15 Aug 2013

Mike Norman Throws Down the Gauntlet

Mike Norman, MMT, Shameless Self-Promotion 38 Comments

You need to familiarize yourself with this, if you hope to understand my forthcoming response.

(Ron Paul et al. are coming to town in one week, so I can’t deal with this just yet. But soon…)

P.S. Here’s the audio of the speech he’s referring to, and here’s the original debate between Mosler and me.

38 Responses to “Mike Norman Throws Down the Gauntlet”

  1. Ken Pruitt says:

    Mike Norman is the same person who is currently running no less than ten different channels on YouTube all dedicated to attacking Peter Schiff. It’s clear that this man has no life.

    I wouldn’t waste my time with him. Dealing with him would be about as constructive as dealing with Krugman.

    • Ken Pruitt says:

      Also, the comments on the video are disabled even though the video only has like 300 something views (as of this writing). That should tell you everything you need to know.

  2. सुनिल says:

    Mike Norman is not only wrong, he can’t even take a joke.

  3. Guillermo Sanchez says:

    I heard the whole debate (I transformed the video to mp3 file) and when this guy started to talk I get the astonishing impression he was disapointed because you and Mosler didn’t have a deadly mud fight or something.

  4. Bob Roddis says:

    1. After jousting with the MMTers last night, I was told that there’s a BIG DIFFERENCE between Mosler’s business card example and bank robbery. When the government engages in Mosler’s scheme, it’s legal and moral. That’s it. Profound, isn’t it? Personally, I was always disturbed by Mosler’s African “hut tax” example. A normal person would be appalled by that example, not cite it for how cool it was for imposing monetary policy:

    The following is not merely a theoretical concept. It’s exactly what happened in Africa in the 1800’s, when the British established colonies there to grow crops. The British offered jobs to the local population, but none of them were interested in earning British coins. So the British placed a “hut tax” on all of their dwellings, payable only in British coins. Suddenly, the area was “monetized,” as everyone now needed British coins, and the local population started offering things for sale, as well as their labor, to get the needed coins. The British could then hire them and pay them in British coins to work the fields and grow their crops. @ p. 26


    2. I don’t buy the argument that being required to pay taxes with otherwise worthless funny money is what gives funny money its MARKET VALUE. I was again told last night:

    As MMT argues, taxation is what creates the demand for a particular “money-thing”

    My response: That’s not true either. In the US, people were slowly tricked into using what had been silver certificates when the silver redemption language was removed. However, what keeps people using them are other taxes assessed on all transactions using other forms of money. If you transact using foreign currency and/or precious metals, you have to keep track of your basis in the alternative money and pay capital gains taxes on any possible “gains”. A phony taxable “gain” can occur when the funny money “dollar” has depreciated against your alternative money that is used in a transaction. That’s a severe impediment to using alternatives to funny money “dollars”. Absent the government’s currency having significant independent value on its own as money for transactions, it could always be obtained very cheaply for use in paying taxes at the last possible moment if most transactions and savings were done using sound money.

  5. Major_Freedom says:

    Dr. Murphy,

    I humbly recommend:


    • Bob Roddis says:

      Yes but….

      Why aren’t Krugman and DeLong trolls? Or Sumner?


      They do not have the common courtesy to fairly and clearly set forth our concepts and/or analysis without name calling, distortion and/or total non-response pretending we do not exist. In fact, none of them do. It’s all pretty amazing to me.

    • knoxharrington says:

      Well said, Major. I looked up “Troll” in the dictionary and it said “See Mike Norman.”

    • Bharat says:

      I don’t think Murphy plans on feeding the trolls. My suspicion is that he plans on out-trolling them.

  6. John P says:

    Is this true Bob? Do you go for cheap laughs in the classroom?

  7. Cosmo Kramer says:

    It is one thing to disagree with someone’s POV. It is another to completely fail to see their POV and attack the one you fabricate.

    My only comment….

    If suddenly rape and murder were legal, would it be any less wrong when it is committed?

    point: Murphy

  8. guest says:

    I’ve got this one, Murphy:


    More specifically, though (off the top of my head):

    Bob Murphy saying that MMT is right about how monetary policy is carried out, currently, is not an endorsement of that policy.

    (Again, this is off the top of my head, so If this was the point where Murphy was saying that MMT is not merely claiming that they are describing how things are – that MMT’ers, like Austrians, do actually have policy prescriptions – then there you go; That was the context, not admitting the MMT’ers had their policy prescriptions right.)

    Mike thinks Bob ignores the fact that robbing banks is illegal, but in fact all he’s saying is that money printing like the MMT’ers should be considered robbery – both require coercive theft; We are forced to use the paper the printing of which government enforces a monopoly upon.

    And no, the government was never granted money-printing powers:

    Is Ron Paul Wrong on Money and the Constitution?

