This amusing video clip is making the rounds on Twitter. It’s worth a look and a laugh.
Jared Bernstein was asked about Modern Monetary Theory (MMT).
MMT says government is different. It owes the money to itself and the debt can be canceled at will. In MMT theory, a benevolent government would spend the money wisely, cancel all the debt or pay interest to itself, and everyone will essentially live happily ever after.
The notion is really amusing. But it was more amusing watching Bernstein try to address a question on it.
If you are looking for some recommended reading on economic theory, I can help. Please see Debunking MMT, Keynesianism, Monetarism: Reader asks “What theories do you believe?” Mish Reading List
A quant I know commented on this guy, he said he never knew what he was doing and now proved it
The video went south 5 seconds in when the unnamed lady said “I’m waiting for someone to stand up and ask “Why does our government borrow money in the first place?” Well, she was the someone and she was standing up at the time. So she asked it. Funny thing is, she DIDN’T say “I’m waiting for someone to explain why…”
Naturally, she ought to know why, since its basic knowledge among school children (from earlier generations, granted) that the Constitution empowers Congress to regulate coinage and collect taxes — and not employ some moronic MMT or other gobbledygook which the Founders decried with the likes of John Law and his ridiculous bonds and bearer note scheme that destroyed the French economy when Ben Franklin et al. were kids.
But I’m living on another planet knowing such things. Still, I’m a science teacher. Why do I know more about these things than, say, a musician & social worker?
Bernstein received a degree in fine arts from Manhattan School of Music, a second degree in Social Work from Hunter College, and a DWS in Social Work from Columbia School of Social Work.
He has no education or training in Econ yet he is Biden’s top economic advisor.
The government goes through this Kabul dance of borrowing money because it creates the illusion that they will pay it back with interests through legitimate means. Of course, they always succumb to graft and vote buying and the borrowing gets out of hand. As debt explodes, the Fed steps in and prints money. The process of government borrowing and the Fed printing to buy the bonds has the added advantage that the banksters can take a cut.
Obviously the guy is a moron and got the job because of tribal influences.
This has to be a parody – the whole Biden administration; all the other governments too.
When can we get an AI government ? It couldn’t come a day too soon.
Imagine if it learned from these idiots – which is exactly what is happening right now.
And when it all fails they will say, “Ah well, it was all just an experiment anyway.” These people are so divorced of the reality of billions of people across thr planet.
per wiki.
HE IS NOBODY!
—
Bernstein stated he grew up in a “musical family” and aspired to be a professional musician as a young person.[8] Bernstein graduated with a bachelor’s degree in music from the Manhattan School of Music where he studied double bass with Orin O’Brien. Throughout the Eighties Jared was a mainstay on the jazz scene in NYC.
He also earned a Master of Social Work from Hunter College as well as a DSW in social welfare from Columbia University‘s school of social work.
He may be nobody but he is Biden’s economic advisor
The guy has a degree in music. It sort of reminds me of reading about something similar going on in the Soviet Union. They would have a guy in charge of a huge energy department, but the problem being he was big party activist and was only previously in charge of making shoes.
And that folks is a wrap, for the United States. He has no clue how the Treasury floats bonds and FED buys and prints off the collateral. We are so hosed
No, you fool! We need more diversity! The beatings will continue until morale improves!
This was hilarious….in a horrifying kind of way.
Better to Remain Silent and Be Thought a Fool than to Speak and Remove All Doubt.
Upton Sinclair’s famous quote applies here. “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
Jared Bernstein is a stooge. Gregory Mankiw once held the same position 20 years ago.
Mankiw is now the most influential economist in America and his textbook is required reading for almost every college student who takes economics.
Mankiw the stooge says: “A primary job of banks is to take in deposits from people who want to save and use these deposits to make loans to people who want to borrow. Banks pay depositors interest on their deposits and charge borrowers slightly higher interest on their loans. The difference between these rates of interest covers the banks’ costs and returns some profit to the owners of the banks.”
Mankiw doesn’t seem to understand how the financial system works.
People tend to confuse economics with finance, they really are two completely different subjects with only an occasional overlap.
Haha.
Too Bad the Masses don’t understand what is going on . . .
…and that’s the way they like it.
Holy shit. Is this guy for real?
He makes Kammy the cackling hyena look like a genius.
