The Smith Family manga continues – Episode 6 is now available….
😂😂😂
BREAKING 🚨: Short Sellers
— Barchart (@Barchart) November 22, 2023
Hedge Fund short sellers sustained losses of approximately $43 billion over the past few days pic.twitter.com/k2FXpsY0cZ
What Art Degree Monetarist wouldn’t be short into this:
You’d have to be…
Beijing: China needs to decisively ramp up fiscal spending so it can support an economy damaged by Western restrictions on trade, according to a Chinese scholar studying an unconventional school of economic thought.The Star
Jia Genliang – the co-author of the new book Modern Monetary Theory in China and a professor at the Renmin University of China in Beijing – said China should lift its headline deficit ratio to above 5% of gross domestic product on average for the next decade.…
Jia is one of the most prominent Chinese proponents of Modern Monetary Theory (MMT), whose principle is that countries which borrow in their own currencies don’t face a real debt limit because they can print money to pay for it. That theory has attracted attention in China over the past few years as authorities relied more on fiscal stimulus and infrastructure investment to help a slowing economy.
Episode 5 in our new weekly Manga series – The Smith Family and their Adventures with Money – is now available. Have a bit of fun with it and circulate it to those who you think will benefit …
I have just finished reading the excellent new book by Branko Milanovic. It’s called “Visions of Inequality” and is a tour through the history of economics since the days of Quesnay. More specifically it takes a look at how a handful of prominent economists have treated the topic of inequality. Most of you will have covered this territory before, but examining how people such as Quesnay, Smith, Ricardo, Marx, Pareto and Kuznets discussed the problem of distribution is not only an excellent refresher on their individual thought, but is also a tour through the evolution of economics itself.…
In his very long seventh chapter, where he lays bare the lean years for the study of distribution, he goes on offense. He prefers to call the economics developed during those mid to late twentieth century decades “Cold War” economics because it was ideologically tainted by the preferences of the American ruling class. It also suffered a catastrophic breakdown of method. The two go hand in hand. In order to eliminate power — and thus by definition things such as class — economics reduced its boundaries and focused only on matters that did not disturb its patrons.…
Power matters. The study of inequality allows us to reconnect economics with reality….
NEARLY 30 YEARS AGO, a New York fund manager named Warren Mosler noticed a discrepancy between what he saw day-to-day in his interactions with the Federal Reserve and the way almost all academic economists write about money. The way they write, you would think currency-issuing governments need to tax before they can spend — Mosler noticed it is the other way around.
Getting this wrong is not trivial. It biases policy narratives. It misleads politicians into thinking that there is something inherently good or sustainable about budget surpluses. It misleads them into worrying about finding the money to meet their commitments when that is the wrong question to ask.
It’s Wednesday, and today I discuss the latest US inflation data, which shows a significant annual decline in the inflation rate with housing still prominent. But for reasons I discuss, we can expect the housing inflation to fall in the coming months. I also discuss how on-going fiscal ignorance allows the Australian government to avoid investing in much-needed fast rail infrastructure which would solve many problems that are now reducing societal well-being. And then some of the best guitar playing you will ever hear.…
The resurgence of economic orthodoxy is a great example of how declining schools of thought can maintain dominance in the narrative for extended periods of time if the vested interests are powerful enough. In the case of the economics profession, mainstream New Keynesian theory persists because it serves the interests of capital. Recently, the IMF urged the Australian government to engage in ‘fiscal consolidation’ in order to support further interest rate hikes by the RBA aimed at reducing inflation quickly. In general, the IMF is urging nations to engage in fiscal austerity in order to bring their public debt ratios down. The problem is that even their own research shows that these fiscal adjustments on average do not succeed. And, usually, they leave a damaged society where the lower income and disadvantaged cohorts are forced to endure the bulk of the negative effects....William Mitchell — Modern Monetary Theory
Given yesterday’s detailed monetary policy analysis, I am using today to present an array of news items and some brief analytical thoughts on central bank monetary policy. The latter is based on a very interesting speech that the governor of the Bank of Japan gave in Nagoya earlier this week. The juxtaposition with the way the Western central banks are behaving at present is stunning. There is also some self promotion and some announcements. Then we get to listen to Ron Carter. A good day really.William Mitchell — Modern Monetary Theory
Episode 4 in our new weekly Manga series – The Smith Family and their Adventures with Money – is now available. Have a bit of fun with it and circulate it to those who you think will benefit …William Mitchell — Modern Monetary Theory
It follows from what has been said that a “shortage” of money with the state is not a technical shortage. Thus, it is never the lack of “money” that causes the state to be unable to spend, but always the lack of resources that causes the state to be unable to get what it wants. Money moves resources. If there are no resources, nothing is moved. However, if resources are the monopolist of money — the government with its central bank — can move it even when the political will is there. This applies to wars, but also to social programmes. The state can always afford to pay money to the poor or create employment for the unemployed. It is always a question of political will....Monetary Policy Institute Blog #106
Whoa! October employment report…
What about all the MMT free munnie interest income (to people who are already bazillionaires) from the higher rates somehow creating a Democrat regime economic nirvana? Perhaps not? 🤔
This and the initial 1.2% Q4 from the Atlanta Fed has this thesis not looking too good so far I’d say…
U.S. hiring slowed to 150,000 jobs in October. The unemployment rate rose to 3.9% https://t.co/7dLb8rYpLg
— Real Time Economics (@WSJecon) November 3, 2023
Greetings from the Pearl of Africa!
