Martin Wolf, fiat money, and Paul Krugman (again)
Martin Wolf makes a very well reasoned argument for the direct public creation of money today in the Financial Times. Wolf, the associate editor and senior economics commentator of this highly respected journal of finance says this:
“Why is it good to support the leveraging of private property, but not the supply of public infrastructure? I fail to see any moral force to the idea that fiat money should only promote private, not public spending.”… “the case for using the state’s power to create credit and money in support of public spending is strong.”
What Wolf recommends is simple common sense and brings home the point that not only the “deficit crisis”, but the entire global recession is manufactured. There is never a financial reason for anyone to live poorly as sufficient finance always exists at the collective level. Those who enjoy positions of power and hide this fundamental fact are truly guilty of the moral crime of perpetuating immense human suffering throughout the world.
Which brings us to the obvious question, noted ad nauseum on this blog: where the hell is Krugman and Stiglitz and the rest of the merry band of faux progressives in this country? How can it be that the simple solution advanced by Wolf is rejected and ignored by the guardians of respectable leftism? Why is it that one of the most respected economics writers in the world can, in the Financial Times no less, state the obvious truth – that the crisis essentially has no clothes – yet our Nobel laureates of the left cannot? Will there be no end to the embarrassment of watching our self proclaimed ‘conscience of a liberal’ mumble through his standard mealy-mouthed position that the public debt exists in some strange economic quantum superposition, being at the same time highly dangerous and in need of substantial future reduction yet also needing to be increased even further?
Obama said in his speech last night that we can’t keep drifting “from one manufactured crisis to the next.” As long as the obvious insights discussed by Wolf are ignored by the mainstream left in this country, a never ending drift is an absolute certainty. And Krugman, et al are among its most important craftsmen.