Wray: The Great Depression and the Revolution of 2017

Posted on by

By L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City who writes at New Economic Perspectives

WASHINGTON, 7 NOVEMBER 2017*. Yesterday Speaker of the House Dennis Kucinich was sworn in as President, replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his father’s well guarded compound on the grounds of the Bin Laden family’s palace. Vice President Dick Cheney, who has been in a coma since August after suffering his fifteenth heart attack, was declared incompetent. President Kucinich immediately announced a wide-ranging package of policies designed to bring an end to the Great Depression, which began with the global financial crisis of 2007. He called for calm and pleaded with leaders of the Revolutionary Tea Party Army that has encircled Washington to call off the attack that had been planned for today, the 100th anniversary of the Bolshevik revolution. Commandant Dick Armey said he is willing to meet for a discussion of a ceasefire so long as his militia can take their weapons home.

President Kucinich apparently ordered the Marines to invade Goldman Sachs headquarters in Manhattan early this morning. While there were some reports of small arms fire, most of the 6000 employees were reportedly removed without struggle and are on their way to various jails and prisons in the greater New York area. CEO Timothy Geithner was captured at La Guardia, attempting to board a private jet said to be headed for Riyadh. An anonymous source claimed that Geithner complained that President Bush had left him behind after promising protection. President Kucinich announced that Geithner would be charged with fraud, racketeering, and tax evasion. The case dates back to 2012 but had been put on hold when former President Sarah Palin ordered the attorney general’s office to stop its investigation of the Treasury Secretary. President Kucinich said that Goldman, the last remaining bank in America, would be nationalized. He assured depositors that the bank would reopen next Monday under management of a team of presidential appointees led by William Black. All insured deposits will be protected, but it is believed that other claims will not be honored. FBI agents have reportedly moved to seize all assets of current and former Goldman employees. Warrants for the arrest of former Treasury Secretaries Paulson, Rubin, and Summers were also issued.

President Kucinich’s package of policies includes universal and comprehensive debt cancellation. Under the plan, all private debts will be declared null and void. The implications are not immediately clear since delinquency rates have already reached 95% on most categories of debt. Several economists said that the new President was only validating reality, but others argued that it gave legal protection to squatters who have refused to leave their foreclosed homes over the past decade. The global movement for the “Year of Jubilee” had been pushing for such debt relief since the crisis began.

The policy proposals, which have been dubbed “New Deal 2.0”, also include a universal job guarantee that would provide work and wages for the nation’s estimated 75 million unemployed. The plan seems to follow a proposal that then-Representative Kucinich had introduced into the House in 2011. Funding for the program would be provided by Washington, but projects would be created and managed at the local level. At the time, Kucinich had argued that the program would “take workers as they are and where they are”, providing a living wage to participants and useful public services and infrastructure to their communities. When asked how the government would pay for the program, Representative Kucinich had said at the time “by crediting bank accounts, of course—that’s the only way a sovereign government ever spends.” However, his bill had failed to get out of committee; it was revealed that large campaign contributions were subsequently made by hedge fund manager Pete Peterson to all committee members who had opposed the legislation—and although he was never accused of wrong-doing, it was long suspected that there might have been a connection.

President Kucinich also announced a new “Marshall Plan” for war-ravaged Europe, which has descended into near anarchy since the EU collapsed in late 2010. He called on the Italian Red Brigade army to end its siege of Berlin. He promised to begin an airlift of food for Europe’s starving millions, to be followed by industrial products to help European nations to begin to produce for domestic consumption. He called for an end to fiscal austerity and argued that since each nation had adopted its own currency with the collapse of the euro, each now had the ability to “spend by crediting bank accounts.” Hence, “whatever is technologically feasible is financially feasible.”

Wall Street rallied on the news, with Nasdaq reaching a new high of nearly 250 and the Dow hitting 1150—the highest levels seen since the Great Crash of October 2011. The dollar also rose on the news, to $52 per Chinese RMB. Optimism spread to Japanese markets, with the yen remaining close to 132 per dollar.

In his statement, President Kucinich said that the long “nightmare” was coming to an end. He struck a conciliatory tone when he responded to a question about the actions of the administration of President Obama in the early years of the Great Depression, which many believe to have set the stage for the Great Crash. “Look, President Obama as well as his successors followed the advice of economists—who continually called for more fiscal austerity, much like the misguided physicians used to bleed patients to death. They were, and still are, clueless. I promise you that I will ban all economists from my administration. I will not seek, nor will I follow, advice from economists.” After a decade of suffering over the course of the second Great Depression, the nation breathed a collective sigh of relief.

The President pointed to the experiences of China, India and Botswana, the only nations to escape the Great Depression. He recalled that just a decade ago, US GDP and the standard of living of the average American were many times higher than those in any of these nations. Indeed, Botswana was widely derided for its policies, which had generated hyperinflation. Yet, each of these countries had adopted a job guarantee and had developed programs that achieved full employment with wage and price stability. And while unemployment rose dramatically all around the globe, these three nations enjoyed full employment and rising living standards—indeed, all three have surpassed the US median real household income level. President Kucinich said that Botswana has offered to send advisors to help get America’s fiscal and monetary policy back on track. He proclaimed that the days of misguided fiscal austerity are over, and promised to “spend whatever it takes to get our nation’s workers and factories operating at full capacity.”

In related news, a handful of economists have declared their support for President Kucinich’s policies. Among them is former Fed Chairman Alan Greenspan, who had recanted his belief in free market economics early in the depression. Over the years he has moved ever further to the left as he embraced reforms ranging from socialized medicine to abolition of private ownership of the means of production. While some economists have dismissed Greenspan’s public statements as the rants of “a senile old man” others have noted that the statements have become remarkably cogent in contrast to the testimonies he used to provide as Chairman. An early disciple of Ayn Rand, Greenspan’s recent testimonies now include obscure quotes from Marx, Lenin, and Rosa Luxemburg. He has also been calling for the elimination of the Fed, arguing that monetary policy and fiscal policy should be consolidated in the Treasury Department.

*Disclaimer: Some of the events reported here have not been fact-checked**.

**Disclaimer: Actually, none of the events reported here has yet occurred, although some are quite likely.

Print Friendly, PDF & Email


  1. tyaresun

    No part for Grayson? No Ron Paul? Although I like Kucinich, we are going to need more than a Kucinich.

