I did not quite expect the question I raised on Saturday to get the reaction it did: there have been 121 response to my request for lists of economic myths needing shattering, and that number is still rising.
I asked the question with good reason. I wanted to know the answer. I will now be doing an analysis of the responses and will then work out where to go from there.
My instinct is to do three things.
The first is to then flag the list of requests and, in effect, keep it open.
The second is to highlight those that got most support and seek confirmation that these are, indeed, the right ones to focus on.
The third reaction will be to write responses. I would suggest that these are in four parts.
The first part will be the Twitter response: 240 characters to dismiss the myth (if possible).
The second will be the slightly longer response: the 200 words that anyone on radio might get, at most, on the issue.
The third will be the longer still blog version (which will usually be the easiest to write, by far). this might be 700 to 800 words.
And the fourth version will then add references, or may simply be those references, plus charts.
Thoughts?
And thoughts as to how this is to be done? I am planning to blog the responses but then have a link page on the wiki, plus links to other common myths at the bottom of each post. Does that make sense.
Finally, a series name? Again, thoughts?
PS: a final note: it has occurred to me that I have not have taken very much time at all off this year: I even blogged when in bed with Covid-19. I am taking a bit of a break (by my standards) this week, so reactions may be a bit slower than normal.
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Economics: An Easy Guide for People and Planet.
How come you were able to get a COVID-19 test, when so many of our front line NHS staff were not?
I didn’t
I just had all the characteristics of it
I’m saying I had it like I would say I had a cold
If the pattern fits I am confident of the diagnosis
“Reasons for Myths and the need for Mellow Thoughtfulness “
Economics: Myths and Facts
It has to be an e-book.
Layout something akin to an academic paper?
Abstract — 240 characters — twitter > links directly to blog post (which has a repeat of the abstract at the top?), followed by,
Introduction — 200 words — conveys most important message succinctly but with some detail missing (easy to chop out for ie radio appearances), followed by,
Discussion — no word limit, full discussion of the issue
References
Have I become so compliant with the rules of academic paper writing that I did not spot that?
Yikes…..
None of the academic papers I wrote ever had that layout. Perhaps things have changed since I was doing things.
Look again….sort of
Richard, well I looked again and there was no ‘sort of’ about it. None of my papers went from an introduction to a discussion without some meat in the sandwich which described the science under consideration. None of them followed the old joke about saying it 3 times either … tell them what you’re going to tell them, tell them then tell them what you’ve told them … either.
Howay Rod.
I know what you’re saying – an academic paper written as I suggested above would be poorly laid out and a poor read. I actually agree with that sentiment.
I just jumped to the closest example I knew of hierarchical information introduction.
Maybe I should have suggested:
Title – twitter
Abstract – 200 word piece (most important “findings”)
The rest (extended discussion)
References
Richard – I don’t think that you defaulting to this type of structured discussion is a bad thing :), regardless of your possible desire to avoid becoming a part of the establishment (?).
Particularly with complex ideas, it lets you get the message out quickly and/or in depth, which is required for a large and varied audience.
I got introduced as a ‘public intellectual’ the other day
I think they end up against walls….
Let’s hope not!
You’re very welcome up North, and I’m sure even further north, if a bolthole were required
🙂
A break?
Do it!
In fact I’ going to shut up as well (don’t all smile at once).
🙂
Sorry!
Well fair enough, I asked for that.
Anyhow, what’s all this yapping – I thought you were having a break? – get yourself off for walk or something (but don’t go too far in these post Cummings days).
Or how about re-acquainting yourself with your collection of railway books over a nice cup of home made coffee?
You can do it Richard!!
Narrow gauge Hunslets this evening
I will say no more…..
I’d like to see something like – Everything You Believe About Money and Wealth is Bullsh*t but I suspect that will put off a lot of the people who should read it.
How about something like – Do You Know What Money Is? You Might Be In For A Surprise.
Or – Money, It’s Not What You Think, or How To Stop Worrying and Love The National Debt.
…?
🙂
Slaying the Money Myth
there’s a brilliant book called The Mythical Man Month, about computer development but still fascinating subject https://en.wikipedia.org/wiki/The_Mythical_Man-Month
Everything You Must Know About The Economy But Which ‘They’ Were Afraid To Tell You
Also, in either the third or fourth version, perhaps include some practical examples that apply to everybody’s day to day life. ‘An example of this is…..’ could assist in the understanding.
