DOES AMERICA NEED TO DO A 180?

* This post was written in 2011 before Mr. Roche founded Monetary Realism, which was formed due to several disagreements Mr. Roche and many other former MMT proponents had with the school of thought.  For more info on the difference in views please see here.  For more on MR’s views please see here.

This whole job guarantee debate has really shed light on the schism in many MMT thinkers.  One group wants you to believe that the American way of doing things is so broken that it needs a drastic overhaul (in this case, the hiring of up to 30 MILLION government employees).  My position has been that we need to maintain a more measured approach and acknowledge that while America is in a deep hole currently, it does not require such a drastic overhaul (yes there are big problems and I’ve spent years being bearish and discussing them, but let’s keep things in perspective).  There are things our government can do that will help enormously, but won’t risk undermining the ideals that helped build this great nation.

I think a little perspective will help with this whole debate.  People seem quick to forget what has been built here in the USA. In just 235 short years we have built the most prosperous wealth creating economy ever known to man.  EVER.  There is simply no refuting that fact.  The ideals that built that economy were based on small government and individualism.  We took the idea of a constitutional republic and combined it with a rugged sense of individualism that unleashed a whirlwind of innovation and wealth creation.   That shirt on your back?  Yep, an evil capitalist likely helped in its creation.  The computer you’re staring at?  Yeah, some evil capitalist likely helped make that.  The medicine that helps save millions of lives every year?  Yeah, capitalists help fund those.  The hundreds of billions of dollars Bill Gates and Warren Buffett have convinced themselves and their rich friends to give to charity?  ARRGGGG, THOSE GOD DAMN CAPITALISTS!   This is not to imply that capitalists are some world saving group out to find world peace.  But let’s not throw the whole idea under the bus just because a bunch of bankers got together and threw a wrench in the machinery over the last 20 years….

I know we’re in a rut right now.  But before we start thinking about completely overhauling a system that has served so many incredibly well over the course of hundreds of years, let’s try to put things in perspective and not forget that while government can certainly help our society, it is not the answer to all of our problems.   Call this story one of American exceptionalism or whatever you want to.  I call it our reality.  We know for a fact what built this great nation and we can prove (factually) how well it has performed and how far it has come in such a short period (despite recent turbulence).  If your economic policy involves a drastic overhauling of that system then the onus is on YOU to prove that the current system is not only broken, but can be outperformed by another type of approach.  To those people, I say good luck.  You will need it.

* Comments have been turned off here for fear that the internet may explode.  

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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