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.
Pages
▼
Pages
▼
Wednesday, October 17, 2012
I can't stand them both
Obaman, Romney...what's the difference? Two clueless idiots. That's it, I'm done watching debates. I think next time I'll watch Honey Boo Boo.
I was saying just yesterday that all of you in this "community" are like the only ones I can communicate with anymore on these issues... "I got no one to talk to" LOL. rsp,
Last night was the first debate I watched. A depressingly vacuous presentation from two Herbert Hoover acolytes running for the job of Comptroller-in-Chief. Neither of these guys has the slightest idea about how to promote social and economic progress, or anything resembling a real plan. They both seem to pride themselves on their lack of vision and ambition. If things get better during the next four years, it will only be by accident. I have to vote for Obama since Romney represents a dangerously reactionary party, and Obama's party is simply inept and corrupt. But I'm re-registering in November after the election. I haven't decided whether I want to try to try to work on creating a new party, or will just pick some existing one like the democratic Socialists.
Of course, they both flunk economics. So, we need to look at the social agenda each brings along which leads to your preferred futures of Social Security, Health Care, and Supreme Ct appointments.
Thanks Mike. It's hard to have confidence in the future with both parties advancing idiotic economic theories. One of the most disturbing phenomena is that neither party seems to have a sensible account of what caused the financial crisis.
I didn't see the first one and I didn't watch last night - it would have only lead to yelling at the TV.
That said, I'm finding my friends understand that somethings wrong with both of them, but can't quite put a finger on it. I think if none of the above was on the ballot box they'd both lose.
I'm finding my friends understand that somethings wrong with both of them, but can't quite put a finger on it.
Adam1, I think most Americans now understand that they are being prepared for a meaningless future of mass servitude on a plantation in permanent decline, and all our leaders want to debate is how to pay for the replacement cotton gin, and how to make sure the spending on whips doesn't exceed the revenue from the cotton.
They also know that while their planet is being murdered, the leaders of both parties just engaged in a macho pissing contest about who will do a better job fracking it to death.
"most Americans now understand that they are being prepared for a meaningless future of mass servitude on a plantation"
MMT remains virtually unknown among the U.S. masses except for those who need it for business, trading or investing. Mr. Norman is about the only person I have seen who has a knack for simple presentations that cater to busy working people without an interest in economics. Until the message is tuned for mass media and answers the simple questions about how it is relevant to individuals -- instead of why it is right and "they are wrong", the prospects are quite dim for politicians to parrot themes discussed here in these rarefied economic circles. MMT NEEDS to translate the success it has had in financial and economic media to mainstream Democrat leaning outlets like CNN and MSNBC and NPR. Politics would never again be the same. Maybe Mosler is on the right track in his election where he will help directly help leaders learn and then leaders can teach rather than the other way around.
Perhaps, the debate could have had some substance had Third Party candidates been invited. Instead, Jill Stein and her vp running mate were detained for 8 hrs!
Green Party Candidates Arrested, Shackled to Chairs For 8 Hours After Trying to Enter Hofstra Debate
MMT isn't enough. It will definitely help when people have a better understanding of the monetary system, but that understanding can be used to defend plutocracy or undermine it; to reinforce inequality or promote equality. Understanding the structure of wealth, power, domination and exploitation - and the options for changing those structures - go well beyond the monetary system.
I have a project I'm working on that is graphical in nature but contains no numbers. Doesn't even mention MMT. MMT is nothing more than applied system relationships (the relevant ones however).
My presentation lays out the economic machine in simple terms - so simple that if people don't understand the basic idea then I doubt anything will get through to them.
Should be ready in a week or so - I have work calling too.
I want to run it by the hive mind here for criticism when it's ready.
Matt,
Bill Still e-mailed me this morning with a question. Seems like people are asking him about the loans-don't-create-the-interest conundrum and he doesn't know what to tell them.
