Warren Mosler

Early life

Mosler attended the University of Connecticut where he majored in Economics.

After graduating from college, he initially went on to work at the Savings Bank of Manchester in Manchester, Connecticut in 1973. Next he went on to work in Hartford before moving to New York City. From there he would go on to work on Wall Street, specifically Bache & Co., Bankers Trust NYC, and William Blair.

Hedge fund work

In 1982 he founded his hedge fund, Illinois Income Investors (III), where he was made president and was responsible for several strategies utilizing government securities, mortgage backed securities, LIBOR swaps and LIBOR caps, and financial futures markets. Here he made several profitable investments, particularly betting successfully on government securities. By the mid 1990s, most of the firm had been largely turned over to his partners, as he had disagreements on the direction of some of its investments.

Later, he relocated to the U.S. Virgin Islands to participate in a government-sponsored economic growth initiative.

Academic work

Academically, he is known for his writings on Modern Monetary Theory, an economic theory that describes the way fiat money is created and used in modern economies. His unorthodox views have gained a substantial following among the Internet and academia.

In 2010 he published Seven Deadly Innocent Frauds of Economic Policy outlining errors that can be made in the development of policy and explains what he deems "true" as proper alternatives.

In recognition that his "leadership in the field of economics is notable" Mosler was awarded an honorary doctorate from Franklin University Switzerland in 2014, after the Mosler Economic Policy Center (a center founded by him and aimed at encouraging education and research in new concepts and methods of economic policy analysis) had promoted a lecture about functional finance at Franklin the year before.

In 2014 he became visiting professor at the University of Bergamo.

Mosler's Law

He is attributed with creating Mosler's law dealing with fiscal policy of a nation during a recession. Specifically, Mosler's law states that “[...] no financial crisis [is] so deep that a sufficiently large fiscal adjustment cannot deal with it.” He stated that the recent recession could have been alleviated much quicker from a full payroll tax holiday that suspended FICA taxes (or massive government spending increases, depending on one's politics) until unemployment fell. He opposes overly high taxes since they discourage consumption within an economy but does agree a certain tax level is needed to guarantee citizens use the dollar as a currency. He is confident that inflation is a non-factor in his analysis given current procurement policy as long as there is sufficient excess capacity. In his theory the government has the complete ability to constantly expand net spending and guarantee consumption and growth. He supports unlimited FDIC deposit insurance for all bank deposits for US banks.

He stresses that federal spending is in no way constrained by tax revenues, therefore the government will always be able to make payments in its own currency, stating “Federal Government checks don't bounce”. He goes on to state that any and all debt passed on to future generations will never be burdensome, since they will undoubtedly consume whatever is produced.

He developed much of his belief from his time as a hedge fund manager when many investors predicted the Italian government defaulting on bonds, whereas he predicted, correctly, that Italian government would not default and thus made considerable returns.

Economic views

Mosler supports government funding for full-time employment with full health care coverage for employees and dependents, thus triggering all firms providing health care to remain competitive. He states health cannot be viewed as a production cost, therefore the government should fund for at least 90% of the cost paid by the firms. Finally he supports issuing medical debit cards to all citizens, for a fixed amount. This covers any medical costs and any amount above this will be covered by "catastrophe insurance". At the end of every year, citizens would receive a portion of their unused medical debit card.

In a brief proposal, Mosler stated the energy crisis could be solved by lowering the speed limit nationally to 30 mph. According to Mosler, this would cut gasoline consumption and pollution since automobiles run more efficiently at slower speeds, while also greatly increase the demand for public transportation. He states that such an initiative would eventually lead to a supply shock forcing prices down, and improve real terms of trade.

Mosler supports government purchases of houses in the foreclosure process from the bank at the lower of the fair market value or remaining mortgage balance. The government then would rent the house back to the original owner and after two years the house is put on the market with the original owner having the first rights of purchase.

Mosler supports eliminating the income tax and replacing it with a real estate tax to "anchor the currency". He also supports eliminating tax advantages for any savings accounts, since he states savings do not increase investments necessarily. He supports luxury taxes being used to limit the consumption of undesirable goods.

Sportscar and Maritime Engineer

Mosler developed several luxury sports cars and supercars, including the Consulier GTP and the Mosler MT900. Starting in 1985, his cars were marketed by startup company Consulier, later renamed Mosler Automotive.

His designs were marked by excellent performance and high-speeds. Mosler was so confident of one of his models, the Consulier GTP, that he offered a bounty of $25,000 to anyone who could beat it in a race. Car and Driver took up the gauntlet and defeated his car. Mosler noted that the model used in the race was a worn out Consulier and even so offered to pay if he was allowed to use his own driver and replace the brake pads. Car and Driver refused. Mosler subsequently offered the challenge once more for a higher bounty of $100,000 and held an event at Sebring where the Consulier again proved to be far quicker than any other road car.

In the 90s he developed environmentally friendly vehicles including both electric cars and composite-bodied automobiles. The company was sold off in June 2013.

Mosler also designed his own catamaran that he prides on being much lighter, faster, and more fuel-efficient than other models. and is currently constructing a unique 'tandem' 4 hulled ferry that doesn't promote sea sickness to take passengers from St. Croix to St. Thomas.

Political campaigns

Mosler unsuccessfully ran as an independent to represent the United States Virgin Islands as a Delegate in the United States House of Representatives in both 2006 and 2012.

In February 2009, Mosler declared his candidacy with the Federal Elections Commission to run for the office of President of The United States as an independent. In April 2010, he withdrew to run in the United States Senate election in Connecticut, 2010, briefly as a Democrat, but ultimately as an independent. In the final tally he received 0.98% of the vote.

Personal life

Warren Mosler lives in St. Croix in the United States Virgin Islands where he resides full-time with Elizabeth O'Tool.

Selected publications