September 27th, 2013
in Op Ed
by Roger Erickson, Mike Norman Economics
An organized group cannot easily grow if it doesn't allow itself to at least note and denominate any real growth trying to happen. Not allowing ourselves to "note" things reduces to denial of real growth. Where's the logic in that?
What? The slack-jawed yokels, Erskine and Bowles, want an example which their little pea brains can understand? Fine. Let the "Erbles" chew on the following classroom skit as they run around their little exercise wheel. It accurately paraphrases their Erble logic.
Erble Teacher: "Children, today we're gonna solve a word problem together. Master Marriner Eccles, let's start with you. If your farm harvests 2 ears of corn you have 2 ears of corn, right? Now, if you water and weed enough to get 2 more ears of corn, how many ears of corn do you have now?"
Erble Teacher: "Nope. Sorry. We've run out of numerals. You can't have a '4' to use."
Marriner: [Pauses to actually use his 6 year old brain.] "Listen here, teach'. Were you born in a barn? You ain't the boss of me. If I have 4 ears of corn I've got 'em, and no deficit of activity in what you call your brain is gonna convince me otherwise."
Erble Teacher: "Watch yer language young fella. And you listen to me. Our great and illustrious Banker's Guild owns this here numerals market, and if we say we're out of numerals to use in word problems, then you better believe that we actually are. Capiche? Now if you want a few more numerals to use in your calculations, we're gonna have to get 'em from somewhere, right? That only stands to reason, ya gotta admit it. Numerals don't just grow on trees. Now line up quick, and sign these here IOUs to take home to your parents. You turn over enough real corn - or eggs & bacon - and our Banker's Guild will go out and procure the real numerals you need. Until then, you're not allowed to solve any word problems, and that'll impair your learning. You don't want THAT, do you?"
Marriner: [Momentarily stares in disbelief at what passes for a teacher, but - luckily - has already been imbued with both the capacity for abstract thought AND the will to use it.] "Ok, teach'. I see how it's gonna be. Tell you what. I'm leaving this so-called school right now, 'cuz I've got better things to do with MY time than listen to some fool proclaim that there's a shortage of what are only virtual, representational discourse units, when there are actual events in the world outside that we ought to and must be busy manipulating if we're to survive as a nation.
You ought to be ashamed of yourself! Kids are sent here to learn something that will improve their ability to be good citizens. Instead, you're filling their heads up with absolute nonsense, and not even using your own head.
Here's what I think with my own thought #4, 'cuz I haven't run out of fiat thoughts, or how to use 'em, regardless of what YOU say. Nearly every baby comes into this world with the ability to start babbling, and that babble is free and unlimited as long as they have a stomach full of real nutrients. Some of us eventually learn to carefully use that unlimited babble as a valuable communication skill that helps us direct real outcomes that are MORE than the sum of their parts. That's called organization, and it requires thinking. YOU, on the other hand, have gotten yourself stuck in the babble phase, and you've never learned to organize your unlimited babble for real utility. When my dad & mum hear about your nonsense, they'll run you outta town pronto, and we'll get us a real teacher that has a brain and the honesty to use it right! Sayonara."
Erble Teacher: "Huh? I won't pretend to understand what on earth you're talking about young whippersnapper, but I assure you that it's total nonsense. I'm sure your folks will give you a sound whuppin' and send you right back to finish your schooling. Why, everyone knows that real and nominal are two separate and very real entities, and both have to be acquired from somewhere. 'Got fiat thoughts,' indeed! Humph."
[We know how that argument ended, in 1933. Operational reality prevailed over nonsense, although just in time, and only after very real disorganization had set in, and precious time had been lost.]
Back to the present. You'd think any logician would quickly arrive at the same conclusion when applied to any currency system - not just fiat currency - just by pondering the dictionary definitions of "public initiative" and "fiat" and "currency" - or maybe even throw in the words "denominate" and "represent." How many citizens have looked those 6 words up in a dictionary, before trying to discuss national policy? Surely that's not asking too much?
For those that have accidentally - despite a formal education - graduated from the babble phase of language let's get on with some simple, practical lessons all citizens should have passively acquired, by age 6.
In banking jargon, Warren Mosler says it this way.
A monetary economy (and its incomes and corporate proﬁts), by deﬁnition!, cannot grow without positive credit growth, which in turn leads to growing deposits.
This is a drop dead simple point of "fiat currency regime 101." One that you'd think:
1) every politician should have to demonstrate possession of, BEFORE being allowed to take the oath of office, and
2) every citizen should have to learn BEFORE registering to vote for said politicians.
You'd also think that elementary axiom is an operational pre-requisite to even discussing WHAT to spend national effort on, and how to distribute denominated efforts of our nominal currency units in patterns that don't lead to either inflation or deflation.
Having said this, what have we here in the "exceptional" USA been doing with our time since Marriner Eccles' days? Hmmm??
Here's what we've doing. We've been actively training our own citizens to approach their own policy denominating paradigm ass-backwards! There's no denying it. No wonder nearly all our politicians heads eventually end up where they are, with worse than just their noses brown as a consequence! That's gotta stop, or we'll eventually shoot our culture in the foot enough times to remove that foot, and thereby kill our own markets, culture and nation.
If you've been considering yourself as part of that sub-group previously exalted as the US Middle Class, you know full well what that now-perforated foot feels like. A cultural organ full of more holes than a politicians' understanding of currency operations! Without functional feet, is it any wonder that our Democracy is on it's last legs?
One desired outcome ought to be a universal consensus to just stop shooting and instead regrow our injured cultural foot? Then take the other one out of our politician's mouths, where it's been getting chewed up, and put it back where it belongs? Actually supporting a growing nation rapidly becoming all that it can be?
If - compared to other electorates - we've actually remained remotely exceptional, through this last 80 years of phenomenal self-ignorance, just think how well off this country could be if we only had a group brain!
In conclusion, out of pity alone, here's my final message graciously humoring the Erbles.
"You know, I agree that YOU at least have run out of representational units. In fact, it's not just numerals. Your deficit has progressed so far that you're also out of any and all logical representations. Whatever's coming out of your mouth is null and void of all utility and hence, of any real value. Given that your logic account is running deeper into the red with every utterance you make, I hereby initiate a Citizens Arrest, and revoke your fiat "nonsense" account. Please close your mouth and desist from any further logical-debiting. Any further verbal credit issued from your account will be refused, until your logical basis is again accounted for.
Yours truly, and Condolences for your present state, US Citizens for Logic."