An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Monday, October 21, 2024
Pepe Escobar —Date With Destiny–BRICS Offers Hope in a Time of War
Sputnik International
Pepe Escobar: Date With Destiny - BRICS Offers Hope in a Time of War
Sunday, October 20, 2024
BRICS plans ‘multi-currency system’ to challenge US dollar dominance: Understanding Russia’s proposal — Ben Norton
The BRICS Cross-Border Payment Initiative (BCBPI) will use national currencies, instead of the US dollar. Russia’s finance ministry and central bank released a report detailing plans to transform the international monetary and financial system.
BRICS—facts and figures — Peter Hanseler/Denis Dobrin
IntroductionVoice from Russia — The trilingual blog about geopolitics and geoeconomics written by a Swiss living in Moscow
In the first part of this year’s BRICS series, we described the geopolitical environment in which BRICS is currently operating and trying to evolve. This environment has changed for the worse since the last BRICS summit in South Africa last August.
The consequence is that BRICS cannot develop freely, because on the one hand, the decisions – especially those of the USA – regarding the wars in Ukraine and the Middle East, the situation in the financial markets and finally the elections in the USA will have serious consequences for the whole world. On the other hand, the decisions of the BRICS regarding the admission of new members and the introduction of a currency (unlikely) or a payment and settlement system (likely) will also have a major impact on the overall geopolitical situation.
This article deals with the facts and figures of the current state of this organization, the figures including candidates for admission (BRICS+) and an outlook with figures including interested countries (BRICS++). In a subsequent article, we will cover the topic of a new currency and a new payment and settlement system.
BRICS – facts and figures
Thursday, October 17, 2024
The Boy Who Cried Wolf About Government Debt —Yeva Nersisyan, L. Randall Wray
In a New York Times editorial, David Leonhardt recounts Aesop’s apocryphal story about the boy and the wolf, warning that while deficit hawks have so far been wrong, the growing government debt will eventually bite. He reports the economic plans of both presidential candidates would add to the debt that will soon exceed GDP and grow to 130 percent of annual output under a President Harris, or 140 percent with a Trump presidency.Levy Economics Istitute
The story of the boy and the wolf was a fable, although it was within the realm of possibility. The fable of the debt wolf is not. While there are real world wolves—Leonhardt mentions climate catastrophe and autocratic leaders, and the authors would add rising inequality and the concentration of economic and political power in the hands of billionaires.
Policy Note 2024/1 | October 2024
Yeva Nersisyan, L. Randall Wray
Improvement Of The International Monetary And Financial System — The Ministry Of Finance Of The Russian Federation, Bank of Russia, Yakov and Partners
The Ministry Of Finance Of The Russian Federation, Bank of Russia, Yakov and Partners
Episode 7 (S2) of the Smith Family Manga is now available–A revealing Zoom session — Bill Mitchell
Today (October 18, 2024), MMTed releases Episode 7 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit.…
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
How Australian Monetary System Favours the Powerful — Denis Hay
Social Justice Australia
How Australian Monetary System Favours the Powerful
Denis Hay
Friday, October 11, 2024
LA Woman
Great breakdown of a great song (by The Doors) by these 2 Millennial black bros… never understood the song as a metaphor for the city of Los Angeles but yeah I get it now… makes it even better…
Wednesday, October 9, 2024
The Deficit, the National Debt, and why we don’t have to worry about them. — John Rudden
Short article on Stephanie Kelton's The Deficit Myth.
Daily KosThe Deficit, the National Debt, and why we don’t have to worry about them.
John Rudden
Wednesday, October 2, 2024
Episode 6 of the Smith Family Manga (Season 2) is now available— Bill Mitchell
Today (October 3, 2024), MMTed releases Episode 6 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit. Episode 6 was delayed by two weeks…William Mitchell — Modern Monetary Theory
Episode 6 of the Smith Family Manga (Season 2) is now available
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Tuesday, October 1, 2024
Modern Monetary Theory film proves finding the cash isn't the problem — William Thomson
As we have been writing for over a year in this newsletter, the UK Government, as the issuer of the UK pound, can never run out of money. They can afford whatever is priced in pounds. There is never a problem finding the money. This leads to a natural and painful conclusion: Continuing austerity policies is a political choice....
Monday, September 30, 2024
Class origins matter – but who are the agents of change? — Bill Mitchell
Not MMT or economics as such but it is interesting in that Bill is an MMT founder so his stance on economic sociology is relevant.
There was an interesting article in the UK Guardian the other day September 26, 2024) – Take it from me (and Keir Starmer) – you should never pretend to be more working class than you are. I don’t usually agree with the journalist but this article made me reflect on a lot of things.…
Aside:
The scrutiny arises because many of these “Labour people” appear to have accumulated wealth (real estate etc), have come from well-paid jobs and network with the elites in society.
For that they are referred to, in a pejorative way, as ‘champagne socialists’.
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
The ball is now in Finance Ministry's court, Chinese economists say — Zichen Wang
The Ministry of Finance of the People's Republic of China (Chinese: 中华人民共和国财政部; pinyin: Zhōnghuá Rénmín Gònghéguó Cáizhèngbù) is the constituent department of the State Council of the People's Republic of China which administers macroeconomic policies and the annual budget. It also handles fiscal policy, economic regulations and government expenditure for the state.The ministry also records and publishes annual macroeconomic data on China's economy. This includes information such as previous economic growth rates in China, central government debt and borrowing and many other indicators regarding the economy of mainland China.The Ministry of Finance's remit is smaller than its counterparts in many other states. Macroeconomic management is primarily handled by the National Development and Reform Commission (NDRC). State-owned industries are the responsibility of the State-owned Assets Supervision and Administration Commission, and there are separate regulators for banking, insurance and securities. It also does not handle regulation of the money markets or interest rates. These, together with other aspects of monetary policy, are governed by the People's Bank of China (PBC), mainland China's central bank. The Ministry, NDRC and PBC are equal in status, with their political heads all sitting on the State Council.
The ball is now in Finance Ministry's court, Chinese economists say
Zichen Wang | Research Fellow & Director for Int'l Comms at Center for China and Globalization (CCG), after 11 years at Xinhua News Agency. Founder & Editor: Pekingnology & The East is Read. Salzburg Global Fellow (2024-)
Saturday, September 21, 2024
How I came to MMT — Robert Cauneau
Interesting personal story.The discovery of a monetary approach, which, in this case, not only relates to a field that I was not familiar with, but also constitutes a total challenge to my own knowledge of public finance management, which I have practiced throughout my career, is not something trivial. So I decided to tell my own story.
