Thursday, June 28, 2012

Bill Mitchell — The on-going crisis has nothing to do with a supposed liquidity trap

The problem is that while there are some leading economists who are arguing against harsh fiscal austerity at present at the basis of their reasoning is a thoroughly mainstream approach which has helped create the problem. I don’t think their version of ECO101 Macroeconomics provides the answers. There is some common ground with Modern Monetary Theory (MMT) but an even deeper incongruence.
Read it at Bill Mitchell — billy blog
The on-going crisis has nothing to do with a supposed liquidity trap
by Bill Mitchell

7 comments:

Detroit Dan said...

Liquidity claptrap...

Ryan Harris said...

On CNBC today, Fed's Fisher called for congress to "reboot to a "modern" understanding of fiscal policy. The fed is getting pretty direct at prodding congress to do something. I doubt he means Modern Money as we know it, but anything is better than the Gold Standard clowns running congress and it is a perfect example of what Bill Mitchell is saying-- even the mainstream is arguing against austerity.

GLH said...

Tom Hickey:
If you haven't already read it, please go to New Economic Perspectives and read Dan Kervick's article about healthcare and then in the replies MRW posted a you tube video by Lawrence O'Donald explaining that there is no individual mandate in the health care law. If you don't mind I would like your opinion on the matter.

Anonymous said...

Bill is right!Let us sign this:
A Manifesto for Economic Sense-Paul Krugman and Richard Layard
http://www.manifestoforeconomicsense.org/

Matt Franko said...

Doesnt look like Bill thinks it's time to stop and declare a 'magnanimous victory'... sorry McCulley too bad for you.

Ryan,

Ive witnessed that type of thing too at the lower levels... but its "the boss" that remains the problem...

What Bernanke has been doing is in his Congressional reporting, when some of the Congress people are getting a bit inquisitive with BB about why monetary policy simply is not working, BB trumps them with the deficit and debt...

When ever Congress starts to break BBs balls about monetary policy being impotent, BB somehow gets the conversation twisted around over to the lack of long term so-called "fiscal sustainabilty" and puts it back on them... BB is using the "debt" and deficits as a defense mechanism when any serious inquiries start to be made into the effectiveness of monetary policy, so the Fed is exhibiting schizophrenic behavior... Fisher saying one thing and BB saying another... true morons.

Even Jamie Dimon did this the other day when they had him on the rack, Dimon pulled the "deficit card", and put it back on Congress.

Congress of course too moron to see thru this obfuscation.

Sad.

rsp

paul said...

This just in from Noahpinion via Lars P Syll's blog:

"Science" without falsification is no science…

http://larspsyll.wordpress.com/2012/06/29/macroeconomics-in-the-aftermath-of-the-crisis/

Lars looks like another MMT sympathizer from Europe.

Matt Franko said...

Right Paul looks like from Smith:

" The creation of new theories does not represent scientific progress until it is matched by the rejection of failed alternative theories."

So this shows how utterly absurd Paul McCulleys suggestion to at this point "magnanimously declare victory" is.

Until the current orthodoxy is completely humiliated (I'm sorry), and shown to be the morons that they are, imo no progress can be made.

"expose, rebuke, entreat" 2 Tim 4:2

3 step process, cant be made any simpler imo... it's not about "being a gentleman" at this point.

rsp