Recent Items

Bond, Treasury Bond: 007 is Out of Cash, but Your Government Can’t Be

So now even austerity is getting product placement in movies….

This post on the howler in the new James Bond movie does not include the usual caveats about government spending in a fiat currency system, which we feel compelled to add. A currency issuer will never go bankrupt. It can always satisfy its obligations. What it can do is create too much inflation. But with over 30 years of crushing labor bargaining power, short and uncertain job tenures, low labor force participation, and no to tepid real wage growth, we are a long way away from having to worry about inflation. What we have that looks like inflation in certain (for instance, continuing increases in health care costs) is looting in actual or perceived “must have” services like higher education. Note that in higher education we are seeing a beginning of a customer revolt as law school enrollment has fallen markedly and more and more young adults seen to be considering community colleges more seriously as an option than they would have even a decade ago.

It’s also encouraging that a professor of film picked up this pitch for the supposed necessity of austerity, and has taken a general interest in modern monetary theory, and how austerians make the grifting known as public-private partnerships seem reasonable. And before you say that state and local governments are budget constrained, let us not forget that that is another policy choice. That great American socialist Richard Nixon implemented revenue sharing, in which the Federal government gave money to states and IIRC even cities, on the logic that the Federal government could raise money more efficiently, but local authorities had a better handle on their needs. Revenue sharing did have supervision measures to prevent corruption. Reagan got rid of revenue sharing.

By Scott Ferguson Assistant Professor of Film & New Media Studies. University of South Florida. Originally published at the unheard-of center

spectre
In the most recent James Bond film, Spectre (2015), a cabal of digital surveillance capitalists-cum-global terrorists attempt to take over the British national intelligence service. This clandestine group builds a flashy high-tech skyscraper in the heart of London and, at one point, it is explained that only private investment would be able to afford this cutting-edge structure. In reality, the scenes inside the fictitious data center were shot within London’s current City Hall. Yet according to the film’s harrowing storyworld, the British government simply does not have the money to commission such an extravagant edifice.

Though mentioned only in passing, this comment about the insufficiency of public funds appears to structure the film’s entire plot, which pits what is essentially an embattled government program against the allegedly greater powers of global information capital.

Deemed “Bond for the age of austerity,” Spectre’s cash-strapped hero still gets a pair of handsome cars, as well as a perfectly-pressed ensemble for every climate and occasion. In the end, however, what Spectre shows is that, today, it is easier to believe a man can single-handedly take down an evil capitalist organization than it is to imagine a government being able afford dazzling new public infrastructures.

Meanwhile, the true specter haunting the latest installment of the Bond franchise is not global info capitalism, as the film’s narrative suggests, but rather what Modern Monetary Theory (MMT) reveals to be the limitless government treasury bonds that could be immediately deployed to enfranchise everyone. As MMT has it,

A sovereign government’s finances are nothing like those of households and firms. … [Such a] government does not need to “borrow” its own currency in order to spend. Indeed, it cannot borrow currency that it has not already spent. … Government never needs to sell bonds before spending, and indeed cannot sell bonds unless it has first provided the currency and reserves that banks need to buy the bonds. … A sovereign government cannot become insolvent in its own currency; it can always make all payments as they come due.

MMT’s two-pronged revelation is that it is impossible for a currency-issuing government to run out of a unit that it alone supplies, and that austerity is a cruel fiction that can be instantly reversed. In a word, there are no monetary reasons why we, as a public, cannot have nice things.

We can have universal healthcare; free university education; high-quality public housing; socialized child and elder care; low-cost postal banking; environmental cleanup and retrofitting; and a robust public arts program. We can also create a locally-organized public works system, which would establish just minimum standards for pay and benefits, put the means of production in the hands of workers, and ensure everyone’s right to meaningfully participate in shaping our world. And such a world can be made ours without risking inflationary price rises, says MMT, so long as government funding remains directed at real resources and productive capacities.

For all this, we require neither Bond-like physical prowess nor computer-simulated collisions, but only political will and the capacity to electronically credit bank accounts out of thin air.

Print Friendly, PDF & Email

24 comments

  1. sd

    Here’s my wishFull thinking, a Jobs program. A government program that provides on demand jobs. In other words, you become unemployed. At any time you a citizen can walk into a government agency that will immediately provide temporary employment suitable to the citizens skill set. Sure, it may mean travel outside the area or off hours, but it’s respectable work at a living wage.

