Elizabeth Warren’s Advice to Jerome Powell; Sentiment Without Intelligence

The Wall Street Journal of 7/25/2022 featured an article by Senator Elizabeth Warren: “Jerome Powell’s Fed Pursues a Painful and Ineffective Inflation Cure.” Because she lacks an objective, normative, abstract, explanatory theory and, thus, fails to understand the functional interdependencies constituting the organic economic process, particular arguments in her article are a) sometimes contaminated by psychopolitical wishful opinions, b) often ignorantly one-sided because she is unaware that some policies have double edges, c) sometimes contradictory of her other arguments, and d) in at least one case, supercilious.

E. Warren suffers from the same plight as Thomas Piketty. To satisfy her responsibility to the public, she needs to achieve a scientific understanding of the organic economic process; she needs to get a “grip.”

We are at the heart of Piketty’s plight: he has no clue of the needed grip on the grounds of the inequality in history. So, what else can he offer but a centralist solution, taxation, to history’s drunken careening. (McShane, Philip, Picketty’s Plight, 53)

In equity (the basic expansion following the surplus expansion) should be directed to raising the standard of living of the whole society. It does not. And the reason why it does not is not the reason on which simple-minded moralists insist. They blame greed. But the prime cause is ignorance. The dynamics of surplus and basic expansion, surplus and basic incomes are not understood, not formulated, not taught….. [CWL 15, 82]

We recommend that E. Warren assign one or more of her staff to become experts in Bernard Lonergan’s Macroeconomic Field Theory. That person can then advise and provide both a framework and a systematic guidance to E. Warren. The advisor must master, in particular, Figures 14-1, 27-1, and 31-1 (below) and the differential equations isomorphic with the patterns of interconnections among functional velocities and accelerations constituting the dynamic economic process.

Better still, E. Warren should withdraw from the hubbub of Washington politics for a week, find a place of perfect solitude, and gain mastery herself of Bernard Lonergan’s Macroeconomic Field Theory. In particular, she should gain understanding regarding a) the causes and cure of today’s inflation, b) the fundamental explanatory principles of concomitance and implicit definition, c) the normative conditions of dynamic macroeconomic equilibrium, d) the normative achievement of a balanced federal budget, e) the theory of artificial inflationary booms and corrective slumps, and f) full-employment implementation of “the basic expansion.”. Inflation constitutes a swindle on its victims and an undeserved benefit on its beneficiaries.

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; [CWL 21, 37-38]

Again, Key figures to be mastered by E. Warren and her advisors include the following three:

After some preliminaries regarding what constitutes good economic theory on which all can agree, we will quote from E. Warren’s article and supply comments re her failure to appreciate the principles of concomitance, continuity and equilibrium as heuristic guides to achieving an abstract, normative, explanatory, macroeconomic theory. (Also click here)

The key principle of concomitance underlies the normative theory; and the theory provides precepts to government, the private sector, and academe for proper management of the economic process. Concomitances, represented in Figure 14-1, include:

Concomitance of Outlays and Expenditures,
Concomitance of Incomes with Outlays and Expenditures,
Adjustment of basic and surplus Incomes to achieve the concomitant variation of crossovers constituting dynamic equilibrium in the phases of the pure cycle of expansion,
Concomitant magnitudes and frequencies of product flows with magnitudes and frequencies of payments flows to avoid the swindles of inflation and deflation,
Concomitance of activities which are intrinsic to, and thus concomitant with, other certain velocitous activiities in the two circuits,
By the organic unity of the economic process, organization among all the vital parts
Concomitance of productive activities with the technical possibilities at a given state of technology, politics, and culture in order to achieve full employment and maximum performance.
Concomitance and the notion of a doppelganger: Webster: a ghostly companion or counterpart; e.g. supply requiring a demand, and demand requiring a supply; or, monetarily, outlays-incomes as the ghost of expenditures, and, thus, expenditures being the ghost of outlays

Preliminaries

Warren passingly admits that the economic process suffers from a sickness in the form of inflation: She states, “As with any illness, the right medicine starts with the right diagnosis.” But, because she lacks normative, explanatory theory, she herself lacks the framework needed to properly diagnose and prescribe. She fails to explain inflation so as to counter inflation, i.e. she fails to identify the cause, prevention, and reversal of the illness ; so, she proposes some insufficiently-constrained or offsetting fiscal medicines which may taste good but are likely to worsen the illness.

In order to satisfactorily analyze and critique the recent and current disequilibrated, intrinsically-inflationary flows of products and payments, macroeconomists need, first, a scientific heuristic and method guiding them to a systematization of the dynamic economic process. How does the process, consisting of recurring velocitous and accelerative flows of products and payments in two circuits, work? What are its invariant, general principles and laws? Does Lonergan’s scientific systematization yield a normative theory and an adequate explanatory framework by which to assess and reliably criticize aberrant patterns of dynamical flows of products and payments?

Macroeconomists must explain the dynamical process by differential formulations whose abstract terms and relations are isomorphic with the patterns among the correlations discovered by insight into the data. The field-theoretic equations will bestow clarity on the dynamic process; they will provide authority to the macroeconomist; and they will provide a theory which the econometrician may test. And the explanatory theory will be the basis of agreement among politicians. Politicians will conduct their arguments on a higher plane; they will exhibit rigor and consistency rather than juvenile self-contradiction, flip-flops, and political squabbling.

In brief Lonergan is looking for an explanation in which the terms are defined by the relations in which they stand, that is, by a process of implicit definition. … No doubt Keynes was an economist first and a methodologist second … Lonergan, for his part, is perhaps a methodologist first and an economist second, but he was able to push his economic reflections further than Keynes because he had a firmer grasp of the essentials of an effective theory. … Lonergan’s critique (shows that) … the emphasis shifts … to searching heuristically for the maximum extent of (functional) interconnections and interdependence; and that the variables (of the system) discovered in this way might not resemble very much the objects (or the aggregates) (such as coincidental prices) which, in the first instance, (the non-methodologist) was thinking about. [Gibbons 1987]

Lonergan … was seeking the explanatory intelligibility underlying the ever-fluctuating rhythms of economic functioning. To that end he worked out a set of terms and relations that ‘implicitly defined’ that intelligible pattern. When all was said and done the relations, and the terms they implicitly defined, were markedly different from either the terms of ordinary business parlance or the terms of neoclassical and Keynesian economic theory. Moreover, not only did Lonergan’s terms differ, but he also indicated that these aforementioned terms (of neoclassical and Keynesian economic theory) were permeated, as were the terms of Newton’s theory of gravitation, with descriptive, nonexplanatory residues. Hence, just as a mathematical equation may be said to be the most adequate expression of purely intelligible relations among explanatory terms in certain instances – for example, Einstein’s gravitational field tensor equations – something closely akin to Lonergan’s diagram seems necessary for the realm of dynamic economic functioning. So, for example, the existence and manner of dynamic mutual interdependence of the two circuits of payment, basic and surplus, is not adequately expressed either by descriptive terms (since this pattern does not directly relate to the senses of anyone operating in a common-sense way in a concretely functioning economy) nor by the series of (simultaneous) equations that do not explicitly manifest the interchanging of ‘flows.’ [CWL 15, Appendix: History of the Diagram, 1944-1998, 179]

Again, E. Warren suffers from the same plight as Thomas Picketty. To satisfy her responsibility to the public, she needs to achieve understanding; i.e. she needs to “get a grip.”

