Sunday, April 8, 2012
beowulf — (MMT – JG) + Medicare = MMT
The ever-resourceful beowulf (Carlos Mucha) strikes again.
Carlos observes that tactically James K. Galbraith is for an indirect approach to job creation, chiefly through the non-profit sector, that has a chance of being implemented politically in the US, rather than the MMT JG, which he sees as politically impractical at this time. Joe Firestone also gets a plug for suggesting how single-payer could result in job creation as well as more effective and efficient coverage for the population.
Carlos goes on to develop a specific approach that he suggests is more feasible politically than an MMT JG because it would be funded through the Fed rather than budgetary appropriation, a politically contentious process.
Thinking pragmatically, I don't think that any program that expands social welfare significantly is feasible politically at this time in either the US, UK, or EZ due to the political climate. The dominant trend is still Thatcherism aka neo-liberalism. The prevailing Zeitgeist is dominated by neo-liberalism, neo-imperialism, and neo-colonialism.
Until this spirit of the time runs its course, perhaps as a result of fallout from the next shock, welfare is going to take a back seat to unbridled acquisition and its push to make the world safe for laissez-faire capitalism.
So there will be plenty of time to hash this out in preparation for a change of eras.
Read it at Modern Monetary Realism
(MMT – JG) + Medicare = MMT
by beowulf
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46 comments:
i think that the shit will hit the fan, soon. jill stein of the green party is a site better than the rest of the talking head, useless assholes http://www.jillstein.org/text_psou obviously the dems nor repukes care about "we the people"
great points, which I have been saying as well and which I agree completely.
I was studying up on my American neo-classicism, American Gothic, and American Transcendentalism lately, and I realized that the age of the Enlightenment has many interesting parallels to the dominant economic thoughts of today.
Just as Toni Morrison stated that the Englightenment was the science of slavery, so too is today's economic neo-liberalism the "science" of classism.
The parallels are striking. Both schools of thought tended to focus on less government involvement, more "private" enterprise, and the individual, and held INTENSE contradictions between their philosophy of idealism and the high state of man (reason) with their PRACTICE of slavery and the disappointment of reason and rationality alone to achieve and accomplish.
It is also interesting to note America is basically on it's 33rd set of 7 years, which is essentially how long it takes for a body to renew all of its cells AND 33 is a "master number." Perhaps this type of "thinking" is the real underbelly of America.
Alexis de Tocqueville ;)
Hey Tom.....check this out
https://www.facebook.com/OccupyDallasBankActionTeam
WE, the Residents of the City of Dallas, demand that the City Council publicly examine the banking, lending, and investment practices of financial institutions utilized by the City for the management of public funds. In addition, WE demand an examination of their home-foreclosure practices, as well as an examination of their political contributions to our local elections. Furthermore, as WE have lost confidence in effective federal regulation of U.S. financial markets and in so-called "Too-Big-Too-Fail" Wall Street banks, such as Bank of America, J.P. Morgan-Chase, Wells Fargo, Citigroup, Morgan Stanley, and Goldman Sachs, WE demand that the City make every possible effort to conduct all financial business with community owned banks and credit unions; and that the City Council establish a financial reform committee, bringing together experts and the general public, to examine ways of bringing immediate effect to these goals.
P.S.
Warren Mosler will be speaking with Occupy Dallas June 23rd!
MMT-OWS unity!
also add in to the INTENSE contradictions, Allen Greenspan "admitting" that his theories were wrong and he was surprised. And hwat are the results of his "miscalculations"....poverty, despair, suicide, turmoil, struggle, economic collapse, etc.
This is no different both in form, structure, and content to Jefferson "struggling" with the rights of man and the practice of slavery.
Same exact template and motif; new script.
Here's the equation we lived through then and we are living through now again:
Aristocratic class + high ideals and philosophy - honest, rigorous, and practical reality and application = pain, suffering, strife (this is America's dark/shadow side).
the same can be said for the founding of America against the natives and all of that story. It's all recapitulations of the same theme and pattern. This appears to be a major lesson America is working out. The role of society, individual, idealism, and application. A worthy cause indeed and so fitting for dire strains to achieve them. How else can it be.
