49/ is it possible that they are so afraid of “inflation” they are actually creating “inflation”? (Where each “inflation” is a different flavor of inflation)
48/ And maybe the bottom dropped out from under the NOK, but the whole oil tax thing will keep it from dying. Because there will always be buyers, because they have no other choice.
47/ I don’t know what the answer is, my earlier idea of constraining the supply of NOK… it looks like they did that, and it had apparently about as much effect as the interest rate (not much if any).
Maybe without these two things it would’ve spiraled out of control… but I don’t think so, because this wasn’t caused by our economy.
So maybe the best thing would’ve been to just accept it? Yeah, the NOK is weak, because the world is rough, increase salaries some and just sit tight? Maybe even stimulate internal growth to compensate?
52/ Ok, I think I get it. MMT says that a deficit isn’t a sign of government overspending, inflation is. (And here they are clearly talking about the overheated economy inflation) So as long as the spending doesn’t cause inflation, it doesn’t matter if you run with a deficit even over a longer period (she mentioned decades).
So basically she is sort of saying that deficits aren’t real because taxes aren’t real.
This is more like the water in a radiator system (my analogy). You can add in water or remove water, but the system isn’t the water. And adding water (money) only becomes a problem when the pressure in the system gets too high and water starts spilling out somewhere.
Basically, money isn’t “real”. It’s… just water in a radiator system in a building. The building and the radiators and the people living there are the real things.
53/ Ok, fine. Y’all have told me over and over to read Steve Keen, and I would’ve if he had a freaking audiobook, but he does have a podcast, so let’s do a crossover, because he has an episode on MMT. (h/t @joelving and the 5 other people who have brought it up) https://mastodon.joelving.dk/@joelving/112720891429481986
55/ Short recap: he basically agrees with MMT on most things. One thing came up though which is relevant to my discussion here about Norway, and that is that the USD is not a normal currency, and it can get away with a lot the rest of us can’t. The term he used was “reserve currency”. https://en.wikipedia.org/wiki/Reserve_currency
62/ I feel so smart when I read news articles that agree with me 🤓 🤣 “And an interest rate increase will not help, he believes. - The higher the interest rate goes, the more landlords have to raise the rent, and then the interest rate increase is inflationary. It does not have the same effect as in the housing market, where prices fall if interest rates rise. The interest rate is not a good weapon to deal with this kind of inflation. It makes matters worse, he says.” https://e24.no/norsk-oekonomi/i/93zl4d/uenige-om-leieprisene-det-gjoer-vondt-verre
61/ Based on this is it possible that Norway is actually doing MMT? Sort of? But instead of “printing money” they are covering a planned deficit with the earnings from its petroleum export?
64/ Real estate prices are up 8% this year, that’s bananas. But I guess it’s like the gold, people are investing in their homes, and maybe also the fact that it is a closed loop system. So until people start defaulting on their loans, the real estate market won’t feel it.
63/ What is absolutely hilarious is that the effect he describes on the housing market is actually not happening. But this is yet another time the terrain is wrong for not fitting their map.
67/ To be fair, I think that issue is pervasive in the whole field. They are not able to separate ideology from models of the economy. And then they infuse in morality and destiny and Right and Wrong in these models until it’s more mythology than science.
And I don’t mind ideology. I have a great helping myself. But when you’re already in a non rigorous field, mixing opinions into “models” makes the whole thing even less serious.
A complex system is what it is. You find out the shape of it empirically. You can form hypotheses, design experiments and test. You don’t sit in a corner and Devine It. You might have a famous “shower thought” but then you test.
And seriously, these people (economists) don’t test ANYTHING.
7/ I was starved for actual critical analysis of what is included and what is not, that I am now a bit too enthusiastic that someone is actually doing that.
9/ I digressed into a video where the author of “Late Soviet Britain” Dr Abby Innes summarizes her book. And in this clip she much more eloquently states what I’ve been trying to say. (Thanks to @bobthomson70 for pointing me to it) https://mastodon.social/@bobthomson70/112705819512473529
18/ Chapter 2 seems to be about money, so far a bit too abstract for me. If you’re on the fence about money, I recommend the book Money by Jacob Goldstein (basically the biography of money), which convinced me that money was a practical solution to a real problem and the lack of it creates a society that doesn’t work very well. Especially a section in there where paper money was invented in China and then banned again (ages ago, if anyone has dates let me know), and the effect of both on society. (Deleted and reposted since I made a threading error 😅)
17/ Ok, chapter 2 concludes that even if we only consider and support “use value” we still want to assign a (monetary) value to homes (and other goods) because barter is a difficult system.
16/ Ok, for context, the chapter is called “Use value and exchange value” and I do like using homeownership as the scaffolding for the narrative, because it is very relatable. What he is describing is homes as both a home for people (use value) and as a “financial instrument” (I think this is “exchange value”) that can be used in various forms of speculation. And that when that type of speculation goes wrong, real people are hurt because they might lose their homes (both homeowners and renters) or end up in unlivable conditions.
21/ “Money, in the first instance, is a means whereby I can make a claim on the social labour of others: that is, a claim on that labour which is expended on the production of goods and services for others in the marketplace (this is what differentiates a 'commodity' from a 'product' like the tomatoes I grow in my backyard for my own consumption)”
Maybe I’m just a bit dense, but I’m struggling with this. “A claim on the labor [of] others”? A “commodity” vs a “product”? Maybe it’s me not being a native English speaker…
Which are his homegrown tomatoes? And where does the unpaid labor in the home (often done by women) go in this? And just because someone buys something you made, how is that “making a claim on your labor”?
19/ I’m struggling with his definitions here because it seems to me that he is saying that something has “value” if we assign a price to it. Maybe I’m misunderstanding. Because how does unpaid labor work in this context? Childcare, chores, cooking… do they only have value when we pay someone to do it? Is this like homegrown tomatoes? I have questions.