Adair Turner, Chair of Britain's Financial Services Authority by Reuter's
Taking a page from Monetary reformer Stephen Zarlenga's playbook (though I doubt he has read him), the chairman of Britain's Financial Services Authority, Adair Turner, calls for direct issuance of money to Main Street, not the banks, debt-free. See the Reuters article here and the full truly historic speech.
A couple of years ago I might have argued only for monetary stimulus by means of paying for actual work instead of direct-to-consumer money, but now, after so many QEs have effectively pumped up the elite money power, we need to send some money to Main Street just to re-achieve some sort of balance (which is why the bankers will fight this tooth and nail, so be prepared to not accept their lies). Turner's full paper tackles the inflation worries honestly, thoroughly, and provides historical examples of support from major economists - Chicago School founder Henry Simons, Milton Friedman, "Helicopter Ben" Bernanke, etc. traditionally, and wrongly, thought to be in opposition. He provides direct quotes from them going "off the reservation" at a time when it was safe to do so (Bernanke in 2002, before he became Fed Chairman, for example, but see my "Fantasy Fed Speech," just for what could and OUGHT to be said by Bernanke).
This may indeed be the breakthrough we've been waiting for. We can ratchet it back when inflation rises due to an excess of demand over ability to produce. Right now, we have vastly subpar production, and while it would be preferable to put the money towards actual production, the fact remains that if you give $1000 to every man, woman and child, it WILL stimulate the economy through increased "aggregate nominal demand" exactly as Turner says on page 2 of his speech (only 46 pages, not 70 as in his academic paper). $1000 to buy goods will mean more goods made, more goods sold through retailers, and hiring in all those sectors. When we get down to unemployment of, say, 3%, than we can start to worry about over-heating, not now.
Whatever inflation we DO have now - and that IS real in the real world basket of goods and services middle class people actually use - is caused by commodity and land speculation (read: inflation) brought on by excess money printing (QE) pumped at a rate of a trillion/year into the banking sector with nowhere else to go.
Those who knee-jerk respond with cries of "Inflation! Ruination! Zimbabwe!" etc., including the majority of commenters on this article, lack rigor. They are trading economics for the self-flagellating Austerian religion. Kudos to Ellen Brown for going beyond all that, and for finding this article and posting it to the Public Banking group. She is far more rigorous and practical than 99% of the economists out there. We need to be the same.
Austerity does not work, as they are finding out all over Europe.
It didn't work for the banks (at least from their P.O.V.), as they knew from the very beginning, and the only reason you hear it preached from that sector is so they can keep their relative wealth compared to the rest of the population, not because it's sound economics. This is why they will fight such a proposal, especially from one of their own.
I hope Turner doesn't have any skeletons in the closet, or can't be set up like Elliot Spitzer or Jean Claude Trichet were, but he'd better watch his back. These guys don't forgive and they don't forget.
*** UPDATE ***
A major analysis of Turner's speech by the UK-based Positive Money campaign can be found here.
They too, point out how past economic scions, even supposedly conservative giants like Milton Friedman and Henry Simons (founder of the Chicago School), promoted a system of "overt money finance" (Bernanke's term) to stimulate the economy.
Why do people continue in this mode, and how can we recognize it? I came across this comparison between scarcity thinking and abundance thinking that might help explain things, recently:
Here are some comparisons of mental attitudes:
Scarcity thinking: There will never be enough.
Abundance thinking: There is always more where that came from.
Scarcity thinking: Stingy with knowledge, support, and compassion
Abundance thinking: Thrives on sharing knowledge, support, and compassion
Scarcity thinking: Suspects everyone
Abundance thinking: Does not fear trusting everyone.
Scarcity thinking: Hates competition, fearing he will "lose."
Abundance thinking: Welcomes competition, believing it makes him
better and the pie bigger.
Scarcity thinking: Regards talented employees as a threat.
Abundance thinking: Regards talented employees as assets.
Scarcity thinking: "How can I get by with less than is expected?"
Abundance thinking: "How can I give more than is expected?"
Scarcity thinking: Thinks the worst is yet to come
Abundance thinking: Thinks the best is yet to come
Scarcity thinking: Thinks small. Avoids risk.
Abundance thinking: Thinks big. Embraces risk.
Scarcity thinking: Spiteful and fearful.
Abundance thinking: Grateful and confident.
Which mode does society function under? Which mode do progressives function under? Which mode do YOU function under?