    We have just too much wasted creative human capital in this country.

    1. fajensen

      In Denmark, they will immediately send your leeching arse out to pick up dog shit in return for the right to receive social security (between 600 and 1200 EUR per month, taxable, of course) – and you don’t get any “extras” like holidays, sick leave, working hours counted against the minimum requirement for unemployment insurance – et cetera. Pure slave labor.

      Being poor, sick or unemployed reflects a poor morality and must be punished religiously. It’s the Incentives Structure – If you earn less than 10% of the population “regular beatings”, strict supervision, threats, punishment and general abuse is “Motivation” – If you earn more than 10% of the population, then, “The reward structure must be competitive”, meaning: More of Everything (and no supervision) is what motivates people.

      Reminds me of Czechoslovakia under communism – get a bit drunk and come home late after the un-official and un-declared “curfew”, 23:30, no decent folk out; not taxis, But hundreds of people hacking away at the ice with pikes and carrying the ice away in wheel-barrows. That’s how there were never any unemployed under communism – it’s funny that “capitalism” should come up with the same solutions, is it not?

      PS:
      If you come to my old home town, Lemvig (DK), you get to clean the beaches along the North Sea. Which is nice – cold and windy, but, nobody bothers you, the beaches are deserted.

  2. alex morfesis

    marriner eccles before the accord…memories…of the world we left behind…faded pages of those melodies of the way it was…airbrushed pictures, of the ones we left behind, smiles we used to give each other…its the way it was…

  3. craazyman

    that’s horrible that Bond is on a budget. That’s amazing. Is that why he’s wearing Crockett & Jones shoes instead of Edward Green or Gaziano and Girling? They’re not as expensive, although I personally have a pair of Crocket & Jones Westfields — they look awesome — and those C&J shoes Bond wears are pretty stylish, I have to say. Maybe only old men wear Edward Green and G&G these days, guys that live in Palm Beach or sit around in London Clubs with a newspaper all day before getting drunk on sherry and reading some Robert Browning poetry then going to bed at 9 pm. Bond is a young dude so maybe that’s why he has C&Js. He probably thinks “If I had a pair of Edward Green’s on there’s no way I’d be able to go from meeting to banging the girls in an hour or so. It might be never! No hot young woman wants to bang their grandfather. I mean really.” Or something like that.

    At any rate. Printing the money might not make any difference, if all it does it get him a pair of G&Gs or Edward Greenes. Sometimes it’s not about money, but it’s about imagination. Sometimes the money liberates the former and sometimes it doesn’t. Sometimes your best days are when you’re broke and hungry — as long as there’s a way out. If there’s no way out, then those aren’t your best days. There’s always a way out, if you can see it. That’s the problem, seeing it. That’s hard. If you can see it, then you can get some shoes at Joseph A. Bank and you’d still score. You don’t need the C&Js or God Forbid, your grandfather’s shoes.

    Can you imagine Bond in a Joseph A. Bank suit and some $120 dollar shoes with rubber soles. I can! You’d never know the difference. If people don’t have that then you need to print the money. That’s the least a guy should have. I don’t want to be a zealot about this. it’s only philosophy of economics and we all know that’s just a hobby, not a profession with observable standards of quality and craft. haha

    1. craazyboy

      The Bond household still isn’t like a household if the government buys you $700 shoes. The most you can get in America is $300/month for food stamps and Obama Care, but you have to be too broke to pay rent to qualify. I figure that’s because the landlord lobby isn’t that strong in Washington DC. But Bond stays in those 5 star hotels for $500 a night all year around.

      Now if the British government was really into austerity, then it might be more like the Charles Stross novel, Atrocity Archives. The Brits have a top secret intelligence unit tasked with preventing Lovecraftian threats from other dimensions, or wherever, and the accountants run the agency. Agents drive Smart cars – no Aston Martins or anything like that. They wear no name tennis shoes too, shockingly, and every day is “casual day” so employees don’t need a loan to buy a suit!

