While hardly needing a full-on onslaught by an Austrian thinker, when even some fairly simplistic reductio ad abusrdum thought experiments should suffice (boosting global GDP by a few million percent simply by building adeath star comes to mind), Diapason's Sean Corrigan has decided to take MMT, also known as "Modern Monetary Theory", to the woodshed in his latest missive in a grammatical, syntaxic (replete with the usual 200+ word multi-clause sentences) and stylistic juggernaut, that only Corrigan is capable of. So sit back in that easy chair, grab your favorite bottle of rehypothecated Ouzo, and let the monetary hate wash through you.
Money, Macro and Marketsby Sean Corrigan of Diapason Commodities Management, and author of the excellent Santayana's CurseRead it at Zero Hedge
Sean Corrigan Crucifies MMT
posted by Tyler Durden
19 comments:
I stopped reading carefully at this point:
Among its supposed ‘breakthroughs’ is the truism that a government which issues its own fiat currency can never go bankrupt—at least in an accounting sense—and so should never shrink from commandeering ever more resources from its subjects,
... which was enough to conclude that they blarney-blogging Mr. Corrigan really hasn't read much MMT and is mainly just having some fun clearing his lungs at the expense of MMT.
It gets worse with the discussion of Greece.
Yup. The guy makes all the same mistakes. Compares the US to Greece, etc. "Commandeer resources"...blah...blah...blah. Garbage and totally inscrutable.
It's sometimes hard to tell if people are ignorant or purposely deceptive. Sean displays this tendency: why use Greece as an example? Does he really NOT understand why Greece is not a good example? Or, does he know Greece isn't a good example, but he uses it anyway?
Sometimes Bernanke displays this same tendency.
I stopped reading Zero Hedge many moons ago. About the only blogger there with any common sense is George Washington. The rest are just conspiracy theory gold bugs.
If zero hedge is against it, then I probably want to be for it.
A good contrary indicator.
Resp,
I’ve got to know Sean Corrigan well at the Austrian site where he publishes most of his stuff (The Cobden Centre). I gave up paying any attention to him long ago. He has a brilliant command of the English language and regularly uses a hundred words where one will do. As to ECONOMICS, he has no grasp of the subject whatever.
Ralph, "crucifies": this is an interesting choice of word by the one infatuated with Brad Pitt over there btw...
Corrigan:
" In effect, they are asking us to believe that, short of having this paternalistic blessing conferred upon us by our selfless Platonic Guardians, it would be utterly beyond the wit of Acting Men to devise some alternative means of lubricating their frequent, voluntary, and so value-enhancing transactions."
This is just like Bob Roddis has been commenting here. It's like they believe MMT is posing that our current arrangements are the only way to operate an economy... wtf?
MMT is explaining our current arrangements.
I dont understand how these Austrian's brains work.
I can see that Austrians I guess advocate for different arrangements, but THAT IS NOT WHAT WE ARE CURRENTLY DOING. HELLO!? HELLO!?
We are not operating under a system of Austrian economics. We are operating an open monetary economy utilizing state currency.
If you disagree with this policy, then by all means you have a right to advocate for different policies, but you cant say MMT has it all wrong when all MMT is doing is establishing a theoretical body of economics which includes an ACCURATE description of our current arrangements....
More morons.
Resp,
You can't cure a debt problem with more debt. Period!
Not a single one of you MMT guys can answer how Empires end. Not a single person. You think in linear terms and not exponential. Not a single person on this site seems to understand the exponential function in mathematics or maximum potential for all systems be they organic or man made.
Let me throw you a bone in understanding the exponential function. If you can, calculate the time remaining until the system blows sky high. It's not that hard for you deep thinkers is it?
http://market-ticker.denninger.net/akcs-www?get_gallerynr=2772
Anon -
Please read pages 13-68 of this:
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
Your posts indicate that your really aren't familiar with the material in there.
Mr. Franko:
There is no "system of Austrian economics" under which one might operate. You do not understand this and you have firmly announced that you do not want to understand this.
Of course there isn't an "Austrian economics", system or otherwise.
Just a lot of ideological blather.
Bob,
"economics" from Greek 'oikonomos'
ie 'House MANAGEMENT', not 'House Chaos', not 'House Invisible Hand', not 'House Freedom', etc...
Are you indicating that Austrian Economics does not advocate a policy?
Resp,
Austrian system is a system, a system where capital has all the political power and property is the first law in the hierarchy of the law.
If you don't understand this you don't understand frack about how human societies work. Most probably you are trying to deceive people though.
Leverage,
In other words, Austrian system is serfdom for the propertyless...
MMT is a democratic system where the people hold power through their elected government. Private Property rights hold a critical claim in that hierarchy, even if Austrians want to deny that.
Mr. Corrigan appears to have a serious inferiority complex which he compensates for by being overly verbose.
Leverage,
Land values are not created by property owner. Why should he then capture the yield? Isn't that against libertarian ideas?
The “anonymous” Austrian above says “You can't cure a debt problem with more debt.” The first answer to that is that MMTers tend NOT TO ADVOCATE MORE DEBT!!!! Doh! They tend to go along with Abba Lerner suggestion that in a recession, the government / central bank machine should simply create new money and spend it into the economy. No extra debt involved!!! (At which point Austrians along with other economic illiterates start chanting “Weimar” and “Mugabwe”.)
So “Anonymous” needs to study MMT before sounding off on the subject.
But even if a country goes for the debt route, the reason why extra debt can enable paying off an existing debt is that output from the extra debt is large enough to facilitate paying off both the old debt and the new one. BradDeLong (who is not a self-proclaimed MMTer far as I know) actually does the maths on this piont here:
http://delong.typepad.com/sdj/2012/03/under-these-circumstances-a-larger-national-debt-is-indeed-a-national-blessing.html
Others (who are also not MMTers far as I know) have done similar calculations:
http://www.debtonation.org/wp-content/uploads/2010/06/Fiscal-Consolidation1.pdf
and
http://www.newyorkfed.org/research/staff_reports/sr551.pdf
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