tag:blogger.com,1999:blog-2761684730989137546.post107212392505360732..comments2024-03-29T09:32:34.853-04:00Comments on Mike Norman Economics: Four guestions to MMTers and some answersmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-2761684730989137546.post-75014880401305790852012-03-25T02:08:39.167-04:002012-03-25T02:08:39.167-04:00honestly all Austrians and MMT-ers HAVE TO READ (A...honestly all Austrians and MMT-ers HAVE TO READ (AND REALLY UNDERSTAND) Henry David Thoreau's essay called "Civil Disobedience." It is an absolute MUST, b/c it addresses the issues of the size of government, the role of the individual in society, and the path to Freedom on earth in the most detailed, direct, and comprehensive manner I think I have ever read in modern literature. He addresses all the issues Austrians and MMT-ers ultimately fight over, which is the role of government in society versus the role of the individual, etc. I re-read this great piece today and I was in awe how much it relates to the philosophical issues MMT-ers and Austrians and Libertarians and America at large today are grappling with and attempting to resolve in good conscience.<br /><br />It is even more fascinating that it was published in 1849 while Marx's communist manifesto was published in 1848. I do not know if Thoreau knew of or read Marx at the time (though I suspect he would have)...either way the parallels in the ideas are striking indeed. Most people don't realize that Marx was more democratic than socialist, and he looked to the Freedom of America both on paper and in geographic possibility as a model for Europe to follow. But that's really another story for another time.<br /><br />And to whet Matt Franko's whistle...check out the last couple paragraphs of "CD" where Thoreau talks about the New Testament and what I believe is an allusion to the New Jerusalem in the last line of the entire piece.<br /><br />Arguably one of the most powerful and potent political and civil documents ever written.<br /><br />http://sunsite.berkeley.edu/Literature/Thoreau/CivilDisobedience.htmlMariohttps://www.blogger.com/profile/00905402431684735610noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-84116794717482925252012-03-20T09:42:56.984-04:002012-03-20T09:42:56.984-04:00In reply to Senexx:
"I actually don't un...In reply to Senexx:<br /><br />"I actually don't understand Mitch's argument about government size, on one hand he says big spending is big government and then on the other he says that is not necessarily the case.<br /><br />The argument is inconsistent. I did enjoy Bill and Warren's though."<br /><br />Careful, you're putting words in my mouth. Nowhere in my post did I say that big spending is big government. What I said is MMT is not consistent with small government. It does not follow from the statement "MMT is inconsistent with small G" that it must require big government, and therefore big spending. So if that's what you are implying, then you are mistaken.<br /><br />While it is the case that big government requires big spending, it's entirely possible to have big spending without big government, if we understand that to be associated with all the notes on bloated bureaucracy I mentioned before. <br /><br />So to recap:<br /><br />A commitment to small G, necessitates a reduction in government spending. That is inconsistent with MMT. But, if you design it right, you can certainly spend at levels one might typically associate with big government, without the actual administrative apparatus rising to that level. There's nothing inconsistent about that argument.Mitch Greenhttps://www.blogger.com/profile/06000730739155962118noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-46726183897480945542012-03-18T16:24:53.135-04:002012-03-18T16:24:53.135-04:00Right the vast libertarian conspiracy to empower t...Right the vast libertarian conspiracy to empower the individual. Better off sticking to fort knox, strategic petroleum, corn and rice stuffs. Those buffer stocks appeal to demos and repubs constituentsRyan Harrishttps://www.blogger.com/profile/04815033054435303399noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-2067495442161999002012-03-16T20:08:50.877-04:002012-03-16T20:08:50.877-04:00Ryan, The operational description is only part of ...Ryan, The operational description is only part of MMT. MMT is a macro theory that takes full employment and price stability as criteria of economic effectiveness, and it rejects the prevailing view of full employment, which is a redefinition of full employment allowing for use of a buffer of unemployed. It also uses a floor wage (MMT JG) as a price anchor for price stability. Some people think that this is a liberal political choice. We just had a big go-around on this.