Tuesday, April 1, 2014

The Difficulty of Accepting MMT


I've been immersed in the MMT movement for over a year now, and I have been reflecting a little bit on the incredibly enlightening journey that MMT has taken me on. The issue that is most present in my mind is the difficulty that other have in accepting MMT. I will openly admit that the operational descriptions that back MMT are somewhat difficult to understand. Since I had fairly little experience with economics beforehand, it took me four or five readings of Warren Mosler's "Soft Currency Economics" to really understand everything he was saying.

Thankfully, all the MMT blogs and videos were  tremendously helpful in rounding out my understanding of MMT; and once I did, it was an incredible feeling. I felt like I had entered a new stage of understanding in my life. I felt like a dark cloud of confusion and cynicism had finally been lifted off me, and I couldn't stop smiling for days. Macro policy made so much sense now, and I gained a new confidence in my ability to discuss economics with others.

Since then though, it has been more difficult. Understanding MMT, while living and working in Washington DC can be quite the emotional struggle. While I always want assume the best of people and give the benefit of the doubt whenever possible, I am constantly astounded by the ignorance of people in This Town. As far as I can tell, this ignorance is pervasive at all levels- from the lowliest Hill intern, to both ends of Pennsylvania Avenue, and all up and down K Street.

Its one thing for Republicans to be ignorant of economic realities, since the entire party is based on ignorance of basically everything. However, as someone who used to consider himself a Democrat, it is significantly more difficult to see fellow Dems/Progressives stuck using gold standard thinking and rhetoric. While it did take me a few years to stumble upon and learn MMT, I did so at the end of my undergrad years. What excuse do the career economists/policymakers have? Its really not that difficult people! To be fair, this journey was probably easier for me than others. I am fairly young, and do not have a long career in economics/politics that could be invalidated by accepting MMT.

I have come to realize that for most people, the barrier to accepting MMT is not intellectual deficiency, but a timid and pathetic desire to cling to the status quo. For many people, especially in the economics profession, accepting MMT would mean turning their backs on their entire careers of bullshit, and the income and prestige that came along with it. No matter how many times we try to explain monetary operations to so called experts, they cannot bring themselves to admit we are correct. The cognitive dissonance that MMT creates often leads, at best to denial (See Sumner, Scott), and at worst, to bitterness and anger (See Palley, Thomas). However, this also means that the few that have accepted MMT later in life, and possibly putting their careers in jeopardy, posses rare forms of courage and integrity. These people are true patriots.

Accepting MMT  means realizing that involuntary unemployment is an evil curse upon the human species, and not a natural cycle brought on by God. Accepting MMT means realizing that the vast majority of our policymakers and elected leaders are hideously incompetent, and are causing unbelievable harm to the people of the United States and the world. Accepting MMT means coming to the depressing conclusion that economic policymaking, unlike almost every other field of human endevour, has actually gotten worse, not better, over the past 100 years. 45 years after passing from this earth, Marriner Eccles' grave is spinning so fast, its probably hovering somewhere in the Utah desert.

We are making progress. To my great excitement., it appears that Dylan Matthews and Matt Yglesias, both members of the new "Vox Media" venture, are publicly accepting MMT. So despite the challenges described above, we have to shamelessly press forward. Only MMT can affirmatively answer the "how do we pay for it question". Only MMT has the firepower to defeat the evil empire of austerity. At this point, saving our country, and possibly our entire planet, requires using MMT to elevate policy discussions into the 21st century. Its up to us.

49 comments:

Clonal said...

Connect with Pete Stark from CA. He got defeated in the primaries in 2012 after the redistricting. He is an ex banker, and understands how the money system works. A testament to it is the classic video interview with Jan Helfeld He may have ideas now that he is "retired"

Peter Pan said...

Cory Hoffman is someone who has done his homework, as reported earlier by Mike:
http://mikenormaneconomics.blogspot.ca/2014/03/cory-hoffman-progressivemmt-candidate.html

Dan Kervick said...