Typically moronic comments by FDO15 and Cullen Roach. Good gomments by everyone else.
Also good comments by everyone else, as well as good gomments.
Per CR:
"Besides, I know for a fact that Galbraith doesn’t support the idea of MMT with the JG embedded in it as a necessary piece."
It is a pity about Galbraith. I thought he might want something like the JG.
So now Beowulf has another solution. But, I doubt it is going anywhere fast either.
The political climate is too toxic for anything.
JKG never claimed to be MMT, and MMT economists never claimed he was. JKG has always held that if he is associated with a school of thought, it is "Galbraithism." He is carrying on in the path of his father. He is an MMT ally and agrees with a lot of things that MMT economists hold.
Thanks for the kind words Tom. The point of my post is that sometime towards the end of June, the Supreme Court is likely to throw out the Obamacare law, lock stock and barrel. Its going to be pandemonium with both parties (I hear tell there's an election this fall) scrambling to come up with plans on how they'll reboot the healthcare system next January.
I was riffing off a point Galbraith made ("the federal government handles *insurance* extremely well. Social Security and Medicare are functional, efficient programs.") to suggest that MMTers use what they know to make plans ahead of the crisis instead of waiting to see what the Shock Doctrine has in store for us.
"JKG never claimed to be MMT, and MMT economists never claimed he was."
Come on Tom, he was the subject of the first 10 paragraphs of the Post story ("Modern Monetary Theory, an unconventional take on economic strategy").
http://www.washingtonpost.com/business/modern-monetary-theory-is-an-unconventional-take-on-economic-strategy/2012/02/15/gIQAR8uPMR_story.html
I'd be remiss not to mention Galbraith's new book just came out, "Inequality and Instability: : A Study of the World Economy Just Before the Great Crisis".
"Come on Tom, he was the subject of the first 10 paragraphs of the Post story ("Modern Monetary Theory, an unconventional take on economic strategy")."
But that is attributable to neither JKG or MMT. JGK has often spoken favorably of some MMT positions, and people have erroneously assumed that he is therefore MMT. JKG never published anything within the MMT framework, for example, which I take it to be necessary to qualify an economist as MMT.
The MMT economists are those who consistently publish on MMT and are in agreement on key fundamentals. But most importantly they self-identify as MMT, whereas others do not.
Michael Hudson and Bill Black who teach at UMKC are also sometimes taken to be MMT. They are MMT allies but not MMT. Same with Wynne Godley, who published with Randy, and there are many other cases, too.
"Come on Tom, he was the subject of the first 10 paragraphs of the Post story"
What makes a single article on WaPo an authority on MMT? As opposed to the various other mainstream media introductions to MMT that conclude "deficits don't matter"? Look, I've heard the "tell us the story again Uncle Wray/Mosler/Mitchell" at least a dozen times now, and that WaPo post is the first time I've heard of Galbraith. And you know what? I didn't freak out and draw the worst possible conclusion: more proof of insidious and deliberate MMT obfuscation to destroy "innovators" because they won't be able to think straight much less INNOVATE because someone in the economy might have a job that WE ALL KNOW THEY ARE NOT WORTHY OF.
Meanwhile Obama continues to amass his negro army on the front lawn of the White House. I'm confident there is a connection.
PS. Right now, none of MMT's policy prescriptions are politically feasible. Neither are MMR's. And in today's political arena where affordability is "center stage", the discussion regarding the degree to which one MMT/MMR proposal is superior to another is laughable.
Cullen Roche says: "Yet you all [MMTers, if anyone hasn't picked up on THAT yet] constantly claim him [Galbraith] as your leading voice."
Where is this stated? To me, this is more manufactured Rain-Man-like outrage. And I'm not trying to be stupid about this, so feel free to educate me with proof of these CONSTANT claims.
Galbraith clearly states that the problem he sees with the JG is a political one:
"The problem is that the program goes right into the budget firing line, where it will get chopped up."