    1. Stephen Richardson

      Not that my intention is to take this too seriously. But, it interests me how this focuses on the political and economic context but not demographics, resources, and environment.

      I believe in the context of economic/trade collapse your food shortage areas are going to be in Asia and Africa. Europe, USA, and Brazil were still some of the largest net food exporters last I checked. Honestly we don’t need many of the useless trinkets that come out of the world’s workshop but they do need food. Of course we do need energy, but we are profligate with our use. Despite an economic collapse and massive unemployment I suspect the people in the west will still eat. Drought issues are going to be closer to the equator and in monsoon areas, which does not bode well for the developing world.

      As that occurs you will either have civil conflicts or aggression will be focused towards outside parties. The populations of many developing and emerging economies will in effect question the value of the neo-liberal project as it has mainly resulted in huge inequality within their countries, including India and China.

      Despite the suffering that occurred in the last depression, that generation learned a frugality that we overindulgent selfish fucked up brats that presently occupy the western world could never imagine. If we can handle it in a manner that doesn’t result in extreme civil unrest I suspect that a depression may be a welcome respite for the environment. Necessity is the mother of invention, maybe we can finally learn to live within our means.

  2. anonymous

    This is a real treat to read, Yves. Thank you. Too bad Dennis sold out for a few rides on Air Force one and the dubious distinction of ‘saving’ the Obama presidency, at least for a few more months. I sincerely wonder if this administration will be known as the most incompetent in US history. It would take some doing, but they’re certainly on the right, er wrong, path.

  3. Max

    “replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his father’s well guarded compound on the grounds of the Bin Laden family’s palace. Vice President Dick Cheney, who has been in a coma…”

    More lame Bush Derangement Syndrome.

    1. KFritz

      Driven that way by narcissists, borderline and full blown sociopaths, and the intellectual progeny of Ayn Rand.

    2. Skippy

      Give the bush kids a box of explosives and tell them to clear a field of stumps…problem sovled

      1. bob

        Barbara told them long ago they couldn’t do that unless uncle Dick and KBR were there with them.

    3. elmot

      “replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his father’s well guarded compound on the grounds of the Bin Laden family’s palace.”

      My favorite part of this delightful essay. It’s been a few years since I felt inspired to froth about this sort of thing, but a little reminder is always useful for those in denial (for example, above).

        1. Kelli K

          Yes, but hadn’t been expecting to find it here. I gave up after the first paragraph. I do hope it includes a scene in which Obama and Geithner find time to consummate their “man-crush,” perhaps on Jamie Dimon’s private island where I am sure they have both taken refuge by 2017.

  4. AmeriKKKan

    Not even Americans, the most vile and stupid people on earth, are demented enough to elect on other Bush. Surely not. Although they didn’t really elect the first one either I guess.

    1. Vinny

      Just curious, if Americans are demented for electing Bush, what would you call Europeans for buying into this EU falacy, demanding to collect 3000+ Eutos a month after retiring at 55 from high-school lrvel educatin type jobs, and continuing to expect handouts, while getting lazier and more arrogant every day.
      Just curious…


    2. NOTaREALmerican

      What about the Italians and their moron?

      Nope, humans love to follow powerful amoral scumbags. It’s how you can identify a true dumbass peasant.

    1. alex black

      Max and Dave both seem quite chill. You might want to offer your pills to some of the others who are foaming at the mouth.

  5. AmeriKKKan

    that’s *another bush*. And 2017 seems optimistic. It will all hit the fan long before then; I think it will start with Europe where the modern equivalent of the guillotine will makes its first appearance.

  6. Andrew Bissell

    They do always start new deals after the worst of a depression has run its course, don’t they? All the better to claim the post hoc ergo propter hoc credit for the eventual recovery.

    1. DownSouth

      Why does it not surprise me to find you here, still hawking mythologies that were debunked following the last great depression?

      In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.
      –Eric Hoffer

      1. Siggy

        The Hoffer quote is profound.

        We will be very fortunate if there is, in deed, a revolution circa 2017. It’s not that revolutions generally bring correction and equity it’s that they bring a fresh ledger that is beneficial. After all, it must be sullied anew.

        The writer of the lead to this string is an interesting fellow. As clever as his piece may be, it makes me very sad because it offers no cure. Implies no practical cure and in its artifice is pointless on its face. It is an example as to why academia and its coterie of sycophants and dilante philosphers are unable to engage a dialogue that informs the body politic as to the reality at hand.

        This dilatory piece is nothing more than the seed bed of missdirection that fosters the agrandizement of self to the exclusion of the society at large. Appellations as to neo this or that are pointless. Do you want what your contract for government calls for, a Republic? Or do want some form of socialism?

        Somewhere in today’s blog there was a very cogent observation as to a triptyche of forces represented by government, the body politic and corporations. Our problem may be even simpler than that. It may be as simple as the have’s versus the have not’s.

        We have a verbal class warfare in progress, will it escalate to blood shed? Who will win? What will be won?

      2. Doug Terpstra

        “It is hard to fill a cup that is already full.”
        -Mo’at (played by CCH Pounder) in Avatar (2009).

  7. Cynthia

    I too have had nightmarish visions of the neocons and the neolibs working together to drive America and the rest of the West into dystopia, but I have yet to dream up an effective antidote to counter this. Dennis Kucinich is a good start, though.

    1. Doug Terpstra

      Wray’s comedy needs another footnote disclaimer: that this is not the same Kucinich who caved on the Insurance and Drugmaker Wealthcare bill.

  8. CSTAR

    Of course by 2016, physicists in Beijing University had developed the “Paracom”, a device to transfer information to and from alternative universes. It is widely believed that much of the unrest in Tea Party circles resulted when it was divulged that Ms Sarah Palin in an alternative universe, had renounced her Tea Party ambitions, absconded with 18 million dollars in campaign funds and vanished. It was later discovered, again by the Paracom, that Ms Palin had fled to Cartagena, Colombia where she acquired a Cafe/Seafood restaurant. Ms Palin’s little bistro did well for two years, until waters from the undersea oil volcano in the gulf of mexico, reached the Colombian coast and destroyed the economy of the entire Caribbean coast of South and Central America.

    1. Vinny

      You’ve got your geography wrong, my friend. The Gulf Stream actually goes to Europe. That decrepit old UK will get this British Petroleul oil spill delivered right on its decrepit filthy shores.


