Great Leap Forward


OK, I know you think this is yet another critical column on Chairman Ben Bernanke.

Nay, I just returned from a conference held by the Central Bank of Argentina—“Central Banks, Financial Systems and Economic Development” held in Buenos Aires on October 1st and 2nd. Yours truly gave a talk on Modern Money—and the powerpoint will appear below (not magically—I’ll probably need professional help so your patience will be required).

In attendance were what appeared to be about 200 central bankers from across the globe, plus a smattering of reps from international financial institutions like the IMF and as well a few from academia.

An unusually large number of presentations were given by economists who can loosely be charged with heterodoxy: Jamie Galbraith, Anwar Shaikh, Stuart Holland, Jane Knodell, Jayati Ghosh, John Weeks, William Lazonick, Dirk Bezemer, Fernando Cardim de Carvalho and many others.

What the heck was this motley crew doing at a Central Bank conference? One cannot imagine them at Jackson Hole.

Well, here’s the deal. The head of the Argentine Central Bank—Mercedes Marco del Pont–has been awarded the distinction as “the world’s worst central banker” ( By whom, you might ask? Well, by Wall Street’s sycophantic press. Wall Street hates Mercedes. The woman, not the car.

Why? Well, for one thing she’s a woman. Wall Street hates female heads of central banks (take a look at the list of the top ten worst—3 out of 10 are female; then take a look at the 10 best,  of which all but one are males.)

But that’s not anywhere near the most important reason. Ms. Marco del Pont kicked off the conference with a rousing talk, defending her central bank’s recent move away from a single mandate (inflation target) to pursuit of multiple mandates: financial stability, employment creation, and economic development with social equity.

Boy does Wall Street hate that.

Stability? Where’s the profit in stability? Employment creation?—Wall Street is a job destroyer.

Economic development? Nay, Wall Street wants de-development, a return to a feudal economy as finance plays the role of wealth-extracting feudal lord.

Social Equity? You’ve got to be pulling my leg. Wall Street is overseeing the greatest concentration of wealth in the hands of the new oligarchy that the world has ever seen.

No wonder they hate Mercedes.

Moi? I’ve seen the perfect replacement for Ben Bernanke when his current term ends. I do not know whether a foreign national can be picked to head the Fed, but if not we ought to be working on removing the restriction. Governor Marco del Pont’s presentation was the most eloquent defense of the multiple mandate that I’ve seen. She laid out the need to rethink the role of central banks—to push them to directly provide finance for development and to ramp up their historic role of cooperating with the treasury to finance needed public spending.

When she mentioned her “award” given by the lapdog press, she clearly relished the battle. Later that evening I (unfortunately) was seated at dinner with a former IMF economist, now a central banker in India. He confidently predicted that Argentina will be “kicked out” of the IMF any day now because of the incompetence of its government and especially of its embarrassing central bank.

(Sure enough, the IMF’s Christine Lagarde has threatened a “red card”—soccer speech for expelling a player—to which Argentina’s feisty President Kirchner replied:  “My country is not a soccer team. It is a sovereign country and, as such, is not going to accept a threat.” If there is anything Wall Street hates more than a country with a female Governor of its Central bank, it is a country that puts women in charge of both government and the central bank!)

My immediate thought as I listened to the Indian central banker’s smug assessment of Argentina’s fate: that’s like being kicked out of a motorcycle club or drug cartel for insufficiently enthusiastic raping and pillaging of innocents. There are some clubs you just don’t want to be a member of.

The twinkle in the Governor’s eye told me she appreciates the irony that her central bank’s concern with the 99% is what makes her incorrigible in the eyes of the IMF’s flunkies.

(Oh, and as an aside, this IMF official/India Central Banker went on to claim there is no longer any poverty in India, that the caste system is actually a thinly disguised scheme for social advancement—sort of like Aristocratic Polo Clubs for everyone–and that India is the greatest land of opportunity the world has ever known, with all Indians “free to choose” whether to be rich—or poor—according to individual tastes, and thus the globe’s most perfect example of democracy to which all others ought to aspire. Such is the ecclesiastical orthodoxy we mortals encounter in central banking circles.)