I have a more charitable interpretation of beltway resistance to MMT. MMT has tended as a school of thought to practice a kind of studied neutrality about almost all social and political values other than full employment. If you ask Warren Mosler whether the US should do X or Y, you are likely to get the answer, "that's a political question." Well duh, that's the point. Washington policy-makers are in the business of building and sustaining coalitions to achieve extensive platforms of specific political ends. If you have no detailed and well-formulated agenda, you are not a player in that game. Punting with "That's a political question" is just not the way policy makers in Washington think, or can afford to think. There is no mystery as to why MMT can't get traction if it isn't even entering a fully-built vehicle in the policy race.

In Washington, people think in terms of organized systems for doing things. You can't just say, "get rid of the payroll tax" and expect people to take you seriously and respond with anything less than horror if you are not at the same time offering a concrete alternative mechanism for administering the Social Security system, one of the most important and extensive bureaucratic systems in the country. Most progressive politicians worth their salt in DC would probably suspect that these calls to dump the payroll tax are a right-wing Trojan horse for privatizing Social Security. These people are not dumb; they are not "morons". They are serious people trying to defend a system under constant attack, and can't afford to jump on a few loose suggestions by a handful of blogospheric dilletantes.

Also, MMT thinking about the conduct of monetary policy and price stability is half-baked and impractically qualitative. I have had people say to me that the only rule should be, "just keep spending until you get full employment". Well, it simply doesn't work that way. The government is not run by some kind of dictatorial money-issuing and spending czar. These decisions have to be into budgets, built into accounting systems and built into public financing operations - not improvised on a day-to-day basis. They also have to be pushed through legislatures - with a lot of heavy-lifting and a difficult expenditure of political capital - in advance of their implementation and with a system put in place for administering them over the course of the whole fiscal year.

Also, there is no guarantee at all that full employment will be reached simply by the injection of dollars into the economy as a kind of free-floating "aggregate demand." It is entirely possible, given the structure of economic institutions, social power and capital ownership in the country, that beyond a certain point more dollars simply means inflationary pressures without more employment. And the idea that the solution to this is just to create a minimum wage "buffer stock" of nominally employed worker meat isn't going to appeal to many people. I know this form personal experience in discussing these issues with all and sundry.

Dan Kervick said...

Also, MMT has absorbed the math aversion of much of the post-Keynesian school, and as such is ill-equipped to offer more than hand-wavy answers when people are asking to "do the numbers." If people are serious about promoting an agenda that incorporates MMT ideas, then they should create a policy-formulating institute or think tank in which MMT serves only to inform the macroeconomic background, but is not itself treated as though it were some kind of comprehensive solution to our problems. The think tank should offer a soup-to-nuts, A-Z instruction manual for reforming government policies and operations across a broad range of important issues, and not fall back on "we don't do politics". It has to say exactly what is being proposed and exactly how to set up the systems for implementing the proposals. It should cook up detailed legislative text that staffers can turn into a legislative act. It has to provide the kind of ammunition legislators and bureaucrats can confidently put forward in a quantity-driven arena of policy debate without getting chewed alive by the CBO, government accountants, and other think tanks who have all their ducks in a row and a fully buttoned-up policy program.

Tyler Healey said...

Members of Congress and the president don't have to accept MMT. All they need to know is that it is self-defeating to enact any fiscal austerity when the national unemployment rate is higher than two percent.

Dan Lynch said...

The Just GateKeeper seems to be confusing MMT with Functional Finance & Sectoral Balances.

MMT includes Functional Finance & Sectoral Balances but adds Minsky's conservative ELR and Mosler's neoliberal free trade.

You can accept FF,SB, and other post-Keynesian premises while rejecting MMT.

Disagree with whoever said that MMT is politically neutral. FF & SB are politically neutral, free trade and workfare are not politically neutral.

Agree with Kervick about the issues with the JG and with MMT's aversion to math.

Regarding full employment and inflation, note that Australia maintained full employment for 30 years and inflation was below 4% for 20 of those years.

It seems to me that the field of economics does not have a good handle on inflation, and that includes MMTer's who claim that a JG would be a "price anchor."