    “What is Constitutional Money?” with Edwin Vieira — Ron Paul Money Lecture Series, Pt 2/3

    Now before we get to Mike Norman’s belief that Peter Schiff hasn’t been right about anything in the last 7 years, let’s see how Peter Schiff did before the crisis:

    Peter Schiff Was Right back in 2004 (07-28-2004) pt 3/6

    Peter Schiff Mortgage Bankers Speech Nov/13/06

    Peter Schiff Was Right 2006 – 2007 (2nd Edition)

    So, from at least 2004, Schiff was right on the money.

    And consider that another Austrian Economist, Ron Paul, was calling the crisis since at least 2001 (I’m going to say 1999 for what he said about the housing market during his opposition to Graham-Leech-Bliley):

    Ron Paul: “This real-estate bubble will burst, as all bubbles do” (part 3)

    Ron Paul Calls the Housing Collapse in 2003

    Back to Schiff.

    The only thing Schiff got wrong was that he was certain that the Fed couldn’t re-inflate the housing bubble right after it popped – oops. Mike Norman thinks this is a recovery – oops.

    Most of the other stuff Norman mentioned has either been dealt with …:

    Mish Shedlock Exposed

    So Where’s the Inflation? Tom Woods Talks to Mark Thornton

    … Or hasn’t happened yet:

    Don’t believe the hype — the U.S economy is not recovering, it’s getting sicker.

    Gold, the Titanic & Lifeboats – Why it’s Important to Own Physical Gold

    (And to my knowledge, Peter Schiff has either said that hyperinflation is either merely possible, OR, IF THE FED DOESN’T CHANGE POLICY then hyperinflation is guaranteed. If the Fed wants to let the crash happen before it hyperinflates, then the hyperinflation won’t happen – but the crash will.)

    Two more issues I’ll address are the bad lending standards (if memory serves, Schiff never said “artificial lending standards”), and the so-called “deregulation”.

    Bad lending standards:

    The bad lending standards Schiff was talking about can be found here (More information, from HUD itself, can be found by going through citations in Tom Woods’ book, Rollback):

    Recent Efforts to Overload the American System

    And then, regarding the so-called “deregulation”:

    The Glass-Steagall Myth Revisited

    I’m not sure I get what Norman is saying at the end about keeping interest rates low and not causing inflation, so I’ll just say that the interest rate is lowered BY printing money, so inflation is what “lowering the interest rate” entails; I’m not sure that addresses part of his issue, though.

    • Bob Roddis says:

      Schiff said “non-existent lending standards” and that prices had been bid up to artificial heights. Norman then asked, “What artificial lending standards?”

      Krugman may just be dishonest but Norman is truly clueless.


  9. Matthew M. says:

    This Mike Norman fellow is just a little troll. Don’t bother with him, he’s too easy and boring, you could crush him between your pinky and ring finger.

  10. Jonathan Finegold says:

    You do a good Mike Norman impression,

    • Bob Roddis says:

      Yes indeed. It’s so good that I’ve given up the idea of me doing 30 minute long Mike Norman impressions on youtube.

  11. Gene Callahan says:

    You named him BY NAME? What an awful person you are!

  12. JimmyA says:

    This guy is hilarious.

  13. JimmyA says:

    Sort of reminds me of those wrestling interviews from the 80’s 🙂

  14. Joseph Fetz says:

    This is just based upon observation (both visual and communicational), I am not attempting to take a shot at the guy –I’m not trying to, but I guess in the objective sense I am doing just that– but I would not be at all surprised if this guy gets picked up by the po po for a possession charge sometime in the future. I’m thinking either meth or coke.

  15. random guy says:

    Lol. Please tell us this was your goal when you brought him up. That would be impressive work.

  16. skylien says:

    Just too good to be true..

    “Stupid raising rates.. keep em low and smooth and do open ended lending against any crap that is out there as cheaply as possible forever, that will bring inflation down, I guarantee! That’s because it is legal you know..”

  17. AcePL says:

    Hi Bob,

    I will not rise to the bait… 😉

    Except for maybe one thing. After many mentions of the debate Norman’s was last straw. I found the time and listened to it. I have to agree that IT APPEARS Mosler crushed you. He had more better answers – not meritorically, but truly in form only – and had them short and to the point. You distract yourself easily going deeper into the Hayekian bliss, which in the end gives impression of mental chaos.
    I think short but powerful intro to ABCT (no more than 2-3 minutes) is the thing to work on and use as a sort of template. Concentrate on prices role, and how EVERY OTHER ECONSCHOOL ultimately distorts the price system leading to bust and rip-off of poor people by politicians in collusion with financiers.

    And I would like to congratulate on digging out THE BEST of individuals sputtering in outrage and uttering nonsensical rants.

  18. kavram says:

    Bob may have won on the economics front, but he’s got nothing on this guy when it comes to fashion.

  19. Jim PM says:

    Maybe I’m remembering wrong, but what was he talking about when he says that raising interest rates increases inflation?

  20. steveZ says:

    Mike Norman is a shill. Payed (by peter schiff) to act like a douche bag and attack the Austrian school, to make their critics look dumb. A living strawman.

  21. Bob Roddis says:

    Regarding MMT, there are substantial portions of the Mosler/Murphy debate that have been transcribed on Rohan Grey’s blog:


    I’ve just begun to examine that blog.

