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Thursday, November 17, 2011

Monetary Mamma Jamma

Here is one very interesting take on the economy that actually incorporates a few concepts from Modern Monetary Theory (MMT). When rappers start rapping about bailouts, IOU's, credit, and debt it's because we are in one big monetary mamma jamma.

The economy explained by Tay Zonday: Mama Economy



Lyrics:
Are you confused about the Economy?
Well have no fear!
I'm going to explain the American Economy right now!
The dollar? Just think of it like a promise from the government,
but the value of the dollar has to be there to be relevant...
The value of the dollar comes from China and Iran,
When they put their cash reserves in a U.S. dollar plan,
They buy treasury bonds from the Federal Reserve,
We say "we owe you extra money cause you gave us some of yours,
That's a big part of the national debt,
All the interest that we haven't paid to China quite yet,
And a hundred other countries cause we're such a good investment,
The whole world gives us money we say "hey we'll pay you interest!"
This is how money is created from air...
Bank Bailouts? Federal Budgets? Money isn't really there,
It's an I.O.U. -- Remember, dollars are a promise?
When you borrow from a bank it's not from other depositors,
The money for your loan gets created on-the-spot,
Then they put it in your name, gamble on your life and body,
But if you lose your job then you were a bad bet,
If a million lose their jobs then we have a recession,
Here's the dirty secret: your labor's too expensive,
Wall Street wants you spending money but the never want to pay you,
In your life cash and credit -- they are very different things,
But your credit's someone else's cash once it leaves your name,
This is why money is debt and your debt is good for Wall Street prosperity,
And economic growth since the 1970's,
Is consumers gettin' credit without wages increasing,
So when they talk about the housing crisis,
They never say "we need to lower housing prices,"
"We need better devices to afford high prices,"
Meaning higher debt / lower interest,
Cause you're underpaid to begin with,
That's the cycle we're in,
We don't understand so all we can do is question,

Chorus:
Mama economy make me understand,
All the numbers,
Why daddy's on a welfare plan,
Turnin' thirty forty fifty,
Gotta move in with my parents,
And the stocks go up,
But the jobs disappear,

Yeah,
Mama economy make me understand,
All the numbers,
Why daddy's on a welfare plan,
Turnin' thirty forty fifty,
Gotta move in with my parents,
And the stocks go up,
But the jobs disappear,

Because wages barely grew for ... forty years,
When you buy stuff they delay the cost of ownership,
You can't afford it so they make it to depend on,
Endless small transactions which is like renting,
You pay more for printer ink than you do for gold,
And more for bottled water than you do for oil,
Razor blades are made to oxidate,
So you're forever in debt to them -- just to shave,
It's a type of socialism called "market socialism."
The best-designed product meets a need and doesn't last,
We subsidize waste with landfills and holidays like earth day,
Teachin' kids -- "Recycle Please!"
But kids don't learn in school we live one worldview --
Neoliberal economics in all their politics,
They don't ask why corporations are human citizens,
Or why grandma pays more taxes cause she lacks stock dividends,
Or why private bankers print the public money,
Or why democracy is broken cause their leaders won't be cutting,
Loopholes or subsidies for constituent industries,
Putting legislative bodies in a deep freeze,
So the Ph.D.'s and the G.E.D.'s cry with Ayn Rand down at the temp agency,
Sayin' "We believed in meritocracy..."
"But there's more to the story -- Answer me!"

Chorus:
Mama economy make me understand,
All the numbers,
Why daddy's on a welfare plan,
Turnin' thirty forty fifty,
Gotta move in with my parents,
And the stocks go up,
But the jobs disappear,

Yeah,
Mama economy make me understand,
All the numbers,
Why daddy's on a welfare plan,
Turnin' thirty forty fifty,
Gotta move in with my parents,
And the stocks go up,
But the jobs disappear,

Mama economy make me understand,
All the numbers,
Why daddy's on a welfare plan,
Turnin' thirty forty fifty,
Gotta move in with my parents,
And the stocks go up,
But the jobs disappear.
----
Violin: Lindsey 'Stomp' Stirling
Other stuff: Tay Zonday

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia