Sunday, November 20, 2011

Krugman — Fools and clowns

“I have a structural hypothesis here,” Krugman told ABC’s Christiane Amanpour Sunday. “You have a Republican ideology, which Mitt Romney obviously doesn’t believe in. He just oozes insincerity, that’s just so obvious. But all of the others are fools and clowns. And there is a question here, my hypothesis is that maybe this is an ideology that only fools and clowns can believe in. And that’s the Republican problem.”
Read the rest at Raw Story (short and funny)
Krugman: ‘Only fools and clowns’ believe Republican ideology
by David Edwards

Get out the popcorn. This is really getting good.

Here's the rub. Disagree at the expense of coming across as a fool or clown.


Matt Franko said...

Talk about fools and clowns, Krugman is the biggest moron on the left.

He actually sits down and breaks bread with Warren Mosler in a face to face at least once and he still doesn't get it. Krugman is the Peter Schiff of the left I'm sorry.

Tom, tip for the Left: Time to discard Krugman, Baker, Stiglitz, Hudson, Galbraith, the lot of them. Time to retire all.

Tom, you know more about the truth of our economic systems today than all of these from the academe of economics COMBINED!

btw Tom, It looks like Prof. Randy Wray has perhaps been making some progress with Roubini's shop based on the tweet from Roubini that Warren posted earlier today....


Anonymous said...

Krugman...LOL! On his beast day he can't find his way out of a paperbag with directions.

Matt Franko said...

Again Beo pointed out this from Romney: "The president thinks that if you have cash on your balance sheet that means you’re gonna go hire people. No, you hire people if you have customers. The president doesn’t understand what makes the American economy go. I do."

This sounds like Warren Mosler could have written it for him.

wh10 said...

Matt, what's your beef with Galbraith? He openly endorses MMT.

I appreciate all you do for MMT, but, no offense, your misanthropic strategy will not be the winning one.

The inflammatory nature of MMT's proponents has already cost it a lot, as Marc Lavoie has documented, one of the few academic friends of MMT.

What you write is for the world to see.

Tom Hickey said...

Randy Wray has definitively associated himself with the left.


Matt Franko said...


Put a clock on it already, this has been going on for years and they STILL do not fully endorse MMT (which MMT is the truth btw), including Galbraith, I'm sorry. MMT took me 15 minutes to see and they are taking YEARS. And I have left supportive comments at blogs that Galbraith has written at ND2.O... probably what seems like 2 YEARS AGO now. I for one am done with these people, time's up.

Mario here has documented how at the recent Keynes vs Hayek debate Galbraith was served up several softball opportunities to respond in paradigm and he refused. He doesnt get it, or is misrepresenting. And I have watched several Yahoo! tech ticker videos where Task and Blodget have interviewed Galbraith a couple of times over the last few months and the best we get from him is "deficit owl" which is not technically in MMT paradigm imo. Watch the inflation video I posted a while back from the 2010 Teach-in and you can hear Prof. Stephanie Kelton lament the fact that Galbraith "couldnt make it" for the teach in, too bad. Perhaps I am being too hard on him as if he would have been able to "make it" there he may have learned something.

Warren M or Bill M I believe would never describe themselves as "deficit owls", the whole concept of a deficit owl implies that deficits matter in the first place: WRONG! It is fiscal policy (not "the deficit") that matters in relation to the tradeoffs between employment and stable prices... the owls do NOT go as far as to admit this.

Time is up, time to move on imo... MMT has great thought leaders in their own right who dont need these dinosaurs and they have the web to publish. Too much academic and political "baggage" with these people.

As far as Lavoie, Peter Cooper broke down a paper or draft that Laovie wrote recently and I read it there and it is the biggest bunch of useless 'inside baseball' jibber jabber I have ever come across in this: the PKs say this, the MMTs say that, the Circuitists said this, the MMT web people aren't "professionals" (GOOD!, btw this is a cheap shot at Warren Mosler who doesnt have the PhD imo, and btw Galbraith has made similar statements about Warren being a "amateur" economist.), MMT people dont have manners, blah blah blah... who cares?

Lavoie's paper is like the Academe of Economics episode of the "Glee" high school girl TV show, a bunch of "who said this and who said that" BS. Completely useless, empty and un-edifying. He wrote something a while back that Ramanan picked up where he said something like: "the TGA has to be provisioned" or some such BS. Why would an MMT adherent waste any more time on somebody who thinks that....

Galbraith has NEVER openly and fully endorsed MMT and Lavoie has never done this either.

