How’s it goin’ ?
How’s she cuttin’ ?
How’s she cuttin’? This phrase comes from farmers asking about the conditions for hay or crop cutting during the harvest season and has since been adopted across Ireland to be a way to ask how you are. (Google)
How’s the new money circulatin’ ?
- Are the explanatory, interdependent flows that are in a circular conditioning with one another keeping pace with one another?
- Are crossovers balancing according to the phase of the pure cycle so that one circuit does not drain the other?
- Is the rate of injections by the Fed of new money in sync with the rate of increase of properly balanced basic and surplus productive magnitudes and frequencies?
- Or is the new money excessive and only winding up stuck in the Redistributive Function so as to inflate stock and bond prices?
- Or is the new money getting continually poured into and recycled within the basic circuit so as to continually outpace product flows and inflate food, clothing, and shelter prices?
- Or is the new money being judiciously channeled over time by We-our-government, We-our-Federal Reserve, or We-the-private-sector into longer-term investments justified by their beneficial social or monetary returns?
- Are government budgets balanced?
- Or are government waste, profligacy, and pusillanimity combining to build a big and menacing blob of debt from which the only escape is either legal default on bondholders or default by inflation so as to make sacrificial lambs of elderly savers by means of a swindle. (For principles applicable to a) superposed circuits and b) deficit spending and taxes, see CWL 15 , pp 162-65, 173-76)
- Or is the primary and sole purpose of the excessive new money simply the self-aggrandizement and job security of the political class?
The “Summary of (Lonergan’s) Argument” (CWL 15, 5):
The present inquiry is concerned with relations between the productive process and the monetary circulation. It will be shown 1) that the acceleration of the process postulates modifications in the circulation, … 5) that either or both a favorable balance of trade and domestic deficit spending create another type of systematic profits, 6) that while they last they mitigate the necessity of complete adjustment of the propensity to consume to the accelerations of the process, 7) that they cannot last indefinitely, 8) that the longer they last, the greater the intractability of ultimate problems. From the premises and conclusions of this analysis it will the be argued 9) that prices can not be regarded (by the stewards of the economy) as ultimate norms guiding strategic economic decisions, 10) that the function of prices is merely to provide a mechanism for overcoming the divergence of strategically indifferent decisions or preferences, and 11) that, since not all decisions and preferences possess this indifference, the exchange economy is confronted with the dilemma either of eliminating itself by suppressing the freedom of exchange or of certain classes of exchanges, or else of effectively augmenting the enlightenment of the enlightened self-interest that guides exchanges. [CWL 15, 5-6]
The ideal of constant exchange value:
… the dummy must be constant in exchange value, so that equal quantities continue to exchange, in the general case, for equal quantities of goods and services. The alternative to constant value in the dummy is the alternative of inflation and deflation. Of these famous twins, inflation swindles those with cash to enrich those with property or debts, while deflation swindles those with property or debts to enrich those with cash; in addition to the swindle each of these twins has his own way of torturing the dynamic flows; deflation gives producers a steady stream of losses; inflation yields a steady stream of gains to give production a drug-like stimulus. [CWL 21, 37-38]
- So, we say to Congress, the Senate, the Treasury and Yellen, the Fed and Powell, “How’s all that new money cuttin’ ” ?