Friday, March 31, 2023

My podcast interview with MMT professor Randy Wray.

25 comments:

Peter Pan said...

Investing 20 years of your life towards a PhD doesn't mean you abandon your integrity.

We don't have academics, we have crooks.

Footsoldier said...

I wonder what Randy would make of this.


https://newleftreview.org/sidecar/posts/the-french-uprising


I would love to see real change happen, but for me the far right will sweep in and own the hatred with false promises. They will become the face of the opposition ( the saviour of France ) and the blob will survive. Morph and absorb the anger in a way that ensures the status quo, ruling class structures remain.

We've seen it a million times, the many faces the one party nation state can produce with relative ease to fool, coral and herd the public to where they want them. If need be the ruling class will simply wait them out and right off a generation whilst they prepare the next generation as easy pickings.

The hope that this time will be different will fade into history as the blobs ability to give birth to nothing new will win out for eternity. A few decades is all it needs to make people forget it ever faced a threat in the first place.

Footsoldier said...

Trump will play or a far right wing face will play the exact same con trick on America. Millions will fall for it and after the voters are dead, history will act as if they never even existed. A different story to the actual reality will be told in a reaganesc fashion in every class room. That ensures the myth out lives the facts.

Matt Franko said...

Trump gets back in he will direct the Fed to slash rates to 3% on day one….

Lock it,,,

Matt Franko said...

Good job Mike!

Should be using a methodology that doesn’t rely on “framing” ie figurative language..

Footsoldier said...

This type of thinking has bubbled to the surface in MMT circles and should have been strangled at birth.


https://twitter.com/MammothWhale/status/1641699206891991040


All that is ever needed is a job guarentee. Yet, some MMT'rs bend over backwards to win over the basic income crowd. Monkey wrench in any way they can a basic income into the job guarentee.

As per usual it is driven mainly by the Greens to appease the Green leaders that have a sick fetish about basic services incomes.

Footsoldier said...

Neil needs to find some time on his wayland blog to kill this idea of the basic income once and for all. Using this white paper to do so and tear it to shreds.

Peter Pan said...

Basic income is part of the Great Reset, according to right wingnuts.

Matt Franko said...

I’d vote for basic income for Art degree people if they would promise to leave the rest of us normal people alone..,

Tom Hickey said...

MMT opposes the UBI (universal basic income) as ineffective and potentially inflationary. The MMT JG (universal employment guarantee with the JG wage anchoring the currency to labor) is all that is necessary to address the unnecessary and wasteful idling of human resources instead of instituting a full-employment (less transitory) policy fiscally.

However, MMT is not opposed to basic income in principle. A basic income policy that is not universal in scope is compatible with an MMT JG, and it would not affect the efficacy of the JG. MMT economists differ somewhat on this issue while agreeing on the MMT JG.

Arguably, a welfare-based society as opposed to a market-based economy would supplement incomes below the poverty line, in effect eliminating poverty. Others might argue that this could be more effectively and efficiently accomplished by targeted public investment that would increase national productivity.

These are all issues that need further consideration and discussion by taking account of the social, political, and economic factors involved in terms of the system as a whole, which would include ecological, international, regional, national, intranational aspects of the design problem. That is, different countries and different regions might address social, political, and economic issues differently and this may have an impact on other areas. As we are seeing now, climate change, pandemics, and conflicts are involved at the ground level.

Moreover, different groups have different worldviews, e.g, differences in values, different cultures, e.g., civilizational differences, different institutional arrangements, and differences in preference in subgroups. For example, in the US, there is an ongoing discourse over the proper role of the federal government and state sovereignty. Obviously, MTT impacts this since the federal government is sovereign in the national currency while states of users of the currency. This affects how policy options are designed. There could be a uniform national policy or block grants administered by the states. But relying on state funding would be difficult if tax policy was affected. In other words, design solutions are complicated in terms of a complex adaptive system comprised of complex adaptive subsystems.

As I have said, all discussion about such matters is theoretical until the policy is specified in bills to be voted on in liberal democracies since these are hot-button political issues requiring a considerable amount of voter education about them.

Countries that are run as technocracies, notably China, approach matters differently. At this point, China is the leader in addressing poverty, for example. This is being done through a combination of infrastructure improvement rurally and urbanization as agriculture is mechanized. China has a high level of unemployment relative to developed countries measured by per capita GDP, which is consistent with developing countries. Addressing the needs of developing versus developed countries while taking into the factors affecting the issues is a challenge, especially in developing an integrated world at the same time.

