Randall Wray - Why Our Economy Keeps Crashing

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊

[@vin.handle]

If, as some predict, AI and similar technologies increase productivity and supply, wouldn't you need a more than expected increase in the money supply to prevent deflation? Deflation may be more of a problem than inflation if we get a large boost in productivity.

[@brodyalden]

Quite an “if”.

[@vin.handle]

@@brodyalden "If we have a cure for polio". Quite a big "if" but it did come true and society has benefited.

[@collie8]

you would need different distribution of product. Even if nobody needs to work, AI cannot create raw materials, so some taxation for distribution would be needed. Increasing money supply without ordering some work to be done won't help to defeat deflation effects.

[@MarioMtLr]

Great to see Steve Keen's ideas put to test with another great mind. Thanks for the content and take time to enjoy life, that's what we are fighting for ultamately. 😂

[@davidwilkie9551]

Punctuated Equilibrium, transverse trancendental prime-cofactor frequency density-intensity alignment amplitudes in the Calendar of years.. boom-bust chaos is typical for Earth's Ecology.

[@kmakiable]

Great video ❤

[@eroceanos]

Well, exponential growth is impossible in any physical system... if you do it anyway, you get boom and bust. That's my guess... and now let's watch, I'm curious...

[@Achrononmaster]

@2:14:00 "stability is destabilising" yet Minksy wanted to promote stability! Doh! Wray's one-liner is too glib. To reduce the instability in a financial system you remove the sources, which are excessive (pointless) competition, artificial (imposed) austerity, and fixed exchange rates, and controlled currency supply. You let the currency float, and go to full employment, with an employed labour buffer of forever up-skilled workers (ideally, skill training resources withstanding). And crucially: banks get told only *_what they can do_* (narrow banking) run the payments clearing system, and assess credit risk. And 100% bank deposit insurance --- so no one with too much cash on their hands needs to seek a shadow bank (a major source of financial instability). And finally, ZIRP --- so there is no basic income only for people who already have money. All other sources of _financial_ instability are pretty negligible imho. Economic output (pandemic/asteroid sensitive) and political instability (regime/invasion/coup sensitive) are different topics.

[@Tryshroom]

Haven’t watched the whole thing yet my main thing is who is going to agree to this politically without the biggest struggle in American history. This would be a struggle on a level possibly never seen & the US dollar declining do we have enough time to pull this off there would have to be some incredible diplomacy during these times as well as political alignment with this idea . I love it but this is a Hail Mary

[@PyroShredder982]

Man this stuff is pretty dense. I took some macro as an undergrad at Binghamton but it wasn’t nearly this technical lol

[@antediluvianatheist5262]

Anarchy of production. Your basic problem is capitalism. It's not a problem, it's a feature. This is how the super rich own everything.

[@Resmith18SR]

Life is Messy. Capitalism is even Messier.

[@RuinDweller]

"Let the markets regulate themselves" makes about as much sense as "Let sulfuric acid determine its own shape".

[@davidwilkie9551]

And incomplete-incomprehensible.., branch off ecological circumstances.

[@Tryshroom]

Great quote

[@علي-ش7ث8ب]

*Get rid of debt.*

[@Achrononmaster]

That would mean getting rid of currencies. All currencies are (nominal) debts of the state. But that's fine. a fiat currency issuer can always make all payments on debt due, and always accepts back their currency for payment of taxes (eliminating the state's debt obligations). Maybe you just mean eliminate all *_private debt?_* That could be done, but then there is no chance of private investment using credit, and no big purchases beyond incomes (so no house ownership, unless it is 100% state housing). The better stabilization is a Job Guarantee labour floor. Full employment + price stability, no one loses their house (unless they want to).

[@علي-ش7ث8ب]

@@Achrononmaster I meant get rid of all debt and adopt a currency driven by useful taxes the idea of the government borrowing from itself and from the private sector is stupid and dangerous ,debt grows way more faster than the economy it's simple math so eventually the whole economy will collapse. In a debt economy you'll never have full employment,look at what the Fed is doing,it's literally creating unemployment to save the economy!!!

[@علي-ش7ث8ب]

@@everythinglooksgrey8796 _If a government defaults on its debt denominated by its own currency that means it's run by very stupid people._

[@علي-ش7ث8ب]

@@everythinglooksgrey8796 this is why the idea of a government borrowing its own currency is stupid and dangerous

[@RuinDweller]

@@علي-ش7ث8ب What's stupid is the idea that a monetarily sovereign nation would ever need to borrow in its own currency to begin with, when they, themselves are the only party legally capable of producing it. You are applying gold standard logic to an economy that no longer uses it. Who do we "owe" when we deficit spend, China? Taxpayers? If they produce dollars, they are counterfeit. ONLY the FED government can produce USD, and we can fulfill any debt in USD, in full, at any time. You are focusing too much on the currency, which is infinite. What has real value are real resources, which are finite. When you run out of those, your currency is worthless.

