Tegucigalpa on the Potomac

This tweet caught my eye:

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Wrong, this is exactly who we are. Tens of millions of Americans support Trump’s coup attempt.

For years I’ve been pointing out that the US is becoming a banana republic. Does anyone still dispute my claim?

“But Gorsuch . . . “

“TDS!”

Intellectuals can be so clueless.


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50 Responses to “Tegucigalpa on the Potomac”

  1. Gravatar of Andrew Andrew
    6. January 2021 at 13:45

    Having lived in Honduras for a period of time in the late 80s, May I say you are being hard on the Goose.

  2. Gravatar of ssumner ssumner
    6. January 2021 at 14:18

    Andrew, Yes, you are probably correct.

  3. Gravatar of anon/portly anon/portly
    6. January 2021 at 14:39

    “Intellectuals can be so clueless.”

    You’re saying there are pro-Trump intellectuals? I think that’s a stretch. Anyone who didn’t get PJ O’Rourke’s “Hillary’s bad, but bad within normal parameters” the moment they heard it, isn’t really an intellectual.

    At the very least they can’t be a *policy* intellectual. Can you be a low-information policy intellectual?

    That doesn’t mean they have to agree with everything you say about Trump – I don’t myself. And in any case Trump hasn’t been all that easy to figure out, as we’re in month 48 and I don’t think anyone can truthfully say they know the answer to all (or even most) of the many “can he really be that [sleazy, lazy, dim, thoughtless, etc]?” type questions that have, if anything, only increased in frequency during his term in office. (The Sumner answer is generally a stronger “yes” than my own answer – I am generally more agnostic, or just baffled).

    (If this is a nutty comment hey, I think we all get three or four “free” nutty comments today – it’s harder to think clearly when your jaw is fixed in an open position).

  4. Gravatar of anon/portly anon/portly
    6. January 2021 at 14:43

    Just a note, probably wacky: doesn’t it seem like there’s a strong cosplay element among the rioters? The “banana republic” thing is one thing, but the “extended childhood” thing is another….

  5. Gravatar of Michael Sandifer Michael Sandifer
    6. January 2021 at 14:44

    This may be the “Have you no sense of decency sir?!” McCarthy moment for this braindead movement. Let’s hope. After this, I think the Trumps are probably finished as candidates in American politics.

  6. Gravatar of Andrew Andrew
    6. January 2021 at 15:43

    The path to a pardon is now closed. I wonder if Trump can live with the thought of incarceration. He may leave in a casket – probably by his own hand.

  7. Gravatar of Carl Carl
    6. January 2021 at 15:53

    I think Pence just became the de facto President for the next two weeks. Trump no longer has any legitimacy after what he said today. He’ll probably write a few more pardons, but beyond that he will be ignored. All he’ll be capable of doing is winding up his wahoos.

  8. Gravatar of ssumner ssumner
    6. January 2021 at 16:12

    anon/portly, There are lots of intellectuals who said Trump’s critics had TDS, and that it was all OK because he picked Gorsuch.

    Michael, You said:

    “This may be the “Have you no sense of decency sir?!” McCarthy moment for this braindead movement.”

    That works in the movies, and in countries that are not banana republics.

  9. Gravatar of Michael Sandifer Michael Sandifer
    6. January 2021 at 16:30

    Something I didn’t know when I wrote my last comment is that large Twitter stakeholders are discussing deleting Trump’s account. It’s already locked. Also, Facebook may take unprecented action against Trump.

    This could support my view that the Trumps are finished. This was a bridge much too far.

  10. Gravatar of msgkings msgkings
    6. January 2021 at 16:43

    @Carl:

    It’s already happening sort of. Pence was the one who gave the order to send in the National Guard, not the commander in chief (for 2 more weeks). Trump is done.

  11. Gravatar of Ray Lopez Ray Lopez
    6. January 2021 at 17:01

    So Scott Sumner, tell us, do you think the Capitol police were justified to fatally shoot a female protestor, assuming she was unarmed, in the chest for trying to enter the House chamber?

    Keep in mind according to the evening news it is said every few years some nut case tries to disrupt Congress by shouting from the gallery and enter into the chamber, and further, the better practice among police is not to use deadly force during a riot. I breathlessly await your reply (snicker).

  12. Gravatar of Benjamin Cole Benjamin Cole
    6. January 2021 at 17:05

    “The protestors who took over the Capitol building were mostly peaceful. Police violence resulted in the death of one woman-activist.”