We are at the heart of Picketty’s plight: he has no clue of the needed grip on the grounds of the inequality in history. So, what else can he offer but a centralist solution, taxation, to history’s drunken careening. (McShane, Philip, Picketty’s Plight, 53)

Because academe has not discovered, formulated, and taught a normative explanatory theory of how the economy should work, the non-economist E. Warren can only offer sentiment without intelligence. Her supposed solutions and cures, though noble in some respects, are psychopolitical rather than objectively scientific.

A rigidly egalitarian system belongs to a perfectly egalitarian world; (but) a world in which men are, in fact, unequal must find a different system. What system? If the idealism is sentiment without intelligence, it is as likely as not to mate with the underground cynicism of the revolutionaries to foist upon us a dictatorship of the proletariat in which the proletariat does not dictate, a dictatorship of the Herrenvolk in which the Volk obeys the Fuhrer. But if that idealism can be brought to learn the discipline of logic and of scientific reflection, then it will impose a generalization of the exchange economy. To determine the nature of such a generalization is the aim of this inquiry; but at once this is at least evident. The vast forces of human benevolence can no longer be left to tumble down the Niagara of fine sentiments and noble dreams. They have to be assigned a function and harnessed within the exchange system, for in no other way can that system shake off its fictitious fetters to move consistently towards its maximum. [CWL 21, 36]

… economics cannot be merely empirical; it has to be critical; to reach a critical standpoint, it has to be normative. … academics looking for easy tasks had best renounce any ambition to be economists; … if mathematicians and physicists can surmount their surds, the economist can learn to master his. [Paraphrase of CWL 3, 236/261]

I make the outrageous claim that the basis of serious criticism and construction is lacking in the ruling economic community. Peter Drucker wrote in the eighties, “By now we know, as Schumpeter knew fifty years ago, that every one of the Keynesian answers is the wrong answer.”⁸ But this we does not seem to include the vast majority of either economics professors or economic advisors. [McShane, 2017, 84]

Having the proper supply of money in the process is important. Modern Monetary Theory, espoused by the advisor to B. Sanders, is a prescription for inflationary swindles, financial disaster, and social chaos. The magnitudes and frequencies of payments must be correlated and coordinated with the magnitudes and frequencies of productive turnovers. The system must have the proper money supply in order to achieve the proper circulation of monies within and between the operative, productive circuits and, thus, avoid the swindles called inflation and deflation.

… 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]

Modern Monetary Theory – bedrock in socialism’s grand canyon of ignorance – sets up a disaster waiting to happen. In its unchecked extreme of printing and distributing money unconstrained by relation of the flow of dummy money to the real flow of goods, and services, it would bring about rampant inflation, menace the financial system, and, ultimately, bring about a) the destruction of the financial system, and b) social chaos. The longer unconstrained printing and irresponsible borrowing would last, the greater would be the intractability of ultimate problems.

“There are two ways to conquer and enslave a nation…

One is by sword…

….another is by debt.”

John Adams, 1826

E. Warren admits that inflation is painful, but she pays the recent and ongoing pain short shrift; she prefers to concentrate attention on her selected political preferences in her selective political narrative. In particular, she neglects to treat the possibility and probability of a dangerous wage-price spiral; and she fails to emphasize satisfactorily that inflation hurts lower-paid workers most by declines in their real wages. Ideally, money would be constant in exchange value, and Congress would responsibly effect a balanced federal budget. To repeat: Again, Ideally,

… 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]

The recent annual deficits and cumulative national debt have been intrinsically inflationary. And most of the several trillions of the Fed’s new “money in circulation” is still in the system being absorbed gradually by higher prices of non-discretionary goods, services, and housing, and of equities, bonds, and works of art, and forcing lower-wage earners to demand higher earnings; thus a socialist profligacy is forcing further inflation of production costs, and, in response, prices. (Click here)

A normative theory calls for a balanced federal budget rather than annual deficits and accumulating debt. Modern Monetary Theory’s sentiment without intelligence prescribes a welfare state, and socialism as a possible halfway house on the road to totalitarianism.

Now this type of surplus (personal income stemming from government profligacy) is not confined to warlike concerns. Once the possibility of an unbalanced budget is established, the precedent can be invoked to persuade politicians to carry on other wars: wars on illiteracy, on poverty, on ill health, on unemployment, on insecurity. Where the profit motive does not prove efficacious, the state must intervene. … the increasing volume of transactions requires a larger money supply, and the central bank can be persuaded to meet the demand. … it appears to be less evident that a vicious circle of ever more demands for a larger money supply with no increase in real income is inflationary … In any case there has emerged in fact if not in name the welfare state. … Its mechanism is rather strikingly similar to that of the favorable balance of foreign trade. The debt once owed by colonies to richer countries now is replaced by the national debt. … now the long overdue basic expansion is doled out to one’s fellow countrymen under the haughty name of welfare. [CWL 15, 85-86]

Excerpts and Comments

We quote and comment on selected E. Warren statements. The number on each quote refers to the number of the paragraph in Warren’s article in the Wall Street Journal. Our comments are based upon the Key Notions of

Concomitance
FMD always is the current process
Real analysis
continuity
equilibrium
A scientific heuristic – explanation rather than mere description
classical and statistical laws
“functional” as a technical term pertaining to the realm of explanation, analysis, theory
monetary functions as circulations of money in a circular series of relationships of dependence of some flows of payments on other flows (CWL 15, 48)
Analytic distinctions: point-to-point and point-to-line
Inexorability and indeterminacy
Pure cycle of expansion
Phases in the pure cycle of expansion
Basic terms are rates and changes in rates
abstraction
implicit definition – technique and significance
inexorability and indeterminacy
isomorphism
organicism
P’Q’ = p’a’Q’ + p”a”Q”
Field theory and invariance
Relativistic prices and quantities
The good of order

