Yasmin Tayag — How Do You Pay for the Green New Deal? Ask Andrés Bernal

The House of Representatives didn’t know what hit it.

The Green New Deal, introduced by Representative Alexandria Ocasio-Cortez in February, energized politicians on both sides of the political spectrum with its twin goals of carbon neutrality by 2030 and the promise of jobs for every American. It also polarized them. Critics have one main question: How the hell are we going to pay for it?
As the guy responsible for the plan’s “jobs guarantee,” Andrés Bernal, 32, has a lot to answer for. And he’s more than happy to. The Colombia-born, Texas-raised advisor to Ocasio-Cortez spends most of his time thinking about the people who need that kind of job security and how to pay their salaries. In fact, he’s one of them.

When he’s not advising the most galvanizing congresswoman on the planet on progressive economics, he’s a Ph.D. candidate and lecturer of urban studies at Queens College in New York City, making him part of one of America’s most notoriously underprotected workers’ groups....

The next generation is rising up and they are energized.

Inverse
How Do You Pay for the Green New Deal? Ask Andrés Bernal
Yasmin Tayag

Zero Hedge — Ivanka Starts Cat-Fight With AOC: "People Want To Work For What They Get"

Hilton asked Trump: "You’ve got people who will see that offer from the Democrats, from the progressive Democrats, Alexandria Ocasio-Cortez: ‘Here’s the Green New Deal, here’s the guarantee of a job,’ and think, ‘yeah, that’s what I want, it’s that simple.’ What do you say to those people?"

To which Ivanka responded: "I don’t think most Americans, in their heart, want to be given something. I’ve spent a lot of time traveling around this country over the last 4 years. People want to work for what they get," adding "So, I think that this idea of a guaranteed minimum is not something most people want. They want the ability to be able to secure a job. They want the ability to live in a country where’s there’s the potential for upward mobility."...

Pouring the Kool-Aid.

Zero Hedge
Ivanka Starts Cat-Fight With AOC: "People Want To Work For What They Get"
Tyler Durden

Paul Mason — Alexandria Ocasio-Cortez’s Green New Deal is radical but it needs to be credible too

The backers of Ocasio-Cortez’s bill released and then withdrew an FAQwhich seemed to suggest the investment would be paid for using the methods advocated by Modern Monetary Theory (MMT). MMT rightly argues, as against free-market economics, that a state with a sovereign currency cannot go bust. The state can create growth, and thus the means to pay back money borrowed; and it can create money, via the central bank, which can be used to lend to government.
For many people on the radical left, MMT has become a new panacea - a get-out-of-jail free card for Keynesian economics in a world of highly indebted and stagnant capitalism. Unfortunately, it is not.
While it’s true there is a lot more tax and spend capacity in a modern economy than the free-marketeers admit, it is not infinite. Nor is it possible to infinitely expand the money supply without collapsing the value of money towards zero. MMT gives no account of where economic growth or profit comes from other than within the monetary system itself. Unlike Marxists, who believe value is created in the production process, the MMT crowd believe it can be created by the interplay of fiscal and monetary policy. (For a longer takedown, see this from the left economist Michael Roberts.)
If MMT is wrong, there are two negative outcomes for the Green New Deal project.

That "MMT gives no account of where economic growth or profit comes from other than within the monetary system itself" is flat out wrong. Paul Mason claims to have read all of the MMT literature. Well then, if he has, he doesn't seem to be been an attentive reader, or lacks reading comprehension.

MMT is in agreement with most economists that economic is about the allocation of scare real resources, non-scarce resources having no market value, i. e. are "free goods." What conventional economics misses is how finance and economics are joined at the hip in a monetary production economy, and that this joint is structured in terms of double-entry accounting, which implies stock-flow consistent modeling using a unit of account. This brings in the the institutional arrangement and operations of finance, both public and private. 

Finance makes economics understood as the production, distribution and consumption of real good possible in a monetary production economy through price rationing in markets. Failure to understand this and its implications results in economic under-performance and inefficiency in the use of real resources, and also leads to financial excess (inflation) and deficiency (deflation). 

This was a major point made by Keynes that MMT economists agree with: Investment causes saving. It is not the case that saving causes investment. In a market-based capitalist society, production is chiefly the outcome of investment, with government acting in the background to provide a fertile field on which to plant, so to speak.

Full employment is the outcome of optimal economic performance. In a monetary production economy, proper understanding of the relationship of finance and economics is needed to maintain optimal economic performance and real full employment (not defined-down unemployment) while also maintaining price stability. 

This may seem to be the same as the neoclassical assumption of general equilibrium in the long run, but it is not. According Keynes, whom the MMT economists follow in this respect, there is no tendency to long-run equilibrium. Optimal performance with minimal waste of real resources has to be achieved and maintained. The task that MMT undertakes to make possible by providing the needed understanding that is now missing.

Optimal efficiency arising from natural spontaneous order in perfectly symmetrical markets exists only in formal models and not in the real world, where social, political and economics asymmetries predominate. The question is what to do about this. 

The answer of economic liberalism is bend the real world toward the ideal. That is a chimera given culture and institutions that impose social, political and economic conditions that work against it. It is as utopian as the pure communism that economic liberals criticize.

MMT is about dealing with reality, such as it is, and doing what is possible to make it better for all.

