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.
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Wednesday, April 24, 2013
Stephen Colbert DESTROYS Reinhart and Rogoff. Hilarious!!!
One commenter indicates a set of characteristics which is fairly common in many US cities:
Antifaschistische Antifaschistische's picture
In my unnamed city, I can drive on some new boondoggle freeways and spend my time in high income neighborhoods and feel like the world is wonderful. However, if I ever become adventurous (and I have) and decide to do something like...take common city streets 20 miles from my place to the airport...
30% of what I drive through looks like once great neighborhoods now overcome by weeds (of the plant variety) and weeds of humanity.
50% doesn't even look like freakin America....it looks like a trip to Tijuana or Laredo. (ps..I love Mexico so don't junk me for this...it's just a real observation)
10% looks like some soon to be failed attempt at "revitalization"
10% is just given up on and leveled
by the way, my unnamed city is at the top of the economic growth list for the entire US of A.
It’s easy to overestimate the differences between UMass and more mainstream departments. [...] even the “left Keynesians” of Amherst don’t go as far as some of their peers at, say, the University of Missouri – Kansas City in dismissing the possibility of high deficits leading to inflation later on.
“It’s almost a talmudic claim that since no country with its own currency can go bankrupt, no deficit can be bad,” Epstein says. “They’ve made important contributions, and a lot of them are my friends, but we try to look at things more critically and not assume there are absolutes.”
FFS, how do they not know better? And if they do know better, why do they say it?
geerussell, I hope I can say what I'm thinking: I think no one really knows whether [Federal] deficits "can be bad".
I think know one knows, because the things that really ARE causing the problems in our economy have been going bad for so long that the whole world has gone thru the looking glass, so to speak.
When nothing is normal, it is impossible to truly evaluate whether something that IS NOT a problem, COULD BE a problem... not that it really matters anyway.
We would do well to agree on the IS NOT, for now, and stop making pronouncements that are as extreme in their own way as those of Austrians and gold buggers.
Art, the MMT economists are pretty clear that deficits and debt are never, ever "bad" in absolute figures, and most ratios involving them are irrelevant.
The ratio that is relavant is the interest rate and the rate of growth of the economy. But a govt that is sovereign in its currency can control the interest rate through its central bank if it chooses, that is not an issue either.
What does matter is price stability and currency stability, and policy makers do have to take those into account wrt to the deficit and debt.
And even the “left Keynesians” of Amherst don’t go as far as some of their peers at, say, the University of Missouri – Kansas City in dismissing the possibility of high deficits leading to inflation later on. “It’s almost a talmudic claim that since no country with its own currency can go bankrupt, no deficit can be bad,” Epstein says. “They’ve made important contributions, and a lot of them are my friends, but we try to look at things more critically and not assume there are absolutes.”
This is inaccurate and misrepresents the MMT position, which has been articulated in detail, making clear that while insolvency is not a risk operationally for a currency sovereign, inflation is. Apparently, the Amherst folks either have not read the MMT economists on this, or they don't understand their work, or just disagree, e.g., are part of the circuitist cohort that disagrees with MMT.
I get what you're saying but that's kind of a different thing than the complaint I'm making.
Suppose after a few direct exchanges with you and reading the bulk of what you've written at your blog and in comments elsewhere, I were to turn around say "Art claims no private debt can be good, but I try to look at things more critically and not assume there are absolutes".
At best, there's a mystery as to how your position got lost in translation and repeated in caricature form. At worst, I'm intentionally misrepresenting you.
Now multiply me times, oh... everyone give or take about a dozen people. Every time, you describe a nuanced position and it gets echoed back to you in straw-man form and critiqued on that basis. That's pretty much where MMT is. Regardless of what MMT'ers say or how they say it, it gets translated as "deficits don't matter".
L. Randall Wray and Dean baker have both gone on record saying their requests for the R&R data were ignored, yet they released it to a grad student.
ReplyDeleteDid they think a student from a non-Ivy League school would be too stupid to figure it out? Anyone have insight into this?
Bill Mitchell too.