Time's up with these people at least that is imo.


wh10 said...

Matt, the reality is you have to be more patient.

Maybe Galbraith realizes something that you're not willing to accept: massive amounts of inertia and egotistical judgement within the econ community. Perhaps he thinks he has to be strategic about how he presents himself for the risk of not losing credibility.

That said, he openly endorsed UMKC in his INET video critique of mainstream econ.

Most importantly, in the literature and policy spheres, where it really counts in academia, his Levy policy notes and Congressional testimony openly present the MMT viewpoint. There is no question! He directly cites Fullwiler and Wray amongst many of the others! Who else, with someone of Galbraith's prominence, is doing that within academia??

To write him off for all that he is done is burning bridges with one of the most valuable academic friends MMT has, and it's insane IMO.

As for "deficit owl," Stephanie Kelton's twitter account is called "deficit owl," so you should relax a bit on that semantic quibble.

As far as Lavoie's paper, I personally agree with part of his viewpoint, and in many ways so does Kelton (

Should MMT every go mainstream, do you literally expect economists to view it EXACTLY as Mosler or Wray does?

Do economists now view things EXACTLY as Keynes or Friedman did?

No! What you want is completely unrealistic, though I understand your frustration.

Be patient, be friendly, and keep fighting the good fight.

Matt Franko said...

Yes Tom,

Prof Wray is a good example of the type of MMT thought leaders who dont need Galbraith, et al. anymore, they are becoming a force in their own right.

And their New Economic Perspectives blog is only really months old (in earnest under leadership of S Kelton), and Wray didnt really know how to blog until recently... this is just getting cranked up.


wh10 said...


*Do all economists, either decades ago or currently, view things exactly as any of the econ gods they worship?*

Ryan Harris said...

Have academics published MMT as mathematical models to journals so it could be utilized more formally? The ideas make it into the mainstream media, but few academics are satisfied with the verbal descriptions by Mosler and others. I think this makes it harder for Central Bankers and Academics to adopt the framework into their work and theories. They have to start from scratch. Perhaps one day Mosler's largesse with UMKC will help in this regard.

Anonymous said...

Matt, if your standard for progress is that we need a world in which everyone "fully endorses" MMT, then you might have to wait a long time. That never happens to any theoretical approach in economics. Even the most successful innovations never become universal gospel believed down to each jot and tittle by an army of adherents.

Plus, am I the only one who finds the constant talk of who is "in paradigm" and "out of paradigm" somewhat obnoxious? This kind of talk makes MMT sound like a paranoid cult of rude bullies.

Galbraith's a pretty smart f-ing guy, and seems to agree about 90% with MMT. Count your blessings. If there are some areas here and there where he doesn't see 100% eye-to-eye with some MMT theorists, then bring the areas of dispute up for reasoned debate. Maybe both sides will learn something

I agree that Krugman's "New Keynesian" approach is a serious part of the problem. It's part of the cluster of theoretical orientations that have killed off fiscal policy and given way to much credit to monetarism and central bank oriented approaches. So just keep debating and keep trying to persuade Krugman and others like him. Try some civility and intellectual decorum. The angry retreat into the "paradigm" so you can sneer impotently at everyone who is "out of paradigm" isn't the way to be persuasive.

Matt Franko said...


Good points about patience, but this has been going on for years for me and longer for Mike and even longer for Mosler/Wray/Mitchell and others... .

I have no I'll will towards any of these people, and wish them the best, they have contributed over the years.

But I think they can be and should be doing more, that is what leadership is about. If you are not willing to lead, then you have to get out of the way of the next generation of leaders, the time is now.

None of the young people for instance who are in or support the OWS movement even know who these older economic people are. The new MMT thought leaders can step right into an economic leadership vacuum created by their retirement. (btw Stiglitz still consults to go to the IMF for countries I have evidence)

Yes, I saw that "owl" ID too and all I can say is Prof Kelton should perhaps reconsider her handle.

And I'll take another look at Kelton's paper there and get back...

wh10 said...

Tomato, not really, and Fullwiler recognizes that this potentially needs to be the next frontier. However, I've seen a working paper of Fullwiler's (not sure if it is published formally), modeling out the ELR.