Peter Pan said...

Policies advocated by the Great Reset are in the 'one size fits all' category. The pandemic response as orchestrated by the WHO are evidence of that.

Localism is preferable to what these globalist technocrats have in mind.

Footsoldier said...

They try and put as much lipstick on a pig as any marketeer tries to do with the product they are selling. It still won't work for all the same reasons it didn't work before the lipstick was applied.


https://new-wayland.com/blog/basic-income-thief-of-time/

Tom Hickey said...

Localism is preferable to what these globalist technocrats have in mind.

Globalization is in the process of unfolding and has been for centuries and even millennia. It has been the project of empires, the most recent of which is the British Empire morphed into the Anglo-American Empire and its vassals the rest of the West, which regards the rest of the world as colonies.

Now that it is being contested in the confrontation of the multipolar versus unipolar views of what globalization should look like.

While the conflict involves liberalism versus traditionalism, Western liberalism is based on exclusivity, which is incompatible with liberalism being tolerance for a multitude of views. As a result, traditionalists view this as an attempt to dogmatically impose a particular viewpoint that favors the interests of "the golden billion" at the expense of everyone else. Previously, traditionalists had sought the dominance of their views, but presently, the argument of traditionalists is to "let a hundred flowers bloom." History turns out to be ironic.

Polarism suggests an underlying system, here with social, political, and economic factors, and the interface of not only countries and regions but also civilizations.

So while globalization is inexorably underway, how its development will unfold is uncertain, but what is sure so far is that it involves conflicting interests.

Regarding localism, the principle of subsidiarity holds that decisions should be made as close to the parties involved as possible. This is an acknowledgment of localism as essential to the social, political, and economic organization of society.

Peter Pan said...

Globalization violates national sovereignty. Not even empires are exempt from its rules. Look at the World Health Organization proposals for dealing with pandemics. Everyone is expected to sign on, and to agree that WHO diktats shall override constitutional law.

This naked power grab is doomed to failure. There will be a backlash, nationalism will reassert itself, and technocratic 'one size fits all' solutions will be rejected. I consider globalism to be a symptom of the myth of progress.

Along with subsidiarity is the principle of democracy. If a policy affects you, you should have a say in it. The opposite of what the UN, WHO, and WEF believe in.

Tom Hickey said...

Globalization along Western lines (Western-controlled UN, WHO, and WEF) is now dead — unless there would be a world war from which the US emerged victorious. Considering that such as conflict would inevitably go nuclear, that outcome can be rejected. There would not be anything left to win.

That leaves multipolar globalization that preserves national sovereignty (of equals independently of size) and civilizational uniqueness (tradition) under bona fide international law rather than an arbitrarily constructed "rule-based order" operated by and for the benefit of a hegemon.

Actually, it’s a liberal way of balancing traditionalism, whereas a hegemony of exeptionalism is profoundly illiberal.

Peter Pan said...

Globalization that is synonymous with mutually beneficial trade is acceptable. But globalists are too ambitious to be satisfied with that.

Nations with big economies seek to take advantage of smaller economies. They cut trade deals that are skewed in their favor. We can't expect altruism to prevail over the current economic orthodoxy.

Matt Franko said...

“globalization “ is just a figure of speech representing a collection of US Cold War soft power initiatives …

They didn’t work…

You have the two big commie nations China and Russia still belligerent…

Big question will be if those 2 can maintain their current state of material progress without the continuous western prodding and assistance of “globalism”…

Or if they will degrade back into their former archaic form without it…

Peter Pan said...

China and Russia = US and Canada

But China will have to run trade deficits.

NeilW said...

"However, MMT is not opposed to basic income in principle. A basic income policy that is not universal in scope is compatible with an MMT JG, and it would not affect the efficacy of the JG. MMT economists differ somewhat on this issue while agreeing on the MMT JG. "

It's not compatible with the Job Guarantee. In fact it undermines the mechanism by which Job Guarantee is considered an acceptable transfer by the wider population - that if you want any money from the state, and therefor people to *pay the tax* necessary to fund that transfer in real terms, you have to stop self-consuming labour hours and make them available for the service of others.

You have to work in solidarity with those who are working more than they strictly need to in order to provide your necessities.

