Minute 6:20 Scott: This is why I advocate along with Henry George and other monetary reformers that we break up the monopoly of money creation itself and that that way the politicians are not going to be bribed by money because they have their own supply. Because it seems that politicians are very cheap in the world of finance that these bankers operate in (and) to buy off for congress is a modest investment from their point of view...
Yanis: I agree, Scott...
...and that they'll continue to do it and the there's no reason not to, as Andy says why they wouldn't. But the only way to break that - I believe - is to break the monopoly on money as well as the monopoly on land and the land in the expansive sense as meeting all resources.
Yanis: I agree"
Scott: So if we don't take this monopoly power away from the financiers in around two years then what hope is there for the actual productive class to have any sort of parity in the society?
Yanis: Spot on. I agree. I agree entirely. But there's one danger in this narrative, not that I disagree with you, but we have to be very careful how we hone it because today there is, as you well know, there is a tea party/libertarian argument against the monopoly of money, against the Federal Reserve, against fiat currencies and in favor of a Hegekian(?) blueprint of privatizing money and effectively allowing private...banks to issue their own currencies.
Now this libertarian pipe-dream, which of course is never going to come to fruition, is a political bulwark against the agenda that you just outlined. So it's...we must be very clear about this. It is not...the problem is not that we have state fiat money. The problem is that we have a Fed...a Federal Reserve System, in the United States, a European Central Bank in Europe, which is in the pockets of the private financiers.
And the task is not to undo the state's control of money. The point is to strengthen it but to make the state operate...operate...utilize its control of money on behalf of manufacturers, on behalf of creative people, on behalf of all those whose lives are wrecked as we speak by the rent-seeking behavior of the financiers that control through the revolving-door strategy the regulators.
Minute 9:05
It's clear Varoufakis agrees with the majority of economists in that economic demand must be increased.
Later, Mazzone and I discussed the possibilities for Greece a bit more and came up with this broad outline for a plan:
1. Issue drachmas for local consumption and spending. The amount should be enough to meet the 30% Output Gap, but not enough to cause too much inflation; the problem now, of course, is rampant deflation caused by too little money in circulation.
2. Agree to pay off the debt over 100 years, 1/100th per year. In reality, this will be the basis for negotiation, but it is a concrete one, something that has not been offered so far.
3. Use the devalued currency to encourage cheap tourism to Greece and exports. Tourism growth estimates vary considerably but 16.7% is a good mid-range calculation in 2014, and tourism remains Greece's main economic engine, supporting 53 job categories.
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