He thinks that each school has a piece of the answer, and no one has the whole of it. This fits nicely with Hegel's dialectical approach to the development of knowledge, btw, as well as science as a work in progress.
Read it at The Money View
Heterodoxy and The Economist
by Perry Mehrling
UPDATE: JKH comments:
Wed, 01/04/2012 - 6:33am.
Neo-chartalism is strong on accounting and monetary operations, but weak on risk.
Regarding the former, base money is the problem with orthodoxy. Base money in the form of reserves is almost meaningless. Banks do not lend on the basis of reserves. They lend on the basis of capital. Failure to understand this is a profound general problem within the economics profession. In particular, it’s been a problem for its comprehension of QE.
Regarding the latter, the effect of QE is not additional purchasing power. Purchasing power is available already by collateralizing the instruments that might not have been removed from the market. This is not a perfect offset, but it is an important caveat.
The true effect of QE is to take risk out of the market. That is a stabilizing factor in terms of risk management viewed broadly. And it allows resetting of the private market risk taking function. Neo-chartalists don’t seem to acknowledge any of this. They focus on the fact that removing risk from the market removes expected return, and consider that a drain of income rather than a removal of risk. That’s the wrong way to look at.