Clint Ballinger
@clintballinger
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The emerged economy | The built economy Book: https://t.co/JGGNnF2R41
Joined December 2009
There is a pervasive, annoyingly simplistic, & neverending online debate: Libertarian/free market vs socialism/communism, as if these are stark choices 1/
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@cullenroche @GeorgeSelgin Only reason discussed reserves and trys etc was bc many were clearly getting that wrong. Idea was to correct that and move on to more important things. But the mainstream, finance press, & politicians were far more resistant to that than expected. So here we are still
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@cullenroche @GeorgeSelgin Yes, the purpose of gov and organizing public things isn’t usually about production (“usually” bc infrastructure, pure research, edu etc should be partly aimed at helping production in long term). Public spending: organizing public goods; bank lending: organize private production
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@RaulACarrillo 6 little words in the Banking Act of 1935 - These force the system that confuses the public, even the highly curious/educated public, and many/(most) economists, into profoundly misunderstanding the system we have. Accounting shakes out to OMF, but appearace radically deceiving
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@cullenroche @GeorgeSelgin So that was a good policy choice as opposed to letting the market respond to price increases?
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This would be true if it truly started as white
Many fail to realize one of the most valuable tools an economist can possess is actually just a good whiteboard
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@cullenroche @GeorgeSelgin As far as rates-By what precise channels did ↑rates reduce inflation? To what effect on middle and below households? Were there any counter-effect channels? What did these do to the overall degree to which rates had to be raised? & to what effect on what prices? And the wealthy?
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@cullenroche @GeorgeSelgin Anyway— spend different is the key. And no rates don’t fix supply shocks, they amplify. Why wasn’t Covid going to cause price level increases? The best thing to do is let that real cost pass through, and let markets respond Trying to intervene w rates in that situation is insane
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@cullenroche @GeorgeSelgin The same arguments mmt makes against UBI applied to poorly targeted relief. Mmt ppl discussed this very problem. The mainstream legacy practices made well executed, precise relief much less feasible quickly
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@cullenroche @GeorgeSelgin Wait- understanding reserve accounting is why the Biden administration had poorly targeted covid relief policy? (and of course we’ll ignore that every inflationary episode in last 100+ yrs was a supply shock, as was Covid/ukraine)
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@cullenroche @GeorgeSelgin Wrote a short book about that- yes we want arms length lending entities. Serve a fundamentally different purpose than gov spending. But it is bank-credit. Better to be precise
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@cullenroche @GeorgeSelgin Reserve accounting is important for understanding overall system to avoid the silly mistakes many make. As I mentioned, extend FDIC to be unlimited and then the difference really wouldn’t matter. I’m happy w bank credit yeah
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