More fully:

Concomitance (click here and here)
FMD always is the current process

Thus the productive process is a purely dynamic entity. We began by saying how broadly the term was to be taken. But it is also necessary to insist how narrowly. It is not wealth, but wealth in process. … It is none of its own effects, if by effects are understood what has been completed. It is neither the existence nor the use of durable consumer goods, of clothing, houses, furnishings, domestic utensils, personal belongings, or indeed any item of private or public property that can be listed as a consumer good and has passed beyond the process to become an element of the community’s standard of living. On the other hand, with regard to producer goods a distinction has to be drawn: they are in the process as a means of production; they are in the process in the sense that labor is in the process or that management is in the process, namely, their use forms part of the process; but once they are completed they are no longer under process, any more than labor or management is under process and being produced. … factories and machinery, railways and power units, warehouses and offices are in the productive process only while being produced; once they are produced, they themselves have passed beyond the process to enter the category of static wealth, even though their use remains a factor of production.(CWL 15, 21-22)

Real analysis (click here)

… real analysis (is) identifying money with what money buys. … If you want to treat money that doesn’t make a difference, you can have a beautiful liberal monetary theory. But it doesn’t say the way the thing works. [CWL 21, Editors’ Introduction, xxviii quoting Lonergan]

Our aim is to prescind from human psychology that, in the first place, we may define the objective situationwith which man has to deal, and, in the second place, define the psychological attitude that has to be adopted if man is to deal successfully with economic problems. Thus something of a Copernican revolution is attempted: instead of taking man as he is or as he may be thought to be and from that deducing what economic phenomena are going to be, we take the exchange process in its greatest generality and attempt to deduce the human adaptations necessary for survival. [CWL 21,42- 43]

Continuity (Read CWL 21, 73-5)

An initial and provisional theorem of continuity was enounced in a preceding chapter (§24). Now it may be indicated in its full generality. ¶ The analysis has revealed that the economic system is a pattern of aggregate dynamic relationships arranged in different kinds of velocity and accelerator rhythms. In the real order there are the primary and secondary rhythms, with the former accelerated by the latter. In the monetary order there are the rhythms of excess release from the redistributional area to the primary and secondary rhythms; and again, the former accelerate the latter. ¶ Now the general theorem of continuity is that this complex machine has a nature that must be respected. Absolutely, there is no necessarily right value for the monetary accelerators DT’, DT”, DC’, DC”; again, absolutely, there is no necessarily right values for the six multipliers C’, C”, T’, T”, G’, G”. But what is true is this: as soon as a few of these are determined, the rest become determined within narrower limits, for all form part of an organic whole; to violate this organic interconnection is simply to smash the organism, to create the paradoxical situation of starvation in the midst of plenty, of workers eager for work and capable of finding none, of investors looking for opportunities to invest and being given no outlet, and of everyone’s inability to do what he wishes to do being the cause of everyone’s inability to remedy the situation. Such is disorganization. Continuity, on the other hand, is the maintenance of organization, the stability of the sets and patterns of dynamic relationships that constitute economic well-being in a society. ¶ While the provisional theorem of continuity (§24) did regard the static phase, it is important to observe that the general theorem regards any phase. There is a general historical movement of ideas, opportunities, and decisions integrating into that major rhythm in which transformations are followed by exploitations only to bring forth new and deeper transformations. Within this broad historical scheme of things, the role of any age, and still more of any country, is but a small thing: the past was settled by our forebears, and the future will be in the hands of posterity; only the present is ours, and it is only within the limits that we make of the present what we wish. Our starting pint is already determinate: we have to face things as they are; we may never lose sight of them or attempt to reckon without them. But not only is there ever a broad and unalterable datum of things as they are; there are also the limitations which this datum imposes on things as we are going to make them. ¶ The theorem of continuity is the abstract and formal aspect of such limitations in the economic order. At the moment the exchange process is static or expanding or contracting. We may like it so or we may wish it different. But in any case there is some determinate range of values of the multipliers and of the monetary accelerators – of C’, C”, T’, T”, G’, G”, of DC’, DC”, DT’, DT” – that corresponds with such a decision. Moreover there has to be an internal coherence between these values, and to violate this coherence is to rout economic organization. Just as the movements of the controls of an airplane must be coordinated and all coordinations are not possible at all instants, so also he economic machine as its controls, which can be moved only in concert and only in a limited number of ways at any given time. ¶ Such is the general theorem of continuity. In the abstract and in a general way, it affirms that the economic process can proceed only within the limits of equilibrium of the various phases. To step outside them is to bring about a general breakdown. (CWL 21 73-5)

Dynamic Equilibrium

without further clarification Schumpeter acknowledged that dynamic analysis called for a new light on equilibrium. Such new light arises when, over and above (DSGE’s) equilibria of supply and demand with respect to goods and services (classical microeconomics), there are recognized further equilibria (crossovers balancing, concomitance of outlays with income and of income with both outlays and expenditure, and actual technical coefficients conforming to normative coefficients) that have to be maintained if an economy chooses to remain in a stationary state, to embark on a long-term expansion, to distribute its benefits to the vast majority of its members, and so to return to a more affluent stationary state until such further time as further expansion beckons. … Moreover, such macroequilibria are more fundamental than the microequilibria assembled by Walras. (FMD’s macroequilibria) are the conditions of a properly functioning economy. (CWL 15, 92)

Need the moral be repeated? There exist two circuits, each with its own final market. The equilibrium of the economic process is conditioned by the balance of the two circuits: each must be allowed the possibility of continuity, of basic outlay yielding an equal basic income and surplus outlay yielding an equal surplus income, of basic and surplus income yielding equal basic and surplus expenditure, and of these grounding equivalent basic and surplus outlay. But what cannot be tolerated, much less sustained, is for one circuit to be drained by the other. That is the essence of dynamic disequilibrium. [CWL 15, 175]

A scientific heuristic – explanation rather than mere description

A distinction has been drawn between description and explanation. Description deals with things as related to us. Explanation deals with the same things as related among themselves. The two are not totally independent, for they deal with the same things and, as we have seen, description supplies, as it were, the tweezers by which we hold things while explanations are being discovered or verified, applied or revised. … [CWL 3, 291/316]

classical and statistical laws (Click here)
“functional” as a technical term pertaining to the realm of explanation, analysis, theory (Click here and here)
monetary functions as circulations of money in a circular series of relationships of dependence of some flows of payments on other flows (CWL 15, 48)
Analytic distinctions: point-to-point and point-to-line (Click here)
Inexorability and indeterminacy (Click here)
Pure cycle of expansion (Click here)
Phases in the pure cycle of expansion (Click here)
Basic terms are rates and changes in rates
Abstraction (Click here)
implicit definition – technique and significance (Click here)
inexorability and indeterminacy (Click here)
isomorphism

