cross-posted from: https://thelemmy.club/post/12591808

  • Jared Bernstein, Joe Biden's Chief Economist, faced difficulties explaining money's workings in a documentary or Finding The Money,' despite his role.
  • He stumbled through concepts, highlighting the confusion around government money printing and borrowing
  • Bernstein, who is head of the US Council of Economic Advisers, is not formally trained in economics and appeared bewildered in the clip
  • Droplet [comrade/them]
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    edit-2
    2 months ago

    One, demand-side inflation can only happen when the people have more money than there is productive capacity to supply the goods and services needed. When you spend a lot of money to invest in productive capacity (factories, hospitals, schools etc.) you get real, tangible benefits (i.e. real goods and services) back from those investments.

    Similarly, every case of hyper-inflation is a result of currency depreciation from trying to pay back foreign debt denominated in a foreign currency. This was laid out very clearly in Michael Hudson’s Super-imperialism. The idea that hyper-inflation comes from printing too much money is a liberal myth.

    In Weimar Germany, it was the collapsing exchange rate from dumping the German marks on to the foreign exchange market to pay back war reparations imposed on Germany by the European powers, who were in turn squeezed by the US who lent them the money during WWI. In the case of Zimbabwe, they were desperate to import food after the collapse of their agricultural capacity, and borrowing in foreign currency to pay for food import caused the plunging of their exchange rate. In Venezuela, Chavez pegged the bolivar to US dollar in 2003, which made it extremely vulnerable to economic warfare by the US. In 2015, the shale revolution was launched by the US to destroy the oil revenues of Russia, Iran and Venezuela, resulting in the collapse of the Venezuelan oil-dependent economy and combined with the sanctions placed by the US on Venezuela, caused hyperinflation as the currency plunged in value.

    Two, the Credit Reform of 1930-32 introduced a Dual Circuit monetary system where the (non-cash) rubles that fund development were only partially overlapping with the (cash) ruble circuit that circulates/flows to the hands of the people, who use those (cash) rubles for consumption. The state monitors the supply and logistics of goods produced, and regulates the flow of cash (through salary payment) to the people. This minimizes the situation where there is more money than there are goods to be purchased, thus serving as an additional measure against inflation.

    • PolandIsAStateOfMind@lemmygrad.ml
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      2 months ago

      Fun fact: During and after civil war in Russia the topic of import was mentioned in Lenin's works very often, and Lenin was positively extatic over every deal where foreign sellers accepted rubles instead of gold or other currencies, and heaped praise on anyone who could negotiate deal in rubles.