Best political system (and how to get there).

[Max Rockatansky]

Blame WHAT on others? You're just as lazy and apathetic and uneducated and narcissistic as those citizens, for insisting that they must play your game. ....

Nice rant defending those too stupid to vote or inform themselves on the issues. I disagree with you for two reasons. 1) it's not my "game". Voters are not required to vote nor are they required to know about the candidates or the issues in which they are voting. The fact I support voters becoming informed and you do not is a matter of opinion, not a "game".

2) You are free to defend apathetic voters blaming others for their apathy, I do not.

 

[untermensche]

Simple: anyone who talks about IQ as if it means anything no longer has the right to vote.

IQ does mean something.

It is a score on a test.

It does not mean a person has any sense at all however.

Why not let animals vote?

It could be done:

The animals would be presented with the candidates, either directly or through images, or maybe by being exposed to each candidate's scent. Then each animal's response to a candidate could be analyzed, and the candidate which gets the more favorable response would be credited with that animal's vote.

Why should only humans be allowed to vote? or only animals which have intelligence?

Animals do vote. Nothing but animals vote.

That of course is a problem when those animals are not educated.

 

[Max Rockatansky]

Why not let animals vote?

It could be done:

The animals would be presented with the candidates, either directly or through images, or maybe by being exposed to each candidate's scent. Then each animal's response to a candidate could be analyzed, and the candidate which gets the more favorable response would be credited with that animal's vote.

Why should only humans be allowed to vote? or only animals which have intelligence?

Animals do vote. Nothing but animals vote.

That of course is a problem when those animals are not educated.

Says the guy who claims IQ doesn’t matter. Sure, education and IQ aren’t the same thing, but most intelligent people recognize it’s easier to educate someone with an average or higher IQ than someone with a lower IQ.

 

[untermensche]

Why not let animals vote?

It could be done:

The animals would be presented with the candidates, either directly or through images, or maybe by being exposed to each candidate's scent. Then each animal's response to a candidate could be analyzed, and the candidate which gets the more favorable response would be credited with that animal's vote.

Why should only humans be allowed to vote? or only animals which have intelligence?

Animals do vote. Nothing but animals vote.

That of course is a problem when those animals are not educated.

Says the guy who claims IQ doesn’t matter. Sure, education and IQ aren’t the same thing, but most intelligent people recognize it’s easier to educate someone with an average or higher IQ than someone with a lower IQ.

IQ (a score on a test, not something inherent to a person) means nothing in terms of real world sense.

Nothing!

To rely on a test score to save us is insanity.

It shows a lack of sense.

 

[Harry Bosch]

Startups and marginal companies need help generally because they have bad management. If you have bad decision makers, throwing money at them isn't going to help. I just don't see any compelling reason to use government money for costs that can be picked up by the private sector.

Meh - even if that's true, I doubt private sector lenders are uniquely equipped to assess it simply by dint of privateness. Contrary to neoliberal myth, the public sector has a good record of picking winners

As it is, private sector lenders overwhelmingly fund competition for existing real estate and speculative financial "assets" which keep crashing the real economy of production, consumption and employment. "Throwing money at" productive endeavours and seeing what sticks is what they're supposed to do. Private sector lenders simply aren't doing enough of it. And why would they in world of chronically indebted consumers?

Harry, apologies if I'm confusing you with another poster, but aren't you a financier with proven experience of funding start-ups? I'm not suggesting cutting you out, I'm suggesting recruiting you and using your expertise++. I can't see what objection you'd have, other than ideological.

If federal gov spending truly is unlimited,

It's limited by real resources, not money.

I'd rather see us tackle the costs of higher education, health care, infrastructure, cleaning up the environment. I'm a whacko, but I actually think that our number one threat today is the environment (not failing startup companies). I'd rather see government resources going towards lowering carbon, cleaning the air, cleaning the oceans and etc.

They're not mutually exclusive - quite the opposite. Don't go all zero-sum on us.

