Wednesday, October 24, 2018

Bill Mitchell — Progressive political leadership is absent but required

One of the themes that has emerged in the discussions of the British Labour Party Fiscal Credibility Rule (which should be renamed the Fiscal Incredulous Rule) is when is the right time for a political party to show leadership and start educating the public on new ideas. The Modern Monetary Theory (MMT) project has been, in part, about educating people even if our ideas have been strongly resisted by the mainstream. The mainstream (New Keynesian) paradigm in economics is degenerative (meaning it has little empirical validation) and eventually it will fade into historical obscurity. For many of us that cannot come quickly enough.
The defenders of the Rule argue that progressive politicians have to tread carefully or else the amorphous financial markets will turn on them and destroy their initiatives. The problem is that by kowtowing to the City or Wall Street, the progressive political forces become captured and redundant. Witness the electoral demise of social democratic parties over the last several decades.
The conditions are ripe (see below) for a courageous head-on attack on these financial market elites and educate the public so that they allow elected governments to legislate for all rather than serving the interests of the elites, which has become the norm over the last several decades. The problem is that progressive political forces are also taking advice from mainstream economists who use the tools of neoliberalism. The upshot is that progressive political leadership is absent but desperately required....
Bill Mitchell – billy blog
Progressive political leadership is absent but requiredBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


AXEC / E.K-H said...

Link on ‘Bill Mitchell — Progressive political leadership is absent but required’

MMT and the overall political corruption of economics

Egmont Kakarot-Handtke

Konrad said...

The Labour Party’s "fiscal credibility rule" is the same as the Democrats “pay-go” plan. Both stipulate that the federal government must balance spending with tax increases.

I haven’t been able to decide whether “fiscal credibility” and “pay-go” are purely neoliberal, or are instead a Labor / Democrat / trick to prevent Tory / Republican attacks on social programs.

If they are a trick, then they work like this…

All sides cling to the lie that the federal government runs on tax revenue, and therefore must “live within its means.”

Armed with this lie, Labor / Democrats say they will agree to Republican demands for cutting social programs if Republicans will agree to paying more taxes. Since Republicans / Tories hate taxes even more than they hate social programs, they are prevented from cutting social programs.

Now, however, Republicans want to have their cake and eat it too. Last year Republicans pushed through massive tax breaks for the rich. Now, Republicans want Social Security and Medicare to be slashed in order to “pay for” their tax cuts.

Normally Republicans could not get away with such hypocrisy. However we are in the age of Trump. The peasants are so sick of political correctness, identity politics, and Russia-gate that most of the the peasants will eagerly put their necks on any chopping block that Trump and the Republicans offer to them.

Cut Medicare? Why not? Privatize Social Security? Fine. At least Republicans aren’t communists.

On the other hand, “fiscal credibility” and “pay-go” may not be tricks. Labour / Democrat leaders may simply be neoliberals.

Democrats could have pushed through Universal Medicare when they last controlled the US Congress (2007-2011) but instead they passed Obama-care, which is a giant giveaway to the giant insurance companies.

“The public are ready for progressive leadership.” ~ Bill Mitchell

Yes if “progressive” means things like Universal Medicare.

No if “progressive” means more identity politics and political correctness.