Matt- to clarify on the Lavoie piece. The way I interpret is that Lavoie agrees with the fundamental proposition that there is effectively no constraint on govt spending. But I don't think his issue is semantic BS. He's saying that, at least in the academic realm, where rigor and detail are required, there is no need to not explain things as they are actually accounted for on balance sheets. Fullwiler and Kelton are similarly rigorous in their papers. Conceding the reality, which is that under current arrangements the US must sell treasuries before it spends, takes effectively nothing away from the point that govt spending isn't constrained. So why not it present it that way within the academic realm? That's all he is saying. It takes nothing away from MMT. Furthermore, for those that don't yet get MMT (that 'steps 1 through 3' are unnecessary to get to 'step 4'), leaving it as simple as govt spending credits comes off as disingenuous, which is more reason to be rigorous and detailed.

wh10 said...

Actually, I want to make a modification.

I'm not sure if Lavoie completely submits, in that paper, that the roundabout process places no constraints on govt spending, but I am going to give him the benefit of the doubt and say that that is the spirit of what he saying. I could be wrong though.

That being said, even though Fullwiler and Kelton have written the t-accounts as Lavoie has in their papers, I have never seen them explicitly justify why each of Steps 1-3 don't post any constraints. Usually its a summary assertion after its all been laid out. You might think it doesn't require explanation, but I'd have to assume it's necessary in the literature, particularly for such a paradigm shifter. PeterC is the first I've seen justify why each individual step poses no constraint, and I would argue an academic paper would need to be even a little more robust.

Fullwiler and crew are too far ahead of everyone to assume everyone will agree without explicit explanation.

Matt Franko said...

"There is nothing or very little to be gained in arguing that government can spend by simply crediting a bank account; that government expenditures must precede tax collection;"

- Oh really! Nothing to be gained when 99.9% of our fellow citizens have been brainwashed to think the govt "gets the money" from the taxpayers... what planet is this guy from? He probably consults with one or several of the big Canadian dealer banks who profit from the status quo.

He continues:

"All these counter-intuitive claims are mostly based on a logic that relies on the consolidation of the financial activities of the government with the operations of the central bank, thus modifying standard terminology. I believe that such a consolidation leads to the avoidance of crucial steps in the analysis of the nexus between the government activities and the clearing and settlement system to which the central bank partakes, and hence leads to confusion and misunderstandings."

It's not that MMT is trying to teach people how to work at the Fed and the Treasury Depts.

It's trying to show what the total system-wide capabilities are in order to make better POLICY.

What is he saying, that MMT cant tell the truth because it may confuse these college kids who may go to work at the Fed or UST? Please spare me.

Tom Hickey said...

There are two schools of thought on mathematical models. One that thinks that modeling is necessary for taking anything seriously. Economics is like physics.

The other, that mathematical modeling doesn't apply in a complex field like economics without resulting in oversimplification. Economics is not physics, it's more like biology.

Tom Hickey said...

BTW, Noah Smith, trained in both physics and econ, has a couple of good posts on the above.

What I learned in econ grad school

What I learned in econ grad school, Part 2

Anonymous said...

I think it is useful to look at the government both as a single unified system, subject only to voluntary constraints, and also as a network of separate but interrelated institutions, each with its own specific institutional constraints. Both perspectives yield useful information on how things work, on on what kinds of policy changes are possible, and on what would be required to implement those policy changes.

One way to think about the different kinds of constraints that operate on government agents is to ask this question: Suppose Warren Mosler somehow became President and named Scott Fullwiler as his Treasury. What sorts of policy changes would they make in order to implement their MMT insights and give us better public policy? Which changes could they make unilaterally, and which would require them to submit legislative proposals to Congress?

Tom Hickey said...

Two of the chief complaints of MMT economists is that most economists don't understand vertical/horizontal operations and also don't understand double entry accounting or observe stock-flow consistency. Instead, they are wedded to models that don't actually model the real world but rather what is going on in their heads. How to deal with these people on their turf when they refuse to come onto yours.

wh10 said...

Matt, he is asking for them to be more rigorous in describing the system. It's not about 'a truth.'

The plain reality is that that is how it is in academia. The approach needs to be rigorous and as scientific as is reasonable.

Justifying expediency in explanation because the goal is to 'unbrainwash the world' is not a legitimate scholarly argument. Now, you can make that argument after the rigor has been demonstrated, but you can't use it a priori.

Remember, Lavoie is not operating in blogworld. We're in economics journal world.

That's just how it is. And that's how it should be, or academia would be inundated with even more garbage.

Tom Hickey said...

@ Dan

Good points.

Anonymous said...

