LateMechanic
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User ID: 1841
LateMechanic
7d ago
Yep exactly, the regular broadcast Fox stations just do regular down-the-middle local news like ABC/NBC. Fox News channel is completely different & separate, set up as a cable channel for exactly this reason (avoiding FCC regulation).
By contrast, with Kimmel it was directly the head of the FCC applying the pressure, not MAGAs cancelling their Disney+ to make them fire Kimmel.
I think it was actually mainly a twitter mob here as well. At 9-10am on wednesday there were already angry re-posts of the prior night's kimmel monologue, signal boosted by Elon to millions of views. So Kimmel was basically already the target of the day, for people who had been having a lot of success against their targets over the previous few days. That's why Benny Johnson had the FCC chair Carr on and why they were discussing Kimmel, which got posted that afternoon right before the affiliates announced they were cutting Kimmel.
Everyone who has told a more simplistic story about it being obviously due to a gangster FCC chair threatening ABC, or Nexstar having ulterior motives trying to butter up the administration, seems to ignore this part of the story that the outrage was already well under way on wednesday. (unless I got the timeline wrong myself)
edit: I think I did get part of the timeline wrong, and the monologue was apparently from monday night? Still, it was getting heat on wednesday morning from Elon & twitter.
LateMechanic
7d ago
Yeah they're interchangeable at this point, especially from the perspective of everyone understanding basically what you mean. And the 1-syllable version is certainly easier to be workable offline rather than the 5-syllable one.
I just think there was meaningfully something different being gestured at with the "warrior" part of it that we were seeing in the mid 2010s, while 'woke' was more like new elite manners or religion that especially spread among coastal urban white people who were susceptible to guilt tripping or were looking for meaning. I don't know why it works, but being told that you have the original sin of being born white and thus being intrinsically racist (even if you don't consciously think you're racist), but that the good news is you can repent and strive to actively be anti-racist and elevate PoC in your life while spreading this awakening to others...somehow this did actually work on a lot of people. So at least the way I saw it, there's usually a well-meaning core to wokeness. A lot of these people actually did think the non-woke were simply lacking education about historical injustice or something, while other older boomers maybe just shrugged their shoulders and went along with it to avoid status loss, like "I guess this is where society is going now, I can adapt".
So in my opinion, wokeness is enough to ruin movies/shows/fiction, or to make events or press conferences annoying with land acknowledgements or massive split-screen sign-language translations. But it took some real coordinated meanness/nastiness of self-styled social justice warriors to actively cancel people and salt their earth. This had a different level of commitment where these people knew they were down in the trenches of the culture war and had enemies.
LateMechanic
7d ago
When we're checking for hypocrisy, I think it's important to remember what original 'cancelations' and cancel culture entailed, even if that sometimes comes off as quibbling over degree. Plenty of your post still stands even if we're talking about minor retribution over speech, but some relies on the weight of what we knew as 'cancel culture' that just isn't applicable IMO.
Rather than just being a synonym for 'fired', 'canceled' was instead typified by the twitter phrase "wait, why is this person still being heard from? Didn't we cancel him?" It wasn't just getting someone unemployed from their current job, but instead attempting to actively make them unemployable. A complete salting of the earth by the mob, an ongoing blacklisting from society, kept up by dozens of psychos on twitter keeping tabs on targets for years on end (and rallying the troops if there was a new sighting). If Louis CK or Warren Ellis bounced back with a new sitcom or movie, that company would have been eating a ton of shit and facing boycotts. Pressure was put on their friends, family, and past colleagues to denounce them personally. Ethan Van Sciver was a top artist at DC, but he was openly republican and celebrated trump winning in 2016. For that he was hounded out of DC, and definitely wasn't going to be allowed to jump to Marvel or Image. The SJWs (not really 'woke', which is more of a high society new religion, though we conflate these now) wanted him bagging groceries or working fast food, or preferably just killing himself, and said so. He and some others had to jump to independent crowd-funded comics projects, and then got kicked off Kickstarter from this cancel culture pressure (until finally getting to Indiegogo who held tough).