The bottom line is that we as a society should be more concerned with helping people than with maintaining the value of some rich guy's portfolio. Austraians ignore people and fixate on inflation, MMT ignores people and fixates on achieving something called "full employment" even if it wastes talent and makes people miserable by coercing them to do dead end minimum wage jobs.





Ryan Harris said...

With technology, there is no reason government could not have a queue of projects that are funded and prioritized to help meet fiscal and economic goals. Heck China does exactly that. I like a less automatic system than an ELR, otherwise foreign and domestic people will game the system to defeat its purpose. The aversion to math isn't a necessity of MMT, I think math and statistics could help MMT quantify logical limits and magnitudes, It should be a rich area for ambitious grad students to explore since it has been almost entirely neglected by the professional MMT economists.

Tom Hickey said...

Right, Dan. An MMT economist needs to update John Kenneth's Galbraith's The Good Society ( and Economics for Public Purpose (1973) for the 21st century. Monetary economics without an institutional framework doesn't cut it as a policy tool other than to say, "Here's your operational policy space and it's large than you now assume." I'm pretty sure Jamie Galbraith would love to assist in this.

I realize that MMT economists don't necessarily agree on politics, nor should they. But until someone knowledgeable puts together a vision of what MMT shows possible from a policy viewpoint that is comprehensive and coordinated, MMT is going nowhere politically. In fact, the chances are that it will be picked up by the right and used to promote military expansion.

The Just Gatekeeper said...

Dan,

I'm trying to do just that. I agree that we need some sort of institution in the nation's capitol.

I'm not convinced on the math thing, though. As I see it, no one on the Hill gives a crap about mathematical models or complex economic theories.They dont' have the expertise or interest in those types of high-academic en devours, since it gains them nothing politically.

I think MMT could do just fine sticking to what we have now and turning it into federal advocacy, without the added complexity of mathematical models. I do really believe that economics should be a qualitative field, and less of a quantitative one. The obsession with quantification is a neoliberal tendency that hasn't served policy well IMO. It hasn't even worked well for those that have attempted it. The modeling seems to be another way for socially-underdeveloped economists to hide the antisocial toxicity of what they are doing.

Dan Kervick said...

"I think math and statistics could help MMT quantify logical limits and magnitudes, It should be a rich area for ambitious grad students to explore since it has been almost entirely neglected by the professional MMT economists."

I think this is right, Ryan. But the departments where it is taught will have to make a commitment to go in that direction and hire or recruit sympathetic people who have the math chops to take it there.

"In fact, the chances are that it will be picked up by the right and used to promote military expansion."

Agree Tom. In fact, in recent years it was the military-Keynesian Republicans who made the biggest hay about the idea that "deficits don't matter" while the hapless Democrats got themselves all tangled up with surplus-seeking and Rubinite crowding out theories of federal spending. Doesn't Warren mention Donald Rumsfeld as someone who was very receptive to his idea?

Dan Kervick said...

Well, it seems to me that at some point you need to be able to come up with a defensible answer to the most basic fiscal questions: "How much are you proposing and projecting we spend?" and "How much revenue are you proposing and projecting we raise?" The projections involved in the answers to those questions entail an answer to the question, "What sized deficit are you proposing?" The person who offers answers to those questions needs to have some defensible answer to the question, "Why those numbers and not other numbers?" Call the presuppositions for the answer to that question a "model" if you like, or call it something else. But it is going to have to include some kinds of calculations of something.

Even Paul Ryan has a budget with numbers in it.

Tom Hickey said...

Where would math and statistics add usefully to the analysis that the accounting does not accomplish? What needs to be added to the MMT analysis through math and statistics to make it more acceptable as a policy tool?

Tom Hickey said...

Lenin: What is to be done?

The left is facing the same problem today. The problem is addressing issues piecemeal within the prevailing frame and using the prevailing universe of discourse.

There needs to be a comprehensive and coordinated narrative that presents a vision of possibility and how to actualize it through political action.

Economics is needed to make the vision credible and also to show how to achieve material goals effectively and efficiently without running off the rails.

It also has to include strategy and tactics for getting from here to there iteratively and incrementally through application of agile methodology.

Dan Kervick said...