It's not the idea itself that he appears to disagree with.
Minor.
JKG: "The thing about these sectors is, they have multiple funding streams. Higher ed has state money, federal money, tuition, philanthropy… This buffers the institution from cuts."
"Cuts" in Federal sources of funding only come from a mentality of "taxpayer on the hook/Government as Household". Otherwise, if they were worthwhile fiscal expenditures that were previously funded, why would govt cut them? You would only cut them if you thought falsely that you were 'leaving debt to children/borrowing from Chinese, etc'
I can see Beo's point about Galbraith wanting to protect his (and his father's who was a big believer in 'tapayer on the hook' based on some of his writings) reputation and perhaps being overly politically pragmatic... but can we draw the line on 'govt as household' please?
Let's not dumb down the public by letting the public go on believing 'govt as household' because we think it is politically pragmatic. Can we at least muster up the courage to take a stand on that please?
This concept is not hard to grasp. And then the public can make their own choices on how to use fiscal because the false "how are we going to afford it financially?" argument will be DEAD.
If you go around thinking and saying 'govt is like a household' then you are a moron (stupid one) in this regard.
"Fat, drunk and stupid is no way to go through life son..." - Dean Wormer in 'Animal House'
i don't know what it buys us to say
JKG is/is not "MMT". Is there some sort of bible of MMT that you have to sign up to in order to belong? Even Carlos here and the MMR folks are kinda kin folk.
What I object to about MMR is their flat out assertion that the JG is "central" to MMT. That puts us on very different paths. JKG, do far as I know, never outright rejected the JG. See the comment above. His is a more practical objection. I disagree with that since avoiding a fight never won you anything. But, I can understand it.
I would like us to solve the unemployment problem. Hell, even Krugman is welcome in that debate.
But the political environment at the moment prevents any sort of meaningful action to be taken.
What is this argument about?
Cullen Roche has made another muddled and unfounded statement? One of the 'MMTers' has slightly different ideas to the others? Golly.
beowulf, I think you are pushing the logic here. Of course JKG has taken a risk by associating himself with MMT and advancing key MMT positions. He is not considered heterodox but rather developing the old Keynesianism of his father, who was extremely political as well as critical. The fact that he is considered part of MMT is an advantage to MMT and a disadvantage to him, so far. But he clearly sees it as useful to h im, probably because it is true descriptively, and he is not saying much that Wynne Godley didn't say, too. MMT is happy to acknowledge the Godley association but they certainly don't claim him, even though they more right too in that he did co-published with Randy. JKG has always maintained the separation himself, and while MMT economists have welcomed the association, I don't think that that have ever violated his desire to remain independent.
MMT is a macro theory with many antecedents, such as Innes, Knapp, Godley, Lerner, Minsky, Marx, Kalecki, Keynes, Moore, etc. As MMT economists have said, MMT is unique in putting all these together into a macro theory. If there is a unique element in MMT macro it is the MMT JG which combines a BSE with a wage floor as price anchor. One can agree with a lot of MMT without being MMT. Godley and JKG fall in that camp. So do a lot of others.
@ Charles Hayden,
That's the way, keep going!!
MMRists did not say the JG was central to MMT. MMT said that.
"The reality is that the JG is a central aspect of MMT because it is much more than a job creation program. It is an essential aspect of the MMT framework for full employment and price stability. "
-Bill Mitchell
http://bilbo.economicoutlook.net/blog/?p=17528
Thanks Peter.
Actually, I'd been thinking about it. If it was not central, it would be "close". It is certainly a policy one could deploy to help in unemployment and price stability, if one thought those things important. Mitchell, Mosler and Wray all think so.
""The reality is that the JG is a central aspect of MMT because it is much more than a job creation program. It is an essential aspect of the MMT framework for full employment and price stability. -Bill Mitchell"
As I have said for the umpteenth time, the MMT is a integral piece of MMT macro theory addressing FE & PS, rather than a policy option that follows from the theory. Take the MMT JG away from the macro theory and what's left is pretty much PKE macro using Godley models. Actually, Lerner's FF is as much related to policy as the MMT JG. But it is not just a policy option in MMT macro. It too is part of the rationale for achieving FE & PS.