Again, to take perhaps a simpler and more familiar example, if someone is doing physics and you open his book, what do you find? You find just mathematical equations. He is solving problems, and what is it? It is more mathematics.
Why do you say he is doing physics? He seems to be doing mathematics all the time. It is because there are regions of mathematics that are isomorphic with physical reality. There is the same relational structure between a given mathematical theory or system as there is between events that can be observed. This is another case, a big case, of isomorphism: on the one hand, mathematical expressions, and on the other hand, physical events. There is the same relational structure. But in the mathematical case, the relational structure links symbolic expressions, or mathematical concepts, with one another, while in the physical case what are related are concrete physical events, wave lengths that you observe through a machine and so on. ¶ So there is an isomorphism of geometry, algebra, physics; the same relational structure can be found in all three. Consequently, one’ symbolism can be given a geometrical interpretation, or an algebraic interpretation, or a physical interpretation. [CWL 18, 32-33]

organicism (Click here)

An initial and provisional theorem of continuity was enounced in a preceding chapter (§24). Now it may be indicated in its full generality. ¶ The analysis has revealed that the economic system is a pattern of aggregate dynamic relationships arranged in different kinds of velocity and accelerator rhythms. In the real order there are the primary and secondary rhythms, with the former accelerated by the latter. In the monetary order there are the rhythms of excess release from the redistributional area to the primary and secondary rhythms; and again, the former accelerate the latter. ¶ Now the general theorem of continuityis that this complex machine has a nature that must be respected. Absolutely, there is no necessarily right value for the monetary accelerators DT’, DT”, DC’, DC”; again, absolutely, there is no necessarily right values for the six multipliers C’, C”, T’, T”, G’, G”. But what is true is this: as soon as a few of these are determined, the rest become determined within narrower limits, for all form part of an organic whole; to violate this organic interconnection is simply to smash the organism, to create the paradoxical situation of starvation in the midst of plenty, of workers eager for work and capable of finding none, of investors looking for opportunities to invest and being given no outlet, and of everyone’s inability to do what he wishes to do being the cause of everyone’s inability to remedy the situation. Such is disorganization. Continuity, on the other hand, is the maintenance of organization, the stability of the sets and patterns of dynamic relationships that constitute economic well-being in a society. ¶ While the provisional theorem of continuity (§24) did regard the static phase, it is important to observe that the general theorem regards any phase. There is a general historical movement of ideas, opportunities, and decisions integrating into that major rhythm in which transformations are followed by exploitations only to bring forth new and deeper transformations. Within this broad historical scheme of things, the role of any age, and still more of any country, is but a small thing: the past was settled by our forebears, and the future will be in the hands of posterity; only the present is ours, and it is only within the limits that we make of the present what we wish. Our starting pint is already determinate: we have to face things as they are; we may never lose sight of them or attempt to reckon without them. But not only is there ever a broad and unalterable datum of things as they are; there are also the limitations which this datum imposes on things as we are going to make them. ¶ The theorem of continuity is the abstract and formal aspect of such limitations in the economic order. At the moment the exchange process is static or expanding or contracting. We may like it so or we may wish it different. But in any case there is some determinate range of values of the multipliers and of the monetary accelerators – of C’, C”, T’, T”, G’, G”, of DC’, DC”, DT’, DT” – that corresponds with such a decision. Moreover there has to be an internal coherence between these values, and to violate this coherence is to rout economic organization. Just as the movements of the controls of an airplane must be coordinated and all coordinations are not possible at all instants, so also he economic machine as its controls, which can be moved only in concert and only in a limited number of ways at any given time. ¶ Such is the general theorem of continuity. In the abstract and in a general way, it affirms that the economic process can proceed only within the limits of equilibrium of the various phases. To step outside them is to bring about a general breakdown. (CWL 21 73-5)

P’Q’ = p’a’Q’ + p”a”Q” (CWL 15, 156-62)
Field theory and invariance (Click here)

Relativistic prices and quantities (Click here)
The good of order (Click here)

Again, the principle of concomitance is a key principle underlying the normative theory, which provides precepts for proper management of the economic process. E. Warren’s statements should be evaluated in the light of the abstract explanatory principles and laws of the always current, purely dynamic economic process.

Concomitance of Outlays and Expenditures,
Concomitance of Incomes with Outlays and Expenditures,
Adjustment of basic and surplus Incomes to achieve the concomitant variation of crossovers constituting dynamic equilibrium in the phases of the pure cycle of expansion.
Concomitant magnitudes and frequencies of product flows with magnitudes and frequencies of payments flows to avoid the swindles of inflation and deflation,
Concomitance of activities which are intrinsic to, and thus concomitant with, other certain velocitous activiities in the two circuits,
By the organic unity of the economic process, organization among all the vital parts
Concomitance of productive activities with the technical possibilities at a given state of technology, politics, and culture in order to achieve full employment and maximum performance.
Concomitance and the notion of a doppelganger: Webster: a ghostly companion or counterpart; e.g. supply requiring a demand, and demand requiring a supply; or, monetarily, outlays-incomes as the ghost of expenditures, and, thus, expenditures being the ghost of outlays

.1. “Since President Biden’s inauguration the U.S. economy has created nine million new jobs.”

Comment: It might be ingenuous to say that the reopening of the economic process – thanks to rapid development, distribution, and application of vaccines – has all by itself restored former jobs rather than insinuate that the current administration has “created” “nine million new jobs.” Also, against the backdrop of a flood of money into the system, it might be ingenuous to point out that there remain several million job openings, presumably due to retirements and, perhaps, cash incentives not to work. These unfilled job openings reduce overall productivity and establish the conditions for a price-wage-price-wage inflationary spiral. (Click here)

.1. “… the Fed risks triggering a devastating recession.”

Comment: There is no doubt that a recession is “devastating” to its many victims, especially to lower-paid workers who lose their jobs; but also there is no doubt that the inflation caused by the profligacy and waste of Congress and the Executive Branch, while being “devastating” to its victims, provides a windfall-boon to its beneficiaries. Inflation has both losers and winners. So, if it so happens that the nation must choose between excess-demand inflation and deficient-demand recession, leaders must compare rationally the damage of continuing swindling spirit-crushing inflation against the damage of a job-reducing, spirit-crushing recession. Leaders have mismanaged so as to put themselves “between a rock and a hard place.”

