Modern Monetary Theory: Musk Edition

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• ContactClosure@lemmus.org ⁨11⁩ ⁨hours⁩ ago

  Elon Musk is a fucking idiot that doesn’t know how anything works. Tax the rich.

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  • sem@piefed.blahaj.zone ⁨10⁩ ⁨hours⁩ ago

    He knows how to grift.

    He knows how to abuse employees

    He knows how to strip businesses of their value for short term gain

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    • marcos@lemmy.world ⁨9⁩ ⁨hours⁩ ago

      He knows how to strip businesses of their value for short term gain

      That one is not clear. He never seems to get any gain from his businesses.

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  • cavitationfetishist2@quokk.au ⁨10⁩ ⁨hours⁩ ago

    Nah.that would create the illusion they contribute something. Exterminate them.

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• DarkFuture@lemmy.world ⁨5⁩ ⁨hours⁩ ago

  The world needs to get over this “rich people must be geniuses” fantasy.

  How many examples of fantastically wealthy absolute morons do we need?

  When you start looking into extremely wealthy people you start noticing that the majority started out life on 3rd base with pockets stuffed with cash and family connections to help them make more.

  Elon Musk is a racist moron. He used family wealth to make acquisitions 99% of us can’t make and that’s how the momentum started. He is not an engineer. He doesn’t create anything. He just buys companies and takes credit for the employee’s work.

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• gedaliyah@lemmy.world ⁨10⁩ ⁨hours⁩ ago

  Image

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• Racoonwithbenefits@lemmy.zip ⁨11⁩ ⁨hours⁩ ago

  I think maybe Musk is an idiot

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  • ToiletFlushShowerScream@piefed.world ⁨11⁩ ⁨hours⁩ ago

    I don’t understand how an entire tech industry fell so hard for him.

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    • Doom@lemmy.world ⁨8⁩ ⁨hours⁩ ago

      You should be asking who his publicist is. Whoever they are, they are very good at what they do. The only reason we all figured out Elon is a trash fire nazi is either he stopped listening to the publicist or he fired them and went rogue.

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    • cavitationfetishist2@quokk.au ⁨10⁩ ⁨hours⁩ ago

      Because nobody’s told you, or because you don’t want to?

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• TropicalDingdong@lemmy.world ⁨10⁩ ⁨hours⁩ ago

  Just to be clear, we do quite litterally print money and hand it around in time of crisis, and as a literal component of our economic development strategy.

  For example, there was no reason Obama was obligated to focus on saving the banks per se. That same money could have gone to home owners instead. They chose to do it the way that they did. Likewise during covid.

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  • UnderpantsWeevil@lemmy.world ⁨10⁩ ⁨hours⁩ ago

    we do quite litterally print money and hand it around in time of crisis

    The US Treasury borrows from the Federal Reserve on assets that are added to the Federal Reserve balance sheet. And then the Treasury pays back the loan incrementally over the period of the loan (often on the order of 10-30 years). So it isn’t “literally printed”, it is borrowed at the Federal Reserve Prime Rate, which is typically less than the growth rate of accumulated tax receipts by year.

    For example, there was no reason Obama was obligated to focus on saving the banks per se. That same money could have gone to home owners instead.

    Absolutely. TARP was some bullshit used to prop up bank equity value at the expense of homeowners.

    But the principle behind TARP was that the US government exchanged currency for equity stake in these failing firms. And the firms that recovered then bought back the state at marginally higher face value, which allowed the Treasury to book a profit for every business that hadn’t outright failed already. Over the life of the program, the real cost to the Treasury was minimal (arguably profitable, depending on who you believe).

    The Treasury could have bought up mortgage notes instead, at pennies on the dollar, and started collecting interest on the debt just like the private banks had. Then they could have renegotiated mortgages of underwater homes at lower interest rates, while the private sector lenders filed for bankruptcy. That would have drastically reduced the foreclosure rate and dumped the material cost of the financial crisis on stock and bond holders of these private companies.

    But in either case, we weren’t just printing a bunch of crisp new dollar bills (or their electronic equivalent) to fund the purchase. We were effectively doing the Vulture Capitalist trick of borrowing against the assets we’d just purchased, at an interest rate that was below the expected return value of the assets.

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    • dis_honestfamiliar@lemmy.sdf.org ⁨6⁩ ⁨hours⁩ ago

      You know… I was going to shitpost outright infinite money theory.

      The government is a sovereign country. It can print money all day long. And based on your comment, it could print print money against bonds to fund a better life for all.

      I mean this is a shit post, but I’ve also added that we could feed and house the poor.

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    • TropicalDingdong@lemmy.world ⁨8⁩ ⁨hours⁩ ago

      The US Treasury borrows from the Federal Reserve on assets that are added to the Federal Reserve balance sheet. And then the Treasury pays back the debt incrementally over the period of the loan (often on the order of 10-30 years). ***So it isn’t “literally printed”, it is borrowed at the Federal Reserve Prime Rate, ***which is typically less than the growth rate of accumulated tax receipts by year.

      And those dollars borrowed from the Federal Reserve… where do they come from?

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    • GoofSchmoofer@lemmy.world ⁨7⁩ ⁨hours⁩ ago

      The Treasury could have bought up mortgage notes instead, at pennies on the dollar, and started collecting interest on the debt just like the private banks had. Then they could have renegotiated mortgages of underwater homes at lower interest rates, while the private sector lenders filed for bankruptcy. That would have drastically reduced the foreclosure rate and dumped the material cost of the financial crisis on stock and bond holders of these private companies.

