Marshall shows that MMT proponents' rejection of a gold standard because it limits policy options doesn't mean that they are not realistic about the gold market.
The Gold Report
Get Ready for the Gold Rebound Before It Is Too Late: Marshall Auerback
Brian Sylvester of The Gold Report interviews Marshall (8/8/12)
(h/t Roger via email)
Even if you are not interested in the gold market, follow the link and scroll down to a look at what Marshall has to say by way of MMT analysis. He expresses it very clearly and precisely. His presentation of the MMT JG is particularly exemplary and positive in tone.
See also Marshall Auerback: Gold and Silver Opportunities in Turbulent Times
Brian Sylvester of The Gold Report interviews Marshall (10/19/11)
8 comments:
I favour JG in some shape or form, but Auerback clearly hasn’t thought JG through.
First, he trots out the old myth about JG providing employers with “pool of available labor it could draw from”. Hogwash! The unemployed are no more “available” to employers when doing JG than when fully unemployed. If anything, they are LESS available because pay is slightly better doing JG work than when unemployed, which REDUCES the incentive to take a regular job.
Second, the idea that JG has a counter-cyclical influence is false logic. Expenditure on JG consists of a wage that is equal to benefits, and nothing is spent on permanent skilled labour, materials etc, then there is clearly no counter cyclical effect. Alternatively, a JG system can spend significant amounts on equipment, materials, permanent skilled labour, etc. But that expenditure is necessarily an addition to AD. Now if the economy can take additional AD without exacerbating inflation, why not spend the money on regular jobs (public and private sector). Regular jobs are bound to be more efficient than JG jobs.
Third, Auerback repeats the myth about JG bringing “price stability”. I’m afraid that given excess AD, employers will bid up prices, and employees will feel more confident about wage demands, and that’s that. The fact that here are some JG people being paid some miserable basic wage is 100% irrelevant.
Some advocates of JG are their own worst enemies.
This from the "gold" wiki:
"At a price of US$1900 per troy ounce, reached in September 2011, one tonne of gold has a value of approximately US$61.1 million. The total value of all gold ever mined would exceed US$10.1 trillion at that valuation."
http://en.wikipedia.org/wiki/Gold_reserve
At that price, all of the gold is equal to all of the USD NFAs issued ($10T).
So gold has dropped since then by 10-15%. "Gold" probably wants it's amount that has made it above ground to be of greater value than the total USD NFAs so it may be that it takes another run towards $2000.
Gold has been "losing" since 1971 for sure. Though lately it is staging a comeback as the gold alternative, HUMAN LAW, or what the Greeks called nomos, is breaking down across the west. A point Marshall makes here very well.
As nomos is in decline, gold rises.
If the morons in current leadership end up taking the whole thing down, I guess the human can always go back to the guaranteed job of digging for gold...
Rsp,
"guaranteed job of digging for gold."
Not possible, most easily exploitable gold deposits have been already exhausted.
Gold mining now a days is a very industrious enterprise which need expertise and capital.
There won't be a new 'gold fever' which the poor can take as a scapegoat. Capitalists control gold exploitation so this wouldn't be a solution.
In fact, the last time we found humanity in a similar situation things were solved by having two subsequent world wars and a communist revolution.
Domination of commodity money is the sign of distrust in humanity, and will enter us in a new period of warfare and violence, as it always has done.
First, he trots out the old myth about JG providing employers with “pool of available labor it could draw from”. Hogwash! The unemployed are no more “available” to employers when doing JG than when fully unemployed. If anything, they are LESS available because pay is slightly better doing JG work than when unemployed, which REDUCES the incentive to take a regular job.
May not be a problem over there, Ralph, but I have seen many articles saying that part of the persistence of UE in the US is employer reluctance to hire the unemployed. Employability is inversely correlated with length of unemployment. After a person has been unemployed for long time, the chances of their even gaining employment again is questionable. Unemployment of any length, as is characteristic now, ruins the resume.
Related: I was just reading in the morning paper that homelessness in Iowa has spiked this summer, and Iowa has not been hard hit by the recession.
Some advocates of JG are their own worst enemies.
The worst enemy of a JG is those zombie objections which have been so thoroughly addressed in past discussions yet appear newly risen every time the topic is mentioned.
If you look at it from the perspective of an actual righteous employer (there are a few out there!), who may be reluctant to fire an obviously unhappy/under-performing employee as the employer would perhaps not want to simply throw the employee out on the street.... then a robust JG may empower this type of employer to quickly terminate the under-performing employee as the employer would know that the terminated employee could always report to the JG.
This would help both the employer and employee who found themselves in this situation (neither happy with current situation) to move on more quickly (life is short!)...
This would also give the employer some power as the employee would want to perform better at the job (which would pay a bit MORE than the JG wage) because the employee would know that the employer could just send the employee to the JG at any time....
So you have to look at it from both sides....
rsp,
Also,
If the employer was an asshole, the employee could look at the differential between the JG wage and the employers wage and decide if the difference was worth the crap one had to put up with at that employer.
The better employees would gravitate towards the better employers... sounds like "win/win"...
But again you have to look at it from both sides...
Rsp,
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