This blog began as a place to stash links, as an adjunct to the continual raging battles in my IRC channel on freenode, ##political_reality. However, it’s also morphed into a bit more as I became more opinionated in my old age. I became hooked on economics in 2007 like many people, but unlike most others, I am not much impressed by most of the theories extant on why it happened and what we should do about it. We seem to be mainly stuck with “cut the deficit”, “get rid of government”, “end the Fed” and “go back on the gold standard.”
Yes, US government since Reagan has only been interested in making the rich richer and corporations more powerful. Since deregulation in the 70’s and the mass infection of the collective mind with Chicago School, Ayn Randian meme, elitism, inequality and the utter impunity of the wealthy and powerful have reached third-world proportions in the US, and over most of Europe as well.
However, all this is not necessarily characteristic of all governments. Looking around the planet, there are governments that are primarily purveyors of services to the people. Governments of coalitions, where there is constant competition between groups of citizens–and not all of them wealthy. Governments where people routinely enjoy high wages, full employment, excellent health care, personal freedom and great business environments. Governments exist because the human default is hierarchy and division of labor–but what it does for us (or to us) is a choice.
So, the focus of this blog is to ask “what is real?, “what works?” and “how do we achieve it once we know?”
Who am I? I’m an electronics designer, an artist, and a freenode channel op with a deep fascination with economics and our crazy political scene.
About the banner
It’s from a fairly famous US sectoral balances graph. I do not know who originated it, but it’s widely used in various demonstrations of how the money supply is apportioned between government (red), private domestic (blue) and current account (green–rest of the world.) The rest of the world and domestic add up to government–since government is the source of the money supply. All the money issued by the government is divided between domestic use and “rest of the world” use. What it illustrates is that when government runs a surplus (collects more in taxes than it spends), the rest of the world + domestic have less money; they go into deficit or deflation. As long as we must run a trade deficit (current account surplus) we must *also* run a government deficit if the domestic sector is to have any surplus to save or grow. The little red blip above the centerline is the famous Clinton surplus that drove the private sector so deeply into debt and gave Wall Street the power it enjoys today.
The idea that the US “budget must balance” is probably Congress’ number 1 financial error, and why we are still stuck with high unemployment and low wages. To find out more, check out the MMT links page.
Also, please check out Zap’s Freenode IRC Channel for sometimes fast and furious, but generally polite, discussion of politics and economics.