> Also, 'printing money' is a feature, not a bug: it allows for currency needs to be met so that economic activity/growth can occur.
We all know the Central Bank hymn book by now.
That said, printing money doesn't create economic activity nor economic growth nor wealth. I know central bankers and their inflationist acolytes want you to believe this and they have dazzling models to show this, and convincing buttoned-up tales to prove this, and I'm not trying to re-litigate an argument as old as Vienna.
Hopefully some subset of humans will remember how wealth is created. And incidentally, if you look in your library, you can find very different interpretations of the various booms and economic depressions of history.
Yes, but some folks don't seem to accept the evidence and the historical record of what didn't work, and why we moved towards the current system. Some folks still think that FDR (and Keynes) got things wrong.
> That said, printing money doesn't create economic activity nor economic growth nor wealth.
While liquidity is not (necessarily) sufficient for economic activity it is necessary, and a lack of liquidity certainly hinders it. This is evidenced not least from the Great Depression and that once a country abandoned the gold standard they started to recover:
Fixed supply monetary systems (like the gold standard) are a hindrance, and it's not like they do anything useful like create a stable monetary base either:
> but some folks don't seem to accept the evidence and the historical record of what didn't work, and why we moved towards the current system. Some folks still think that FDR (and Keynes) got things wrong.
They did get things wrong. But that's my opinion. And economics isn't a science but a confidence game, mostly.
They were wrong because the market is a coordination mechanism that works based on information. The most important information in the market is the price signal. The first important price is the price of money. Central planners mess with that price and thus distort the market. In fact, the era of money printing has created more economic instability than prior periods.
But why mess with the price signal? So that you can pick and choose winners and losers. If they couldn't do that it wouldn't be worth the effort to centrally manage and control all human economic activity.
But again, I'm not trying to re-litigate a boring debate. The Central Bankers won, monetary and fiscal control has been centralized in the hands of a few people. Gold has been confiscated and expropriated from civilian hands, the dollar is backed by nothing except guns and oil, and 90% of the world's trade and debt is dollarized.
Money printer go burrr and thanks to that printing all my assets over the past 20 years have become insanely valuable as denominated in dollars, which keep being printed.
> the historical record of what didn't work?
Work, for whom? By what measure? At what cost? And who paid the costs? You talk about the Great Depression but unless you're a time traveller you'll remember the GFC as well?
Ah. But this is all so boring and not worth debating because it's been debated for as long as humans have wanted central planning of economies and markets.
Thanks for all your referenced articles but I did not read your citations because I've read all this stuff before endlessly over many years, decades actually, because central bankers keep promoting their interpretation of history to justify their control of markets.
>> Some folks still think that FDR (and Keynes) got things wrong.
> They did get things wrong. But that's my opinion. And economics isn't a science but a confidence game, mostly.
I'm curious to know in what way you think FDR/Keynes got it wrong.
Hoover and others tried things in the (then) orthodox way in the early 1930s and things didn't recover. Further, as the Delong link shows, as soon as other countries followed the US' lead they too started to recover.
Then, when the US went back to then-orthodoxy in ~1936 under political pressure and moved towards (e.g.) a balanced budget, the economy started tanking right away. Further, the orthodoxy of (so-called) "sound money" and balanced budgets caused political turmoil in more than one country:
A whole bunch of folks had to relearn this not too long ago when there was a push for "expansionary austerity", which Keynesians said would be bad for economic growth/recovery post-GFC, and which did in fact turn out to be bad:
> But why mess with the price signal? So that you can pick and choose winners and losers.
Actually it's to regulate/moderate economic activity. Because it is not Friedman's money supply (quantity) that determines price stability (i.e., the rate of inflation), but rather its velocity. Even Milton Friedman admitted (Financial Times, 7 June 2003) that "The use of quantity of money as a target has not been a success. I'm not sure I would as of today push it as hard as I once did."
Even in the right-leaning Reagan/Thatcher 1980s central banks (e.g., Fed under Volker) gave up on money supply control and went to interest rates. This was formalized staring in the 1990s:
> […] and 90% of the world's trade and debt is dollarized.
And before that most of the world's trade was (British) 'poundicized', because the UK had the largest economy in the world. And before that…. It seems to be fairly common that world trade tends to be done in the currency of the country that does the largest portion of world's trade—and if two countries are close both of their currencies tend to be used:
> Work, for whom? By what measure? At what cost? And who paid the costs? You talk about the Great Depression but unless you're a time traveller you'll remember the GFC as well?
Yes, I remember the GFC.
I remember then-monetarists abandoning Friedman's (and Greenspan's) ideas and (re-)embracing those of Keynes. I remember rending of garments by right-leaning folks when QE was announced about the terrible things would happen:
> We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.
I remember Keynesian saying it would be fine… and being right.
It was fortunate that Bernanke was the Fed chairman at the time, as his area of academic research was things like the Great Depression (of the 1930s) and how tight monetary policy (dictated by the gold standard) made things worse:
> I'm curious to know in what way you think FDR/Keynes got it wrong.
No, you shouldn't be. I'm just a random guy on the internet.
>> But why mess with the price signal? So that you can pick and choose winners and losers.
> Actually it's to regulate/moderate economic activity.
You see how you miss the point while restating my point? It's as though you're trolling me. We've literally said the same thing.
Ah well, I definitely can't read your long post, as well intentioned as it is because it's too long and I've already spent far too many years debating this stuff.
But thanks again. Maybe someone else will indulge you. I just happen to lack the energy and inclination.
It's simply a matter of first principles and values: If you believe in central planning and control of human activity, then you'll choose your adventure that way. If on the other hand, you don't want a cabal choosing winners and losers, and you truly believe in free markets, for money and everything else, then you'll choose a different path.
You and I can pontificate all day about our chosen interpretations of history, but to what end? You've already made up your mind. I used to believe what you do and buried interlocutors under endless citations extolling central banking.
What does debate with strangers accomplish? Nothing really.
We all know the Central Bank hymn book by now.
That said, printing money doesn't create economic activity nor economic growth nor wealth. I know central bankers and their inflationist acolytes want you to believe this and they have dazzling models to show this, and convincing buttoned-up tales to prove this, and I'm not trying to re-litigate an argument as old as Vienna.
Hopefully some subset of humans will remember how wealth is created. And incidentally, if you look in your library, you can find very different interpretations of the various booms and economic depressions of history.