MMT France
How I came to MMT
Robert Cauneau
Friday, September 20, 2024
China shit market
Commies dilute their productive capital with unproductive commie bullshit = 0…
Here is a wild chart. The total return on Chinese stocks since 1993 is negative. In contrast, India is a 13-bagger. pic.twitter.com/SPvczZxkld
— Jeff Weniger (@JeffWeniger) September 20, 2024
Monday, September 16, 2024
The 20 EMU Member States are not currency issuers in the MMT sense — Bill Mitchell
For some years now (since the pandemic), I have been receiving E-mails from those interested in the Eurozone telling me that the analysis I presented in my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015) – was redundant because the European Commission and the ECB had embraced and was committed to Modern Monetary Theory (MMT) so there was no longer a basis for a critique along the lines I presented. I keep seeing that claim repeated and apparently it is being championed by MMT economists. While there are some MMTers who seem to think the original architecture of the Economic and Monetary Union has been ‘changed’ in such a way that the original constraints on Member States no longer apply, I think they have missed the point. They point to the fact that the ECB continues to control bond yield spreads across the EU through its bond-buying programs (yes) and that the Commission/Council relaxed the fiscal rules during the Pandemic (yes). But the bond-buying programs come with conditionality and the authorities have now ended the ‘general escape clause’ of the Stability and Growth Pact and are once again enforcing the Excessive Deficit procedure and imposing austerity on several Member States. The temporary relaxation of the SGP rules (via the general emergency clause) did not amount to a ‘change’ in the fiscal rules. Indeed, the EDP has been strengthened this year. The Member States still face credit risk on their debt, still use a foreign currency that is issued by the ECB and is beyond their legislative remit, and are still vulnerable to austerity impositions from the Commission and their technocrats. To compare that situation with a currency-issuing government such as the US or Japan or Australia, etc is to, in my view, commit the same sort of error that mainstream economists make when they say that ‘the UK is at risk of becoming like Greece’ or similar ridiculous threats to discipline fiscal authorities in currency-issuing nations.
There are various interrelated questions that bear on this subject....
William Mitchell — Modern Monetary Theory
The 20 EMU Member States are not currency issuers in the MMT sense
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Sunday, September 15, 2024
(II) Xu Gao's case for Beijing to spend — Yuxuan JIA and BU, Xiaoqing
Xu Gao, the Chief Economist and Assistant President of Bank of China International Co. Ltd., and an adjunct professor of the National School of Development (NSD) at Peking University, has been featured on The East is Read several times.
The East is ReadOn August 19, 2024, Xu published a new essay on his personal WeChat blog 徐高经济观察 Xu Gao Economic Observation. This long essay, essentially making a case for Beijing to adopt stimulus measures, will be rolled out in three parts.
Amid cautious signals from the Chinese government and the widespread belief in saving policy "ammunition," Xu Gao calls for a shift to macroeconomic thinking. He contends the government shouldn't be tethered to the belief that money spent is money lost, as a company might. The government revenue isn't fixed or exhaustible but "endogenous," says he, driven by government spending, which boosts private income, consumption, and investment. Unlike individuals and businesses who see income as beyond their control, the government, following Keynesian principles, can step in when demand falters. By increasing fiscal spending and liquidity, it can generate demand where the private sector won't, matching purchasing power with the willingness to spend.
Xu argues that the real limit on stimulus isn't money supply—it's supply capacity. Rising inflation and trade deficits mean domestic supply can't keep up with demand, making further stimulus risky. But when inflation is low and there's a trade surplus, it signals excess supply, making stimulus "not only feasible but also essential."….
(II) Xu Gao's case for Beijing to spend: stimulus now doesn't hinder structural reforms-Chief Economist of Bank of China International continues with the sustainability and necessity of stimulus.
Trump to roll out DeFi project this week
Looks like Trump going to start a crypto exchange and a USD stable coin… 🤔
.@WorldLibertyFi is helmed by @realdonaldtrump's sons, @EricTrump and @DonaldJTrumpJr and the 18-year-old Barron Trump is the project's "DeFi visionary.” https://t.co/PSKhQWyQKu
— CoinDesk (@CoinDesk) September 13, 2024
Wednesday, September 11, 2024
Xu Gao's case for stimulus—Chief Economist of Bank of China International tears apart the opposition — Yuxuan JIA and BU, Xiaoqing
MMT without naming it.
Xu Gao, the Chief Economist and Assistant President of Bank of China International Co. Ltd., and an adjunct professor of the National School of Development (NSD) at Peking University, has been featured on The East is Read several times.
The East is ReadOn August 19, 2024, Xu published a new essay on his personal WeChat blog 徐高经济观察 Xu Gao Economic Observation. This long essay, essentially making a case for Beijing to adopt stimulus measures, will be rolled out in three parts.
Amid cautious signals from the Chinese government and the widespread belief in saving policy "ammunition," Xu Gao calls for a shift to macroeconomic thinking. He contends the government shouldn't be tethered to the belief that money spent is money lost, as a company might. The government revenue isn't fixed or exhaustible but "endogenous," says he, driven by government spending, which boosts private income, consumption, and investment. Unlike individuals and businesses who see income as beyond their control, the government, following Keynesian principles, can step in when demand falters. By increasing fiscal spending and liquidity, it can generate demand where the private sector won't, matching purchasing power with the willingness to spend.
Xu argues that the real limit on stimulus isn't money supply—it's supply capacity. Rising inflation and trade deficits mean domestic supply can't keep up with demand, making further stimulus risky. But when inflation is low and there's a trade surplus, it signals excess supply, making stimulus "not only feasible but also essential."
Yuxuan JIA and BU, Xiaoqing
Tuesday, September 10, 2024
Wholesale Payments Systems and Bank Reserves — Brian Romanchuk
Some of the nity-gritty involving payments systems that underlies some institutional arrangement needed to understand MMT's analysis.
Bond Economics
Wholesale Payments Systems and Bank Reserves
Brian Romanchuk
The Myth That the US is Rapidly Approaching Bankruptcy — Michael Hudson
Yves Smith's introduction
Naked CapitalismYves here. It is frustrating to see a normally solid YouTuber almost go off the rails by getting outside his area of expertise, geopolitics, and fall for libertarian scaremongering. We’ve commented before on the tendency of certain schools of commentary to fall into belief clusters, so anti-globalists are anti-dollar hegemony (and often crypto fans) to the degree that they have not bothered understanding how a currency issuer like the US operates. A currency issuer can never suffer an involuntary bankruptcy. They can always create more currency. What they can do is generate too much demand compared to the real resources of their economy, as in inflation.
In the discussion below, Micael Hudson
has spend[spends] a significant portion of the interview debunking US budget myths to Nima of Dailogue Works. Hudson not only got Nima to agree to a more accurate title but also Hudson starting by laying out MMT basics in his extended opening discussion. As Hudson said via e-mail:Nima had a sensationalist title, “Is the US rapidly approaching bankruptcy.” I showed that this is a myth and the US can’t go bankrupt.
