Friday, December 21, 2012

Stephanie Kelton — Forget the 'fiscal cliff'

We don't need across-the-board tax increases or spending cuts. We need policies that will create more jobs.
Los Angeles Times | Opinion
Forget the 'fiscal cliff'
Stephanie Kelton | Associate Professor of Economics, UMKC
(h/t Dan Lynch via FB)


Chewitup said...

Now that the sun came up this morning and we are alive and kicking, here is a comment from the LA times this morning Re: SK"s op-ed...

"Stephanie, I've been trying to get an answer from one of the economic outlaws over there at UMK about a presupposition you have, and that is how would mmt (which is a great theory I might add) would work when we have in place a corrupt government a plutocracy you can say, inplace. Then add to the fact we have an apathetic electorate which will not assert there political power?"

This is it in a nutshell. The current politicians have no desire to rock the boat and get blackballed from the K St. parties. Ted Kaufman, the Senator from Delaware got nowhere fast. It has to come from the next generation of politicians.
It's up to the apathetic electorate to put the right people in. Hopefully we will not need another all out crisis to affect change. But I'm afraid grass roots efforts are slow. The next generation needs to learn MMT. The good news is they are more receptive to the blogoshere and less so to mainstream media. The other good news is that a mainstream medium put this op-ed in their paper. And many comments are positive.

paul meli said...

Chewitup, the optiimist in me sees very good signs lately re the emergence of MMT thinking and the realization that this is OUR country and we deservr to be part of it. This doesn't mean we won't lose a few battles along the way, but you know what they say about battles.

My optimist side also paid zero attention to the impending end-of-world doom, thanks for alerting me that it didn't happen.

This reminds me of the kid, dozing in class as the science teacher says the Sun will last about another billion years…this shocks the student back to reality and he asks the teacher…"how many years?".
The teacher responds "a billion" and the kid says "Oh, thank God, I thought you said a million."

Chewitup said...

One of the keys to optimism is patience. Sometime in the next billion years we should get it right.

Matt Franko said...


To the extent that MMT explains the way our current system operates, we already "have" MMT and the concerns this person expresses puzzles me...

I guess this person asserts that we currently have corruption, but we dont have MMT?????

We already "have" MMT.

Looks to me like it came in when thru some fortunate happenstance, Nixon took the US off gold here in this era...

Again this comes down to "morons" vs "corruption".

this person seems to be confused.

What is this person saying?

We dont have MMT but we instead have corruption? That is manifestly FALSE.

We have MMT but it is corrupt? OK so what then get rid of the corruption...

I dont get the logic of these type of concerns when I hear them...


Chewitup said...

Corruption is a case of semantics. I'd say he means that plutocracy infers corruption. Most of Congress are not corrupt but they are morons who believe they are doing the right thing (or they have convinced themselves they are).

Matt Franko said...

Well it may be good to hone the message as you can see from this person's comment " how would mmt (which is a great theory I might add) would work when we have in place a corrupt government a plutocracy you can say, inplace..."

You have to respond to this person IMMEDIATELY with "we already 'have' MMT and the govt is NOT corrupt, but they are too stupid to realize this, etc.."

If you do not do this then the person is left thinking this is "all about corruption" and we cant move forward just like the last 10 years for MMT... this is why we get nowhere...

It's NOT about corruption imo... bringing corruption/conspiracy into this confuses the real issue which is a mathematical ignorance (inability to abstract) on the part of key policymakers...


Chewitup said...

Hopefully one of the UMKC outlaws will respond to him.

Merry Christmas to all at MNE! You all are great. Time to enjoy the weekend.

Tom Hickey said...

People are confused over what MMT is. It's much more than they apparently think. I would point out to questioners like that person in the LA Times comments that there is a body of work coming out of MMT and its academic epicenter, UMKC, chiefly from Randy Wray, Bill Black and Michael Hudson. The work that based on Minsky's analysis of financial instability exposes and documents the corruption that accompanies the Ponzi phase of a financial cycle. Randy, especially, has incorporated Minsky into MMT.

But it's also gone beyond just the Ponzi phase of the financial cycle and has become endemic. Clearly, major reform is needed in addition to accountability. So I would also point to Warren's financial reform proposals, too.

Tom Hickey said...

Most of Congress are not corrupt but they are morons who believe they are doing the right thing (or they have convinced themselves they are).

I would say rather, "Most of Congress are corrupt and they are also morons who believe they are doing the right thing (or they have convinced themselves they are)."

The #1 criterion of getting a party's nomination for office is the ability to solicit donations. In order to come out on top, the contender has to tell donors what they want to hear ideologically and policy-wise. Thus, this system is corrupt institutionally to the core, even through participants may not realize that they are themselves corrupt. It's always the other party that is corrupt.

When Eisenhower was first elected a friend of my father's was elected to the senate.when he came up for re-election, he decided not to run even though he was a shoo-in. He said publicly that it was for personal reasons. He told my father that he could not stand the corruption in government and there was nothing he could do about it, so he was getting out. And this was the Eisenhower years!

Nothing will change unless and until we get the $ out of politics and shut the revolving door.

paul meli said...

"People are confused over what MMT is."

Tom, this is fact, but the reality is even worse.

MMT is a description, as Matt said, of a system that is already in place and is working, yet they do not recognize it.

Nothing has to be done to "implement" MMT, we just don't recognize it.

The world as we know it currently, IS an MMT world.

MMT exists, just as gravity does, except when someone splatters at the foot of a tall building we know what caused it.

When the economy goes "splat", everyone looks around with bewilderment.