand. If you happen to be losing gold, you have to raise interest rates, reduce the amount of money in circulation, so you can stay on the gold standard.

If — just suppose — you're in an economic downturn, and people are pulling a bunch of gold out of the banks, then you raise interest rates and reduce the amount of money in circulation, which keeps you on the gold standard... but also is exactly the opposite of the monetary policy you want when people are losing their jobs. It stops economic activity dead.

In other words, this modern crying-out for a gold standard in the midst of an economic crisis is of a piece with all the other claims that we ought to adopt policies not because they will help, but because they're painful, and we deserve pain, don't we? We've been very, very naughty, or we must have been, to get into this kind of trouble, and we need to punish ourselves. Or at least, Ron Paul needs to punish you. And trust me, this will hurt you more than it hurts him.

Read more: http://www.esquire.com/blogs/politics/ron-paul-gold-standard-bad-6654238#ixzz1o4oUit5j

This is the original swiftboating... ronpauling...

We begin with two simple questions:

Why would he put out publications under his name without the slightest idea what was in them?
And if he didn't write the stuff, why hasn't he identified the author and revealed his name?



Based on comparing the writings and positions of Dr. Paul and several other people involved, it would appear the people responsible would be:

Murray Rothbard,
http://murrayrothbard.com/category/rothbard-rockwell-report/


---------------------------------------------------------------------------------------------------------------------------
My google quest began with this article and the comments in it, i have compiled my results:
http://www.redstate.com/leon_h_wolf/2011/12/22/about-those-racist-ron-paul-newsletters-that-he-didnt-read-and-completely-disavowed

------------------------------------------------ RESEARCH

HERE'S RON PAULS RESPONSE:

"The quotations in The New Republic article are not mine and do not represent what I believe or have ever believed. I have never uttered such words and denounce such small-minded thoughts. When I was out of Congress and practicing medicine full-time, a newsletter was published under my name that I did not edit. Several writers contributed to the product. For over a decade, I have publically taken moral responsibility for not paying closer attention to what went out under my name."

-------------------------------

OK, fair enough. Now for a 1995 interview, go to 1:54, here is transcription with his interview proving that he knew newsletters existed, not all the content. In fact, he seems more concerned with finance:

“Along with that I also put out a political, uh, type of business investment newsletter, sort of covered all these areas. And it covered, uh, a lot about what was going on in Washington and financial events, especially some of the monetary events since I had been especially interested in monetary policy, had been on the banking committee, and still very interested in, in that subject.. that, uh, this newsletter dealt with that… has to do with the value of the dollar [snip] and of course the disadvantages of all the high taxes and spending that our government seems to continue to do.”

Watch video here: http://www.youtube.com/watch?v=eW755u5460A

A constant theme in Paul’s rhetoric, dating back to his first years as a congressman in the late 1970s, is that the United States is on the edge of a precipice. The centerpiece of this argument is that the abandonment of the gold standard has put the United States on the path to financial collapse.
http://www.tnr.com/article/politics/98811/ron-paul-libertarian-bigotry

------------------------------------------------------

So what about that, he did have a newsletter? Did it talk about more than money, and did he author those writings? Well it gets more interesting..

this is from a comment here:
http://www.redstate.com/erick/2011/12/22/the-ron-paul-newsletter-and-his-jeremiah-wright-moment/#comment-152657

"Wish I had saved the links. This Dondero guy was supposedly part of a group of people that wrote the content of the newsletters (maybe seven different people), and that Lew Rockwell and Murray Rothbard were the main brains behind the content. Ron Paul wrote some of the content too (probably about sound money, lol). They have also hinted (maybe Rockwell did), that the writer of some of the extreme articles was now dead. It seems that multiple people from that time have died, but the most relevant is Murray Rothbard. He’s like a messiah to this sub-culture, and Rockwell would probably never spill the beans on Rothbard. The tone of the racially offensive parts does seem like it would be written by Rothbard. If you are unlucky enough to attempt to listen through one of his lectures on YouTube, you will notice his attempts at sarcastic humor, if you don’t fall asleep first.

