Not since Ringling Brothers and Barnum and Bailey brought their Three
Ring Circus to town has there been such amazing confusion. The big
difference is that the Circus was fun.
I am increasingly certain that Donald Trump will call for a state of
emergency, build his Idiot Wall, declare war on Venezuela, and proudly
lead us backward into that Magic Make Believe Land when America was
Great...only to discover our Greatness never existed.
Carl Jarvis
On 2/8/19, Miriam Vieni <miriamvieni@optonline.net> wrote:
> The Venezuela Myth Keeping Us From Transforming Our Economy
>
>
> <https://www.truthdig.com/articles/the-venezuela-myth-keeping-us-from-revolu
> tionizing-our-economy/>
>
>
>
> Modern Monetary Theory (MMT) is getting significant media attention these
> days, after Rep. Alexandria Ocasio-Cortez
> <https://www.marketplace.org/2019/01/24/economy/modern-monetary-theory-expla
> ined> said in an interview that it should "be a larger part of our
> conversation" when it comes to funding the "Green New Deal." According to
> MMT, the government can spend what it needs without worrying about
> deficits.
> MMT expert and Bernie Sanders adviser professor
> <https://www.youtube.com/watch?v=H_il45h3Nmo&t=1017s> Stephanie Kelton says
> the government actually creates money when it spends. The real limit on
> spending is not an artificially imposed debt ceiling but a lack of labor
> and
> materials to do the work, leading to generalized price inflation. Only when
> that real ceiling is hit does the money need to be taxed back, but even
> then
> it's not to fund government spending. Instead, it's needed to shrink the
> money supply in an economy that has run out of resources to put the extra
> money to work.
>
> Predictably, critics have been quick to rebut, calling the trend to endorse
> MMT "
> <https://www.zerohedge.com/news/2019-01-21/disturbing-rise-modern-monetary-t
> heory-mmt> disturbing" and "
> <https://www.bloomberg.com/opinion/articles/2019-01-17/modern-monetary-theor
> y-would-sink-u-s-in-debt> a joke that's not funny." In a Feb. 1 post on the
> Daily Reckoning,
> <https://dailyreckoning.com/the-next-great-monetary-experiment-part-ii/>
> Brian Maher darkly envisioned Bernie Sanders getting elected in 2020 and
> implementing "Quantitative Easing for the People" based on MMT theories. To
> debunk the notion that governments can just "print the money" to solve
> their
> economic problems, he raised the specter of Venezuela, where "money" is
> everywhere but bare essentials are out of reach for many, the storefronts
> are empty, unemployment is at 33 percent and inflation is predicted to hit
> 1
> million percent by the end of the year.
>
> Blogger Arnold Kling also pointed to the Venezuelan hyperinflation.
> <http://www.arnoldkling.com/blog/mmt-and-venezuela/> He described MMT as
> "the doctrine that because the government prints money, it can spend
> whatever it wants . . . until it can't." He said:
>
> To me, the hyperinflation in Venezuela exemplifies what happens when a
> country reaches the "it can't" point. The country is not at full
> employment.
> But the government can't seem to spend its way out of difficulty. Somebody
> should ask these MMT rock stars about the Venezuela example.
>
> I'm not an MMT rock star and won't try to expound on its subtleties. (I
> would submit that under existing regulations, the government cannot
> actually
> create money when it spends, but that it should be able to. In fact, MMTers
> have <http://www.levyinstitute.org/pubs/wp_778.pdf> acknowledged that
> problem; but it's a subject for another article.) What I want to address
> here is the hyperinflation issue, and why Venezuelan hyperinflation and "QE
> for the People" are completely different animals.
>
> What Is Different About Venezuela
>
> Venezuela's problems are not the result of the government issuing money and
> using it to hire people to build infrastructure, provide essential services
> and expand economic development. If it were, unemployment would not be at
> 33
> percent and climbing. Venezuela has a problem the U.S. does not, and will
> never have: It owes massive debts in a currency it cannot print itself,
> namely, U.S. dollars. When oil (its principal resource) was booming,
> Venezuela was able to meet its repayment schedule. But when the price of
> oil
> plummeted, the government was reduced to printing Venezuelan bolivars and
> selling them for U.S. dollars on international currency exchanges. As
> speculators drove up the price of dollars, more and more printing was
> required by the government, massively deflating the national currency.