If Jimmy Kimmel gets a new cable channel show, or tries going independent on Rumble or Substack, and rightwingers follow him around everywhere trying to him fired off those as well ("Do you know what he said about Charlie Kirk in his previous job? He can't be given another platform"), then there's a good case that we've entered right-wing cancel culture. Did people track the Home Depot lady to what job she got next, and go after that one too? Until that point, these seem to be pretty limited acts of retribution, rather than "canceling" people.
LateMechanic
7d ago
I'd say ASMR is as distinctively clear a feeling as frisson, but yeah, definitely two different things caused by practically opposite stimuli. I feel like I've experienced it my whole life, from being in kindergarten and having the librarian read a story to the class, to sometimes when getting haircuts, to even being stuck on the phone with some customer service person taking too long to work through something (clacking away on a keyboard while verbally stalling). So I pretty much knew instantly what youtubers were going for when I started seeing the videos in like ~2012, even with the ridiculous 'asmr' term someone came up with.
My experience was more of assuming everyone else was lying about not understanding it, out of some embarrassment that it was too weird or was somehow sexual. But it does really seem like many people don't get the 'back of the head tingles' feeling. Not sure if that goes for frisson too - are there many people out there who don't get 'chills' from some epic swelling music moment?
Then the asmr videos are trying to inorganically bottle it as a more 'pure cut' for people chasing the dragon, like epic movie trailers have tried to get a few frisson moments down to a science.
Yeah I always look through these links for videos, but it seems to be entirely relayed stories or things that people eventually had to plead guilty to in order to get lighter sentences in the zealous over-prosecutions.
And then you get a game of telephone, where NBC news writes "an explosive device" that made a loud noise and apparently caused psychological trauma because some officers anticipated it might have otherwise been a dangerous grenade, in an article where they also mention (at the bottom of the article) the second worst explosive as "lit what appeared to be a firecracker, but it did not explode". And then here it's upgraded to simply "a bomb".
LateMechanic
16d ago
I think normie leftists don't know him, but the one's that engage with leftist influencers probably did know him a little. I think you are right that most of them are regurgitating talking points
I wonder if it's close to the way I know Jimmy Kimmel. The only clips I've seen from him in recent memory are him crying when trump won (about all the soon-to-be-victims he's sorry that our country let down), and then him in various clip compilations of establishment narrative control. I don't really know what he's actually like. But after just about every single topical youtube video I watch, one of the algorithmic suggested 'related' videos that pop up will be the latest official Kimmel monologue clip, including him looking smug with a headline about his latest wrecking of Trump/Elon/reds.
People here have been trying to come up with a 'flipside' hated/effective figure to investigate how those on the right might react similarly or differently. With the usual candidates of AOC or Hasan, or even for me maybe Schiff or Chris Murphy, I would still be appalled by a murder, and at least not celebratory from a random lightning bolt death. But with Kimmel, for whatever reason, it's starting to get warmer.
Maybe it's something along the lines of someone who is a volunteer activist culture warrior (rather than an obvious partisan politician or a clearly delineated fox/msnbc participant), who gets big visibility and always presents themselves as smugly winning & wrecking. That seems to be the same kind of flavor of irritated rage that plenty of people get instinctively from seeing a small bit of Kirk, even from just a thumbnail.
LateMechanic
17d ago
The only way I can picture a 'next shoe dropping' big congealing shift happening among normie liberal masses is more based on who comes out with a strong take, more so than necessarily what the take is. It seems like it takes someone like Chappelle or Jon Stewart to successfully rein people in and to feel a bit ashamed for their previous zeal, or to give the go-ahead that their righteous feelings are directionally correct. I can't think of many others, but these figures are a step above the basic Colbert/Kimmel cultural level (who can come up with great rhetoric for any position but lack authenticity).
I could be wrong about this, but my recollection of the post-George Floyd time period was that it was pretty easy to be hesitant about Floyd as a victim for normies, for the first week. But then Chappelle went viral with his '8 minutes and 46 seconds' angle, and the gas pedal was just locked to the floor after that. And obviously on the flip side, the 'moderating gatekeeper' role is well established.
