ECONOMISTS

 https://internationalmoneyreform.org/news/2023/12/economists/ 

ECONOMISTS

 ( AN ARTICLE FROM THE INTERNATIONAL MOVEMENT FOR MONEY REFORM)

In the world of Economists banks are neutral players in the Economy. They lend from deposits placed by bank customers. If there are no deposits banks cannot lend. Who are the true money creators in the nation is glossed over unaddressed. They believe that is irrelevant to the economy. For Investments to happen the nation must Save.

Investments will only materialise when there is enough Savings. Investments are quite independent of banks. To the Economists banks can be ignored totally in government policy making because they are neutral; just a mover of funds from surplus units to deficient units. Never a money creator.

The fact that banks are havoc money creators in all economies is not computed into a nation’s economic policy making by Economists. Money is paper notes and coins. How many percent is that of the nation’s total money is never discussed. If banks as money creators is never discussed by Economists, there will hardly ever be occasion to discuss to where banks point that money to and its effects. Let alone where banks point that money to leads to general inflation, housing inflation, widening poverty gap, unemployed youths and graduates, frozen starting salaries, and stunted economic growth compared to potential that could strengthen the country’s exchange rate.

Money creation and money systems are quite divorced from the ups and downs in the economy. The unending inflation in nations year on year is never discussed by Economists and hardly associated with a faulty money system. That is the responsibility of Central bankers who deals with nice people from an Institution called Bank of International Settlements in Basel Switzerland. Who is behind the people in Basel is also never questioned. Why would you want to question the origin of nice people?

Economists can quote names like Keynes, Adam Smith, Ricardo, and theories like Classical, Keynesian, Laissez Faire – they are therefore very clever people. They do not need to learn new things people have learnt about the Monetary System. They have a long tradition of Economics teaching and learning from Harvard and Oxbridge. The international NGO called Reform Economics and the University Students in Netherlands and other countries protesting and demanding their Economics Lecturers to stop teaching them the wrong Economics is just an aberration that can be safely ignored. And after all Economists have interest rates as a policy tool to solve everything, bar the kitchen sink.

How do you deal with inflation? Increase the interest rate. How do you help poor people in a Covid economy? Lower interest rate. How do you improve exchange rates? Increase interest rate. How do you remove youth and graduates’ unemployment? Lower interest rate. How do you deal with house inflation? Increase interest rate. How do you address widening poverty gaps? Lower interest rate.

There are Economists in the World Bank, the IMF and there is an Economics dept in every major bank. So how could they be wrong? The World Bank and the IMF are some of the nicest institutions in the world. And banks make huge profit for themselves every year, and no Economists have complained about banks. The nation’s problem of general inflation, house inflation, unemployment of youths and graduates, frozen starting salaries, widening poverty gaps thus cannot have anything to do with banks or the monetary systems otherwise the clever Economists will be at the forefront protesting about them. Economists understand all the issues that may befall the economy of a nation and they have the interest rate to solve everything. They are therefore natural advisors to the government.

By Zahid Aziz BA Econs (Exeter), MSc IBF (IIUM), Deputy Chairman Movement for Monetary Justice, Malaysia, Core Group member IMMR.