  9. alex black

    Oh, Lord. This is what happens when you let Economics Professors drop acid. Please, keep it within the English Departments.

    I have to go clean my brain out now by reading some Aldous Huxley.

      1. alex black

        Not hiding. I just needed a dose of good prose from someone who wrote beautifully while on LSD. The writing in that piece was horrible. The sad part is that the author was probably thinking it was hysterically funny and brilliant as he was writing it.

  10. Paul Repstock

    Well, the “Debt Cancelation Idea” always did sound good to me. Even when I heard the early numbers on the bailout pakage that seemed to be the most reasonable way to go.

    However, as things have unfolded and grown like Kujo in this mess, it becomes obvious that canceling every mortgage in the United States would have been far cheaper and more fair. Those people without mortgages would have been less impacted by the gift given to their more indebted peers, but less than they will be by the longterm effects of this wealth transfer.

    Sadly, I’m sure this was never an option for the government or for the financial industry. If one owns a nice fat chicken, one does not set it free to roam over the country side. One never knows where the eggs might be laid or where the chicken might be when there is a void on the menu..:)

  11. Jim

    Some things were better prior to the Internet and blogs. Academic thinkers were known through their scholarly articles.

  12. Paul Repstock

    Well Jim; while that might be true you aren’t forced to read these blogs or anything on the internet.

    As for “Academic thinkers”; Who do you think put us in this mess?? Hmmm? I’m certain that Ayn Rand shakes the foundations of her memorial every time someone reminds her of the legacy of her ‘very academic’ protege.

    What is needed in this world is a lot more common sense and integrity and a lot less ‘top down academic wizzardry’.

    Any dirt farmer in Ethiopia could tell them that one cannot take out more than you put in. The real world, never mind physics, does not allow that.

    As for the intenet; common people everywhere now have the opportunity to air and defend their thinking. If one believes in freedom, that must be a good thing.

    1. Hal Horvath

      Obama was always a ‘centrist’ President, from the beginning.

      Since he’s centrist, the ideologues will hate most everything he does, and what he does will be moderate, and often a good (or possible) choice.

    2. Hal Horvath

      I agree, and another interesting piece of this is that at some level most of us have a sense of what will happen, and what can work, and to what degree, when we can forget the theories for a minute and just have a quick take.

      So, it’s like the…holistic, or wider mind is better at this game. Perhaps in the same sense that a soccer player often plays best when acting without thought, and only occasionally can use theories to help out his game, but not usually during play. He could not for example improve a kick with theoretical thinking while kicking. So one needs some theory and thinking, between games, and must use intuition and sense during play.

  13. Michael Fiorillo

    It disturbs me that some people seem to think that President Obama’s administration is incompetent.

    Let’s take a look at what he has accomplished in just 18 months:

    – he has tarnished political liberalism and everything within its gravitational pull for at least another generation, if not longer.

    – he has hastened and provided so-called liberal cover for attacks on Social Security and Medicare, the job for which Wall Street hired him.

    – He has accelerated the hostile takeover and privatization of the public schools, another of the tasks assigned to him.

    – He has destroyed the possibility of any progress on African-American political and economic issues for the lifetimes of everyone reading this blog. After all, we’re a post-racial society now, aren’t we?

    – He has neutralized (not that it was so hard to do) so-called left/liberals on issues regarding the the all-consuming National Security State.

    By and large, I’d say he’s been a highly successful Trojan Horse, setting the stage for Finance to profitably cannibalize the remaining non-coercive functions of the public sector in the aftermath of Wall Street’s strip mining and outsourcing of the nation’s productive base.

    1. Hal Horvath

      Obama was always a ‘centrist’ President, from the beginning.

      Since he’s centrist, the ideologues will hate most everything he does, and what he does will be moderate, and often a good (or possible) choice.

    2. BDBlue


      Obama is a terrible president for most Americans, but that doesn’t make him a failure. It just means his goals aren’t what you think they are.

  14. DownSouth

    An early disciple of Ayn Rand, Greenspan’s recent testimonies now include obscure quotes from Marx, Lenin, and Rosa Luxemburg.

    This prediction is quite realistic and conforms to the nature of those with a true believer personality. True believers easily flip from one pernicious mythology to some other mythology, equally as insidious.

    Eric Hoffer explored the phenomenon in his book The True Beleiver.

    A core principle in the book is Hoffer’s insight that mass movements are interchangeable; he notes fanatical Nazis later becoming fanatical Communists, fanatical Communists later becoming fanatical anti-Communists, and Saul, persecutor of Christians, becoming Paul, a fanatical Christian. For the true believer the substance of the mass movement isn’t so important as that they are part of that movement.

    1. Doug Terpstra

      Is that not also true of neo-libs, neo-classisists, and Neo-cons (Straussians)? Cult mind control seems to be a phenomenon of a truly powerful force, the messianic ego, Haidt’s rogue elephant.

  15. michel

    Well, the extraordinary thing about this piece and reactions to it is the proposition that the solution to the problem is both more spending = more debt, and also more defaults = abolition of all mortgage debt.

    You are not going to get both. And if you get more debt and no defaults (which is what is going to be required) then you are not going to get more growth. As ‘This time its different’ shows.

    OK, you want to follow the third way, you propose to print money and use that to pay the increased debt. No, that too will have consequences for rational economic behavior, which also will be self defeating. You inflate away money, people stop holding it, stop investing in productive activity because they have put it into assets. Turnover of assets dries up, why sell for worthless money? Economic activity falls. It does not work.

    Why is it so hard to accept that rational economic policy consists of living within our means? The only explanation that comes to mind is the huge consumption of psychoactive drugs, mainly SSRIs, which appears to have deprived large sections of the American establishment of the power of connected logical thought.

    And to have induced a weird form of hysteria, where people keep mentioning Bush for no particular reason and then foam at the mouth.

    1. Vinny

      It’s highly unlikely this can be pinned on SSRIs. I’d look more toward the effects of urestrained daily self-congratulatory back slapping sessions at taxpayer-financed cocktail parties organized by various White House mediocrities.