Yes, I'm a banker! I used to be a commercial banker for a bank. Now I own a small manufacturing company. This means that I make a product and sell it on terms, so people owe me money again! I always be banker. (An inside joke that anyone who owns a small business understands). I'm not saying that that private sector bankers make better decisions than public sector "bankers" (SBA, USDA, and etc.). But private sector bankers lend money that puts their bank at risk. Public sector bankers would lend putting the public monies at risk.

No they wouldn't. There isn't really some pot of "public monies" in that sense. That isn't really how public finance works for a monetary sovereign (see post #62 ITT). The govt does not need to balance its budget, it needs to balance the economy.

Wouldn't you rather have public sector money more secure to be counted on for our schools, SSN, and etc?

But that ain't the choice. Private sector lenders overwhelmingly fund competition for existing real estate and asset bubbles which actually damage the real economy, and invest too little in it. I'd rather the private sector took care of itself but it ain't doing so. Gov't, meanwhile, isn't revenue-constrained like a household or firm and needn't divert funding from schools etc.

That'd be a small - and not necessary - part of it anyway. I'm mainly talking about funding public goods i.e. the sort of things Bernie Sanders or Jeremy Corbyn propose, which get slapped down with deficit-hysteria. I think that would help the private sector take care of itself. People who dislike public spending often talk as if education, healthcare, infrastructure etc were a drag on the productive economy. In fact they are engines of the productive economy. The bloated financial sector is the drag. Contractors, nurses, teachers with disposable income would stimulate growth. The constraint would be inflation -not "public monies"- at which point gov't would cut spending and/or raise taxes (and whatever tinkering central banks want to do with interest rates).

Govts everywhere did something of the kind after WWII despite debt that dwarfed today's. The result was the most sustained boom in history.

Here's another way to look at it: the private sector does a great job making and selling cheese burgers. Do you advocate the government taking over distribution of cheese burgers? If not, what is the difference?

The difference between a start-up grant/loan for a new product and taking over distribution of an established one. A world of difference.
But, again, that'd be a small - and not necessary - part of it. A functional finance model just makes it explicit that it's an option.

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

Is it your position that nationalized lending would make loans more available for startup companies? And if so, would fewer startups fail?

 

[Horatio Parker]

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

Is it your position that nationalized lending would make loans more available for startup companies? And if so, would fewer startups fail?

The advantage is that loans are made for reasons that advance the public interest rather than to generate income in any way, usually from non-productive speculation.

Warren Mosler says banks are already regulated to the degree that they are essentially govt agencies. What he suggests is regulating banks in a such a way as they can only do what they're allowed to do, instead of regulating what they can't do.

Both approaches have their disadvantages. With public banking, the politically connected tend to get more loans.

As for saving deposits, use the postal system or some other national savings programs.

 

[Canard DuJour]

Meh - even if that's true, I doubt private sector lenders are uniquely equipped to assess it simply by dint of privateness. Contrary to neoliberal myth, the public sector has a good record of picking winners

As it is, private sector lenders overwhelmingly fund competition for existing real estate and speculative financial "assets" which keep crashing the real economy of production, consumption and employment. "Throwing money at" productive endeavours and seeing what sticks is what they're supposed to do. Private sector lenders simply aren't doing enough of it. And why would they in world of chronically indebted consumers?

Harry, apologies if I'm confusing you with another poster, but aren't you a financier with proven experience of funding start-ups? I'm not suggesting cutting you out, I'm suggesting recruiting you and using your expertise++. I can't see what objection you'd have, other than ideological.

If federal gov spending truly is unlimited,

It's limited by real resources, not money.

I'd rather see us tackle the costs of higher education, health care, infrastructure, cleaning up the environment. I'm a whacko, but I actually think that our number one threat today is the environment (not failing startup companies). I'd rather see government resources going towards lowering carbon, cleaning the air, cleaning the oceans and etc.

They're not mutually exclusive - quite the opposite. Don't go all zero-sum on us.

