William Mitchell — Monetary policy in the hands of the central banker sociopaths is advancing the class interests of the elites

Recently, I wrote about the conditions that dictate what impacts interest rate changes will have on aggregate spending and demand-driven inflation in direction, magnitude and temporality – see RBA governor’s ‘Qu’ils mangent de la brioche’ moments of disdain (June 8, 2023). It is highly likely in many cases, the decisions by central banks to increase interest rates, ostensibly to ‘fight inflation’ actually make inflation worse. More people are starting to understand that point even though central bankers appear to be still talking big about further interest rate rises. But the evidence is mounting against their position and ultimately that evidence is exposing the deep flaws in mainstream macroeconomics. I argue today that the problem is not only that the interest rate hikes can be inflationary but they are also facilitating a major reinforcement of the class divisions in our societies whereby the low income cohorts are transferring massive income benefits to the higher deciles. I also discuss cricket which recently has provided a demonstration of how the class divisions work. Then some music, given it is a Wednesday.

Macroeconomics meets reality. Conventional economics is approached as a theoretical science rather than a practical one. Heterodox economics, beginning with Marx, takes a practical approach that seeks to align economics with real-world opportunities and challenges rather than account for price changes and their expected consequences in terms of "the natural forces" of the market. Heterodox economics does this by extending the purview of economics beyond so-called natural market forces. These conditions include social and political factors and institutional arrangements that affect economic behavior. This is where significant factors like class enter the equation whereas they are excluded by the methodological assumptions of the conventional approach.

William Mitchell — Modern Monetary Theory
Monetary policy in the hands of the central banker sociopaths is advancing the class interests of the elites
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

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