The central Job Guarantee principle is that you have to offer up your labour hours in return for a fixed income, unless exempted from the work requirement by age or infirmity.

That last bit covers all the 'income guarantee' needs in a society.

The Job Guarantee principle defeats the 'we need to cut benefits to get people to take up all these jobs on offer' line. Everybody already has a job, so private sector jobs need to compete for labour by offering better terms and conditions.

Tom Hickey said...

Neil, I think that is not MMT doctrine. It is Bill's position, but not that of the US MMT economists, most of whom I assume are aligned with the Democrats rather than the GOP. There are several issues involved. First is the people that are not able to perform useful labor will fall through the cracks without welfare transfers that presently exist. Secondly, welfare transfers are an established practice in the US and an essential aspect of the "left," such as it is. Requiring "workfare" in opposition to welfare is a GOP position, and the criticism of the MMT JG as a complete replacement of the presently existing welfare system is considered "workfare." It would not fly politically in the US. This is why the US-based MMT economist differ from Bill on this issue (as I understand it), meaning it not accepted MMT doctrine.

The MMT JG is designed to address employment by a universal job offer for those able and willing to work ("willing" means it is a voluntary program). Technically that gets rid of involuntary unemployment. It still leaves a lot of people below the poverty one and some homeless that are not able to work for a variety of reasons, many even if they were willing to do so.

As I said, talking about the theory is fine to clarify ideas, but show me the bill that is ready to be submitted for a vote to the legislature. In the US, the next step is getting through committed and then through the leadership to be brought to the floor. This is where the rubber hits the road politically and theory doesn't carry much weight.

Tom Hickey said...

“globalization “ is just a figure of speech representing a collection of US Cold War soft power initiatives …

Yes and no. "Globalization" is understood as the imposition of a world order that is based on Western liberal values and principles, but which is really the imposition of a US-led "rules-based order" that solidifies the hegemony of the Anglo-American Empire, in which states other than the US and by association the UK, Canada, Australia and NZ are considered either vassal states or colonies, the latter including the developing world. In reality it is a US-controlled neoliberal order. That project is waning and can only be imposed at this point by submitting Russia and China.

In this sense "globalization" could be considered a figure of speech but if one claims that then one should name which of the recognized figures of speech it is or else propose and define a new figure of speech.

On the other hand, the concept of globalization is well-defined in the relevant disciplines that study such phenomena, such as economics, sociology, and history. This is now a recognized trend. Here, globalization means the effect of communications and transportation technology on cultural fusion, the result being the progressive development of a world culture and global civilization.

I have said previously it will likely take 500 years for this to mature, i.e., it's a long process historically that will gradually replace the 500 year domination of the West and the accompanied Westernization and unite historical civilizations without completely destroying diversity. But in the mature stage, most people won't think very much about antecedents, just as most people now don't think about prior development, e.g., the rise of Western civilization from the Judaeo-Christian tradition, ancient Greek thought, the division of Christendom into Eastern and Western branches, the Protestant Reformation and the subsequent Counter-Reformation, the rise of science, and the advent of Modernity and now Postmodernity.

The world system in entering new and uncharted territory now that Western civilizatino appears to have peaked and the ROW is fast emerging as a force for change.

NeilW said...

" It is Bill's position, but not that of the US MMT economists,"

It's also my position, and many other, and is why the 'Newcastle' MMT approach is moving away from the 'Kansas' MMT approach. The latter is far to US specific, increasingly concentrating on US hang-ups and is becoming of little use to those of us outside the 'Globalist homogenous' bubble, or those who want nothing to do with that political approach.

" It still leaves a lot of people below the poverty one and some homeless that are not able to work for a variety of reasons, many even if they were willing to do so."

There are no cases where JG leaves people below the poverty line, since the purpose of it is to eliminate that issue - for all those who are *willing* to work. The 'able' bit is wrong. JG covers that via the disability and retirement pensions

The only people who are not able to provide labour hours are those who have an infirmity. Once they are signed off by a doctor they receive the wage.

The political issues come about if you narrow the definition of what a 'job' is below 'service to others'.

Giving people money for nothing is a political non-starter. It triggers the broken window effect. The starting political position here in the UK is Universal Credit - where you do have to work to get your payment, or you get sanctioned.

Therefore the battle here is making that payment a living wage, and giving people the ability to choose the 'default job' rather than some poor quality private sector split shift thing. Then widening choice of jobs beyond the 'default job' and getting to the hegemony where the private sector is expected to compete for labour resources.