Leaders can apply

.a. Lonergan’s (and others’) analysis of strata of incomes and propensities to spend or save, and

.b. Lonergan’s ratios expressing the relation of surplus income to total income and of basic income to total income,

and, by substituting (1-w) for w compare possible migrations of income earners downward and upward among levels of income.

To avoid inflation or deflation, Incomes must adjust to the varying requirements of a pure cycle of expansion. Purchasing power must keep pace with variations in production. Henry Ford knew this.

… the acceleration of the productive process, if it is to succeed and not be destroyed by circulation maladjustments, postulates that in a proportionate expansion the rate of saving, I’, be constant, that in a surplus expansion it increase, that in a basic expansion it decrease, dI’ < 0. The implications of this postulate will concern us in subsequent sections on the cycle of basic income, the cycle of pure surplus income, and the cycle of price spreads. (CWL 15, 133)

The central adjustment (that the successive phases of the pure cycle of expansion postulate) is variation in the rate of saving. This rate may be defined, conveniently for present purposes, as the ratio of surplus income to total income. Assuming that the rate of saving will not differ appreciably because income is derived from basic or surplus outlay, we may denote this rate by the symbol w, so that

w = I”/(I’ + I”) (CWL 15, 131-32)

The obverse of the rate of saving (I” = E”) for investment in new and better capital items is the rate of spending (I’ = E’) for one’s standard of living (consumption). So we may paraphrase the above:

The central adjustment (that the successive phases of the pure cycle of expansion postulate) is variation in the rate of expending. This rate may be defined, conveniently for present purposes, as the ratio of basic income to total income. Assuming that the rate of expending will not differ appreciably because income is derived from basic or surplus outlay, we may denote this rate by the symbol (1-w), so that

1-w = I’/(I’ + I”) (CWL 15, 131-32)

The concomitant variation of the payments in the two circulations of two types of products is the condition of constant exchange value:

G = c”O” – i’O’ = 0 (CWL 15, 49)

Click here re equilibrium

Politicians must not give a mere passing acknowledgement to inflation – “move along here; there’s nothing to see, just a little inflation, no problem, move along now” – then tout the supposed benefits of more budget-busting doppelganger spending, perhaps garnering popular votes but lacking a justifying financial or social return. Such budget-busting action might wind up creating a devastating permanent bloated, inefficient bureaucracy– characterized by corruption, cronyism, waste, and incompetence – which would only exacerbate the degree of inflation. Again,

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]

A bloated, self-preserving bureaucracy, characterized by corruption, cronyism, waste, and incompetence constitute the major defects often found in a bureaucratic solution.

The excellence of the exchange solution becomes even more evident when contrasted with the defects of a bureaucratic solution. The bureaucrat … (gives the people) what he thinks is good for them, and he gives it in the measure he finds possible or convenient; nor can he do otherwise, for the brains of a bureaucrat are not equal to the task of thinking of everything; only the brains of all men together can even approximate to that. … when a limited liability company has served its day, it goes to bankruptcy court; but when bureaucrats take over power, they intend to stay. … when the pressure of terrorism is needed to oil the wheels of enterprise, then the immediate effect is either an explosion or else servile degeneracy. … the exchange solution is a dynamic equilibrium resting on the equilibria of markets. … every product of the exchange economy must mate through exchange with some other product, and the ratio in which the two mate is the exchange value. The generality of this equilibrium makes it indifferent to endless complexity and endless change; for it stands on a level above all particular products and all particular modes of production. While these multiply and vary indefinitely, the general equilibrium of the exchange process continues to answer with precision the complex question, Who, among millions of persons, does what, among millions of tasks, in return for which, among millions of rewards? Nor is the dynamic solution unaccompanied by a continuous stimulus to better efforts and more delicate ingenuity. For the uniformity of prices means that the least efficient of those actually producing will at least subsist, while every step above the minimum efficiency yields a proportionately greater return. [CWL 21, 34-35]

(Society) must … direct its main effort to … the overhead final product of cultural implements. It must glory in the deepening, in the pure deepening that adds to aggregate leisure, to liberate many entirely and all increasingly to the field of cultural activities. (CWL 21, 20)

… each stage of the long process is ushered in by a new idea that has to overcome the interests vested in old ideas, that has to seek realization through the risks of enterprise, that can yield its full fruit only when adapted and modified by a thousand strokes of creative imagination. And every idea, once it has borne its fruit, has to reconcile itself to death. A new idea is new only when it first appears. It comes to man not as a possession forever but only as a transient servant; it has its day, glorious or foul; it lives for a period that is long or short according to its generality, but it may be succeeded by other alternatives, and in any case it will be transformed, perhaps beyond recognition, by higher generalizations. Thus the stagecoach disappeared before the train, the clipper ships gave way to steamers, domestic spinning wheels and looms were concentrated in power-driven factories, money changers yielded place to bill brokers, brokers to banks and financiers. Nor is it impossible that further developments in science should make small units self-sufficient on an ultramodern standard of living to eliminate commerce and industry, to transform agriculture into a superchemistry, to clear away finance and even money, to make economic solidarity a memory, and power over nature the only difference between high civilization and primitive gardening. … But we are not there yet. And for society to progress towards that or any other goal it must fulfill one condition. It cannot be a titanothore, a beast with a three-ton body and a ten-ounce brain. It must not direct its main effort to the ordinary final product of standard of living but to the overhead final product of cultural implements. It must not glory in its widening, in adding industry to industry, and feeding the soul of man with an abundant demand for labor. It must glory in the deepening, in the pure deepening that adds to aggregate leisure, to liberate many entirely and all increasingly to the field of cultural activities. (CWL 21, 20)

.2. ” … urgency is no excuse for doubling down on a dangerous treatment.”

Comment: Claiming urgency is not necessarily a lame excuse to do whatever one wants; sometimes, to prevent a situation from getting worse and causing harm, quick and effective action is necessitated; sometimes we must make a choice between the lesser of two evils and take quick effective action.

Modern Monetary Theory is a disaster waiting to happen. In its unchecked extreme of printing money unconstrained by relation to the real flow of goods, and services, it would bring about rampant inflation, menace the financial system, and, ultimately, bring about a) the destruction of the financial system, and b) social chaos. The longer unconstrained printing and irresponsible borrowing last, the greater the intractability of ultimate problems.

