Monday, June 5, 2017

Bill Mitchell — Being lectured about the problem by those who created the problem

The post begins with analysis of US politics and political economy, but the take-away begins when Bill starts deconstructing the myths that led to the debacle. Everyone interested in MMT and especially those who want to promote it should have these points down as an elevator speech.

Bill Mitchell – billy blog
Being lectured about the problem by those who created the problem
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill is very careful to convey the whole message as economically as possible.

Here is a Twitter stream from yesterday

Scott Fullwiler:
Bill Mitchell:


Penguin pop said...

So much brilliance in only a few tweets. Scott and Bill are heroes to me and a great inspiration. I'm still constantly learning new things about MMT and improving my understanding of what can be done with the policy space and breaking from tired, old paradigms.

Ryan Harris said...

Who knew.

Dan Lynch said...
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Dan Lynch said...

The twitter stream about the hypothetical JG is disconnected from the blog about center left politics.

Agree with Bill about the center left parties having lost their way.

Partly agree and partly disagree with Bill's concluding remarks: "The problem for progressive parties is that until they abandon this neo-liberal macroeconomic frame and actively build in voter education on a truly progressive macroeconomics (that is, Modern Monetary Theory) to their campaigning they will be lost in these contradictions. ... They then resort to pathetic – we will ‘tax the rich’ scenarios

While I certainly agree with functional finance at a national level, you cannot get much done at a national level without first winning at the state and local level where functional finance does not apply. Congressional races are often pre-determined by district boundaries -- which are controlled by the state government. Voting rules are largely controlled by state and local government. Hence whoever controls state and local government has a huge advantage in national races. Republicans understand this and have successfully gained control of 68 state legislative chambers.

Do Democrats have a plan to take control of state and local government? Hell no.

Will Bill's emphasis on MMT help state and local candidates? No, because state and local governments are not currency issuers. They must collect revenues and balance their budgets, just like a household.

Taxing the rich (and untaxing the poor) is very viable progressive campaign strategy at the state and local level.

Democrats have done just the opposite, supporting regressive state and local taxation. I sometimes jokingly refer to the Democratic party as "the party of Regressive Taxation" or "the party that never met a regressive tax it didn't like."

Bill's blog does not show a way forward. In fairness, there may not be a peaceful way forward. If we want to apply functional finance then we must gain control not only of the White House but also Congress, which probably requires gaining control of the state governments. There is no simple path to doing that, though I agree with Bill's sentiment that an alliance based on class issues makes more sense than the current identify politics. Taxing the rich is a class issue and should not be dissed.

Matt Franko said...

"identity politics at the expense of traditional class conflict"

Many on the right don't like the identity politics either...

Ryan Harris said...

It takes a very long time to get people to think differently about economics. Supply side credibility fades month by month but remains firmly entrenched for at least a couple more election cycles in congress, I suspect.

Ben Johannson said...

The Right loves identity politics much as anyone else. Their identity as the morally superior vs. the identity of others as justly inferior.

Matt Franko said...

That's the ALT right Ben