Just one point on the modeling: If MMT students and practitioners ever get in charge of our macroeconomic policies, they will presumably approach the government's balance sheet and deficits in terms of public purpose, and principally the dual public purposes of full employment and price stability. At that point, it will not be sufficient to rely only on correct theoretical accounts of the sectoral balances, stocks and flows, and the generally causes of unemployment and price instability. It will be necessary to measure things and estimate things, so as to gauge the impacts of any proposed deficit spending package. So some quantitative mathematical models will be needed.

Tom Hickey said...

Lavoie: ""All these counter-intuitive claims are mostly based on a logic that relies on the consolidation of the financial activities of the government with the operations of the central bank, thus modifying standard terminology. I believe that such a consolidation leads to the avoidance of crucial steps in the analysis of the nexus between the government activities and the clearing and settlement system to which the central bank partakes, and hence leads to confusion and misunderstandings."

This is the nub of it. The MMT economists bemoan that although it has been explained in great detail, Lavoie just doesn't get it. Of course, he is not alone in this. Very few economists want to take the time necessary to understand the nitty gritty of vertical operations and the details of reserve accounting. The MMT economists are experts in this.

Tom Hickey said...

"So some quantitative mathematical models will be needed."

See Godley and Lavoie, Monetary Economics, for the SFC Treasury models.

Tom Hickey said...

I should add that these models are huge and only entities with large staffs use them — treasury departments, central banks, large banks. Jan Hatzius uses this type of modeling at Goldman, for example. It was developed by Wynne Godley at the British Treasury during his stint there.

wh10 said...


I am going to somewhat disagree. As I noted at Heteconomist (, I have never seen an MMT paper that, beyond just showing the accounting of each step, walks through each step individually *and explains why each of those steps does not pose a constraint.* The tactic is usually to let the accounting speak for itself and summarily assert the process as a whole (steps 1 through 5) poses no constraints. PeterC is the first I've seen to actually walk through each step and attempt to justify why each poses no threat. Even he didn't nail all possible explanations, as Dan Kervick, in the comments, makes the assertion that it is also profitable for banks to play the role in 'step 1.'

I would argue that this is a reasonable and necessary exercise, and that the job should be more robust than what has been presented in that Heteconomist thread.

Now, I may be mistaken, since I haven't read all MMT papers, but I think I have read the more technical ones from the likes of master Fullwiler. But even in his papers, though the accounting is clearly shown, the robust justification *for each step* not posing a constraint is, if I recall correctly, missing.

Is such an approach overkill? For the time being, I honestly don't think so, especially in the literature, and to convince the profession that the reasoning behind the MMT position is sufficiently robust.

wh10 said...

Happy to be proven wrong though.

wh10 said...

And, as I state in the Heteconomist thread, that most economists "don't get it or agree" is an argument enough that it is not overkill. Hand feed it.

Look, Lavoie provided the same t-accounts that have been illustrated in Fullwiler's and Kelton's papers. He understands the reserve accounting to that extent, which is a lot more than most. But he is or may be still asking for justification for why these steps pose zero constraints.

wh10 said...

Also, I want to quote Kelton here-

"As we in the MMT tradition consistently insist, spending must, as a matter of logic, precede taxation in the first instance."

Regarding taxes specifically, this seems to be everywhere and always true, regardless of self-imposed constraints.

So I think Mark is logically wrong to complain about this point.

HOWEVER, a complaint regarding that 'issuance of securities does not fund the deficit' I think is slightly more reasonable. The reason is that, though it is not necessary to fund, given current US constraints, bond issuance HAS TO PROCEED spending. Even in the first instance, if in the beginning of the fiat regime we had the same constraints, bond issuance would proceed spending! The govt would have to erect a private banking system, separate from the Fed, to accept its bonds in exchange for a govt checking out.

Which leads me to an interesting observation, which is that, though we say the Fed can't provide overdrafts or buy bonds directly from the govt, doesn't the private banking system effectively do that anyways? So is there any difference?

I've never seen that point made in MMT literature. Though maybe it's a stupid one.

wh10 said...

Fellows, I've continued this conversation with PeterC at Heteconomist if you are interested.

Matt Franko said...


Appreciate both of your thoughtful comments. Good points about academia, I agree basically with you both there. But I have to say that is not my bag here at Mike's. After some time in this, I decided here some time ago that this is not an 'academic issue' or 'technical' with me anymore, this is a 'moral' or 'human' issue so to speak (I'll leave it at that) with me going forward. The Academy of Economics has gotten us into this mess (see movie 'Inside Job', the Roosevelt Institute taking Peterson money, etc..), they are corrupt to the core. So with me, it is not really just Galbraith, it is the entire academy, I do not see any value there at all. With anyone there really, I'm done.

