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Jill Stein, A Thought

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Jill Stein is running for President on the Green Party ticket. I believe that Jordan Weissman, of Slate's money box, did a fine job recently of chronicling some of the difficulties in taking her policy positions seriously. Yes, Weissman is probably in the tank for HR Clinton, and probably figures running down Stein helps save the world from Trump. Still, when he's right he's right.

I'll simply paraphrase here one of Weissman's contentions, about Stein's ignorance of monetary policy.

Student loans, she said, "should be canceled in the same way that the debt of Wall Street was canceled, essentially writing it off as a digital 'hat trick,' which is done in the form of quantitative easing.”

Let's ignore this as a contribution to discussion of student loan. The point here is whether she knows an anus from a hole-in-the-ground in the realm of monetary policy. The conclusion is: she does not.

I'm against quantitative easing. I think is a disastrous policy, and Stein's implicit amiability with QE is one of the points here that should concern us. But ... never mind that. DOES SHE EVEN KNOW WHAT SUCH TERMS MEAN?  That is a prior question surely. And Weissman aptly makes the point that she does not.

QE doesn't involve cancelling the debt that banks owe. It involves the central bank buying the debt that banks own and that somebody else (often the US Treasury) owes to them.

Debt owed or debt owned. Just one small letter, eh? Just an "n" sound inserted in the right spot.

Um, no. The words "marital" and "martial" sound and look a lot a like, too. But I hope Ms Stein doesn't take them as synonyms.

Briefly. Suppose a trading desk at Bank of America owned a lot of Treasury bills. QE means the Fed buys those bills and pays for them by newly created money -- poof! the B of A desk can put the newly 'paid' money on its own books, and the Fed has the T-bills on the asset side of its balance sheet. The money supply is larger than it was a moment ago. No debt of Bank of America has been forgiven, but B of A does have more cash on hand than it did a moment ago.

The 2008 bank bailout and the subsequent rounds of QE are somewhat different subjects, conflated here. (They are related, though, and again Weissman covers all this ground well.)

In another statement, Stein connected the bailout to her proposed student debt relief program more elaborately. She said the bailout "didn't put money in" the banks' pockets, but "rid them of all that debt that they would otherwise have had to pay." That's what she wants to do for former students who owe a lot of money.

Sorry, Ms Stein, the bailout -- and the QEs -- did and DO put money into banks' pockets. Creating the money in the process. The banks are the points whence the new quantities of money enter the system, because dumping it from helicopters is considered inelegant. Such ignorance from someone of her prominence and ambitions is almost Trumpian. Though, to be fair, she is in many other respects utterly unTrumpian.

All of that said: I would still say to anyone wavering between a vote for Clinton and a vote for Stein: vote for Stein. Just as I would say to anyone wavering between a vote for Trump and one for Johnson: vote for Johnson. The big issue now is the rejection of the two party system itself, the one tat keeps giving us these 'choices.' Stein and Johnson together represent the very imperfect heads of the little rebel alliance.


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