Sunday, January 8, 2017

Bill Mitchell — Austerity is the problem for Britain not Brexit

Regular readers will know that I firmly supported the LEAVE vote in the British referendum in June 2016 even though that was somewhat gratuitous given I am neither a British citizen or live there. It was one of those academic exercises where we wax lyrical with little personal at stake. But that aside, if I had have been a British citizen then I would have voted to leave without doubt. The Internet links us more closely these days and in before the Referendum vote I received heaps of antagonist E-mails informing me that I was bereft of all credibility in taking that position. After the vote, when I dared to point out that the official (Bank of England, Treasury, IMF, OECD) and non-official predictions (the investment bankers etc – remember Credit Suisse sending out a Mayday alert of an impending recession which would wipe out 500,000 jobs!) were over the top to say the least (given the post-vote data), I was called delusional and worse. And these personal attacks came mostly from those who claim to be on the progressive side of the debate. Spare the thought! Subsequent data has indeed pointed out that none of the predictions of doom have so far turned out to be true. I know there might be longer term issues when they get onto working out the detail but I stand by my view – Brexit – if handled correctly by the British government will be a net benefit to the nation and its democracy. If not it could offer no real gains. But in this smokescreen of misinformation, a serious study from Cambridge University researchers – The macro-economic impact of Brexit – has concluded, that while there might be some short-run losses in GDP per capita, they soon recover as the British economy adjusts to its break from the dysfunctional European Union. There is no disaster scenario forthcoming!...
Bill Mitchell – billy blog
Austerity is the problem for Britain not Brexit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

7 comments:

GLH said...

What Bill Mitchell seems to never understand is that the media is just the propaganda wing of the deep state and he will never get anywhere with it. If it weren't for the false news of the internet most of us would never haver heard of MMT. I know i wouldn't have.

Matt Franko said...

From Bill here: "DSGE models and their variants share ZERO commonality with MMT."

ZERO...

Matt Franko said...

It's the 'stochastics" and the "equilibrium" that kills it...

Replace stochastic with deterministic and equilibrium with surplus...

Matthew Franko said...

ZEEEEEEEEEEERRRRRRRROOOOOOOOOO...

Penguin pop said...

What Bill Mitchell seems to never understand is that the media is just the propaganda wing of the deep state and he will never get anywhere with it. If it weren't for the false news of the internet most of us would never haver heard of MMT. I know i wouldn't have.

Same here. I first heard of MMT back when people on YouTube were debunking Peter Schiff and I would relentlessly hate-watch those videos. It took me a long time to fully understand and appreciate the logic and reasoning with MMT and what the implications truly are and I just get annoyed every time I hear someone spew garbage that isn't true.

AXEC / E.K-H said...

Economics as poultry entrails reading
Comment on Bill Mitchell on ‘Austerity is the problem for Britain not Brexit’

It is, first of all, of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics the scientific standards of material and formal consistency are observed.

Theoretical economics has to be judged according to the criteria true/false and NOTHING else. According to the well-defined criteria of material and formal consistency MMT is provable false.#1 Because of this, Bill Mitchell’s policy guidance has NO sound scientific foundation. It is nothing more than political economics or soap box agenda pushing.

The very characteristic of political economics is to argue with predictions. Predictive programming, as psychologists call it, is very popular since the prophets of the Bible but most economists do not seem to know that scientists ― as a matter of principle ― refrain from predicting the future.#2

Political economics has produced NOTHING of scientific value in the last 200+ years. The current state of economics is that of a cargo cult or fake science.#3 This applies also to MMT. Bill Mitchell’s Brexit/Austerity argument is not different from the poultry entrails reading of the old Roman haruspex.

Egmont Kakarot-Handtke

#1 See ‘The final implosion of MMT’
http://axecorg.blogspot.de/2016/10/the-final-implosion-of-mmt.html
#2 See ‘Scientists do not predict’
http://axecorg.blogspot.de/2016/02/scientists-do-not-predict.html
#3 See ‘Americans believe crazy things, yet they are outdone by economists’
http://axecorg.blogspot.de/2016/12/americans-believe-crazy-things-yet-they.html

Matthew Franko said...

"scientists ― as a matter of principle ― refrain from predicting the future."

That's what we have engineers for...