If nothing like that happens, then everyone is just kind of shooting from the hip, and blame/justifications are going to stay all over the place.
LateMechanic
21d ago
Some personal best versions, though I think both from the early 70s so not modern remixes:
Oh My Darling Clementine - The Nashville Ramblers
My Way - Honolulu Elvis
And a bit different: Down in the river to pray - Colorado All State Treble Choir (this goes semi-viral every few years since 2019 I think)
attempting to resuscitate random historical egotists I have no connection to who have frozen themselves. Is there any actual incentive for anyone to do so beyond idle curiosity, much less at scale?
Good point. Actually the closest thing that reminds me of is Charles Dexter Ward by Lovecraft, where the necromancer was bringing famous people back to life, only to find themselves in restraints to have any secret knowledge tortured out of them. That's a risky opt-in.
LateMechanic
26d ago
I think that's a definite correlated result. But it seems like the 'TDS' step must come at some point before that, in order for someone to interpret those things in your first 3 paragraphs with maximum uncharity. A Sam Harris for example, definitely does feel an extreme version of frustration that "he can't keep getting away with it". But that's down the line from his extreme TDS where he treats every little thing uncharitably as pieces of an obvious whole, even though he can agree on any individual piece (when litigated) having completely benign or subjective interpretations available.
LateMechanic
1mo ago
For people who even saw the whole video but linked with some unambiguous caption 'girls fend off migrant predator', they're primed to jump to different conclusions when hearing the older sister screaming "she's only 12, get away from her!"
Given a different context, it's much easier to imagine she's saying that like 'stop filming and trying to get my sister in trouble or embarrass her on the internet, she's only a retarded 12 yr old who was trying to impress the older kids!'
Then there's just left the debate where people can make assumptions about what happened before the video: whether this was probably a poor guy minding his own business who was practically attacked, or finally a pro-social citizen doing his part to police public spaces, or likely a tattle-tale karen trying to get his 5 minutes of fame, or possibly a predator whose pickup attempt failed and is now embarrassed and hoping 2 wrongs make a who-cares.
LateMechanic
1mo ago
Seems almost identical to the video of the minnesota girl saying nigger. We don't see the initial brandishing of the 'weapon' in either case, but presumably right after that, the guy pulls out his phone and tries to bait it out again to share on the internet, even if he has to pursue her a bit. And in both cases, the guy filming suspects he'll be more sympathetic.
LateMechanic
2mo ago
Yeah I think it's just backward-looking in his conception. To the extent it was profitable at all, then that's the extent that the labor turned out to have been 'socially necessary'. So it's supply & demand after all.
I think it basically works as a way to think of where the profit value comes from: putting together inputs and selling the output for more money, thus you got more 'use-value' out of the inputs than you paid for their 'exchange-value'. But I agree with others that there's no reason for Marx to have said that only labor can have a use-value greater than their fair exchange-value (apparently he just switched on a dime while writing Capital and declared that, in order to make the theory of value into a classical labor theory of value, and then got tied in knots trying to justify that declaration).
LateMechanic
2mo ago
That would mean the corresponding labor was not "socially necessary" labor time. Marx was trying to avoid getting down into supply & demand fluctuations, to mainly make a more core scientific approach to investigating where value/profit comes from. But that "socially necessary" term is where he had to bundle it in anyway.
LateMechanic
3mo ago
Hence the panic, because deplatforming just looks desperate and villainous. So it comes down to a bet about what is truly more popular/populist, for whether you'd want to signal boost it or not. And I'd suppose that it's actually pretty likely that a majority of people watching minneapolis and LA protestors trying to impede ICE/FBI/DHS might be fantasizing about an even more aggressive response by the cops like OP. It's at least pretty popular among young normie dudes.
If you're saying that @Hadad's confessed opinion in detailed written motte-form is probably so extreme that it would turn people off, I still wouldn't bet on that.
