Category Archives: Federal Reserve
Recommended WSJ Interview of Paul Singer
The Saturday-Sunday Wall Street Journal of 4/8-9/ 2023 featured an Interview by James Freeman of Paul Singer, founder of Elliott Management. P. Singer’s past predictions are notably congruent with the consequences systematically necessitated by, the deviations in policy of the executive and legislative branches from the norms of Lonergan’s Scientific Functional Macroeconomic Dynamics.
First, we quote some sections of Freeman’s interview of Singer; then we’ll quote brief sections to preview the treatment to follow. From the Interview: (Continue reading)
The Einsteinian Context: Curvature and Relativity
Albert Einstein, Steven Weinberg, Lillian Lieber, Douglas Giancoli, Raymond A. Serway, Bernard Lonergan, Philip McShane, Peter Burley,
Graduate students seeking a thesis topic may expand this treatment of the Einsteinian context of Functional Macroeconomic Dynamics. It should be of special interest to those having a strong background in theoretical physics and, thus, able to appreciate the analogies from physics. “Similars are similarly understood.” (CWL 3, 288/313)
Philip McShane alerted us to the resemblances between Lonergan’s context of general macroeconomic dynamics and Einstein’s context of general relativity.
(Part Two entitled Fragments) belongs almost entirely in what I call the Einsteinian context of Part Three, in contrast to the Newtonian achievement of Part One; … [CWL 21, Index, 325]
A new science has emerged. Lonergan has elevated conventional macrostatics to a macrodynamics explaining economic accelerations. (Continue reading)
The Notion of Organic Unity; Macroeconomic Field theory as a Unified, Systematic Whole
Lonergan’s treatment of the intelligibility of the plane circle provides to us a clue. In the basic insight defining the plane circle, – that all radii are equal – all the interrelated concepts tumble out together in an intelligible unity. The all-together intelligibility points to a template for explanation in the macroeconomic field; it fore-casts a singular unified intelligibility of the dynamic, organic economic process. In the sweeping comprehensive act of understanding, all the abstract explanatory conjugates explaining the dynamic economic process are “yoked” together by their functional relations to one another. The interdependencies of the flows which constitutethe whole dynamic system are grasped in a solidary whole. And the patterns of the formulation are isomorphic with the patterns in the objective, unitary economic process. The principle of unity and wholeness is a single, comprehensive intelligibility. (Continue reading)
To and For Economists, Investment Analysts, and Commentators on Bloomberg Surveillance, Squawk Box, and Mornings with Maria
To Tom Keene, Andrew Ross Sorkin, Maria Bartiromo, Lisa Abramowicz, Becky Quick, Francine Lacqua, Dagen McDowell, Joe Kernen, Jonathan Ferro, Larry Kudlow, Charles Payne, Neil Cavuto, Stuart Varney, Jim Cramer, Henrietta Treyz, Larry Summers, David Weston, Courtney Donohoe, Romaine Bostick, Hallinda Amin, Dani Burger, Gina Cervetti, Margaret Collins, Manus Cranny, Abigail Doolittle, Scarlet Fu, June Grasso, Kriti Gupta, Ritika Gupta, Morgan Brennan, David Faber, Steve Liesmann, Carl Quintanilla, Kate Rooney, Rick Santelli, Michael Santoli, Liz Claman, Gerry Baker, Taylor Riggs, Anastasia Amoroso, Jackie DeAngelis, Brian Brenberg.
Lonergan’s Preface to his seminal work Insight, A Study of Human Understanding, begins …
In the ideal detective story the reader is given all the clues yet fails to spot the criminal. He may advert to each clue as it arises. He needs no further clues to solve the mystery. Yet he can remain in the dark for the simple reason that reaching the solution is not the mere apprehension of any clue, not the mere memory of all, but a quite distinct activity of organizing intelligence that places the full set of clues in a unique explanatory perspective. (CWL 3, Preface ix)
Paraphrasing the above (CWL 3, Preface, ix): Continue reading
Pointers Regarding Interest Rates and Inflation; The Delusion in Manipulation of Interest Rates
We encourage the reader to consult the following entries.
