[Peace-discuss] Letter in today's NG

[David Green]

This letter was published in today's NG; it's a response to local economist Fred 
Giertz.
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.
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.
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.
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.


      
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