Leisure, not jobs. Rising yields, not rising employment

Britains Green New Deal

Jonathan Ford rightly rubbishes the proposals from the government to create jobs. The argument is well rehearsed. The fallacy is to assume that all jobs are equally productive. They are not. The sole purpose of economic activity is to consume, and the market is the perfect mechanism to allocate resources to maximize the utility of consumption. Sadly, the Conservative Party long ago lost sight of this principle.

I suppose it is related to the Marxist labour theory of value: that the value of everything is somehow a rollup of the labour used to create it: no work, no value.

Stock idea

Water Intelligence — WATR - gRIFOLS (grf-p)

? Micro Systematation (??)

$SNOW — red hot stock, which does something obscure with cloud computing!

Inflation again

I just read this great article by a great economist: Raghuram Rajan. It basically says that the fault with MMT thinking is that the cost of debt can start to rise well before inflation is a problem. It happens when real borrowers start to lose faith in the ability of a government to service its debts in real terms (i.e. using real resources). He notes that whether the central bank buys up all the debt or not, this is still a problem, because eventually banks will demand more and more interest on their excess reserves, which is what they receive in exchange for the treasury bonds they have sold.

You should read the article, but it’s the simplest exposé of the fallacy of MMT that I’ve seen. As he says, when a theory states that there is such a thing as a free lunch, it should be examined forensically. The MMT free lunch is that inflation starts to be a problem only when unemployment falls below its natural rate. Rajan argues that rates demanded by borrowers will start to rise well before this, as the governments of many developing nations have realized.

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