[@Rob-fx2dw]

There is no such thing as "aggregate demand" in the economy as Randall Wray talks of it. The concept of an "aggregate demand" as he misuses it is itself rubbish because it contains no account for prices and as demand increases or decreases for any product prices are a relevant factor. Yet Randall Wray ignores this always present fact for goods or services of any kind in the economy. e.g. The demand for tomatoes decreases as prices rise and increases as prices fall so what is the so called "aggregate demand" for anything at any time without considering prices? Answer :- Nobody knows and nobody can determine it because demand, supply and price are the determining and interacting factors in any sale of goods or services. .

[@peepeepoopoo3324]

If you do a quick google search on the definition of “aggregate demand” you will find that aggregate demand specifies the amount of goods and services that will be purchased at all possible price levels

[@Rob-fx2dw]

@@peepeepoopoo3324 Thank you for proving there is no such thing as 'aggregate demand' by your definition. That is because nothing is able to be purchased at all price levels. If you think it exists anywhere then where has it existed ever when some things are not for sale at the lower end of prices and others are incapable of being purchased at the maximum price level because there is always insufficient money available to do so in any real economy. So price has been ignored. The term "aggregate demand" is therefore nothing that existed or has ever existed. It is a purely abstract term and so no purchase has ever been made that is part of it.

[@peepeepoopoo3324]

@@Rob-fx2dw lmao dude aggregate demand is a curve. Aggregate demand is a curve on a graph with price level on the y axis and real GDP on the x axis. Just google man hahahaha

[@Rob-fx2dw]

@@peepeepoopoo3324 You are confused. A curve is graphic representation of something. It is not an actual thing itself and does not prove the existence of any particular thing. I can draw a graphic representation of anything I have imagined but it does not mean the thing exists. All it means is I could have already imagined a something that is abstract such as notion which is somethiung that does not exist in reality.

[@peepeepoopoo3324]

​@@Rob-fx2dw What happened to "aggregate demand contains no account for price"? Now aggregate demand is just a graphic representation that's purely imagined? It's not based on any real data? Like real GDP on the x axis? And real price data being estimated on the y axis? Googling is easy btw

[@dwaindibley4137]

This is mostly just an exercise in mental masturbation. You ever heard of a book called "Modern Monetary Mechanics" published by the Chicago Fed in 1961? It was a detailed explination of fractional reserve banking and the money multiplier. It was replete with charts, graphs, formulas, and equasions, going into great detail on how that system worked and it was (and still is) taught to every student who studies economics. It was later proven to be a complete work of fiction, debunked by the Fed itself (3 times), the Bank of England, Standard & Poors and many others. In that regard, just about everything you're going on about in this video, is of the same quality as "Modern Monetary Mechanics". Oh and, your explination of how our monetary system works, is so far out of the relm of reality, it defies debate.

[@Zivikele-Mzobe]

What's your take?

[@billkem007]

Why not enlighten us?🤔

[@SchrodingersCat8813]

No I am not familiar with that book but...in 2014 the BoE put out a paper that exactly agrees with MMT. It lays out very clearly how money (and banking) work and its as explained here. Also while looking up refutations to the book you reference, which btw I found none....I found a 1995 St Louis Fed paper discussing endogenous money. You appear to be wrong. Central Banks seem to feel $ works this way, and they'd know they are the ones that actually deal with it. As for the monetary system most of what MMT has said has turned out to be true so yeah idk seems the only fiction here is your claim

[@Rob-fx2dw]

@@SchrodingersCat8813 You are wrong. The bank of England has NOT put out a paper that agrees with MMT. You are totally wrong when you say "As for the monetary system most of what MMT has said has turned out to be true ". The MMT is load of regurgitated bollocks from years ago. Their absurd claims are laughable and indicative of those who do not do proper research and when questioned cannot answer straight questions. Take for instance the MMT idea that taxes put value into and get acceptance of the money (Mosler, Randall Wray, Kelton, Keen, ). The reality is taxes did nothing to get acceptance or keep any value in the money in every country where despite taxes the money became through inflation worthless and rejected by their own people and own governments. Can you put up a reasonable answer to that MMT's claim ? I guess not and that is the same for all of the MMT economists who when asked cannot support their own claim. Also take their idea that all money originated from the government and therefore government has to spend first before taxes are paid. It is simply absurd because most money in the economy (90% or more) is created by private banks who are not the government and do not get that money from the government. You should be able to point out in the following document which outlines the Fed's activities just where the Federal Reserve itself explains how banking works creating new money to lend to private banks as MMT claims. The fact is it doesn't and that is precisely why it does not say so even though it lays out in summary their full operations.. It is titled "What the Central banks does". Refer to this :- www.federalreserve.gov/aboutthefed/files/the-fed-explained.pdf

[@mns8732]

Get another guest. Thank you

[@RuinDweller]

Watch another channel. Thank you.