Yes, I'm a banker! I used to be a commercial banker for a bank. Now I own a small manufacturing company. This means that I make a product and sell it on terms, so people owe me money again! I always be banker. (An inside joke that anyone who owns a small business understands). I'm not saying that that private sector bankers make better decisions than public sector "bankers" (SBA, USDA, and etc.). But private sector bankers lend money that puts their bank at risk. Public sector bankers would lend putting the public monies at risk.

No they wouldn't. There isn't really some pot of "public monies" in that sense. That isn't really how public finance works for a monetary sovereign (see post #62 ITT). The govt does not need to balance its budget, it needs to balance the economy.

Wouldn't you rather have public sector money more secure to be counted on for our schools, SSN, and etc?

But that ain't the choice. Private sector lenders overwhelmingly fund competition for existing real estate and asset bubbles which actually damage the real economy, and invest too little in it. I'd rather the private sector took care of itself but it ain't doing so. Gov't, meanwhile, isn't revenue-constrained like a household or firm and needn't divert funding from schools etc.

That'd be a small - and not necessary - part of it anyway. I'm mainly talking about funding public goods i.e. the sort of things Bernie Sanders or Jeremy Corbyn propose, which get slapped down with deficit-hysteria. I think that would help the private sector take care of itself. People who dislike public spending often talk as if education, healthcare, infrastructure etc were a drag on the productive economy. In fact they are engines of the productive economy. The bloated financial sector is the drag. Contractors, nurses, teachers with disposable income would stimulate growth. The constraint would be inflation -not "public monies"- at which point gov't would cut spending and/or raise taxes (and whatever tinkering central banks want to do with interest rates).

Govts everywhere did something of the kind after WWII despite debt that dwarfed today's. The result was the most sustained boom in history.

Here's another way to look at it: the private sector does a great job making and selling cheese burgers. Do you advocate the government taking over distribution of cheese burgers? If not, what is the difference?

The difference between a start-up grant/loan for a new product and taking over distribution of an established one. A world of difference.
But, again, that'd be a small - and not necessary - part of it. A functional finance model just makes it explicit that it's an option.

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

No, people could deposit as much money in commercial banks as they want to, but the economy would be less dependent on commercial lending.

Is it your position that nationalized lending would make loans more available for startup companies?

That would be a political decision. A functional finance model just puts the option on the table without it being ruled out by bogus budget constraints.

 

[Loren Pechtel]

(Re)nationalise central banks and seriously restrict the ability of commercial banks to lend money into existence.

Money is a public good.

Shoot economists at random until they start devising realistic theories.

If you remove the ability to lend you remove the banks. Everyone[..etc]

good thing no one's suggesting it then.

So you're no one?

Because that's what you're suggesting.

"Loan money into existence" is the standard crackpot attack on how banks function.

 

[Loren Pechtel]

That would be a political decision. A functional finance model just puts the option on the table without it being ruled out by bogus budget constraints.

And a functional electric grid hooks up any consumer who needs it without seeing if there are enough generators.

And a functional water system hooks up any consumer who needs it without seeing if there is water in the wells.

 

[Canard DuJour]

That would be a political decision. A functional finance model just puts the option on the table without it being ruled out by bogus budget constraints.

And a functional electric grid hooks up any consumer who needs it without seeing if there are enough generators.

And a functional water system hooks up any consumer who needs it without seeing if there is water in the wells.

no, they'd be real constraints, not bogus ones.

 

[Canard DuJour]

good thing no one's suggesting it then.

So you're no one?

Because that's what you're suggesting.

"Loan money into existence" is the standard crackpot attack on how banks function.

OK, you tell me what you think I mean by that and why you think it's wrong.

Then I'll tell you what I mean and we'll do a little comparison of the two, then compare and contrast with some authoritative descriptions.

 

[untermensche]

good thing no one's suggesting it then.

So you're no one?

Because that's what you're suggesting.

"Loan money into existence" is the standard crackpot attack on how banks function.

To you reality is just a bunch of crackpot stories.

 

[Horatio Parker]

good thing no one's suggesting it then.

So you're no one?

Because that's what you're suggesting.