    2. Jerry Denim

      The piece is science fiction/socio-political satire in case you didn’t notice. Yes there is no way the US could ever dig itself out of debt by printing more of the bankster cabal’s nefarious debt money (Federal Reserve Notes) BUT since the piece was obviously a fantasy, why not entertain the idea that one day a brave leader may be willing to grasp the nettle of monetary reform and reclaim the proper duty of the Congress to mint money. The United States government would be able to spend new money into existence with no debt and without negative consequences. You should read about how Lincoln financed the Civil War and saved the United States by refusing the usurious money of the Banksters and instead printing his own “greenbacks”. It could happen if there were a crisis and the political will. You sir are laboring under many false assumptions, ‘Econned’ as our host might say. The world is not always as it seems.

  16. dearieme

    “common people everywhere now have the opportunity to air and defend their thinking..”: that ‘thinking’ must come as quite a shock to those folks unacquainted with common people.

  17. Hattip

    Oh what nonsense. Would that Jeb bush or Cheney were in charge for they would put an end to this Marxist idiocy and stand up to our foreign and internal enemies.

    Stop projecting the immorality of the Left on decent Americans. Cheney has done more good for this nation in any one year of his professional life that you will have done in all of your years. In the end, the harm you have done will far outweigh any good that you have added. Stop adding to the Marxist slander of this good man. It is wholly immature and unmanly. You should be ashamed of yourself.

    It is the treasonous Marxist “policies” of the Democrat party these last 80 years and their willful and solipsistic mismanagement of this nation that have us in this pickle in the first place. So too it is with their coreligionists in the EU.

    Are you really suggesting that the criminal regime in Communist China have a superior “political system”? Are you really that befuddled? You should ask just who has facilitated their “rise” and to what ends they undertook this program. “Yves”, or whatever your name is, you just cannot face reality and thus cast about for “villains” on which to fix the blame. But it is folks like you–tools for the establishment Left–that are the enablers of these problems. Seriously, this business of projecting all of this on “the free markets”, “evil capitalists: or imagining that Democrat insiders in places like GS are “capitalists” or proponents of “free markets” is just nonsense. You are not even paying attention; you do not understand the game, or, if you do, are a shill for the most evil pf forces. (BTW, did GS turn you application down or something? you come off as a bitter reject).

    We know were collectivism leads–did you miss the 20th century?

    Kucinich? He is a raving Marxist moonbat. He is allowed to rant by his handlers because he draws in a few imbeciles and no one else takes him seriously, at least until Obama and his looters showed up.

    What we are witnessing is the the end of covert Marxism in the West. It has failed. The Leftist/Statist elites will now try overt Marxism with all the open tryanny that comes with it. You will not like it very much, Yves, when they come knocking on your door.

    Yves, you need to do a little soul searching and grow up a bit. It is not rational and measured thought on economics or politics that move you but rather narcissism and vanity; these weaknesses of yours are being manipulated by the Left to your detriment and shame (were you capable of it).

    Grow up. Do it while you can still return to decency and honor.

    1. aet

      Yeah grow up, and find out about the wars:


      The so-called manufactured “economic crisis” diverted you guys from the real action, eh?
      Keep that military budget growing, and the national security state flourishing.
      Too bad if you’re just “little people”…..

      Well, some of us get the word out via the net.
      Like the war reporting .

      1. aet

        I take it that you have no problem with ‘collectives” when they take the form of a US Corporation?

        1. DownSouth

          The only hope Hattip’s fascism has of winning (or tying) is in a contest in which it is pitted against Communism.

          It cannot win in a contest with the liberal democracy that was the hallmark of the New Deal.

    2. Skippy

      I’m not defending Yves here (she can handle that her self) but, your statement parallels the above with out the comedic intent. One writing was intentionally absurd, as where the other is cognitive belief based on prideful unsubstantiated exceptionalism and fearful loss of that mental crutch. What ever the out come of tomorrow brings I doubt yours or your perceived antagonists ideologies will prevail, as they are both showing a brittle and worn tooth faced with the dilemmas at our door step, energy, resource depletion, incressing toxicity in all biospheres, endless conflict, population loads, coruption that would even make Romans blush with its abandon etc etc etc.

      BTW before you go name calling ie right, left, center or what ever fences you choose, I personally don’t believe in that rubbish.

      Skippy…practically raised in B. Goldwater’s lap.

      1. Vinny

        No worries, Skippy. It’s obvious these are all die-hard neocons, British Petroleum spin doctors, or just plain vanilla Goldman Sochs criminals…LOL


    3. patriotic losers

      This is great. This comical shouty man is like when you visit your elderly relatives and read the old-time newspapers, it’s full of stuff like this, like the letters from the guy in the old soldier’s home who denounces flag-burning every week even when nobody’s burning any flags, and the old crispy gumming cat food sticking up for annual bonuses that exceed her lifetime income. Life has passed them by, the flag they prayed to is for shit, and when they cease to exist their wasted lives will sink without a ripple. We are cashing in on the failure of your state, you chump. You’ll be pledging allegiance to the New World Order in your dotage.

      1. Doug Terpstra

        “…pledging allegiance to the New World order in your dotage.” gGreat stuff. Soon, the new world odor.

        This comment bites, shreds, and eviscerates. You’re too kind.

    4. Vespasian

      hattip: note that this was NOT WRITTEN by Yves, but was a guest post “By L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City who writes at New Economic Perspectives”. Call out the appropriate person, please.

      That being said, I fully agree with your assessment. Wray and his MMT-ilk have zero understanding or concern of the socio/political impacts of their wonderful theoretical economic models. They advocate incredible power for those controlling federal pursestrings; witnessing our current gov’t, who thinks this is a good idea? I believe the MMT folk are incredibly naive.

    5. MacroStrategy Edge


      Please go buy an cruise ship, an island, or a failed nation state (Greece should be available soon) and set up your Libertaustrian utopia, invite all your fellow travelers, and let’s see what happens.

      I am willing to wager within 3 months, Piggy is roasting on the spit, and it is all Lord of the Flies Redux in LibertAustria.

      But please, please, please do us the benefit of not having to guess anymore about this one. Stop propagandizing, rally your Tea Party troops, amass the funds, make the move, and show the world what you’ve got.

      Seriously: Robinson Crusoe was a fable, and even he had his Man Friday. Put your money, which is after all created by the government, where your mouth is and go to it!

      Grow up indeed.

  18. Michael Fiorillo

    Thank you for revealing the commie/pinko conspiracy that dominates this nation.

