Optimal Money Flow - Hardcover

Lawrence C Marsh

Hardcover

ISBN 10: 1734225203 ISBN 13: 9781734225204

Publisher: Greenleaf Book Group Press, 2020

Synopsis

Extremes in income and wealth inequality are leading us closer to a highly insecure and unstable economy. Neoclassical, monetarist, Keynesian, and other economic paradigms have proven inadequate to explain this phenomenon.

While many books promote redistribution as an issue of fairness, Lawrence C. Marsh's Optimal Money Flow explicitly sets aside the fairness issue to argue instead that redistribution is imperative for economic efficiency, stability, and maximum economic growth. Marsh introduces his unique money flow paradigm as the replacement for other economic paradigms that have failed at addressing the situation we face today.

Marsh's money flow paradigm views the flow of money to the top of the wealth pyramid as inherent, inevitable, and inexorable to the free enterprise system. This new paradigm requires that government assume its rightful responsibility to direct sufficient money flow from the top to the bottom (like a heart pumping blood throughout the body) in order to maximize employment, economic growth, and efficient resource allocation. In a healthy economy, the money then flows naturally back up to the top in a circulatory flow.

Optimal Money Flow provides an abundance of stimulating, original ideas for readers who appreciate books at the intersection of economics and politics. One such idea is Marsh's ''My America'' personal accounts. This new policy tool would serve as an alternative to the Fed buying US Treasury securities in New York financial markets, which just lowers interest rates and boosts stock and bond prices. Instead, a ''My America'' Federal Reserve bank account would be created for every American, into which money could be injected directly to provide consumers with cash to stimulate demand when the economy slows. Conservatives will appreciate two aspects of this approach: The people, not the government, decide how to spend the money, and it does not increase taxes or add to the national debt, while it simultaneously avoids excessive inflation through prudent monetary management. It also uses less money and has a more direct and immediate impact on consumer demand than the purchase of US Treasury securities.

Lawrence Marsh sees government as the heart of the free enterprise system--where it does and should play an active part in maintaining and ensuring efficient and equitable resource allocation in an economy. Previous economic paradigms viewed government as an external, alien force outside the system, but Marsh promotes a very different approach. While he acknowledges there is efficiency in the market for ordinary goods and services, he sees contagion effects and inefficiency in many financial markets.

With higher levels of globalization, low levels of unionization, and more rapid technological change, a new type of business cycle has emerged--one in which rising middle-class debt and stock market bubbles have replaced price and wage inflation as the source of economic instability. Marsh believes government can contribute to the efficiency of the free enterprise system by better aligning marginal costs and marginal benefits, and that in the long run, government can greatly enhance efficiency, productivity, and economic growth.

Marsh also takes on the commonly held notion of a static fight over a fixed economic pie with the assertion that this view must be replaced with one of a dynamic process that maximizes the growth rate of the economic pie for everyone--by keeping the money flowing to all parts of the economy.

Optimal Money Flow's important message and unique proposals deliver a fresh view of the interconnectedness of the globe and an updated understanding of the underlying economic forces that shape our lives today--including international trade and how one country's decisions now impact the rest of the world.

About this title

About the Author

Lawrence C. Marsh is professor emeritus in the Department of Economics at the University of Notre Dame where he taught graduate and undergraduate economics for 30 years. He served as Director of Notre Dame's Ph.D. program in economics for 13 years. In ''retirement'' he served in 2010 as visiting professor of econometrics and statistics in the MBA program at the University of Chicago's Booth School of Business and in 2016-2017 at Avila University in statistics and research methods in psychology.

From the Back Cover

Excerpt from Optimal Money Flow:

"We had seen the stranger in the alley behind our home earlier that day. But we didn't see him sneak into the garage, grab my wife's purse, and steal her cash.

The next day I saw him again. This time I followed him down the alley. When I caught up with him, I explained that anyone stealing small amounts of money here and there was making a mistake. I told him what he really needed was not money but money flow. These neighborhood families were making six-figure salaries, but he was just getting occasional crumbs. Fighting over the crumbs is no way to get rich, neither for an individual, nor for a country. I never saw him again. Perhaps he was afraid of getting caught or wanted to avoid another boring lecture.

Money flow is important in the international economy, in the domestic economy, and in state, city, and local economies, just as it is in our own family's economy. Too often we think of money as a static concept. We fight over the economic pie. But, in reality, money is a dynamic flow. Money flows through our economy just as blood flows through our body. Our economic well-being and that of our fellow citizens is more closely defined by our money flow than by the amount of money we have at any particular time. Just as getting money flow right is important for us as individuals, it is also important for us at the local, state, national, and international levels."

From the Inside Flap

Lawrence Marsh sees government as the heart of the free enterprise system--where it does and should play an active part in maintaining and ensuring efficient and equitable resource allocation in an economy. Previous economic paradigms viewed government as an external, alien force outside the system, but Marsh promotes a very different approach. While he acknowledges there is efficiency in the market for ordinary goods and services, he sees contagion effects and inefficiency in many financial markets.

With higher levels of globalization, low levels of unionization, and more rapid technological change, a new type of business cycle has emerged--one in which rising middle-class debt and stock market bubbles have replaced price and wage inflation as the source of economic instability. Marsh believes government can contribute to the efficiency of the free enterprise system by better aligning marginal costs and marginal benefits, and that in the long run, government can greatly enhance efficiency, productivity, and economic growth.

Marsh also takes on the commonly held notion of a static fight over a fixed economic pie with the assertion that this view must be replaced with one of a dynamic process that maximizes the growth rate of the economic pie for everyone--by keeping the money flowing to all parts of the economy.

Optimal Money Flow's important message and unique proposals deliver a fresh view of the interconnectedness of the globe and an updated understanding of the underlying economic forces that shape our lives today--including international trade and how one country's decisions now impact the rest of the world. Readers will rethink their basic assumptions about the nature of economics and the role of government.

Edition details

• Publisher: Greenleaf Book Group Press
• Publication date: 2020
• Language: English
• ISBN 10: 1734225203
• ISBN 13: 9781734225204
• Binding: Hardcover
• Number of pages: 250