PUtting things in context, MMT as a monetary theory debunks the lack of affordability myth. The monetary theory says nothing about society, politics, or economics. As a macro theory MMT shows how to harmonize growth, employment and price stability in a capitalistic economy under a non-convertible floating rate monetary regime.
That's a big chunk, but only a minuscule part of the whole that needs addressing. This is a species issue in the emerging global age, and owing to current circumstances, it is developing into an existential one for the species as increasing complexity exceeds adaptive response.
This gap is the real deficit to be concerned with.
Dan and Tom, The statements about "The monetary theory says nothing about society, politics, or economics." is just silly. I think we have had this discussion until we were all very nauseated during the JG debates. MMT addresses the primary cause of inequality in the economic system: the lack of demand for labor. Certainly there are other requirements for social justice, equality and what not but giving masses of people the ability to earn a living IS revolutionary and has rarely happened ( that I can think of ) in human history.
Ryan, you did not read all of what I wrote there. There is a difference between monetary theory and macro. For example, the monetary analysis has nothing to say about a JG other than affordability is not an issue. The JG is part of the macro analysis in my view. In the view of some others it is purely a policy choice.
I don't think MMT really says a lot about affordability or lack of affordability from an aggregate point of view. What it does say something about is the potential powers of government compared to private sector enterprises.
A society draws on its real resources - natural resources, fixed capital resources, social capital resources and human resources - to produce things of value. Money is a tool for the mobilization of real resources, and so decisions over how to distribute money among various competing hands has an impact over who has or doesn't have the power to mobilize those resources. The power to create money doesn't magically create additional resources or make things that the society couldn't afford before. However, the fact that sovereign governments can create money means that those governments have the ability to appropriate more resource mobilization power to themselves.
MMT is mainly about the institutional architecture of the modern monetary system. But even after people understand this architecture, many will resist expanding the role of government - because the fact is, conservatives do not want governments to exercise more economic power. MMT only takes you so far. The route to a more progressive world requires a whole bunch of additional moral and political persuasions that goes far beyond financial architecture.
MMT says nothing about society, politics, or economics. That isn't it's purpose.
MMT is the recognition of patterns that exist in an economic machine that functions according to normal laws of the Universe.
Mainstream economics says nothing period that is useful in this regard. The applied math it presents solves non-existent problems. Sudoku puzzles are just as useful.
Politics, human behavior, exploitation, inequality…none of those things are moving parts of the economic machine. They exist outside of it.
Those things represent barriers to what would work just fine thank you if only the world wasn't full of people (and leaders) that couldn't be bothered to think.
Politics is a completely separate issue. There is little we can do as part of the MMT community to effect politics.
Our role is that of educators or messengers to explain what our monetary system is capable of in terms of making the average citizens life better.
Saying that "MMT isn't enough" is an understaement, but if MMT ideas aren't implemented what difference will anything else we do make?
Dan Kervick MMT is mainly about the institutional architecture of the modern monetary system. But even after people understand this architecture, many will resist expanding the role of government - because the fact is, conservatives do not wantgovernments to exercise more economic power.
Same error that Ryan made and it a popular misconception about MMT. MMT covers a number of things in addition to its monetary theory, and the monetary theory itself is more than an operational description. Unless one takes MMT to co-extensive with Warren's "Soft Currency Economics."
The MMT economists have built on "Soft Currency Economics" and placed within the the broader framework of Post Keynesianism, including Minsky, although he refused to be associated with a school, like his teacher Joseph Schumpeter. MMT is built on aspects of PKE (endogenous money) or presupposes them.
IN terms of its policy positon, MMT is "liberal," in the sense of making full employment primary rather than price stability, as does conservatism. It is also institutional rather than neoclassical ("naturalism") or neoliberal ("free market").
The operational description of the modern monetary system is independent of economics and is a matter of money and banking, and finance. The operational description is institutional, i.e., an articulation of rules and what these rules implies. Some of these rules imply accounting identities, and they are systemic constraints, that is, boundary conditions, arising due to the rules of double entry.
The system set up by the institutional rules, including operational rules, is applicable across money and banking, finance, economics, and policy, regardless of where on the spectrum one stands.
