Thursday, January 19, 2017

More on Munnie Printing


Some guy in the academe tries to take some shots at MMT here but that is not the point.

This is revealing here the guy says:


The modern monetary theory crowd argues economists have misunderstood how the government interacts with the economy. The rest of us just don’t get it! It’s all a big conspiracy, it would seem.

Bold mine.  Here we see this nexus again at the confluence of stupid and subversion.

Now, FD I have always advocated that these people are 100% stupid vs. the ROW that claims it is all a big neoliberal conspiracy, but if you read this here, this guy reveals that they are somehow experiencing BOTH.

IOW, the guy says (at the same time) that they are stupid (ie 'the rest of us don't get it') AND it is a conspiracy (literally 'its all a big conspiracy')... at the same time.

How could they be existing while believing they are BOTH stupid AND subversive at the same time?

So this is very interesting...



19 comments:

franco said...

"(2) Thus, said countries can provide unlimited resources, pay for whatever they want, and create full employment. Nirvana, here we come!"

Already felt like giving up here. It's clear that this person isn't interested in genuine discussion or critique. Anyone who had taken the time to understand MMT will notice the emphasis on distinguishing between real and financial constraints.

Goes on the invoke the spirits of Weimars and Zimbabwes past, which only highlights their inability to see past their own beliefs and understand historical contexts past what is required to serve said beliefs.

All the article does is leave me thinking how the fuck did this guy become a professor?

Matt Franko said...

franco there is some really deep shit being demonstrated here methinks....

Penguin pop said...

That article makes me want to vomit. This fool makes the same strawman arguments I've heard over and over again about hyperinflation or we're running out of money. Why is this so hard for these people to understand? If they've gone to a business school or have ran their own business before, they should have some idea about how accounting and finance works. Maybe that's the main issue here. Lack of real world experience, lack of intelligence and utter stupidity as you have emphasized before, Matt. I'd also like to attribute how prevalent a lot of this tired thinking is. They have the better marketing unfortunately and know how to make their bullshit sexier in the eyes of the people who have never looked at an income statement, a balance sheet or a statement of cash flows in their lives.

Peter Schiff logic right here folks:

"For a recent example, just take Zimbabwe: in late July 2008 a Zimbabwean (second, or “ZWN”) dollar was worth 688 trillion times less than it was in August 2006.

When one issues bonds to back a deficit one has to convince investors that, at some point, revenues will be raised or spending will be cut. Otherwise investors won’t buy the bonds at the prevailing price. And a higher price means that less deficit spending can be financed."

Ryan Harris said...

Beat the strawman to death.


filed under no publicity is bad publicity.

Ignacio said...

they cannot comprehend a solution to a problem can be simple.

it's pure stupid.

Matthew Franko said...

I,

But how is he able to also bring in the "conspiracy" too? Like I say 'at the same time'?

Seems like it would have to be one or the other...

I get how they are definitely stupid but dont understand how they can also be saying 'conspiracy' at the same time...

Ignacio said...

"It’s all a big conspiracy, it would seem."

Sounds like irony to me, haven't read the whole thing though, but he seems to be mocking, it's a succession of straw man arguments.

IDK, economists minds work in strange ways.

Tom Hickey said...

The term “innocent fraud” was introduced by Professor John Kenneth Galbraith in his last book, The Economics of Innocent Fraud, which he wrote at the age of ninety-four in 2004, just two years before he died. Professor Galbraith coined the term to describe a variety of incorrect assumptions embraced by mainstream economists, the media, and most of all, politicians.

The presumption of innocence, yet another example of Galbraith’s elegant and biting wit, implies those perpetuating the fraud are not only wrong, but also not clever enough to understand what they are actually doing. And any claim of prior understanding becomes an admission of deliberate fraud - an unthinkable self-incrimination.


Warren Mosler, 7DIF, Prologue, p. 5

Bob said...

Malice versus ignorance on the part of economists. Which one implies a conspiracy?

Tom Hickey said...

There are also conspiracies of ignorance, where the Dunning-Kruger effect is suppressed. Everyone pretends to know more than they do and it remains unspoken.

The GFC was a good example. When confronted, economists admitted their ignorance, sort of, but quickly retreated from that position to claim that high ground again even though nothing had changed for them. That's what a conspiracy of ignorance will do for you.

Tom Hickey said...

Then there is also the confession that Paul Samuelson made of telling noble lies to the public about "sound finance" since the public is not capable of handling the truth.

https://youtu.be/EeeasEyTZqo



Matt Franko said...

"any claim of prior understanding becomes an admission "

Yes Tom but they cannot be making that claim... it can never be self-incrimination... hence no fraud...