That said, if some still think that the academe is still a relevant place in which to make the case for MMT, there are many more intelligent in the ways of the academe than I and I would leave that to those people to press forward there. But I would have to say that I have watched this for years to no avail. My materialist interpretation of why there has been no progress with the academe is that most in leadership there actually posses a subtle form of discalculia, or a subtle mathematical cognitive deficiency.

Going forward, I may come across some economic data points from time to time that I think are interesting/timely, and intend to post that type of stuff here, fiscal data, etc...but after focusing on those types of objective data to no avail for some time, I've started to try to also identify data or phenomenon, or historic, or archaelogical records or something that is more "tangible" to readers here who are not trained 'economists', or perhaps also are not gifted with 'mathematical maturity' to try to help them "see" what the MMT is really about, what a state currency system really can do for us, if we can just get more people to understand it...

This has not been easy either but I dont think anyone else is using this angle that I have in mind here (maybe I haven't described it well) within the MMT sphere and it may be a way for me to actually add value to the MMT 'team's' work towards edification in the greater human economic understanding that we (and I mean me and you two) now possess.

Getting back around to the subject of Tom's post, I've come to the point where I do not believe it is the time any more to "suffer fools".


paul meli said...

I suspect that most of these guys are hesitant to get fully behind the MMT paradigm because at this point in time it would probably destroy their credibility with the majority of people. Their voices would no longer be heard.

I give Krugman a lot of credit, it takes guts to say this on national TV…

":my hypothesis is that maybe this is an ideology that only fools and clowns can believe in. And that’s the Republican problem…".

Ryan Harris said...

It was remarkable Krugman took the position. The media pundits were clearly shocked he strayed from their "non-partisan" middle where they report mis-information rather than being labeled against one side or the other.

Tom Hickey said...

Which leads me to an interesting observation, which is that, though we say the Fed can't provide overdrafts or buy bonds directly from the govt, doesn't the private banking system effectively do that anyways? So is there any difference?

I've never seen that point made in MMT literature. Though maybe it's a stupid one.

The whole point of the institutional arrangements is to prevent the government from acting in certain ways but permitting the financial sector. This is to "limit government" and also to encourage rent-seeking.

Tom Hickey said...

@ wh!0

The MMT economists were rather shocked and disappointed when they saw Lavoie's paper. They know him well and thought he understood their position. He did not consult with them, or show them the paper beforehand.

They were not at all pleased with the attention and perhaps even felt somewhat betrayed.

peterc said...

Matt, I think there are different roles different people need to play. Some have a media presence or political clout. Some are academics. Some are neither and simply engage in debate with commentators and bloggers all over the place.

I am more in the third category, though in my blog perhaps trying to bridge the gap between the second and third groups in the sense that when we are trying to debate on the internet we get curly questions or tough arguments to address. They are not necessarily tough for the academics to address, but they are tough for us to address.

In my opinion, Lavoie’s paper does raise issues that I would struggle to answer properly when debating on the internet, and I’m guessing others would as well.

Tom: I’m a bit taken aback that the academic MMTers would feel shocked or betrayed that someone would write a paper critical in some respects (though overall pretty positive) of their approach. That seems strange to me.

Are you able to address Lavoie’s central point about the consolidated government sector? I’m not sure I can. I’m expecting the academic MMTers can, but I haven’t come across anything in their published work to date that makes me certain of it. That could well be due to my lack of comprehension.

wh10 said...

Cheers, Matt, we're on board. And I said, I can certainly understand the frustration. It's only been '1 year' for me. Keep it up.

Matt Franko said...

Cheers All,

Just to make sure everyone who may be monitoring here has seen Prof Fullwiler's paper here wrt operations, etc.:

This looks pretty strong to me in regards to acknowledging upfront what Lavoie calls "the counter-intuitive" and his concerns as I interpret them...

Perhaps if Lavoie is a Professor he thinks that students will read the MMT literature and he thinks that if they interview for jobs at Treasury depts and CBs they would not get hired or if they do get hired they will be ill prepared to perform their jobs if they think the CBs and Treasuries are in the same govt sector organization...


Serum said...

You're not really a mainstream movement until you have at least three factions viciously attacking each other as traitors.

Tom Hickey said...

peterc, I think you'll have to ask some of the MMT economists like Scott about this. I am just reporting on what I have heard, and I hesitate to speak on their behalf.

As far as addressing Lavoie's objection, I don't think that it is incumbent upon either of us to do that. That's for the MMT economist to answer in a paper if they so choose.

