This is a good Twitter thread and I suggest reading it. I am sure MMT economists will jump in.
Here's an excerpt.
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Brad DeLong: MMT is Abba Lerner's Functional Finance with bells & whistles & some confusions. Manipulate G to stabilize Y & π, manipulate M to get an i to make debt finance sustainable, and rely on π to tell you if your policies are sustainable... If π↑ need G↓
Suresh Naidu: Clearest exposition of MMT in a tweet. Fight me deficit owls!
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BDL has thought this through. That means taking MMT seriously.
Grasping Reality
Sunday Morning Twitter: Functional Finance/A Better World Is Possible Tweeting...Brad DeLong | Professor of Economics, UCAL Berkeley
You mean he has not thought it through at all: this absurd analysis is apparently just a restatement of NAIRU thinking, combined with "rational expectations theory". Bill Mitchell has demolished such arguments again and again. see
ReplyDeletehttp://bilbo.economicoutlook.net/blog/?p=10554
Right. I should clarify that BDL has through it through in the sense of becoming familiar with enough MMT to be able to approach it earnestly in terms of his own POV, which he has declared to be neoclassically based, like Paul Krugman. But, unlike Krugman, BDL has taken the trouble to at least become acquainted with the MMT position enough to treat it seriously. Few other economists have done this.
ReplyDeleteThe good thing is that this provides a platform for MMT economists to engage in a debate rather than having to deal with people that criticize without even having read any of their serious work, which is most critics — now reacting to tweets with back of the hand, off-hand remarks that are uninformed.
The good thing about Twitter is that it is fostering this aware and interaction, whereas this was not happening with blogging very much.
The downside of Twitter discussions of controversial subjects like MMT is that lot of irresponsible professional people make unprofessional comments that influence the framing negatively by perpetuating straw man framing. as in the above thread, "I thought MMT ….."
At least BDL is bringing in Abba Lerner and FF. To his credit, BDL is one of the few economists that pay attention to history of economics and to history in general. The rest act as if there were no history worth speaking of and no significant historical influence. BDL is also aware that economics, especially macro as political economy, is joined with other disciplines at the hip.
The silos are breading down to some degree, it seems, but may be I am being optimistic.
As a matter of strategy, if I were an MMT economists I would see an opportunity in engaging positively with BDL. I think that sometimes Bill may take a confrontational position that obviates that or makes it more difficult.
But to get real traction in the field and politically, American MMT economists are going to need more influential allies than James K. Galbraith. I am confident they know this and are working on it. This also seems to be a reason that Stephanie and Scott are devoting considerable time and effort to Twitter in addition to engaging with the MMT base and expanding it among non-economists.
A related matter regarding strategy is that I think it would be a mistake to overly emphasize MMT purity. It comes across as cult-like behavior. For MTT to get real traction politically it is going to need some of the highly influential economists that will likely continue to remain neoclassical in their m.o. to get on board policy-wise. I think that is now doable with folks like BDL and Joseph Stiglitz, and maybe even Larry Summers. But for that to happen, you can't be too jealous of your ideas and will have to compromise to some degree to get the ball rolling. Power players hold the cards and they know it. The alternative is for them to "discover" the ideas themselves "independently" and take credit for reviving what was known for a long time by previous economists and finance people.
ReplyDelete“NAIRU thinking, combined with "rational expectations theory".
ReplyDeleteDialectic 101...
Debunking MMT in one Counter-Tweet
ReplyDeleteComment on Brad DeLong on ‘SUNDAY MORNING TWITTER: FUNCTIONAL FINANCE/A BETTER WORLD IS POSSIBLE TWEETING...’
(i) The macroeconomic foundations of MMT are provably false. More specifically, the MMT balances equation is proto-scientific garbage.#1
(ii) Because of (i) the whole analytical superstructure of MMT is false.
(iii) Because of (ii) MMT is scientifically worthless.
(iv) Since the founding fathers, in economics, a theory need NOT be true according to well-defined scientific criteria but only politically useful. Economics started as Political Economy and is a cargo cult science since then.
(v) According to the axiomatically correct macroeconomic Profit Law, it holds Public Deficit = Private Profit.
(vi) Because all MMT policy guidance boils down to deficit-spending/money- creation, MMT policy directly and immediately increases macroeconomic profit. Effects on employment/prices are uncertain and secondary.
(vii) Because of (vi) MMTers are the natural useful idiots of the one-percenters.
(viii) The MMT sales crowd promotes an economic theory that is definitively falsified according to the scientific criteria of material/formal consistency in the social media and in the econoblogosphere by pretending that MMT policy is for the benefit of the ninety-nine percenters.
(ix) MMT academics do NOT promote science but provide a cover for the agenda of the one-percenters.
(x) MMT academics suppress critique/refutation of MMT on their blogs and on Twitter.
(xi) The observable unequal distribution of income and financial wealth is the empirical proof (a) of the axiomatically correct Profit Law, and (b), that the deficit-agenda-pushing from Keynes to Lerner to MMT to Trump has been very successful.
(xii) MMT is the easily recognizable tip of the iceberg of political corruption of economics.
(xiii) Brad DeLong’s BETTER WORLD IS POSSIBLE TWEETING does NOT originate from the Republic of Plato but from the Sewer of Romulus and reminds everybody that the internet could, as far as economics is concerned, be an intellectual force multiplier but is actually “a hive of scum and villainy...”
Egmont Kakarot-Handtke
#1 For details of the big picture see cross-references MMT
http://axecorg.blogspot.com/2017/07/mmt-cross-references.html