So what is the basis of the international attack on Argentina, aside from the fact that its leaders are thumbing their noses at the IMF? Well, Argentina has “high” inflation. How high? Well, it depends on how you measure it. The government’s numbers come in around 10%; the right wing press claims 25% or so. To be sure some of this is just about measurement: inflation is measured as growth of some price index so it matters critically what you put into the index, how you measure inflation of the individual components, and what weighting you give to each. This always surprises students—who think that the CPI numbers are handed down by heaven. In truth, they are constructed, by fallible humans, and are always subject to controversy. (If you want to read up on construction of the USA CPI, you can take a look at this:

But here’s the more important point. Argentina has been growing very quickly since its financial crisis in the early 2000’s. It abandoned its currency board fix to the US dollar, it adopted a job guarantee program (Jefes), it defaulted on its dollar-denominated debt, and it told the IMF to take a long hike to hell. Rapid growth was thus inevitable. Unemployment and poverty plummeted and living standards rose. The currency stabilized and wages and prices started to inch up. More recently, the global commodities boom that resulted from Wall Street’s speculation drove up prices of Argentina’s main commodities outputs: soybeans and beef. These are both major exports and major components of the domestic consumer basket.

Believe me, an Argentinean without massive quantities of beef served at the table at least three times a day is not a happy Argentinean.

It is thus understandable that Argentina faces double digit inflation; indeed the result was entirely predictable. Imagine that your country is both a producer and a major consumer of a scarce commodity—say gold. In a speculative boom, gold prices rise quickly but that does little to quell domestic demand for gold. Indeed, as prices rise, domestic consumers bid prices ever higher as they try to get their share of output. Government policy will most likely turn against exporters due to the political necessity of conserving a share for local consumption. And then imagine that a natural disaster (earthquakes destroy some of the mines) reduce local supply. Inflation and some degree of social discomfort would be inevitable.

That’s more-or-less what happened in Argentina recently, as bad weather reduced soy and beef output. (And politics made the shortages worse by further restricting supply.)Rising global prices as well as falling domestic output (and thus employment) squeezed consumers who insist on keeping beef in the consumer basket.  It is not at all surprising that Argentina is experiencing inflation—somewhere between 10% and 25% depending on how you measure it and who you believe. And that consumers are pissed.

But inflation will come down quickly. Prices are up mostly due to global speculation in commodities. I’ve written about that before—this is by far the biggest commodities speculative bubble in human history—so won’t go into it here except to say that what bubbles up to record highs will collapse into unfathomable lows. Presto-Change-O, Governor Marco del Pont’s main thorn in the side disappears.

(To be clear, I do not think the road ahead will be free of bumps. The coming next great recession in the developed world is going to hurt Argentina’s exports so it has got to find sufficient domestic demand to replace that.)

At the end of the conference, Argentina’s Vice President Amado Boudou joined the Governor to defend the maverick approach taken by Argentina’s government. He insisted that the Governor at the helm had brought a “breath of fresh air” to the central bank. He recounted his recent attendance at a G20 conference on “new ideas” at which he proclaimed there were no new ideas. He also ridiculed the currently fashionable view that central banks must focus only on preserving the “value of the currency” through inflation targets: a money anchored to the bottom of the sea will cause the boat to sink in the first serious storm. What really counts, he rightly insisted, is unemployment: with higher unemployment you get more debt, more poverty and less economic growth. That is why you need jobs, not single-minded devotion to stable prices.

We are, he said, at a crossroads in economics. Not only in terms of what goes on in the world, but also in terms of how we look at the world. In recent years we have put the financial system in center stage—to our detriment. We need, instead, to put employment and development first. And to do that we need to stop listening to the multi-lateral institutions (and, I’d add, to the central banker lapdogs) who offer the same tired recipes that have always failed.

If Argentina has got the world’s worst central banker, what we need is a race to the bottom.

The Powerpoint of my presentation should appear below–if not now, then soon:

mmt for argentina pdf


RonTOctober 5th, 2012 at 2:30 am

"Independent" central banks work for the creditors, for the 0.01%. For them jobs are unimportant, and stable currency is crucial, they don't work, they defend the wealth they inherited. Sadly it is us versus them, and the central bankers work for "them".

Carlos JGOctober 5th, 2012 at 3:50 am

You got paid in dollars for the conference? We, Argentinean people are not allowed to buy any dollars. We want to buy dollars because the Central Bank that you talk about, actually is a printing machine, and it only finance the government and corporate friends. The sold a big lay to you. When you say rightist media, you are also wrong, even leftist legislators have inflation figures well above 25%.

And by the way, the vice president of the nice smile, he is being on trials for using public funding for his private business including the purchase of printing bills company that later was hired by his government to print money!!!

Next time, take a walk outside the conference room and ask people on the streets what they think about the governmentm

Also, we were beef leading exporters and now we don’t even have enough for self consumtion. Get your facts wright! If you want to take Marco, please be our guest!! Imagin that she cuoldn’t do anything about inflation and now she should be providing growth, employment, social inclusion (what this really mean!?!?)