Parts of MMT macro can be taken out or altered, and that results in a different macro theory, from which different policy options will follow.
The MMT claim, so far unchallenged, is that MMT macro is the only macro theory on the table in which there is no voluntary unemployment. The contention is that this is more efficient and effective economically than theories that leave some % of resources permanently idle.
What baffles me is that there are people who take the other side of the efficiency argument. Who claim it's more productive to have that percentage of people unemployed.
Right on Tom. Take the JG out of MMT and you don't have MMT. You have something which I guess is more like MMR.
Jonf, there is no such thing as the JG not being central to MMT. It is the policy that generates FE & PS in the macro theoretical sense. If you don't include the JG then you don't have MMT. There is no MMT without the JG. As Tom said, that world is just post-Keynesian econ in the Godley sense. Which is great and all, but it's not MMT.
Geez, now that this is becoming a religious thing I feel like I am falling into MMR territory here. Bummer.
I want unemployment fixed. I guess I am really not interested in being pure MMT, if that means JG or nothing. The political climate is toxic and the chance of a JG seems really slim. Maybe that makes me PK with a twist.
@ Jonf
it is necessary to distinguish among macro theory, and policy, strategy and tactics. What policy options could actually get passed in Congress in a
particular political climate is tactics. MMT economists agree that tactically this is a tough time for any program that expands social welfare, and the MMT JG is particularly progressive. That means progressives should just shut up, or that they should propose something that that think as legs tactically but is less than they would like? Some say just shut up and wait for the meltdown, others say take what you can get, and others say go for what you believe to be the best solution. These are tactical choices based on different strategies.
Then there are disagreements over policy. Some think that a JG is just bad policy.
Then there are differences over macro. Some don't think that achieving FE & PS is a concern of macro.
"Beating must continue until morale is improved..."
There is no (political) compromise possible, and untackling fallacies is of most utter importance if anything must move forward.
Otherwise nothing will be fixed in reality, and that's what a lot of people wants, because the situation is already good for them and they don't care (until they do because its too late, and the compromise will come with populists leaders just like in the 30's in Europe).
I will prefer in the future, when chaos is not an option but an outcome, to have a clean conscience that I tried to do the right thing: unemployment is manufactured, there is no reason for unemployment to exist, and everyone claiming to be so is wrong or has an agenda. So may I be a radical on this, ok, but at least I'm not hypocrite in the name of some sort of 'compromise' with the status quo (favouring their memes, like for example public sector is useless and job creation should be completely left to private interests).
@ Anonymous; April 9, 2012 1:56 PM
Yes!
@ Tom
Here's the thing Tom. Depending on what numbers you like and what participation rate you use, there is somewhere north of twenty million unemployed and up to thirty million, and I have even seen it higher. So something needs to be done. I would love a JG. It is simple to understand and likely does a good job at getting the cronyism out. And in the future it could help stop bidding job pay down.
But we are losing trillions of dollars of GDP and destroying millions of lives in the process. So I couldn't care less if you call it MMT or PK. If Krugman or Gailbraith or Carlos have good ideas how to fix it, then I am for it. I am not for sitting around waiting for the stars to align. But then I got nothing.
MMT contributes to the conversation, if for nothing more than to take out the hyperventilating over deficits, and Warren's payroll tax holiday adds to the stimulus. Wray has pointed out we can have any size government we want and the economy should be managed for the public purpose. That at least sounds rational to me. To me it says there is a whole array of progressive ideas that can be moved along without us "going bust" in the process.
But me, an MMT purist, nah, not so much.
The MMT economists are not purists on tactics. They insist that the best strategy is to put forward the best policy proposal that the macro rationale justifies, and then adjust strategy and tactics to what is possible to accomplish at the moment. They have said that it is unlikely that the entire MMT policy proposal would be adopted at once, and that an iterative strategy is most feasible under current conditions. They don't insist that tactically it's all or nothing, and they admit that the MMT JG would be a tough sell when we are now dealing with the Ryan budget.