LateMechanic
3mo ago
My second thought is to reply, 'Say it louder, and into the microphone, please.' Seriously. Go hop on Fox News and give an interview about how you want to shoot protestors and cruelty is the point and God praise Donald Trump. Write your angry, impotent screeds and spread them as widely as possible - under your real name if you can. There's really nothing better for democratic electoral odds than platforming people like you.
I think he might just get accused of trying to copy Asmongold, who appears to have become one of the most popular streamers & youtubers right now with pretty similar commentary (maybe not quite as violent of fantasy, but in that similar direction). And rather than the democrats wanting to smugly signal boost it, they are in a panic over how to counter that popularity.
LateMechanic
3mo ago
At work I use C++ Builder / RAD Studio which makes for ridiculously quick & easy creation of native Windows apps for most any level of UI sophistication, using the VCL windows-wrapper library. Or they have a different library which supports cross-platform native from one codebase. And other than c++, their other language for the same product is Delphi, which I think may be more popular particularly among hobbyists. I'm not a fan of software getting more bloated and laggy in general, so I definitely appreciate the native snappiness.
Most people don't even know these still exist from back in the 90s, when they were Borland turbo pascal & c++ builder, after microsoft poached all those borland engineers to go on to make c# and .net. So it's not exactly the best career choice, if that's your angle. But they are still keeping up with the times, and made a free community version of the otherwise expensive IDE.
LateMechanic
3mo ago
but there is a well-defined understanding of what normally happens to debt that there isnt so much with money
What people thought was their well-defined understanding of government money & debt led to stuff like completely being blindsided by QE not affecting inflation. Monetization, printing the obligations! Or to the japanese bonds widowmaker trades, where people just couldn't believe the interest rate could go down with that much debt. Or indeed, the '90s Italian bonds case where Mosler made his first hedge fund hundreds of millions, taking a free 2% spread by betting against people who thought Italy had default risks for their own currency debt.
How it works so far may be consistent with your theory, but also others where there is still cause to worry.
Hence the content of my very first post to fcfromssc. If anyone feels like the way the system has been run for over a century is irresponsible and must be leading to unavoidable disaster, let them try to prove that case that we have cause to worry! Let's see the hard-nosed analysis about this supposed disaster, from people who understand the zero-sum nature of financial accounting and who can also properly explain everything else going on now and in history in whatever framework they find illuminating.
Don't sign up politically for a sucker play based on feelings & fear, and don't expect your opponents to do so either. All the evidence shows that economic disaster follows shrinking the debt, while good times follow growing the debt. For those who don't want to learn the plumbing, at least consider going with 'nothing ever happens' and take up the grill pill, for your own sanity. Elon wouldn't have crashed out if he realized the deficit is a tool which would be useful to his own goals of becoming multi-planetary, instead of assuming it's an existential threat because we're 'broke' or something.
LateMechanic
3mo ago
If thats why currency is debt
I'm just showing that you can google 'why is cash a liability of the central bank' and get people offering different ways of trying to explain it, if you're confused to the point of asking 'what's stopping them from saying all yuan are their liabilities'.
In my view as I've written, it's just following just the normal IOU/credit/banking logic, but the only thing special here at the 'top' of the money hierarchy is that it's not promising to pay/convert into anything else -- it's just abstract credit. And the reason why anyone treats that credit as valuable is because we're also simultaneously in debt to the issuer (we owe abstract value to the government in tax payments in this case).
It sounds like youre now suggesting something about inflation as the criterion.
That's what I think I've been saying from the start, so I'm sorry if I didn't make it more clear in this chain of replies. Inflation is the constraint on making the deficit too large, providing more savings than people want in aggregate, the excess value of which gets burned off. So that is a discussion about 'real' desired monetary wealth and inflation being self-correction mechanism, which I'm sure we hit at the top of this chain. The evidence of pushing against this constraint is seeing it happen.
Is accelerating inflation the right criterion and old economists where just too worried about going over, or do you object to that criterion as well?
The old orthodox approach was to think you mainly use monetary policy and the interest rate to deal with everything. So they are trying to be vigilant about when inflation is around the corner, and think (thought? maybe it's more up in the air in the last year with countries starting to question this and try the other way around) that raising the interest rate causes unemployment, which is used to curb inflation.
