Tuesday, April 4, 2017

Sashi Sivramkrishna — Modern Money and the Obsession Over Fiscal Consolidation


Good article. The word is getting around.

Except to the Left. In the US, Bernie Sanders is still leading with "paying for" an expansion of progressive programs by taxing the rich.
With the growing concern over unemployment, discontent over the preoccupation of central banks with low and stable inflation as well as a recent turn towards fiscal activism in the West, it could be a matter of time before MMT becomes the basis for new populist-nationalist macroeconomic policy. And like so many instances in the recent past, what was once considered left/left-of-centre economics has now been appropriated by the right/right-of centre.
The Wire — India
Modern Money and the Obsession Over Fiscal Consolidation
Sashi Sivramkrishna | Professor of Economics at Narsee Monjee Institute for Managment Studies, Bengaluru

10 comments:

Noah Way said...
This comment has been removed by the author.
Noah Way said...

I'm not sure you can fault Bernie for trying to achieve progress within the existing (absurdly ridiculous) system. Although I would prefer tearing it down entirely and starting over (a very real draining of the swamp, if you will) the chance that "the powers that be" would do this of their own corporate-funded accord is non-existent as they all benefit from this system.

Those who make peaceful revolution impossible will make violent revolution inevitable.
-- JFK

Neil Wilson said...

"I'm not sure you can fault Bernie for trying to achieve progress within the existing (absurdly ridiculous) system"

You can when he has Stephanie on the team. Somebody at some point is going to have to explain the truth to people.

Tom Hickey said...

What will happen if the US left keeps up politics as usual, there will be a bigger implosion than the last. Then voters may conclude that a liberal solution is unworkable and go for a more statist solution and possibly a demagogue. Oh, wait. But seriously, Trump is not Hitler, Mussolini, Franco, or Pinochet. That could happen here.

John said...

Neil: "You can when he has Stephanie on the team. Somebody at some point is going to have to explain the truth to people."

As much as we all respect Stephanie Kelton, you really have to wonder why she wasted all that time and energy on a man whose voting record is barely distinguishable from Killary's. Bernie talks a good game, but his voting record is abysmal. Bernie and a number of other "liberals" in the Democratic party are charlatans. Stephanie Kelton can spend her time as she wants, but the outcome was always obvious. For all Bernie's "democratic socialism", his voting record is shocking. How anyone, let alone one of the world's brightest economists, could think they could change a man wedded to rightwing policies is beyond me. As for all that "holding his feet to the fire", really? Wasn't this the same argument made for Bubba and Obama?

And what kind of progressive needs to have his feet held to the fire? A leader who despises you and everything you stand for! Apparently, the kind of leader progressives are after is one who says: "Vote for me, the charlatan candidate. I don't want to implement the change you want, but if you torture me long enough I might give you a few crumbs!"

The golden rule in all walks of life, especially politics, is look at what they do, not what they say. And in that respect Bernie, Obama, Bubba, the Kennedy brothers were all superb progressive talkers. When it came to actually doing something they were anything but progressive, and in many cases embraced and went beyond the GOPhers ideological policy recommendations.

Penguin pop said...

John, I am aware of Bernie's voting record. I've actually said I didn't trust him from the start. He seemed like Ron Paul but for the progressive side. Think about it. Dude's been in office for all those decades, just like Ron Paul but just happens to say things on paper that people like, but in practice, the story's much different. Yeah, I will like some of what he says and even retweet it on my Twitter page, but I just wanted to get this out there that this has always been my true feelings about the guy.

He has this cult of personality aspect to him too. I can say the same thing about Trump, Obama, and all these clowns, hucksters and charlatans. I've learned to not trust anyone who claims they're about "change!" That usually means they're full of shit and just pandering to the suckers out there.

Yeah, I still contend Bernie was clueless about much of what Stephanie tried to tell him. Stephanie had her heart in the right place, but not even she could get a stubborn old mule to drink water. I still agree with many of the tenets of MMT and functional finance, even though we all still have our own take on what the policy perscriptions should be. I think even if everyone knew the truth, there would still be a lot to argue and debate over, like Tom wanting to cut military and the empire drastically as opposed to Auburn's pro-Empire position.

Penguin pop said...

I also wanted to add psychopaths to the first sentence in the second paragraph. It's pretty much how I see a lot of idiot politicians these days.

John said...

Penguin, I would say that if everyone understood what, say, Tom and Auburn know, things would change very quickly, and it'd be in a radical social democratic way, no two ways about it: full employment, free education up to and including graduate school, free health care for all, generous pensions, etc. Even with all the mass propaganda the public are subjected to, in polls a majority of the public still hold social democratic positions, like the ones above. Imagine what their positions would be if they knew the truth! It'd be close to unanimity for social democratic policies. That's pretty much the case here, and it's not a question of self-selection.

The issue over the empire is another matter, although I'm inclined to believe that most people would take Tom's position, which is also mine and yours. Again, it's just sheer propaganda that makes people believe there is a "defence" budget, when the truth is that there a war and empire budget. Auburn's wording is telling: he accepts that there is an empire; most Americans wouldn't even understand a sentence with the words America and empire in them; and if they understood what Auburns understands, they'd rebel against it rather than accept it. So like Vietnam and Iraq, when people understand that they're being lied to then their positions will change regarding the empire. I think Auburn's great. I love the guy, and I've learned a huge amount reading him, but his views on the empire are unfortunate for someone as knowledgeable and perceptive as he is. Matt's the same way: super bright but surreally wrong on some very important things that you start wondering if he's a century ahead of his time with his blend of surrealism and what would ordinarily be considered satire if it weren't said in seriousness.

There's no reason for us to all believe the same stuff. That's why Randy Wray has a segment in his primer entitled "MMT for Austrians". Hjalmar Schacht, Hitler's central banker, got pretty conversant with MMT-style thinking eighty or so years ago, and is probably the best example of economic intelligence gone horribly wrong. If the empire and its Carthaginian solution war machine were freed from the deficit mongers. Be thankful for small mercies! MMT-style thinking may end up be the making of us, but it may also prove to be the end if the beast is unshackled. The idiot and psychopathic politicians you allude to would be either too stupid to understand what they've done or are enthusiastic to feed the beast with human blood.

Ryan Harris said...

"And like so many instances in the recent past, what was once considered left/left-of-centre economics has now been appropriated by the right/right-of centre."

Being called racist, fascist, xenophobic, white trash multiple times each day by legions of outraged Dems must be sort of liberating. They're already the worst thing on earth, why not get labelled MMT too? How much worse can that be?

Six said...

"Being called racist, fascist, xenophobic, white trash multiple times each day by legions of outraged Dems ... "

Can you point me to any evidence of this? I only ask for my own education, not to contradict you.