    I’ve long wondered about the reasons behind multi-trillion dollar banker bailouts, endless wars based on false pretexts (justifying war budgets that exceed global military outlays in other nations), the highest incarceration rate in the world (with an explicit racial component), stolen elections, and a population that is compelled to pay for the destructive greed of an ever-decreasing percentage of the population. Thanks for illuminating us.

    But there’s still a question I need you to answer: when exactly did the Bolsheviks take over? 1776? 1860? 1865? 1913? 2008?

    Please inform.

      1. aet

        Eh, don’t bother: a reaction like hattip’s to this piece of mediocre satire indicates an inability not to take serious things lightly, nor frivolous things serioud=sly.

        But play is always serious business…ask a stock trader.

  19. craazyman

    I could almost believe the stuff about Greenspan.

    I have to give the guy credit (no pun intended), he’s about the only chef who cooked up the current mess to forthrightly say his world view was wrong. I do respect that candor. Too bad all the other bozos are still ducking and covering, or are so lost they’ll never find home.

  20. Ignim Brites

    Well, the gulag has put the kibosh on the concept of Revolution, not to mention the laogai. And with the demise of “the dialectic”, we can freely see the revolutionary nature of Nazism. So, today revolution is redolent of mass murder. Not that this isn’t seductive to the will to power. But for most, revolution is so 19th, even 18th, century. Who wants to be so dated. The kewl new thing is secessionism. After the next election look for CA to move to independence with MMT as its oxygen.

  21. Paul Tioxon

    I liked the telling bit about debt cancellation and currency creation. ‘ability to “spend by crediting bank accounts.” Hence, “whatever is technologically feasible is financially feasible.”’ So when it all becomes much too much, and we move to a pay pal monetary system and enterprise software economic development engine, what will all of you people here do in the new social order. Really, seafood cafe?

    1. aet

      If you issue your own currency, and you can levy taxes,, what’s to stop you from doing so?
      The need to borrow from foreign bond-holders?

      1. aet

        And if the Society already produces a surplus of food and necessities….why not take some time off?

        1. Vespasian

          While your taking your time off, I’ll be working to secure the productive assets so that when the inevitable “surplus of food and necessities” dries up (producers taking your advice of time off, natch) I can scoop that productive capacity up and lord it over y’all. Why? ‘Cuz if I’m not, someone else will … and I don’t want them to have that power over me.

          Dog eat Dog is the real world. MMT is a fantasy, experimented with once before across a eleven-time zone political union, where it — very noticeably — failed miserably. The elite within that system did fairly well, however, even after the collapse. All the more reason to oppose it.

          1. DownSouth

            Dog eat Dog is the real world.

            This is an iteration of the sort of immorality that the New Atheists—-Ayn Rand and Richard Dawkins—-proselytize.

            It is pseudo-science (pseudo-objectivity) that has about as much basis in factual reality as the Garden of Eden, or the notion that the world is 5,000 years old.

          2. i on the ball patriot

            Dog eat dog (human eat human, organism eat organism) is the real world. And there is much factual reality to support it. In fact, failure to accept that reality — and that deception is the base force in organisms getting their needs met — is the real stumbling block that allows the more perceptive few to deceive the many with pie in the sky when you die fantasies and a myriad of other false ideologies, isms, etc.

            When you accept that very natural organism eat organism reality, and the greater intellect and externalizing power of humans, you see the need for alliances and very strong regulation and transparency in those alliances. Regulation and transparency that would prevent those like insecure Vespasian from securing all of the productive assets.

            Deception is the strongest political force on the planet.

  22. Vinny

    Recommended course of action: buy gold, guns, ammo, and land asap. Learn survavslist farming, get a few goats, 30 chicken, and for crying out loud, learn to live without the Internet.


    1. aet

      And then band together with your neigbors for the common defense, establish credit and trade systems, and banks, and…oh wait…

  23. Chris M.

    I always knew Kucinich was ahead of his time and had a bright future. If only we could fast forward to 2017.

  24. Dan Duncan

    This piece reminds me of a “comedic” movie trailer with precocious kids and talking animals. You know the kind of movie I’m talking about: They typically star sit-com “actor” trying to make it to the Big Screen…and they’re always described as “zany” or “whacky”…

    “Larry ‘The Cable Guy’ and Rosanne star in The Bickersons! Watch these comedic legends take the younger sister of Macualay Culkin and her adorable, fuzzy, TALKING gerbil– Fidgety–on some whacky, zany adventures! Oh, and did we mention: Fidgety, the Fuzzy Gerbil–actually talks throughout the movie?!?!?

    Whacky, Zany Fun!”

    Whenever I see these trailers, I cannot imagine that anyone could possibly find them amusing or in any way funny. But, evidently, some do….

    And here we are….with some zany ,mad-cap shenanigans on Naked Capitalism:

    “The Great Depression of 2017: Some whacky fun for Lefty Economists everywhere! See Ayn Rand as the belligerent grand mother, Alan Greenspan as the family dog and everyone’s favorite villain–George Bush the evil CEO of an oil company! Wild, “Zan-Whacky” fun! You’ll laugh right out of your seat!”

  25. Kevin de Bruxelles

    It seems strange that the MMT guys would go after Dick Cheney since they are both fellow travellers who claim that “deficits don’t matter”. What bothers me about MMT, while freely admitting that it does contain a lot of truth, is the snake oil way it is sold: always the advantages, never the limits. But I as soon as I hear about potential solutions, my first instinct is to push them to the limit to see what it brings.

    The unspoken message of today’s piece is that a societies wealth is decided by how willing their government is to print money. Now I’m sure this black and white simplicity is rendered in at least a slightly deeper shade of grey in other MMT works, but why not through a few simple thought experiments see where the limits are.

    Let’s imagine a a series of societies consisting of 100 families. And since trade policy is one of the great blind spots of MMT let’s imagine these societies lives in a sort of isolation – while there are neighbouring societies, there is no external trade.

    In order to set at least one limit, let’s imagine the extreme Society F has designated one family to act as government and central bank. The government then declares a currency, a tax and a policy of full employment. All ninety nine families decide to sign up for a government job. Now this government is slightly disorganized and in the end they produce almost nothing – no food, no shelter, no clothing, the only thing they do manage to make is a million bills of currency. What will happen to Society F? They will all die of course since there is not enough production to even sustain life for a week, unless of course they can eat, drink, wear, and live under the piles of currency they managed to produce. In summary 0% in wealth production, 100% in service = starvation.