Tom,

I think the math is needed to provide some quantitative measure of the optimal size of the projected deficit, given as inputs current levels of key macroeconomic aggregates.

The whole stumbling block is MMTs positive attitude toward deficits. But MMT doesn't have the attitude that there is no limit on the acceptable size of a deficit given various economic circumstances. So then, it seems to me that the burden is on MMT to offer concrete policy guidance on exactly how to adjust fiscal policy in response to prevailing economic conditions

And it won't due to appeal entirely to automatic stabilizers and claim the deficit will then be "endogenous", because part of the debate is about what stabilizers to put in place in the first place, how they will work, what will trigger them, etc.

Also, suppose we get into a stagflation scenario again, and we have 9% unemployment with 15% annual inflation. What exactly would MMT propose in those circumstances? Reduce the base wage of the job guarantee pool but hire more people into it? Something else?

Tom Hickey said...

If people are serious about promoting an agenda that incorporates MMT ideas, then they should create a policy-formulating institute or think tank in which MMT serves only to inform the macroeconomic background, but is not itself treated as though it were some kind of comprehensive solution to our problems. The think tank should offer a soup-to-nuts, A-Z instruction manual for reforming government policies and operations across a broad range of important issues, and not fall back on "we don't do politics".

Having discussed this with MMT economists, I'd say they are no board with the idea. It requires considerable funding, and they are not fundraisers. It also would involving hiring full time personnel and they are academics not interested in leaving academia for a think tank career in DC.

So if it is going to happen, it's going to take coordination from elsewhere. No fair blaming it on the academic developers or the inventor, who did mount a couple of political campaigns and has funded MMT institutions. Time for others to pick up ball and advance it down the court politically.

Tom Hickey said...

Seems to me that the principle issues are availability of real resources to meet needs and then wants in the future and how best to ensure that these resources are available in future through action taken today and in the near term.

Dan Kervick said...

"No fair blaming it on the academic developers or the inventor, who did mount a couple of political campaigns and has funded MMT institutions. Time for others to pick up ball and advance it down the court politically."

I agree with that, Tom. Economists aren't to blame for just being economists and not policy moguls. On the other hand, it is also unfair for people to say, "Why don't those moron politicians recognize and adopt my brilliant ideas?" when from a public policy point of view many of those ideas remain extremely schematic.

Tom Hickey said...

The way this happens politically is behind the scene through private conversations that the public never knows about. Politicians, even if convinced, will not adopt policy that the public is strongly opposed to unless they are quite certain it will not affect their prospects for reelection. So a great deal of the challenge lies in reversing the decades of neoliberal propaganda that has the public convinced that public debt and fiscal deficits are bad for ordinary people and "their grandchildren." That's going to require a long media campaign and lots of money, just as it did to build the neoliberal propaganda machine that now controls American public opinion and US politics.

Matt Franko said...

Dan this just out today, I dont think that this has been well "thought out" or that Ryan has some sort of well recognized mathematical "model" behind this:

"WASHINGTON (AP) — House Budget Committee Chairman Paul Ryan unveiled an updated Republican budget plan Tuesday that would slash $5.1 trillion in federal spending over coming decade and promises to balance the government's books with wide-ranging cuts in programs like food stamps and government-paid health care for the poor and working class. Ryan's plan would also cut Pell Grants for low-income students and pensions for federal workers, while steering away from cuts to benefits for senior citizens, at least in the short term. The proposal would reprise a voucher-like Medicare program for future retirees that would be the basis for GOP claims that the measure would drive down government debt over the long term. It also relies on unofficial scorekeeping help from the Congressional Budget Office, reflecting the beneficial effects of deficit cuts on long-term economic growth and tax revenues."

I just see Ryan & Co just operating from some sort of belief (philosophy) that "deficits are to be reduced in general"... and "govt is borrowing from foreign nations" or "no freeloaders" "debt to gdp has natural limits", etc... seems like they dont really have a "model" that ties any of this spending to some sort of projected "inflation" or "money multiplier" or "money supply" growth...etc..

