John Cochrane has given us yet another example of how neoclassical economics differs from MMT on the question of fiscal policy. Arguing that there is "nothing new to MMT" is not paying attention.Bond Economics
Yet Another Example Of Mainstream Handwringing About Debt
Brian Romanchuk
Plus as part of his attempt to show there is nothing new in MMT, he cited a recent article by Olivier Blanchard (former chief economist at the IMF). The article advocated MMT ideas, which according to Cochrane, showed there is nothing special about MMT. What Cochrane failed to mention, as I made clear in a comment after one of his articles, is that Blanchard has very much shifted his ground towards a more MMT outlook over the last 5 to 10 years.
ReplyDeleteI.e. Blanchard is one of the many who is guilty of the old trick: "First you ignore them, then you mock them, then you claim it was your idea all along".
Those crying "nothing new" seem to forget that MMT is entirely new in the area that matters.
ReplyDeleteWe don't look at confiscating excess net savings, or trying to hide them by pushing offsetting private debt. We just accommodate it as we see it as inert. We sack the central bankers, replace them with civil servants and lock the interest rate - preferring to handle stabilisation via the auto-stabilisers.
And that's the bit they can't get their head around.
He is just seeing some of the parts of previous people’s theory synthesized into MMT.., then says “it’s not new!”...
ReplyDeleteIt’s not supposed to be recognized as “new!”... it’s supposed to be recognized as a synthesis ....
It’s like saying a human born being with blue eyes isn’t “new!” because there have been previous people who had blue eyes...
And that's the bit they can't get their head around. NeilW
ReplyDeleteLet me help, MMT in a nutshell:
1) Unlimited welfare for the banks and by extension for the rich, the most so-called "credit worthy."
2) Wage slavery to government for the victims.
3) Taxes on the non-rich to curb price inflation.
4) The elimination of positive yields and interest on inherently risk-free sovereign debt but even this one good thing does not go far enough since such debt can and should command NEGATIVE yields and interest.
And btw, Neil it CANNOT be said that grossy unequal ownership of real assets such as land are "inert" but cause real hardship in the way of homelessness.
So where are MMT's land reform proposals? Hmmm?
”Let me help,”
ReplyDeleteYou didn’t help. You just being dishonest again pushing your own agenda.
Andrew Anderson: Hope you like the letter which I wrote recently, and which the Financial Times published, which I managed to get several economists to sign. It attacked the privileges available to banks which are not extended to other lenders under the existing fractional reserve system. This is the link to it:
ReplyDeletehttps://www.ft.com/content/f128ffd8-1d28-4f9b-b3aa-4b798ebdae3e
The letter sometimes looks like it's behind a pay-wall when trying that link. If it does, try Googling the title of the letter and one of the authors, i.e.: "It's time to reconsider full reserve banking" and Huber or Hulsmann.
AA all you have to do is create your own theory as an antithesis to MMT... and promote it heavily...
ReplyDeleteThen when you eventually die your survivors will synthesize some of your stuff into other theories...
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