The numbers will get worse every month for the remainder of the year. It doesn’t matter what BS numbers the government/MSM claim. People know the layoffs are increasing. The average “Joe” has less money to spend on discretionary items. Credit cards will be maxed out and/or credit will be cut off by creditors.
What I find unusual is that the 2-10 yield inversion has not uninverted yet, nor have bond yields started to fall… the historical pattern is that mass layoffs don’t start until those two things kick in, but we can see data showing layoffs already happening last year, and the numbers of hires and quits continuing to fall as labour surplus dries up.
10 year at 4.63% – 2 year at 5.98% = – 1.35% inversion, just hanging there…
The treasury market seems to expect interest rates to rise again before they fall, but in many jurisdictions around the world, yields are falling, but for different reasons (e.g.: Switzerland and Japan are not at all in the same situation in terms of debt).
Rates rising again, if oil spikes again doesn’t look good for the stonkmarkets.
Apparently the USA has been in recession since October 2023, but you can see signs of things heading south from January 2022 in some charts. The UK and EU, and other parts of the developed world seem to be in recession; Switzerland is doing OK.
https://www.cnbc.com/quotes/10Y2YS
2-10 spread hovering at about -0.31% since the start of October 2023.
Once the instability you mention becomes irrefutably evident:
Credit lines will be reduced or extinguished.
Credit standards will make it impossible to borrow. First it will be risk lending ie. construction and business, then residential and home equity loans. This will collapse construction for about 3 – 4 years. ie 1991
There will be zero jobs left in real estate sales.
There will a few jobs in foreclosure and appraisal as the pigs buy up the carnage and banks write off the losses.
Repossessed RV’s will fill stadium parking lots.
No one will lend into this enlarging deflationary chasm as repricing discovery processes do their thing.
The economy will lock up and housing prices will plummet.
Unemployment will mimic the 80’s
States will “till tap” the productive entrepreneurial elements to feed the services over expansion of the boom time and honor promises to retirees.
$900,00 car payments will cease being paid.
No amount of stimulus, QE or Fed _uckery is capable of preventing the economy from inevitably rebalancing itself.
I suspect they will find a way to save the banks and the surveillance state. Anything beyond that is expendable including shrinking the military.
You’ll know its done, when Gen Z’s can buy a modest house with a pretty good job, might take 5 – 6 years to move through this.
Does this sound correct to you?
Any opinions on “how bad will it get?”
Will it happen before or after the election?
Is WW3 the only solution to deflect the blame from the (((inflators)))
Awesome campaign ad. For Trump
If Kamala Harris were a man and put in charge of economics.
Fauci probably has invented a gain of function mind virus and it is making the rounds in White House.
People still remain puzzled why Housing keeps getting more expensive. Let’s see, someone actually has to work to produce a real good which is housing then is asked to accept Fiat as pay.
Might be something to do with it.
Hey now, you are talking about our next President there! Don’t go making fun of how incompetent Kamala is, because she will definitely be running the country next term, if she’s not running it already!
Get real. The puppeteers will never let Harris make any decisions, any more than Biden makes any now.
Joe wasn’t lying smartest person he knows is his son.
He’s the only person who has “earned” millions of dollars without working for it, paying taxes, have experience or speak the language.
Qualifiers for Cabinet level experience position.
“Ukranian energy expert” is a helluva euphemism for “legalized bribery,” “nepotism,” and “unregistered foreign agent.”
Where is crackhead Hunter these days? I just assume he’s on another multi-month bender when regime media keeps him out of the spotlight. I’m still waiting to see who brought all that cocaine into the White House too. We know it wasn’t Hunter because our propaganda outlets keep telling us he’s, “in recovery.”
The same people who scream about the debt anytime a Dem is in office will turn around and push for more tax cuts when the Rs are in power. They both suck.
I’ll take tax cuts any day
MMT is associated the most with Japan and what they are doing money-wise. There may be lots of rot underneath from using MMT, but last time I checked Japan is doing great Everyone is fed, Toyotas continue to get produced, and cleanups of massive nuclear accidents gets taken care of by someone. So you have to ask … why arent they in breadlines and running from landlords and why arent the Toyota factories shut down?
They are essentially slaves, spending every waking moment of their lives working for abysmally low pay. Don’t make it sound like unicorns and rainbows.
There is no news coverage of any nation like you describe. If Japan were a pit, somebody would have said something. My financial person who is Japanese has had no probs with the home country for decades. I just bought a used Rav4 and it is Toyota thru and thru.