The same rules apply to reactionary policy as to radical policy and everything in between. This encompasses the global economic and political system as long as the present monetary regime stands. If it changes, then new rules will apply and different contraints and alternatives will too.
To put it another way, economics in a monetary system of commodity production, distribution and consumption presupposes monetary institutions, hence understand of the institutional arrangements (rules of the game) based on money and banking, and finance. Those rules are the same for all approaches to economic theory and policy formulation and execution because they define the system (structure) and its operations (function). "Soft Currency Economics" is a summary of the fundamentals of the modern monetary system.
Many people equate this with MMT, but MMT economists have developed MMT over the years since Warren published SCE in January 1994, and now MMT covers a lot more ground than that — credit money theory (Innes), state money (Knapp), endogenous money (Moore, Circuitists), SFC macro modeling using the sectoral balance approach (Godley), functional finance (Lerner), financial economics (Minsky), as well as a drawing on Marx/Kalecki, PKE and institutional economics.
The basic kerfuffle seems to among those that think the economy is a free-for-all among individuals (social Darwinism), a free-for-all among nations (patriotism, jingoism), the life-support system of a nation (nationalism), or the life support system of humanity (globalism). These result in different views of society, politics, and economics, but as long as the monetary system remains unchanged, the same rules apply to all views.
I just want to resist the easy assumptions that are made in various places throughout the blogosphere - not by the economists but by the fan club - that MMT, monetary sovereignty, the state theory of money, and/or related theories are a kind of revelation of unlimited wealth and affordability.
For example, a country with very abundant and easily and inexpensively accessed petroleum deposits can afford to provide internal combustion transportation to all of its citizens. A country without such deposits (or without goods and services in can exchange for the petroleum resources of other countries) might not be able to provide that form of transportation on as broad a basis. And this issue is independent of the nature of the monetary system.
This is true, of course, Dan. MMT economists point out that the constraint is real resources, not the ability of the currency sovereign to "afford" them. If there are resources available for sale, the state can transfer them to public use by using its currency issuing power.
It's a political decision over which and how many available resources to dedicate to public use and how they should be used. Here social, political and economics institutions come into play, as well as cultural traditions and conventions.
Also, If a country desires to use a resource that is not available domestically in the quantity desired, then foreign exchange must be obtained to acquire it through trade, unless a swap of resources can be arranged.
Look, unlike right-wing America, left-wing American are thinking people and are amenable to facts. It's no use groaning about how stupid some people are.
We should do everything we can to spread the world, and I put my hand up to help.
"I just want to resist the easy assumptions that are made…not by the economists but by the fan club …that MMT… related theories are a kind of revelation of unlimited wealth and affordability."
Dan, I think you are attributing mistakes made by critics of MMT to the rest of us.
We in the "community" know that MMT tells us we can always afford to buy that which we can produce.
MMT (proponents) are cognizant of the reality that we can be resource-constrained.
We still have critics claiming MMT says "deficits don't matter, we can spend as much money as we can create. It's a free lunch".
This is clearly a class of people that doesn't see nuance in anything.
Paul, you are right, and the people like yourself who have been around for a long time and have read the MMT literature don't fall into crude errors.
But swirling around some of the MMT blogs are some people who do seem to fall into the mistake of thinking that sovereign monetary power is equivalent to limitless sovereign wealth without the need for difficult decisions.
Also, my insistence that "MMT isn't enough" is based on the experience of arguing with conservatives who pretty well understand every uncontroversial fact, operational reality and institutional analysis that MMT demonstrates or teaches, but who do not embrace MMT policy solutions. That's not because they are deluded about the capabilities of government, but because they don't share the values that lead others to defend full employment, social justice, etc.
"That's not because they are deluded about the capabilities of government, but because they don't share the values that lead others to defend full employment, social justice, etc."
This is accurate, but the elephant in the room is that their "values" enacted through policy will lead to an inevitable collapse of the very system they are "protecting".
