I mentioned that there was to be a BBC Radio 4 programme with the title ‘Shaking the Magic Money Tree' about a week ago. I have finally caught up enough with my week to listen to the programme, made by journalist Michael Robinson with whom I have made television and radio programmes over the years.
The programme is disappointing in not explaining how money is made out of thin air: that is a big weakness. But, much of it is good and it's certainly worth the 28 minutes listening time.
And there is a write up, here.
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Disappointing is about right.
Andy Haldane was able to contribute without being put under any pressure from an MMT perspective.
He did’t sound wholly comfortable to me
And Michael Robinson did not wholly let him off the hook either
Worth a reminder of a certain ECB chief who was made to feel uncomfortable when asked about money from thin air (note the nervy shuffling of papers as he answers) I’ve posted this before but might be worth another look for those who haven’t see it:
http://www.youtube.com/watch?v=_fF3pNTtmfc
But he ducked the reason why…
Exactly-hence the nervous smile and shifty fidgeting!
Unfortunately it requires me to sign in. I refuse to give any organisation my details, and I certainly refuse to allow the BBC to preach propaganda at me. I did catch some of it when I was in my car, and got quite annoyed when they didn’t mention that money was made out of nothing. They were suggesting it comes from selling gilts or debt from what I recall. My memory often fails me when I’m not paying attention so I could be wrong.
It quite explicitly said the money was created out of nothing
I really do not think the BBC preaches propaganda
Where do you get your objective news from? I know of no such source
But for all its many faults the BBC remains better than many
Who else would broadcast this, for start?
RT
Pardon?
Are you kidding?
“Despite its claim to be independent and impartial, and the constant accusations of a liberal bias, the BBC has always sided with the elite. As Tom Mills demonstrates, we are only getting the news that the Establishment wants aired in public. Throughout its existence, the BBC has been in thrall to those in power. This was true in 1926 when it stood against the workers during the General Strike, and since then the Corporation has continued to mute the voices of those who oppose the status quo: miners in 1984; anti-war protesters in 2003; those who offer alternatives to austerity economics since 2008.”
Tom Mills book ‘The BBC: Myth of aPublic Service is worth a read.
I accept this fact
But the suggestion just make that RT is more objective makes no sense at all
That’s just choosing your elite
There are some very good shows on RT (lots of bad ones too). But Renegade Inc is especially good and covers topics like this. I’m sure you wouldn’t watch it based on a random readers recommendation, but perhaps if others vouch for it too. It’s a very good program, to pique your interest, they recently covered topics like the recent leasehold scandal, and PFI.
Richard- might be worth noting that someone has posted under the name ‘John.Adams’ whereas the regular poster is John Adams -somebody taking the Michael here, I think. (No need to post-just in case you hadn’t noticed it)
Thanks for the concern and I am always open to such comments – I do not spot all trolls
This was ‘the real’ John Adams
RT do present heterodox economists such as Michael Hudson and MMT economists like Pavlina Tcherneva but they also present Libertarian ones as well. I’d say they are much better than the BBC at presenting non-mainstream economists but RT clearly has an agenda and seems to use what has been called ‘non-linear warfare’ in it’s analysis:
‘And the Kremlin’s “non-linear” sensibility is evident as it manipulates Western media and policy discourse. If in the 20th century the Kremlin could only lobby through Soviet sympathizers on the left, it now uses a contradictory kaleidoscope of messages to build alliances with quite different groups. European right-nationalists such as Hungary’s Jobbik or France’s Front National are seduced by the anti-EU message; the far-left are brought in by tales of fighting U.S. hegemony; U.S. religious conservatives are convinced by the Kremlin’s stance against homosexuality. The result is an array of voices, all working away at Western audiences from different angles, producing a cumulative echo chamber of Kremlin support. ‘ (http://foreignpolicy.com/2014/05/05/how-putin-is-reinventing-warfare/)
As always the Russian’s play three dimensional chess while the West plays bad two dimensional!
having said that, RT shows some excellent documentaries. I prefer Democracy Now and The Real news Network -both no frills presentation.
I confess I d not watch a lot of television
Maybe I have started a debate I am not much interested in….