“The media isn’t reporting on something so that thing must not be happening!”
Do you guys even listen to yourselves?
The real news stories are the ones that are concealed, not revealed. Anything that threatens the status quo that is accidentally revealed or that has to be revealed, then has to be memoryholed ASAP.
You’re right. Karoshi is totally made up, and the average worker only taking 10 of their 18 paid vacation days each year makes total sense. How could I have been so stupid?
Oh yeah, and minimum wage in Tokyo (!) is $7.20/hr USD. You’re right that no one reports on that, especialliy in Japan, where they are probably ashamed to do so.
Not in English no… but in their own language, the news is totally different.
Your Japanese “financial person” is obviously not in Japan for a reason.
This deserves more analysis. Their crime rate is way lower than ours though, right? How much vacation time do they currently get versus Americans, and how does their full-time job “slavery” compare to our gig economy?
The crime rate is low because immigration is low, and the yakuza are very well organised and integrated with officialdom. However, as they have allowed more of the usual suspects in, they start to see crime emerge.
OK. You’ve convinced me. I guess it *is* all rainbows and unicorns there.
Does Japan print Dollars or Yen? Asking for a moron.
uhuhuhuhu… are you joking?! Japan is in long-term economic decline, people are struggling to make ends meet there …homelessness is increasing there …their currency is tanking, as the BOJ gradually buys all debt, making imports expensive.
Japan has a much higher savings rate.
The Japanese save, we don’t. Their savings finance the government bond purchases.
Here is another good explanation – https://www.armstrongeconomics.com/armstrongeconomics101/economics/the-fallacy-of-mmt/.
We are run by idiots and sociopaths. The only question is what do we do about it?
While there is nothing we can do about the collapse of the debt Ponzi scheme once the new debt buyers dry up, we can make sure we don’t choose the totalitarian path being constructed by the mother WEFers, even after losing everything and desperation set in.
Why can Soros and the Rockefeller Foundation fund the anti-Israel protest, and the lovers of freedom and liberty cannot get one trillionaire to fund freedom protests? Some say it’s because all of the trillionaires are sociopaths that have thrown in with the mother WEFers and Neocons. Regardless, why can’t all of the so-called Patriot bloggers and Podcasters collaborate on a giant GoFundMe campaign to keep an endless stream of protestors shutting down DC?
Studies have been done showing sociopaths are most concentrated in leadership positions. While this establishes a relationship between wealth and sociopathic behavior, it does not conclude a causal relationship ( wealth causes sociopathic behavior vs sociopathic behavior leads to wealth).
There are distributions for any outcome, and there are a large percentage of sociopaths that are corrupt, narcissist, or both. Semantics aside, we know that power corrupts, and Republics become the most corrupt form of govt because so-called Representatives will get bought by those consumed with power and wealth. If you don’t like the use of the word sociopaths, I’m fine with substituting idiots.
Ol’ Uncle Joe could not have explained it better himself!
Just watched it. Good Lo_d, we are in heap big trouble as the native Americans might say. Is he a Harvard graduate or maybe a Columbia graduate…sure sounds like it.
This is not good.
Its like Butthead explaining how “chicks” think.
crooks
Bernstein is putting his undergraduate music degree and graduate education in social work to good use.
It’s funny. If you ask a carpenter why you need tools to make a table, you will get the same stare as he figures out whether you are pulling his leg, trying to get you to say something to use against you or whether you are just plain clueless.
The carpenter has a good answer, gnawing the wood into shape is too hard on the teeth.
Bernstein has no answer.
Gnawing the finances of a state into shape is hard on your teeth too.
Well, old Joe, stop collecting taxes. Borrow all the money you want.
I wonder if all this has anything to do with inflation? /sarc
Nah. “We’ll just raise taxes to bring inflation down.” MMT? High inflation and high taxes. What’s not to like? </s>
He makes Kamala and Joe look like geniuses.
Kamala does that every hour of every day. Big difference.
MMT brings to my mind the picture taken late in WWII in Germany of a woman with a wheelbarrow full of money on her way to the bakery to buy a loaf of bread. The money had become almost totally worthless. MMT with its endless printing would cause the same result.
That woman was probably photographed in 1923. During the Third Reich era, the German mark was pegged at about 42 cents US and I suspect that strict capital controls were in effect.
Yes, you’re right. Thanks.
Recommended reading: http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html
I read the book years ago “When money dies, the nightmare of the Weimer”
Very good post.