In terms of accelerating inflation, that could just mean the inflation rate going up slightly, which is probably all you'd see from real demand-pull inflation. The real worry that panics people is a spiral where somehow it just keeps accelerating. But you could really only get this if you keep pushing hard with ever-increasing amounts of spending in the face of higher prices, such as having too much government spending indexed to CPI. Or indeed, raising the interest rate, which pays people money just for already having money, which is likely why raising the interest rate is actually not a good tool for fighting inflation in reality. They are probably mostly scarred from the experience in the 70s, without distinguishing between demand-pull and cost-push inflation (unemployment won't stop inflation if it's caused by an oil shortage, etc.).
What do you think of NGDP targeting?
It always seemed goofy, still based on the same assumption the central bankers are wizards that can dial inflation up or down at will. Monetary policy just isn't that powerful, which people would understand if they actually learned the balance sheet assets/liabilities accounting and the plumbing of various operations, instead of thinking there's one special thing called "money" like the textbook said, which can slot into hand-drawn supply & demand toy model charts. That stuff just appears to be brain-breaking.
People rightly want a plausible model for "observations in the real world" before making them loadbearing.
This is all an explanation of how it all already works. It's already loadbearing. Did anyone think the US made it hundreds of years with the debt climbing into the millions, then billions, then tens of trillions by listening to people suggesting that in the long run, 'rational' actors know that the budget will have to be balanced, and thus save all their money for paying judgement day taxes when the long run finally ends?
Occasionally the people freaking out about large numbers actually got their way and reduced the debt significantly, causing our country's only depressions every single time they did it (which also ends up re-exploding the deficit & debt anyway to recover).
precisely what keeps critics of mainstream economics outside the mainstream
Luckily for us all, they usually bring in bankers to run things in government. When they do tap academic economists like bernanke, they have to learn everything on the job, and end up later on trying to get the word out about how things really work.
So the MMTers are often quoting and collaborating with past fed chairs and treasury secretaries, and communicate very easily with the various hedge funders like McCulley & Dalio, and just anyone in finance. They only feud with and can't break through to economists, who have a turf to defend unrelated to accuracy of thought.
The fact that they historically descend from IOUs and there are some conventions left over from that time does not tell us "what it is".
Here's a chicago fed piece that tries to describe it one way, if you like this "But currency is a liability to the central bank that issues it—a promise to stand behind the currency’s value in the future.".
It's just easiest for all the accounting and understanding, to see it as a bearer physical receipt version of the general electronic account credit (rather than the other way around, seeing the electronic reserve balances as promises to pay the physical version). Just all as types of credit from the central bank, which no longer promise redemption into anything, other than abstract value that is accepted by the government for relief from taxes/fees/fines/tariffs/etc.
I agree it's possible that you could do the accounting in other ways, and in fact I think maybe coinage in the US is in a weird spot like that, technically (like they are a liability of the treasury instead of the fed, or even that the treasury doesn't recognize them as a balance sheet liability maybe).
Again, what actual reality stops the fed from listing all yuan as its liabilities?
I'm not really sure what that would mean. Without it actually being a real liability, you could just say it is and that their balance sheet is in a massive capital loss in a fake way?
Technically, what actually stops that in the real world is that what the Fed can do is precisely limited by what congress has allowed in the Federal Reserve Act. But yeah congress amends that plenty throughout history.
Someone gives me 100 gold, and I commit to giving him back 104 gold in a year.
OK yeah I guess that's a gold bond or practically commodity-futures trading. If writing that "IOU 104 gold at x date" note enables any extra normal spending that you wouldn't have otherwise done, that spending would have some inflationary pressure on prices of things you buy. Because again it's the spending which is the relevant thing.
I asked about this because before you suggested employment as an indicator for the right deficit. Do you have any suggestion for something that directly tells me when the appetite for monetary saving is satiated?
It's something you observe after the fact. I think in the original transcript post I made at the top of this chain, mosler called it 'you count the heads of the people in the unemployment line', and you also see what is happening with the price level week by week, month by month, seeing if it starts ticking up.
