Tuesday, December 11, 2012

Peterson Institute Economists Like the Platinum Coin Idea?

commentary by Roger Erickson

Could the ‘platinum coin option’ solve the U.S. debt crisis?

What we really need are anthropologists to solve our fiscal problems.  Read on, to grasp why.

This murky story starts with a seemingly isolated, and arcane question. Does the Pete Peterson Institute like the platinum-coin option for real, or do they just see it as a way to reduce future public spending, and hoard more of the existing currency supply among the plutocrats? Answering that arcane question, however, requires assessing the context - involving class & clan competition, and competing social paradigms held by the feuding sub-groups competing to shape group policy.  Hint: you can't coordinate without communicating.

[And wow. Some of the other factions  REALLY don't understand fiat currency!]

Initially, I can't tell if Pete Peterson is evil, or just ignorant about dynamic operations. Any evidence to tilt one way or the other?

Turns out Pete's had multiple interviews on Charlie Rose, so I'm going through them, to see if it helps shed some light on this baffling situation. It's revealing, from the start.

Jump to the 6 min mark here, to see Pete's views on the American dream.

Ok, Pete Peterson is a typical child of immigrants, like so many of us. Unlike others, however, he took a narrow path and became an absolute acolyte of Milton Friedman, working out of the Death Star (U-Chicago Economics Dept). Pete now clearly believes that in order to attain liquidity, "money" has to be saved up - even by the issuer of fiat liquidity notation!

I'd love to ask him how we "save" inter-personal credit, optimism and goodwill - aka, social credits; aka, social liquidity. Just to see how he answers.

[How do other social species maintain liquidity? Do ants hoard pheromones?]

Pete either didn't notice, or never accepted, that we left the gold std in 1933?

It's a tragically ironic twist that a man who "cares so deeply" about loss of the American Dream, is absolutely the major peril to that dream ... and simply doesn't realize it. He wants to save the American Dream, by starving it of liquidity? It's confusing. Doesn't that imply that he wants us all to have one, and only one, fixed dream - nevermore to diversify and evolve? Note to Pete: there is no evolution without liquidity - only austerity, and death.

There may be a deep-seated social reality here. Innovative people want liquidity so they can rapidly explore all options. Conservative people want to avoid risks, and hoard existing assets. They both extrapolate their fears of one another to extremes.

To be fair, conservatives hyper-extrapolate their fear that freely exploring emerging options will "naturally" lead to hyperinflation and collapse. They're patient, organized control freaks, and hibernators. They panic at the thought of depleting hoarded static-assets.

To be fair, innovators hyper-extrapolate their fear that any constraint whatsoever to exploring emerging options will stifle all exploration, and "naturally" lead to debt-deflation and collapse. They're impatient, disorganized risk takers, and rebels. They're enraged by the thought of running up dynamic-asset Output Gaps.

In reality, conservatives don't want to enslave and kill everyone, they just want them to suffer, a little bit - so everyone stays properly "motivated"? That's controlling.

In reality, innovators don't want to risk everyone's lives, they just want them to maintain enough daredevil practice to avoid comatose hibernation - so everyone stays adequately alert and gets enough practice, whether they want to or not? That's pushy.

Surival tracks the messy back and forth of staying between those two tolerance limits? Can't the two camps get together and focus on smoother navigation, rather than wasteful oscillations? Isn't that failure to maintain prior levels of coordination the factor that is really killing the American Dream?

We can do this. Can anyone schedule a small, private meeting with Pete Peterson?


5 comments:

Matt Franko said...

"Can anyone schedule a small, private meeting with Pete Peterson?"

Ask Mike, Peterson sometimes works out at the same gym Mike works out at in NYC ;)

but seriously Roger I agree with you it would be good if some MMT folks could get in to see Peterson... give it a shot anyway... rsp,

Mike Norman said...

Turns out it wasn't Peterson after all. It was another guy named Pete, who looks just like Peterson (I kid you not), but maybe a little more spry and in shape.

On the real Peterson (and others like him), it's amazing how the markets and economies, globally, have been calling bullshit on all their claims and warnings for years and years and years, yet they are still viewed as sages.

This guy makes these hollow statements so matter of factly and NO ONE in the media challenges anything they say. It's disgusting.

And by the way, the "American Dream" was never about becoming a billionaire for most people. It was about freedom, having a house of your own, a job, sending your kids to college, maybe a vacation trip once in a while. My father didn't make a lot of money. He was a fireman, but we had the American Dream. Unfortunately that is not possible today, because of warped, misguided, idiots like Peterson.

Crake said...

What I don't understand about

"To be fair, conservatives hyper-extrapolate their fear that freely exploring emerging options will "naturally" lead to hyperinflation and collapse. They're patient, organized control freaks, and hibernators. They panic at the thought of depleting hoarded static-assets."

is the standard conservative view on environmental and energy fronts. I could see being "scared" of new energy sources but what about the fear of running out of the existing energy?

Roger Erickson said...

@Crake;
See the Grand Banks off of Newfoundland. The simplistic mentality is that "it's there, until it's not there."

The famed Grand Banks cod fisheries are depleted now, but for 500 years, no one saw it coming. At least most people dismissed the few who did see it coming.

geerussell said...

is the standard conservative view on environmental and energy fronts. I could see being "scared" of new energy sources but what about the fear of running out of the existing energy?

I think the hoarders of static assets look at themselves like first-class passengers on the titanic. The options afforded by hoarded wealth are a hedge vs icebergs and too-few lifeboats.

There may not be enough energy for everyone but I'll have enough for me. Sea levels may cause disruption and displacement but I'll still have everything I need. And so on and so forth. The only thing they fear is losing their position relative to the masses.

It's delusional but it's an easy delusion to maintain inside the bubble of wealth.