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In a 2013 article, the St. Louis Fed featured arguments that QE was not debt monetization because the Fed balance sheet would return to normal .... None of that happened. A decade later, the Fed’s holdings of Treasury securities and other assets, both in absolute terms and as a percentage of GDP, are far higher now than they were then, and are rising. So, it became clear that it was and is debt monetization.

There is no mystery here. FED paid interest rates on excess reserves de facto turning money banks held with FED into bonds. Compare it for instance with short term T-bills with maturity of four weeks. In fact I deem this as somewhat dirty play.

Nevertheless there is "easy" way for FED to return to normal. Just stop offering interest on reserves and just sell back to the market the collateral that FED took from primary dealers in exchange of the cash in the first place. In a sense it does not matter for broader economy if the asset that sits on the primary dealer balance sheet is "interest earning excess reserve" or "interest earning government bond".

Although there is some truth to it, the problem with that analysis is that proponents of that view are only looking at one side of the ledger, rather than both sides of the ledger. The other side of the ledger is that the government was able to spend money on the domestic economy via the fiscal spending side that it never extracted from any existing base of money; it instead extracted that funding from a newly-created pile of dollars from the Fed, and those Treasury securities are locked away on the Federal Reserve’s balance sheet from which it drew the new dollars from. The Treasury Department is the mechanism for the Federal Reserve’s QE to get to the public.

Exactly. Banks hold money and FED holds government bonds. If FED decides to sell the bonds back to the market then it sucks those excess reserves out. So as the author says it - there are two sides to the balance sheet.

Things like Medicare, Social Security, military spending, crisis stimulus checks, and so forth, would likely have to be reduced if the Treasury was limited to only borrowing from real lenders rather than borrowing from newly-created pools of dollars from the Federal Reserve. So, a portion of QE money does make it to Main Street (the portion that goes to buying Treasury securities); albeit in an indirect way based on government fiscal decisions.

Yes, they would be limited by public demanding increased interest rates for the capital to be poured into the system. But the fact is that the government already pays the interest rate on excess reserves for these not to go into economy generating inflation.

In other words, let’s say steel mills usually operate at 90% capacity, and in a given recession their capacity dips down to 50% of capacity, as demand decreases significantly while the existing supply of steel factories and trained steelworkers is unchanged. Well, MMT says that the government can go ahead and do a big infrastructure stimulus and print money to buy a bunch of steel at that point, and it won’t cause inflation because there is plenty of capacity to produce that steel. It just offsets deflation. It would only cause inflation if the steel mill was already running near 100% capacity and the government was trying to print money to buy more steel anyway.

Yeah, this could work in theory. Except the fact that it depends on the political process to manage inflation/deflation. It would be like saying that there is no need to have Military Procurement system that has some broader mandate and budget from congress to adhere to. Instead whenever army or navy or airforce or spaceforce needs something - they just ask congress and congress provides the things they need. This could work - except not really.

Modern Monetary Theory says, “Wait a second, the first two models are built on an antiquated system that involved hard money like gold, and the third model still goes through those same antiquated motions..."

There is nothing bad about using old - or as the author says "antiquated" - system if it achieves what is says it does. Look at the inflation in USA especially since around 1987 when Alan Greenspan became FED chair and the central bank adopted inflation targeting of around 2%. Amazing how they consistently did that for decades. Not 5% or 50% and not -5% or 99%. Central bank wants 2% inflation and then uses "antiquated" tools to achieve exactly that for decades without using any "Modern" monetary theories - at least not those that are part of MMT.

In fact it is MMT that is antiquated. The adherents are trying to revive discussion like fiscal theory of price level and utilizing functional finance - idea that was proposed by early 20th century economist Abba Lerner. Believe me, there is nothing "modern" behind MMT.

FYI for viewers:

MMT = Modern Monetary Theory

And the inflation here is price/cpi inflation, not monetary supply inflation. (commonly conflated)

A nice complement to the "looming bank collapse" thread :)

Great article, thanks for posting.

I think she sums it up perfectly. One other fatal assumption with mmt is it sounds a lot like central planning and we know from history does not work. Fdr used mmt in the 1930s and it worked ok for a while, but fdr was a bit of an idealist . And as soon as fdr cut spending in 1937 we fell back into the depression. Ussr used central planning and their exonomy eventually fell apart. The arguement that central planners are experts so they can make the best choices is rubbish. Mmt may work for a very short time when the choices are obvious. But over time you are faced with trade offs that only some one expert in their field knows how to account for. Not to mention that you have to trust the central planners to do what is right for all of society not just his own constituancy or to line his own pockets. Do politicians always do what is right for society?

Crypto is international is not affected by any borders. Hence crypto's value proposition as a remittance tool. Bitcoin and other crypto have use cases other than trying to "get rich"

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Twitter is not on the masthead of The New York Times. But Twitter has become its ultimate editor. As the ethics and mores of that platform have become those of the paper, the paper itself has increasingly become a kind of performance space. Stories are chosen and told in a way to satisfy the narrowest of audiences, rather than to allow a curious public to read about the world and then draw their own conclusions. ...

My own forays into Wrongthink have made me the subject of constant bullying by colleagues who disagree with my views. They have called me a Nazi and a racist; I have learned to brush off comments about how I’m “writing about the Jews again.” Several colleagues perceived to be friendly with me were badgered by coworkers. My work and my character are openly demeaned on company-wide Slack channels where masthead editors regularly weigh in. There, some coworkers insist I need to be rooted out if this company is to be a truly “inclusive” one, while others post ax emojis next to my name. Still other New York Times employees publicly smear me as a liar and a bigot on Twitter with no fear that harassing me will be met with appropriate action. They never are.

