An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
meanwhile, back on planet earth, the fearless leaders are debating about how much to cut the safety net, but atleast we got the confusion over the true meaning of the letter "s" resolved. but what about the flux capaciter? or the board stretcher?
Consider that some people navigate by "dead reckoning" and some people navigate by "waypoints".
I believe you are in the dead reckoning camp (pure math) and these other folks are in the waypoints (semantics) camp.
My hope is once they get their waypoints established on this, they will be able to move forward....
It's like the guy and his wife in a car: She says "you dont know where we are, stop and ask for directions (waypoints)", he says: "yes I do we are heading east (dead reckoning)", etc...
We find MMT's use of the term "saving" confusing therefore there is no rationale for the JG.
Banks are big and swing big loan books around therefore there is no rationale for the JG.
If people consume a lot then it's like a circus in Rome or something therefore there is no rationale for the JG.
We define currency as any means of exchange therefore there is no rationale for the JG.
The economy's like a machine so there isn't really a hierarchy or anything therefore there is no rationale for the JG.
MMTers don't want people to know about their secret plans for big government so they hide secret messages within confusing terms which we find confusing therefore there is no rationale for the JG.
People just get together and a make a shared money system so taxes are not so important and also bad therefore there is no rationale for the JG.
If there's more spending and working then unemployment will probably solve itself or something but we had better not mention that because we haven't thought much about it yet therefore there is no rationale for the JG.
So all this semantic discussion about the difference between net savings and savings matters exactly how...
Meanwhile in the real economy, economic realism school (not MMR) predicts we will get: cuts, unemployment, increasing income disparity and poverty, decreasing disposable income, decreasing demand, rising prices because leverage and margin over the 'saving creators' (aka bankers). And people demanding nonsense like NGDP targetting, FED giving more funny money to banks, the government paying interests to itself, free risk income in form of public debt securities, increasing buyout of cheap assets by those who posses the 'savings' and increasing liabilities by those who posses 'disavings' and other related absurdities.
But hey, these ivory tower discussions are kinda fun to read!
P.S: And yeah, keep confusing stocks with flows.
P.S.2: Matt, that's not a valid excuse anymore and I don't think it even helps the case rationalizing along these lines 8also kinda an ad hominem attack).
But if they refuse to listen because 'MMT'ers just authoritarian leftists' making non-points already acknowledged by MMT...
Had hope for MMr centring on other stuff I don't feel comfortable or could be argable about MMT but they choose to nitpick stuff which is barely relevant anyway.
Is this where the MMTers all come now to whine about their problems? MMTers Anonymous?
Mocking a financial accountant for being a "pedant" is like mocking a doctor for having steady hands. That's just stupid.
JKH crushed the MMT economists and showed that their accounting is sloppy and often wrong - something some of the top MMT economists seem to be making a regular thing out of after the 29 trillion dollar mistake.
Since we're all human, everyone's perspective is necessarily limited, and no one can afford total certainty.
This suggests that temperance and humility might be more appropriate than condescension and excess. We're all in the same boat here, so why not afford yourself and your fellows a little generosity of spirit? You never know, we all might end up learning something.
It just shows what this "debate" was about. It was about trying to confuse people into believing that MMR has some original insights trumping MMT. And LVG, FDO15 and some other folks did indeed get confused. In the end it turned out that the debate was about verbal shortcuts MMT uses and no professional MMT-er is ever confused about but the mission got accomplished: "MMR right, MMT wrong" is the take-away some people got. Ou-kay. In the meantime we are waiting for the first original MMR thought and for their promised onslaught on the orthodoxy.
This looks to me like it is very close to being settled for "the accountants", they should be about ready to move on...
Terminology and identities close to being nailed down for them, and time to get back to the real issues.
Paul said it in the other thread: weve got a closed system and "in order for the economy to save as a whole the government must net-spend is not a great leap".
Well, it is a great leap for our morons in charge...
Why is this MMR vs MMT? I think the MMR people are just trying to push the MMT understandings forward though they don't entirely agree with the framework. That's not a bad development. It's a great development. It means the MMT ideas are gaining enough traction that they are worthy of sub-schools of thought. Like Keynes and all of his followers.