I'm a strong believer in the fact that the frog will leave the pot before it gets boiled.
How do we convince others not to commit suicide (and unfortunately take us along for the ride)?
Before we can expect leaders to make the right policy decisions, we have to convince them that the economy works according to MMT (real Universe) principles, not the shamanism that you so rightly labeled.
Maybe I'm arrogant in assuming that economics operates the way MMT says it does, but in reality, economics operates the way MMT says it does. TINA.
"Also, my insistence that "MMT isn't enough" is based on the experience of arguing with conservatives who pretty well understand every uncontroversial fact, operational reality and institutional analysis that MMT demonstrates or teaches, but who do not embrace MMT policy solutions. "
Yes but Dan, I believe those people only "believe" that because they think what you propose is "too hard" politically at this time to be able to implement... ie "once someone hears 'JG' then forget it"... they give up without even a fight... that's what I interpret their position as (even despite what they may actually tell you)...
they think the JG is too hard a political sell so dont even want to bring it up at this time, even to the point of ridicule...
MMT isn't "enough" because even if everyone understood and accepted the descriptive aspects of MMT all the political decisions about size and role of government remain to be made.
There would still be people trying to stand in the way of social justice, full employment, etc. but without TINA to back them up I really believe they'd find themselves marginalized.
I've been done.
ReplyDeleteLast night my wife wanted to bring the debate to the bedroom and watch it.
Thank God I'm near deaf in one ear. Put the bad ear up and slept like a baby. :-)
Wife: "why aren't you interested in this"?
the Money Boo Hoo twins?
ReplyDeletePaul,
ReplyDeleteI was saying just yesterday that all of you in this "community" are like the only ones I can communicate with anymore on these issues... "I got no one to talk to" LOL. rsp,
Last night was the first debate I watched. A depressingly vacuous presentation from two Herbert Hoover acolytes running for the job of Comptroller-in-Chief. Neither of these guys has the slightest idea about how to promote social and economic progress, or anything resembling a real plan. They both seem to pride themselves on their lack of vision and ambition. If things get better during the next four years, it will only be by accident. I have to vote for Obama since Romney represents a dangerously reactionary party, and Obama's party is simply inept and corrupt. But I'm re-registering in November after the election. I haven't decided whether I want to try to try to work on creating a new party, or will just pick some existing one like the democratic Socialists.
ReplyDeleteOf course, they both flunk economics. So, we need to look at the social agenda each brings along which leads to your preferred futures of Social Security, Health Care, and Supreme Ct appointments.
ReplyDeleteDan Kervick: I totally agree.
ReplyDeleteThanks Mike. It's hard to have confidence in the future with both parties advancing idiotic economic theories. One of the most disturbing phenomena is that neither party seems to have a sensible account of what caused the financial crisis.
ReplyDeletedid anyone see the "CEO Debt Debate" on Bloomberg. It was quite grotesque.
ReplyDeleteY:
ReplyDeleteThankfully, no. It would have made me ill.
I didn't see the first one and I didn't watch last night - it would have only lead to yelling at the TV.
ReplyDeleteThat said, I'm finding my friends understand that somethings wrong with both of them, but can't quite put a finger on it. I think if none of the above was on the ballot box they'd both lose.
I'm finding my friends understand that somethings wrong with both of them, but can't quite put a finger on it.
ReplyDeleteAdam1, I think most Americans now understand that they are being prepared for a meaningless future of mass servitude on a plantation in permanent decline, and all our leaders want to debate is how to pay for the replacement cotton gin, and how to make sure the spending on whips doesn't exceed the revenue from the cotton.
They also know that while their planet is being murdered, the leaders of both parties just engaged in a macho pissing contest about who will do a better job fracking it to death.