MRKOctober 5th, 2012 at 3:59 am

You clearly do not live in Argentina. I am an Argentinean resident for over six years now and I can tell you that the inflation is leaving me without any savings at all. My standard of living is going down the drain. I used to be able to go on vacation once a year, to Patagonia for example. I am unable to do so for the last several years though, due to the extraordinary high costs these days of healthcare, rent, food, just the basic needs. The policy of the BCRA is making sure everybody will be equally poor. Bye, bye middle class. I really think Argentina will be better off, I know I would at least, if there would be no BCRA at all and Argentina would just adopt the real, chilean peso, or whatever other currency (Ecuador style). Did you happen to take a look at the balance sheet of the BCRA? (warning, this will download an excel file of the BCRA:… They have "assets" called 'ADELANTOS TRANSITORIOS AL GOBIERNO NACIONAL' which is cash given in advance to the government, the BCRA will never see this money back, imho, a normal bank would be insolvent. Every peso extra being printed and given to the government will make the few pesos I own worth less if the productivity which backs up the fiat money doesn't increase at least at the same pace as the monetary emission. Unfortunately this is exactly the case in Argentina. It's the only country which currency in L.A. is depreciating against the USD, not taking into account Venezuela They should stop the presses. I want my money to keep its buying power, or better to see it increased! Oh wait, they just nationalized a printing press (ex-Ciccone) in order to be able to print even more…. I try to save in order to buy something new I like, I take note of its price, only to find out when I come into the store, that the price has gone up and that the amount that would have been enough a few months ago when I started saving, now isn't anymore. It's frustrating as hell and it makes me angry. Simply, because it's not fair at all. They should protect the value of the money I worked so hard for! Its illegal taxation. FYI, the inflation is closer to 25-30% then it is to 10%. Otherwise, how come the government authorizes a rise of up to 25% on my healthcare plan!? Year after year! Just this semester they tried to hit the breaks, the only thing they will accomplish is for the healthcare system to get worse and/or go bankrupt. Please give Mercedes a job elsewhere if you think she is qualified. Ah, and I can't even buy foreign currency anymore, not that I have money to spare to buy it with, but why would they need to impose such a brutal scheme…. because they think it's nice? If I start to save now (which I can't) and I want to travel to let's say the USA, first I will lose 25% per year on my savings due to inflation and second, they will let me buy the equivalent of about 50 USD per travel day, how the hell should I be able to eat, sleep and travel on such a budget!?! This going completely wrong, take my words for it. It may take a while, because Argentineans are resilient and creative people, but sooner or later, this fictional USD-ARS peg bubble will burst… or we'll end up like Cuba…

JerryOctober 5th, 2012 at 10:03 am

The local comments on inflation are correct. It has been running at 25%+ now for 5 years and the Argentinean people are sick of it. As a foreign company in the country, we have no choice but to give our staff wage compensation that at least meets inflation and we have been doing so. So, at least take some real knowledge on inflation away from your Argentinean visit. Perhaps also consider that the central bank reform strategy being promoted by Marco could possibly just be an exercise in shifting public focus and power retention for Cristina's government? Like the Malvinas?

Philip PhilipsonOctober 5th, 2012 at 10:17 am


It's not just the right-wing press calculating the inflation number. Check this out:

As far as the inflation itself goes, I've heard that it may be in part related to the balance of payments which might make it more difficult to get rid of.

Oh, and Business Insider has put the Australian central banker in the Top 10. Can't wait to see them eat their words when the housing bubble crashes, plunges the economy into recession and the bank bailouts ensure.

MrLemonOctober 5th, 2012 at 2:24 pm

Oh come on, don't tell me you don't like to be told Randy didn't even get the most basic facts right.

MrLemonOctober 5th, 2012 at 2:34 pm

" As far as the inflation itself goes, I've heard that it may be in part related to the balance of payments which might make it more difficult to get rid of. "

that's also wrong. inflation preceded the BoP problems which are a consequence of the internal inflation and the managed overvalued exchange rate.

LRWrayOctober 5th, 2012 at 2:46 pm

Carlos let me explain how this works. I know that those outside academia think we all get rich giving presentations. Actually, I was paid nothing–no dollars, no pesos, nada–to speak at the Central Bank. That is normal. We consider this to be part of our job, our contribution to public service. Occasionally we get a small honorarium, although rarely (never?) when we appear before government (conferences, testimonies, etc).

As to your various other accusations, I suppose these are common among the rightwing press (you should see what they say about our President in the US!).