I appreciate your measured comments here and elsewhere on this blog today.
for me, there have definitely been some parts of my colleagues presentation of the paradigm that I have not repeated myself. They still have things right, but I think some parts even beyond the "S" issue were less than perfectly clear (such as "operational," which I attempted to define since nobody else had and it was being interpreted incorrectly quite often).
Interestingly, I learned about saving (as opposed to net saving, which came later) in large part from Randy's writings in the early to mid 1990s. Net saving came along because of the desire for a separate measure regarding Minskyan financial positions of the aggregate sectors, as opposed to understanding the accumulation of investment and why saving doesn't finance investment (which is what the earlier saving literature is about).
Even though I consider myself to be a mainstream sort of chap, I've certainly learned from MMT and PKE.
I think that one of the problems is that it's part of the nature of online debates that they are given to overheating. So unfortunately these things easily go off the rails, and it's hard to debate matters of substance and conviction, which after all are the things people really want to discuss.
My tentative explanation for this is that when people discuss things in person, it's much more costly to be rude, because you tend to be in more direct contact with the person you're being rude to. On the internet, you don't really have the same incentives to take the feelings of other people into account. And it only takes a few people acting in this way to set up a dynamic where even the calmest people in an online community can get drawn into a screaming war of words.
At the same time, any given sentence can be read in many different ways, so there are lots of opportunities to misconstrue the intent or tone of the author.
And I think we all know how hard it is to stay calm when someone is dismissing your carefully considered and researched position on the basis of no knowledge whatsoever.
That's why I try to have arguments with people who are smarter, wiser and more informed than myself. It's a principle that has generally served me well!
18 comments:
meanwhile, back on planet earth, the fearless leaders are debating about how much to cut the safety net, but atleast we got the confusion over the true meaning of the letter "s" resolved. but what about the flux capaciter? or the board stretcher?
Is there a "Pedants Anonymous"?
There should be.
Paul,
Consider that some people navigate by "dead reckoning" and some people navigate by "waypoints".
I believe you are in the dead reckoning camp (pure math) and these other folks are in the waypoints (semantics) camp.
My hope is once they get their waypoints established on this, they will be able to move forward....
It's like the guy and his wife in a car: She says "you dont know where we are, stop and ask for directions (waypoints)", he says: "yes I do we are heading east (dead reckoning)", etc...
They will get comfortable I hope (soon!)... Resp,
Matt
In the meantime our fearless leaders are killing us softly…
…though I have little hope that they can be educated. Somehow they need to be discredited and replaced.
We have to figure out who is reachable and speak to them.
"Science (economics?) advances one funeral at a time" - attributed to Max Planck
A MMR poem:
We find MMT's use of the term "saving" confusing therefore there is no rationale for the JG.
Banks are big and swing big loan books around therefore there is no rationale for the JG.
If people consume a lot then it's like a circus in Rome or something therefore there is no rationale for the JG.
We define currency as any means of exchange therefore there is no rationale for the JG.
The economy's like a machine so there isn't really a hierarchy or anything therefore there is no rationale for the JG.
MMTers don't want people to know about their secret plans for big government so they hide secret messages within confusing terms which we find confusing therefore there is no rationale for the JG.
People just get together and a make a shared money system so taxes are not so important and also bad therefore there is no rationale for the JG.
If there's more spending and working then unemployment will probably solve itself or something but we had better not mention that because we haven't thought much about it yet therefore there is no rationale for the JG.
But anyway we choose not to focus on how to solve problems like unemployment because we are apolitical therefore there is no rationale for the JG.
So all this semantic discussion about the difference between net savings and savings matters exactly how...
Meanwhile in the real economy, economic realism school (not MMR) predicts we will get: cuts, unemployment, increasing income disparity and poverty, decreasing disposable income, decreasing demand, rising prices because leverage and margin over the 'saving creators' (aka bankers). And people demanding nonsense like NGDP targetting, FED giving more funny money to banks, the government paying interests to itself, free risk income in form of public debt securities, increasing buyout of cheap assets by those who posses the 'savings' and increasing liabilities by those who posses 'disavings' and other related absurdities.
But hey, these ivory tower discussions are kinda fun to read!
P.S: And yeah, keep confusing stocks with flows.