"Loan money into existence" is the standard crackpot attack on how banks function.

Yes, called "credit" or "endogenous" money.

Whereas "deposits create loans" is the traditional crackpot explanation, which has no bearing in the real world. "Loans create deposits" is how the world actually works.

 

[Lumpenproletariat]

Average citizens are not too stupid to be able to deal directly with public policy issues.

Some form of direct democracy. Where "voters" deal directly with issues rather than being forced to worship guru-demagogue-blowhard-speechmakers (candidates).

This doesn't mean holding a "referendum" vote on everything. There are many other possibilities.

Horrible idea.

1) This causes a system with very little inertia. It will swing back and forth with the fad of the moment.

No, that's not what "direct democracy" is about. It could easily be structured to do the opposite, to reduce the swinging back and forth which we have now, with the Reds and Blues negating and repealing whatever the other side does, or the next administration undoing what the previous administration did.

If the current jury system functions OK to settle court cases, some similar system could function OK to deal with public policy matters.

2) Many issues require a fair amount of understanding, . . .

Don't juries have a "fair amount of understanding" when they decide on a case? There's no reason to say ordinary citizens cannot have a "fair understanding" of something. The process has to be similar to the way juries must first have all the facts and hear all the arguments, and only then do they decide on it.

. . . the simple answer is wrong.

That's why we need juries to decide criminal cases. In some high-profile publicized cases the public sees a video clip or headlines and is persuaded to the simple answer but doesn't see all the evidence, as the jury does. The jury does get all the evidence and gives a different verdict than the general public would give based only on its limited sound-byte information.

So we need a Direct Democracy system which is structured similarly to the way the jury system works, where the citizens making the decision have complete information and not just the sound bytes from the latest headline news. Then the result will not be the simple answer, but a reasonable judgment based on all the evidence.

It's the current representative system which is driven by simplicity and sound bytes and slogans from the politicians, giving their campaign speeches or their propaganda speeches on the Senate or House floor. We don't get comprehensive information this way. The public which is to make choices needs to have more sophisticated information on the issues, like the information a jury has when it deliberates a case.

Voters don't have the time to dig into such matters.

Yes they do, just like a jury has time to dig into the facts of a case it is hearing. We don't need ALL the voters to decide on every matter. What we need is to have a group of ordinary citizens (or a few groups) decide on each matter and hear all the facts on it, and make a decision based on all that information, rather than decide based on a few speeches from politicians using their charismatic skill to manipulate an audience with slogans and lies and half-truths.

3) Look at where we have direct democracy now--ballot initiatives.

These are only one form of direct democracy. The jury system shows us a model for a much better form. But the initiative process is basically good and should be improved so ordinary citizens can have more of a direct voice in choosing public policies.

The current ballot measures fall way short of the ideal form of direct democracy. And yet even these ballot measures are better than having no process at all for citizens to participate directly.

Recently prop. 6 in California was a reasonable measure put to the public, to repeal a gas-tax increase. Overall this went OK, with most voters recognizing the need for a modest gas tax and not yielding to the instant-gratification instinct to simply rebuke the politicians for a tax increase -- it was only a modest increase, and reflected the need for incentives toward reducing reliance on fossil fuels.

It was imperfect, as neither side really informed the voters honestly about it, and the title of the measure was misleading. And yet it's better that this vote took place than it would have been to have no vote on a gas tax. And there should be similar referendum votes on many other taxing and spending issues as well.

The vast majority of them are utter crap, even when they appear to do something good.

No, you're grossly exaggerating. They are a mixed bag, and much could be done to clean up the initiative process. It's better to improve the current system than abolish it. It would be an insult to all citizens to take away any initiative process and tell citizens in effect that they are too stupid to ever make any decisions directly on issues, and that all they're good for is to put their mark next to the name of the demagogue of their choice on a piece of paper. And other than this they should shut up and let the elected demagogues do all the thinking.

Even the ones that pass are often crap.

