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<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>This letter was published in today's NG; it's a response to local economist Fred Giertz.</FONT></P>
<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>The economy, the most crude measure of which is GDP, consists of material goods and services produced by the labor of all workers (this excludes significant unpaid labor, such as child care). That includes laborers in both the public and private sectors, all vitally productive. Currency has no inherent value, but merely represents the products of that labor.</FONT></P>
<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>When the financial system implodes through the unnecessary and ruthless speculative risks and excesses of privileged, greedy, and unproductive people, as well as through the negligence and cowardice of economists and politicians who might have counseled and taken preventive measures, the result is that millions of individuals are unable to sell their labor. This is due to the dramatic disappearance of (partly fictitious) monetary wealth, and thus a drastic decrease in the demand for goods and services, viciously cycling.</FONT></P>
<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>Basic economic theory dictates that the government can and should literally print and distribute money, through government programs or tax reductions, to increase demand and productive labor. The Federal Reserve can (and does) borrow with no interest, causing no increase in total federal interest payments. During the meltdown of 2008-09, our politicians and bankers chose to print $10-15 trillion for Wall Street balance sheets, but less than $1 trillion for jobs. The result of that policy is a historically pathetic “recovery” with high permanent unemployment.</FONT></P>
<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>Economists who tout that recovery either do so disingenuously, with full knowledge of the above, or sincerely, with complete ignorance of the above. It’s hard to say which is worse.</FONT></P>
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