Where is the mathematical "model" that shows economic growth as a function of "the deficit" that Ryan purports to be using here? "Laffer curve" doesnt model this...

Here is something they put out recently it has no empirical data in it, it seems entirely Rationalist to me:

https://budget.house.gov/uploadedfiles/appendix_ii-_economic_benefits_of_deficit_reduction.pdf

No model here either in this reference:

http://www.cbo.gov/sites/default/files/cbofiles/attachments/43769_AlternativePaths_2012-2-5_0.pdf

These "projections" are all just "made up"... there is no empiricism anywhere here imo (I don't see any...)

Seems like they just try to get the most reductions in spending that they think they can get away with politically... being motivated by patriotic notions of "saving the country" or something...

They dont have a "model" so I dont see why we should be required to come up with one...

Though perhaps to your one point we could come up with our own budget proposals using qualitative/rationalist approaches also...

rsp,

Dan Kervick said...

Matt, my guess is that he does have some economists working for him who have some kind of model that projects revenues and spending over a given time period - even if it is not be a very good model.

I know politicians or their staffers sometimes just pull numbers out of their asses. But if people are trying to sell a completely new way of doing things and thinking about budgets and public finance, they need to do better than that.

Matt Franko said...

Dan I would like to just see at least at first some sort of broader acceptance of the fact that we're not actually "out of money" like we've seen lately out of the generation next-ers in the DC policy media that Justin references in the post... Klein, Matthews, et al...

That would at least be a start and then we could start to challenge some of the rationalist assertions of the austerity advocates like Ryan & Co. via the new media ... put them on the defensive for a change...

rsp,

Anonymous said...

As an Australian that has been on Australian Workfare, I'd appreciate a JG if it paid the Australian minimum wage. I could live like a King compared to the Workfare payment. That includes their effectively being no limitations on the duration of Workfare (there is limitations but that's a separate story).

So someone going from unemployed to a minimum wage job is glorious.

If you are going from employment to unemployment to a minimum wage JG I can see where Dan Lynch is coming from. However if you are going from unemployment to employment to any job that pays you more he couldn't be more wrong.

If you start from the proposition of being employed first, nearly all workfare, JGs etc look crap but if you start from the proposition of being unemployed/long term or otherwise it is gold.

Whilst the JG is for everyone, personally I don't care about job swappers, they're the problem holding the unemployed back - that and businesses refusal to train (again another separate story).

As for "dead end" well that depends entirely on your own choices even in the rhetorical dead end min wage jobs - they don't have to be, that's up to you.

Anonymous said...

As for mathematics - as I've written elsewhere that's just code for baffle you with bullshit.

I think RWER or one of the many other brilliant blogs that occasionally have sympathy for MMT has done posts on the same thing - why maths is crap in macroeconomics.

That's not the title but the substance of the post.

Detroit Dan said...

I agree with senexx that the other Dans miss the mark with their criticisms here. These aren't constructive criticisms, in my opinion.

My opinion is that Kervick is wrong about the need for more math. I'm with Pilkington on that. Conventional economics is awash with math which obscures more than it explains.

With regard to policy proposals, I again feel that Kervick is off the mark. MMT is an economic school, not a political school.

So back to The Just Gatekeeper. I agree with you. I was where you are now 4 or 5 years ago, in terms of seeing the world more clearly thanks to MMT. (There are even some equations that helped me understand.) In my opinion, economics as a profession is something of a priesthood. People are paid well to support the status quo, irregardless of the absurdities underlying their analyses. People are legitimately concerned about radical change in societal foundations, and thus tend to be cautious in accepting heretical arguments.

Mosler, Wray, Mitchell and others have nailed down the best of the best with regard to Functional Finance and Post-Keynesian ecconomics, and brought the various strands together so that the whole is greater than the sum of the parts. As in many spheres, the truth here has a liberal bias...

Dan Kervick said...

With regard to policy proposals, I again feel that Kervick is off the mark. MMT is an economic school, not a political school.

I don't disagree with that, but then why complain about the difficulty in getting Washington policy-makers to pay more attention. If you've got nothing to sell them, they have nothing to buy.

Unknown said...