Today, I had a very productive visit to Kampala, Uganda, the Pearl of Africa, with my dear friend Julius Mucunguzi (we were colleagues in Addis Ababa, Ethiopia). I had two long deep-dive conversations with senior government officials, Minister of State for Industry, the Hon David Bahati, and Uganda's Permanent Representative at the United Nations, Ambassador Aadonia Ayebare.…
Episode 3 in our new weekly Manga series – The Smith Family and their Adventures with Money – is now available. Have a bit of fun with it and circulate it to those who you think will benefit …
This month, we speak with Larry Johnson, associate professor in the Social Foundations of Education Program at the University of South Florida, Saint Petersburg. In his pedagogy, Johnson focuses on the complex relationship between education, culture, and society with the goal of exploring policies and practices from historical and contemporary perspectives that address structural inequality, and transforming educational institutions into sites for social justice. Johnson is notably a long-time proponent of Modern Monetary Theory (MMT) and variously mobilizes MMT’s insights when training our teachers-to-be....
Just Money Featured ArtistsArtist Spotlight
Episode One image: "If the taxpayers fund the government spending and they get the money from businesses who get it from the taxpayers when they buy things, then were do the taxpayers get it from?
Episode One
The Centre of Full Employment and Equity’s MMTed project has recently launched a new manga comic book series entitled “The Smith Family and their Adventures with Money”. A collaboration between Modern Monetary Theory (MMT) pioneer and Economics Professor William Mitchell and Japanese manga artist and designer Mihana (@mihana07: https://twitter.com/mihana07), the series explains the fundamentals of MMT in a straightforward, nontechnical way through the experience of the middle-class Smith family. Professor Mitchell works on the scripts and website code and layout, while Mihana works on the graphics and layouts of cartoon. Mihana’s artistry here comes into its own. Their characters operate on the ground of everyday life with spell-binding animation and esprit. As they interact, they transform arcane economic questions into accessible issues relevant to all of us....
Oops! Down to 1.2% projected for Q4…. Let’s see if the MMT people repost this one … (Tip: don’t hold your breath waiting doesn’t fit the Democrat narrative).
On November 1, the initial #GDPNow model nowcast of real GDP growth in Q4 2023 is 1.2%. https://t.co/OnYxN0CQUF #ATLFedResearch
— Atlanta Fed (@AtlantaFed) November 1, 2023
Download our EconomyNow app or go to our website for the latest GDPNow nowcast. https://t.co/ISzNblWfFW pic.twitter.com/u9CweBwBaD
Hard to see how a few $100B of additional free interest munnie paid to people who probably have zero propensity to spend it is somehow going to create this wonderful economy after same said rate increases destroy over half a $1T of bank capital… 🤔
Atlanta Fed was fairly prescient in Q3 and was bumping up their 3Q GDP Nowcast most of 3Q coming out pretty close when all was said and done for Q3 …… going to have to see if this happens again in Q4 … but they are now starting from a pretty shitty +1.2%
One of the founding concepts of Modern Monetary Theory is sectoral balances. And its power lies in its simplicity. Every economy can be broken down into three sectors: The government sector, the private sector (which includes me and you) and the foreign sector. Assuming a balanced budget, then government spending increases our net-wealth. A government deficit is our surplus.
I ran across a couple lame attempts at blaming the U.S. Treasury for not extending the duration of issuance during the pandemic low in yields. This is entirely typical for market commentary — going after fiscal policymakers and ignoring the major culprit, which is the central bank. To the extent that the United States has put itself into an awkward macro stabilisation situation with respect to interest rate expenditures, it is the result of the brain trust at the Federal Reserve.
One could try arguing that if the Treasury lengthened issuance maturities and the Fed buys those bonds back, the Treasury has locked in their funding cost and that is all that matters. The problem is that approach ignores that the Fed is a wholly-owned subsidiary of the Treasury1, and so when the Fed blows itself up on hare-brained levered rates positions, the Fed losses will work its way into the fiscal accounts via reduced dividends. Financial accounting consolidates wholly-owned entities for a reason....
It’s Wednesday and I use this space to write about any number of issues or items that have attracted my interest and which I consider do not require a detailed analysis. The issues discussed may be totally unrelated. Today, I provide my response to yesterday’s decision by the Bank of Japan to vary its Yield Curve Control (YCC) policy, which some commentators are frothing about. The change was very minor and is not a sign that the expansionary position of the Bank is shifting significantly. I also discuss the culture of denial in the US State Department and then rock out to come classic swamp....
Cleveland Fed now at 0.07% for October:
Projects to less than half their alleged “inflation” target…
Meanwhile these psychos want to still appear “hawkish”… 🤔