The mainstream econ version of this, at least 20+ years ago, was called NAIRU: the non-accelerating inflation rate of unemployment. The level of unemployment below which any extra pushing just gives inflation. But they were treating it in a very strange way, trying to assume and make predictions about it ahead of time "maybe the nairu is now 5 or 6 instead of 7, can we allow unemployment to keep getting lower before we jump in and cool things off?". That posture is only explained if you think you're going to accidentally tip into a spiral which is hard to escape from (which was never borne out).
There's multiple ways to count unemployment, but the basic headline unemployment rate can definitely get down to 2-3% with no inflation, it seems from maybe the last 50-100 years. It's a bit hard to say because policymakers have usually been so cautious that we barely have any experience with demand-pull inflation (usually there's some type of cost-push supply side explanation for inflation). Probably the best evidence would be re-examining the '60s and what mainstream keynesians found trying to push for full employment.
Im very curious what an economics looks like where you avoid these indefinite future end arguments generally, rather than just in this one context.
I suppose it just looks more like just looking at the real world. As they say, the long run never really gets here, we are always in a series of short runs. The actual concrete accounting, logic, and plumbing seems much more useful to nail down and understand first, before starting to build more & more elaborate models on various assumptions. I bet it would probably be a fun job to make DSGE models and papers about theoretical risk-adjustments if you can find someone to pay for them, coming up with new tricks and techniques and assumptions. But I'm not too impressed with the real-world understandings & predictions of most equilibrium thinking, whether in econ or finance. I liked this Keynes quote, compared to Barro-style ricardian equivalence type stuff:
In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
LateMechanic
3mo ago
Yeah I think that's a basic different political difference among people who basically know how things work.
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Some people have a fear that if you tell policymakers the truth about how money and government finance work, they will spend without limit, on dumber & dumber things, until we reach ruination. As Paul Samuelson put it, the 'superstition that the budget must be balanced' may be a useful bulwark, just like old-fashioned religion used myths to scare people into behaving civilized.
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Others have a fear that if you don't tell policymakers the truth about how money and government finance work, you will get increasing amounts of those who start panicking and despairing about things that aren't actually problems (like: "well, it is a big number", or thinking we're on the hook to china or stealing from our grandchildren), and that they will eventually start blowing up the system and destroying the country's economic prosperity for no reason in the worst own-goal ever.
I can appreciate the worry in the first impulse to some extent. Certainly during the uncovering of the USAID stuff, that feels like vindication for people with this worry. So I definitely agree that some smart self-imposed constraints are warranted, like the fact that congress has to make and agree to a formal budget (rather than just running the whole government as a USAID style slush fund).
But I think our experience is that most people really hate inflation. So telling policymakers that the true constraint on overspending is just inflation does not likely end up with them overspending with inflation-indexed UBI of $100k, or removing taxes entirely, or whatever.
So on balance I'm more worried about people despairing about the deficit & debt out of ignorance and thinking 'those sound like negative things, I know how my own personal finances work'. It leads to all kinds of pointless stress, doomerism, making goofy political moves, and maybe eventually serious economic limitations that run counter to building the most prosperous society we can.
I believe that MMT provides the perfect framework to justify irresponsible fiscal policy.
The view is that irresponsible fiscal policy is running too small of a deficit and causing part of the population to languish in unemployment, or too large of a deficit and pointlessly inflating away the value of a dollar. And that other common definitions of fiscal responsibility are based on either misunderstanding the system, or intentional deception to tie the hands of untrusted officials.
MMT was ultimately a project to bring back some knowledge that was practically lost over the generations, which helps solve the cognitive dissonance of 'why does the system keep running seemingly fine, isn't it all going wrong and about to collapse?'
So I'm basically of the opinion that people mostly got macroeconomic management down through the 20th century, flawed people as they might be. And in this quarter-century, the US has done the best by far. So I'm signing up on the side of trying to calm down the doomsayers and suggest a reminder that those fears of impending doom were even stronger before, constantly throughout each generation, but maybe stick with 'nothing ever happens' for your own wellbeing until you're sure you're not solving your cognitive dissonance the wrong way.
