While this is a mostly good piece on Warren, Lowrey gets enough of it wrong to call into question her ability as a reporter. Yes, Warren designed and built a yacht, and he designed and built great race cars (even if his first model was called one of the fifty worst cars ever–for its unorthodox looks, not for its performance). It is also true that Modern Money Theory has taken off in the blogosphere, where it has picked up tens of thousands of followers. And Warren just completed a whirlwind speaking tour in Italy that attracted hundreds of listeners even in small towns. (Try that, any other American economist!)
The rest of her piece is filled with bias and mistakes...Economonitor
Warren Mosler & MMT: Deficit Lovers?
L. Randall Wray | Professor of Economics, UMKC
Bonus: Randy explains the real interest rate.
So I think the bottom line of Randy's piece is that MMT doesn't deny that government spending can increase the real interest rate. It depends on how Fed responds and how the spending impacts inflation expectations.
ReplyDeleteRight, Dan.
ReplyDeleteIt was a mumbo-jumbo quote to begin with, which is Thoma's fault. He threw out some mumbo-jumbo to discredit MMT. He just shows that Thoma is confused, IMO. It's also possible that the NYT author just picked something way out of context, which would be in keeping with the rest of the column...
Who knows what Thoma actually said.
ReplyDelete"Deficit" indicates a lack so it is automatically pejorative. How about the expression "Bonus tax credits" instead?
ReplyDeleteF. -- There has been a suggestion made that we use something like "the government's net contribution to the economy." Not that your suggestion is inaccurate, but most people don't understand that our currency is valuable because it can extinguish a citizen's tax obligations. Also, almost any mention of taxes, even tax "credits", has at least some negative connotations.
ReplyDeleteI think it's Dan Kervick who has written eloquently on relabeling deficits as the government net contribution. (Apologies in advance, Dan, if I have confused you with someone else.)
John, I think that's Mike Hoexter you're thinking of.
ReplyDeleteWray is being far too pessimistic;
ReplyDeleteany PR is good PR; that's stage 1
the most surprising thing about Annie Lowrey's article is that it completely ignores the most simplistic points that Warren makes - that there's a difference between economic theory and existing currency operations;
and that theory & actual operations do have to reconcile in daily life
http://economix.blogs.nytimes.com/2013/07/04/warren-mosler-a-reading-list/
ReplyDeletethis follow up at the NYT is much more useful for those realizing they should at least know the rudiments of existing currency operations
should be very useful
Wholeheartedly agreeing with F. Beard, and still using "positive" and "negative" balance rather than surplus and deficit when I discuss these issues with people who don't know much about them. If they think of "negative" as a negative I simply analogize the positive and negative terminals on a battery. One isn't better than the other but both are needed to function.
ReplyDelete"One isn't better than the other but both are needed to function."
ReplyDelete…and one must have a higher charge than the other or nothing moves…
I read it at the NY Times
ReplyDeleteThey still have to publish Krugman so don't expect them to give a proper reflection ...
Fwiw I'm trying to expose the Peterson people as morons..... vice 'dishonest'. They're Blind to authority and have inadequate math cognitlve abilities ... rsp
ReplyDelete