Dondero: “Neither Rockwell or Rothbard are/were “libertarians.” In his later yers Rothbard called himself a “Paleo” aligning with the conservative southern successionists. Rockwell, today calls himself an Anarchist, and has distanced himself greatly from any part of the libertarian movement.”

http://www.libertarianrepublican.net/2011/02/1970s80s-libertarian-party-stalwart.html

“The newsletters’ obsession with blacks and gays was of a piece with a conscious political strategy adopted at that same time by Lew Rockwell and Murray Rothbard. After breaking with the Libertarian Party following the 1988 presidential election, Rockwell and Rothbard formed a schismatic “paleolibertarian” movement, which rejected what they saw as the social libertinism and leftist tendencies of mainstream libertarians. In 1990, they launched the Rothbard-Rockwell Report, where they crafted a plan they hoped would midwife a broad new “paleo” coalition.”

http://reason.com/archives/2008/01/16/who-wrote-ron-pauls-newsletter"

---------------------------

Ok now we're getting somewhere.. so what about Dondero, Rockwell, and Rothbard?

Reason: Your former staffer Eric Dondero is challenging you for your House seat in 2008.
Paul: He's a disgruntled former employee who was fired.
http://reason.com/blog/2007/05/22/ron-paul-on-9-11-and-eric-dond

-----------------------------------
What about these mid 1990's interviews like this one from the Dallas Morning News:

In 1996, Paul told The Dallas Morning News that his comment about black men in Washington came while writing about a 1992 study by the National Center on Incarceration and Alternatives, a criminal justice think tank in Virginia. The comment about black males being fleet of foot came from a 1992 newsletter, disavowed by Paul.

Paul cited the study and wrote (NOT SAID): “Given the inefficiencies of what DC laughingly calls the criminal justice system, I think we can safely assume that 95 percent of the black males in that city are semi-criminal or entirely criminal.”

“These aren’t my figures,” Paul told the Morning News. “That is the assumption you can gather from the report.”

Dr. Paul denied suggestions that he was a racist and said he was not evoking stereotypes when he wrote the columns. He said they should be read and quoted in their entirety to avoid misrepresentation. [...]

"If someone challenges your character and takes the interpretation of the NAACP as proof of a man's character, what kind of a world do you live in?" Dr. Paul asked.

In the interview, he did not deny he made the statement about the swiftness of black men.

"If you try to catch someone that has stolen a purse from you, there is no chance to catch them," Dr. Paul said.

He also said the comment about black men in the nation's capital was made while writing about a 1992 study produced by the National Center on Incarceration and Alternatives, a criminal justice think tank based in Virginia

Paul spokesman Jesse Benton said the congressman was practicing medicine at the time the newsletters were published and “did not write or approve the incendiary passages and does not agree with them.”

“He has, however, taken moral responsibility because they appeared under his name and slipped through under his watch,” Benton said. “They do not reflect what he believes in: liberty and dignity for all mankind. … Dr. Paul, renowned as a straight shooter who speaks his mind, has given literally thousands of speeches over the past 35 years, and he has never spoken such things.”
--------------------------------------------------------------------------------
Paul, an obstetrician from Surfside, Tex., denied he is a racist and charged Austin lawyer Charles "Lefty" Morris, his Democratic opponent, with taking his 1992 writings out of context
http://reason.com/blog/2008/01/11/old-news-rehashed-for-over-a-d

"Instead of talking about the issues, our opponent has chosen to lie and try to deceive the people of the 14th District," said Paul spokesman Michael Sullivan, who added that the excerpts were written during the Los Angeles riots when "Jesse Jackson was making the same comments."