.2. (raising interest rates is) “largely ineffective against many of the underlying causes.”

Comment: We agree and have said that manipulating interest rates can prove to be “largely ineffective,” – even counterproductive. There are factors that are prior to changing interest rates and more effective.

The purpose of this section is to inquire into the manner in which the rate of saving W is adjusted to the phases of the pure cycle of the productive process. 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. … The simplest manner of attaining a fairly adequate concept of basic income is to divide the economic community into an extremely large number of groups of practically equal income. … In any group i let there be at any given time n_i members; let each member receive an aggregate (basic and surplus) income y_i per interval, so that the whole group receives n_iy_i; finally, let us say that the group directs the fraction w_i of its total income to the basic demand function, so that basic income per interval is given by the equation

I’ = Σw_in_iy_i(CWL 15, 133-134)

… and so one obtains for the increment per interval of basic income the simpler equation

δI’ = Σ (w_iδn_i + n_iδw_i)y_i(CWL 15, 133-134)^{ftnt. 189}

where n_i includes the adjustment due to migration. We shall consider in turn variations in basic income in virtue of δn_iand variations in virtue of δw_{i .}… Hence, in migrations from low to less-low income groups, most of the increment of individual total income becomes an increment of basic income; but in migrations from high to still higher income groups, most of the increment of individual total income becomes an increment of surplus income. Evidently, then, suitable migrations are a means of providing adjustments in the community’s rate of saving. To increase the rate of saving, increase the income of the rich; while they may be too distant from the current operations of the economic process to judge, at least they can put their money into the bank or bonds or stocks, and perhaps others there will see how it can best be used. To decrease the rate of saving, increase the income of the poor. … The foregoing is the fundamental mode of adjusting the rate of saving to the phases of the productive cycle. …(and) this fundamental mode of adjustment is complemented by a further mechanism of automatic correction. (price and quantity changes treated in The Road Up and Down) (CWL 15, 133-134)

Again,

… , the following conclusions seem justified. When the rate of saving is insufficient, increasing interest rates effect an adjustment. This adjustment is not an adjustment of the rate of saving to the productive process but of the productive process to the rate of saving; for small increments in interest rates tend to eliminate all long-term elements in the expansion; and such small increments necessarily precede the preposterously large increments needed to effect the required negative values of dw_i. Finally, the adjustment is delayed, and it does not deserve the name of adjustment. It is delayed because the influence of increasing interest rates on short-term enterprise is small. It does not deserve the name ‘adjustment’ because its effect is not to keep the rate of saving and the productive process in harmony as the expansion continues but simply to end the expansion by eliminating its long-term elements. (CWL 15, 143-44)

(Click here)

But, just for the sake of understanding and accountability, we ask what might have been the government’s and the Fed’s set of mistakes which efficient-caused and formally explains the present painful inflation? A sound, normative, explanatory theory of how the economic process should actually work- such as the theory of Functional Macroeconomic Dynamics, also called Macroeconomic Field Theory – might explain to us the ineptitudes in raising interest rates and in flooding the economic process with more money than it needs; and theory might explain to us the cure by both a properly calibrated money supply and the implementation of the basic expansion. For a sound diagnosis, one would benefit from comparing the errant flows of money against a sound normative theory of properly concomitant, balanced flows. (Click here and hereand here and here)

.3. “skyrocketing energy prices caused by Vladimir Putin’s war on Ukraine.”

Comment: No doubt the war has had a marginal negative effect on fuel prices in the chain of drilling, refining and distribution, but to insinuate that the entire effect is due to Putin is to fail to tell the whole truth. Such a narrative is disingenuous; it is opportunistically political rather than honest econometric analysis.

The real issue, then, is truth. Though it has concerned us all along, it will not be amiss to bring together at least the main points made on different occasions and in different chapters. Accordingly, we distinguish

- the criterion of truth,
- the definition of truth,
- the ontology of truth,
- truth in expression,
- the appropriation of truth, and
- the truth of interpretation. (CWL 3, 549/572-73)

.3. (“Higher interest rates) won’t break up the corporate monopolies that … could be raising prices because they can.”

Comment: We agree that the elected officials must not strike a Faustian bargain with monopolies, oligopolies, and cartels. They must be effective in their regulating for the good of all. Politicians should not cozy up to monopolies and powerful oligopolies simply because they are significant political donors. But higher prices are not always caused by a malice of monopolies or oligopolies. Sometimes it’s simply scarcity and bloated backlogs that spontaneously result in higher prices just to clear a market. At other times it’s maldistribution of Incomes. (Click here and here and here)

… when prices rise or fall because the distribution of income has not anticipated these requirements correctly, then price variation is not a postulate for variation in E’ and E” but rather a spontaneous effort at adjusting what should already have been adjusted. (CWL 15, 131)

.5. (… ” higher interest rates make it) more expensive for businesses to invest … . As a result employers will slow hiring, cut hours and fire workers, leaving families with less money.”

Comment: The manipulation of interest rates is double-edged. (Click here) Textbooks say mistakenly that interest rates should be raised to attract savings for financially or socially beneficial investment. Prices may rise normally due to scarcity or non-normatively due to a maldistribution of Incomes. In the latter case the process spontaneously responds to correct a maldistribution of Incomes. Again,

… when prices rise or fall because the distribution of income has not anticipated these requirements correctly, then price variation is not a postulate for variation in E’ and E” but rather a spontaneous effort at adjusting what should already have been adjusted. (CWL 15, 131)

The traditional doctrine of thrift and enterprise looked to the supply of and demand for money to adjust interest rates and the adjusted rates to adjust the rate of saving to the requirements of the productive process. But it can be argued that a) this view was not sufficiently nuanced in its estimate of the requirements of the productive process, b) that it missed the magnitude of the problem, and c) that it tended to lump together quite different requirements. … [CWL 15, 140, ftnt. 197]

Again,

We agree that higher interest rates are likely to choke off, to some extent, investment otherwise justified by a high financial and social return. The question now becomes, with a 64% labor participation rate and the count of job openings exceeding the count of available workers, will higher interest rates bring about a better balance of jobs and workers, and, thus, help to mitigate the “painful” swindling wage-price spiral which leaves lower-paid workers, fixed income workers, and many retirees behind? Might not part of the solution be a higher participation rate?

.7. “Despite these warnings, the Fed chairman still has cheerleaders for his rate-hiking approach.”

