Bill takedown of Sabine Lautenschläger, member of the Executive Board of the ECB and former Vice-President of the Bundesbank, presents a suitable opportunity for me to inject my own experience over the past several weeks following many hits from Google alerts on "MMT" and associated topics, including the MMT economists. I have not posted these since they are so off-base they are not even worth commenting on, and they are also repetitious. All wrong in pretty much the same ways.
There as been a running debate for some time here in the comments over whether the drivel about about MMT that appears in the corporate media from so-called experts in economics and finance is owing to ignorance or a desire to malign and marginalize MMT, or perhaps a combination thereof.
I have taken the position that experts are expected to know better, so the presumption is bad faith and malicious intent.
However, I have had to change my mind on this. Now it seems to me that what I have been reading is a matter of ignorance and that the supposedly top people in economics and finance, who should know the realities of what they dealing with, e.g., the relevant institutional arrangements and accounting, don't. They are almost uniformly clueless. Worse, many don't want to know, since their minds are already made up. This is especially alarming when these people wield power in shaping the narrative and directing policy.
Even more surprising is that the hands-on financial people that have a monetary stake in the game are similarly clueless, other than a few exceptions, notably Jan Hatzius, chief economist at Goldman and some economists at the Bank of England. (This is not too surprising, since Wynne Godley developed his ideas of monetary economics while serving at Treasury, and Hatzius brought Godley to Wall Street.)
Not that there has been no adverse intent involved in this all. Most of the these people are heavily invested reputationally in a wrong paradigm and admitting this would be disastrous for them. So at least some self-protection is also likely involved.
Then there is also the pressure of group think.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" — Upton Sinclair, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109.
Bill Mitchell – billy blog
ECB denial is just embarrassing
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
ECB denial is just embarrassing
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
5 comments:
Only a handful of people in finance need to understand government finance. Even most bond fund managers mainly make money from trading corporate spreads. So they go with the groupthink.
"However, I have had to change my mind on this. Now it seems to me that what I have been reading is a matter of ignorance (...) Then there is also the pressure of group think"
Thanks god, Tom! Finally, you can see it. Is this a tipping point for Mike Norman Economics? I hope so.
The issue is not bad faith and malicious intent (at least not for most of the cases). The issue is ignorance. We should stop with that conspiracy theory thing and understand that ignorance is the enemy here!
MMTers: too much mind-reading, too little thinking
Comment on Bill Mitchell/Tom Hickey on ‘ECB denial is just embarrassing’
Tom Hickey recounts the highlights of his spiritual development: “There as been a running debate for some time here in the comments over whether the drivel about about MMT that appears in the corporate media from so-called experts in economics and finance is owing to ignorance or a desire to malign and marginalize MMT, or perhaps a combination thereof. I have taken the position that experts are expected to know better, so the presumption is bad faith and malicious intent. However, I have had to change my mind on this. Now it seems to me that what I have been reading is a matter of ignorance and that the supposedly top people in economics and finance, who should know the realities of what they dealing with, e.g., the relevant institutional arrangements and accounting, don’t. They are almost uniformly clueless. Worse, many don’t want to know, since their minds are already made up.”
This follows immediately Bill Mitchell’s lengthy psychological study about groupthink among mainstream economists.#1 And somebody recently asked Why does everyone hate MMT?#2 Not surprisingly, as shrewd psychologists, MMTers put forward a plausible explanation: MMT is rejected because of “ignorance or a desire to malign and marginalize MMT, ….” This exemplary psycho-social diarrhea is the main constituent of economic debates since time immemorial.#3
True, there is a lot of BS in the media about MMT but this does NOT justify to answer it with counter-BS. What one has to realize is that the whole Mainstream vs MMT blather is way beside the point. As Schumpeter admonished his mentally retarded co-economists long ago: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”
The point is NOT whether MMT is loved or hated but whether it is true or false. This whole psychological/motivational mind-reading exercise is nothing but a distraction from the scandal that both Mainstream and MMT is proto-scientific garbage.
Fact is that MMT has been refuted on all counts.#4, #5, #6, #7, #8 More specifically, it is a mathematical fact that the MMT sectoral balances equation is false.#9 Because the foundations are false the whole analytical superstructure and the economic policy guidance are false.
It is a curious fact that MMTers do not answer to the proof of material/formal inconsistency. Instead, they do what they accuse the Mainstream of: denial, PsySoc filibuster, blocking, and censoring. Applying Tom Hickey’s mind-reading to MMT itself: “Most of the these people are heavily invested reputationally in a wrong paradigm and admitting this would be disastrous for them. So at least some self-protection is also likely involved.”
In combination with the proven material/formal inconsistency of the MMT approach, this leaves but one psycho-social conclusion: MMTers are stupid or corrupt or both.
Egmont Kakarot-Handtke
References
https://axecorg.blogspot.com/2019/04/mmters-too-much-mind-reading-too-little.html
@ André
True enough. However, experts are supposedly bound ethically and iaw best practice to be intimately acquainted with their field. Many if not most of these people appear to be guilty of negligence rather than bad faith, but such negligence is a serious failing when in a position of trust. This is called "culpable ignorance."
"experts are supposedly bound ethically and iaw best practice to be intimately acquainted with their field"
Agreed.
But things are so twisted in economics that many "experts" don't even understand that they are no experts at all. To make things worse, there is a lot of group think (just see Bill Mitchell's work), ego and life long careers at stake.
To make it even worse, there is also criminal activity, in the form of plain and simple fraud and similar. However, I don't think this the norm...
Post a Comment