The Powerless Politician

By “politicians” I would like to mean anyone involved in policy, so that includes civil servants and people who vote, and people who suppress the vote, and people who do good things so others don’t have to think too much to worry about the vote. But for this article I will restrict to the normative use of “an elected representative.” I’d like to thank GhostOnTheHalfShell for some inspiration.

The question is: what can local councils and regional councils do when the central government restricts their budget?

The framing (MMT): the local councils are not constrained by revenues. The tax receipts do not fund the local government.

Can they simply run a local currency to drive full employment and prosperity? (You cannot be optimally prosperous with a single person unemployed.)

Level 0 Answer — are you an agent of the state?

Far too many n00bie MMT’ers, I suspect, worry local councils depend on tax receipts. But local councils are no different to the central government departments. They are agents of central government.

No governments (that I know of) ever spend directly “as The Government”.

The tax payer is not funding the local government because the tax payer’s I.O.U. is typically worthless. The local governments are funded by the central government which is self-funding.

This is supposed to be MMT-101, so I hope Jim Byrne is reading. Which reminds me, I changed my mind and think Scotland is a better place for MMT Knowledge to grow (as well as Samoa and Barbados), since they have a strong existential (sort of) need for Independence. So Scottish people are primed for learning MMT like no others, I suspect. What Scottish national of sound mind would not like to give Westminster the middle finger?

Your Whisky exports are a real cost, but in this case it is the exception which breaks the rule: send the British Upper Crust more whisky, as much as you can, to rot their livers. Soften up their military too like this, then when their livers give up, invade with country dancers and bagpipe terrorism.

Level 1 Answer — Local currency?

Yes, they can run a local currency and a Job Guarantee. All they need is a secure spreadsheet. Maybe one administrator (if the software automation is in place) — who is there mainly to prevent fraud. I guess if there is initially a lot of fraudulent attempts to game the system (create ꕗꖹꝆꝆꕷꖾꕯꖡ jobs) maybe two administrators. One with a “gun” called ‘Local Fines Due’ crafted by ‘Pay or We Knock on Your Door Politely Limited’.

Don’t be triggered little anarchists. this is just records of social obligations. The Mosler machine gun/Uzi metaphor is apropo I think, the government is damaging you in far more ways than you have imagined${}^\ast$ by imposing tax liabilities and failing to give you the means to redeem.

${}^\ast$A topic for another day.

The problem is to permit payment of central government taxes with the local currency.

There is a bank clearing obstacle here, depending on institutional structure in the country. Some local councils might be able to easily get around the legalities, others might not.

It can become a political battle. But my comment to Ghost was this is one worth fighting, losing is not the fear. Not fighting is the fear. Just by fighting the issue is raised and veils of neoliberal myths can be torn down and obliterated, even if we lose.

My guess is a trouble is that local counsellors do not have the courage because they want to get re-elected. They do not want to lose their income. SO they are spineless and gutless, but I would understand. I would be too if I was living comfortably and had a mortgage to pay. (No I wouldn’t be so spineless, but I had to stick that deflation in so as not to appear too rude.)

Level 2 Answer — The courage

We had a local counsellor turn up for our local viewing of the film Finding the Money who said some local counsellor “knew MMT” but lacked the power to increase their budget.

I told her they have power and can use a local currency to drive full employment.

Guess what happened?

Even the MMT bigwig academics stomped on me and told me I was being unfair. I guess they are deaf? I don’t know.

In Wellington we even have two names for the currency ready for debate:

• The Shake (we get earthquakes).
• The Hurricoin (our Rugby team are the Hurricanes). I cam e up with that one so it gets my vote.

But apart from a name (the hardest thing), the rest is just local council policy implementation. Pretty easy.

I know what you are thinking! Never underestimate the power of the bureaucratic deep state to spill the ball. We could start a list of the things they’ll say to avoid implementation. But that’d be too depressing.

The worst thing is, imagine they eventually see a local currency working in another region driving a significant increase in prosperity there. What will they think?

“Oh my idiot obstinance and bureaucratic conservatism lost us four years of real output that can never be recovered.”
?

Yeah, right.

However, there are local currencies operating around the world, a few, not too many. But they are success stories. We even have one system in New Zealand, the Wairarapa Green Dollars or LETS system. Been running since 1991.

The greatest success is they exist! So no fussy bureaucrat here complaining a local currency would be “too much bureaucracy” has a leg to stand on.

Can you taste the irony of that!?

Level 3 Answer — Prosperity

We can never be prosperous just with full employment. The type of production matters, and we do not want it to be electricity guzzling A̶I̶ ̶m̶o̶d̶e̶l̶s̶ machines for spitting out strings stochastically that turn a simpleton into a Dall-E Picasso, or Taylor Swift knock-off composer. This would be wasteful and we would DOGE their ꗇꕷꕷ to Mars ${}^\dagger$.

${}^\dagger$Is that a tasteless joke? I can’t tell.

At the very minimum we want machines for generating Radiohead knock-offs. only then are we at full quality employment, hence max prosperity.

Level 4 Answer — Doh!

We do not need local currencies! The central government can always allow local government to have an overdraft facility. The purpose is full employment, not money supply finagleling.

But while the central government is run by dinosaurs and oligarchs, local action is required. Local action is a moral responsibility I would say.

If you get elected to regional council your job is not to worry about getting re-elected. Part of your job is to herd central gov politicians, and while that is harder than herding cats, there are ways. Embarrassment is not something a cat can suffer.