Comment: The use of the word “cheerleaders” is demeaning, mean-spirited, and supercilious. The people Warren refers to might be right; they are, given the present situation, trying to be analytic for the good of the whole country rather than for themselves. In the meantime, EW is concentrating on a slanted narrative and political sentiment rather than applying an adequate level of intelligence. Decency mandates an apology by EW to Powell and Summers, as well as to enthusiastic teenage kids who lead cheers on pep squads. Disagreeing with EW’s psychopolitical assertions does not make anyone an evil person or a cheerleader. The answer to all this political rhetoric and dialectic is a sound, normative, explanatory economic theory on which all can agree.

.7. “This is the comment of someone who has never worried about where his next paycheck will come from.”

Comment: Relatively poor vs. relatively wealthy is a different issue from

good economic science, which is able to explain, detect mismanagement, and effectively correct ,and
bad economic muddle which is unable to explain, detect mismanagement, and effectively correct?

Poverty and political vitriol do not, of themselves, make one’s statements truthful. And wealth does not, of itself, make one intrinsically dishonest, unsympathetic and uncharitable. EW’s disparaging vitriol is silly and regrettable; it insinuates that one’s hard-won, legitimately-earned financial security makes one untruthful. A modicum of humility, a lot less artificial sanctimony, and an intense search for the truth and verification of explanatory economic theory are in order. Again,

- the criterion of truth,
- the definition of truth,
- the ontology of truth,
- truth in expression,
- the appropriation of truth, and
- the truth of interpretation. (CWL 3, 549/572-73)

.8. “If Messrs. Powell and Summers have their way, the resulting recession will be brutal.”

Comment: Is this a proclamation of certainty, or is it political rhetoric characterized by vagueness? And should this “brutal” recession be blamed on raising interest rates or by the necessity to correct the inflation caused earlier by the government’s flooding the system with money and failing to correlate the magnitudes and frequencies of products with the magnitudes and frequencies of payments? How “brutal”, to the fifth decimal place, will the future be, if we don’t have continuously bigger, more wasteful government spending rather than a balanced-budget featuring the private sector’s implementation of the basic expansion, wherein dQ’/Q’ > dQ”/Q”. (Click here)

.8. “Republicans … will press for austerity – tax cuts for giant corporations and the rich, weaker regulation on big businesses, and little economic support for the most vulnerable. Democrats should be ready to reject the Republican playbook and prepared to help working families survive.”

Comment: Republicans are not the only ones who favor giant corporations. The rest is rhetoric. The issue is ignorance, not greed. There must be an objective theory on which all can agree. There need not ever be, on one side austerity and on the other side swindling profligacy, all stemming from egoistic and group bias.

See pages 218-42 in CWL 3 treating individual and group bias

When intelligence is a blank, the first law of nature takes over: self-preservation. It is not primarily greed but frantic efforts at self-preservation that turn the recession into a depression, and the depression into a crash. [CWL 15, 82]

Our aim is to prescind from human psychology that, in the first place, we may define the objective situationwith which man has to deal, and, in the second place, define the psychological attitude that has to be adopted if man is to deal successfully with economic problems. Thus something of a Copernican revolution is attempted: instead of taking man as he is or as he may be thought to be and from that deducing what economic phenomena are going to be, we take the exchange process in its greatest generality and attempt to deduce the human adaptations necessary for survival. [CWL 21,42- 43]

Every decent person – which includes conservatives, liberals, and individuals of every ethnicity and gender – hope for working families to survive and thrive. That is why it is important to discover, formulate, and teach an objective theory; then undertake a vast educational project, propagate enlightenment, and implement the “basic expansion” featuring the proper distribution of incomes.

Again,

The purpose of this section is to inquire into the manner in which the rate of saving W is adjusted to the phases of the pure cycle of the productive process. 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. … The simplest manner of attaining a fairly adequate concept of basic income is to divide the economic community into an extremely large number of groups of practically equal income. … In any group i let there be at any given time n_i members; let each member receive an aggregate (basic and surplus) income y_i per interval, so that the whole group receives n_iy_i; finally, let us say that the group directs the fraction w_i of its total income to the basic demand function, so that basic income per interval is given by the equation

I’ = Σw_in_iy_i

… and so one obtains for the increment per interval of basic income the simpler equation

δI’ = Σ (w_iδn_i + n_iδw_i)y_i

where n_i includes the adjustment due to migration. We shall consider in turn variations in basic income in virtue of δn_iand variations in virtue of δw_{i .}… Hence, in migrations from low to less-low income groups, most of the increment of individual total income becomes an increment of basic income; but in migrations from high to still higher income groups, most of the increment of individual total income becomes an increment of surplus income. Evidently, then, suitable migrations are a means of providing adjustments in the community’s rate of saving. To increase the rate of saving, increase the income of the rich; while they may be too distant from the current operations of the economic process to judge, at least they can put their money into the bank or bonds or stocks, and perhaps others there will see how it can best be used. To decrease the rate of saving, increase the income of the poor. … The foregoing is the fundamental mode of adjusting the rate of saving to the phases of the productive cycle. …(and) this fundamental mode of adjustment is complemented by a further mechanism of automatic correction. (price changes) CWL 15, 133-134

(Click here)

.9. ” … the president ordered the largest-ever release of strategic oil reserves and spurred one of the fastest declines in gasoline prices in more than a decade.”

Comment: In this argument percentages would be more appropriate than absolutes. The so-described “largest-ever” released oil reserves don’t of themselves amount to diddly in the global scheme of oil production and distribution and the concomitant variation of products and money to avoid inflation. “largest-ever” is unqualified and slanted political rhetoric. It’s easier to decline from an artificially-high price than from a lower competitive price in an economy featuring the good of order. (Click here)

How does the recent price compare with what would be a competitive price in a well understood and well-managed economy honoring the precepts of Functional Macroeconomic Dynamics? (Click here)

.9. “To lower food prices, he dedicated $1 billion to expand meat-processing capacity.”

Comment: No comment

.9. “And giving the Biden administration more tools to bolster competition policy would help crack down on price gouging by large corporations.”

Comment: See second comment for page 3 re regulating monopolies above. Competition is a good thing.

.10. “Investing in high-quality, affordable child care would lower costs by bringing more than a million parents into the workforce.”

Comment: Providing security and good education are important functions of government. Presently there are calls for the Commonwealth of Massachusetts to take over the struggling Boston Public School System. It is a complicated matter. Failure of the government to provide good education is not an option. Failure of the government, religious institutions, and other influencers, including each and every individual, to effect a good culture is also not an option.