A lot of this kerfuffle arises from failure to distinguish among theory, policy, strategy and tactics. The MMT economists are in agreement on theory and policy in general, but they may differ on strategy and tactics.
There are some differences wrt policy. For example, Warren proposes setting the rate to zero while Scott would not, as I understand them. Warren would eliminate tsys issuance other than 30 day bills, Scott would not, again as I understand them.
That makes sense. Can't get the whole loaf all the time. I wonder if we will ever get the JG. That is why I don't like the characterization that it is "essential" meaning indespensible. I agree it is built into the theory, but maybe not so essential when push comes to shove. First we need a politician who will push for it.
@ Jonf
It is essential to MMT as a macro theory. The theory implies policy prescriptions based on economic efficiency and effectiveness, which are the basic criteria of management. Strategy and tactics are based implementing policy based on the situation. Strategy and tactics are fashioned to particular circumstances like the US at present. The strategy and tactics would be quite different in other countries based on their circumstances.
"Geez, now that this is becoming a religious thing I feel like I am falling into MMR territory here. Bummer."
Don't fight it, just let the tractor beam take you in. :o)
Actually I don't think a JG is intrinsically bad idea. Just as with the idea of lions and lambs lying down together, I endorse the concept. I suppose my concerns come at it from the opposite direction from JKG-- it sounds like he doesn't think Congress will fund it adequately, my concern is even with funding I'm doubtful the Dept of Labor will manage it competently (their most recent direct govt jobs effort was not overflowing with awesome).
"A $5 billion federal weatherization program intended to save energy and create jobs has done little of either... The Department of Labor spent most of the past year trying to determine the prevailing wage for weatherization work, a determination that had to be made for each of the more than 3,000 counties in the United States, according to the GAO report.
Secondly, many homes have to go through a National Historic Preservation Trust review before work can begin. The report quoted Michigan state officials as saying that 90 percent of the homes to be weatherized must go through that review process, but the state only has two employees in its historic preservation office."
http://abcnews.go.com/WN/Politics/stimulus-weatherization-jobs-president-obama-congress-recovery-act/story?id=9780935#.T4OGso7Sgto
"I don't have time to hit google for an exhaustive list"
Given your history Beowulf, that's gotta be a joke. Well played.
And as you well know, the best part of google is that whatever conclusion you wish to draw, google will more than accommodate. You bring up the weatherization program, and interestingly enough, my google "research" shows very different results:
"Weatherization program ramps up after slow start":
http://www.stateline.org/live/details/story?contentId=489973
"Despite Rocky Start, Texas' Weatherization Program Thrives"
http://www.texastribune.org/library/data/texas-stimulus-weatherization-assistance-program/
"Weatherization works!":
http://thehill.com/blogs/congress-blog/energy-a-environment/199727-weatherization-works
You note the incompetence of the Dept of Labor. Good. But will that differ from MMR's proposal for the Dept of Innovation? Also, have you ever dealt with corporate bureaucracy? Seen 'Office Space'? Read Dilbert? While comedy, all based in elements of truth. And it's very true that all "productivity" halts at the always malfunctioning copy machine.
When in school I once had a 3 month summer gig. It took 6 weeks to get a phone. Best part? I was a telemarketer. So I got to sit there for 6 weeks wearing a headset attached to nothing, reading the latest issue of Cosmo.
MMR is all about "balance". Perhaps you should try practicing it sometime.
this argument is retarded and childish. Please will MMR and MMT step down, shut up, and join together. This is all going nowhere far too fast, and only goes to show how easy even the best of men and minds can fall "prey to politics."
Tread CAREFULLY gentlemen!!! Pride comes before the fall and a house divided shall never stand.
Cullen and Beo and Tom and everyone else need come back to center as things were "in the old days." Nothing delights the devil more than destroying a good thing. Ideas and the greater good before little egos. Better to lose a battle and win than the war then vice-versa. We need all the solidarity we can muster at this time.
this should read as follows (my apologies):
Better to lose a battle and win the war then vice-versa.
you are all, every one of you, way too smart and bright to be bickering over mole hills underneath the looming shadow of the towering mountain.