We pre-arranged that I would give a 25-minute lead-in discussing just whom the US Treasury debt is owed to, and why most of it has no intention of being paid (paper currency, debts to foreign central banks and to the US Fed), and as for debts to bondholders, US Treasury debt continues to be a flight to safety, not to risk...
The Myth That the US is Rapidly Approaching Bankruptcy
Michael Hudson
Modern Monetary Theory: Economics for the 21st Century – MOOC – now available via MMTed.org — Bill Mitchell
William Mitchell — Modern Monetary TheoryI am travelling all day tomorrow so I am bringing forward the normal blog post to today. I am pleased to announce that from today the MMT MOOC which we ran through the University of Newcastle’s edX facility over the last few years is now available through MMTed on an on-going basis. Read on to get the full details and access.
Modern Monetary Theory: Economics for the 21st Century – MOOC – now available via MMTed.org
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Trump 3% Mortgage Policy
Trump promising a return to 3% mortgages if he can get back in…
He’ll have to tell his Central Bank to lower the policy rate down to at least 2% to hope to get his 30-yr fixed back to 3%…
Donald Trump says his plans to slash regulations will get mortgage rates 'back down' to 3%, per FORTUNE
— unusual_whales (@unusual_whales) September 9, 2024
Monday, September 9, 2024
Episode 5 of the Smith Family Manga (Season 2) is now available – the Finance Report hots up Bill Mitchell
Today (September 6, 2024), MMTed releases Episode 5 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Saturday, September 7, 2024
Short term interest rate characteristics…
Some concern by Monetarists out there that current short term risk free rate of interest compared to the average of a past period of the short term risk free interest rate is a cause for serious concern wrt equity prices…
Think of financial asset prices as a function of the equation P = (A-L)/A where A and L are Depository system Assets and Liabilities…
At point 1 the fiscal surpluses were being saved in the TTL accounts at Depositories increasing system L by $100Bs … at point 2 the Fed increased Depository system A by hundreds of billions in September 2008, causing credit provision to cease and the GFC …. and at point 3 they again did the same thing as 2 establishing over $1 trillion of A in March 2020 causing the credit function to again cease until this regulatory function was suspended ….
Today Treasury no longer utilizes TTL accounts and we are in large fiscal deficit anyway, and no where have I seen currently is the Fed proposing to increase A at this time rather their stated policy is to continue to gradually “normalize” system A at much lower levels…
“Correlation is not causation” etc…
Thursday, August 29, 2024
Some debriefing on continuous fiscal deficits and debt issuance — Bill Mitchell
William Mitchell — Modern Monetary TheoryA government cannot run continuous fiscal deficits! Yes it can. How? You need to understand what a deficit is and how it arises to answer that. But isn’t a fiscal surplus the norm that governments should aspire to? Why frame the question that way? Why not inquire into and understand that it is all about context? What do you mean, context? The situation is obvious, if it runs deficits it has to fund itself with debt, and that becomes dangerous, doesn’t it? It doesn’t ‘fund’ itself with debt and to think that means you don’t understand elemental characteristics of the currency that the governments issues as a monopoly. These claims about continuous deficits and debt financing are made regularly at various levels in society – at the family dinner table, during elections, in the media, and almost everywhere else where we discuss governments. Perhaps they are not articulated with finesse but they are constantly being rehearsed and the responses I provided above to them are mostly not understood and that means policy choices are distorted and often the worst policy decisions are taken. So, while I have written extensively about these matters in the past, I think it is time for a refresh – and the motivation was a conversation I had yesterday about another conversation that I don’t care to disclose. But it told me that there is still a lot of work to be done to even get MMT onto the starting line....
Some debriefing on continuous fiscal deficits and debt issuance
Friday, August 23, 2024
Episode 4 of the Smith Family Manga (S2) is now available — Bill Mitchell
Today (August 23, 2024), MMTed releases Episode 4 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Sunday, August 18, 2024
Chartbook 310 The shock of the new: Dollar dominance and modern monetary macro in the 1920s. — Adam Tooze
Not MMT but relevant historically. How the world got here ((to dollar hegemony), as well as to monetarism, the accounting identity that is, as the basis of macro.
Adam Tooze is a historian rather than an economist, so he is able to shine a different light on the subject.
ChartbookChartbook 310 The shock of the new: Dollar dominance and modern monetary macro in the 1920s.
Adam Tooze | Shelby Cullom Davis chair of History at Columbia University and serves as Director of the European Institute
Friday, August 16, 2024
NDX100 EPS
Something happened after the 2022 Biden unprecedented rate increases to really crush (-32%) the EPS of the NDX100… 🤔
With the implication that this one time discount after the unprecedented Biden rate increases in 2022 might be reversed if those said rate increases were to be reversed…
Wednesday, August 14, 2024
Monday, August 12, 2024
Major macroeconomic policy reform is needed to reduce the reliance on monetary policy — Bill Mitchell
There is some commentary emerging that is finally starting to question the reliance on monetary policy (setting interest rates) as the primary macroeconomic policy tool with fiscal policy forced into a passive role. In Australia, this debate has intensified in the last week following the hubris from the new Reserve Bank governor, who thinks her role is to sound like a ‘tough guy’ dishing out threats of ever increasing interest rate rises even as inflation falls. There was an Op Ed in the Sydney Morning Herald today (August 12, 2024) – Maybe only a recession will fix macroeconomic management – by the Economics Editor Ross Gittins, which challenges the current macroeconomic consensus. Some of this argument is acceptable. But when he advances his alternative proposal of “a new independent authority” to set monetary and fiscal policy, the reality is that this would be as bad as we have now. More on that later....
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Friday, August 9, 2024
Episode 3 of the Smith Family Manga (S2) is now available — Bill Mitchell
Today (August 9, 2024), MMTed releases Episode 3 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit …
Thursday, August 8, 2024
US labour force data provides no basis (yet) for recession panic — Bill Mitchell
The financial markets around the world have over the last week demonstrated, once again, that they are subject to wild swings in irrationality despite mainstream economists holding out the idea that these sorts of transactions exhibit pure rationality. Some of the capital movements are explained by a shift in the interest rate spread between Japan and the US as the former nation decided to increase interest rates modestly. That altered the profitability of financial assets in each currency and so there were margins to exploit. But the big seings came when the US Bureau of Labor Statistics (BLS) released their latest labour market data last Friday (August 2, 2024) – Employment Situation Summary – July 2024 – which showed payroll employment increasing by only 114,000 (well down on expectation) and the unemployment rate rising by 0.2 points to 4.3 per cent. Suddenly, the headlines were calling an imminent recession in the US and that triggered a flight into safer assets (government bonds) away from shares etc, which drove down bond yields (as bond prices rose) and left some short-run carnage in the share markets. A few days later the panic subsided and one has to ask what was it all about. In this blog post, I examine the labour force data and add some new extra ‘recession predictors’ to see whether the panic was justified. The conclusion is that it was not....