My impression is that they feel they have answered this sufficiently already, so I don't know whether a paper will be forthcoming.

beowulf said...

Tom, tip for the Left: Time to discard Krugman, Baker, Stiglitz, Hudson, Galbraith, the lot of them. Time to retire all.

You sound like Dr. Evil liquidating his father-son support group (to be fair, they WERE insolent). :o)

beowulf said...

I'm sympathetic politically to an underlying point that Matt is making, to wit, we're more likely to see MMT policies adopted by a Republican president than by a Democratic one (and I plead guilty to thinking that Romney is head and shoulders above the rest of the field). After all, only Nixon can go to China.

I also plead guilty to believing in the wisdom of the expression "Paris is worth a mass". In politics, you don't win by changing people's minds. You win by convincing people that YOU agree with something they've believed all along. Something Bob Inglis (who was entirely too sane to be SC congressman in the first place) belatedly realized only after he was confronted with Tea Party crazytalk:
"And you know, what I should have said was, 'Over my dead body that's gonna happen. I can guarantee it's not gonna happen,'" said Inglis. "That would have been the better answer, wouldn't it? Rather than the one I gave, which is, 'Well it's not quite that bad, let's keep it within the realm of facts.'"

To that end, I suggest we stick it to the Federal Reserve and those Chinese bankers ripping us off and spend with US notes and balance the budget with coin seigniorage. After all, this is America, not American't. :o)

Matt Franko said...


Just thought of this. Lavoie is Canadian. And I jumped over to PeterC's and I read some if his recent comments at his Lavoie post and Peter also seems to be having trouble with this concept of a 'unified' govt sector, Peter is in Australia.

Do you think that perhaps in some indirect way, both Peter and Lavoie's "outlook" or judgement is somewhat affected by the system of govt that they have/are residing in?

In terms of govt authority. For instance here in the US we may be taking it for granted that "govt can do whatever it wants" (that's the way I look at it anyway), but perhaps outside the US this may not be necessarily how a person would look at it?

Are Canada and Australia somehow still 'under the Crown' and not really under 'self-government' like we in the US are? And this fact pervades in this circumstance and perhaps Peter's and Lavoie's entire thought process is being effected by this.

Could they both perhaps not be "free to think" in the counter-factual and are then having trouble "seeing" an alternative causation.

IOW I'm reading Peter's comments over there and I am saying to myself: "How can Peter not see the simplicity of this?" It is borderline shocking to me, because I can tell Peter is extremely intelligent.

From Wiki: "Psychological research shows that people's thoughts about the causal relationships between events influences their judgments of the plausibility of counterfactual alternatives, and conversely, their counterfactual thinking about how a situation could have turned out differently changes their judgements of the causal role of events and agents. "

Could they both (Peter less forcefully than Lavoie) be experiencing a different form of judgement in their thinking based on the specific type of govt authority they have been made subject to?


Tom Hickey said...

Don't know, Matt. One of the MMT economists said that Lavoie's first language is not English. Maybe he doesn't completely understand what they have written.

Matt Franko said...


It is painful to watch Romney probably forcing himself to provide 'lip service' to these GOP morons of this era; 'freeze spending', etc..... to me, he starts to look 'off balance' when he does this, and his voice changes.... I think Krugman has some insight into his 'body language' here. Romney's a politician for sure first and foremost. To your point I guess at that level you have to be...

Keep thinking "COIN"! Resp,

Matt Franko said...

"British–Canadian relations (also called Canada – United Kingdom relations)[1] are the bilateral relations between the governments of Canada and the United Kingdom. London and Ottawa enjoy cooperative and intimate contact; the two countries are related through history, through language, through the Commonwealth of Nations, and their sharing of the same Head of State and monarch."

Canada seems to still be under the Queen. And Australia:

"The contemporary political relationship between London and Canberra is underpinned by a robust bilateral dialogue at head-of-government, ministerial and senior officials level. As Commonwealth Realms, the two countries share a monarch..."

This issue of how a person is able to approach the concept of a 'unified government' may come down to the specific form of govt authority that the person is made subject to, to an extent...


selise said...

wow. sorry to be late to this thread, but must add my two cents.. especially re galbraith.

1. re the teach-in.

galbraith was supportive and helpful. imo, in no way was that a fair criticism.