>
> It was the same problem suffered by Weimar Germany and Zimbabwe, the two
> classic examples of hyperinflation typically raised to silence proponents
> of
> government expansion of the money supply before Venezuela suffered the same
> fate. Professor Michael Hudson, an actual economic rock star who
> <https://peofdev.wordpress.com/2017/07/31/michael-hudson-on-modern-monetary-
> theory/> supports MMT principles, has studied the hyperinflation question
> extensively. He
> <http://michael-hudson.com/2012/08/financial-predators-v-labor-industry-and-
> democracy/> confirms that those disasters were not due to governments
> issuing money to stimulate the economy. Rather, he writes, "Every
> hyperinflation in history has been caused by foreign debt service
> collapsing
> the exchange rate. The problem almost always has resulted from wartime
> foreign currency strains, not domestic spending."
>
> Venezuela and other countries that are carrying massive debts in currencies
> that are not their own are not sovereign. Governments that are sovereign
> can
> and have engaged in issuing their own currencies for infrastructure and
> development quite successfully. I have discussed a number of contemporary
> and historical examples in my earlier articles, including in
> <https://ellenbrown.com/2017/06/27/sovereign-debt-jubilee-japanese-style/>
> Japan,
> <https://ellenbrown.com/2018/02/27/funding-infrastructure-why-china-is-runni
> ng-circles-around-america/> China,
> <http://www.webofdebt.com/articles/commonwealth_bank_aus.php> Australia and
> <https://ellenbrown.com/2012/04/01/oh-canada-imposing-austerity-on-the-world
> s-most-resource-rich-country/> Canada.
>
> Although Venezuela is not technically at war, it is suffering from foreign
> currency strains triggered by aggressive attacks by a foreign power. U.S.
> economic sanctions have been going on for years, causing the country at
> least
> <https://www.telesurenglish.net/news/Venezuela-Lost-Millions-as-Result-of-US
> -led-Sanctions-Maduro-20190102-0013.html> $20 billion in losses. About $7
> billion of its assets are now being
> <https://www.rt.com/news/450057-cynical-sanctions-us-lavrov-venezuela/>
> held
> hostage by the U.S., which has waged an
> <https://venezuelanalysis.com/analysis/14263> undeclared war against
> Venezuela ever since George W. Bush's failed military coup against
> President
> Hugo Chávez in 2002. Chávez boldly announced the "Bolivarian Revolution," a
> series of economic and social reforms that dramatically reduced poverty and
> illiteracy as well as improved health and living conditions for millions of
> Venezuelans. The reforms, which included nationalizing key components of
> the
> nation's economy, made Chávez a hero to millions of people and the enemy of
> Venezuela's oligarchs.
>
> Nicolás Maduro was elected president following Chávez's death in 2013 and
> vowed to continue the Bolivarian Revolution. Recently, as Saddam Hussein
> and
> Moammar Gadhafi had done before him, he defiantly announced that
> <https://www.rt.com/news/441448-venezuela-drops-dollar-currency/> Venezuela
> would not be trading oil in U
> <https://www.rt.com/news/441448-venezuela-drops-dollar-currency/> .
> <https://www.rt.com/news/441448-venezuela-drops-dollar-currency/> S
> <https://www.rt.com/news/441448-venezuela-drops-dollar-currency/> .
> <https://www.rt.com/news/441448-venezuela-drops-dollar-currency/> dollars
> following sanctions imposed by President Trump.
>
> The notorious
> <https://www.theamericanconservative.com/larison/pompeo-puts-elliott-abrams-
> in-charge-of-regime-change-in-venezuela/> Elliott Abrams has now been
> <https://venezuelanalysis.com/analysis/14263> appointed as special envoy to
> Venezuela. Considered a war criminal by many for covering up massacres
> committed by U.S.-backed death squads in Central America, Abrams was among
> the prominent neocons closely linked to Bush's failed Venezuelan coup in
> 2002. National security adviser John Bolton is another key neocon architect
> advocating regime change in Venezuela. At press conference on Jan. 28, he
> held a yellow legal pad prominently displaying the words "
> <https://truthout.org/articles/the-us-is-orchestrating-a-coup-in-venezuela/>
> 5,000 troops to Colombia," a country that shares a border with Venezuela.
> Clearly, the neocon contingent feels it has unfinished business there.