G Hewitt says:
“Despite its claim to be independent and impartial, and the constant accusations of a liberal bias, the BBC has always sided with the elite….”
G, (if I may call you ‘G’) you’d find ‘London Calling’ in tune with your perceptions of BBC impartiality.
https://www.youtube.com/watch?v=TXQYuLUAbyw&t=60s
How can one expect to have a proper debate and facts presented by an organisation that thinks it is good to have Tory Matthew Parris on the radio?
Or an ex Tory politician (Nick Robinson) as a political editor.
Or what about Tory Michael Portillo eating up budgets looking at the railways his party talked of turning into bus lanes? And what is a supporter of BREXIT doing looking at European railways now?
I mean c’mon. I can’t recall many from Labour politico’s getting air time…..oh hang on….Kilroy! Oh no – awful, awful!
Seriously though, the BBC is failing as a serious broadcaster these days on this articular issue.
I doubt Michael Robinson is a Tory
The BBC has a duty to all
I absolutely stand by the right of Tories to be employed, even if I disagree with them
‘I absolutely stand by the right of Tories to be employed, even if I disagree with them’.
Well, good for you.
But is it not the case that the Tories are well supported in the media anyway? I don’t see why we should have to pay them for it as well. To be a presenter of a programme is one thing, but then to support the Government when asked for your opinion about as well is not on in my view.
There are lots of goof ideas here that find it hard to get a hearing in the MSM. This is related in my view to this particular topic under discussion.
Richard, my plug for RT is not because I believe it is more objective than say the BBC. RT has its own faults. Some say for example it is too soft on Putin. I don’t care if it is. If Putin is a problem it is for the Russian people to sort out. The value of RT and other diverse broadcasters is that they offer a different perspective. We need these different perspectives in order to help spot fake news.
That point I accept, entirely
But I take all my media with an awareness that they are all biased
It is useful to see the different perspective offered via RT. The US media tells us quite a different story. I recall seeing you on RT, Richard, being interviewed by Max Keiser.
Obviously someone in our Establishment sees the value of RT because it is included in our Freeview channel selection while Al Jazeera has disappeared.
I was on once
I decided not to do so again
All corporate and government sponsored media is propaganda. How could it be otherwise? Pope Gregory XV, Edward Bernays and Goebbels have a lot to answer for. Caveat emptor!
I must say I was having real problems understanding how money was created out of thin air until I saw this youtube video from Prof Richard Werner on how banks create money – https://www.youtube.com/watch?v=EC0G7pY4wRE — from 5:50 — which incidentally came from a RT broadcast (I may well have got link from an earlier post on here).
He describes that in law, banks don’t take deposits and don’t make loans, but they are in the business of buying securities.
When a bank makes a loan, they are purchasing a “promissory note” from the customer.
In creating a “promissory note”, you are creating a future revenue stream for the bank.
When a bank “issues a loan”, to match your “promissory note” it creates a record of it’s debt to the customer equal to the value of the “promissory note” as an “accounts payable liability” to the customer.
The bank restate (slightly incorrectly in accountancy terms) the “accounts payable liability” as a customer deposit … but no-one has deposited any money. This is the money which was created, but at the instant of it’s creation an equivalent amount “anti-money” or debt was created (i.e. your promissory note).
It’s this idea that out of nothing you create “money” and “anti-money” (debt) which cancel each other out which was missing from my understanding of how money was “created”.
So when you borrow from a bank you are actually borrowing from your future self, with the bank acting as an intermediary.
Is this an accurate description of how money is made “out of nothing” or have I missed something?
I think most would have a problem with the concept of a promissory note
But it’s not wrong….
It’s a bit like how people think the government works — i.e Tax first then spend the tax’s, rather than the spend first followed by tax to regulate the market.
People think it’s the banks loan which comes first, and the customer signs a contract to pay back the loan.
But the promise to pay the bank a set sum – the “promissary note” comes first which allows the bank to create a “customer deposit” (accounts payable liability), which in it’s accounts is balanced by the value of the “promissary note”.
There is no money to lend, it’s all smoke mirrors debt and banking regulations.
I accept all that
But I am not going to explain MMT using a term – promissory note – that will be alien to most people
I accept it worked for you