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Subject:  Re: On Argentina, Krugman, Mosler, and Wenzel Date:  2/6/2013  9:46 AM
Author:  warrenmosler Number:  393885 of 404

It is relatively easy to formulate a policy to bring down inflation (although implementing the policy will be more difficult). Despite what you hear all the time, wage and price controls work.

I never said that, as you state, so please change your post, thanks.  And note that while Wray and I agree on quite a bit, we also have our differences.  For example, I immediately took issue with his '29 trillion bailout' calculation, as I categorically do not 'count' liquidity provision as a bailout.  Instead, I see cb liquidity provision for its member banks as a fundamental element of banking with a floating exchange rate policy.  For example, at the inception of the euro, I wrote about how the ECB was the underlying liquidity provider for the euro banking system, and that in a downturn the system can't function without it.     

Back to your artical, in fact I have made your same point about controls, and more so.  Wage controls keep down the wages of those under control while the rest benefit, so it's in general a highly regressive policy as well.

Regarding your comments on 'inflation', what I have said is that the dollar is a simple public monopoly, for better or for worse, and therefore the 'price level' is necessarily a function of prices paid by the issuer of a currency when it spends, and/or collateral demanded when it lends.  As the single suppliier of that which it demands for payment of taxes, that the govt. is necessarily price setter is a point of logic.  And, to that point, indexation of wages is has long been identified as the source of latin american 'inflations'.  

Note too the difference between what the fed calls 'relative value stories' and 'inflation stories.'  Often a cost of living increase due to relative value shifts is categorized an inflation increase, so beware the semantics.

If there is anything I actually have written that you don't agree with please let me know, thanks.  Most is on my website under 'mandatory readings'   

Warren Mosler 



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