Wednesday, December 23, 2020

Who’s Afraid of MMT? — James K. Galbraith

It is not surprising that current and retired central bankers feel threatened by Modern Monetary Theory. With deep roots in the Keynesian tradition and a consistent commitment to achieving full employment, MMT shows that good economics and sound policy doesn't have to be shrouded in obscurantist cant....

Good post. Short, too. 

Project Syndicate
Who’s Afraid of MMT?
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin

9 comments:

lastgreek said...

Dylan Ratigan, for one ;)

Andrew Anderson said...

and a consistent commitment to achieving full employment, ... James K Galbraith

Not full employment but instead full wage-slavery to either the private sector or government.

And since the focus is on providing jobs rather than accomplishing useful work, we can count on eventual make-work as automation takes over more and more useful work.


MMT shows that good economics ... ibid

Good economics doesn't ignore that the liabilities of the banking cartel are, due to government privilege, largely a sham toward the non-bank private sector.

and sound policy doesn't have to be shrouded in obscurantist cant.... ibid

Sound policy would be based on justice, including an ethical banking model. But so far, MMT is for INCREASED* privileges for the banks at the expense of citizens, especially the non-rich.

*eg. unlimited deposit guarantees FOR FREE.
eg. unlimited, unsecured fiat loans at ZERO PERCENT interest.

Matt Franko said...

“ The inconvenient fact that two leading advocates of MMT are women will perhaps have caught the reader’s notice. ”

Playing the gender card...

Hey Tom,

Where in the Plato instruction manual does it say to play the gender card?

Peter Pan said...

How else can he level a charge of sexism?

Matt Franko said...

Instead of playing g the gender card Why doesn’t he just say they those assholes are morons and have no relevant training to be able to understand what is really going on?

Matt Franko said...

“ MMT describes how “modern” governments and central banks actually work, and how changes in their balance sheets are mirrored by changes in the balance sheets of the public – an application of double-entry bookkeeping to economic thought.”

Hey Tom,

Where in the Plato instruction manual does it say to synthesize Science with Dialog?

mike norman said...

"And since the focus is on providing jobs rather than accomplishing useful work, we can count on eventual make-work as automation takes over more and more useful work."

It's what I've been saying for a long time. #UBI

Ralph Musgrave said...

Re Andrew Anderson’s point that private banks enjoy privileges, one important privilege they enjoy is that they are featherbedded by taxpayer backed deposit insurance and multi billion dollar bail outs, whereas OTHER LENDERS do not enjoy that luxury. By “other lenders”, I mean for example pension funds and mutual funds which lend to corporations when they buy corporate bonds. Plus there are the millions of people who are friends of or family members of people running small businesses who lend to those businesses.

Private banks are simply middlemen who put lenders and borrowers together. There’s nothing wrong with middlemen, but there is no excuse for them enjoying taxpayer backed privileges.

Ralph Musgrave said...

More on Andrew Anderson's point about removing bank privileges....

John Cochrane has just published a good article on this subject:

https://johnhcochrane.blogspot.com/2020/12/cbdc-in-eu.html