Like the laws passed by elected legislators often are. The answer is to improve the process, not tell citizens they're nothing but cattle who can only be manipulated and herded into line by their speech-maker demagogues, who are the only ones capable of making decisions and so must lead 99.9% of us around by the nose.

 

[Canard DuJour]

good thing no one's suggesting it then.

So you're no one?

Because that's what you're suggesting.

"Loan money into existence" is the standard crackpot attack on how banks function.

Yes, called "credit" or "endogenous" money.

Whereas "deposits create loans" is the traditional crackpot explanation, which has no bearing in the real world. "Loans create deposits" is how the world actually works.

What's really crackpot is people who disbelieve both that govt creates money and that banks create money..

They must think there's some money mine somewhere.

 

[untermensche]

It was Nixon who took us off the gold system.

Now there need not be anything behind money.

Wealth is an agreed upon illusion.

 

[Harry Bosch]

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

Is it your position that nationalized lending would make loans more available for startup companies? And if so, would fewer startups fail?

The advantage is that loans are made for reasons that advance the public interest rather than to generate income in any way, usually from non-productive speculation.

Warren Mosler says banks are already regulated to the degree that they are essentially govt agencies. What he suggests is regulating banks in a such a way as they can only do what they're allowed to do, instead of regulating what they can't do.

Both approaches have their disadvantages. With public banking, the politically connected tend to get more loans.

As for saving deposits, use the postal system or some other national savings programs.

Could you give me an example of a "non-productive speculation"? I'm sure that you probably mean buying bare land to hold for investment. I can tell you as a former banker that many banks won't touch bare land financing. Too risky. The vast majority of bank loans are for lines of credit, equipment loans, building loans, and mortgages. But yea, you highlighted a big issue: only the politically connected get more loans. I'm sorry but I think that the Trump loonies have way too much power today as it is. No way in a million years would I want them to have more power...

 

[Harry Bosch]

Meh - even if that's true, I doubt private sector lenders are uniquely equipped to assess it simply by dint of privateness. Contrary to neoliberal myth, the public sector has a good record of picking winners

As it is, private sector lenders overwhelmingly fund competition for existing real estate and speculative financial "assets" which keep crashing the real economy of production, consumption and employment. "Throwing money at" productive endeavours and seeing what sticks is what they're supposed to do. Private sector lenders simply aren't doing enough of it. And why would they in world of chronically indebted consumers?

Harry, apologies if I'm confusing you with another poster, but aren't you a financier with proven experience of funding start-ups? I'm not suggesting cutting you out, I'm suggesting recruiting you and using your expertise++. I can't see what objection you'd have, other than ideological.

If federal gov spending truly is unlimited,

It's limited by real resources, not money.

I'd rather see us tackle the costs of higher education, health care, infrastructure, cleaning up the environment. I'm a whacko, but I actually think that our number one threat today is the environment (not failing startup companies). I'd rather see government resources going towards lowering carbon, cleaning the air, cleaning the oceans and etc.

They're not mutually exclusive - quite the opposite. Don't go all zero-sum on us.

Yes, I'm a banker! I used to be a commercial banker for a bank. Now I own a small manufacturing company. This means that I make a product and sell it on terms, so people owe me money again! I always be banker. (An inside joke that anyone who owns a small business understands). I'm not saying that that private sector bankers make better decisions than public sector "bankers" (SBA, USDA, and etc.). But private sector bankers lend money that puts their bank at risk. Public sector bankers would lend putting the public monies at risk.

No they wouldn't. There isn't really some pot of "public monies" in that sense. That isn't really how public finance works for a monetary sovereign (see post #62 ITT). The govt does not need to balance its budget, it needs to balance the economy.

Wouldn't you rather have public sector money more secure to be counted on for our schools, SSN, and etc?

But that ain't the choice. Private sector lenders overwhelmingly fund competition for existing real estate and asset bubbles which actually damage the real economy, and invest too little in it. I'd rather the private sector took care of itself but it ain't doing so. Gov't, meanwhile, isn't revenue-constrained like a household or firm and needn't divert funding from schools etc.