To all: I will write a follow-up to explain why it is that there is such a hostile Argentinean reaction to my post. Entirely predictable for reasons I'll explain later.

AndreaOctober 5th, 2012 at 2:46 pm

those who complain about inflation in Argentina, are those who want to buy the iPhone5. Stupid people and devoid of morality is full also of Europe. the Argentine people want to return to policies of Domingo Cavallo?
If you want, we wil givel rMario Monti, Mario Draghi, Trichet, Merkel, Hollande and many other promoters of policies neofeudal.

LRWrayOctober 5th, 2012 at 2:49 pm

Hi FidoPhil: back to your usual? A bit slow on the uptake, tho, as this time you did not get the first comment in.You were a full hour behind Ron!

LRWrayOctober 5th, 2012 at 2:56 pm

Ed: They lost me with the citation to "Mr Never Saw Anything Coming" Cochrane. Anyone who learns their central banking from the Univ of Chicago can't be trusted on anything to do with money. To be sure, I am critical of mission creep at the Fed, but the Fed's creep is in the direction of bailing-out banksters. Get it back into the business of promoting full employment, rising living standards and economic development. Why would anyone think that such things are outside the scope of central banking?

MrLemonOctober 5th, 2012 at 3:12 pm

they certainly don't want to return to Cavallo's policies. which is quite strange actually considering how much they loved them untill 2001. even the Kirchner family strongly supported them as long as they kept them in power and made them rich. (Cristina prefers Louis Vuitton handbangs and designer shoes to iPhones, she has rather old-fashioned nouveau riche taste )

Philip PilkingtonOctober 5th, 2012 at 3:44 pm

Lack of correlation does not prove causation. And Argentina do not have a "managed overvalued exchange rate". Their rate floats.

MrLemonOctober 5th, 2012 at 3:50 pm

No, they manage their exchange rate.

That's why there is an unofficial exchange rate, higher than the official one.

You should, at least, get ONE fact straight!

Philip PilkingtonOctober 5th, 2012 at 4:14 pm

It's a managed float. Which is pretty much a floating regime. Like Japan etc. and most other countries.

If it were any lower the inflation would probably be worse because the elasticity of imports is very low.

RadicalCenterOctober 5th, 2012 at 4:41 pm

MMT rightly emphasises the role of excessive deficit as a cause of elevated inflation in its theoretical approach, but when Randall Wray sees elevated inflation in practice, he never blames the deficit or the government! He gets into convoluted explanation about how CPI is calculated, commodity booms, speculators and bad weather (why don't Canada has 20% inflation then? they got bad weather and a commodity boom too.)

If you allow me, I wrote a poem about your trip to Argentina:
a right-wing ideologue walks into Pinnochet's Chile, and marvel at how great things are.
a left-wing ideologue walks into Kirchner's Argentina (or Chavez's Venezuela), and marvel at how great things are.

Philip PilkingtonOctober 5th, 2012 at 4:47 pm

Comparing a democratically elected government to a murdering dictator. I guess that's a "centrist" perspective. Nice one.

MrLemonOctober 5th, 2012 at 4:52 pm

they can have a lot in common.

one big difference is the size of the mausoleum built for Nestor Kirchner.

Philip PilkingtonOctober 5th, 2012 at 5:04 pm

I don't know of many floats in big countries that are not managed, explicitly or otherwise. Google "Plaza Accords". Or spend some time in the FX markets and you'll see certain interesting movements in the major currencies from time to time.

When most people say "not managed" they mean a non-pegged currency. If you're not aware of that you should spend more time in the markets etc. Pick up the lingo. Then offer lessons on how overvalued currencies cause inflation (LOL WUT!?) in the comments sections on economics lessons so that people can offer you the dunce hat.

Philip PilkingtonOctober 5th, 2012 at 5:06 pm

Warning: making such comments may completely discredit you in the eyes of reasonable people who appreciate parliamentary democracy.

What are you going to say next? "Hitler wasn't all bad; after all, he built the Autobahn."?

MrLemonOctober 5th, 2012 at 5:32 pm

you still don't get it.

a crawling peg is a managed exchange rate, bound to the same problems as a fixed exchange.

it's not an overvalued managed peg that causes inflation, it's inflation with a managed peg that causes the currency to be overvalued.

the dunce hat is all yours. and you seem quite proud of owning it.

MrLemonOctober 5th, 2012 at 5:43 pm

reasonable people should look for the pictures of the mausoleum, and draw their own conclusions. but reasonable people will never understand Argentina.

anyway, if Randy still has credit among certain people after this post, why wouldn't I?