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Monday, August 5, 2024
The Bank of England does not need a tiered reserve system for the Government to avoid austerity — Bill Mitchell
There is an interesting debate going on in the UK at present about the concept of tiered bank reserves. The concept is now being used by commentators to argue that the new British government does not need to inflict the austerity that the Chancellor has now announced (even though she is denying that is what the government is up to) because the government can simply reduce outlays to the commercial banks in order to meet the fiscal rules. The discussion is rather asinine really and features all the missteps that commentators make when trying to appear progressive but falling into the usual mainstream macroeconomic fictions....
William Mitchell — Modern Monetary Theory
The Bank of England does not need a tiered reserve system for the Government to avoid austerity
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Saturday, August 3, 2024
Trump: No tax on tips, no tax on Social Security
Thursday, August 1, 2024
British Chancellor fails the basic test – language is meant to impart meaning — Bill Mitchell
Language is meant to bring meaning to discourse. That means we want to use terms that convey information that is of use to us in making our way in the world. The problem is that economists have perverted that process and introduced a metaphorical language that is intended to persuade the reader/listener to accept a particular view of the world but which undermines their ability to actually understand the phenomenon in question. Marx knew long ago how language could be constructed to advance the interests of the ruling class. The mainstream economics commentary that is also used by politicians falls into this category. Terms are used that have no meaning in an elemental sense but provide support for ideological agendas. We, the public, allow that to happen because we are ignorant about the context. It becomes a vicious cycle of lies and fictions which undermine human and environmental sustainability but certainly transfer income to the top-end-of-town. A recent path setting address to the House of Commons by the new Chancellor is a classic example of this reality denial....William Mitchell — Modern Monetary Theory
British Chancellor fails the basic test – language is meant to impart meaning
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Wednesday, July 31, 2024
Trump Embraces the “Bitcoin-Dollar”, Stablecoins to Entrench US Financial Hegemony — Whitney Webb
Where all this may be going is anyone's guess. Wherever, it looks like down the rabbit hole. The UK is "broke." The USD is being crushed under "a mountain of debt." De-dollarization is "in full swing."
The Alternative WorldTrump Embraces the “Bitcoin-Dollar”, Stablecoins to Entrench US Financial Hegemony
Whitney Webb
Monday, July 29, 2024
MMT and international trade–some further considerations in a degrowth context— Bill Mitchell
One of the undercurrents at the recent UK MMT Conference in Leeds was the apparent unwillingness of MMT economists to acknowledge their mistake in dealing with international trade. In our new book – Modern Monetary Theory: Bill and Warren’s Excellent Adventure (published July 2024) – we devote a chapter to this issue. There are various strands to the criticisms we receive ranging from claims we are simply wrong at the most elemental level to others claiming trade has no part in the MMT framework. All miss the point and I am surprised people have tried to make a ‘career’ (or advance their egos) on this issue. As I have noted several times in the past, the issue is nuanced but the elementary facts are not. I am now working on a section for my new book (with Dr Louisa Connors) on ‘degrowth’ and system viability from an MMT perspective and so I am linking the trade aspects of MMT with this narrative to provide further clarification of how nuanced this area of discussion can be. Here is a little glimpse of that work....
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Saturday, July 27, 2024
Episode 2 of the second season of our Manga – The Smith Family and their Adventures with Money — Bill Mitchell
Today (July 26, 2024), MMTed releases Episode 2 in the second season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit …
William Mitchell — Modern Monetary Theory
Episode 2 of the second season of our Manga – The Smith Family and their Adventures with Money – available now
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Friday, July 26, 2024
In the latest episode of our Of Interest podcast, Steven Hail gives the MMT perspective on the monetary system, inflation, climate change & more — Gareth Vaughan
interest.co.nz
In the latest episode of our Of Interest podcast, Steven Hail gives the MMT perspective on the monetary system, inflation, climate change & more
Gareth Vaughan
Monday, July 22, 2024
Currency Hierarchy — Eric Tymoigne
In Stabilizing and Unstable Economy, Minsky noted that “[a]n economy has a number of different types of money: everyone can create money; the problem is to get it accepted” (p. 228). While governments and banks usually get the spotlight, tens of thousands of monetary instruments have been issued by localities, ecclesiastic domains, local seigneurs, taverns and other private agents in many periods of monetary history, worldwide, up to the present [see Burn (1853); von Glahn (1996); Fletcher (2003); Blanc (2017)]. All these instruments are part of a “hierarchy of money” (Bell, 2001), “debt pyramid” (Olivecrona, 1957), “pyramid of credit” (Murad, 1954), or “scale of credit” (Wilson, 1811); a concept used to categorize the variety of monetary instruments available in a given area common to all of them, and the extent of the operation of a payment system and its integration within other, usually broader, payment systems. While the given common area is often the domestic economy, the international scale can also be considered (see de Conti et al., 2013; Palludeto and Abouchedid, 2016).
Eric Tymoigne, MMT economist
Associate Professor of Economics at Lewis & Clark College
Research Associate at the Levy Economics Institute of Bard College
Friday, July 19, 2024
UK MMT Conference 2024 – Slides available for download
The Gower Initiative for Modern Money Studies
UK MMT Conference 2024 – Slides
Scotland needs its own currency ASAP after indy, say top economists
Tuesday, July 16, 2024
MMT’s Leeds conference and disinvitations — Richard Murphy
Funding the Future
MMT’s Leeds conference and disinvitations
The Bank for International Settlements (BIS) as ideological fortress for monetary technocrats — Vadym Syrota
Not MMT per se, but it explains something of the tenacious hold that neoliberalism has on economic and monetary policy owing to the Bank of International Settlements ((BIS).
Monetary Policy Institute Blog #146The Bank for International Settlements (BIS) as ideological fortress for monetary technocrats
Vadym Syrota, Ph.D. in economics, independent banking expert, contributor to the specialized blog of the Kennan Institute Woodrow Wilson Center (USA)
Friday, July 12, 2024
Season 2 of our Manga – The Smith Family and their Adventures with Money — Bill Mitchell
Today (July 12, 2024), MMTed releases Episode 1 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. We have spent the last several months developing the storylines and graphics and Season 2 will run from today to December 6, 2024 with episodes appearing on a fortnightly basis.
Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Thinking back 50 years to Nixon's resignation.
Tuesday, July 9, 2024
Warren Mosler Says US Is Spending Too Much — Bloomberg
Odd Lots Podcast: Warren Mosler Says US Is Spending Too Much
Friday, July 5, 2024
Modern Monetary Theory: Bill and Warren’s Excellent Adventure (video)–Promo — Bill Mitchell
Here is a short video about our new book – Modern Monetary Theory: Bill and Warren’s Excellent Adventure – which will be published on July 15, 2024.William Mitchell — Modern Monetary Theory
Modern Monetary Theory: Bill and Warren’s Excellent Adventure – Promo
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Sunday, June 30, 2024
Atlanta Fed reduces Q2 GDP forecast once again, as I said they would
Back in April, the Atlanta Fed's first GDP forecast for Q2 was 4.2%. I said that was ridiculous based on the year-over-year drop in net government transfers. I said they would have to revise that lower, probably equal to Q1 GDP of 1.6% if that. And sure enough, they did...FIVE TIMES, until they got it down to 1.5%-1.6%.
Then, because of one strong retail sales report in May, they boosted it back up to 3.2%. Once again, I said they'd have to bring that down because the year-over-year drop in net government transfers had gotten worse. And sure enough, they did. Now they have it at 2.1%, which probably has to decrease even more.
I don't know what their model is, but mine is very simple, more accurate, and timely. Net government transfers are the first derivative of all economic activity.
Thursday, June 27, 2024
Dems warn Trump could “stoke inflation!”…
Dems doubling down on their current moron monetarist thesis that a plurality of voters will prefer the current regressive high interest rate policy over some other less regressive Trump fiscal/monetary policy…
Sixteen of the world's most notable economists — all Nobel Prize winners — are warning that former President Donald Trump could stoke inflation if he wins the presidency in November and moves forward with his economic plans. https://t.co/JRbXTuje2F
— CBS News (@CBSNews) June 26, 2024
Thursday, June 20, 2024
Watch this Movie — Bethesda 1971
Daily Kos
Watch this Movie
Bethesda 1971
Wednesday, June 19, 2024
Everything you want to know about MMT — Lars P. Syll
One of the positive contributions of MMT, especially from a European point of view, is that it makes it transparently clear why the euro-experiment has been such a monumental disaster. The neoliberal dream of having over-national currencies just doesn’t fit well with reality. When an economy is in a crisis, it must be possible for the state to manage and spend its own money to stabilize the economy.
Lars P. Syll | Professor, Malmo University
Thursday, June 13, 2024
Print Money in Structured Manner to Plug Deficit Instead of Raising Taxes, Economist Tony Mwiti Advises Kenyan President William Ruto — Muyela Roberto
Tuko (Kenya)
Print Money in Structured Manner to Plug Deficit Instead of Raising Taxes, Economist Tony Mwiti Advises Kenyan President William Ruto
Muyela Roberto
Trump floats concept of eliminating the income tax and replacing it with tariffs
Even libertarian douchebag and alleged STEM degree Massie on board…. Would need a big GOP sweep to get it passed….
I guess the tax elimination is going to over ride the debt doomsday thesis of these libertarian morons in their pea brains…. Hard to understand how their brains work….
I’d take it… we could get rid of the tax but they would still be stupid…
Can’t have everything…
👍
Most intriguing policy idea from the GOP meeting at the Capitol Hill Club this morning:
— Thomas Massie (@RepThomasMassie) June 13, 2024
Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs. 🧐 pic.twitter.com/hw0k8gwlGa
Wednesday, June 12, 2024
IMF: Dollar’s "stealth erosion" in global reserves by other currencies—Serkan Arslanalp, Barry Eichengreen, Chima Simpson-Bell
Taking a longer view, over the last two decades, the fact that the value of the US dollar has been broadly unchanged, while the US dollar’s share of global reserves has declined, indicates that central banks have indeed been shifting gradually away from the dollar.BNE
IMF: Dollar’s "stealth erosion" in global reserves by other currencies
Friday, June 7, 2024
MMT — the key insights — Lars P. Syll
As has become abundantly clear during the last couple of years, it is obvious that most mainstream economists seem to think that Modern Monetary Theory is something new that some wild heterodox economic cranks have come up with. That is actually very telling about the total lack of knowledge of their own discipline’s history these modern mainstream guys like Summers, Rogoff and Krugman have.New? Cranks? Reading one of the founders of neoclassical economics, Knut Wicksell, and what he wrote in 1898 on ‘pure credit systems’ in Interest and Prices (Geldzins und Güterpreise) soon makes the delusion go away….
Lars P. Syll | Professor, Malmo University
Monday, June 3, 2024
Senior mainstream economist now admits central banks are not as independent as many believe — Bill Mitchell
The UK Guardian published quite an odd article the other day (May 30, 2024) by Mr GFC Spreadsheet Fudge Man Kenneth Rogoff – Why policymakers are more likely to risk high inflation during periods of economic uncertainty – which essentially claims that economic policy has been conducted for several years by institutions that do not meet the essential requirements that are specified by the mainstream New Keynesian macroeconomic approach, upon which the institutions have claimed justification. If that makes sense. He now claims that the eulogised principle of ‘central bank independence’, which is a mainstay of the New Keynesian justification that macroeconomic counter stabilisation policy should be left to monetary authorities and that fiscal policy should play a supporting but passive role, no longer exists as policy makers have had to come to terms with multiple crises. Of course from an Modern Monetary Theory (MMT) perspective such independence never existed and was just a ploy to allow the governments to depoliticise economic policy making and thus distance themselves, politically, from the fall out of unpopular policy interventions. If it wasn’t the IMF to blame, then it was the ‘independent’ central bank for austerity and interest rate hikes and all the rest of it. Now we have a senior Harvard professor admitting it was a ruse and bemoaning the fact....
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW,
The deficit myth
Lars P. Syll | Professor, Malmo University
Saturday, June 1, 2024
Odd posts from Warren Mosler claiming "crowding out."
Investment boom, crowding out consumption.
— Warren B. Mosler (@wbmosler) May 31, 2024
If business spending rises and personal consumption falls, so what? All that is, is a shift in the cohort doing the net spending. The economy may look a little different (factories getting built rather than expenditure on consumer goods, leisure, etc), but why is that a concern and how does he conclude, necessarily, that this is the reason for an economic slowdown?
It's wrong and it misses the main point which is the fact that the slowdown in the economy is coming from a decline in net government transfers (i.e. the "deficit") because "reverse stabilizers" are kicking in. (Tax deposits are rising faster than Treasury withdrawals.)
He ought to know this.