2. re "Galbraith has NEVER openly and fully endorsed MMT"

you've read galbraith's intro to warren's book? how exactly was that not a full endorsement?

for an additional endorsement, please see this quote from galbraith:

"It would be useful if the basic principles of modern monetary theory, if the work of Wynne Godley and his followers insisting on models that maintain stock flow accounting consistency and if Minsky's instability principles were at the core of understanding of these matters. But it is obvious that they are not." — James K. Galbraith

(Transcribed from "A Profession in Disgrace", presentation to the ASSA ASE session,
"New Directions in Macro: Where is the Real World Pulling Us?" Denver, Colorado on January 9, 2011)

3. re "btw this is a cheap shot at Warren Mosler who doesnt have the PhD imo, and btw Galbraith has made similar statements about Warren being a "amateur" economist."

full quote in galbraith's "in defense of deficits" (aside: does anyone reading this thread seriously think that was not a super essay?) begins with:

"As the inspired amateur economist Warren Mosler likes to say,..."

seems to me that both quoting warren, and the way it was done was meant as a complement. no way did i read it as a cheap shot.

4. i know nothing about the hayek debate, so have nothing to say on that.

5. re: this is a 'moral' or 'human' issue

totally agree.

selise said...

oops. here is the missing link to "in defense of deficits"

Райчо Марков said...


Peterc brought up an interesting subject by turning our attention to the friendly Lavoie's MMT critique, which basically wasn't critique on substance rather then on form.

I think with his comments and links on Scott Fullwiler gave nice respond - I hadn't seen before some of his papers he linked there, which explain clearly the religious deficit spending dance present US law requires.

To quote Fullwiler:

"I should also add that we shouldn’t overinterpret or over-critique Marc’s paper. The basic points he is making are (1) MMT and horizontalists/circuitistes completely or at least almost completely on how the monetary system works, and (2) the two groups disagree on what the best way is to present how the monetary system works to others in academia and elsehwere–that is, how the framework should be explained overall.

It used to be that horizontalists/circuitistes thought neo-Chartalists were saying something different than what they were saying. It’s now recognized that’s not the case–they just don’t like how we’ve presented it. There are some nuances beyond that, but that’s mostly it."

Райчо Марков said...


I fully understand Matt's frustration about people's ignorance regarding MMT.

Warren Mosler and the other MMT people-first generation have been fighting this ignorance for 20 years without a major breakthrough yet. I am frustrated too - I even thought we could and should have done more to reveal the truth. I commented that even Warren Mosler, you me could do more... Certainly Galbraith could have done more in this regard. But we all are good folks. Galbraith is a great man.

beowulf said...

2. re "Galbraith has NEVER openly and fully endorsed MMT"
you've read galbraith's intro to warren's book? how exactly was that not a full endorsement?

You know, I'd forgotten about that. Thanks for the reminder Selise. The testimony Galbraith gave to the Bowles-Simpson commission was just over the top incredible.
-That the Commission’s work is illegitimate
-That current deficits and rising debt were caused by the financial crisis
-That future deficit projections are generally based on forecasts which begin by unrealistically assuming full recovery
-That, having cured the deficits with an unrealistic forecast, CBO recreates them with another, very different, but equally unrealistic forecast.
-That the only way to reduce public deficits is to restore private credit.
-That Social Security and Medicare “solvency” is not part of the Commission’s Mandate.
-That as a transfer program, Social Security is also irrelevant to deficit economics.
-That markets are not calling for deficit reduction, either now or later.
-That in reality, the US government spends first & borrows later; public spending creates a demand for Treasuries in the private sector.
-That the best place in history (for this Commission) would be no place at all.

Matt Franko said...

As far as the orthodoxy, Galbraith is "the best we have got", I would say, no argument there...

Here is I believe his latest Tech Ticker video (I make a point to watch ALL of Prof Galbraith's appearances on the Tech Ticker as he is the "best we have got").

I think it is fair to say that he believes, if I take him at his words:

...that the ratings agencies are wrong about solvency of the US govt due to the fact that bonds have rallied since the downgrade;

...that there is no "long term debt" problem wrt the US govt;

...that the total US "debt" has not reached a % of GDP where it would constitute a problem; "debt deflation"; the 'confidence fairy'.

So he is still a 'work in progress' as far as fully understanding MMT imo, again if we just look at what he says here, perhaps he is choosing to not reveal all he knows for some sort of political reasons.

Or he may possess this slight mathematical cognition problem that I am trying to identify out there which I believe is holding many back from a full MMT understanding. (maybe he can't "see" it.)

If he truly understands MMT, he could be doing/saying a lot more than he is.

fyi I still plan on watching all of his future Tech Ticker appearances, mostly in hopes of seeing a change in his presentations that would represent a breakthrough for him.