P.S.2: Matt, that's not a valid excuse anymore and I don't think it even helps the case rationalizing along these lines 8also kinda an ad hominem attack).
But if they refuse to listen because 'MMT'ers just authoritarian leftists' making non-points already acknowledged by MMT...
Had hope for MMr centring on other stuff I don't feel comfortable or could be argable about MMT but they choose to nitpick stuff which is barely relevant anyway.
Is this where the MMTers all come now to whine about their problems? MMTers Anonymous?
Mocking a financial accountant for being a "pedant" is like mocking a doctor for having steady hands. That's just stupid.
JKH crushed the MMT economists and showed that their accounting is sloppy and often wrong - something some of the top MMT economists seem to be making a regular thing out of after the 29 trillion dollar mistake.
LVG,
http://4.bp.blogspot.com/-VcrNn8AiWMc/Tq2CavD4Y1I/AAAAAAAABCs/iv07lVmamsE/s1600/Someone+is+wrong+on+internet.png
LVG,
Why seek escalation in this fashion?
Since we're all human, everyone's perspective is necessarily limited, and no one can afford total certainty.
This suggests that temperance and humility might be more appropriate than condescension and excess. We're all in the same boat here, so why not afford yourself and your fellows a little generosity of spirit? You never know, we all might end up learning something.
Vimothy,
It just shows what this "debate" was about. It was about trying to confuse people into believing that MMR has some original insights trumping MMT. And LVG, FDO15 and some other folks did indeed get confused. In the end it turned out that the debate was about verbal shortcuts MMT uses and no professional MMT-er is ever confused about but the mission got accomplished: "MMR right, MMT wrong" is the take-away some people got. Ou-kay. In the meantime we are waiting for the first original MMR thought and for their promised onslaught on the orthodoxy.
This looks to me like it is very close to being settled for "the accountants", they should be about ready to move on...
Terminology and identities close to being nailed down for them, and time to get back to the real issues.
Paul said it in the other thread: weve got a closed system and "in order for the economy to save as a whole the government must net-spend is not a great leap".
Well, it is a great leap for our morons in charge...
Resp,
Why is this MMR vs MMT? I think the MMR people are just trying to push the MMT understandings forward though they don't entirely agree with the framework. That's not a bad development. It's a great development. It means the MMT ideas are gaining enough traction that they are worthy of sub-schools of thought. Like Keynes and all of his followers.
Great, they understood what MMTers are saying- net savings idea.
Wray explains to critics where that big number came from and why some people misunderstood what it meant http://www.multiplier-effect.org/?p=3244
Vimothy,
I appreciate your measured comments here and elsewhere on this blog today.
for me, there have definitely been some parts of my colleagues presentation of the paradigm that I have not repeated myself. They still have things right, but I think some parts even beyond the "S" issue were less than perfectly clear (such as "operational," which I attempted to define since nobody else had and it was being interpreted incorrectly quite often).
Interestingly, I learned about saving (as opposed to net saving, which came later) in large part from Randy's writings in the early to mid 1990s. Net saving came along because of the desire for a separate measure regarding Minskyan financial positions of the aggregate sectors, as opposed to understanding the accumulation of investment and why saving doesn't finance investment (which is what the earlier saving literature is about).
Best,
Scott
Thanks, Scott.
Even though I consider myself to be a mainstream sort of chap, I've certainly learned from MMT and PKE.
I think that one of the problems is that it's part of the nature of online debates that they are given to overheating. So unfortunately these things easily go off the rails, and it's hard to debate matters of substance and conviction, which after all are the things people really want to discuss.
My tentative explanation for this is that when people discuss things in person, it's much more costly to be rude, because you tend to be in more direct contact with the person you're being rude to. On the internet, you don't really have the same incentives to take the feelings of other people into account. And it only takes a few people acting in this way to set up a dynamic where even the calmest people in an online community can get drawn into a screaming war of words.
At the same time, any given sentence can be read in many different ways, so there are lots of opportunities to misconstrue the intent or tone of the author.
And I think we all know how hard it is to stay calm when someone is dismissing your carefully considered and researched position on the basis of no knowledge whatsoever.
That's why I try to have arguments with people who are smarter, wiser and more informed than myself. It's a principle that has generally served me well!
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