      1. craazyman

        Riding the bus to work it occurred to me that Joseph A. Bank is the American secret agent who does anything Bond can do, but with a cheap suit & $120 shoes. If Bond meets three hot female agents and has a steamy affair with one of them in an hour after a dinner at a fine French restaurant in Paris — with his C&J shoes — Joseph A. Bank would bang all three in a hotel room after a few draft Buds at happy hour at some shopping mall bar/restaurant. That’s the power of Joseph A, Bank, American secret agent. He might drive something like a Chevy Camaro and take Sunday’s off to watch football. No secret agent work on Sundays! But it’s not because of Church.

        That’s what money printing can do. If their’s dudes who don’t have a job and can’t get the Joseph A. Bank suit & shoes, that’s a social atrocity. Every guy should have that. Who needs the C&Js and the Aston Martin or whatever Bond drives? Who needs the sommelier and Paris dining? YOu need the happy hour and the burger & fries. Then you can do it. Print it up!

        1. craazyboy

          I don’t think Joseph A. Bank uses draft Bud for banging agents, unless they are undercover gurly man agents. I bet he uses Chablis, or maybe that pink zinfandel, or whatever it is. Results in an hour is tough no matter what, but with white wine, two hours is easily achievable. Unless they’re 3 lesbians – then 20 minutes, if they like you.

  4. JEHR

    I have to laugh (sardonically) because now that we have a Liberal government which seems to understand that a sovereign country cannot run out of cash to pay its bills and this government promises us three years of deficits while it is paying for infrastructure, etc., the Conservatives are already accusing them of being profligate with money and becoming “big” government and going into debt. But the Conservatives built up a substantial deficit for most of their time in power and “balanced” the budget by cutting services and firing employees. Which would I rather have? Guess!

  5. beene

    For anyone interested in the con run on the public that only way to finance industry or innovation is having debt based currency should read Browns’ book Web of Debt.

    Remember fiat is simply created out of thin air and is always backed by taxpayers when it fails and a gold mind for banks when debt created currency is successful.

    The banking system has even over time made it illegal for the government (state or federal) to have a banking system to compete with private banking.

    If you want to understand how simple it would be if fiat was not debt created to eliminate all government debt buy or ask someone to send you a copy of page 442 of the Web of Debt that’s titled (no more taxes) and using government figures to prove how quickly it can be done.
    http://www.amazon.com/gp/product/B00FFHSPKU?keywords=web%20of%20debt&qid=1449492731&ref_=sr_1_2&s=books&sr=1-2

    1. James McFadden

      Here are some additional book suggestions to add to the excellent Wed of Debt to round out one’s understanding of economics, financialization, instabilities, and the neoliberal fraud perpetrated on us.
      Debunking Economics Steve Keen
      Epic Recession Jack Rasmus
      This Changes Everything Naomi Klein
      Griftopia Matt Taibbi
      It Takes a Pillage Nomi Prins

  6. Paul Tioxon

    I am still waiting for some answers to using the stock buy backs of corporate America as the equity needed to deposit a dollar for dollar amount into the Social Security Trust Fund. Stocks are destroyed as capital after cash is moved from the balance sheets of corporations to the shareholders who sell their stock back to the corporation. The money that is diverted to this form of financial engineering could have gone to wages and benefits, including underfunded pensions, what is left of pensions. It seems the SS Trust Fund could also fund Medicare, as a monthly amount is deducted to pay a portion of that health plan from the monthly SS payment. And, as SS represents a buy in from people who work, it is not a give away to the undeserving, but an equitable distribution of the gains of productivity that come from actual hours worked by people.

    Another ridiculous British movie propaganda piece is the super spy thriller ” KINGSMAN: THE SECRET SERVICE”. A privately funded, private security organization was founded to protect the kingdom? because slimy politics muddies everything with deliberation and hemming and hawing and scandals when decisive action is mandated by the terribleness of evil. It’s a pretty nauseating film with a super tech company implanting free cell phone service into heads of the general population considered as a future step forward in human progress and civilization. But, it’s all a trick to enslave us!! HAH! Save us Kingsman Secret Service, oh please, the government is stuck in politically correct neutral.

      1. Paul Tioxon

        You just like Samuel Jackson cursing his head off, that’s all, and wearing that stupid baseball hat.

  7. susan the other

    Haven’t seen Spectre. But it sounds like pre-emptive TINA. And we can all be confident because we have James Bond and Batman to make sure the evil capitalists don’t get too out of control. Bizarre message since they’ve been out of control for decades already. This essay is a great message however because it free-rides on all the Bond bullshit in private banking and finance and in one short paragraph manages to blow the propaganda out of the water. This little essay is much cleverer than all the James Bond style TINA.

