Fiscal is Exclusive, Monetary is Inclusive: An Amateur's Perspective

Before I even "go there", it seems appropriate to stress that I am self-taught in many ways which would appear "amateur" even if I held multiple degrees. Just the same, that fact doesn't prevent me from thinking about economic issues waaay too much of the time: a characteristic which would probably make me just as "dull" - at a cocktail party - as any economist! I was warned about the perils of "one track thinking" as a young college student, by the way. One of our music professors, for all intents and purposes, still lived in the time of the musical greats. Which was okay by me, as I can still imagine Beethoven walking through the woods, even today. However, another music professor warned us - as to his colleague who lived in the past: "Don't be like him. Make sure you 'have a life'!"

Therein lies the problem, in terms of today's continuing unemployment and the need for new ideas and solutions which unemployment suggests. We all thought we would "have a life", provided we did everything right, which included hedging our bets in resources, knowledge commitments and skills use.  So, for a long time, that's exactly what most of us tried to do. Some, of course, have succeeded in maintaining economic access, which means it's easier to adhere to the models which existed alongside one's journey of relative success. Anyone who walks in this path has preexisting ownership of idea commitments, which now provide time for all the other demands of life. It is mostly those who didn't succeed, who don't have adequate reason for strict adherence to the old models (intriguing though they may be) who have less to gain from the commitment. Certainly, one doesn't always hear from this quiet group (notwithstanding the occasional revolution) but now there is the Internet...oh wonderful "mixed blessing" where dialogue happens on a daily basis between haves and  have nots of all wacko descriptions.

Persistent unemployment is just one reason why ideas long held perfectly rational are being called into question, but it is an important one. It's not enough to say "Well we would take care of unemployment but the voters won't let us", even it that were true. I have little doubt as to the wisdom in Keyne's thought processes, and his work. So when I recently brought up the "in the long run we're all dead" quote with my inadvertent remarks, I was not doing so to show Keynes as somehow wrong or misguided. He simply lived in times which - while certainly complex - were nonetheless different in some important aspects, to the nature of wealth capture in today's world. Government fiscal policy in Keyne's time had the capacity to do much more than in the present, in large part because it was still in the process of spreading knowledge use to overall populations in ways that dramatically increased wealth utilization. Thus, many forms of fiscal policy in the 20th century were quite beneficial in ways not readily achievable in the present. Yes, there are still plenty of desirable fiscal policies near and dear to our individual hearts which, nonetheless, are not likely to be implemented any time soon due to escalating concerns demanding the attention of governments everywhere.

So the amateurs among us have had plenty of time to watch our governments botch things up, over and over. Today, special interests have become the primary beneficiaries of most fiscal stimulus.  Anything that goes through the designated fiscal pipelines gets magnified by those who seek to take part. Especially painful is the slow motion train wreck that has become the economic game of "let's pretend knowledge is (still) scarce", so that we can tightly discipline it and feed the beast with government and/or insurance money and lifetime savings and "lucky dog" pensions...take your pick. If that were not enough, we've had to increase the value of the dwellings we live in many times over, just to have monetary equivalence for the middle class to feed the artificial knowledge scarcity beast. Then we feel guilty about the ones who can't really even play the game, and so try to raise their minimum wage a couple more times to drop some nickels into the pit of the beast, as well. 

Many of the unanswerable billing mysteries of life are attributable to the beast. Just pick up that ambulance bill over there on the bar...a couple of thousand dollars and the patient didn't need any help from anyone, or anything, but just a bed for between hospital transport? Hmmm...make some phone calls perhaps? Nevermind...except that we'd be fools to actually walk away from the issue altogether. We didn't have to pay much - that time - but Medicare was taken to the cleaners. We're wracking our brains how to do something differently, since everyone lining up at the trough now ensures Medicare is going to be quite anemic really soon. Any economic actors who want to remain ethical (given the current circumstances) are likely to become as anemic as Medicare itself.  They have to get to the trough quick, just like everyone else, if they're not going to be starved out.

Granted, monetary policy is not the only strategy we need to stop this travesty from happening. Plus, handing over the keys to some for-profit drivers would only serve to run more people off the road altogether (Russia comes to mind). However, monetary policy has the ability to approach problems through more inclusive means, because the impartiality of money printing is not beholden to entrenched special interests. For instance, consider the countless numbers of worthwhile projects - R & D for instance - which at least have consideration in Washington. But the minute money comes up short, no one is really looking at the big portion of the bills to cut anything, instead it is all too easy to look at the little local projects or investments and say, how silly...taxpayers are paying for THAT? Yes, the worthy little project was exclusive. But it was almost nonexistent compared to the exclusivity that had been concocted for the "big guys".

The most important task of monetary policy,  suggested by NGDPLT, is to approximate as closely as possible the individual economic actor and his time ownership commitments. Today, both governmental fiscal objectives and their related financial interests would see to it that such monetary equivalence, or relevance for individual actors, does not happen. Communities need better ways to coordinate and encourage wealth creation, instead of yet more dependence on outside help or living circumstances which many citizens can ill afford.  Presently, such dependence makes them incapable of seeing the real knowledge and skills wealth potential that exists in their own midst. The creation of true free markets in knowledge use would not just make local communities more sustainable. It would also bring into sharper contrast the special interests still lining up at the government trough for the usual handouts, especially if those interests are still complaining about oversized government! (Go figure) In such circumstances, "get sustainable" might even be referred to as "get real". Well...we're a long way from such a scenario, but it's fun to think about on a Sunday afternoon.