Rogoff and Reinhart NYT response
by Warren Mosler
The intellectual dishonesty continues.
As before, it’s the lie of omission.
R and R are familiar with my book ‘The 7 Deadly Innocent Frauds of Economic Policy’ and, when pressed, agree with the dynamics.
They know there is a more than material difference between floating and fixed exchange rate regimes that they continue to exclude from their analysis.
They know that one agents ‘deficit’ is another’s ‘surplus’ to the penny, a critical understanding they continue to exclude.
They know that ‘demand leakages’ mean some other agent must spend more than its income to sustain output and employment.
They know federal spending is via the Fed crediting a member bank reserve account, a process that is not operationally constrained by revenues. That is, there is no dollar solvency issue for the US government.
They know that ‘debt management’, operationally, is a matter of the Fed simply debiting and crediting securities accounts and reserve accounts, both at the Fed.
They know that if there is no problem of excess demand, there is no ‘deficit problem’ regardless of the magnitudes, short term or long term.
They know unemployment is the evidence deficit spending is too low and a tax cut and/or spending increase is in order, and that a fiscal adjustment will restore output and employment, regardless of the magnitude of deficits or debt.
Carmen’s husband Vince was the head of monetary affairs at the Fed for many years, serving both Alan Greenspan and Ben Bernanke. He knows implicitly how the accounts clear and how the accounting works, to the penny. He knows the currency itself is a case of monopoly. He knows the Fed, not ‘the market’ necessarily sets rates. He knows that, operationally, US Treasury securities function as interest rate support, and not to fund expenditures. He knows it all!
Carmen, Vince, please come home! I hereby offer my personal amnesty- come clean NOW and all is forgiven! As you well know, coming clean NOW will profoundly change the world. As you well know, coming clean NOW will profoundly alter the course of our civilization!
Carmen, Vince, either you believe in an informed electorate or you don’t!?
(feel free to distribute)
R and R are familiar with my book ‘The 7 Deadly Innocent Frauds of Economic Policy’ and, when pressed, agree with the dynamics.
They know there is a more than material difference between floating and fixed exchange rate regimes that they continue to exclude from their analysis.
They know that one agents ‘deficit’ is another’s ‘surplus’ to the penny, a critical understanding they continue to exclude.
They know that ‘demand leakages’ mean some other agent must spend more than its income to sustain output and employment.
They know federal spending is via the Fed crediting a member bank reserve account, a process that is not operationally constrained by revenues. That is, there is no dollar solvency issue for the US government.
They know that ‘debt management’, operationally, is a matter of the Fed simply debiting and crediting securities accounts and reserve accounts, both at the Fed.
They know that if there is no problem of excess demand, there is no ‘deficit problem’ regardless of the magnitudes, short term or long term.
They know unemployment is the evidence deficit spending is too low and a tax cut and/or spending increase is in order, and that a fiscal adjustment will restore output and employment, regardless of the magnitude of deficits or debt.
Carmen’s husband Vince was the head of monetary affairs at the Fed for many years, serving both Alan Greenspan and Ben Bernanke. He knows implicitly how the accounts clear and how the accounting works, to the penny. He knows the currency itself is a case of monopoly. He knows the Fed, not ‘the market’ necessarily sets rates. He knows that, operationally, US Treasury securities function as interest rate support, and not to fund expenditures. He knows it all!
Carmen, Vince, please come home! I hereby offer my personal amnesty- come clean NOW and all is forgiven! As you well know, coming clean NOW will profoundly change the world. As you well know, coming clean NOW will profoundly alter the course of our civilization!
Carmen, Vince, either you believe in an informed electorate or you don’t!?
(feel free to distribute)
New York Times
Debt, Growth and the Austerity Debate
By: Carmen Reinhart and Kenneth Rogoff
8 comments:
I've known Warren Mosler for eleven years. I consider him a very close friend. He's taught me everything I know when it comes to economics and MMT. I have nothing but the utmost respect and admiration for him. I think he's one of the most brilliant people I have ever met and I hold my friendship with him in the highest regard. That is why I am writing this open plea to him.
Warren, I can no longer bear the sight of you begging the established mainstream orthodoxy of economic jerks to "be nice and do the right thing." This is beneath you.
Sorry, but they don't know. I've met many of these people when I worked at Fox and had conversations with them. Believe me, they don't know it. They refute what you say vigorously and call it nonsense.
Warren, I really think you're misreading these people. If they know all your views, why do they keep saying the exact opposite? In essence, they're openly discrediting everything you say. They may say they agree with you, but they are publicly very dismissive of you. That's an outright show of disrespect, or more.
And begging these jerks to do the right thing just looks sad. It's beneath you. Please, stop.
What I find disturbing about this is the fact that Warren suggests these two were familiar with MMT and seem to know and to have known their work was erroneous all along. That makes them not merely incompetent but frauds, and dangerous ones at that. They come from that same institution of Larry "smartest guy on the planet" Summers. Maybe there's something in the air over there.
Vince Reinhart works for the American Enterprise Institute and Carmen Reinhart and Ken Rogoff were affiliate with Pete Peterson's outfit. That says it all. This was a hatchet job pure and simple. Now that are getting their asses handed to them, as is fitting. But they have no shame.
If they really to know and understand as Mosler claims, if they really do intimately understand the content of the Innocent Frauds, then we are in big trouble. If they know and understand, then many people "in their circle" know and understand, and are specifically choosing to blatantly lie in person and in scholarship.
We're in big trouble if the basic tenets of MMT are understood by the elites and they still force tens of millions of people to needlessly suffer. It's worthy of revolution.
I side with Rodger Mitchell on this. Many if not most of them know full well what's up.
To paraphrase randy Wray, when smart people are involved, if something is a choice between being stupid or being malign, choose malign.
And I would add to that, especially when means, motive and opportunity are present.
This is a storm in a teacup. It's a shame for R&R, because apart from the spreadsheet error, they haven't really done anything wrong.
"It is covered in those who are perishing, in whom the god of this eon blinds the apprehensions of the unbelieving" 2 Cor 4:3
They are all faithless ("unbelieving") blind and cannot see what is really going on no matter what they may say to your face...
We need like $250M and although I believe we would still not be able to ultimately kill it, we could put the all time hurt on it...
rsp,
It is all politics and not economics at all - politics of the 1% against the rest. It is part of the brain washing process of the 99%. The 1% don't ever want the value and usefulness of their private capital for the economy and society to be questioned. They are scared of the fact the national currency is a simple public monopoly. They are even more scared if the 99% find out this simple fact. They are scared of democracy when they can't control it.
That's all. In order for MMT to be more successful in its popularization, MMT needs to put in action at least the same money the 1% are putting. That's why I wanted for us to be more organized like in a formal organization. I only regret Warren didn’t become a billionaire. ☺
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