@Dan,
ReplyDeleteYou'll like this one if you haven't already seen it...
http://www.rollingstone.com/politics/blogs/taibblog/this-presidential-race-should-never-have-been-this-close-20120925
"most Americans now understand that they are being prepared for a meaningless future of mass servitude on a plantation"
ReplyDeleteMMT remains virtually unknown among the U.S. masses except for those who need it for business, trading or investing. Mr. Norman is about the only person I have seen who has a knack for simple presentations that cater to busy working people without an interest in economics. Until the message is tuned for mass media and answers the simple questions about how it is relevant to individuals -- instead of why it is right and "they are wrong", the prospects are quite dim for politicians to parrot themes discussed here in these rarefied economic circles. MMT NEEDS to translate the success it has had in financial and economic media to mainstream Democrat leaning outlets like CNN and MSNBC and NPR. Politics would never again be the same. Maybe Mosler is on the right track in his election where he will help directly help leaders learn and then leaders can teach rather than the other way around.
Perhaps, the debate could have had some substance had Third Party candidates been invited. Instead, Jill Stein and her vp running mate were detained for 8 hrs!
ReplyDeleteGreen Party Candidates Arrested, Shackled to Chairs For 8 Hours After Trying to Enter Hofstra Debate
http://www.rawstory.com/rs/2012/10/17/green-party-candidate-police-handcuffed-me-to-a-chair-for-eight-hours/
MMT isn't enough. It will definitely help when people have a better understanding of the monetary system, but that understanding can be used to defend plutocracy or undermine it; to reinforce inequality or promote equality. Understanding the structure of wealth, power, domination and exploitation - and the options for changing those structures - go well beyond the monetary system.
ReplyDelete"MMT isn't enough."
ReplyDeleteI have a project I'm working on that is graphical in nature but contains no numbers. Doesn't even mention MMT. MMT is nothing more than applied system relationships (the relevant ones however).
My presentation lays out the economic machine in simple terms - so simple that if people don't understand the basic idea then I doubt anything will get through to them.
Should be ready in a week or so - I have work calling too.
I want to run it by the hive mind here for criticism when it's ready.
Matt,
Bill Still e-mailed me this morning with a question. Seems like people are asking him about the loans-don't-create-the-interest conundrum and he doesn't know what to tell them.
PUtting things in context, MMT as a monetary theory debunks the lack of affordability myth. The monetary theory says nothing about society, politics, or economics. As a macro theory MMT shows how to harmonize growth, employment and price stability in a capitalistic economy under a non-convertible floating rate monetary regime.
ReplyDeleteThat's a big chunk, but only a minuscule part of the whole that needs addressing. This is a species issue in the emerging global age, and owing to current circumstances, it is developing into an existential one for the species as increasing complexity exceeds adaptive response.
This gap is the real deficit to be concerned with.
Dan and Tom,
ReplyDeleteThe statements about "The monetary theory says nothing about society, politics, or economics." is just silly. I think we have had this discussion until we were all very nauseated during the JG debates. MMT addresses the primary cause of inequality in the economic system: the lack of demand for labor. Certainly there are other requirements for social justice, equality and what not but giving masses of people the ability to earn a living IS revolutionary and has rarely happened ( that I can think of ) in human history.
Ryan, you did not read all of what I wrote there. There is a difference between monetary theory and macro. For example, the monetary analysis has nothing to say about a JG other than affordability is not an issue. The JG is part of the macro analysis in my view. In the view of some others it is purely a policy choice.
ReplyDeleteI don't think MMT really says a lot about affordability or lack of affordability from an aggregate point of view. What it does say something about is the potential powers of government compared to private sector enterprises.
ReplyDeleteA society draws on its real resources - natural resources, fixed capital resources, social capital resources and human resources - to produce things of value. Money is a tool for the mobilization of real resources, and so decisions over how to distribute money among various competing hands has an impact over who has or doesn't have the power to mobilize those resources. The power to create money doesn't magically create additional resources or make things that the society couldn't afford before. However, the fact that sovereign governments can create money means that those governments have the ability to appropriate more resource mobilization power to themselves.