Politicians must not ignore the influence of culture in economies. Can many social problems be solved by an improved culture rather than by throwing more and more money at them? Economic values exist within a hierarchical scale of values. (Click here and here)

Should E. Warren’s “high-quality, affordable child care” become the responsibility of a big bureaucratic government? Will it be as stellar and effective as our government- and union-controlled public educational system? A complicated issue, about which one’s arguments cannot be facile. It has many aspects. “high-quality, affordable child care” cannot be institutionalized and become a victim of a bureaucracy, whose primary interests are themselves and their wallets.

The excellence of the exchange solution becomes even more evident when contrasted with the defects of a bureaucratic solution. The bureaucrat … (gives the people) what he thinks is good for them, and he gives it in the measure he finds possible or convenient; nor can he do other wise, for the brains of a bureaucrat are not equal to the task of thinking of everything; only the brains of all men together can even approximate to that. … when a limited liability company has served its day, it goes to bankruptcy court; but when bureaucrats take over power, they intend to stay. … when the pressure of terrorism is needed to oil the wheels of enterprise, then the immediate effect is either an explosion or else servile degeneracy. … the exchange solution is a dynamic equilibrium resting on the equilibria of markets. … every product of the exchange economy must mate through exchange with some other product, and the ratio in which the two mate is the exchange value. The generality of this equilibrium makes it indifferent to endless complexity and endless change; for it stands on a level above all particular products and all particular modes of production. While these multiply and vary indefinitely, the general equilibrium of the exchange process continues to answer with precision the complex question, Who, among millions of persons, does what, among millions of tasks, in return for which, among millions of rewards? Nor is the dynamic solution unaccompanied by a continuous stimulus to better efforts and more delicate ingenuity. For the uniformity of prices means that the least efficient of those actually producing will at least subsist, while every step above the minimum efficiency yields a proportionately greater return. CWL 21, 34-35)

.10. “Ending tax breaks for off-shoring and investing in American manufacturing would create good jobs and strengthen supply chains.”

Comment: In the scheme of costs-outlays equaling incomes-expenditures would higher pay result in higher prices for American-made goods? A complicated economic and political issue.

Read CWL 15 pp. 12-13 re exchange rate, and pp. 165-73 re The Balance of Foreign Trade

Outlays for productive services are the source of incomes to expend on the products produced.

O’ = I’ = E’ = R’ (interpret the Diagram of Rates of Flow);

O” = I” = E” = R” (interpret the Diagram of Rates of Flow); and

G = c”O” – i’O’ = 0) (the condition of dynamic equilibrium).

.11. “low unemployment and high inflation are painful, but a Fed-manufactured recession that puts millions of Americans out of work without addressing high prices would be far worse.”

Comment: What would be so painful if a) the basic expansion were properly implemented, b) low unemploymen were achieved, and c) proper migrations in income levels were effected? The key issues are a) the concomitance of Outlays, and Incomes, and Expenditures, b) the normative correlation of the magnitudes and frequencies of production turnovers with the magnitudes and frequencies of payments, c) the basic expansion is properly implemented, and d) proper migrations in income levels be effected. Would all the spending E. Warren recommends increase inflation and hurt the lower-paid workers? Is she contradicting herself?

O’ = I’ = E’ = R’ (interpret the Diagram of Rates of Flow);

O” = I” = E” = R” (interpret the Diagram of Rates of Flow); and

G = c”O” – i’O’ = 0) (the condition of dynamic equilibrium).

Again, we recommend that E. Warren assign one of her staff to become expert in Bernard Lonergan’s Macroeconomic Field Theory, so that that person can advise and provide both a framework and systematic guidance to E. Warren. The advisor must master, in particular, Figures 14-1 and 27-1 and the differential equations isomorphic with the patterns of interconnections among functional velocities and accelerations in the dynamic economic process.

Better still, E. Warren should withdraw from the hubbub of Washington politics for a week, find a place of absolute solitude, and gain mastery herself of Bernard Lonergan’s Macroeconomic Field Theory. In particular, she should gain new understanding regarding the causes and cure of today’s inflation and regarding the central precepts of concomitance, equilibrium and a balanced budget by the federal government. Inflation constitutes a swindle on its victims and an undeserved benefit on its beneficiaries.

that of the favorable balance of foreign trade. The debt once owed by colonies to richer countries now is replaced by the national debt. … now the long overdue basic expansion is doled out to one’s fellow countrymen under the haughty name of welfare. [CWL 15, 85-86]

Finally, one is tempted to ask, Did EW ever take a physics course that impressed upon the mind a) the principles and laws of fluid dynamics, b) Kirchhoff’s laws of electric circuits, c) the interrelations of electric and magnetic charge, d) the ideas in mechanics of continuity and equilibrium, e) the explanatory significance of differential equations and tensors? Also, did EW ever take an economics course? When the seeds of painful inflation were being sewn, did she point out and protest? Could it be that, like Picketty, EW needs to achieve understanding of the economic process, i.e she needs to “get a grip” on the grounds of the inequality in history?

Again,

A New Paradigm: Bernard Lonergan's Macroeconomic Field Theory

Purely Relational Foundations for Macroeconomics; An Explanatory Systematics and A New Standard Model of the Objective Economic Process

Elizabeth Warren’s Advice to Jerome Powell; Sentiment Without Intelligence

Preliminaries

Excerpts and Comments

… real analysis (is) identifying money with what money buys. … If you want to treat money that doesn’t make a difference, you can have a beautiful liberal monetary theory. But it doesn’t say the way the thing works. [CWL 21, Editors’ Introduction, xxviii quoting Lonergan]

I’ = Σw_in_iy_i(CWL 15, 133-134)

δI’ = Σ (w_iδn_i + n_iδw_i)y_i(CWL 15, 133-134)^{ftnt. 189}

I’ = Σw_in_iy_i

δI’ = Σ (w_iδn_i + n_iδw_i)y_i

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Preliminaries

Excerpts and Comments

… real analysis (is) identifying money with what money buys. … If you want to treat money that doesn’t make a difference, you can have a beautiful liberal monetary theory. But it doesn’t say the way the thing works. [CWL 21, Editors’ Introduction, xxviii quoting Lonergan]

I’ = Σwiniyi (CWL 15, 133-134)

δI’ = Σ (wiδni + niδwi)yi (CWL 15, 133-134)ftnt. 189

I’ = Σwiniyi

δI’ = Σ (wiδni + niδwi)yi

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I’ = Σw_in_iy_i(CWL 15, 133-134)

δI’ = Σ (w_iδn_i + n_iδw_i)y_i(CWL 15, 133-134)^{ftnt. 189}

I’ = Σw_in_iy_i

δI’ = Σ (w_iδn_i + n_iδw_i)y_i