LateMechanic
3mo ago
You should be more charitable than this. How do you think the level of reserves changes over time, simply from the payment of interest on reserves? How do they go down then? You can check the NY Fed for this; there is also data.
The level of reserves definitely changes over time, and they can buy & sell at will. But that's irrelevant to the interest rate maintenance after 2008, because the system is absolutely flooded with excess reserves. You just linked to the OMO page where they said it:
Before the global financial crisis, the Federal Reserve used OMOs to adjust the supply of reserve balances so as to keep the federal funds rate--the interest rate at which depository institutions lend reserve balances to other depository institutions overnight--around the target established by the FOMC.
The Federal Reserve's approach to the implementation of monetary policy has evolved considerably since the financial crisis, and particularly so since late 2008
The old system was that they had to mop up any excess reserves to keep them at 0, using OMOs, or else commercial banks would have a race to the bottom of trying to lend them to each other accepting lower & lower rates, and the central bank wouldn't maintain their target rate.
The new system is that they swapped billions/trillions of treasury securities into excess reserves, and then just directly pay the policy interest rate on those reserve balances. As of 2006, they were already planning on making this change to the interest rate maintenance regime in 2011 (because it's a much better system and makes everything easier), but moved it up to 2008 during the crisis to have the better tools at that time.
The currency is infinitely elastic: always more available to be created at a given price (at commercial banks and up at the central bank). These are simply expanding balance sheets of credit-debt relationships, rather than a relatively fixed quantity of things. When people still have the 'money as a thing' mindset, they get hopelessly confused in the modern financial reality, trying to track nominal & real stocks of money and switching between a dozen different monetary aggregates, trying to make any sense of it in the face of QE & such. Chosen nominal rates, floating quantity stock, dynamic real price level not in anyone's direct control.
The point is that the amount of money in nominal terms is not economically relevant. (If you search for the "most valuable currencies," you will encounter articles like this one in Forbes that are completely useless). The economically relevant quantity is the "real value" of the stock of money or the market(!) value of money in terms of other goods and services.
OK yeah the concept of inflation being "what one dollar buys", whereas a different concept is "what all the dollars buy". But this isn't like some kind of main policy concern where everyone is trying to rank highly on that kind of list, with Kuwait currently winning. Countries are trying to run their economies well, aiming for a balance between low unemployment and low inflation. The currency is merely a tool, and outside of any exchange pegs or various temporary gold standards, they aren't backed by anything. They're valuable because each country taxes its citizens and only accepts their own currency in payment.
As a follow-up point, I mentioned that if you want to increase the real value of the total stock of money, you need more backing.
That might be a "sufficient but not necessary" kind of point. The price level is totally dynamic so you could get deflation out of nowhere just from the "animal spirits" changing and everyone trying to save monetarily, increasing the real value of money. Or you can keep the economy running and extremely productive and end up with the money stock more valuable even with some inflation, being nominally larger. You can implement policies that incentivize saving for retirement in regular bank account balances and move the needle quite a bit.
Now maybe we could announce that we were foolish not to "back" the currency with anything of value in the central bank, and that we're reimplementing a gold standard, going back to the wisdom of the 19th century. And it could be sufficient to get people to immediately value money slightly more in comparison to stocks or something. But certainly not necessary.
So money is just a security, a very special one for sure, so the same ideas of 'backing' for stocks and bonds apply to it.
I don't know, looking up convience yield briefly, it doesn't appear to have anything to do with currency. It kind of seems like getting tied in knots without realizing the basic chartalist logic about taxes being the driver. Meanwhile none of that suggested anything about the subject of backing.
I was referring to episodes like the ones explored in The Monetary and Fiscal History of Latin America. I might be able to understand your argument better if you tell me how it is consistent with these episodes.
Wow yeah that is a pretty big set of examples. The entire late 20th century history of a ton of different developing nations with all kinds of various macroeconomic paths pursued. I mean, multiple countries have literally switched on & off of simply using USD as their currency. I have no expertise to weigh in very deeply, but these aren't exactly examples of well-run macroeconomies just getting tripped up.