    1. nigelk

      Hint: Batman IS the evil capitalist.

      Think about it: what are the 2 most successful franchises of the last 15 years? Iron Man & Batman. The first is a defense contractor, the second a nondescript billionaire whose company has so many investments that he’s got a batmobile collecting dust in a basement…and both ‘heroes’ ensure that the status quo is maintained…huzzah!

  8. paulmeli

    “…What it can do is create too much inflation”

    As can any source of spending. All spending carries an inflation risk.

  9. Anon

    Didn’t actually read this very carefully, but the author appears to miss the actual premise underlying the movie.

    While the justification for private finance was austerity based, in fact the corrupt official who organizes the scheme is just fronting for an organized crime takeover of government — and especially its intelligence services. The movie is hardly promoting the view that private investment is a solution to government budget problems.

  10. greensachs

    Heaven forbid our intrepid motion picture industry helps dispel ANY long standing myth(s). They could loose their well deserved tax breaks, er, monetary incentives.

  11. Ishmael

    Bond is a speculator but he understands the risks. That is why he is so successful in casinos.

    In Spectre there were some shots inside Rules. Yves, one of my favorites if you are ever over in London and wish to have a great meal in a restaurant several hundred years old. Many a famous English author has dined there. It is my recollection there is a Graham Greene room there.

    Rules RULES!

  12. kevinearick

    AI: Tong & Triad Political Psychology

    The human brain has 100 trillion interconnections, balanced by nature. Trying to replace a human, which represents the apex of what science can see, which is negligible, is an incredibly stupid approach. The fact that most jobs, especially those at the top end of the income distribution, can be done by a machine tells you how incredibly stupid those jobs are.

    An expert opinion about a brain by a brain is useless. Left to its own devices, the brain is self-obsessed, which is only multiplied by groupthink; all it can do is produce gravity. With groupthink, most of the signal is thrown away by the self-reinforcing bias, and the remainder is amplified.

    Trump is berating the media, but says nothing about the artificial real estate inflation pounding the global middle class into submission, and Hillary’s response is that women should be able to do the same damn thing. Both point at the symptom that is terrorism and propose more of the cause as the solution, Draghi’s only tool. Whether the Fed raises or NIRPs, issuing legacy credit in both directions, is irrelevant.

    Of course they can’t figure out how consciousness arises, even though the basic physics is staring them right in the face, on the other side of the mirror they have constructed with false assumptions to confirm themselves. Einstein didn’t invent anything. The atom bomb simply became expedient when Tesla’s work was about to turn the empire on its head, at the point of demographic collapse, just when you would expect it to appear.

    Government is designed to out-select natural selection, and is doing a piss-poor job by all accounts, gobbling up everything in its path, so the majority votes to require full participation right out of the birth canal, with Obamacare. Under those conditions, Pollyanna is an effective response for mom, to raise independent-thinking children, because left to his own devices, dad is going to design weapons. Taking Grace from the equation leaves war as the outcome.

    I can fix your elevator and distribute the income to balance the system, or I can supply the combatants with weapons, to kill each other. If you want to vote that the majority is smarter than the minority, that an irrational market can outlast all rational investors, and that the majority has the right to kidnap children, to enforce its arbitrary debt issuance, you are certainly welcome to do so. There’s always another crack-pot economic theory to replace the last.

    Life goes on, while the majority creates and responds to artificial emergencies, which is why labor says that a crisis on your part is no reason for an emergency on labor’s part, and if you don’t like this speed, you certainly will not like the next. You are best off doing some work, better off controlling legacy capital being depreciated, and worst off vacillating in between the two. Labor is not being squeezed by vice.

    America is just the latest Nation/State scam with a middle class dead in the water, salted by scapegoats trading among themselves to maintain pressure on a nearly empty toothpaste tube. There are two basic types of circuits: one with an input and an output, and one with an output. Like the brain and body, capital and middle class occupies one side of a fulcrum, over spacetime, which, not coincidentally, is a dc circuit chasing its own tail and getting further behind.

    There is control, money and life. The brain God gave you is far more valuable than other people’s real estate inflation, unless you replicate the ponzi behavior you see, which you may want to do, from time to time. Capital can’t get enough control because trying to out-smart the universe doesn’t work, and paying people to pretend it does merely creates the illusion, with increasingly expensive drugs.

