The difference between misinformation and disinformation is that the former can be accidental and unintentional, while the latter is intentional.
While the Libertarian website, Reason.com, always has spewed wrong ideas, I have come to believe they now are well into the disinformation stage.
In short, they have transitioned from loud-mouth, bar-stool buffoons to louder-mouth Tucker Carlson.
Here is the latest headline:
Reason.com – Free Minds and Free Markets
Nobel Prize–Winning Economist: Democrats Are Committed ‘To Spending Other People’s Money’
Vernon Smith weighs in on Biden’s budget, how government causes inflation, and why bailing out Silicon Valley Bank was a bad idea.
NICK GILLESPIE AND JUSTIN ZUCKERMAN | 3.29.2023 2:45 P
I caught up with the 96-year-old recently in Southern California and conducted a long interview about his life and work that will appear as a Reason podcast.
Here’s part of our conversation about President Joe Biden’s massive $6.8 trillion budget plan, the role of government spending and Federal Reserve policy in causing inflation, the bailout of Silicon Valley Bank, and why Smith believes “it’s very hard to keep Democrats [from] wanting to make the world better by spending other people’s money.“
I must admit that the headline an the introductory paragraphs told me I would not be able to stomach listening to the entire drivel. Here are my comments based on just the above:
Starting with the simplest, there is no Nobel Prize in economics, nor should there be. It’s called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
It’s like me injuring myself and awarding me the Rodger Mitchell medal in memory of the Military Order of the Purple Heart.
Or, having taking some pictures at my family Thanksgiving dinner, I award myself the Mitchell Award for Best Picture in memory of the Academy of Motion Pictures Arts and Sciences Awards for Best Pictures.
Also, there should be no real Nobel Prize in economics because economics has not yet graduated to science levels. It is a philosophy that lacks proof, but exists on intuition and belief.
Sciences make verifiable predictions. Economics makes predictions that can’t be verified. They are little more than hunches.
Economists are like stock market chartists with their “head and shoulders” graphs, histograms, and MACDs, all of which sound scientific but in reality are balderdash.
“GOVERNMENT SPENDING CAUSING INFLATION”
Next, there is no evidence that federal spending causes inflation. It is a common belief in economics circles, but it is based on the logical intuition that if you have more of something its value declines.
Sadly, Facts don’t agree with intuition.
Money is unlike other commodities. It always is in demand.
If we have plenty of oil, we don’t use more. There becomes a surfeit that needs to be stored at a significant cost. The price goes down. When there is too much, production can’t be shut down in and instant; when there is a shortage, production can’t be started instantly.
If we have plenty of food, we don’t begin to eat more. The extra must expensively e stored or allowed to rot. The the price goes down. When there is too much or too little, production can’t respond quickly.
By contrast, the federal government quickly can produce more dollars when needed, simply by giving them away or spending them. In the unlikely event there ever are too many dollars, the government could tax them away.
Another major reason why money is unique: If you have plenty of money, you still want more. Storage not only is free, but receives interest. The usual rules of supply and demand don’t operate.
Having plenty of money does not reduce the price of money. It actually can increase the value of money, because investing opens new areas for more investing.
That is why we see graphs like this:
“BAILOUT OF SILICON VALLEY BANK”
The bailout of the Silicon Valley Bank (SVP) was necessary to prevent massive losses to the economy and to individual depositors.
Gross Domestic Product (GDP) is a measure of the economy by being a measure of spending (GDP = Federal and Nonfederal Spending + Net Exports).
Adding dollars to the economy increases GDP; taking dollars from the economy reduces GDP.
Dollars held by banks are dollars in the economy as part of the M2 money supply measure. Allowing SVP depositors to lose money would reduce GDP, which would be recessionary.
Gillespie and Zuckerman advocate punishing the bank and those responsible by allowing them to fail, the classic “cut one’s nose to spite one’s face” situation.
Because banks operate under a profit motive, their leaders face the ongoing temptation to engage in higher-risk activities. When these activities fail, the banks, not having infinite funds with with to pay off depositors, fail.
The prevention and cure is to have all banks owned by the federal government, an entity that is not motivated to take higher risks and has the infinite ability to pay depositors. There is no public purpose for banks to be privately owned.
Bank depositors already are insured (up to $250,000) by the federal government. Federal ownership would expand that protection while decreasing risk.
“SPENDING OTHER PEOPLE’S MONEY”
This pejorative trope, though often expressed, is based on the false notion that the federal government spends federal tax dollars.
While state and local governments, being monetarily non-sovereign, do spend taxpayer dollars, the federal government operates differently.
Being Monetarily Sovereign, the federal government has the infinite ability to create dollars.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”
The federal government neither needs nor uses tax dollars. Even if it stopped collecting taxes, the federal government could continue spending forever.
The primary purpose of federal taxes is to control the economy by taxing what the government wishes to discourage and by giving tax breaks to what the government wishes to encourage. A secondary purpose is to insure acceptance of US dollars by requiring them to be used for taxes and other payments.
Reason.com, that Libertarian, anarchist organization, has become more far right-wing of late, and following in the Fox News / Tucker Carlson tradition, has resorted to exaggeration and outright lies — i.e misinformation and disinformation — to push its anti-government agenda.
The federal government is very good at one thing: Creating dollars. Thus it has no profit motive. It’s motives revolve around its voter constituency. The more it can do to please its voters, the more votes it can acquire.
The Republican constituency is the rich, and the Republicans know it.
The Democrats’ constituency is the not-rich, but the Democrats don’t understand economics. So, despite creating such social programs as Social Security, Medicare, Medicaid, and poverty-fighting plans, the Democrats repeatedly fall into the trap of not recognizing Monetary Sovereignty.
Thus, they go along with the “can’t afford it” excuses for not implementing Medicare for All, Social Security for All, free college for all and other social programs that would benefit America.
Meanwhile, the Libertarians join hands with the Republicans to widen the Gap between the rich and the rest. Disgraceful.
The next time you read any Libertarian or Republican wish list, ask yourself, does this help the not-rich or does it widen the Gap between the rich and the rest? Then vote accordingly.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
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