Monetary Theory

John Kenneth Galbraith, American economist, famously said that “the best money is worthless.” His son, James Kenneth Galbraith, now teaches at the University of Texas in the LBJ School of Public Policy, whence he continues to agitate for a more realistic science of economics.

James has a number of acolytes who make their home at the University of Missouri in Kansas City. And they’ve actually come up with a moniker that, quite frankly, is not a barn burner. MMT for Modern Monetary Theory may remind of the MTA, where Charlie was famously lost in Boston, but it doesn’t resonate. MM, for Modern Money, seems to work better, even in combination with Public Purpose, as it is being highlighted in a series of seminars at Columbia Univesity in New York.

New York being where all the money men seem to reside, it makes sense to have serious discussion there. Less obvious, perhaps, is why some fellows out of Missouri are presuming to offer advice. Never mind coming up with some notions that throw conventional wisdom about money out the window. But, it does make sense. After all, the St. Louis Branch of the Federal Reserve Bank is where all the data for the official regulators of our monetary system is collected. One could even argue that the heartland is more in touch with what America really needs. And let’s not forget that Harry Truman was from Missouri. When Harry said, “the buck stops here,” what he meant was that he was a hands on guy. A buck is a metaphor, but also something real.

And that’s the point the first speaker in the seminar series, L. Randall Ray, tries to make about money and our particular version of it, the dollar. The whole first session is available on Youtube, all one hour and forty-seven minutes of it. Since that’s a bit unwieldy, I’ve taken the liberty of breaking out the main speakers in four, more manageable segments. Ray is an economist and shares the podium with Michael Hudson, an historian. And, while the formal agenda calls for the historian to go first, Ray’s presentation is more of an attention grabber, even if he starts out with a test.

Personally, I have to admit that I really like the comparison of the dollar to the inch because I agree with it. Prejudice likes to be reinforced.

I haven’t uploaded the fourth segment in which Professor Hudson talks about the current state of our financial affairs yet. But, when the upload is complete it will have the same title with a little ‘d’ instead of a,b,and c.

By the way, when Randy Ray says the President is lying, that’s not quite correct. The excutive is under constraints, similar to the states, in that he can’t issue dollars and spend without authorization. It’s the Congress which has the power and is setting up self-imposed limits. The question is why does Capitol Hill deny it and pretend it’s all the banks’ fault?

Why does the dead-beat dad leave his paycheck at the pub? Some people are mingy. [btw, if you check the definition by clicking on mingy, you’ll see an ad for Paul Sadler, Texas Democrat running for U.S. Senate]


Monica Smith

Monica Smith writes Hannah's Blog. Born in Germany, she came to the United States as a child, living first in California, then after an interval in Chile, in New York. Married to a retired professor at the University of Florida, where she lived for 17 years, she moved to St. Simons Island, Georgia, in 1993 and now divides her time between Georgia and New Hampshire. (New Hampshire, she says, is always interesting during a presidential election.) She and her husband have three children and five grandchildren. Ms. Smith says she "learned long ago that I am not a good team player when I got hired at the Library of Congress, fresh out of college with a degree in political science and proficiency in four foreign languages, to 'edit' library cards and informed my supervisor that if she was going to insist I punch the clock exactly on time, my productivity was going to fall from being the highest to being the same as everyone else's. The supervisor opted to assign me to another building where there was no time-clock. After I had the first of our three children, I decided a paycheck wasn't worth the hassle."