Three great quotes

Even now, I am confident that most people at The Times do not hold these views. Yet they are cowed by those who do.

This shows you the power of bullying and coercion can have a disproportionate impact on the integrity of the paper, and it points to a solution of just eliminating those few bullies. It is indeed a correctable problem, not entrenched dogma throughout the entire paper.

As places like The Times and other once-great journalistic institutions betray their standards and lose sight of their principles, Americans still hunger for news that is accurate, opinions that are vital, and debate that is sincere. I hear from these people every day.

The big question is who will gobble up these castoffs who cling to standards and integrity?

None of this means that some of the most talented journalists in the world don’t still labor for this newspaper. They do, which is what makes the illiberal environment especially heartbreaking.

It is interesting that he considers the entire environment illiberal.

Bari Weiss’ resignation letter is so spot on and beautifully articulated, that if I had space for it, I’d frame it and hang it up in my home!

While I'm not surprised at all, that this is how it is, it's still pretty damn shocking to hear about how the daily work environment is and how openly hostile staff are.

She complains that Twitter mobs always pile on criticism of her OpEd essays written 'as best as she could given pressing deadlines' which in turn, influences NYT editors to modify with post-initial-website-publishing changes against her approval.

Since 2018, she also has had this one of many notable hyprocrisy hall of fame calibre tweets: https://twitter.com/bariweiss/status/963165579313065984

Yes, yes, I realize. Felt the poetic license was kosher.

It was in reference to her articles' feedback criticizing that she awkwardly and redundantly cited 2018 Olympic snowboarding gold medalist Chloe Kim as a Korean-American, in the same critically unthinking vein as a prior instance of referring to physicist Michio Kaku as Japanese-American, when the context in which they were newsworthy at the time did not involve their ancestral ethnicity being directly relevant to the story.

(Chloe is second generation (to Korean immigrants) American-born, as is Michio (to Japanese immigrants). Both have lived their entire lives and led notoriously successful careers in America.)

NYT is a shit-show. Trustworthiness & Credibility have been tanking at an exponential rate.

Conservatives will literally not be satisfied until all liberals respond to every argument they make by praising their bravery for making it. "Oh my god, thank you so much for sharing your views on race science with me - I'm unfortunately too cowardly to admit the obvious truth of your amazing perspective, but I feel honored to have encountered your bravery." That's what it would take to get the "fair liberal interlocutor" badge from the IDW.

I think the accounts alphashadow, njtrafficsignshopper and high_wind_buddha are all sockpuppets for the same person.

The language is idiosyncratically similar for all their replies.

I've never accused anyone of this on reddit before but the similarities really struck me reading their replies one after the other in my inbox. Something fucky is going on here.

Yeah just because you say you're centrist doesn't mean you're centrist. I don't know enough about this person's work to make a judgement on how true what she says is, but I do know that the Times has a pretty robust center-right opinion section and so I'll take this with a grain or two of salt. Let's see if any other center-right figures follow in an exodus or if this person is just crying.

Me me me me me me

She is certainly a talented writer. Which isn't merely an aesthetic judgment. The wokies tend to write in a juvenile, infantile style. While simple prose is good prose, whenever I read a woke writer I get the impression that they don't have the capacity for complex or critical through, which shines through in their prose. For example, they love the suffix "super-" as in, super-white. Robby Soave's book is filled with good examples of this.

She’s one of the reasons I stopped reading the NYT. Her entitlement is nauseating

Say hello to the next Dave Rubin!!!

I've got to ask, how many people in the thread have ever consistantly read the New York Times?

A disingenuous hypocrite, definitely. But I also wonder if maybe she’s addressing a legitimate issue. I doubt it, good riddance

"But the lessons that ought to have followed the election—lessons about the importance of understanding other Americans, the necessity of resisting tribalism, and the centrality of the free exchange of ideas to a democratic society—have not been learned. Instead, a new consensus has emerged in the press, but perhaps especially at this paper: that truth isn’t a process of collective discovery, but an orthodoxy already known to an enlightened few whose job is to inform everyone else."

Whoa

"Even now, I am confident that most people at The Times do not hold these views."

This strikes me as wishful thinking.

Since this was posted in r/MediaCriticism I thought it was just gonna be celebrating the resignation of a hack writer from a widely circulated publication. But after reading the submission statement it seems the intent was to critique the NYT for finally pushing her out? Bizarre.

Now if we can only replace 95% of the rest of the NYT staff maybe they could be a respectable paper.

Not the last, more are coming.

The saddest part is any moment now she is going to get another, even more high profile job where she makes twice what I do to do half the work. Trash humans like this always manage to fail upward.

I'm interested to hear more about this. Why was Weiss run out of NYT town, but more conservative writers like Brooks, Stephens, and Douthat were not?

Bari Weiss is such a pearl clutched hypocrite. She loves free speech when it's not against the government of Israel.

Awesome, Heather is mentioned!

Gotta tell you - as an Australian I found her article and her comments on Rogan about Australia pretty tonedeaf, factually incorrect at times, and ironically she only spent time in Sydney. so very much got a Sydney-centric perspective. However. No one deserves to be bullied at work, no one deserves the hostility she was served. The NYT should be absolutely ashamed of themselves

I think this is incredibly disingenuous, which does not surprise me about anything she writes. The context is, a writer on one of the most venerated platforms one can have in that profession, who uses it to decry the fall of free speech, is now claiming that she's giving that up because her opinions are criticized.

Further I accuse her of intentionally conflating legitimate criticism of her work and views with antisemitism, a habit rebuked by one of America's preeminent Jewish political scientists.

This is what she does, this is a stunt.

What the fuck does that even mean?