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-40435053841736744042012-03-16T18:58:42.111-04:002012-03-16T18:58:42.111-04:00Tom, I read your comments yesterday about MMT not...Tom, I read your comments yesterday about MMT not being conservative or liberal enough. MMT as a description of a monetary system shouldn't be perceived as liberal or conservative, should it? Granted the model is different from ours in several ways, we don't really have a freely floating currency with several of our largest trading partners. We are a reserve currency. Current budgetary rules don't allow spending to be de-linked from taxation or borrowing. The government has allowed others to use its monopoly issuance of currency: foreign governments can effectively print dollars with the swap lines and banks can lend without having reserves first. But these differences from the idealized MMT model aren't partisan even if they were reformed to be like MMT. And the observations about how the monetary system operates otherwise are not partisan. The ideas about how to use the monetary system can help to achieve partisan goals. But those aren't strictly part of MMT, they are simply a demonstration of how the monetary system could or <i>should</i> be used. Its important not to be perceived as partisan because the political parties are so completely associated with corruption.Ryan Harrishttps://www.blogger.com/profile/04815033054435303399noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-80640073366972652792012-03-16T14:47:53.133-04:002012-03-16T14:47:53.133-04:00Quote: "Clearly, MMT depends upon the alleged...Quote: "Clearly, MMT depends upon the alleged truth of the Keynesian assertion that the free market fails and results in stagnation and unemployment"<br /><br />No. MMT rests on the notion that "Free Markets" can't exist (because it's a non-defined concept) and real markets do fail that results in stagnation and unemployment.<br /><br />Bob, most of us here are tired of dealing with you theoclassical religious fundamentalist of all kinds. American is being crushed by fundamentalism. You don't know any economics. All you have is a religious belief in a false God called the "Free Market." I have news for you. That God doesn't exists. It never did.Septeus7noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-80598769921311471422012-03-16T14:27:33.475-04:002012-03-16T14:27:33.475-04:00Quote: "So, when trying to understand how hum...Quote: "So, when trying to understand how human beings interact with scarce resources, we're going to ignore both the human beings and the scarce resources and pretend they don't exist.<br /><br />I finally get MMT! Thanks!"<br /><br />The Austrian school denies the existence of human beings with their apriori assumptions about human action which deny the possibility of human creativity which of course is man's most defining characteristic. <br /><br />The Austrian school also denies the existence of accounting.Septeus7noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-34941626125864982442012-03-16T09:06:20.712-04:002012-03-16T09:06:20.712-04:00Randall Wray responds to the 4 questions:
https:/...Randall Wray responds to the 4 questions:<br /><br />https://docs.google.com/document/d/19y94BieONXbGmaVXWtcgYqJ-t8qA_GWdOOAjmdf95QI/edit#JJnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-75245880321438670662012-03-15T23:55:17.506-04:002012-03-15T23:55:17.506-04:00This is just a thank you to Bob Roddis for answeri...This is just a thank you to Bob Roddis for answering my fallacy question in the other post.<br /><br />One more question: Do you accept Warren's fallacy of composition of if a few ppl stand up in a sports stadium its ok but if everyone does it nearly everyone has a lousy view?<br /><br />Or words to that affect.Senexxhttp://modernmoney.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-10310004488528580042012-03-15T23:45:11.725-04:002012-03-15T23:45:11.725-04:00I actually don't understand Mitch's argume...I actually don't understand Mitch's argument about government size, on one hand he says big spending is big government and then on the other he says that is not necessarily the case.<br /><br />The argument is inconsistent. I did enjoy Bill and Warren's though.Senexxhttp://modernmoney.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-54374240016639341412012-03-15T22:28:53.373-04:002012-03-15T22:28:53.373-04:00I especially liked Bill's answer on the JG. I ...I especially liked Bill's answer on the JG. I was skeptical about it, since I thought it was merely an add on, an after thought. One needs to have an answer to the twin evils. The JG provides the policy solution. We have tried the NAIRU approach and it is not working. Time to go the other policy route.Jonfhttps://www.blogger.com/profile/08422916863145293925noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-34284119611173978252012-03-15T19:12:21.643-04:002012-03-15T19:12:21.643-04:00As a description of how the monetary system works,...<i>As a description of how the monetary system works, MMT is not a complete economic theory that describes resource scarcity, human behavior, politics and various other areas, except as they impact money: Inflation, Unemployment, Savings Desires etc.