      I’m curious how this action would have changed the last 20 years of politics? Those in power during that time did a shit job of really explaining why the banks got the money and not the homeowner. I think this really exposed who the federal politicians were representing, and it wasn’t the everyday voters. I think that anger and sense of betrayal that the American people were told to “kick rocks.” while the actual criminals got a bailout of our money still sits in the dissatisfaction of most of the population.

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• TomMasz@piefed.social ⁨7⁩ ⁨hours⁩ ago

  I learned how this wouldn’t work in grade school. What are they teaching rich white South Africans these days?

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• Blue_Morpho@lemmy.world ⁨11⁩ ⁨hours⁩ ago

  We all hate Musk but isn’t Musk suggesting Universal Basic Income?

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  • ZeroGravitas@lemmy.dbzer0.com ⁨11⁩ ⁨hours⁩ ago

    No. That would be achievable through reallocation of funds, e.g. from tax revenue. If the quote is correct, that’s just increasing monetary mass, aka printing money. Which is Inflationary AF.

    That being said, I find it hard to believe that a CEO in this day and age wouldn’t have at least this basic understanding of how the economy works. This being Musk, there’s no need to invent extra character flaws. The man has plenty to go around.

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    • Bustedknuckles@lemmy.world ⁨11⁩ ⁨hours⁩ ago

      A cynical view is that he does understand and is just shitposting and muddying the water around UBI

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    • cavitationfetishist2@quokk.au ⁨10⁩ ⁨hours⁩ ago

      find it hard to believe a CEO wouldn’t understand

      Being a CEO is an actual disease that causes measurable cognitive decline.

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    • gibmiser@lemmy.world ⁨10⁩ ⁨hours⁩ ago

      Its a cover. Saying populist ideas without any intention to support them or help them come about is just a way to hide his real actions under a veneer.

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    • Bonsoir@lemmy.ca ⁨11⁩ ⁨hours⁩ ago

      Well, the text says “you could actually get deflation because there will be so much abundance produced”. There is some reality where this is true, as increasing the monetary mass would do nothing if the economy (the amount of goods and services produces) also increases. But I wouldn’t bet on an universal basic income increasing the global production.

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    • EvilBit@lemmy.world ⁨10⁩ ⁨hours⁩ ago

      The only way this makes sense, and I guarantee he’s not advocating for this, would be to print and distribute so much money to the lower and middle classes that the upper class wealth is diluted and inequality is reduced. But the havoc that would wreak outside of the US is something I can’t even speculate on.

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    • Blue_Morpho@lemmy.world ⁨11⁩ ⁨hours⁩ ago

      How do you get UBI without issuing checks from the Treasury. There isn’t enough tax money that can be taken from Billionaires to sustain UBI.

      Not just tax, but take every penny of every Billionaire in the US. Net worth of all US billionaires is 8.4 Trillion.

      270 million US adults.

      = 31k per person. Once.

      That’s 31k one time. Then there is no money for next year.

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  • Macchi_the_Slime@piefed.blahaj.zone ⁨11⁩ ⁨hours⁩ ago

    I just looked over the interview. it was fucking WEIRD man. He’s kind advocating for a UBI? Basically he’s saying that AI is going to give us the whole Star Trek “post scarcity” future thing and like money is simultaneously going to be useless, but that how that could happen is the Treasury could just give people checks and inflation wouldn’t be an issue because the AI would be creating so much abundance. It’s genuinely hard to parse

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    • ChanchoManco@lemmy.zip ⁨9⁩ ⁨hours⁩ ago

      It’s part of the grief, hyping AI and his robots while promising that he’s gonna give money after they replace the workforce. Guess what happens next?

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  • Not_mikey@lemmy.dbzer0.com ⁨7⁩ ⁨hours⁩ ago

    Yeah, billionaires like UBI because they can pretend they care about the plebs, but in reality they know it will just cause inflation, which there stocks won’t be effected by, and push even more money into the stock market to protect against inflation, inflating there portfolio.

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  • NottaLottaOcelot@lemmy.ca ⁨8⁩ ⁨hours⁩ ago

    How is a guy who says too much was spent on food stamps and foreign aid going to like the budget to produce a livable UBI? It’s basically selling people a pipe dream to justify cutting current social services, and then we can colour us all shocked when UBI either never rolls out or is like $5 per person

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• nullify3112@lemmy.world ⁨5⁩ ⁨hours⁩ ago

  Dictators and hyperinflation, name a more iconic duo.

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• 9point6@lemmy.world ⁨11⁩ ⁨hours⁩ ago

  Inflation is good for musk, it means his investments make more money

  Let’s all not be naive here

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  • UnderpantsWeevil@lemmy.world ⁨11⁩ ⁨hours⁩ ago

    In the short term. But you still need a stable currency for international trade. So far, the US has managed to keep the dollar strong(ish) especially with regard to our oil and tech exports. And they’ve done this after floating over $30T in debt, no small feat.

    Idk if Musk Bucks meaningfully change that math. So maybe it’s fine. A few hundred billion, which is still barely a percentage point on the national economy.

    But it does add stress to an already inflated system.

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• Yeller_king@reddthat.com ⁨8⁩ ⁨hours⁩ ago

  It works if you pull money out of the economy and retire it with taxation.

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  • UnderpantsWeevil@lemmy.world ⁨7⁩ ⁨hours⁩ ago

    That definitely helps. Although still have to contend with money velocity, which is why you need to adjust the prime interest rate on new debt

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• Skullgrid@lemmy.world ⁨11⁩ ⁨hours⁩ ago

  This is the richest man in the world. fucking hell. I hope we don’t get a Mansa Musa moment

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