MMT is mainly about the institutional architecture of the modern monetary system. But even after people understand this architecture, many will resist expanding the role of government - because the fact is, conservatives do not want governments to exercise more economic power. MMT only takes you so far. The route to a more progressive world requires a whole bunch of additional moral and political persuasions that goes far beyond financial architecture.
MMT says nothing about society, politics, or economics. That isn't it's purpose.
ReplyDeleteMMT is the recognition of patterns that exist in an economic machine that functions according to normal laws of the Universe.
Mainstream economics says nothing period that is useful in this regard. The applied math it presents solves non-existent problems. Sudoku puzzles are just as useful.
Politics, human behavior, exploitation, inequality…none of those things are moving parts of the economic machine. They exist outside of it.
Those things represent barriers to what would work just fine thank you if only the world wasn't full of people (and leaders) that couldn't be bothered to think.
Politics is a completely separate issue. There is little we can do as part of the MMT community to effect politics.
Our role is that of educators or messengers to explain what our monetary system is capable of in terms of making the average citizens life better.
Saying that "MMT isn't enough" is an understaement, but if MMT ideas aren't implemented what difference will anything else we do make?
Dan Kervick MMT is mainly about the institutional architecture of the modern monetary system. But even after people understand this architecture, many will resist expanding the role of government - because the fact is, conservatives do not wantgovernments to exercise more economic power.
ReplyDeleteSame error that Ryan made and it a popular misconception about MMT. MMT covers a number of things in addition to its monetary theory, and the monetary theory itself is more than an operational description. Unless one takes MMT to co-extensive with Warren's "Soft Currency Economics."
The MMT economists have built on "Soft Currency Economics" and placed within the the broader framework of Post Keynesianism, including Minsky, although he refused to be associated with a school, like his teacher Joseph Schumpeter. MMT is built on aspects of PKE (endogenous money) or presupposes them.
IN terms of its policy positon, MMT is "liberal," in the sense of making full employment primary rather than price stability, as does conservatism. It is also institutional rather than neoclassical ("naturalism") or neoliberal ("free market").
The operational description of the modern monetary system is independent of economics and is a matter of money and banking, and finance. The operational description is institutional, i.e., an articulation of rules and what these rules implies. Some of these rules imply accounting identities, and they are systemic constraints, that is, boundary conditions, arising due to the rules of double entry.
The system set up by the institutional rules, including operational rules, is applicable across money and banking, finance, economics, and policy, regardless of where on the spectrum one stands.
The same rules apply to reactionary policy as to radical policy and everything in between. This encompasses the global economic and political system as long as the present monetary regime stands. If it changes, then new rules will apply and different contraints and alternatives will too.
To put it another way, economics in a monetary system of commodity production, distribution and consumption presupposes monetary institutions, hence understand of the institutional arrangements (rules of the game) based on money and banking, and finance. Those rules are the same for all approaches to economic theory and policy formulation and execution because they define the system (structure) and its operations (function). "Soft Currency Economics" is a summary of the fundamentals of the modern monetary system.
ReplyDeleteMany people equate this with MMT, but MMT economists have developed MMT over the years since Warren published SCE in January 1994, and now MMT covers a lot more ground than that — credit money theory (Innes), state money (Knapp), endogenous money (Moore, Circuitists), SFC macro modeling using the sectoral balance approach (Godley), functional finance (Lerner), financial economics (Minsky), as well as a drawing on Marx/Kalecki, PKE and institutional economics.
The basic kerfuffle seems to among those that think the economy is a free-for-all among individuals (social Darwinism), a free-for-all among nations (patriotism, jingoism), the life-support system of a nation (nationalism), or the life support system of humanity (globalism). These result in different views of society, politics, and economics, but as long as the monetary system remains unchanged, the same rules apply to all views.
ReplyDeleteI just want to resist the easy assumptions that are made in various places throughout the blogosphere - not by the economists but by the fan club - that MMT, monetary sovereignty, the state theory of money, and/or related theories are a kind of revelation of unlimited wealth and affordability.