Tom Hickey said...

There are no cases where JG leaves people below the poverty line, since the purpose of it is to eliminate that issue - for all those who are *willing* to work. The 'able' bit is wrong. JG covers that via the disability and retirement pensions

The only people who are not able to provide labour hours are those who have an infirmity. Once they are signed off by a doctor they receive the wage.


This could be addressed by qualifying the JG in a similar way to full employment. Just as full employment is specific as "full employment less transitional," so too, the JG could be specified as something like "a universal employment guarantee by the currency issuer, including a basic income guarantee for those unable to provide productive work."

However, the devil is in the details, which is why I say I want to see the bill to be submitted to the legislature and see whether it is possible to get agreement from all who qualify as MMT economists, although the range of MMT professionals seems to be expanding to include lawyers, for example. Lacking such agreement, there would not be an "MMT position" on this issue, but rather a range of views.

A bill would have to address the nitty-gritty of criteria for determining eligibility for welfare without work, for instance.

Someone like Rohan Grey, who is both a law professor and a prominent MMT professional, could do this in consultation with other MMT professionals (after some criterion is developed for identifying them). Then the content of this bill would qualify as "the MMT position."

But this is not the end of it. In the US, the bill could be delivered to a sympathetic congressperson, who would then seek a co-sponsor from the other party to gain bipartisan support in committee. If the bill makes it through committee, then it has to be brought to the floor by the leadership of the majority party the House of Representatives for a vote. If it passes there, it would go to the Senate, where it goes through a similar process. If it passes there, then it would go to POTUS for signature as law. Anywhere during the process, the bill may be changed or amended in either House or Senate, or in reconciliation.

So there is really a long way and complicated process this has to go through so while creating a theoretical construct is needed it is just a guideline for the lawyers, lobbyists, and politicians that would be involved. Moreover, something similar would have to happen in other jurisdictions for a JG to be adopted there. Since the process is convoluted, those bills that succeed in getting through the process might not be similar owing to modification for political expediency.

But the beginning of a serious discussion is production of a bill that must be specific enough to deal with all the devils in the details.

Tom Hickey said...

For clarification, it is necessary to bifurcate MMT into the descriptive aspect and theoretical aspect.

The descriptive aspect shows how the monetary system works in general, along with specific descriptions of how this is instantiated institutionally in various countries as special cases of the general case.

The theoretical aspect involves causality, whereas the descriptive aspect does not although institutional arrangements determine the range of possibility, like fiscal space. These causal relationships are based on the institutional arrangement articulated by the descriptive aspect and can be used to formulate policy.

Many policy choices are available so this becomes s political question. All policy questions are resolved by the passage of laws.

The institutional arrangements treated by the descriptive aspect of MMT provide a foundation for legislation, and many views can be legislated on this foundation.

The theoretical aspect also influences the formulation of legislation in terms of the possible, but it also allows for specific proposals unique to MMT.

One of these is the MMT JG. This involves very specific policy and therefore it has to be articulated in terms of a bill or bills that can be adopted by the political authority as law.

This is important since MMT is sometimes represented as the descriptive aspect only or chiefly. This is incorrect.

The theoretical aspect is sometimes also misunderstood as being about policy. It is not. Rather, it is a causal explanation of macroeconomics based on a correct understanding of the monetary and financial systems based on institutional arrangements, which are chiefly legal. While basic accounting practice is customary, accounting standards are legal. This is "the MMT lens" for viewing macro. The MMT JG is part of the theoretical aspect in that it uniquely shows how to achieve the "holy grail" of macro, namely, the reconciliation of the trifecta of growth, employment, and price stability, a trifecta which is otherwise thought to be unachievable.

Understanding of the descriptive and theoretical aspects of MMT enables precise policy formulation based on economic reasoning involving systemic efficiency, effectiveness, and resilience. This means that it is not dependent on a particular political viewpoint or ideology.

While the MMT JG follows from the macroeconomic analysis of MMT, to become effective it has to be expressed as a specific policy proposal in terms of institutional arrangements that can be adopted as a law or regulation. This, of course, involves engaging the political process of a specific jurisdiction.

Peter Pan said...

We have seen how the JG has been removed from MMT with surgical precision. Critics never mention it.

Sort of how trade figures between the US and China are conveniently omitted. All the talk is about 'decoupling'.