</i><br /><br />That's exactly right. But it's also true that most of the people who developed MMT are professional economists, who naturally have opinions on those other issues drawn from the various economists and schools of thought they admire. Sometimes they express those views. So casual readers can have difficulty determining where a given writer's MMT positions end and where more independent thinking begins.<br /><br />MMT isn't a church. It's a bunch of different people who have all found common cause in closely agreeing on a core of very important things that are still either rejected or misunderstood in mainstream economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-86023874725419310422012-03-15T18:54:22.503-04:002012-03-15T18:54:22.503-04:00the "evil big government"doesnt need tax...the "evil big government"doesnt need taxes to spend anyway. it is supposed to serve the public, which it currently does a very shitty job of, i might add. the person asking the four questions must not have read much of mmt.davenoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-32773556747361203422012-03-15T18:42:53.736-04:002012-03-15T18:42:53.736-04:00randy wray has recently wrote articles about how b...randy wray has recently wrote articles about how big a government can or should be. it was at new economic perspectiveshttp://neweconomicperspectives.org/2012/02/mmp-blog-38-mmt-for-austrians.html.davenoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-69042646213571505202012-03-15T18:42:30.739-04:002012-03-15T18:42:30.739-04:00Bill Mitchell made a good point in one of his blog...Bill Mitchell made a good point in one of his blogs about the size of government argument,<br /><br /><br />"I can tell you that there is no analytical result that you can derive from mainstream economic theory – even within their own logic – that determines an optimal size of the public sector. The body of theory is silent on that question. Mainstream economists who are honest will concur with that conclusion.<br /><br />However while analytically the models are silent, that doesn’t stop mainstream from inferring that small government is better and leaving you with the impression their models have proven that result. The reality is otherwise and when the IMF or any other mainstream economics organisation makes any statement about the “size” of the public sector then you can conclude – immediately – that those sort of statements are at the deep end of their religion – their ideology.<br /><br />Second, there is nothing in the body of mainstream economics that can show you that a definition of a “credible fiscal strategy” can be related analytically to the size of government. I can easily write out a “neo-classical” model (which would satisfy all the assumptions they make about the economy) which would have the public sector at 90 per cent of the total output and running a balanced budget with full utilisation of resources satisfying all neo-classical efficiency principles. I could also write a similar model where the public sector was only 10 per cent of the total output.<br /><br />The point is that while neither model would make any sense in helping us understand the world we live in, both would be consistent with a rigorous application of mainstream modelling principles. In other words, it is a lie to say that small government is the only way to attain what the mainstream economists (erroneously) would consider to be a “credible fiscal strategy”.<br /><br />http://bilbo.economicoutlook.net/blog/?p=16295<br /><br />Personally I don't care how big or small a government is as long as it's doing the things which a government is supposed to do, but I would include providing universal healthcare as one of those things.Jameshttps://www.blogger.com/profile/07388885044895299757noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-35488121474031436042012-03-15T18:36:51.223-04:002012-03-15T18:36:51.223-04:00"Andy said...I'm more concerned with NEP...."Andy said...I'm more concerned with NEP. I think they need to get back to the basics."<br /><br />What do you mean?JJnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-74907548041302889882012-03-15T18:27:17.006-04:002012-03-15T18:27:17.006-04:00yeah I got that...yeah I got that...JJnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9880002187276187762012-03-15T18:22:01.732-04:002012-03-15T18:22:01.732-04:00In my comment March 15, 2012 5:23 PM, in "It...In my comment March 15, 2012 5:23 PM, in "It is a political slogan of the right, which has has established the farming," "farming" should be "framing."Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-58060977168020052242012-03-15T18:21:56.287-04:002012-03-15T18:21:56.287-04:00It's called Modern Monetary Theory.It's called Modern Monetary Theory.