ReplyDeleteBy the way, Zero Hedge has an article describing the effectiveness of austerity and other elite planning efforts wrt deterioration of US cities:
ReplyDeletehttp://www.zerohedge.com/news/2013-04-24/america-fallen-24-signs-our-once-proud-cities-are-turning-poverty-stricken-hellholes
One commenter indicates a set of characteristics which is fairly common in many US cities:
Antifaschistische
Antifaschistische's picture
In my unnamed city, I can drive on some new boondoggle freeways and spend my time in high income neighborhoods and feel like the world is wonderful. However, if I ever become adventurous (and I have) and decide to do something like...take common city streets 20 miles from my place to the airport...
30% of what I drive through looks like once great neighborhoods now overcome by weeds (of the plant variety) and weeds of humanity.
50% doesn't even look like freakin America....it looks like a trip to Tijuana or Laredo. (ps..I love Mexico so don't junk me for this...it's just a real observation)
10% looks like some soon to be failed attempt at "revitalization"
10% is just given up on and leveled
by the way, my unnamed city is at the top of the economic growth list for the entire US of A.
So there's this in the washington post:
ReplyDeleteInside the offbeat economics department that debunked Reinhart-Rogoff
It’s easy to overestimate the differences between UMass and more mainstream departments. [...] even the “left Keynesians” of Amherst don’t go as far as some of their peers at, say, the University of Missouri – Kansas City in dismissing the possibility of high deficits leading to inflation later on.
“It’s almost a talmudic claim that since no country with its own currency can go bankrupt, no deficit can be bad,” Epstein says. “They’ve made important contributions, and a lot of them are my friends, but we try to look at things more critically and not assume there are absolutes.”
FFS, how do they not know better? And if they do know better, why do they say it?
Ill be blunt: you Yanks have screwed us here Down Under... :-)
ReplyDeletePeople all over the world know of the Reinhart/Rogoff fiasco. We here still cite those two as scholarly research.
http://grattan.edu.au/publications/reports/post/budget-pressures-on-australian-governments/
Check the footnotes and references.
We're fucked.
@ geerussell
ReplyDeleteThe Amherst folks apparently are deficit doves and debt fetishists, too.
geerussell, I hope I can say what I'm thinking: I think no one really knows whether [Federal] deficits "can be bad".
ReplyDeleteI think know one knows, because the things that really ARE causing the problems in our economy have been going bad for so long that the whole world has gone thru the looking glass, so to speak.
When nothing is normal, it is impossible to truly evaluate whether something that IS NOT a problem, COULD BE a problem... not that it really matters anyway.
We would do well to agree on the IS NOT, for now, and stop making pronouncements that are as extreme in their own way as those of Austrians and gold buggers.
Get Thomas Herndon on the MMT bandwagon! He'd be great
ReplyDeleteArt, the MMT economists are pretty clear that deficits and debt are never, ever "bad" in absolute figures, and most ratios involving them are irrelevant.
ReplyDeleteThe ratio that is relavant is the interest rate and the rate of growth of the economy. But a govt that is sovereign in its currency can control the interest rate through its central bank if it chooses, that is not an issue either.
What does matter is price stability and currency stability, and policy makers do have to take those into account wrt to the deficit and debt.
And even the “left Keynesians” of Amherst don’t go as far as some of their peers at, say, the University of Missouri – Kansas City in dismissing the possibility of high deficits leading to inflation later on.
“It’s almost a talmudic claim that since no country with its own currency can go bankrupt, no deficit can be bad,” Epstein says. “They’ve made important contributions, and a lot of them are my friends, but we try to look at things more critically and not assume there are absolutes.”
This is inaccurate and misrepresents the MMT position, which has been articulated in detail, making clear that while insolvency is not a risk operationally for a currency sovereign, inflation is. Apparently, the Amherst folks either have not read the MMT economists on this, or they don't understand their work, or just disagree, e.g., are part of the circuitist cohort that disagrees with MMT.
Art,
ReplyDeleteI get what you're saying but that's kind of a different thing than the complaint I'm making.
Suppose after a few direct exchanges with you and reading the bulk of what you've written at your blog and in comments elsewhere, I were to turn around say "Art claims no private debt can be good, but I try to look at things more critically and not assume there are absolutes".
At best, there's a mystery as to how your position got lost in translation and repeated in caricature form. At worst, I'm intentionally misrepresenting you.
Now multiply me times, oh... everyone give or take about a dozen people. Every time, you describe a nuanced position and it gets echoed back to you in straw-man form and critiqued on that basis. That's pretty much where MMT is. Regardless of what MMT'ers say or how they say it, it gets translated as "deficits don't matter".