    Oh wait. The right narrative, but for the wrong protest.

    I think Scott Sumner is right in many regards. In in a Banana Republic, the media is not left-wing or right-wing, or ideological, but rather affiliated with a dominant political party, and that affiliation determines what is true and what is a “conspiracy theory”.

    Keep your eyes open and your mouth shut.

  13. Gravatar of Nick Ronalds Nick Ronalds
    6. January 2021 at 18:14

    In a banana republic coups are staged and carried through. A shambolic swarming of a Capitol by supporters from the silliest, dumbest end of a the tail of a losing candidate’s supporters, whatever it is, does not equal a coup.

  14. Gravatar of Cartesian Theatics Cartesian Theatics
    6. January 2021 at 18:17

    Welp, they sure got what they were looking for there.

    Win the culture. Bloody fools.

  15. Gravatar of mbka mbka
    6. January 2021 at 18:21

    On the bright side, if due process carries on in spite of all of this, the American Republic still wins. Pretty much anything is “OK” (using the term loosely) as long as due process is perceived winning.

    The Georgia result also shows that the scales tilt away from supporting the madness.

  16. Gravatar of Thomas Hutcheson Thomas Hutcheson
    6. January 2021 at 18:25

    We do not have to wait for Jan 20. He can be impeached and removed from office,

  17. Gravatar of msgkings msgkings
    6. January 2021 at 18:42

    @Ray Lopez:

    Regarding that sad, deluded woman who was killed:

    Play stupid games, win stupid prizes.

  18. Gravatar of ssumner ssumner
    6. January 2021 at 20:51

    All the usual suspects are even stupider than usual today, which hardly seems possible. And yet read the comments. SMH

  19. Gravatar of Mark Z Mark Z
    6. January 2021 at 21:37

    Channeling Pierre Lemieux: who exactly is “we?”

    Ray,
    “So Scott Sumner, tell us, do you think the Capitol police were justified to fatally shoot a female protestor, assuming she was unarmed, in the chest for trying to enter the House chamber?”
    That’s just sexist.

  20. Gravatar of Benjamin Cole Benjamin Cole
    6. January 2021 at 21:53

    “Mostly US-flag waving, peaceful BLM activists occupied the US Capitol today to protest election results. As tensions rose, one black woman—an Air Force veteran—was shot dead by a white police officer.”

    Whoops—wrong narrative again.

    Here we go:

    “Pro-Trump mobs stormed the US Capitol today, and shots were fired. One woman rioter is dead. A Confederate flag was seen inside the Capitol building.”

    —30—

    I am no Trump fan. Better he leaves. Terrible personality for the job.

    But the news coverage…well, like Scott Sumner says, it is like reading “newspapers” in bananaland.

    What do some “mobs storm a building” while other “protestors occupy a building”?

  21. Gravatar of David S David S
    6. January 2021 at 23:32

    Is this the divorce between country club Republicans and Trump Republicans? Prior to yesterday I thought it was solid marriage.

    Did McConnell miscalculate? Or is there a sliver of principle in the man.

    Oh, and we should keep an eye on Mitt Romney. He doesn’t have a soul, but he knows how to hold a grudge–just ask Matt Amorello.

    And how about the guy who is carrying the nuclear football around right now? What’s going through his mind in the wee hours of the night—and for the next 14 days?

  22. Gravatar of Ray Lopez Ray Lopez
    6. January 2021 at 23:36

    It’s pretty obvious that the Capital police who shot the hapless woman protestor/rioter was wrong. They didn’t shoot the painted guy with the horns who stood at the dias, nor the laughing redneck who had his feet on the table of Nancy Pelosi. So why shoot the girl? And will the police be prosecuted for killing an unarmed trespasser? Keep in mind, like in the case of George Floyd killed for kiting a bad check, the penalty for invading the US Capital building (per news reports) is technically merely trespassing, nothing mores serious. Yes, only trespassing. So we kill a young woman for trespassing? Further in Wisconsin a few years ago some left-wing agitators took over the state capital and nobody was killed, see story here: https://www.unz.com/isteve/alternative-timeline-nyt-mostly-peaceful-protesters-call-for-electoral-accountability-inside-capitol/

    Hello Dr. Sumner? Will you speak out against this, as well as the plight of the Ugyhurs? Crickets….

  23. Gravatar of Benjamin Cole Benjamin Cole
    7. January 2021 at 01:11

    David S-

    “Is this the divorce between country club Republicans and Trump Republicans? Prior to yesterday I thought it was solid marriage.”