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-91621655479056452912012-03-15T18:20:32.797-04:002012-03-15T18:20:32.797-04:00Depends how you define free market I guess.Depends how you define free market I guess.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-47707989468690652322012-03-15T18:18:16.635-04:002012-03-15T18:18:16.635-04:00As a description of how the monetary system works,...As a description of how the monetary system works, MMT is not a complete economic theory that describes resource scarcity, human behavior, politics and various other areas, except as they impact money: Inflation, Unemployment, Savings Desires etc. There are plenty of micro and macro theories that describe resources and distribution and attempt to unravel humans.Ryan Harrishttps://www.blogger.com/profile/04815033054435303399noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-33741805745616901672012-03-15T18:13:46.035-04:002012-03-15T18:13:46.035-04:00To Bob Roddis: I don't think there ever was &q...To Bob Roddis: I don't think there ever was "free market". that's why this Austrian free market talk is little out of touch for me. If you point out to Austrians that regulations were lacking and see what happened, the say the government overregulated, and if It wasn't for the government everything would have been ok. <br /><br />The free market system has never existed anywhere that we know of. Somalia has been without government for a while but I am sure some local criminal gangs have been making the rules at least to some extent, and those rules are coercive. Americans haven't seen governments come and go, I have. When the system collapses there is new government but It is very weak in the beginning. Organized crime taxes the business owners, pribes the police etc. Free market didn't form the strong police and couldn't fight the crime, didn't keep the schools running etc (Estonia) May be Austrian theory doesn't work in every part of the world.<br />I met a guy in America who was from Uzbekistan. I asked him if he had been writing to home while living in America. He said no, after the soviets left, there was no mail service, streets didn't have names at that time anymore. Free market didn't take care of that.<br />http://www.youtube.com/watch?v=qj0WnJHeLl8Kristjanhttps://www.blogger.com/profile/09592440548093816331noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-22256101854407624902012-03-15T18:13:25.241-04:002012-03-15T18:13:25.241-04:00But MMT doesn't pretend that humans or scare r...But MMT doesn't pretend that humans or scare resources don't exist.JJnoreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-78597949681050883342012-03-15T18:02:37.393-04:002012-03-15T18:02:37.393-04:00We’re going to start with the basics and make sure...<i>We’re going to start with the basics and make sure we’re executing all the fundamentals. . . .</i><br /><br />So, when trying to understand how human beings interact with scarce resources, we're going to ignore both the human beings and the scarce resources and pretend they don't exist.<br /><br />I finally get MMT! Thanks!Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-87277773566469953332012-03-15T17:52:10.555-04:002012-03-15T17:52:10.555-04:00MMT is never going to be conservative enough for c...MMT is never going to be conservative enough for conservatives. Neither is it going to appeal to liberals and progressive who are fearful of straying from the establishment framing, afraid that they won't be considered Very Serious People.<br /><br /><br />Therefore, two chief factions will object to MMT in terms of their framing. First, there are the conservatives and they will gravitate to MMR as a more conservative position that is based on a similar understanding with key differences. Secondly, there are the liberals and progressives that have bought into the conservative frame for one reason or another. They will argue for liberal and progressive approaches and insist on the need for higher taxes to get the revenue.<br /><br />So speak the truth as you see it, and keep on truckn'.<br /><br /><i>All the [Green Bay Packer] players knew that at the first team meeting, the legendary coach [Vince Lombardi] would waste no time getting straight to the point. Many of the men, half Lombardi’s age and twice his size, were openly fearful, dreading the encounter.<br />The coach did not disappoint them, and, in fact, delivered his message in one of the great one-liners of all time.<br />Football in hand, the great coach walked to the front of the room, took several seconds to look over the assemblage in silence, held out the pigskin in front of him, and said, “Gentlemen, this is a football.”<br />In only five words, Lombardi communicated his point: We’re going to start with the basics and make sure we’re executing all the fundamentals. . . .”</i><br />— Bob Kimbrell, PhD, The Book on Management, ch. 2., p. 7.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com