And, to echo other comments, you’ve earned a break. Thanks for all that you do. I certainly feel significantly more informed. Also, there is more than enough material for me to read from earlier posts.
Craig
I like that…
Money and Economics made simple.
or to borrow from the late Prof MacKay,
Money and Economics without the hot air.
Desp
🙂
The government, almost alone will now require to rescue the economy, because the private sector can’t do it. There is an alternative; it is called deflation and depression.
Too long, too wordy, but you catch the drift; on the front foot.
My first thought was “The Origins of Money”.
But then I decided I’m less than enthused by focusing on the word money, so how about –
“The Mechanics of Government Spending”, or “The Truth about Government Spending”
subtitled – “We are not slaves to some mythical entity, called the economy”.
I have recently been asked to write about money in no more than 500 words – a tough ask. For what it’s worth, here is my effort; not quite on target as it’s intended as a response to current events.
A brief description of macroeconomics.
Economic facts :
1. Private banks create money when they make loans–and destroy it when the loans are repaid. The bank simply credits the borrower’s account while simultane- ously creating a balancing debit account. The borrower spends the money creating economic activity. Money deposited in banks goes into reserves, it is not lent. Banks are not simple intermediaries.
2. The government is not a household because it owns the Reserve Bank which has unlimited ability to create money. Govt spending creates money ; taxation destroys it. There is no necessary identity between spending and revenue.
3. The Government issues Bonds not because it needs the money, but in order to provide a safe haven for investors and also to control interest rates by buying and selling them.
Therefore :
1/ Taxes are revenue (literally ‘returned’ money) and are not needed to finance Government spending, but serve to remove from the private sector excess money which has been injected by Govt spending and by private bank lending.
2/ Government debt is a private sector asset. It is owned by us, the people. (Well, by the capitalists.) The banknote in your purse or wallet is Government debt but your asset. Indeed it is equivalent to a very long term Bond with zero interest rate.
Bonds may never be repaid ; they can be rolled over. If they need to be paid out, that can be done by Reserve Bank money creation, and need not constrain Government spending.
If there is too much spending in the economy, leading to inflation, usually as a con- sequence of excessive private bank lending, money can be drained through taxation or by suppressing the lending.
If there is insufficient private sector spending in the economy, leading to deflation, usually as a consequence of low private bank lending, Government needs to spend, either by creating more money or by borrowing and spending unemployed money from the private sector which is being held as ‘dead’, savings.
Money creation (private or Government) is not inflationary if it employs unused labour and material resources.
A fable : A Government functionary arrives at a Greek hotel and pays E100 for a room. The hotelkeeper takes the 100 note and rushes off to the butcher and pays him the E100 he owes him. The butcher goes to the farmer in the hills and pays him E100 that he owes the farmer.The farmer returns to the hotel and pays his E100 debt to the prostitute who occupies a room there. She in turn pays the proprietor the E100 she owes in rent. The functionary happens to cancels his booking and gets his money back.
The paradox of saving : if any of these people save the money–under a mattress or in a bank–the local economy stagnates. In the absence of local bank lending, the Government must be the lender. (478)
Thanks
Not all for family consumption!
“How to Make Money and Influence People” – The truth about Governments and Money.
Now that I do like….
Myths/Legends or simply wrong. Examples like: We used to believe that unemployment impacted wage levels but we are less sure today and some Labour market economists talk about underemployment instead. Is this now a myth simply wrong or something we clearly do not understand as well as we would like? Take another immigrants depress wage levels evidence isn’t strong but belief it has an effect persists. Is this a myth or simply something where more research is needed? Government spending is like household spending feels like a myth/legend that is a suitable candidate but what is the evidence for and against? Richard I think this is a good idea especially for those of us interested in the subject and its wider impact on society.
I’m working on this…
“How to make money, or how to lose it”?
Economics and Money – What the Government and Media Won’t Tell You, and Why.
or:
The Magic Money Tree Is Real (MMT) Modern Monetary Theory
As for the workload, how about getting some of the more knowledgeable and qualified contributors to tackle a myth or two each? I’m sure they’d be happy to, and then you would just have to edit/correct their work, which I would imagine takes a lot less time than writing everything yourself. I’d be willing to but my only qualifications are dropping out after 18 months of economics and finance at uni and reading your blog and other sources!
Let’s see re the latter
The former noted