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View Diary: The Danger of Too Much Tradition (or "Culture") (6 comments)

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  •  Absolutely! Tradition is a slavemaster not a balm (0+ / 0-)

    Point this argument at mainstream economics and squeeze the trigger. Everything in the current economic model is predicated on an unchanging environment where private sector debt is irrelevant and public "debt" threatens our existence. All of this based on a tradition - that money is "backed" by something such as gold.

    We had such an economy once. It gave us recessions every few years and depressions every couple of decades, and whenever we got into real trouble (like war) we said "screw the gold standard" and went to fiat money. Why? Because despite our enthusiasm for glittery shit, gold has about the same intrinsic value as paper - it is just a relatively scarce form of dirt. So instead of passing around receipts for the dirt as money, we just pass around the receipts. It all works the same for the currency user, it's good enough to pay your taxes with. The only difference is  there's no dirt in the equation. Historically, though, idiots like Ron Paul and his slow son have won the argument for "traditional" (gold backed) money, so we have repeatedly put pistol to foot, squeezed off a round, and returned to the gold standard and all its foibles.

    Finally, in 1971 we chucked the gold standard for the last time. The dollar was fixed to gold at $35/oz but gold was selling for $42. Naturally the dollar came under attack and Nixon, who still retained a modicum of his mind and good sense, saw the world was screwing us, and decided we would screw them in return. We closed the gold window and told the foreign dollar holders to go pound sand.

    Since then we have had a free-floating fiat currency but tradition has dictated that every dollar of deficit spending means issuing the dollar and then selling a bond to get the dollar back and tear it up, just like what you would have to do if the money was gold-backed.

    That's a tradition that causes us to "print" $360 Billion a year in new money to pay rich people interest on bonds that were never necessary and were only issued to keep interest rates from falling to zero!

    •  Yes. The "traditions" of economics are . . . (1+ / 0-)
      Recommended by:
      Old Surgeon

      among the worst influences in the world, holding the entire earth back from taking bold, creative action to get beyond "money" and look to other ways of valuing our activities.

      And the smugness of economists in believing that their area of study is the fundamental way of understanding human behavior instead of a derivative and delimited area of human interaction just keeps them making their pronouncements and leading us all further and further down the rabbit hole.

      Thanks for your perceptive comment.

      •  Have you read any of Michael Hudson work? (0+ / 0-)

        His The Bubble and Beyond is the sort of historical synthesis of economic thought that has been long absent from the curriculum. His exposition of fictitious capital and the diversion of capital from industrial growth to usury is deeply thought provoking.

        Here is an excellent video of Hudson and Randall Wray discussing Modern Money and Public Purpose. Wray starts at about the 4:45 mark and Hudson comes in at 43:35. Both talks are excellent, especially in the context of your diary and its conceptual intersection with economics.

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