That'd be a small - and not necessary - part of it anyway. I'm mainly talking about funding public goods i.e. the sort of things Bernie Sanders or Jeremy Corbyn propose, which get slapped down with deficit-hysteria. I think that would help the private sector take care of itself. People who dislike public spending often talk as if education, healthcare, infrastructure etc were a drag on the productive economy. In fact they are engines of the productive economy. The bloated financial sector is the drag. Contractors, nurses, teachers with disposable income would stimulate growth. The constraint would be inflation -not "public monies"- at which point gov't would cut spending and/or raise taxes (and whatever tinkering central banks want to do with interest rates).

Govts everywhere did something of the kind after WWII despite debt that dwarfed today's. The result was the most sustained boom in history.

Here's another way to look at it: the private sector does a great job making and selling cheese burgers. Do you advocate the government taking over distribution of cheese burgers? If not, what is the difference?

The difference between a start-up grant/loan for a new product and taking over distribution of an established one. A world of difference.
But, again, that'd be a small - and not necessary - part of it. A functional finance model just makes it explicit that it's an option.

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

No, people could deposit as much money in commercial banks as they want to, but the economy would be less dependent on commercial lending.

Is it your position that nationalized lending would make loans more available for startup companies?

That would be a political decision. A functional finance model just puts the option on the table without it being ruled out by bogus budget constraints.

Yea, I'm just 100% opposed to this. Bankers should be neutral. I want my company to be judged on our performances and our credit worthiness. I don't want to be judged on my loyalty to the local government czar.

 

[Canard DuJour]

Again, I'm just struggling to see the advantages of your system. People don't like storing bundles of cash in their house. They like the security and east of depositing it in a bank. Banks obviously use these deposits to make loans. Under your system, would you outlaw banks from making loans? Or would you also nationalize the deposit business?

No, people could deposit as much money in commercial banks as they want to, but the economy would be less dependent on commercial lending.

Is it your position that nationalized lending would make loans more available for startup companies?

That would be a political decision. A functional finance model just puts the option on the table without it being ruled out by bogus budget constraints.

Yea, I'm just 100% opposed to this. Bankers should be neutral. I want my company to be judged on our performances and our credit worthiness. I don't want to be judged on my loyalty to the local government czar.

Now that is a fair point. There's obvious scope for corruption and cronyism.

I think there are at least partial ways to mitigate it : performance-related rewards/promotion for the "czars"; startups go it alone once up and running; non-public funding still no less available. But... yeah.

Again : private sector lenders overwhelmingly fund competition for existing real estate and asset bubbles which actually damage the real economy. I'd rather the private sector took care of itself but it ain't doing so.

Again : funding startups would be a small - and not necessary - part of it (on which you have fixated). A functional finance model just puts the option on the table. I'm mainly talking about funding public goods i.e. the sort of things Bernie Sanders or Jeremy Corbyn propose, which get slapped down with deficit-hysteria.

 

[Canard DuJour]

The following from Prof. Simon Wren-Lewis (one of Britain's most respected economists) is instructive. Not about how to get there but what the big obstacle is. It concerns the UK, but the same applies in the US ..with bells on.

He calls it "mediamacro", AKA the household fallacy :

"Mediamacro is how the macroeconomics of fiscal policy is presented in the media as if the government was a household. It is as if Keynes, and the General Theory that is often said to have begun macroeconomics as a discipline, had never existed. What every first year economics text book tells students is that the government is not like a household.

Mediamacro has become so ingrained in the UK media for two reasons. The first is that one of the two main political parties, and their associated press arm, have pushed it for all it's worth, while the other political party has not challenged the idea in any systematic way. But if you ask many Labour MPs why they have not challenged it they will say that doing so is too difficult. This leads to the second reason.

Most political journalists are not economists. How households work they do understand, but the idea of using fiscal policy in a recession to support the economy is more difficult for them. What is true for political journalists is also true for most voters, and journalists wish to keep it simple and understandable only reinforces mediamacro. The same thing influences politicians who listen to focus groups."
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