Thursday, May 30, 2024
In Defense Of Deficits — Steven Desmyter
I invited Stephanie Kelton to speak at our Man Alternative Investment Symposium in Oxford in 2021. Kelton was Bernie Sanders’s economic advisor and a leading proponent of Modern Monetary Theory (MMT), a neo-Keynesian movement that asserts that there ought to be no theoretical limit to a country’s ability to borrow, providing that it is in control of its own currency. Kelton and Sanders were near-perfect exemplars of the kind of “fiscal irresponsibility” (as their opponents would see it) that Conservatives (and, indeed, conservatives) like to hold out as a warning. Joe Biden, resolutely of the center, friend to the markets and the banks, was able to position himself as a far more rational and responsible alternative....Forbes
In Defense Of Deficits
Steven Desmyter, President of Man Group
Government debt fears – more fiction from the mainstream media — Bill Mitchell
William Mitchell — Modern Monetary TheoryAfter all these years of trying, the insights provided by Modern Monetary Theory (MMT) still haven’t cut through. One doesn’t even need to accept the complete box of MMT knowledge to know that, at least, some of it must be factual. For example, how much brainpower does a person need to realise that a government that issues its own currency surely doesn’t need to call on the users of that currency in order to spend that currency? Even if we could get that simple truth to be more widely understood it would change things. But every day, economists and journalists, that just give platforms to the economists write and say things that demonstrate even that simple understanding of the monetary system fails them. Are they stupid? Some. Are they venal? Some. What other reason is there for continuing to use major media platforms, which give the author a massive privilege in terms of influence and reach, to pump out fiction masquerading as informed economic commentary? And the gullibility and wilful indifference of the readerships just extends the licence of these liars. Some days I think I should just hang out down the beach and forget all of it....
Government debt fears – more fiction from the mainstream media
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Saturday, May 25, 2024
MAGA: The Biden Admin Has Had Zero Coordination Between Fiscal and Monetary Policy
Current MAGA thesis… “inflation!”… “deficit too high!”… “the dollar is going down!”… same shit as always…. if Trump gets back in he’s going to have a lot of trouble with these Art Degree morons on his right flank…
Thursday, May 23, 2024
Nvidia now worth over $2.5 Trillion, more than the market cap of the entire German stock market
Perma bears are going to be FREAKING… OUT…
Nvidia now worth over $2.5 Trillion, more than the market cap of the entire German stock market. pic.twitter.com/Q7sJctOeoR
— Erik Brynjolfsson (@erikbryn) May 23, 2024
Wednesday, May 22, 2024
The conceptual roots of the Global South’s debt crisis — Ndongo Samba Sylla
The Jordan Times
The conceptual roots of the Global South’s debt crisis
Ndongo Samba Sylla, head of research and policy for the Africa region at International Development Economics Associates, is a former technical adviser for the presidency of the Republic of Senegal and a co-author of “Africa’s Last Colonial Currency: The CFA Franc Story” (Pluto Press, 2021) and a co-editor of Economic and Monetary Sovereignty in 21st Century Africa (Pluto Press, 2021)
Tuesday, May 14, 2024
Treasury Settlement
Much easier to understand by the monetarist morons figuratively as “they’re printin’ money!”…
U.S. government securities clearing & settlement visualized pic.twitter.com/ngYUXHWpBu
— Conks (@concodanomics) May 7, 2024
Monday, May 13, 2024
De-Dollarization Bombshell: The Coming of BRICS+ Decentralized Monetary Ecosystem — Pepe Escobar UPDATED
Footsoldier posted this in the comments. I am promoting it to a post.
So-called de-dollarization is envisioned to happen in two major steps stages each with many incremental iterations.
The first stage stage is conducting bilateral trade in the currencies of the trading partners. This is already well advanced.
However, this is not actual de-dollarization, which is the establishment of a competing monetary system with a goal of eventually replacing the USD as the primary global currency.
No one thinks that this will happen quickly and without growing pains, or without Western opposition. But it is a stated goal rather than simply an aspiration.
The Unit plan is now on the table.
Sputnik GlobePepe Escobar
Thursday, May 9, 2024
If Government Can Print Money, Why Does It Borrow? — L. Randall Wray (2005)
Recently, the neglected question of why the US government borrows, given that it can print money, has arisen in the context of discussions surrounding a new documentary, Finding the Money. As L. Randall Wray observes in this one-pager, Modern Money Theory has been providing answers to this question for some time; and, he argues, it is a topic that mainstream economists are ill-equipped to address, since very few concern themselves with the monetary operations that underlie the question of why a currency-issuing government issues debt.
L. Randall Wray, Levy Economics Institute, 2005
New documentary that explains how money works and how pretty much everyone today gets it all backwards.
Wednesday, May 8, 2024
Saturday, May 4, 2024
Corporate buybacks
No not so fast there buddy. .. According to MMT the US government is “borrowing money!” from the tax exempt foreign divisions of these multinationals…
It’s not just transferring retained earnings into foreign UST accounts at the Fed as part of a scheme to reduce overall corporate tax liabilities… that’s not what is happening..
I wonder how many people know these “buybacks” are mostly unpaid taxes distributed to investors in US 🤔
— JustDario 🏊♂️ (@DarioCpx) May 3, 2024
In the case of $AAPL profits are kept offshore in 0% tax countries like Ireland, then $AAPL issues bonds in #US to finance these buybacks and when the bonds mature they use… https://t.co/HKwjqY8PYx
Month end settlements
Have to see if this large month end settlement pattern continues…. It may be that first of the month fiscal transfers are getting so large these days that they are destabilizing reserve assets at Depositories… so Treasury might be scheduling most of the settlements the day before to reduce reserve balances within the same regulatory period as the first of the month…
Treasury issuance is not “borrowing!” despite what MMT asserts…
Treasury issuance is skewed this month. There are net paydowns and one large settlement on month-end. If we exclude month-end, there's a net paydown of $108B. O/N rates should head lower throughout the month. Every net paydown will put additional downward pressure on O/N rates pic.twitter.com/3fTwWGMwmR
— Scott Skyrm (@ScottSkyrm) May 2, 2024
Friday, May 3, 2024
Jared Bernstein, total idiot. You have to see this to believe it.
You know that scene in The Big Short, when after the collapse there's a distinct vibe of "man that was so obvious, how were people so impossibly stupid?"
— Erik Voorhees (@ErikVoorhees) May 3, 2024
If you are loaning money to the Federal Government (ie if you own government bonds), the *only* reason you should feel… https://t.co/KgutE7xeIv
Monday, April 29, 2024
Trump to set interest rates himself under secret presidential plan
Trump getting ready to go to war with the Democrat Monetarist morons who currently run the Fed... He probably wants rates back at zero like Obama had for 8 years…
This would be a catastrophe if it ever happened.
