Hey Joe, Banks Can’t Lend Out Reserves

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I began anoth­er post crit­i­cal of Joe Stiglitz’s analy­sis with the caveat that I like Joe. I’ll add to that that I respect his intel­lect too, both because he’s very bright—you don’t win a Nobel Prize (even in Eco­nom­ics!) with­out being very bright—and because com­pared to some oth­er win­ners, he is very capa­ble of think­ing beyond the lim­i­ta­tions of the main­stream.

But there are some main­stream con­cepts that are so deeply embed­ded in even high­ly intel­li­gent, flex­i­ble thinkers like Joe, that they con­tin­ue think­ing in terms of them, when a bit of real­ly seri­ous thought would show that the con­cepts are in fact non­sense.

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