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Marshall’s magical money machine (The Conceit)

April 8, 2010 Leave a comment

FBN's Liz Claman: Ready for soft landing (probably not a real photo ... sigh!)

Continued from here

“Every magic trick,” Caine’s character tells us, ‘has three steps’: 1) the “Pledge” which is sometimes called “the Magician’s Choice” offers audiences an option, but really tips the process, favoring one option over others. In the same way, life seems to offer everyone the same set of choices, when (in reality) the best choices are more ‘real’ in some lives than in others; 2) The next phase in the magic trick is the “Turn,” transforming one possibility into another unexpected possibility; and finally, 3) the “Prestige,” or return of the original promise in a surprising fulfillment or realization, such as the reappearance of the person who has first vanished.

Critical Vision – “The Prestige”: A Movie Review.

The facts laid out in the preceding section of this post raise the question of whether Washington’s deficits are, in reality, nothing more than the excessive accumulation of social resources in the hands of the very wealthiest members of society. But, in a brilliant example of misdirection, Marshall draws our attention to mere accounting identities: Washington must run deficits, if the rest of society is to save, i.e. if society is to produce more than it consumes. He conceals the nature of these “savings” – the massive concentration of wealth in a few hands, side by side with the relative and absolute collapse in the living standards of the great majority. Hence, the idea that Washington’s deficits only serve to maintain this massive inequality within society need never be seriously addressed by Marshall or his cronies Bill Mitchell, James Galbraith, Randall Wray, Warren Mosler and Rob Parenteau.

The accounting identity of national income to the sum of its parts is the hook intended to grab the attention of millions of desperate working families, who are drowning in debt and looking for any means to keep their heads above water. It serves the purpose of offering a seemingly costless way to increase their income sufficiently to restart the cycle of indebtedness: If Washington runs a deficit, Marshall explains, the massive accumulation of superfluous wealth in the “private sector” can be placed back into currency in the form of public consumption – generating jobs and wages for millions of unemployed.

The rubes are now set up for this performance of economic magic.

Read more…

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