— QE Infinity (@StealthQE4) April 27, 2024
It’s being reported by the WSJ so it’s legit.
If Trump lowered rates into an inflationary crisis it would create a lot of pain. Especially for the middle class. pic.twitter.com/FTLfEQ1Qmu
Sunday, April 28, 2024
Japan
Shots fired:
Japan has always been a favorite talking point for the #MMT crowd, who claim Japan's huge debt load is totally fine. It isn't. Japan is in a currency crisis because its debt forces the BoJ to keep interest rates pinned. A huge warning sign for debt aficionados in the Euro zone... pic.twitter.com/mnO6RUQgnq
— Robin Brooks (@robin_j_brooks) April 28, 2024
Tuesday, April 16, 2024
Accounting 101
So what now we have Art Degree MMT Economics people teaching rudimentary Finance and Accounting Science 101 like this is some big revelation or something? Big deal … 🤔
assets___________BANK________liabilities
— Dirk Ehnts (@DEhnts) April 15, 2024
+ reserves + bank deposits
What happened? 🧐
Thursday, April 11, 2024
JPMorgan says high interest rates are driving inflation higher
But these JPM people are not winning the Art Degree argument though:
JUST IN: 🇺🇸 JPMorgan says high interest rates are driving inflation higher - Bloomberg pic.twitter.com/ui89mAh6RG
— Radar🚨 (@RadarHits) April 10, 2024
This guy is winning the argument:
.@lhsummers, former US Treasury Secretary and Wall Street Week contributor, says he's not surprised inflation rose again in March, but he says an interest rate cut in June by the Federal Reserve would be dangerous https://t.co/VVbO71W83N pic.twitter.com/enjnKsEm5Z
— Bloomberg TV (@BloombergTV) April 10, 2024
Wednesday, April 10, 2024
Latest European Union rules provide no serious reform or increased capacity to meet the actual challenges ahead — Bill Mitchell
It’s Wednesday and we have discussion on a few topics today. The first relates to the new agreement between the European Parliament and the European Council that was announced on February 10, 2024, which purports to reform the fiscal rules structure that has crippled the Member States of the EMU since inception. The reality is that the changes are minimal and actually will make matters worse. I keep reading progressives who claim the EU fiscal rules are no longer operative. Well, sorry, they are and the temporary respite during the pandemic is now over and the new agreement makes that very clear. I also express disappointment that high profile progressives continue to misrepresent Modern Monetary Theory (MMT) as they advance their own agenda, which effectively provides support to the sound finance narratives. Then some updated health data which continues to support my perspective on Covid. And then some anti-fascist music. What’s not to like.William Mitchell — Modern Monetary Theory
Latest European Union rules provide no serious reform or increased capacity to meet the actual challenges ahead
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Wednesday, April 3, 2024
What is responsible government spending? — Guest post by Scott Baum
Today, I am fully engaged in work commitments and so we have a guest blogger in the guise of Professor Scott Baum from Griffith University, who has been one of my regular research colleagues over a long period of time. He indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he is going to talk about what responsible government spending should look like. Anyway, over to Scott …
Death of empires: History tells us what will follow the collapse of US hegemony — Henry Johnston
The turn away from expansion, production and trade toward lending and speculation has precipitated decline for centuries
RT — Question More (Russian state-sponsored media)
Death of empires: History tells us what will follow the collapse of US hegemony
Millions of simulations show that media companies have too much time on their hands — Bill Mitchell
It’s Wednesday and I discuss a number of topics today. First, the ‘million simulations’ that Bloomberg apparently think show that there is an impending US bond market rout. Second, the way in which neoliberal-inspired legislation ensures the private energy providers can gouge prices and make huge profits in the face of a state-owned alternative. Third, my latest podcast with Real Progressives. Fourth, the crocodile tears from the Australian government concerning Gaza when they are effective supplying the means to kill our own citizens and tens of thousands of others. Finally, to calm down after all that some great jazz.…
Bloomberg published a ridiculous article yesterday (April 2) – A Million Simulations, One Verdict for US Economy: Debt Danger Ahead – which I thought might have been a delayed April Fool’s joke.…
William Mitchell — Modern Monetary Theory
Millions of simulations show that media companies have too much time on their hands
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
In Defence Of Discrete Time Models — Brian Romanchuk
Bond Economics
In Defence Of Discrete Time Models
Brian Romanchuk
Tuesday, April 2, 2024
Economic Democracy with Pavlina Tcherneva — Scott Ferguson and William Saas interview Pavlina Tcherneva
Money on the Left — MR Online
Economic Democracy with Pavlina Tcherneva
Scott Ferguson and William Saas interview Pavlina Tcherneva
Thursday, March 28, 2024
The SDGs are not achievable—Unless we decolonize the global economic architecture — Fadhel Kaboub
I’m on my way back to Nairobi. I spent the last 3 days in Rome at a UN expert group meeting on SDG2 (Ending Hunger) at the FAO, in preparation for the 2024 High-Level Political Forum that will be help in July 2024. It was a bit ironic that the FAO building where we held the meeting used to be the Italian Ministry of the Colonies under the Mussolini regime, and my main message to the FAO was about decolonizing the global economic architecture is a prerequisite for achieving the SDGs, including SDG2 to end hunger. It is 2024, and the global food system reflects the legacy of colonial and post-colonial hierarchies. This blog is a brief summary of my main message to the FAO.…
The SDGs are not achievable—Unless we decolonize the global economic architecture
Fadhel Kaboub, Associate Professor of economics at Denison University (on leave) and President of the Global Institute for Sustainable Prosperity. He currently serves as the Under-Secretary-General for Financing for Development at the Organisation of Educational Cooperation in Addis Ababa, Ethiopia.He also held a number of research affiliations with the Levy Economics Institute, the John F. Kennedy School of Government at Harvard University, the Economic Research Forum (Cairo), Power Shift Africa (Nairobi), and the Center for Strategic Studies on the Maghreb (Tunis). Fadhel is Tunisian-American MMT economist. Ph.D. in Economics & Social Science Consortium, 2006, University of Missouri - Kansas City. M.A. in Economics, May 2001, University of Missouri - Kansas City. B.S. in Economics, June 1999, with Distinction
Rinse and repeat–Truss chaos–the new benchmark — Bill Mitchell
For years, those who want selective access to government spending benefits (like the military-industrial complex and other parasitic sectors), while claiming the government cannot afford to provide adequate income support to the most disadvantaged citizens have used various ruses to give an air of authority or legitimacy to their claims. So in the UK, the lie in 1976 by the then Labour government that it was going to have to borrow from the IMF to stay solvent has been regularly wheeled out. In Europe, it was the ‘tournant de la rigueur’ (austerity turn) introduced by the French government of François Mitterrand in 1983 that effectively cancelled the commitment to the progressive – Programme commun – that is often cited as a demonstration of the limited capacity of governments to resist the global power of the financial markets. The fact that it was progressive governments that instigated these events made it more emphatic – the Left essentially swallowed the fictions introduced by the Right and the corporate elites that governments were now powerless against the power of the financial markets. The macroeconomic contest was essentially ceded to the conservatives and it has been that way since. There is now a new ruse that the elites are using that the progressives are also spreading – the Liz Truss Ruse. This apparently tells us that governments must appease the financial markets or face currency destruction and rising bond yields. Like its predecessors, there is no validity to the claims. But the Left is so bereft that it cannot see through the smoke and mirrors. And that is why the world is in the parlous state that it is – the contest of ideas is non-existent. It is a case of rinse and repeat – except all is happening is lies and posturing is being recycled....