-----------------

And all the confusion because he wanted to take responsibility. .. and the real issue? Not with what he may have said, or how consistent he has been denying this lie, but merely:

"Would he even check in to see if his ideas are being implemented? Who would he appoint to Cabinet positions?"

it comes down to an EITHER/OR false choice:

Either Paul is so oblivious to what was being done in his name that this obliviousness alone disqualifies him for a job like the presidency
— or -
he knew very well that horrific arguments were being published his name and he lent his name to a cynical racist strategy anyway.

Is there not any other choice?

There is your answer. The GOP is trying to sow any and all doubt at any and all cost. The content of the newsletters is just convenient; they would have done this anyway.
http://www.theatlantic.com/politics/archive/2011/12/the-story-behind-ron-pauls-racist-newsletters/250338/
-------------------------------------

So Why Smear Ron Paul? Here is why... and the answer may NOT surprise you:

http://www.infowars.com/cnn-poll-ron-paul-most-popular-republican-amongst-non-whites/

yet we're supposed to believe this man, a physician and politician, has actually uttered words like, ""Am I the only one sick of hearing about the 'rights' of AIDS carriers?"

Please. It is VERY unlikely.

http://www.thenation.com/blog/165290/why-do-gop-bosses-fear-ron-paul

Thank you for your time.

@bmacs27 I've been wanting to come back and reply for a couple days now, but didn't have the time. Now I hesitate to messing with the good conversation that followed, so I'll just touch on the points I'm interested in from the whole conversation. If I skip something you really wanted me to answer, let me know!

For one, I do tend to have an odd mix of pro-market and anti-market beliefs. On unemployment, my answer is that in an ideal world, I would want people entitled to some sort of minimum guaranteed income, no matter whether what they do. I like unemployment insurance because it's kinda like that, only with pragmatic real-world strings attached (it's limited in duration, and you've gotta be looking for work and not finding anything, and it stops when you get a new job...).

heropsycho already gave the more economics-minded answer I would've given about unemployment benefits helping prop up demand, and keep the economy from shedding even more jobs. I'd go along with your "you get unemployment, but we're going to make it contingent on you attending free job retraining", but I'd also go along with a WPA-style "we won't pay you unemployment, we'll just directly hire you" sort of arrangement, especially in a jobs market full of laid off construction workers.

heropsycho also gave the succinct answer I was going to give about hoarding labor -- worker salaries and benefits are always on the "cost" side of the company's ledger, and people often get fired long before they become an outright loss to the business. Usually it's because you've become less profitable than what they think they could make by replacing you with someone else (or by just by making other workers work more hours).

And no, I'm not a protectionist who wants to see unions and/or government forcing companies to employ people who're losing them money, I'm in favor of having a social safety net so there's no moral issue with companies laying people off (that's why I like the idea of a minimum guaranteed income).

On the topic of whose economic theories we've followed post-Volcker, for the most part, it's been Monetarist-style monetary policy, coupled with ideological right-wing fiscal policy. Namely, a targeted package of policies aimed at redistributing wealth from the poor and middle classes to the rich. That still leaves things a bit blurry, because the only economic justifications for debt-fueled tax cuts are Keynesian, and modern (New) Keynesians have largely adopted monetarist notions of monetary policy.

But the big disagreement between modern Monetarists and modern Keynesians is about fiscal policy -- Monetarists say it can't work, Keynesians say it can. Part of what confuses people a bit, is that Republicans adopt whatever economic theory justifies what they started out wanting to do. Keynes is right when they want to borrow money to cut taxes, Monetarists are right when Obama wants to pass a stimulus program, and Austrians are right when the Fed tries to help the economy by printing money when a Democrat is in the White House.