ReplyDeleteFor example, a country with very abundant and easily and inexpensively accessed petroleum deposits can afford to provide internal combustion transportation to all of its citizens. A country without such deposits (or without goods and services in can exchange for the petroleum resources of other countries) might not be able to provide that form of transportation on as broad a basis. And this issue is independent of the nature of the monetary system.
This is true, of course, Dan. MMT economists point out that the constraint is real resources, not the ability of the currency sovereign to "afford" them. If there are resources available for sale, the state can transfer them to public use by using its currency issuing power.
ReplyDeleteIt's a political decision over which and how many available resources to dedicate to public use and how they should be used. Here social, political and economics institutions come into play, as well as cultural traditions and conventions.
Also, If a country desires to use a resource that is not available domestically in the quantity desired, then foreign exchange must be obtained to acquire it through trade, unless a swap of resources can be arranged.
"MMT isn't enough"
ReplyDeleteI agree with that, for different reasons.
I have to say the only time I can recall seeing those "easy assumptions" is from critics of MMT misrepresenting it.
ReplyDeleteLook, unlike right-wing America, left-wing American are thinking people and are amenable to facts. It's no use groaning about how stupid some people are.
ReplyDeleteWe should do everything we can to spread the world, and I put my hand up to help.
"I just want to resist the easy assumptions that are made…not by the economists but by the fan club …that MMT… related theories are a kind of revelation of unlimited wealth and affordability."
ReplyDeleteDan, I think you are attributing mistakes made by critics of MMT to the rest of us.
We in the "community" know that MMT tells us we can always afford to buy that which we can produce.
MMT (proponents) are cognizant of the reality that we can be resource-constrained.
We still have critics claiming MMT says "deficits don't matter, we can spend as much money as we can create. It's a free lunch".
This is clearly a class of people that doesn't see nuance in anything.
Paul, you are right, and the people like yourself who have been around for a long time and have read the MMT literature don't fall into crude errors.
ReplyDeleteBut swirling around some of the MMT blogs are some people who do seem to fall into the mistake of thinking that sovereign monetary power is equivalent to limitless sovereign wealth without the need for difficult decisions.
Also, my insistence that "MMT isn't enough" is based on the experience of arguing with conservatives who pretty well understand every uncontroversial fact, operational reality and institutional analysis that MMT demonstrates or teaches, but who do not embrace MMT policy solutions. That's not because they are deluded about the capabilities of government, but because they don't share the values that lead others to defend full employment, social justice, etc.
"That's not because they are deluded about the capabilities of government, but because they don't share the values that lead others to defend full employment, social justice, etc."
ReplyDeleteThis is accurate, but the elephant in the room is that their "values" enacted through policy will lead to an inevitable collapse of the very system they are "protecting".
I'm a strong believer in the fact that the frog will leave the pot before it gets boiled.
How do we convince others not to commit suicide (and unfortunately take us along for the ride)?
Before we can expect leaders to make the right policy decisions, we have to convince them that the economy works according to MMT (real Universe) principles, not the shamanism that you so rightly labeled.
Maybe I'm arrogant in assuming that economics operates the way MMT says it does, but in reality, economics operates the way MMT says it does. TINA.
"Also, my insistence that "MMT isn't enough" is based on the experience of arguing with conservatives who pretty well understand every uncontroversial fact, operational reality and institutional analysis that MMT demonstrates or teaches, but who do not embrace MMT policy solutions. "
ReplyDeleteYes but Dan, I believe those people only "believe" that because they think what you propose is "too hard" politically at this time to be able to implement... ie "once someone hears 'JG' then forget it"... they give up without even a fight... that's what I interpret their position as (even despite what they may actually tell you)...
they think the JG is too hard a political sell so dont even want to bring it up at this time, even to the point of ridicule...
Resp,
MMT isn't "enough" because even if everyone understood and accepted the descriptive aspects of MMT all the political decisions about size and role of government remain to be made.
ReplyDeleteThere would still be people trying to stand in the way of social justice, full employment, etc. but without TINA to back them up I really believe they'd find themselves marginalized.