MrLemonOctober 5th, 2012 at 5:55 pm

I think those who would love to have Marco Del Pont as central banker should just move to Argentina.

RadicalCenterOctober 5th, 2012 at 6:02 pm

thanks for you reply. you forgot to reply to my other point:
"MMT rightly emphasises the role of excessive deficit as a cause of elevated inflation in its theoretical approach, but when Randall Wray sees elevated inflation in practice, he never blames the deficit or the government!" I should add he never blames the government… when it is a leftist/populist government.

Blaming inflation in Argentina on bad weather and speculators is outright ridiculous. If all you want me to do is to replace "Chile" in my poem by "Columbia", I'll do.

ppcOctober 5th, 2012 at 6:16 pm

Thank you MrLemon for introducing some facts here. I would just like to add that all that growth people talk about is overstated. GDP measures are indices just like inflation and suffer from the errors (sic) of the same fallible humans. Real GDP figures are the result of nominal GDP deflated by a measure of inflation. Who comes up with this GDP deflator? The same statistics institute that says CPI is running at 10% pa! In current USD-terms (the currency that has depreciated versus most of the world in the last 10 years), Argentine GDP has not grown only about 50% since 2000 once you factor in the peso's current 30% overvaluation. Even Brazil, with its embarassing growth record managed to post better figures!

Perhaps the ivory tower academics should stick to teaching theoretical economics… those lessons have worked wonders for the world in the last few decades.

RadicalCenterOctober 5th, 2012 at 6:37 pm

inflation causes the nominal managed peg to be be overvalued. If you really think that it is is a "free" float, and if you like trading (as it seems), and think Argentinian inflation is after all not that high, go ahead and convert your U.S. dollars to Argentian pesos at the managed official peg rate.

Then, sit back, and watch your wealth being destroyed with each passing days.

ollyOctober 5th, 2012 at 6:47 pm

Argentina has had mainly budget surpluses over the last few years. It's more complicated than that, though definitely not as simple as "wall street speculation".

PZOctober 5th, 2012 at 9:19 pm

Of course if yearly growth figure of 10% was calculated on the false premise that yearly inflation was 10% when it in reality was 20% that would mean that in the last decade there have been no growth at all. If inflation was in reality 25% a year that would mean Argentinas economy has actually DECLINED 5% every year for the last 10 years.


JimmyOctober 5th, 2012 at 10:10 pm

So Andrea, you like to live with 25 % inflation? Do you really believe that any of the current government members is even close to the stature of Merkel? Stop buying government propaganda (unless, of course, you are one of those contributors paid by the government.

And by the way, what is wrong with buying an iPhone 5. I work hard to make and save money and should be able to do whatever I want with it.

JimmyOctober 5th, 2012 at 10:20 pm

Mr. Ray
I am afraid that they sold you a very distorted picture of the Argentine reality. One can argue about the role of the central bank, but I assume you are not suggesting that the federal government can use the central back reserves to dispose as it pleases. If so, why have a central bank at all, lets consolidate it with the Ministry of Economy and save a few people.

This has nothing to do with gender, it has to do with the rule of the law. The previous central bank governor was sacked by not complying with the presidents wishes to dispose of central bank reserves.

Inflation is out of control, the government keeps buying clientele via the "jefes" programs and others, promoting laziness. The restrictions to buy foreign currency are never ending and crime is rampant. The list goes on an on …. And the situation is not sustainable.

LRWrayOctober 5th, 2012 at 11:32 pm

Mr Gimmy: And why shouldn't elected governments have the right to sack central bankers who try to undermine elected government?

There certainly are some unsustainable processes in Argentina (and every other country I look at); and they won't continue. Inflation, for example. As I said.

LRWrayOctober 5th, 2012 at 11:36 pm

Irony of Irony: now the rightwing is accusing the USA GOVERNMENT of fixing the numbers on unemployment. Hey, unemployment in the USA is not approx 10%, it is 25%!! See how easy that was…………..

But in any case, any careful reader of my post will note that none of it relied on inflation in Argentina being 10% or 25%. Frankly Charlotte, I don't give a damn–for the purposes of my piece, it is irrelevant.

HansOctober 6th, 2012 at 12:07 am

I don't know what's funnier here. The fact that you don't have a clue about economics or the fact that you think you have just one critic in the whole world.

MrLemonOctober 6th, 2012 at 12:15 am

inflation is sustainable, the crawling peg is not.

if there is something argentineans are good at, is sustained inflation

MrLemonOctober 6th, 2012 at 12:16 am

can you buy an iPhone5 in Argentina or do you have to wait until it is assembled in the land of the penguins?

