tag:blogger.com,1999:blog-2277215496195926573.post3635997428343399680..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Positive Money versus Dr Mike King.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2277215496195926573.post-66305714300473537202016-12-12T14:40:56.867-08:002016-12-12T14:40:56.867-08:00My apologies - I meant Mike King. It is very diff...My apologies - I meant Mike King. It is very difficult for me to follow his logic - a diagram with boxes and arrows might help.Paul Lebowhttps://www.blogger.com/profile/15433896494025840203noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-59092963277124450782016-12-12T09:07:49.462-08:002016-12-12T09:07:49.462-08:00I didn't know Werner had any big objections to...I didn't know Werner had any big objections to PM. Did you find any? In view of the work I mentioned above co-authored by him and PM, strikes me he and PM are largely in agreement.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-76321007465824644912016-12-12T07:41:30.935-08:002016-12-12T07:41:30.935-08:00Well, I'm guilty of not reading more of your p...Well, I'm guilty of not reading more of your posts to have a better context for your statements. I ran across your blog when searching for discussions on Werner's objection to Positive Money. So many of the discussions on monetary theory seem overly convoluted and puffed up from my "naive" viewpoint :-)Paul Lebowhttps://www.blogger.com/profile/15433896494025840203noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-88170912025194336412016-12-12T01:13:33.382-08:002016-12-12T01:13:33.382-08:00That passage of mine leaves room for improvement, ...That passage of mine leaves room for improvement, to put it mildly. The point I was trying to make was that Germany, Switzerland have exactly the same bank system as we do, but they have not had real house price increases, ergo it cannot be the bank system that is the cause of house price increases.<br /><br />On the other hand, as you rightly say, had banks in the UK been barred from money creation over the last 20 years, that would have damped down house price increases or stopped them altogether. But that prohibition would have been very deflationary: excess unemployment etc.<br /><br />Positive Money's solution would be more sovereign money, which I agree with. So my hunch is that the net effect of a PM style solution would be that house prices would still have risen, but that the rise would have been less dramatic.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-33887738654573051342016-12-12T00:49:04.857-08:002016-12-12T00:49:04.857-08:00I share your doubts about monetary policy (as does...I share your doubts about monetary policy (as does Positive Money).<br /><br />Re democracy, there are two quite distinct elements in fiscal stimulus decisions: first deciding on the total amount of stimulus, and second, deciding the exact nature of relevant spending (and/or tax cuts). I agree with Pos Money (and the New Economics Foundation and Richard Werner) that the TOTAL should be decided in a relatively undemocratic manner: i.e. by an committee of experts. The extent of lack of democracy there is very much the same as occurs with the existing Bank of England Monetary Policy Committee when it decides on another form of stimulus: interest rate cuts. <br /><br />In contrast (and again in line with the thinking of the above three authors) I agree that exact nature of public spending (e.g. whether to spend more on health or roads etc) should be entirely under the control of democratically elected politicians.<br /><br />For more on the above three's ideas, see:<br /><br />http://b.3cdn.net/nefoundation/3a4f0c195967cb202b_p2m6beqpy.pdf<br /><br /><br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-55521984485553272582016-12-11T19:47:20.367-08:002016-12-11T19:47:20.367-08:00I am baffled by the mocking dismissal of the conce...I am baffled by the mocking dismissal of the concept of democracy in the creation of money. It seems to me that monetary policy is an impotent tool for reaching full employment and for the betterment of society. Fiscal policy is the only way to achieve that and that has to be a democratic process in a democracy. <br />We rely on the advice of 'committees of experts' all the time, what else do you recommend? The "free" market?!<br /><br /> As a fiscal policy maker I would want to know what the ramifications of my spending choices are in terms of available resources to absorb money "I" issue. Ultimately it is I, elected by the people, who determines how to distribute that money, not the "committee".<br />Thanks (from the "naive section")JustMoneyhttps://www.blogger.com/profile/13499214592851731605noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-87096497281959711462016-12-11T19:33:43.676-08:002016-12-11T19:33:43.676-08:00Not sure I understand the claim "But I agree:...Not sure I understand the claim "But I agree: commercial bank money creation doesn’t have much to do with it.[rising house prices]. The banks fueled, encouraged the bubble. It could not have happened without bank complicity. Underwriting was thrown out the window and poison loans were quickly tranched and sold to exuberant suckers.<br /><br />It is my understanding that commercial business loans are a small percentage of bank lending. Much goes to speculation on non-productive endeavors. In addition, nowhere in these discussions do I see the element of time mentioned. The money issued on a long term loan sits out there in the economy for all practical purposes, 'forever'.JustMoneyhttps://www.blogger.com/profile/13499214592851731605noreply@blogger.com