An East Texas Swampland Economist in a World of Cognoscente’s: Like a Minnow in a Sea of Whales

I received the following comment from a reader of my last TPJ Magazine column dated 8/26/2012:

“I enjoyed reading Mickey Walkers' column in the current issue. So I decided to step back and read some of his past commentaries and I. learned something very quickly while doing so. I discovered that Mr. Walker lacks even a rudimentary understanding with regard to the FACT that the U.S. is a Monetarily Sovereign Nation. It is not like a member of the European Union, it is not like a local government nor a state government and it is certainly not like a household, you and me. Until he educates himself in matters economic and becomes cognoscente about Monetary Sovereignty and it's meaning he should avoid commenting on such matters. It is a FACT that those who fail to understand Monetary Sovereignty to not understand economics.”

Obsolete Italian cognoscente (now conoscente) from Latin cognoscere "to know"

Indeed. But the fair reader does make some valid points. I am not a cognoscente when it comes to economics to be sure. I do understand, however, that when a sovereign nation can and does print money that all bets are off when the leaders of a sovereign nation such as America prints excessive dollars just to cover its mistakes and departures from borrowing and spending too much. In short, a sovereign nation such as the United States can screw the country and its people to the wall if it wants to by printing vast amounts of new currency without adding one cent of value to each dollar fresh off the presses. On the contrary these new dollars plus the ones in your pocket become devalued and will not buy what they used to buy. Inflation begins to choke us down (been to Kroger or the Exxon pumps lately?). In short, a monetarily sovereign nation can screw its people. It can borrow trillions of dollars to start wars and never pay back the money borrowed nor even the interest on the money. That’s not cognoscente economics; that is a blight brought upon an innocent nation to fuel the Military Industrial Complex Ike warned us about, isn’t it? And social programs promised by candidates seeking election to public office. Many years ago Congress and many presidents set up elaborate social programs that cost trillions of dollars and helped bring our national debt to a stunning $15.5 trillion! Mr. Reader is correct that even if America did not have the cold cash to finance all these military expenditures or welfare programs no matter. America is a sovereign monetary nation and can print as much money as it wants to. But will there be consequences?

It is a fact that the United States as a sovereign nation can and does control the money supply. It can devalue our dollar; our houses can go underwater, our jobs overseas as the government pathetically tries to borrow more and more money from other nations. And when it does not get the money necessary to keep our government from shutting down guess what? The Fed buys the entire shortfall. That’s right, the Fed buys the US Treasury Notes and Bills that China and Japan did not want. Otherwise our government would shut down. And the Fed pays for the Treasuries with newly printed dollars. Monopoly money, anyone? If you got a printing press why worry? Is this legalized debauchery what Mr. Reader meant when he said, “It is a FACT that those who fail to understand Monetary Sovereignty to not understand economics?” I do not think many Americans would think this wanton abuse of the value of the dollar comes under the discipline of economics. But we all understand monetary rape. I think we would be better served if we understood the peril of not having checks and balances on our sovereign nation borrowing and spending and printing money.   

And if understanding that is to understand economics, I say bunk. That is grand theft America. And that is what has happened to us while all the cognoscente’s of economics were guiding the future of this great country and flushing it down the financial toilet. Maybe that is why so many Americans favor auditing the Fed, eh? Understanding basic arithmetic and the justifying the purpose of the secretive Fed seem like the number one thing that should top our “economic” agenda.

Sorry, but I could not help looking up such a $10 word such as “cognoscente” used in such a small, stuffy context (and come to find out it is an obsolete word as well.). From what tongue would such a word slide off so like a meandering serpent, seeking to intimidate and to evoke an image of an erudite messenger, maybe a scholar of economics or some other lofty discipline? Is this what Mr. Reader portends? Should I be impressed?  Or grateful that I am not “eat up” with the same demons that make him fixated on theory instead of reality and real people who would prosper or suffer due to sovereign monetary mistakes that hurt real Americans?  Like, why continue to bait up your trotline when you can see a 50-pounder thrashing a few hooks down? His solution for my redemption, he hints would be for me to develop even a “rudimentary” understanding that the “FACT” (all caps) that the U.S. is a “Monetarily Sovereign Nation.” I have no argument with him on that point: we all could stand some enlightenment on all subjects humans enjoy talking about. Except for the fact that his chosen word, “cognoscente” is a noun, not an adverb. Sorry to sound so tacky but what is more urgent, in my humble opinion, is Mr. Reader’s need to take a remedial crash course in 4th grade Mathematics so that he might grasp the FACT that economics cannot excuse nor cure our $15 trillion dollar debt (and counting).

