cross-posted from: https://thelemmy.club/post/12591808
- Jared Bernstein, Joe Biden’s Chief Economist, faced difficulties explaining money’s workings in a documentary or Finding The Money,’ despite his role.
- He stumbled through concepts, highlighting the confusion around government money printing and borrowing
- Bernstein, who is head of the US Council of Economic Advisers, is not formally trained in economics and appeared bewildered in the clip
So uh…definitely we all know the correct answer right comrades?
Yes - Bernstein stumbled into a contradiction of central banking.
The fed lends money to control some inflation levers (interest rates) as well as support the political economy of banking (allow financial firms to profit from the margin between fed rates and consumer rates). Lending money as opposed to just giving people money also facilitates, in theory, prioritisation of investments that will produce a greater rate of return.
Alternatively the US could dispense with bankers and centrally plan investment (in a much greater capacity - obviously things like the CHIPS Act are central planning to a degree).
Even if you don’t, the capitalists insist they know more than you because they took economics 101 in high school. They should be able to explain their system whether you understand it or not.
I’m too lazy to watch the video for the context, but how money works is that it is exchanged for goods and services
After looking it up, it sounds like the cash part is pretty much economy-neutral. Banks essentially buy cash. If they have $100,000 and an empty ATM, they can turn that into $90,000 and an ATM with $10,000 in it. The actual thumb-on-the-scale-of-the-economy doesn’t happen there, and it wouldn’t make sense to have it happen there – banks would beg everyone to empty out the ATMs so they could refill them with fresh hondos.
Marx defines money in chapter 3 of capital. Here’s an excerpt, better to read the whole thing.
https://www.marxists.org/archive/marx/works/1867-c1/ch03.htm