A. Overly simplistic, and you're confusing to some degree what is Keynesian. A central tenant of Keynesian economics is counter-cyclical budget deficits. When there's a recession, the government should run deficits, and the larger the recession, the larger the corresponding deficit. That's been a non-stop, although admittedly abused, government policy since the Depression. Also, Keynesian economics had components in it for monetary policy as well. Keynes advocated for lower interest rates during times of recession along with increasing the monetary supply. Yes, he did believe that during more severe recessions that monetary measures would not be enough, but he nevertheless advocated for the various monetary policies. These align up with most recessions as far as what the gov't did from the Great Depression on. Just because Keynesian policies disappointed during the 1970's, the ideas were not altogether abandoned ever since. The simple fact of the matter is aside from 2007, there hadn't been a particularly severe recession since the 1970s, so it's reasonable to assume that direct employment wasn't deemed necessary, not that it was seen as bad policy in all cases.

B. It happened to me by the hand of Microsoft. I'm pretty sure they didn't have flunky MBAs. ;-)

C. There are a lot of similar issues involved. My point was only that you can't just tie requirements to it, and that's that. There are a huge myriad of issues that would come hand in hand with stipulations to unemployment. Your idea is still something I'd be onboard with if those devils in the details were addressed. I do see as an example that some people become unemployed because of structural changes to the economy that causes their jobs to never come back. As a case in point, textile factory workers who lose their jobs due to offshoring are suddenly in a position where market forces have no remedy. They lack the skills to get jobs in areas of growth such as more in depth computer skills, and likely lack the financial resources to get the education and training to get said skills because they're unemployed. This is a perfect example in my opinion where the market and free trade fail from time to time, and some force, likely the gov't, needs to step in for the good of everyone. These people would benefit from retraining, so they can get a good job, business owners benefit from increasing numbers of workers who can do the jobs they're needing people to do, and it becomes a win win situation.

D. The last time we tried no deposit insurance, it failed miserably. Banks lent money for people to buy goods and services they couldn't afford, and stocks on the margin. People stuck their money in banks anyway. The only difference is when fear hit the market after the crash, a lot of people, many irrationally, pulled their money from banks, causing a collapse in the banking system, which tanked the entire economy even further.

People lack the time and/or motivation to stay informed on all kinds of issues from local politics, to PTA meetings. I don't see how they could begin to assess what loans their banks were making as far as riskiness. And the typical American when it comes to finances? Yikes! Next to no savings, can't understand how much they should be regularly investing, etc. And it's not just the stupid people. Most Americans don't even know what a mutual fund actually is. How could they possibly make intelligent decisions about the riskiness of their banks' portfolios? I consider myself smarter than the average bear, but even I'd be paralyzed with fear selecting a bank based what little info I could find of their portfolios. Instead, I make sure they're FDIC insured, because that in and of itself entails objective benchmarks to even get that insurance.

And honestly, I don't see many people making decisions about their banks based on rates alone. As a case in point, very few people I know put money in online high yield savings accounts instead of the local credit union, bank, or large megabank, despite the fact that in most cases online savings account providers such as ING Direct pay 2-3 times the interest. I don't believe that's what caused the madness in the banking industry at all. At the very least, there's a massive list of causes well above FDIC insurance, and even if FDIC insurance did play a role in causing the crisis, it also served well in preventing runs on the banks in general that would have compounded the crisis further.

>> ^bmacs27:

@heropsycho
A. Because we've been leaning on monetary policy as our intervention of choice. Direct employment has been called socialism for 30 years. That doesn't suggest a dominant Keynesian ideology. Really it's been this mix of monetarism and supply-side economics which morphed into some mutilated crony-capitalism.
B. I suppose it could happen, but it would take a rough business climate, or some flunky MBAs. In that situation I'd try to increase my business (i.e. make $200,000).
C. That's why we have food stamps. It isn't a perfect solution, but the kid starves if her folks spend the whole check on smokes too. Vices aren't the kind of "demand side" stimulus I'd like to see (one flaw in the Keynesian argument given the current living conditions of the American poor).
D. I really do believe that if the FDIC didn't exist, "the market" would not have allowed deposits to be leveraged by banks investing in exotic financial instruments. Like you said, even the bankers didn't know what the hell they were doing! Without the FDIC people would very quickly ask, "what the hell you doin' with my money?" Rather, since their money is backed by the government they ask, "what sorts of rates are you offering?" It's that pressure from the distorted marketplace that pushed banks into more and more leverage to stay competitive. Those rates were realized by making massively leveraged bets that were only possible by hedging with exotic instruments. Once upon a time people knew their banker. I think that's the best FDIC there could be. There might be some legal patchwork of the Glass-Steagall flavor that might make it work, but chasing down all the unintended consequences would be a challenge. Certainly figuring out how to unwind all the securitized mortgages that already exist makes that sort of policy direction seemingly prohibitive.
F-. Dude, Peter Schiff is a quack.

@heropsycho

A. Because we've been leaning on monetary policy as our intervention of choice. Direct employment has been called socialism for 30 years. That doesn't suggest a dominant Keynesian ideology. Really it's been this mix of monetarism and supply-side economics which morphed into some mutilated crony-capitalism.

B. I suppose it could happen, but it would take a rough business climate, or some flunky MBAs. In that situation I'd try to increase my business (i.e. make $200,000).

C. That's why we have food stamps. It isn't a perfect solution, but the kid starves if her folks spend the whole check on smokes too. Vices aren't the kind of "demand side" stimulus I'd like to see (one flaw in the Keynesian argument given the current living conditions of the American poor).

D. I really do believe that if the FDIC didn't exist, "the market" would not have allowed deposits to be leveraged by banks investing in exotic financial instruments. Like you said, even the bankers didn't know what the hell they were doing! Without the FDIC people would very quickly ask, "what the hell you doin' with my money?" Rather, since their money is backed by the government they ask, "what sorts of rates are you offering?" It's that pressure from the distorted marketplace that pushed banks into more and more leverage to stay competitive. Those rates were realized by making massively leveraged bets that were only possible by hedging with exotic instruments. Once upon a time people knew their banker. I think that's the best FDIC there could be. There might be some legal patchwork of the Glass-Steagall flavor that might make it work, but chasing down all the unintended consequences would be a challenge. Certainly figuring out how to unwind all the securitized mortgages that already exist makes that sort of policy direction seemingly prohibitive.

F-. Dude, Peter Schiff is a quack.

>> ^Boise_Lib:

Well, this just confuses me.

It mostly made me chuckle. The Catholic church goes ultra-Keynesian in defense of social justice. Somewhere, there's a fleet of Ron Paul supporters whose heads just exploded.

As for the merits of the idea itself, I don't think we're at the point where a global monetary union would be useful. While the IMF doesn't have the same sort of dedication to social justice one would imagine a Papal Global Bank would have, it's not actually doing too bad a job given its limited resources and authority, and given the kind of ideological mindsets that tend to infest monetary institutions.

I'm also somewhat fascinated at the idea of the Catholic church putting out a statement about a need for expansionary monetary policy to ease poverty in the world. I wouldn't have expected such a scientific idea to come from them.

>> ^darkrowan:

For all the goofieness of this vid it does bring up a good question: Who's replacing them? Could be, like The Who said, "Meet the new boss, same as the old boss"?


Seems to be, unlike popular uprisings in some other countries which have resulted in the overthrow of a dictator by the people, this has been paid gangs of thugs backed by NATO airstrikes dealing with Qadhafi and any local resistance. What seems most worrisome is the National Transitional Councils decision to give policy decision making authority out to corporations, for example:
Monetary policy is handled by the Central Bank of Benghazi
http://www.ntclibya.org/english/meeting-on-19-march-2011/

..and oil policy is handled by... The Libyan Oil Company.
http://www.bloomberg.com/news/2011-03-21/libyan-rebel-council-sets-up-oil-company-to-replace-qaddafi-s.html

Pretty much the same as if Bank of America were given full authority to handle all policy decisions for America's banking system, or if Exxon Mobil got to make all fossil fuel and environmental policy.