MrLemonOctober 6th, 2012 at 12:22 am

what about the fact he doesn't answer any of the points made by any of our multiple personalities?

isn't that hilarious?

RadicalcenterOctober 6th, 2012 at 2:45 am

I have never commented here before… So sorry to disappoint you, but you may not have only one critic in this world. I am normally quite friendly to MMT ideas, but your take on inflation in Argentina is embarassing. There is much more to it than speculators and weather patterns.

The inflation-indexed long bond was selling at 14 percent over the summer PLUS the official rate of inflation (currently around 10 percent). So it was possible to get an annual yield of 24 percent on a government bonds. That in itself should tell you a lot about the "official" rate of inflation of 10 percent.

And if the inflation is really running at 10 percent, you can get a deposit rate of 15 percent right now in Argentina (, for a real return of 5 percent on deposit, what then are those crazy Argentinians complaining about?

MrLemonOctober 6th, 2012 at 2:54 am

and downsize your business? what for?
it's easier to raise salaries by 25%, and your prices as well, and keep playing the game until the music stops.

JimmyOctober 6th, 2012 at 9:54 am

Have you considered that market salaries increase by a similar % ? Not to talk about costs of hiring, training, etc, finally a good part of that 7% is unqualified or not interested in working

JimmyOctober 6th, 2012 at 10:08 am

Mr Ray
They should be able to sack central bank governors: for the right reasons, which was not the case
I respect people having right or left wing opinions. The Argentinian versions of right and left wing are not quite what they are in the US or Europe for that matter. They are primarily very corrupt, the right ow left orientation take a second seat

DeusDJOctober 6th, 2012 at 6:21 pm

Hey dumbass, do you realize you responded to yourself pretending to be someone else? A shame Wray manages to attract the biggest losers the economics profession has. Then again you're probably just a dumb kid wasting everyone's time. Go read a book instead of posting your idiotic driven here.

DeusDJOctober 6th, 2012 at 6:26 pm

Have you considered that the problem is inflation expectations? Because the bad thing about runaway inflation is that at some point it just feeds upon itself. HOWEVER, if you increase the productive capacity of the economy the inflation will eventually recede. The Argentinean government is on the right path and eventually things will calm down.

I find it ridiculous that Argentineans want to reduce social spending, and ridiculous that they listen to idiots outside of Argentina, the same idiots/neoliberals that brought them to the 2001 devaluation. The IMF is the last group any country should be listening to, PERIOD. And we don't need pro-fascist losers like this Mrlemon doing his professional troll stint.

DeusDJOctober 6th, 2012 at 6:27 pm

Why don't you speak for yourself instead of the Argentinean government? BTW, I don't see your company going bankrupt, if you're under so much duress then why haven't you gone bankrupt yet?

DeusDJOctober 6th, 2012 at 6:32 pm

Due to speculation and a balance of payments issue due to an overvalued exchange rate. Get it right douchebag. Plus, you lost credibility already with your statement above comparing a democracy to a dictatorship, your true motivations have become quite clear.

DeusDJOctober 6th, 2012 at 6:33 pm

Can you possibly shut your mouth for once? Nobody wants to see a dumbass talk. Go troll a videogame forum instead, a forum much more appropriate for an intellect like yours.

DeusDJOctober 6th, 2012 at 6:34 pm

Can certain IP addresses be banned? These guys need to go, these sorts of comments are not conducive to a real public debate.

MrLemonOctober 6th, 2012 at 8:11 pm

sorry, actually I didn't pretend to be someone else.
apparently you can't understand that either asshole.

spiderOctober 6th, 2012 at 9:03 pm

I relented, DeusDJ. Maybe if I give you a clearer explanation of my thinking you won't be so clueless.

The world's mainstream economists all agree that economic growth is necessary to maintain social peace. Their differences lie in the methods chosen to achieve that goal. Roughly, the elitists seek to establish a climate favorable to business in the belief that if businessmen are able to calculate costs and benefits well they are in the best position to seize opportunities and thus create jobs…while the populists believe that redistribution of wealth is the only way to provide the masses with sufficient buying power to support business.

I think that's all nonsense, a way of conceptualizing that was appropriate to the 19th century, if ever. Here's why;
In the short run global interconnections are too strong for any national government, or most combinations of such, to guarantee opportunity. The forces of globalization, technology, and history and culture are too great to be overcome by policy.
Far more important, the age of cheap resources is finished. That's obvious for land, but its equally true for almost all other resources as well, despite Julian Simon's victories in his bets with Paul Ehrlich. Simon won because true costs weren't used, only market costs. In other words, nobody priced the costs of global warming and environmental degredations (externalities in economic jargon…or…more properly, economic drivel).