    Money doesn’t change system outcomes; it merely controls recognition across event horizons created for the purpose, swapping chairs on the Titanic to keep everyone busy. America is dead in the water because it pissed away its resources playing the game, like every other nation/state, including China, and global banking can only discharge the economy quicker with robots as the economic slaves. The remainder of the upper middle class built with debt is being squeezed out accordingly, as slow as possible.

    No one in this country pays taxes. We issue debt to pay make-workers and finance war, to take other people’s crap. And Americans are now so weak-minded as a result that the rest of the world is telling us to go f- ourselves, lighting fire to their own economies. When the army approaches, set your field afire, so it has nothing to eat.

    You get paid to fix crap; only politicians get paid to assign fault, the only possible result of which is denial, anger and depression, and at the end of an empire cycle, most Americans are politicians, with no exit but war. If an employer doesn’t want to pay you, find another who will, or start a business. Most employers are really landlords, seeking economic slaves.

    The big accounting firms devise an arbitrary extortion algorithm, and the engineers provide a ladder and wiring digram, all of which is easily replaced by a program writing a program. If you look backwards, from the physical symptoms, your only tool is probability, creating more symptoms to feed the activity. That $10k proprietary circuit board becomes a $15 generic board, easily bypassed, if you look forward, replacing any or all of it in the circuit.

    The majority voted itself the right to kidnap and re-educate your children, to enforce arbitrary debt and subsidize equal rights for stupid, placing itself on the path to WWIII. A politician in a robe assigning individual fault for system stupidity is the illusion. All isms are communist dresses, played against each other to protect legacy capital, designed to rule the victim guilty.

    Chimerica rotating native-borns out and foreign-borns in, swapping perceived liabilities in a house of mirrors, is no accident of History. The AI program writes itself; your are the conductor. Effectively, you are building a maze, which implodes upon itself, with consciousness.

    If you are going to bet on what you see, I will take that bet every time, and so will legacy capital. The difference, probabilities measured in the mirrors, is that legacy capital thinks it is hiring engineers to write the code. Don’t underestimate Pollyanna; remote control works in both directions, like an Osterizer.

    Like the cover of a book, don’t let the color of one’s skin fool you, in either direction, to zero you out. The electron appears in more than one dimension at the same time, and neither in both. From the perspective of the willfully ignorant, Tesla may as well have been an alien.

    Whether the majority is replaced by a machine, bombed, or shot in the head by a plant with an AK printer is irrelevant.

  13. Russell Scott Day/Founder of Transcendia

    Even a movie review! Reminds me of a Music Video job with LL Cool J. “Just the Kind of Guy”. Newark Courthouse. There are thrills and thrills. Tying in live in old marbled buildings with dusty electrical rooms is a real thrill. Electricians and wires. AC, DC, doesn’t matter what was intended, you can send power through them.
    A great government requires great buildings. Ben Franklin was the man. Put post offices out there. Who cares about the arsenals, put a post office in town. They will know you are around, you’re serious.
    Generals of the world buying weapons. They talk to each other, plan the wars. Few Foreign Service Pros. They got ignored anyway, when they said Zionism would be a ball buster.
    Wedemeyer said that the Chinese Nationalist were awful corrupt. What happened to American Pragmatism? Huey Long was ahead of his time? All the same.
    I tell people there is no fiat currency for the US. For the US it is Nixon and Kissinger’s Petrodollar, so I made the Insurodollar. Human Capital. Anything the government guarantees is then the direction of the banking and financial engineering and corruption grows like a fungus, or coating of germs, scum pond all over it. School tuitions. The R&D done free by the students paying to be doing it, learning, and do the licensing fees going to pay the bloat of the Administrators, does anybody raise those? I don’t think so. What a deal!
    But Cornell is doing it too for Israel and some weapons that the U of R didn’t want? Why? Cornell?
    Gets turned around every time the way it is presented, spun. TPP is now some leg and arm of a military strategy? Nationalists and Corporatists and maybe really there is a corporation that bought all the DuPont patents for the DuPon family as a hedge against the move into Finance ahead of the rest of the rich. If any corporation might have their own atom bomb, it would be people friendly with the DuPonts don’t yah think?

Comments are closed.