The Ineptitudes in Central Bank Operations
John H. Cochrane’s Article in the Wall Street Journal, Thursday 8/25/2022
Facing Facts: The Ideal of Constant Value of the Currency vs. the Fact of Inflation
The Road Up is The Road Down; the Mechanism of rising and Falling Prices
Paul Romer’s “Endogenous Technological Change” in Bernard Lonergan’s Framework
Here are a few brief selections from the above treatments:
Traditional theory looked to shifting interest rates to provide suitable adjustment. In the main we shall be concerned with factors that are prior to changing interest rates and more effective. [CWL 15, 133) Continue reading
New Foundations in 30 Minutes
New foundations for a new science of macroeconomics are grounded in
- a scientific, dynamic heuristic
- the technique of implicit definition
- precise, purely relational, analytic distinctions between abstract fundamental terms and relations from which a superstructure of complete explanation may be deduced
- the relativistic, field-theoretic functional interrelations among interdependent, mutually-defining, explanatory functional flows
The Executive And Legislative Branches’ Recent Inflationary Flooding Of The Operative Circuits And The Secondary Markets Can Be Easily Understood As The Effecting Of Two Superposed Circuits.
Lonergan used the idea of a superposed circuit to explain a) imbalances in foreign trade, and b) deficits and surpluses of government operations. The same intelligibility of the superposed circuit can be used explain the immediate and ultimate inflationary effects of the Fed’s recent fooding of money into the two operative circuits and the Redistributive Function.
Note in the second image below – Diagram of Government Spending and Taxes – that there is no productive activity symbolized by payments of Z’ and Z” in the channels of monetary flows from O’ to I’ and from O” to I”. New money simply flows from the Redistributive Function to basic monetary demand I’ and surplus monetary demand I”, then back ultimately -to the Redistributive-Function location of financial assets.. The Fed simply creates the money by debiting Government- and Government-Backed Assets and crediting Money in Circulation. A more accurate name for the credit account might be Free Money Unjustified by Associated Production. The flows are intrinsically inflationary.
Important: Please consult CWL 15, Sections 29-31, pp. 162-176.
Also, see on this website the subsection titled “Superposed Circuits” in the Post entitled Understanding All in a Unified Whole.
As there are two circuits, we must distinguish in government spending (Z) in any interval between Z’ paid into basic demand and Z” paid into surplus demand. Similarly in taxes (T), we have to distinguish between T’ withdrawn from basic demand and T” withdrawn from surplus demand. (CWL15, 174)
Lonergan’s “Macroeconomic Field Theory” (MFT), AKA “Functional Macroeconomic Dynamics” (FMD)
Functional Macroeconomic Dynamics seeks not merely to “view” and describe the economic process; rather it seeks to understand and explain the process in order to provide norms of adaptation and systematic guidance to managers of the process. (Continue reading)
Concomitance and Credit; A New Paradigm for the Federal Reserve Bank; Functional Macroeconomic Dynamics Drives Establishment Economics into the Shadows
The macroeconomics textbooks feature three key macrostatic models, all three of which are sublated by the purely relational field theory called Functional Macroeconomic Dynamics. The textbooks’ three featured graphs are two momentary intersections of supply and demand curves plus the Phillips Curve correlation of unemployment and interest rates:
- the intersection of the supply and demand curves at a certain price of goods and services (the macrostatic AD-AS model),
- the intersection of the supply and demand curves at a certain interest-rate, rental-price of money (the macrostatic IS-LM model), plus,
- the now-debunked Phillips Curve correlation of unemployment and interest rates.
The key elements grounding the discovery and formulation of the immanent, field-theoretic intelligibility of the organic, unified, whole economic system include: (Continue reading)