I chose to focus on those costs because they represent reality.

DeusDJOctober 6th, 2012 at 10:13 pm

You responded to yourself (both posters were MrLemon) and in the second post you acted like you were responding to someone else. I find it funny that I'm not the focus of your attention after you have posted numerous times in this thread for no real apparent reason whatsoever other than to say that you hate Dr. Wray and his beliefs. If you don't like it, leave. Otherwise start using real arguments.

DeusDJOctober 6th, 2012 at 10:18 pm

Wow, my reputation precedes me! Oh well, whoever you are I really don't care, if you came all the way over here just to say that then you took a lot of time out of your day and I guess that should be appreciated.

DeusDJOctober 6th, 2012 at 10:27 pm

Ok, glad to see you have finally posted your vision rather than coming here just posting drivel. However, I'm afraid I have to disagree with your analysis, nations still have policy space if they choose to use it. perhaps we can discuss this further later, but for now we'll have to agree to disagree mostly because I dont have time to chat.

DeusDJOctober 6th, 2012 at 10:46 pm

BTW, you've identified yourself as part of the MR guys, because there's only one way you could know who I am. So it appears that Wray's insistence on calling you guys all the same name is more accurate than even I thought.

Oh BTW, UMKC teaches heterodox economics, not just neochartalism/MMT. If you had the honor of meeting all of the students here (past and present) you would realize they are a heterogeneous bunch and not blindly following in line with what you interpret to be MMT.

DeusDJOctober 6th, 2012 at 11:25 pm

This is currently a research interest of many heterodox economists. They would give you various sorts of answers, but point being is that we do address ECOLOGICAL (as opposed to neoclassical, environmental) concerns.

spiderOctober 6th, 2012 at 11:26 pm

Don't be ridiculous. No one with any understanding of economics and the environment – let alone a professional economist – needed that explanation to grasp my meaning.

LRWrayOctober 7th, 2012 at 12:58 am

Deus, Yes, we did identify the IPs and Yes, it is all FidoPhil. He uses a couple of different internet cafes. It is one Troll, who loves the changeling thing. There is no "public debate". It is one warped individual–with connections to another blog that you have already discovered. Ignore him or make fun of him. Do not debate him. Waste of time.

spiderOctober 7th, 2012 at 2:24 am

Just tell me how you can have economic growth without land development and increased energy consumption? Where are you going to get that additional land and energy? How are you going to stop the despoilation of Africa, Latin America, the Arctic, the ocean fisheries, and all other wild places?

Do you really believe that anyone at all has faith in the drivel you academic weenies publish? Anyone at all?

spiderOctober 7th, 2012 at 2:39 am

@Mr. Lemon and Stanley

Did you read Wray's latest? He claims that he (we) checked the IPs and they prove that you, I, FidoPhil, and presumably all his other critics are one person. Literally, not metaphorically.
So he's nuts. Certifiable. How can this be? How can he be a professor at a major university, a blogger on Roubini's site, a respected participant in international conferences? Nobody noticed?
I never expected anything like this. Check my reasoning, please.

spiderOctober 7th, 2012 at 2:59 am

@Mr. Lemon and Stanley

Here's the post I was referring to;

LRWray • October 7th, 2012 at 12:58 am
Deus, Yes, we did identify the IPs and Yes, it is all FidoPhil. He uses a couple of different internet cafes. It is one Troll, who loves the changeling thing. There is no "public debate". It is one warped individual–with connections to another blog that you have already discovered. Ignore him or make fun of him. Do not debate him. Waste of time.

I am cautious because I am on dialup and am never quite sure I am seeing everything.

LRWrayOctober 7th, 2012 at 1:43 pm

Oh RadicalFidoSpidoLemonyStanley: You're shocked, SHOCKED!!, that after days of writing vitriolic personal attacks on a "respected" professor and students at his university as well as others at this blog he outs you as a little troll. What's the world coming to? I'll tell you what: post your real name, real email address, and CV and we'll see what you're made of.

RadicalCenterOctober 7th, 2012 at 2:11 pm

Give me a break, my personnal attack was to tell you that your inflation explanation makes no sense. The people is complaining about massive inflation in Argentina, and you, the gringo professor tell them that weather, wall street speculators, and the right-press is the culprit. Clearly, neo-colonialism is alive and well.

I'm done with you. You'll be happy to hear that you won't see me around here anymore. Good night and good luck.

ollyOctober 7th, 2012 at 5:00 pm


Is it possible to change the comments system so people HAVE to sign in with their blogger, wordpress or facebook account?