    • guest says:

      Bob Roddis,

      I saw your comments on Mike Norman’s blog. I can help with some of your hecklers.

      (For everyone else, this will be brief, so if you haven’t seen the discussion you may not understand what I’m talking about.)

      Regarding the Constitutional prohibition against the issuance of paper money:

      The Federalist No. 44

      The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied; or rather an accumulation of guilt, which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice, of the power which has been the instrument of it. In addition to these persuasive considerations, it may be observed, that the same reasons which show the necessity of denying to the States the power of regulating coin, prove with equal force that they ought not to be at liberty to substitute a paper medium in the place of coin.

      The power to make any thing but gold and silver a tender in payment of debts, is withdrawn from the States, on the same principle with that of issuing a paper currency.

      (There’s some bad economics where the ellipsis is, but what I have cited is sufficient to show that the intention was to disallow the circulation of paper substitutes for gold and silver.)

      At any rate, as you said, the “dollar” was a specific weight of silver.

      One of the commenters keeps referring to the Old Testament in support of MMT. They cite the story where the Israelites are punished by being made to eat the gold they used to make a golden idol.

      First of all, the punishment was for idol worship, not for anything to do with money.

      Second, if that story justifies some kind of aversion to the use of gold as money, then this verse …:

      Deuteronomy 29:17
      And ye have seen their abominations, and their idols, wood and stone, silver and gold, which were among them:)

      … justifies an aversion to the use of paper as money (paper being made from wood).

      Neither is true, but if you accept the first argument you have to accept the second.

      Besides, the Bible only cautions against the love of money, not the pursuit of profit:

      Proverbs 10:4
      He becometh poor that dealeth with a slack hand: but the hand of the diligent maketh rich.

      Luke 19:23
      23 Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?

      And the Old Testament prohibition against usury applied to fellow descendants of Israel (“your brother”), not to everyone:

      Deuteronomy 23:19-20
      19 Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:

      20 Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury:

      The purpose of the Laws of Moses were fulfilled when Christ died for our sins, so the usury laws no longer apply to anyone.

      And under the Biblical paradigm, God was acting more directly on Israel’s behalf, under the theocracy, than now; So, it would seem like they wouldn’t have needed to lend to their brothers with interest, under such a scenario.

    • Jim PM says:

      The way Rohan Grey analyzes the debate is why I’m not a fan of these things. You have a limited time period to respond to your opponent as well as communicate what you have prepared beforehand. When Murphy has to come up with a response on the spot and maybe leaves something out or doesn’t fully address all portions of Mosler’s previous statement, these guys post the transcript and claim that Murphy has conceded these points or that Austrians have no answer for these things. Pretty weak sauce, imo.

      • Bob Roddis says:

        Yes, Bob Murphy conceded all of those points because he did not repeat verbatim his 1:25 lecture on the value of money from his course on “The Theory of Money and Credit”.


        Rohan Grey wants to have a cool and calm back channel discussion with me. The MMTers had claimed that the difference between bank robbery and fiat money was that fiat money was legal. Tom Hickey claimed:

        There is no legal guarantee against inflation and monetary policy aims at some inflation to prevent hoarding and keep the flow moving.

        Rohan Grey wants me to watch Episode 5 of the Columbia lecture series on the joys funny money (the Mosler/Murphy debate was a later episode in that series).

        From those reading materials, I found this by Farley Grubb:

        At the Constitutional Convention the founding fathers decided by explicit vote not to include the power to emit bills of credit and (debatably) not to include the power to charter banks among the powers granted to the national government. Footnote 4

        4 A common error repeated often in the literature is the claim that the Convention intentionally crafted a Constitution where Congress was allowed the power to emit bills of credit. For example, see Baack (653); Ferguson (1969, 254, 258); Nettels (98-99); Rolnick, Smith, and Weber (3); Schweitzer (311). The analysis here, if nothing else, is a valuable corrective in showing that under almost any logically consistent and coherent interpretation such a claim cannot be easily sustained.

        Since we now know for sure that fiat money is illegal in the USA, how does it differ from bank robbery?

  22. Mule Rider says:

    Oh the irony that this self-aggrandizing knuckle-dragger would be so prolific at blasting his name all over the internet (primarily through Youtube and his namesake blog but other places as well) to, one can only assume, build up his own fame, but then reacts with contempt when someone actually refers to him, by name, about something he said.

    Truth really is stranger than fiction.

    • Bill says:

      Mike Norman isn’t interested in economics. That is merely his back door into show business. If he were a good tap dancer he would be doing that instead. The man virtually screams, ” PLEASE NOTICE ME”.

      Obviously a major proponent of the “Bad publicity is better than no publicity at all” school of celebrity, he will say anything at all, no matter how inane, rather than not be noticed. Engaging an intelligent discussion with him is like trying to reason with an insurance salesman. He doesn’t care! This is how he makes a living.

      Hey Mike, you’re a pretty good looking guy with great teeth. Instead of being a pest, why don’t you leave the thinking to the thinkers and go back to the car wash where you might earn an honest living.

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