|Born||September 18, 1949|
Manchester, Connecticut, U.S.
|Political party||Democratic (before 2006)|
|Education||University of Connecticut, Storrs (BA)|
|Field||Modern Monetary Theory|
Warren Mosler (born September 18, 1949) is an American economist,hedge fund founder,engineer, professional automotive designer, and politician. He was the founder of Mosler Automotive and a co-founder of the Center for Full Employment And Price Stability at University of Missouri-Kansas City.
Mosler is a proponent and research financier of post-Keynesian Modern Monetary Theory. He was awarded a Doctor h.c. by the Franklin University Switzerland, and in 2014 was appointed Visiting Professor at the University of Bergamo, Italy.
Mosler has run as an independent for multiple offices including: United States president, a delegate to congress three times, and lieutenant governor. In 2018, he ran unsuccessfully for governor of the U.S. Virgin Islands as an independent.
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.
In 1982 he founded his hedge fund, Illinois Income Investors, 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. 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.
Warren's hedge fund was informed by his developing theories. The business entered a short position on US treasury bonds when many bond traders thought bond prices would spike due to increased scarcity from the US Treasury paying down the US debt. No such scarcity came about, bond prices went down, and the bet paid off. Warren's business lost a bet that Russia would not default on its debt. Warren later attributed this to the fixed exchange rate Russia had at the time.
Later, he relocated to the U.S. Virgin Islands to participate in a government-sponsored economic growth initiative.
Excited to share his various economic theories, Warren met economist Arthur Laffer through a tip from Donald Rumsfeld. Arthur suggested Warren to seek out postkeynesian economists L. Randall Wray, Bill Mitchell, and Stephanie Kelton to discuss his ideas. These post-Keynesian economists taught Mosler about chartalism, and in turn Mosler convinced the economists that taxation and borrowing does not finance US federal government spending. Laffer also introduced Warren to his future collaborator economist Mark McNary. Warren drew on McNary's research on taxes among other research to underpin his self-published monograph, "Soft-Currency Economics".
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 participants in Internet discussion groups and academics. His most recent publication was in fact published in a leading mainstream academic journal.
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.
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.
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.
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.
Mosler also designed his own catamaran that he prides on being much lighter, faster, and more fuel-efficient than other models. He is currently operating a unique 'tandem' four hulled ferry that doesn't promote sea sickness to take passengers from St. Croix to St. Thomas.
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 for a U.S. Senate seat in Connecticut, briefly as a Democrat, but ultimately as an independent. In the final tally he received 0.98% of the vote.
Mosler has run unsuccessfully three times for U.S. Virgin Islands delegate to the United States Congress; his last congressional race was in 2012.
In 2014, Mosler ran for lieutenant governor of the U.S. Virgin Islands as an independent, but quit the race early due to a difference of opinion with his running mate Soraya Diase Coffelt. In 2018, he ran unsuccessfully for governor of the US Virgin Islands as an independent candidate, coming in fourth with 4.7% of the vote.
In 2013, the New York Times described Warren as "transitioning into an active retirement". Warren currently lives in St. Croix in the U.S. Virgin Islands where he resides full-time with Elizabeth O'Tool.