>
> Bolton does not even pretend that it's all about restoring "democracy." He
> blatantly said on Fox News, "It will make a big difference to the United
> States economically if we could have American oil companies invest in and
> produce the oil capabilities in Venezuela."
> <http://nixontapes.org/chile.html> As President Nixon said of U.S. tactics
> against Salvador Allende's government in Chile, the point of sanctions and
> military threats is to squeeze the country economically.
>
> Killing the Public Banking Revolution in Venezuela
>
> It may be about more than oil, which recently hit record lows in the
> market.
> The U.S. hardly needs to invade a country to replenish its supplies. As
> with
> Libya and Iraq, another motive may be to suppress the banking revolution
> initiated by Venezuela's upstart leaders.
>
> The banking crisis of 2009–10
> <https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_2009%E2%80%9310>
> exposed the corruption and systemic weakness of Venezuelan banks. Some
> banks
> were engaged in questionable business practices. Others were seriously
> undercapitalized. Others still were apparently lending top executives large
> sums of money. At least one financier could not prove where he got the
> money
> to buy the banks he owned.
>
> Rather than bailing out the culprits, as was done in the U.S., in 2009
> <https://venezuelanalysis.com/news/5082> the government nationalized seven
> Venezuelan banks, accounting for around 12 percent of the nation's bank
> deposits. In 2010, more were taken over. Chávez's government arrested at
> least 16 bankers and issued more than 40 corruption-related arrest warrants
> for others who had fled the country. By the end of March 2011, only 37
> banks
> were left, down from 59 at the end of November 2009. State-owned
> institutions took a larger role, holding 35 percent of assets as of March
> 2011, while foreign institutions held just 13.2 percent of assets.
>
> Over the howls of the media, in 2010 Chávez took the bold step of passing
> legislation defining the banking industry as one of "public service." The
> legislation specified that 5 percent of the banks' net profits must go
> toward funding community council projects, designed and implemented by
> communities for the benefit of communities. The Venezuelan government
> directed the allocation of bank credit to preferred sectors of the economy,
> and it increasingly became involved in private financial institutions'
> operations. By law, nearly half the lending portfolios of Venezuelan banks
> had to be directed to particular mandated sectors of the economy, including
> small business and agriculture.
>
> In a 2012 article titled " <https://venezuelanalysis.com/analysis/6942>
> Venezuela Increases Banks' Obligatory Social Contributions, U.S. and Europe
> Do Not," Rachael Boothroyd said that the Venezuelan government was
> requiring
> the banks to give back. Housing was declared a constitutional right, and
> Venezuelan banks were obliged to contribute 15 percent of their yearly
> earnings to securing it. The government's Great Housing Mission aimed to
> build 2.7 million free houses for low-income families before 2019. The goal
> was to create a social banking system that contributed to the development
> of
> society rather than simply siphoning off its wealth. Boothroyd wrote:
>
> … Venezuelans are in the fortunate position of having a national government
> which prioritizes their life quality, wellbeing and development over the
> health of bankers' and lobbyists' pay checks. If the 2009 financial crisis
> demonstrated anything, it was that capitalism is quite simply incapable of
> regulating itself, and that is precisely where progressive governments and
> progressive government legislation needs to step in.
>
> That is also where, in the U.S., the progressive wing of the Democratic
> Party is stepping in—and why Ocasio-Cortez's proposals evoke howls in the
> media of the sort seen in Venezuela.
>
> Article I, Section 8, of the Constitution gives Congress the power to
> create
> the nation's money supply. Congress needs to exercise that power. The key
> to
> restoring our economic sovereignty is to reclaim the power to issue money
> from a commercial banking system that acknowledges no public responsibility
> beyond maximizing profits for its shareholders. Bank-created money is
> backed
> by the full faith and credit of the United States, including federal
> deposit
> insurance, access to the Fed's lending window, and government bailouts when
> things go wrong. If we the people are backing the currency, it should be
> issued by the people through their representative government.
>
> Today's government, however, does not adequately represent the people,
> which
> is why we first need to take our government back. Thankfully, that is
> exactly what Ocasio-Cortez and her congressional allies are attempting to
> do.
>
> <https://www.truthdig.com/author/ebrown/> Ellen Brown
>
> Ellen Brown is an attorney, chairman of the Public Banking Institute, and
> author of twelve books including "Web of Debt" and "The Public Bank
> Solution."
>
>
>
>
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