    Now I’ve purposely taken an extreme example. Perhaps some people in Society F do manage to produce something. Through government planning fields are ploughed and houses are made. The whole society will sink or swim together. This type of society has already been tried during the 20th century but perhaps given a second chance it would do better. But if this type of society is the goal, and I would be surprised if it is, then it is best to just be open about it.

    Society A takes a different approach. No government is formed, no currency is issued, no taxes paid, and each family produces twice as much food, clothes, shelter as is needed to sustain life. Through barter at the end of the day each family has more than what it needs to survive and even a surplus of goods is produced in case of bad times. 100% in wealth production, 0% in service = limited prosperity.

    Now of course that presentation of Society A was pretty optimistic, to believe that every family would produce twice as much wealth as was needed. The reality will be much less even. But through the raw forces of evolution in this type of society those families that don’t produce die off. So over time only families capable of sustaining themselves survive.

    But problems arise in Society A. A neighbouring village keeps raiding their fields and stealing their surpluses. Not only that, but many of the families realize that if they didn’t spend so much of their time educating their children and taking care of their old folks, if they didn’t have to walk a mile a day to fetch water, and if they didn’t have all that human sewage collecting in the local pond, that they would be able to produce even more. So they decide to create SOciety B, three families are excused from production in order to organize a government. Seven families are designated as a military service to protect against neighbouring villages. Three families set up a school to educate all the children. Two families are in charge of getting water to each house and cleaning out that pond, etc, etc. But how are these people, who no longer produce any wealth, going to eat? A tax system is designed along with a currency linked to a bushel of wheat. All of the families that are still producing are required to send 30% of their production to the government who then redistributes it to all those families now engaged in non-wealth producing service activities. And magically, freed from the burdens of defending against raiding neighbours, educating children, fetching water, etc. the total production of wealth rises despite the fact that fewer families are actually engaging in wealth producing activities. 60% in wealth production 40% in service = highest prosperity potential. (I’m not sure of the exact ratio).

    But let’s image Society C which is the same as society B except that 5% of the families for whatever reason are not able to find either wealth producing or service jobs. The people decide that these families will not be left to starve in a land of plenty so resources are shared with these people too, in the form or service jobs that are not really needed. 55% in wealth production 45% in service (even though the extra 5% are not required to deliver optimum government services) = fairly high prosperity.

    But in Society D what has happened is that instead of 5% unemployed we get 20% of the families deciding that for whatever reason producing wealth is not for them. They join the dole and suddenly the 55% -45 % ratio production / service is down to 35% – 65%. The government says its all cool and they will just print more money but irrespective of currency games the productive 35% of families are now sharing their wealth at a 1:2 ratio.

    At some point this society breaks down. Either the productive families move away or decide they will get on the dole as well. The only way to correct this drift is to force lots of those families off the dole and force them to sink or swim by producing wealth. But if this group of non-producers gets too large they may band together and overthrow the government. One way or another the society has to find a way to get and keep the productive / service ratio within a sustainable band.

    So while MMT may be useful in many ways, it must accept that currency manipulation alone will never create wealth for a society. A well-managed MMT system may very well be an improvement over current systems, but only if it finds a way to restrict society to the optimal ratio band of wealth producers vs. service providers.

    1. ray l love


      Good effort. I have always appreciated the simple models that put things in their proper perspectives. You also exposed what is the key issue and the reason that the MMT is flawed: It will fail the same way that Communism fails due to incentive issues.

      I spent some time in Nicaragua in the mid-1980s as the Sandinistas were giving their experiment a go and the simple truth is that a centrally-planned society breaks-down due to discontent. An economic system can withstand a small percentage of ‘shirkers’, as you explained, but there is a point when those who work the hardest become resentful of the shirkers and when they, the best producers, begin to rebel the process implodes. (we have some of that here and now)

      I do not however intend to suggest that libertarianism is a better alternative. It is obvious that a balance must be achieved, (which your comment did well to express) and if anything, the current mess is mostly a result of having a combination of the worst aspects of each extreme existing in tandem. We in the US and throughout the developed nations have far too many non-contributing citizens but they are not from the same ideological camp. From the Left there are too many shirkers and redundant public employees, but from the Right there are too many investors who succeed at the expense of others while providing what is again a redundancy.

      The problem has to do with the lack of development in poor nations. Short-term gains at the expense of long-term efforts to ensure that global aggregate demand keeps pace with capacity/supply/employment etc. The problems though are political… having their roots in a democratic tyranny that forces politicians to serve short-term national interests as a matter of political necessity if they wish to maintain power for themselves and for their Parties. The solution must consist of international coalitions that have the ability to exert pressure on national politics through boycotts of corporations. This is the next natural step toward balance and the elimination of corruption at the national and corporate level.

      The efforts to solve the current problems via economic solutions are futile, corruption must be eliminated so as to redistribute wealth globally, or humanity is faced with economic stagnation.

      Bubbles can not exist without there being excessive investment flows in an economy. The solution is fairly simple with respect to the economics: the allocation of capital needs to be redirected more toward development so as to meet the needs of those who have needs, that solves the global aggregate demand problem… and the bubble problem while also addressing the over-consumption issue in the developed nations. Convincing the over-consumers that this is in their best-interest, long-term, that is the difficult part. Especially considering that this must occur with far greater sensitivity for the environment. But there are enough of us, internationally, who are beginning to understand the problems and as the solutions become obvious a coalition will very probably form as needed, something like the current oil-spill could even get things started when the time is right. The thing is, corporations have a vulnerability that will limit their power and once consumers unite the power shift will begin a new era that will have power distributed in an unprecedented balance. Once folks realize that internationally coordinated boycotts can force corporations to yield to ANY demands… things will change quickly.

    2. DownSouth

      Kevin de Bruxelles,

      My principle admiration for MMT is that it pushes back against Austrian School dogma.

      My principle gripe with MMT is it doesn’t seem to take moral issues seriously enough.

      In your examples you don’t take morality into account either. For example:

      Society F: Your assertion that government employees are either non-producers or low-producers has historically proven to be incorrect. If government elite are moral and competent, then government production can be stellar, as was demonstrated in Egypt under the Ptolemies (323 b.c. – 30 b.c.). The pharaohs eventually gave themselves to drink and venery, however, allowing the administration of the state and economy to fall into the hands of rascals who ground every possible penny out of the poor.