Perhaps Mr. Reader you should try a taking a deep breath, relax and go slumming a bit by trying to explain the 8-year pestilence of Ronald Reagan’s “voodoo economics” he inflicted upon us taxpayers back in the 1980s.  You know, the Supply Side stuff, the Laffer Curve monstrosity that fueled Ronnie’s biblical “Evil Empire” witch hunt. You remember how he convinced the American people and Congress to follow his lead (trust me; I am in charge of the Monetary Policy of a Sovereign nation, wink, wink)? After all we needed to bring the Evil Empire to its knees, didn’t we?  The war corporations needed to sell some more $500 hammers. And borrowing the $3 trillion to that divine end was okay, right?  As a sovereign monetary nation we can just print more money to cover the shortfall of Treasury Notes we need to sell, but cannot. So we buy our own paper. Cheney said later that Reagan taught us that deficits don’t matter, and like a silly goose, Bush II obliged and attacked Iraq.  Ka-ching! $4 trillion more was borrowed and spent and added to our National Debt. Poor old Ike’s grave warning for us not to allow our government to be in bed with the Military Industrial Complex went poof in the night.

Mr. Reader, please help us all feel better and to understand Reagan’s spendthrift economics that plunged our country to an additional $3 trillion in the hole (not counting interest for 3 decades)? As a cognoscente of economics that should not be a hurdle for you.

Please tell us things will be alright now that we have fallen into the abyss caused by borrowing and spending to line the pockets of the Military Industrial Complex at a time when the U.S. was at peace with no need to spend money to fight anybody, or any Sovereign nation? Same goes for Bush II and his mindless attack on Iraq (duh, wrong target) Mr. Reader. Perhaps you could explain that little borrowing and spending spree of over $4 trillion that will be choking us Americans trying to make a living now in 2012 when the interest on that little piece of borrowing will haunt us and our posterity forever as our National Debt soars for eons. Where are the cognoscente’s when you need them?

Greenspan was an economist, a real cognoscente if there ever was one. He said he understood economics yet later on admitted that he had been totally and completely wrong. Poor baby.  You can read all about it by Googling “Greenspan admits he was wrong.” But the really damning video has been taken down from YouTube where once he admitted total guilt and now he is accepting “partial” fault for being wrong about his model for the economy. Duh, was he a “cognoscente?” Probably so, Mr. Reader because he believed we as a sovereign monetary nation could never fail. Note below: Greenspan says “Just print more money.”

Laffer and his “trickle down” economics was a cruel joke that gave Americans burger-flipping jobs that Reagan labeled manufacturing jobs. I understand “Monetary Policy” all right.  Whoever has the keys to the United States Treasury can exercise his Sovereign Monetary philosophy so that he can borrow and spend trillions of dollars on whimsical folly. And never have to pay it back.

Obviously, Mr. Reader, you are an economic cognoscente. So do you approve of Ben Bernanke’s remedy for our running out of money when other Sovereign nations have refused to continue loaning the US more money? He is printing trillions of paper dollars, having no added value other than the ink and the paper. Do you understand borrowing and stealing? Oops, I meant borrowing and spending. How about Addition and Subtraction? You say that a sovereign monetary nation does not operate on a budget like you and me, and I give you that. But would that be so wrong as opposed to the shambles we find ourselves in?  Do you really believe we Americans will not suffer because our sovereign nation borrowed trillions of dollars that we will never pay back? Are you at all concerned that the US Dollar as the world currency is being replaced by other countries’ currencies, e.g., the Chinese Renminbi and Yuan? Do you think an ever-rising debt and interest on it all is not a concern because we are a sovereign monetary nation and can just print more money? Do you understand the aftermath of people without jobs, homes, and quality of life thanks to the cognoscente's who call themselves economists and leaders who with a wink and a nod brought us to the brink of financial bankruptcy? Do you empathize with the millions of senior citizens who are faced now with cuts in Medicare, Medicaid, and Social Security? Or maybe you would prefer to debate the technicalities, and talk about theory, not the reality that is the catastrophe of what now lingers due to the trust we placed in our Sovereign leaders?  It is difficult to care about your textbook comments about how a Sovereign Monetary policy works when we all have been had by the leaders we elected and trusted to do the right thing. 

Oh, and you said you enjoyed reading my last column. Thanks. But I got to ask, what did you think about Reagan’s having Jimmy Carter’s solar panels taken down from the White House so we taxpayers could pay more taxes due to higher electric bills incurred at the White House? Is that an example of your Sovereign Monetary policy of a nation? Could it be defended without using doublespeak? And I do apologize for misusing cognoscente, not as a noun which most all world dictionaries agree is its given literary character. But when you used it as an adverb, well I never. Ergo, flippantly, I used it any which way it would fit into a sentence, and I hope you don’t mind because at present I am feeling a bit guilty for doing that. Meanwhile, thank you for your sincere comments and advice. I will take them under advisement.