This could help weed out the trolls.

ollyOctober 7th, 2012 at 6:12 pm


is it possible to change the comments system so people have to log in using their blogger, wordpress or facebook account before they can comment?

This might help to weed out the trolls.

MrLemonOctober 7th, 2012 at 9:37 pm

I never acted as if I were responding to someone else.

My original post is full of arguments that show the real facts.
Somehow, no one has addressed any of them, which is quite telling.

MrLemonOctober 7th, 2012 at 9:49 pm

do you really believe that you have the right to mock anyone as you please, and never be mocked when you write a ludicrous article like this one?

give me a break, all your mistakes have been pointed out as clearly as possible.

just live with it, it's no big deal really.

RationalistOctober 7th, 2012 at 9:49 pm

Mr. Wray's article reminds me of the old joke of a physicist, an engineer, and an economist with a can of beans and no can opener. How do they open the can? The punch line from the economist – "assume a can opener" – could have been used here: "assume a government that wouldn't misuse the power to print money (without anyone really knowing what they're doing) to spend it to buy votes." Especially in a country with the weak institutional respect for law and private property and rights of Argentina.

Glad Mr. Wray is just a pundit and not a politician.

DeusDJOctober 8th, 2012 at 12:25 am

It's not ludicrous, you can argue that he could have mentioned other things without right off the bat calling him the worst economist ever. You and others clearly don't know how to do that, which is why you're nothing more than a troll and a bad one at that. I would urge you to go read a few economics books (preferably non-neoclassical gibberish) instead of reminding everyone of your ignorance.

DeusDJOctober 8th, 2012 at 12:28 am

Go read about something called "endogenous money". The central bank cannot simply print money (in fact, no central bank can)…however, the Argentinean government can.

plus, we're heterodox economists, we don't make silly assumptions like the example you just raised (if you want to see someone that does, see Nick Rowe and his worthwhile canadian initiative econ blog)

ollyOctober 8th, 2012 at 12:55 am

they can buy gold and foreign currency. isn't that 'printing money' without any involvement from the treasury?

MrLemonOctober 8th, 2012 at 4:43 am

the only neoclassical fact I posted was that Argentineans don't eat soy beans.

now, refute that, so we can have more fun.

sorry, this cyber is closing and I need to move to another one.

CalgacusOctober 8th, 2012 at 5:59 am

I agree, Olly, and it's genuine printing if they manage to hoodwink enough regulators & legislators & buy sufficiently worthless securities from their banking sector cronies. Or allow sufficiently insolvent banks to operate, that's printing money too. In the USA, we do the latter as part of an American Idol contest to select the country's crookedest bankster. China does the latter, uses banks for disguised fiscal spending, to build universities & cities & infrastructure.

Of course, Rationalist's comment is beyond silly & DeusDJ is essentially right.

Philip PilkingtonOctober 8th, 2012 at 10:15 pm

Argentina don't have a crawling peg. They have a managed float. This is pretty much what most countries have — i.e. they do not target convertibility into another currency, but they occasionally intervene. This is not subject to the same problems as a peg for many reasons.

"it's not an overvalued managed peg that causes inflation, it's inflation with a managed peg that causes the currency to be overvalued. "

Argentina likely try to boost the Peso because their price elasticity of imports is very low. The problem is that if Argentina allowed the Peso to drop there is a good chance that it would not be able to replace key imported goods with domestically produced goods. This would force producers to pay the new higher price for imports and the inflation would become worse. This is often a problem in developing countries.

The issues are a bit more complex than you paint them when you write things like:

"inflation preceded the BoP problems which are a consequence of the internal inflation and the managed overvalued exchange rate"

The BoP problems are NOT DUE TO the inflation. In fact, Argentina runs CA surpluses [], so I'm not 100% what you're referring to when you talk about overvalued exchange rates and all that garbage. When I said "BoP problems" I was referring to the fact that because the Peso fell after the debt crisis many producers that relied on imports saw their prices rise and passed this onto consumers.

I think you need to bone up, buddy. You come across as having no idea what you're talking about. Start with the facts. Then move onto the theories.

Philip PilkingtonOctober 8th, 2012 at 10:29 pm

"…go ahead and convert your U.S. dollars to Argentian pesos at the managed official peg rate."

For the last time, Argentina don't have a peg. And I clearly said both above and in a linked to piece that the Argentines are likely misreporting their inflation figures. Although they're probably not as bad as certain sons of certain finance ministers claim because people seem willing to buy treasuries despite the fact that even by the official numbers their interest rate is negative.

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