Dan,


"If people are serious about promoting an agenda that incorporates MMT ideas, then they should create a policy-formulating institute or think tank in which MMT serves only to inform the macroeconomic background, but is not itself treated as though it were some kind of comprehensive solution to our problems."

Isn't that the Levy Institute?

Unknown said...

See the 'current research topics' on the front page:

http://www.levyinstitute.org/

Ryan Harris said...
This comment has been removed by the author.
Detroit Dan said...

"why complain about the difficulty in getting Washington policy-makers to pay more attention?" [Dan K]

Again, look at the religious analogy. Why complain about the priests who cling to their dogmatic view of the world in the face of evidence to the contrary? After all, science/history is different from religion. The scientists and historians must prove (using math) that their alternative to dogmatic religion is better.

Anyway, I like that you are being a devil's advocate, and always appreciate your posts in neweconomicperspectives.org...

Detroit Dan said...

"why complain about the difficulty in getting Washington policy-makers to pay more attention?" [Dan K]

Again, look at the religious analogy. Why complain about the priests who cling to their dogmatic view of the world in the face of evidence to the contrary? After all, science/history is different from religion. The scientists and historians must prove (using math) that their alternative to dogmatic religion is better.

Anyway, I like that you are being a devil's advocate, and always appreciate your posts in neweconomicperspectives.org...

Detroit Dan said...

In addition to the Levy Institute, there is http://e1.newcastle.edu.au/coffee/ --- the Centre of Full Employment and Equity, the MMT primer at UMKC, and www.cfeps.org -- the Center for Full Employment and Price Stability...

Dan Kervick said...

y, to some degree yes, all the Levy Institute draws on a broader body of research than just MMT.

Anonymous said...

At some level, you have to be able to kick Fifi the Political Poodle off your ankle and say "This is what the numbers tell us. The Gov't spent this much and taxed that much". Completely apolitical, absolutely necessary. Now we have something we can tell the truth about. I can tell the Prez is lying and it's obvious most of Congress is lying. I can see that their policies are built upon those lies. Remove the false financial imperatives from their political values and policies and see how they stand on their own, without the specter of financial collapse, without the financial fairy tales.

Many will be hard pressed to make their case.

Anonymous said...

"I just see Ryan & Co just operating from some sort of belief (philosophy) that "deficits are to be reduced in general"... and "govt is borrowing from foreign nations" or "no freeloaders" "debt to gdp has natural limits", etc... seems like they dont really have a "model" that ties any of this spending to some sort of projected "inflation" or "money multiplier" or "money supply" growth...etc.."

Matt -

They're just hand puppets trying to promote the New Serfdom. Just as it's happening in Europe. If you thought the money hoarders were rich now, wait until workers consider themselves lucky to get a journeyman's wage of $35/wk, just like in the "good old days". That's an astronomical increase in their buying power even if their currency holdings don't increase one penny.

Unknown said...

Dan, that's why I like it.

Matt Franko said...

maybe Levy should look at opening a permanent office in DC where they can host lunch seminars for staffers, etc... invite staffers over for coffee and pastry and some presentations... talk it up...

This is like the AEI/Brookings type people do... the Fix the Debt morons, etc...

Fix the Debt morons I believe sublets some space from the Peterson Institute to keep costs down... maybe the Concord Coaltion does the same... "birds of a feather..."

Perhaps Levy can sublet some space from Jared Bernsteins or Dean Bakers group....

Though even a nice sublet takes some dinero... which may not be available...

rsp,

Bob Roddis said...

Understanding the convoluted squirtings and emissions of funny money created out of nothing does not mean you understand economics. Most people quickly understand that if the government can create as much funny money as it wants out of nothing that such a regime is both monstrously dangerous and that it does not solve the problem of scarcity.

Most people still think inflation is a mysterious force of nature and not a purposeful government policy of funny money emissions. I still believe that if you MTTers are successful in explaining to average people the true nature of government funny money that they will be appalled.

Finally, the Austrians only have some minor technical disputes regarding your analysis of funny money emissions and squirtings (see Detlev Schlicher, for example).

http://detlevschlichter.com/

The dispute is over the impact of such a system upon society, a process that you refuse to even contemplate.

