Hopefully this is evidence of what Tom has written about here lately: Is the global establishment finally starting to take notice that the current macro policies do not result in equitable, stable, robust economies? And will lead to major problems in the long run?
I hope this is the case. First we need these people to realize there is a problem, and then the next step would be to find a solution. Those solutions would hopefully recognize a new framework that includes the macro realities as disclosed by MMT.
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ReplyDeleteThe problem is micro v. macro and the fallacy of composition. What is good for one is not good for all. When an economy becomes overly financialized, or some do very well and many others not, then the entire economy suffers and everyone is poorer than they could have been.
ReplyDeleteThis is not rocket science, and I would expect that even without MMT, smart people would recognize that economies run on demand and if there is excessive demand leakage, they underperform. MMT just gives a detailed picture of this and what to do about it.
Even some people at the IMF and World Bank are figuring this out and saying it publicly. "It's the demand, stupid."
"When an economy becomes overly financialized, or some do very well and many others not, then the entire economy suffers and everyone is poorer than they could have been."
ReplyDeletemaybe not everyone.... ?
James K. Galbraith: The Implications of Rising Resource Costs for Economic Systems
Good point, selise. Rationing by price doesn't work when price doesn't include externalities. Moreover, rationing by price even with true cost is not a sustainable way to proceed since it excludes the bottom, which is essentially eliminated. This is an issue that the world is already facing with energy/food shortages and the ensuing food riots that inevitably follow. The world is becoming less stable because of it.
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