    Trump, if he was not such an ass, had a historic opportunity to create a better GOP.

    Globalism is not working for the employee classes of developed nations. If you read Michael Pettis’ “Trade Wars Are Class Wars,” it is not clear how globalism can work for the employee class, since successful trade policy in Germany and China (and other parts of Europe and the Far East) is based on reducing labor share of income.

    Add on property zoning, and then axiomatic and chronic foreign capital inflows bloating asset values, including property (everywhere in the Anglosphere, house prices have exploded—just a coincidence?)

    US economists have been useless, even dangerous in assessing present macroeconomic circumstance, usually jibber-jabbering about inflation.

    Trump got it—open borders are not working, “free trade” is a myth, and labor needs more leverage.

    But Trump appears demented, even borderline looney, unable to build alliances, or to stay on course.

    Can the GOP forge an alliance of domestic labor and industry? There are 160 million employees in the US. It is the good foundation for a party, and Donks have abandoned it.

    I think not, the GOP will proceed in a directionless muddle.

    The money-soaked Donks will marry the BLM crowd to the globalists and notch some victories. The old divide-and-conquer routine.

  24. Gravatar of Julius Probst Julius Probst
    7. January 2021 at 01:16

    I wrote this short piece on the rise of fascism in 2016, feels relevant now
    https://macrothoughts.weebly.com/blog/the-rise-of-fascism
    Very sad about the events that unfold in the US

  25. Gravatar of mbka mbka
    7. January 2021 at 01:34

    Ray and Benjamin,

    from ChannelNewsAsia, presumably more objective than any US news site right now (and definitely more than a fringe site like Unz):

    “The woman was shot as the mob tried to break through a barricaded door in the Capitol where police were armed on the other side”

    “47 of the 52 arrests so far were related to violations of District of Columbia Mayor Muriel Bowser’s 6pm curfew”

    “Several others were arrested on charges related to carrying unlicensed or prohibited firearms.”

    “Two pipe bombs were recovered from the headquarters of the Republican and Democratic national committees, as well as a cooler from a vehicle on US Capitol grounds that contained Molotov cocktails.”

    “Police said both law enforcement and Trump supporters deployed chemical irritants during the hours-long occupation of the Capitol building”.

    But yea, besides these small details, totally sounds like routine peaceful deployment of the confederate flag on a US Government building.

  26. Gravatar of Benjamin Cole Benjamin Cole
    7. January 2021 at 03:12

    mbka:

    The Channel News reports could be true, or not.

    But what is seen on videos is a largely peaceful occupation of the US Capitol building, marred by police gunfire, and the consequent death of a female Air Force veteran. I saw dozens, perhaps hundreds of US flags, but no confederate flags.

    The pipe bombs and other items you mention could be false-flag operations or not. Who knows?

    I deplore any kind of violence. A peaceful occupation of the US Capitol sounds like a hoot, and I am sorry death resulted.

    Inevitably, any large crowd, leftie or rightie or alt, or sports-stadium, draws a few nuts. Trump, through his strange public persona, may encourage the nuts. I am glad he is leaving.

    But on the question of media framing, you do not see a difference between how a BLM protest, or riot, is treated compared with a Trump protest, or riot? Or an “occupation” from a “storming”?

  27. Gravatar of mbka mbka
    7. January 2021 at 04:08

    Benjamin,

    here’s your confederate flag https://www.bbc.com/news/world-us-canada-55568131 . Police did fire tear gas, then were overwhelmed and pushed back. To me it’s a miracle that only one person was shot. Three others apparently died of their health conditions (!) which tells you something about how bad the situation was. Probably suffocated.

    Of course it could all have been staged, the bombs false flag operations, the moon landing a hoax, and Trump had no idea this could happen. And Hitler had no idea either that the SA, uh, occasionally, uh, roughed up people.

    And frankly, the police looked hapless and passive. In any other country this would start with tear gas use outdoors, then rubber bullets on the steps of the building, then live bullets indoors. Do you think the congressmen hid lying down behind their desks for fun and entertainment? Had this been a BLM protest, they’d probably ran over the protesters with tanks.

    At least we now know how the lunatic fringe looks like that will support Trump til the bitter end https://ichef.bbci.co.uk/news/976/cpsprodpb/392D/production/_116373641_gettyimages-1294932124.jpg

  28. Gravatar of Michael Sandifer Michael Sandifer
    7. January 2021 at 05:35

    In some ways, we have a very good President for this moment. Biden is friends with many of the stalwarts on both sides in Congress and is naturally inclined toward bipartisanship. I hope he makes a real overture to Republican moderates and brings as many of them into the Democratic Party as possible, drawing a sharp contrast with extremists.