      Society A: “….each family has more than what it needs…” Each family may have more than what it needs, but each family will never have more than what it wants. In hunter-gatherer societies, extraordinary producers give their excess production away. Much of what they receive in return are non-material rewards—-honor, respect, praise, etc.

      “But through the raw forces of evolution in this type of society those families that don’t produce die off.” This assumes individual selection and not group selection, which is the only way morality can be explained using evolutionary theory.

      Society B: “…60% in wealth production 40% in service…” But what about where you have a situation like in the United States, where 1% that produces very little (the financial services sector) garners 40% of the production? There’s such a thing as equality, justice and fairness, for example in concepts like equal pay for equal production.

      Society D: “…we get 20% of the families deciding that for whatever reason producing wealth is not for them.” Primitive societies use shaming and public criticism to motivate these people to produce. Morality is one of the prime motivators that drives people work, as Amitai Etzioni explains in The Moral Dimension. Also, many people will stop working if they perceive they are not getting equal pay for equal production. Also, who’s to say which people are voluntarily unemployed and which are unvoluntarily unemployed?

      MMT and classical economic theory both assume morality, and other emotive determinants of behavior, don’t exist. For that reason I believe both will fail to accurately predict human behavior.

      1. Doug Terpstra

        Great points, DS. You write, “Your assertion that government employees are either non-producers or low-producers has historically proven to be incorrect. If government elite are moral and competent, then government production can be stellar…”

        Recalling Ken Burns National Parks series on PBS is a thrilling reminder that the priceless public heritage, which we often take for granted, was earned through long, loving struggles, with steadfast faith and vision—through the federal government—against voracious and rapacious profiteers. Muir, Olmsted, Roosevelt and many others yielded to transcendent awe to protect such places (Sequoia, Yellowstone, Yosemite, Glacier, Grand Canyon, Jackson Hole, etc) from the short-term profiteering of drillers, miners, loggers and mass tourism. But beyond protection, many of our most beautiful lodges, bridges and roadways in these parks were designed and built during the Great Depression, along with schools, libraries, museums, utility networks, dams and parkways nationwide. None of these were built by BP, Wal-Mart, or McDonalds; we would not have a single one of these transcendent treasures without dedicated professionals in government and serious investment in the public commonwealth.

      2. Kevin de Bruxelles


        I generally agree with your comments but let me make a clarification or two.

        Society F This is basically Plato’s Republic or the benevolent authoritarian described by Dostoevsky’s Grand Inquisitor. I used an extreme example of this system failing just to prove a point. In fact these are the Ideal models of human society but of course since humans are all-too-human they will always eventually fail. But it was not my intention to say that government cannot either be productive or aid the society to be more productive as was made clear in Society B. After all I am a social democrat!

        Society A This is Hobbes’ state of nature meets Little House on the Prairie. I was trying to place the emphasis on production but I agree your description is closer to reality. I can’t decide on the group vs. individual selection thing so I will have to think about it some more.

        Society B This is the ideal social democracy and at least in my opinion to model to strive for. I meant to hit on the parasitical bankster behaviour you allude to by describing some sort of parasitical priestly class sucking off all the surpluses in one of the other models but in the rush I forgot to add it. But obviously there are cheaters in the sense of not producing (or assisting society in general) and cheaters in the sense of monopolizing and devouring huge portions of the society’s production of wealth. ray I love describes this very well in his comment above.

        Society D This tends towards Zimbabwe. The most difficult political decision to get correct is to motivate society towards productive activity through incentives without crushing the weak. But surely one answer is to deal with problems early and often and to never let things get so out of balance.

        My main problem with MMT is political. Surely the Bush Administration was following MMT when they decided to step on the gas and blow through the Clinton surpluses. The Iraq War and tax cuts for the rich all fit well within the MMT framework even if they make vague political statements to the contrary. Government spending lowers unemployment whether you are digging ditches in Barstow or digging graves in Baghdad. Now I’m all for deficit spending in a recession but it should be an investment that will add to the wealth of society and be balanced by less spending during the good times.

        And now they decry Obama and other mainsteam Corporatists as “budget terrorists”. But if they had the slightest clue about political reality they would surely know that neither Obama nor any other Corporatist politician is ever going to cut any deficits. What they may DO on the other hand is shift away a portion of government spending that currently goes to the people and send it to banks and corporations instead. And they may do this under the banner of deficit reduction, but actually reducing the deficit is not on the table.

        But with the previous restraint to a new stimulus, the US / EUR exchange rate, now down to the 1.20’s, there is plenty of room for a new round of US stimulus. But it will be power that decides where that money goes and nowadays its the banks and corporations who have most of the power. So further stimulus will only further corporate power and/or just serve as stimulus for Chinese workers.

    3. Ed Seedhouse

      “MMT and classical economic theory both assume morality, and other emotive determinants of behavior, don’t exist. ”

      The fact that you can even say this with a straight face shows that you know nothing whatsoever about “MMT”. Go back and actually read it without your ideological blinders and you will find that they are actually saying quite the opposite.

    4. mw

      Thank you for a very interesting and easy to understand parable. It was easy to digest for a lay person like me.

      Society A, the libertarian model: I see basically 3 problems.

      – In the average, people may produce ‘twice as much as they need’, but in reality not all the land is equally rich and productivity of people differ. So the basic assumption does not exist in reality. (I know you had to simplify.)

      – In the long run, the cumulative impact of different productivity leads to ‘the Monopoly Game’ end result. In the absence of the social safety network, the inertia will be for the rich to get richer and the poor to be poorer. Once the richer ones decide not to toil themselves anymore, and hire the tenant farmers, there will be no end to the social stratification. It will simply depends on which class you will born into, so to speak.

      -There is no societal prevention scheme against any external risk. Individuals are very weak in fighting external risks (Gulf oil spill’s impact to fishermen is a good example.) This is where a coordinated efforts of a group is superior. Libertarin concept is each to his/her own to the extreme, and discourages group cooperative efforts.

      I would also like to add an appendix to your simplified parable.

