Sunday, April 3, 2016

Bill Mitchell — Fiscal policy is a potent instrument for productivity growth

Sometimes we have to take a longer look at things to see the present in perspective. Greece has been a living experiment for the neo-liberal Groupthink machine that is the Troika. We rarely experiment on humans on any sort of large-scale if there is the likelihood of adverse result. That would breach any notion of human ethics. It is a pity that we relax those standards when dealing with other animals, but that is another story again, which I will leave silent here. The Nazis certainly conducted large-scale experiments on humans and we vilified them for it. The Troika is conducting different types of experiments on the citizens of Greece, which defy reason, and which also have had devastating effects. But still the mantra continues from the babbling mouths of the political leadership in Europe and its technocratic squawk squad (SS) embedded in the European Commission bureaucracy, the ECB, the IMF and various so-called ‘think tanks’ that continually pump out pro-Euro propaganda disguised as research – more structural reform, more fiscal austerity. Apparently, this scorched earth approach is the only alternative and will deliver higher productivity, increased international competitiveness and underpin a return to prosperity. Greece is on the front line of this approach. I never believed it would work because it defies economic reason. Economic reason that is not blighted by the neo-liberal Groupthink. It hasn’t worked. And now, the IMF, or at least segments within the IMF, are admitting that and producing research that supports the opposite case – the Modern Monetary Theory (MMT) case – that expansive “fiscal policy is a potent instrument for productivity growth through innovation”. Correct!

Bill Mitchell – billy blog
Fiscal policy is a potent instrument for productivity growth
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Roger Erickson said...

even our MMT friends don't realize how comical & revealing this statement is

"Fiscal policy is a potent instrument for productivity growth"

Just stop and think about the context here.

Oh the devious webs we spin for ourselves.

Even cave men 100K years ago would laugh at someone formally addressing compatriots & stating

"Group Initiative is a potent tool for productivity growth."

[I can just picture a group of grubby knuckle-walkers, sitting around a fire, experiencing the anti-climax.

What? Don't tell me that some current humanoids have to be told that Fiscal Policy = Public Initiative?

Seriously? Weepin' Buddha on a Decline! What's become of us? If we have kids passing classes by age 10 who don't grasp this intuitively ... no amount of cultural repair efforts will fix this later on.]

Even Neanderthals hearing this statement would take their newfound tool of language and hoot "Well Duh!" Heck, pack animals long before chimps knew the value of teamwork.

Uh ... isn't that the DEFINITION of a social species?

Yet here, 100K years later, we have learned gentlemen having to remind their compatriots of this apparently novel idea. :(

The sinking feeling is palpable.

The collective ability of homo sapiens to keep themselves from thinking is truly impressive.

Yet there's something even more deeply provocative stirring here.

Any trait appearing at higher than chance rates .. you have to consider has an adaptive feature!

Is this part of the process of scaling up a massively multi-citizen culture? Seriously. Just like the brain needs to be able to rely upon ~40trillion "dumb" heart/muscle/kidney/etc cells, does a lean governance structure need to rely upon dumbed-down, idiot-savant masses?

Or is there a better way?

MRW said...

Roger, no one in the US knows what "fiscal policy” is, not how it works. Least of all high-schoolers. You may as well say all homo sapiens come from the Planet Varumphdin.

MRW said...

nor how it works.

Roger Erickson said...

MRW, yes, that's exactly why I said that the sinking feeling is palpable

Matt Franko said...

Well its not "the deficit!" I can tell you that...