Tom Hickey said...

The dispute is over the impact of such a system upon society, a process that you refuse to even contemplate.

Yes, exactly so. We have very different visions and apparently different value systems.

The challenge of a pluralistic society is reconciling different worldview and value systems.

Unfortunately, when it comes to choosing a monetary regime there is pretty much only one possible outcome and each nation also has to fit itself into the prevailing global system.

That choice has already been made for the foreseeable future, so the challenge is doing the best with what is at hand.

Moreover, the direction is toward digital currency rather than commodity money. In most place, people are free to convert their financial resources into real assets to protect themselves from price instability if they think it threatens. Or to save in financial assets that rise correspondingly with inflation.

Not like there aren't workarounds for people that don't agree with the current system.

Detroit Dan said...

Well said, Tom...

Bob Roddis said...

Mr. Hickey: I share the concern regarding the mystery as to why the public has no interest whatsoever in understanding the present unconstitutional system of funny money emissions.

My primary point was regarding the constant whine of the MMTers regarding why no one can understand the alleged marvelous IMPACT of unconstrained funny money emission upon society. Of course most people who are not already hard core Marxists, socialists or leftists are going to be horrified when they understand the reality of unconstrained government funny money. You guys do not seem to be able to separate the two very distinct concepts of:

1) The reality and precise procedural nature of current government and banking system funny money emissions; and

2) Their impact upon society and the "economy".

Everyone should understand #1 because it is how the present system operates. Once they understand #1, few people other than hard core leftists are going to support the MMT analysis of #2 in the sense of it being a positive thing for society.

Tom Hickey said...

Good luck convincing the world to change the global monetary system. In the meantime, we'll deal with the system we have.

Bob Roddis said...

"it is significantly more difficult to see fellow Dems/Progressives stuck using gold standard thinking and rhetoric"

More evidence that average people do not comprehend the nature of funny money emissions and still think of the monetary system in quasi-hard money ways. However, I do not expect them to understand the nature of funny money emissions anytime soon because it's not in the interest of the elite for people to understand it. It is a system by and for the elite to loot the masses.

"Good luck convincing the world to change the global monetary system. In the meantime, we'll deal with the system we have".

Whatever.

Bob Roddis said...

You people have never responded to John Carney’s observation of your massive blind spot regarding the application of your monetary insights to society (probably because it is, indeed, a massive blind spot):

Furthermore, I do think there's a problem with MMT that cannot be confined to confusion.

The problem is as follows: MMTer are so focused on sectoral balances and the interaction between the private domestic sector and the public sector that they often downplay the intra-sector dynamics.

Finally, MMTers do not seem to fully appreciate the problems of ignorance and calculation that inform Austrian economics. They seem to recoil at even thinking about them because of the implications for the limits of political action. This also needs to be corrected.


http://mikenormaneconomics.blogspot.com/2012/03/john-carney-comments-on-jkhs-post-on.html?showComment=1332343882664#c370523094954810558

Detroit Dan said...

I guess I'm a victim of the massive blind spot, because this seems like total gibberish to me. Please don't try to explain. I'm beyond redemption..

Tom Hickey said...

Presupposes microfoundations.

Bob Roddis said...

Presupposes microfoundations

Yes, like real live empirically based acting human beings. How strange is that?

Tom Hickey said...

Very strange if one thinks that humans act independently of cultural, institutional, class, and group influences, all of which introduce meso-causality, as well as free of the structure and functioning of the social, political and economic systems that comprise the overarching system that introduces macro-causality.

Bob Roddis said...

Very strange if one thinks that humans act independently of cultural, institutional, class, and group influences

What a sad and phony argument. No one has ever said that humans do not interact. In fact, you statists who depend upon SWAT teams and prison to force your will upon the recalcitrants are promoting the antithesis of voluntary cooperation and organic natural relationships and culture.

The issue is between voluntary cooperation and SWAT teams. You've chosen the SWAT teams. How else can your horrible monetary monopoly be enforced?

Tom Hickey said...

Huh?