Fraud requires prior knowledge and knowledge is information communicated... they have never had the communication...

It has seemed to come down to stupid vs. subversion but I'm thinking lately it is some sort of cocktail they are drinking where to it starts to look like both...

Tom Hickey said...

The legal definitions of fraud, conspiracy and racketeering are strict and difficult to prove. However, the ordinary language meaning is much looser. Most people hearing Eric Holder saying that bank executives could not be successfully prosecuted for fraud for lack of a case agains them believed that to be ridiculous based on the ordinary language meaning of fraud and the known facts.

It is also rather obvious that there is a "conspiracy" in academia among senior academics to dominate their field by establishing gates and acting as gatekeepers. There is no illegal conspiracy involved, but it a conspiracy in the ordinary use of the term.

Auburn Parks said...

this guy is just plain ignorant.

"What modern economics has going for it is that it is a formal, falsifiable theory."

Absolutely laughable statement. There is no such thing in modern macro.

"I won’t go through the math here, but the problem with modern monetary theory is that, in short, there is only a finite amount of real economic resources that can be extracted through seigniorage (the difference between the face value of physical money and its production costs)."

Seignorage is irrelevant to monetary and fiscal operations. IIt doesnt play any large role in the current system whatsoever and is unnecessary to MMT described operations. This guy has no idea how the Fed, money markets and primary dealers works to provide the liquidity aka reserves necessary to "fund" Govt spending. This guy has no idea about the way the NY Fed desks uses repos and OMOs to offset whatever TSY is doing during the day to makes sure there are always enough reserves in the system to maintain the Fed's target interest rates and launder those reserves through the primary dealers to the TSY so that the financial sector can get its cut and to satisfy the "Govt is dependent on the market" moron crowd that the Govt isnt "printing" money. Which leads to the next one.

"When one issues bonds to back a deficit one has to convince investors that, at some point, revenues will be raised or spending will be cut. Otherwise investors won’t buy the bonds at the prevailing price. And a higher price means that less deficit spending can be financed.When one issues bonds to back a deficit one has to convince investors that, at some point, revenues will be raised or spending will be cut. Otherwise investors won’t buy the bonds at the prevailing price. And a higher price means that less deficit spending can be financed.

It is the discipline of market expectations. And it is a fact. "

No No No, thats not how TSY CD prices work in a sovereign monetary system. There is no default risk so there is no chance that the CD buyer wont get their money back plus interest, the question is only whether that interest you receive is greater or less than inflation during the period. This fact is further complicated by Tsy CD buyers having to guess at what the CB is going to do to arbitrarily change the rates\prices of the Cds. IOW if CBs would just stop monkeying around with the rates then the TSY market becomes a perfect casino for inflation predictions on a number of different time scales.

Of course there is a difference between a saver who intends to hold his Tsy CD to maturity and a speculator who is hoping that the market\Fed will move in one particular direction which makes their Tsy Cd more valuable. Tsy CDs are certainly not priced based on whether people think the Govt is going to cut its deficit or not.

"But here’s the essential substantive problem. Suppose a government wants to pay for some “stuff”. If the government prints money and doesn’t back that by issuing bonds then there is inflation. That inflation leads to the government needing to print more money to pay for the stuff. Which leads to more inflation."

Oh my God how fucking stupid do you have to be to believe such nonsense? I mean $4 trillions in QE with no inflation and still people like this keep repeating the same garbage.

Matt Franko said...

Yes they are really f-ed up and stupid but they also seem to be confused and are somehow conflating/combining conspiracy into it too.... they are in deep shit imo....

Tom Hickey said...

Moron. Not worth responding to. He would not be able to understand the argument since he obviously has no clue. Brainwashed by Harvard. They are the worst.

Tom Hickey said...

Excepting Chicago.

berko said...

I don't get his 'backed by bonds' argument.

In my layman's understanding of things, in issuing bonds isn't the fed govt just outsourcing the money creation to the private banks, so functionally it's no different from the government creating the money directly, apart from providing a sort of fig leaf covering the shocking truth that money is just created out of thin air?

My understanding of MMT is that governments have much more room to move, not unlimited, than conventional economics would lead us to believe.

André said...

"It’s all a big conspiracy"

He said that because a lot of MMTers do say that it's a conspiracy. Let's not be hypocrite. We know some of us say that.

It usually follows a pattern, with the following premises:
(i) it is obvious that the world doesn't work as the neoliberal think;
(ii) it's so obvious that of course the neoliberal themselves know it;
(iii) if they know better, then they are lying when they spread the neoliberal view.

But of course it's all wrong. It's not obvious at all.