Liberté, égalité, fraternité!!!!!!
@Mario
"Weatherization" has nothing to do with it. A typical distraction. And another petty one at that.
http://www.youtube.com/watch?v=7rZbvi6Tj6E
#GoogleHacks
Mario: everyone else need come back to center as things were "in the old days."
This is exactly the problem the Democratic Party under Obama is having. They are trying to capture the center, whatever that is, and the GOP is beating them. Every sports team knows that what to work is what's beating you. Whatever happened to standing up for what you think, after due deliberation, is right. Then, if compromise is necessary to move forward, so be it.
There are fundamental difference between MMT and MMR. Each should be occupied with making its own position clear without attacking the other needlessly. But debate is not beanbag. However, it is supposed to be about issues, not personalities.
@Tom
I agree with your analysis of the dems and have been saying that for YEARS now. I don't see the rift between MMR and MMT to be comparable to that however. In fact I see the rift more razor thin than anything else. So now JG....okay so what. Who really cares anyway? Yes I like the idea of a JG and see tons of value from it. But honestly, we're all getting our panties in a big knot over far too little of an issue. I don't see this as "compromise" in the slightest, b/c I am not comprising on the JG (I don't even know what such a policy would look like). But rather I am just moving on and choosing to stand together with MMR so that we can marshall our forces in better ways. To "lose" Cullen and Beo as well as the "exterior" view of the MMT movement to "outsiders" is waaaaay too much of a loss for the movement to take at such an early stage in its development. I see no good reason for MMT to pay so dearly for any policy at this stage in the game. And the JG debate can stay alive and well no doubt! But to separate things out with MMT and MMR in my view has become a blotch on the timeline of MMT. It would be better to merge back together as one (dis)functional family again and clobber forward as one unit however it looks and appears.
The fact of the matter is that when people REALIZE the principles of MMT, more ideas and policies emerge b/c truly the possibilities are endless. Eventually evolutionary policies that perhaps we can't even conceive of at this time will be born as more and more people contribute to the new MMT discourse and paradigm. THIS AND THIS ALONE should be the main thrust and purpose of the advancement of MMT. Let people and policies be as they be, but let the facts and realities also be known and adhered to. Interpretation and implementation will vary and vacillate to be sure. But truly which one of us here wouldn't prefer to live in a world of MMT policies (even without a JG) over today's policies!!!
This is what I mean by losing battles to win wars. Egos, minds, and hearts unite (and share)!!! The more solidarity we all have together under the MMT banner the more constructive and productive our discussions will be to further MMT, its potentials, and its bounds.
Mario, the difference between MMT and MMR is stark. MMR hasn't put together a macro theory but from what has been said so far, it is supply side and incorporates monetarism. MMT is demand side and rejects monetarism. That is the difference between orthodoxy and heterodoxy.
The difference is not only over the JG. It is over the whole approach to doing macroeconomics. MMR rejects the MMT theory of money, for example. It this were just a matter of a disagreement over tactics, I would agree that it superficial. But it is not. It is a basic disagreement over macro theory and policy based on it.
Their mission seems to be informing orthodoxy about a correct view of monetary economics. I agree that this is an important mission and sincerely wish them the best in accomplishing it. It would move the ball way forward and we could all be talking about reality instead of orthodox fantasies.
interesting. I did not know this. I thought it was just a JG issue and the role of government with society.
MMR rejects the MMT theory of money
what theory is that exactly? I don't think I know of that by name but I probably do by concept?
here's to MORE and MORE!!!!
MMT is based on the credit theory of money v. the commodity theory, and the state theory of money. MMR rejects the state theory (currency issuer as monopolist) in favor of a systems view that I have not seen worked up yet.
what!?!! I didn't know MMR rejected that idea. That's insane!!! I can't believe Cullen would argue that, his articles on MMT are all about the idea of state issued currency. To be honest, I haven't followed much of MMR at all, only the old Cullen posts.
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