      In society B or C, a banking industry was created to provide market and facilitate liquidity for the savings of farmers. Initially it greatly enhanced the farm productivity by equipment loans, etc. But the smart foxes sooner or later noticed that they could make far greater killings by transferring the wealth of the farmers into their own pockets – much quicker than earning meager commissions. It seems this is the current Wall Street vs the Main Street friction.

      Somehow the parable needs a sequel: Society A to Nth may take different paths to development, but ends in the same collapse when taken to an extreme.

  26. michel

    Yes, this is the most extraordinary thing about the present crisis. The left is now proclaiming that debt and deficits do not matter, are positively a good thing, in exactly the same way (though for slightly different reasons) that Reagan proclaimed the same thing.

    When left and right agree on something as idiotic as this, you know we are in a real crisis. Of understanding, in the first place.

    1. DownSouth


      But you’ve omitted what is perhaps the most important detail, as Billyblog points out (see today’s “Links”):

      As an aside, there are two occasions when the deficit terrorists will advocate unlimited spending: (a) to fight a war; and (b) when they are pocketing the largesse directly themselves.

  27. c

    Mr. Wray,

    What you have written is one of the most insanely idiotic things I have ever read. At no point in your rambling, incoherent post were you even close to anything that could be considered a rational thought. Everyone on this site is now dumber for having read it. I award you no points, and may God have mercy on your soul.

  28. Jennifer Hill

    Since moving out to Delaware in 2006 folks always talk about their Ivy League degrees. When I tell them I graduated from UMKC a city school there is the usual, “well OK,” not rude but they have no idea.
    Now I’ll just preface my Alma mater by stating, the University that has unflinchingly taken on the plutocrats of Wall Street, you know the University of Missouri Kansas City. I have a BA History. Impressive no?

    1. craazyman

      Honey, when you’ve got a degree from the University of Magonia, even the Ivy League is just a GED. No tuition either. Just channel the angels and watch the mind screen. It’s all there, really.

      -Delerious Tremens, PhD, BA, GED, U of M

  29. Paul Repstock

    Now now Dearie…
    I know that given the state of modern education and canned laughter, many people find travel beyond single digit addition to be exhausting. However, there still appears to be a certain segment who display an atavistic tendancy toward questioning distributed thought.

    Certainly, one cannot describe the current state of global economics as the product of rational minds. If those responsible for putting us in this position are intelligent, then they are very disturbed people!

    I find it hard to believe that our current state is the result of a random and indulgent stroll through time. But, there does remain the fact that the “Peter Principle” has more force on the higher end of the ladder.

  30. amanfromMars

    Whilst you fiddle about with the deckchairs on the Titanic, Others in Bases Under Ground would Prime their …. well, let us just call them NEUKlearer HyperRadioProActive Turing Bombes and SMART Charges, shall we, for you are obviously obliviously blissfully unaware of Cyber Command and Renegade Rogue Instruction and Stealth Joint Apache Chief Action with CyberIntelAIgently Designed Entities reinforcing Head Office and Global Cyber Security Wings.

    And added Stealth and further Rapid Progress is Sublimely Delivered to SMARTer ProgramMING Leaderships, because of both Arrogant and Ignorant Man’s Apparent Inability to Believe in Fabulous Beta MetaDataProcessing and the Presentation of the Virtual Truth, even as it is Shared so Transparently in the Simple Clear Text here, before you.

    Primitive Beings indeed, and in more Senses than in just their Primitive Leaderships’ Destructive Deeds.

  31. Duke

    Love it – universal job guarantee to provide work and wages to all. There are always some who believe in rainbows without rain. A pleasant diversion though.

  32. Bob Visser

    Living in South Africa, I do know my neighbours quite well. I enjoyed the article, but Botswana does not fit the bill. The learned author should look east, where he will find a country run (into the ground) by a cousin of Obama: Mr Mugabe of Zimbabwe. BV

  33. Raging Debate

    Here is my tale and it is much shorter:

    2011-2012 = Deflation
    2013-2014 = Currency Crisis, Hyperinflation ME War That Goes Nuclear 15 Million Dead, $300 Barrel of Oil
    2015 Debt Default of the United States, Korean War That Goes Nuclear, Goes Global
    2020 1/3 Of Mankind Dead, Rebuilding Phase, Central Banking Outlawed, Peer-to-Peer Banking Established
    2030 Global Markets Reestablished

  34. Vernon Dozier


    I saw almost this exact same thing happening in my Flash Forward. Interesting……………


  35. michael

    Wow, this article raises a few red flags for me:
    L. Randall Wray, following the link to New Economic Perspectives blog, is a member of the same faculty as William K. Black, and Marshall Auerback is also contributor to that blog.
    Does that imply that William K. Black is also member of the Ayn Rand hate cult?
    I hope not.

    So far I had seen William K. Black as the last true role model.
    But such cannot declare others to be nonpersons for reasons of their writing or speeches, unless they called for murder, torture, or other violence.

  36. Jerry Denim

    I’ve never had the chance to read Hoffer but I couldn’t agree more. I have always been fascinated by the fanatical personality type and their innate propensity for vacillation. I will look for it. I found Greenspan’s most recent testimony before Congress to contain a surprising amount of honesty. There were some very obvious misrepresentations of the CYA variety but overall his testimony seemed consistent with a man who was experiencing a change in his worldview.

  37. Benedict@Large

    It is amazing how quickly neoliberals become aggitated and begin jumping all over their cages at the slightest suggestion that the world isn’t actually neoliberal.

  38. Jerry

    I guess difficulty with debt has always been a problem…thus the year of Jubalee which happened every 7 years during which debt was to be forgiven….
    At this time in history, I suspect there will be a way for this sort of thing to occur and I believe it will come in the form of a world “currency” which may turn out to be nothing more than a universal credit or debit card….likewise I believe there will be one world government which will address economic/politicl, etc issues…. and the start of regional war which will start in the Middle East and be abruptly haulted with a 7 year peace accord…but there is hope for those who choose a larger worldview…

  39. Anna Epelbaum

    Why didn’t Kucinich step in when this terrible health plan was getting into bill? He, instead, gave up, and get in. People were expecting quite different from him. I do not trust him much after that. The current internal and external policies are very self-destructive, and very destructive on global scale. No doubts about it, as it is very obvious. But why is it necessary to wait until 2017? Of course, it is the satire, but a lot of truth is usually in any successful joke, otherwise, it won’t become successful.

Comments are closed.