Rinse and repeat – Truss chaos – the new benchmark
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Tuesday, March 26, 2024
Mark Blyth: Unionists 'taking my words on independence out of context' — Xander Elliards
The sequel.
The National (Scotland)Mark Blyth: Unionists 'taking my words on independence out of context'
Philip Pilkington turns the page on MMT?
Philip Pilkington turns the page on MMT?
https://twitter.com/philippilk/status/1772538175564447823
The US, like the UK, can’t go broke in their own currency. But if foreign lenders don’t buy into net bond issuance, USD will have to adjust to shrink the trade deficit. This will put upward pressure on inflation and is what the UK faced under Truss. Will Trump get Trussed?… pic.twitter.com/fDuYrC3Gzx
— Philip Pilkington (@philippilk) March 26, 2024
Monday, March 25, 2024
Monetary Sovereignty and Mark Blyth’s critique of MMT — Peter May
And there is indeed a ‘current account constraint’ – if you are a small open economy you need things you can sell in order to get the stuff you don’t have.MMT does recognize this constraint by treating it with more nuance.
MMT really applies, as many others suggest, uniquely to the US as it issues the world’s reserve currency.
If you are not the US and your Sovereign Currency is weak, it will drive import inflation so it really means that your currency is not properly sovereign.
- China introduced new guidelines to replace Intel, AMD chips and Microsoft Windows in government computers with domestic alternatives.
- The move is part of China's "xinchuang" strategy to achieve technological independence and reduce reliance on foreign technology.
- Analysts predict faster adoption of domestic server processors compared to PCs due to a less complex software ecosystem.
Sunday, March 24, 2024
Climate Reparations, not "finance" — Fadhel Kaboub
A brief note on the EU, Egypt, Palestine, and Copenhagen
MMT's man on the ground in the Global South.
Global South Perspectives—Reflections & Analysis by Fadhel KaboubClimate Reparations, not "finance"
Saturday, March 23, 2024
Untangling the "socialism" vs. "capitalism" dichotomy — Alex Krainer
Interesting post that deal with some of the same concepts as MMT but is not MMT. It's an interesting take. He has seen both sides, having grown up in a communist country (Yugoslavia). He is former hedge fund manager, commodities trader and author based in Monaco. He now blogs on geoeconomics and geopolitics at TrendCompass on Substack.
Alex Krainer's TrendCompassUntangling the "socialism" vs. "capitalism" dichotomy
Friday, March 22, 2024
Entropy, the Theory of Value and the Future of Humanity — James K. Galbraith
In a keynote address to a conference on “Geopolitical Changes” at Kozminski University, Warsaw, on January 29, 2024, Professor James Galbraith called for economics to break with equilibrium dogma and re-found itself on the life principles that govern physics, biology and every existing mechanical and social system. Noting the distinguished presence of Professors Francis Fukuyama and E.S. Phelps, Galbraith called attention to the spectacular fallacies of “an end to history” and a “natural rate of unemployment,” arguing that these doctrines have helped blind our generation to the damage inflicted by rising resource costs and neoliberal policies of austerity and precarity, with dire consequences for households in wealthy societies, for their reproduction rates, and for the long-term viability of the species.
Transcript.
James K. Galbraith is an MMT-friendly economist.
Post-Neoliberalism—Pathways for Transformative Economics and PoliticsEntropy, the Theory of Value and the Future of Humanity
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
Top 25 Heterodox Economics Books — Lars P. Syll
Lars P. Syll’s Blog
Top 25 Heterodox Economics Books
Lars P. Syll | Professor, Malmo University
Monday, March 18, 2024
Claims that mainstream economics is changing radically are far-fetched — Bill Mitchell
I have received several E-mails over the last few weeks that suggest that the economics discipline is finally changing course to redress the major flaws in the curricula that is taught around the world and that perhaps Modern Monetary Theory (MMT) can take some credit for some of that. There has been a tendency for some time for those who are attracted to MMT to become somewhat celebratory, even to the point of declaring ‘victory’. This tendency is not limited to the MMT public who comment on social media and the like. My response is that we are probably further away from seeing fundamental change in the economics profession than perhaps where we were some years ago – after the GFC and in the early years of the pandemic (which continues). My answer reflects the incontestable fact that the make up of faculties within our higher education systems has not changed much, if at all, and the dominant publishing and grant awarding bodies still reflect that mainstream dominance. There is still a lot of work to be done and a lot of ‘funerals’ to attend (à la Max Planck)....
Summary: Nothing is going to change while the same clique remains in power and controls the educational and publishing process. Same in politics, although it is much more difficult to control the narrative that serves as an instrument of control than the narrative in terms of which the public understands economics. Heterodox economics has a long way to go in disrupting and eventually replacing this "Econ 101" narrative that firmly rules the collective mindset.
There is much more in this post than the title and lede paragraph would suggest.
Here is an example.
[Angus] Deaton then admits that “I have recently found myself changing my mind, a discomfiting process for someone who has been a practicing economist for more than half a century.”
How so?
Well,
1. He now says that the dominance of the “virtues of free, competitive markets” has meant that mainstream economics has ignored corporate power.
He wrote: “Without an analysis of power, it is hard to understand inequality or much else in modern capitalism.”
That is, without beginning with class conflict, an analyst has zero chance of gaining an understanding of the dynamics of capitalism, where capital seeks to influence outcomes in any way that advances their cause to retain their hegemony.
But if we introduced that into economic analysis there would be no mainstream elements worth retaining.
The dominance unit of analysis in mainstream economics is the individual.
Society is not considered.
Collectives are not considered.
Conflict is played down.
And when power does come up in mainstream economics the focus has been of trade unions as perverting the free workings of the labour contracting process.
Claims that mainstream economics is changing radically are far-fetched
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia