Why the Elite are Living In an Economic Fantasy
Same Seder Interviews Stephanie Kelton
(h/t Dan Lynch at MMT Deficit Owl Committee)
(h/t Dan Lynch at MMT Deficit Owl Committee)
Professor Stephanie Kelton explained the origins of the Bretton Woods system, why US policy makers still make policy as if we were in a gold standard world, why we will not become like Greece, what really creates hyper inflation, why the US can easily reach full employment without inflation, the problem is demand, why the inflation of the 70s was not driven by government seeking full employment, why the "solutions" to the fiscal cliff will produce a fiscal crisis, what is the best policy to follow now and how the economic debate is changing.
This clip from the Majority Report
I like Dr Kelton a lot, but MMT is losing the immediate battle in a big way. Obama is going to "reform" entitlements. Period. MMT is not even a blip on the radar. The deficit is bad, bad, bad meme is winning in spades. Pete Peterson won....for now.
ReplyDeleteShe's awesome!
ReplyDeleteI agree, Mike. She's got a talent for explaining MMT to lay people. After being on Harry Shearer's and Sam Seder's shows hope she can get on others.
ReplyDeleteWe very much need spokespersons for MMT, people like Mike and Stephanie, Warren and Randy. I suspect Malmo may be right for now.DC is not at all interested in MMT. In fact they are locked and loaded to bring the deficit down and the safety net is part of it. I was pleased to see the Paul K. is coming around. That will help.
ReplyDeleteIt looks as if entitlement reform/cuts vis a vis the fiscal cliff is running into significant resistance:
ReplyDeletehttp://www.nytimes.com/2012/11/27/us/politics/politics-in-play-over-safety-net-in-deficit-talks.html?hp
This is shaping up to be quite the fight. I'm beginning to think we go over the cliff/slope for sure. I see no way these two sides can agree on anything at this point.
Malmo is right. MMT was out-spent, out-resourced, out-marketed and out-promoted by Peterson and the Debt Doomsday crowd for a long time, but we're finally starting to get some traction and we're getting better at communicating our message. Stephanie is a fine example of the latter.
ReplyDeleteIt doesn't hurt that she's photogenic…oops, taboo subject. :-)
ReplyDeleteBut it's true. We have a right to use all the tools available to us.
It's ok to say she's photogenic as long as you concede that Mike is photogenic as well. Your call Paul.
ReplyDeleteI thought I had was that it would be good to have 2 people interviewed... it provides an indirect message that more than 1 person understands and stands behind the main message...
ReplyDeletersp,
I think the interviewer did a nice job also. He let her talk at length and he asked very good questions and follow up questions. It felt kind of like WF Buckley's old Firing Line as opposed to rapid fire questions and rapid fire answers you see ad nauseum in the MSM formats.
ReplyDeleteChewitup, The people in power are mainly men, so although Mike is photogenic, it doesn't matter as much.
ReplyDeleteShe makes the point about taxes legitimizing a currency, or in other words creating demand for it within said nations. Does anyone know if she holds a hard line that incomes must be taxed, however? Government can still create demand for their currencies by various other means of taxation, such as taxing all land rents for instance, no? Given that consumer demand is a job producer as much as those trickle down gods are from the top, wouldn't it be very job stimulative to significantly reduce or even eliminate all income taxes including FICA?
ReplyDeleteI think that politicians could become very interested in MMT if it is presented to them in a way that they see what is in it for them. The answer is obvious. Politics and policy are all about policy space. MMT expands policy space safely by integrating growth (productive capacity, productivity, etc), employment and price stability, the Big Three of economic concern.
ReplyDeleteConservatives want to limit policy space because they don't like "big government." But it can easily be shown that the issue is not "big government" v. "small government" but rather the right size government for optimal functioning and good government rather than bad government (cronyism and corruption). The issue is basically good capitalism v. bad capitalism in a mixed economy rather than capitalism v. socialism.
"Conservatives want to limit policy space because they don't like "big government.""
ReplyDeleteNevermind the reality that capitalism can't succeed without both government spending and expansion of the persistent money supply (deficits), at least under the current system, and no other system is under discussion so that point is moot.
That is the elephant in the room that no one is willing to acknowledge.
She makes the point about taxes legitimizing a currency, or in other words creating demand for it within said nations. Does anyone know if she holds a hard line that incomes must be taxed, however? Government can still create demand for their currencies by various other means of taxation, such as taxing all land rents for instance, no?
ReplyDeleteIt's really the power to tax that legitimized govt itself, not only the currency. This is why anarcho-capitalists are so worked up about taxation.
No specific tax needs to be levied. Could be just about anything. The US did not have an income tax in the early years, and in fact used tariffs predominantly rather than taxation.
That is the elephant in the room that no one is willing to acknowledge.
ReplyDeleteMost fiscal conservatives don't get this. They think that all three sectors can be in surplus simultaneously and that is what they shoot for.
Fiscal conservatives that get this, however — like John Carney — see the wisdom in MMT.