    Let’s address the economic insecurity in the country with something like Friedman’s negative income tax, but inflation-adjusted annually.

    Then, let’s have a new consensus on foreign policy, recognizing the special role the US needs to play to maintain global balances of power. Let’s start to be explicit with voters about US intentions, but conduct ourselves in a way consistent with American republican values.

    Let’s also reach an agreement on court nominations, with both sides agreeing to choose less controversial judges, with an emphasis on maintaining legal precedent, for the most part.

    And some kind of immigration reform will be welcome, perhaps without citizenship for those long in the country illegally. I’d prefer citizenship, but this is a time for compromise. Let’s allow them all to stay permanently, sans citizenship, and open the borders up as much as possible to permanent alien residents, few of whom will ever qualify as citizens. Make it easy to come and stay in America as long as desired, but harder to obtain citizenship. Make citizenship require higher than average incomes and taxes paid over some period of time, just as a start.

    On healthcare, a Medicare public option probably would help ease concerns about healthcare security, being highly suboptimal though it is. Singapore-style reform would be far better, but will it ever be politically possible?

    Finally, let’s address climate change with a stiff carbon tax that goes to 100% to helping to fund the negative income tax, or is somehow otherwise 100% refundable.

    We desperately need a period of peace and as much bipartisanship as possible to give Americans a clear alternative to the chaos and division that otherwise results. These are just some of the long festering issues, resolution of which would greatly help to calm the nerves around the country.

  29. Gravatar of Sean Sean
    7. January 2021 at 06:37

    Only a fool thinks the problems today are policy related. For the most part trump followed the policy playbook of a neoliberal GOP candidate. He cut taxes. He continued most Obama policies. The only big difference was China policy.

    This is 100% culture and media wars. A lot of rural people don’t like being called racists, deplorable and backward all day by media elites.

    Add in the banana republic media we now have that’s given up critical thinking for advocacy. The hypocrisy between how they treat the summer riots versus the capital riots is in display. We are being divided into two tribes which is hyper partisaning both tribes.

    Sumners solutions of tds and tightening institutional control isn’t going to solve the problems. What we need now are politicians recognizing valid grievances and a media to become more balanced.

  30. Gravatar of Becky Hargrove Becky Hargrove
    7. January 2021 at 07:01

    Benjamin,
    While the media didn’t specifically focus on it, there was also a F*&# Biden flag (yes, spelled out) which was paraded through the Capitol. I recognized it, because the same flag is still flying at a neighbor’s house this morning. Supposedly I live in a safe town, but this obscene flag and sentiment is neither good for safety or property values.

  31. Gravatar of Philo Philo
    7. January 2021 at 08:35

    “Tens of millions of Americans support Trump’s coup attempt.” There are probably tens of millions who support communism. Thank goodness for the median voter.

  32. Gravatar of Tacticus Tacticus
    7. January 2021 at 08:38

    It wasn’t an attempted coup, it was an insurrection / sedition. Very disturbing, nevertheless, of course.

  33. Gravatar of Becky Hargrove Becky Hargrove
    7. January 2021 at 08:51

    Benjamin,
    Here’s another example of the difference between “occupying” and “storming”
    https://apnews.com/article/congress-stormed-us-34417ac51a765e297faf53eb0ad15517

  34. Gravatar of Benjamin Cole Benjamin Cole
    7. January 2021 at 09:07

    mbka/Becky:

    OK, I also saw the photo, there was one guy with a Confederate flag, and dozens and dozens, maybe hundreds with US flags.

    I believe Becky there was a guy with an offensive flag regarding Biden.

    This is all framing.

    One could write, “Hundreds of Trump supporters, mostly peaceful and waving US flags, occupied to Capital building to protest what they say was a rigged election. A police officer shot and killed a 36-year-woman demonstrator, an unarmed Air Force veteran. Three other demonstrators also died, after police fired tear gas and forcibly removed protestors from the Capitol area.”

    Or, “A mob tore in the Capitol, bearing signs with vulgar slogans and Confederate flags, resulting in numerous police injuries and the death of one rioter. Three other bystanders died from unknown causes in the vicinity of the swirling, rioting mob.”