I think the original point of contention was about "the ability to repay" government debt. Where the relevant context was the US, but generally countries that have their own floating currency. In this context, government debt is just money & currency in a different form, and it just rolls over indefinitely, so there's no "repayment" really. As for the 'inflation = default basically' angle, the US offers some limited inflation-indexed securities as a nice thing for people who want it, but otherwise makes absolutely no promise of bonds/reserves/notes/coins holding their value.
LateMechanic
3mo ago
Im not entirely on board with treating a simple dollar bill as an IOU. [...] is not a financial instrument
It's a bit strange to think about, without being redeemable for gold or anything, but that is what it is. Cash notes are financial liabilities of the central bank on their balance sheet: https://www.federalreserve.gov/monetarypolicy/bst_frliabilities.htm
The UK pound paper notes even still literally say they are promissory IOUs on them, with the queen or king announcing "I promise to pay the bearer on demand the sum of five pounds". You can't redeem that value in the form of anything other than another one, but yeah it's still an IOU which exists simultaneously on the issuer's balance sheet as a liability and on the holder's balance sheet as an asset. You're holding paper evidence of the government's debt relationship to you.
Other question: If the government borrowed in a foreign currency or gold rather than dollars, would that be inflationary?
If by borrowing in a foreign currency you mean they create an IOU promising to pay (for example) a billion yen in the future, and swapped that with some bank like the IMF for actual yen notes or credit which they then spend: I guess it would be potentially inflationary to that other currency. What adds inflationary pressure is any actual spending. I can't think of what borrowing in gold would mean.
I also notice that you never say whether somethings is in nominal or real terms, whats up with that?
Well everything is just nominal in reality and in accounting. Anyone can always inflation-adjust or gdp-adjust any particular numbers when they feel it's relevant to some particular analysis, like doing comparisons over time or across countries, etc.
First, I dont think this leads to full employment necessarily.
Yeah I mean just increasing the deficit on any random spending or tax cuts will probably juice the economy up to a certain point like 1-3% unemployment, but it would take something more targeted to try to even go beyond that, somehow minimizing transitory/frictional unemployment, without generating inflation. Can depend on how strict you want to be about the term full employment.
Second, even if savings increase over the long term, there will be fluctuations. If a lot of people suddenly want to spend money that youve already spent for them, what happens?
Definitely, it fluctuates even daily. By the nature of having decent "automatic stabilizer" fiscal policies, people suddenly choosing to spend down their savings would result in tax payments going up, safety net spending going down, and thus automatically shrinking the government deficit (maybe even driving it into surplus).
Last, people want savings, but why would they want dollar denominated savings over non-monetary assets? If people just buy index instead of sitting on money, does that already do what you want to do?
Yeah personally I have almost no appetite for monetary savings, I dump it all into non-bond index funds. I'm not sure what you mean about what I want, but yeah the analysis would be that incentivizing saving in other assets like stocks & real estate surely ends up meaning the government won't end up running as large of a deficit (no need to counter savings leakages). Again that's mostly value-free, so I don't call it good or bad.
Some people have complaints about asset price inflation, where it's not that the value of money is falling compared to goods & services, but where we're all plowing endlessly into the stock market like a clown car, bidding it up constantly. But I'm not sure about that.
Well, are there many examples of people who bounced back into other (non-independent) jobs after being canceled by the mob? I think Roseanne and Gina Carano never worked again except for some Daily Wire stuff? But part of this is just definitional I guess, where I'm suggesting that a cancellation means it's more serious than a one-time 'eye of sauron' moment of fury. In your post you said Bari Weiss was canceled, but that was just a story about her getting 'dogpiled on twitter' for a tweet a year after she joined NYT, and then she eventually ended up resigning from NYT 2.5 years after that for other reasons. I just wouldn't define that as a cancellation in even a weak way.
I think you're right about the institutional power. Wikipedia is an underappreciated tool here where the skew can range from slight to major, and it really functions as a kind of 'final say' on people's stories.
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