Matt Franko said...


"amateur": I believe Warren (as well as Mike here) both have economic degrees. Mike has I believe a Masters and Warren I'm not sure but he has undergrad and has studied graduate level at the LSE, etc... and they both have been employed in the financial sector all of their careers at pretty high level jobs that require advanced understanding of economics. Warren runs Valence dont forget that puts out the best economic reports and analysis.

So I dont know what you have to do to "lose your amateur status".

It's revealing. Resp,

peterc said...

Matt, I agree with you about this notion of amateur status. Where would economics be if it wasn't for the guys who either didn't have Ph.Ds or did most of their work outside academia? Ricardo, Marx (non-academic), Keynes (no Ph.D), Kalecki, Mosler. :)

Economics would be in a pretty sick state without them (or should I say even sicker state?).

Kevin Fathi said...

@Matt: the email correspondence I've had with Dr. Galbraith indicates that he is an avid supporter and fully understands MMT. I believe his reluctance to invoke MMT when engaging in policy discussions stems from 1) MMTer's are often viewed in the same light as Rothbardians(eccentric,rabid,etc.) and 2) being branded as "one of those crazy MMTer's" may interfere academically with the biophysical economics research that he and Dr. Chen are working on. Just a theory.

selise said...


ok, you find the "amateur" comment offensive (and apparently think it has something to do with degrees?).

i disagree on both counts. but let's put that aside for the moment...

you made a claim, "Galbraith has NEVER openly and fully endorsed MMT," and i gave two examples that i think disprove your claim. your case is not made stronger by ignoring this.

the lack of quotes of objectionable / wrong / misleading statements doesn't help either.


if your main point is that the best course we should all try to follow is to be as intellectually honest as we are capable of being (iow, no convenient propaganda for short term goals), then i totally agree (please feel free to correct me as often as you are willing. i will only appreciate the instruction).

one of things that seems so very strange to me about this comment thread is that about 6 months ago -- on this very blog -- i was arguing in favor of telling the mmt story straight. and exactly one person agreed.



finally, as important as i think it is, mmt on deficits isn't the only economic/policy/political issue that matters to me. there is also, for example, the democracy deficit, our foreign policy (collective security vs constant war), the environment, energy...

no one can possibly do everything (let alone perfectly)... but damn. as far as i can tell galbraith comes pretty close. he's just about the last person i'd put on the "done with these people, time's up." list of economists.

dan's suggestion, "bring the areas of dispute up for reasoned debate. Maybe both sides will learn something" is something i strongly support. smart honest people disagree about stuff.

Letsgetitdone said...

Somehow, I missed this one. I disagree about Jamie and endorse all of selise's remarks on the subject.

Next, I don't think there's any space between MMT and "deficit owlism." Here's my take identifying the two:

Here's an earlier piece just after Stephanie defined the term:

And here's Stephanie's original piece:

Perhaps I'm reading too much into Stephanie's original characterization; but I don't see any space between MMT and deficit owls.

As for Jamie's not being at the FS Conference. he simply had a prior commitment. is support for it was very public and we used a quote from him to promote the Conference. I believe that without his public support there would have been no Teach-In Counter-Conference at all.

Anonymous said...

@ Matt Franko

Your comments are pretty funny. First, you claim that canadians might not get it because we're ruled by the queen of England. Funny on its own but, even funnier after a cursory glance at wikipedia would lead one to conclude that, if wikipedia is correct and the bank of canada is owned by the canadian government, canadians are in fact closer than US Americans to this 'unified government' thing. Canadians have no reserve requirements or a requirement of zero if you want to put it that way, also closer to "paradigm" or whatever. Second, this perceived mathematical superiority you lord over others is ridiculous. That you understand that 3 3rds sum to 1 is irrelevant to the discussion. Finally to say that deficits don't matter, like Cheney did, is obviously false as it seems to matter to a lot of people and must be qualified to be true. It's not true that deficits don't matter all the time. If inflation were 20% of course it would matter. You should trade some of your mathematical maturity for a firmer grip on reality. MMT's strength is that it attempts to describe the reality of a non convertible floating exchange fiat currency which includes its capabilities and limitations whether they be real or self imposed. It's up to you to explain things as they are not as you wish they worked or should work.

Funny thing. I've read all your posts and still don't know what your beef is with any of them other than not saying MMT. Or is it that your problem is that they understand but don't have the same policy prescriptions as you.

Dick "deficits don't matter" Cheney for President! I bet he gets it but, you wish he didn't.