    Only months ago there were laughable broadcasts of “mostly peaceful” demonstrations in US cities where buildings were being looted and burned.

    Anyway, Trump is leaving, and good riddance. The media wants you to believe he staged a “coup attempt.” Maybe this was the TV reality-show version of a “coup.”

    It’s banana-time in the USA—and US media is looking very tuity-fruity too.

  35. Gravatar of Bob Obrien Bob Obrien
    7. January 2021 at 09:42

    How about we wait to hang Trump until we learn what really happened. I have seen reports that the capital police opened the barriers and let the Trump folks into the capital. I have also seen reports that Antifa was responsible for the violence.

  36. Gravatar of ssumner ssumner
    7. January 2021 at 09:58

    Ben, You said:

    “But what is seen on videos is a largely peaceful occupation of the US Capitol building,”

    LOL, you really have been drinking the koolaid:

    “more than a dozen police officers were injured after a mob of supporters of President Donald Trump stormed the nation’s legislative building, temporarily shutting down a vote to certify his successor’s win.”

    Sean, It sad that you people are too proud to admit that you were wrong about Trump. It shows a lack of maturity. I’d suggesting watching a few speeches by Mitt Romney; you might learn something about life.

    Philo, You said:

    “Thank goodness for the median voter.”

    The median voter voted for Hillary in 2016. Have you forgotten that we are not a democracy? The President is not the person who wins the median vote, he’s the one who wins the EC.

    Bob, You said:

    “I have also seen reports that Antifa was responsible for the violence.”

    That’s obvious. Trump frequently speaks to large groups of Antifa. Who else could it be?

  37. Gravatar of ssumner ssumner
    7. January 2021 at 10:00

    Julius, Very good. I suspect that the internet, terrorism and immigration also play a role.

  38. Gravatar of Trying to Learn Trying to Learn
    7. January 2021 at 11:09

    Scott,

    What realistic (defined as something it’s feasible they’d actually support) policies do you hope Congress and the Biden administration implement in the next two years?

  39. Gravatar of Keenan Keenan
    7. January 2021 at 12:00

    “Intellectuals can be so clueless.”

    Feels out of place here. Wouldn’t intellectuals be doing things other than tuning into political reality tv?

    I would consider you an intellectual Scott, and I hope to see more intellectual-geared posts. Because they’re you’re best!! What are you reading?

  40. Gravatar of Bob Obrien Bob Obrien
    7. January 2021 at 12:36

    “Trump frequently speaks to large groups of Antifa. Who else could it be?”

    I do not believe Trump speaks to (except to condemn them), sides with or encourages Antifa. Just the opposite.

  41. Gravatar of msgkings msgkings
    7. January 2021 at 12:51

    LOL @ Bob Obrien

    Literally not intelligent enough to understand this blog or the comments.

  42. Gravatar of ssumner ssumner
    7. January 2021 at 13:54

    Trying, Maybe something on pot. Perhaps a law that says the Feds won’t interfere in states that have legalized it, while still not legalizing pot nationwide (which Biden would oppose.)

    Otherwise, I expect little from Congress. On his own, Biden could do something on immigration and perhaps trade.

    Of course they’ll also do lots of bad stuff.

  43. Gravatar of ssumner ssumner
    7. January 2021 at 13:58

    Keenan, I mostly read novels, but I did just read a book on philosophy by Schopenhauer.

    For news I read The Economist, the FT, WSJ, WaPo, NYT, Bloomberg, Reason magazine. I subscribe to substack blogs by Matt Yglesias and Razib Khan.

  44. Gravatar of Postkey Postkey
    7. January 2021 at 14:35

    “For news I read The Economist, the FT, WSJ, WaPo, NYT, Bloomberg, Reason magazine. I subscribe to substack blogs by Matt Yglesias and Razib Khan.”

    L.O.L.. Pays to be indoctrinated!

  45. Gravatar of Ray Lopez Ray Lopez
    7. January 2021 at 16:26

    @Everybody- “20 hours ago — WASHINGTON — DC Police said two pipe bombs and a cooler of Molotov cocktails were found near the US Capitol Building “- NEAR is not INSIDE. Some kooks had explosives NEAR the Capital building, so what? There’s probably also 100s of illegal guns outside the Capital building, from gangbangers.

    Second, explain why the Wisconsin union radicals occupation of the WI state building, which was far worse than the US Capital building occupation (see my link above), and which was non-violent (nobody died) should be ignored? Where’s the outrage for the WI occupation?

    Much ado about nothing, this whole tempest in a teapot. The solution is simply to beef up and train better the US Capital police.

  46. Gravatar of mbka mbka
    7. January 2021 at 17:06

    Bob, Benjamin,

    I saw photos and videos of protesters smashing windows and doors using barricades and shields. I saw videos of people jumping in through the smashed windows wearing military garb, helmets (!) and backpacks. I saw videos of people using their flag poles as spears. I saw photos and videos of people pushing police into tight corridors. I saw photos of people pushing against windows of barricaded doors when they could clearly see that they were facing half a dozen drawn guns by federal agents point blank. But hey, maybe the woman who was shot was also a secret Antifa mole. And all the nazis back in the 1930s were just poor misled but basically well-meaning and innocent ordinary people. (which of course they were before they became nazi henchmen, same applies to those who stormed the Capitol – at some point you make a choice that’s just wrong, and then you’re not innocent anymore, no matter your pure intentions).

  47. Gravatar of Benjamin Cole Benjamin Cole
    7. January 2021 at 19:00

    mbka–

    https://www.npr.org/sections/congress-electoral-college-tally-live-updates/2021/01/07/954333542/four-dead-police-injured-dozens-arrested-after-siege-at-the-u-s-capitol

    “Updated at 8:48 p.m. ET

    U.S. Capitol Police say the report that one of its officers had died after being assaulted by violent protesters loyal to President Trump is not accurate. NPR incorrectly reported the death based on information from a well-placed source.

    “Although some officers were injured and hospitalized yesterday, no USCP officers have passed away,” Capitol Police said in a statement. “We ask that our officers’ and their families’ privacy be respected at this time. Should a statement become necessary, the Department will issue one at the appropriate time.”

    —30—

    Well, I give NPR credit for issuing the correction. But you see what goes on in media coverage?

    I do not support the occupation of the US Capitol building. It looked like a reality-TV show version of a coup, and I deplore violence and vandalism.

    What I am pointing out is the media framing of the Trump supporters vs. other favored demonstrations of recent months.

    I watched some news videos, and everyone in establishment DC is totally appalled, incredibly indignant, 100% offended and in a complete pique that villainous, low-life Trump supporters occupied the Capitol building.

    Well, Trump can cruise-missile to death 14 women in Yemen, and that was worth a brief mild discussion, maybe, but the occupation of the Capitol was horrific! A treasonous catastrophe! Bring my adult diapers!

    And the same people condemning “the police” a few months back are now deeply, deeply concerned about police lives.

    The Washington “Banana” Post is offering budget subscriptions….

  48. Gravatar of Spencer B. Hall Spencer B. Hall
    7. January 2021 at 23:29

    re: banana republic

    That happened in 1961.

    Economists are stupid. Economists don’t know a debit from a credit. The economic engine, the savings / investment channel (liquidity risk and maturity transformation), is being run in reverse. $15 trillion dollars in member bank-held savings is frozen, is un-used and un-spent, is lost to both consumption and investment (is an unrecognized leakage in Keynesian National Income Accounting). This is the proximate cause of the deceleration in velocity since 1981. It’s stock vs. flow.

    All monetary savings originate within the payment’s system, the source of interest-bearing deposits is other bank deposits (derivative deposits). And the source of bank deposits (loans = deposits), or commercial bank credit, has evolved since the remuneration of IBDDs, into staid injections of Reserve Bank credit (bifurcated balances between banks and nonbank customers).

    The only percipient way to activate bank-held savings is exclusively dependent upon their owners, saver-holders, to spend/invest either directly or indirectly entirely outside of the payment’s system, e.g., in a NBFI conduit.

    Banks don’t loan out deposits. Deposits are the result of lending. In fact, it’s virtually impossible for the DFIs to engage in any type of activity involving its own non-bank customers without an alteration in bank deposits (synonymous with the money stock).

    The upshot is cataclysmic. Economists say that “long-term neutral rate of interest, R *” has fallen. And this means: ”to avoid the zero lower bound on the funds rate – this fall in the neutral rate may well need to be met with an increase in the long-run inflation target set by the Fed.” And that was in 2017. Economists aren’t learning. “Those who cannot remember the past are condemned to repeat it”

  49. Gravatar of mbka mbka
    8. January 2021 at 00:05

    Benjamin,

    moving goalposts, I see.

  50. Gravatar of Willy2 Willy2
    8. January 2021 at 09:33

    – The US already was a banana republic before Trump became president. But it became more & blatently obvious when Trump became president.

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