This is not to say that Paul Mason has nothing constructive to say. There is plenty to say about the Green New Deal and what it implies financially and economically as well as socially and politically. This is a huge challenge and instead of sniping at each other, we need to exert concerted effort to develop the design solution that has the best chance of success, with no guarantees that it will actually succeed. And it has to pass muster globally, where a myriad of competitive interests are in play.

New Statesman
Alexandria Ocasio-Cortez’s Green New Deal is radical but it needs to be credible too

Paul Mason

Jerri-Lynn Scofield — AOC Campaign Finance Primer Goes Viral

Wow. 16 million hits, and counting. Leave it to Representative Alexandria Ocasio-Cortez (AOC)  to show how to turn a campaign finance primer into a viral video.  Certainly the first time a congressional hearing on strengthening ethics rules for the executive branch  reached such a huge audience. 

This is a must-watch clip. I hesitate to add much commentary, as anything I write will likely not add all that much, and might instead only distract from the original.Nonetheless, full speed ahead, damn the torpedoes! I will hazard adding some commentary.

I only ask that you watch the clip first. It’ll only take five minutes of your time. Just something to ponder on what I hope for many readers is a lazy, relaxing Sunday. Please watch it, as my commentary will assume you’ve done so.

This is a big deal. I have often written previously that without overhauling campaign finance, lasting reform is not possible, if it is even possible to pass in the first place. Getting the money out of politics is a sine qua non of genuine change for the better. And that is just for starters.

If you haven't seen the clip yet (it's all over social media), watch it and you will see why AOC is the political force she is.

Then read the rest of the article. Jerri-Lynn Scofield is a lawyer. She understands this in depth.

Naked Capitalism
AOC Campaign Finance Primer Goes Viral

Jerri-Lynn Scofield

David Von Drehle — That Green New Deal has some seeing only red ink

Which brings us to the common ground that Trump shares with Ocasio-Cortez: Neither one believes in budgets. Central to the Green New Deal is a formulation known as modern monetary theory, which holds that the spending power of a sovereign government is limited only by its productive resources. Trump's fiscal insanity - massive spending along with pleas for lower interest rates - is modern monetary theory in all but name, and his trillion-dollar deficits are inspirational for the authors of the Green New Deal.

For today's left-wing Democrats, the theory promises to answer the critique made famous by the late British prime minister Margaret Thatcher. The problem with socialism, Thatcher said from experience, is "you eventually run out of other people's money." Modern monetary theory says simply: Print some more.

Even the theory gurus agree, however, that printing more money can eventually lead to inflation, and enough inflation can turn a rich country into Venezuela. The mantra of the Green New Dealers - that "deficits don't matter" - is only true until it isn't.
Could it be that Trump's reckless spending and his feckless Republican enablers will doom Democratic firebrands to live in the real world? Seems unfair. But the United States needs at least one party of reality.

Propaganda piece for the bipartisan Establishment, which is deeply conservative fiscally. All emotion, no fact-based argument.

Typical article by an uninformed journalist writing for money. Not worth wasting time on. That The Washington Post sees fit to print this sort of thing is a tell in itself.

Greenwich Time
That Green New Deal has some seeing only red ink
David Von Drehle, The Washington Bezos Post

Ted Nolan — 'Cum Laude'

Physician Ted Noel first admits that AOC went though rigorous math training to obtain her undergrad degree in International Relations and Economics, and then accuses her of making trivial math mistakes. 

He then shoots from the hip himself, cooking up an off the cuff model of why AOC is clearly wrong. 

Dr. Nolan  thinks he can just extemporize a response off the top of his head based on his undergrad math degree as part of his pre-med training when we are talking about launching another Manhattan Project to meet an existential threat. 

Another physician who thinks he is God? Don't waste your time reading this.

NOQ Report
'Cum Laude'

Ted Noel, MD

Kathryn Krawczyk — Alexandria Ocasio-Cortez wants to pay for her Green New Deal by essentially printing more money

Essentially, Ocasio-Cortez is continuing to argue for Modern Monetary Theory — something she said "absolutely" needs to be "a larger part of our conversation" in a recent Business Insider interview. The theory says that because governments can literally print money, "they can spend as much as they like," Politico explains. "Inflation is the only obstacle" that should stop the presses, The Week details here. In short, it's a big, untested idea for a big, untested plan.

Read more two columnist's opinions on why the theory would and wouldn't work here at The Week.

MMT getting hearing anyway.

The Week
Alexandria Ocasio-Cortez wants to pay for her Green New Deal by essentially printing more money

Kathryn Krawczyk

Victoria Guida — Ocasio-Cortez boosts progressive theory that deficits aren't so scary

Fair and balanced. Stephanie Kelton speaks for the MMT view. The other side is presented, too, but I would say that the debate goes to left in this article. For Politico, overall positive, and that says something of itself. MMT is getting harder to dismiss offhandedly.

Politico
Ocasio-Cortez boosts progressive theory that deficits aren't so scary

Victoria Guida

Zero Hedge — Ocasio-Cortez Formulates "Green New Deal" To Fix Climate And "Repair Historic Oppression" Tyler Durden

The talking is over. A legislative proposal is being prepared and will be put on the table "next week."

Politically, the big news is demographics. The millennial generation is now the most populous and the boomers are beginning to die off.

Young politicians are staking their claims to the future — AOC and Tulsi Gabbard, for example. How successful they will be how quickly is uncertain. What is certain is that they are going to be around for a long while and they will be joined by others.

The guard is changing and with the order as a new generation rise to power.

Ironically, the US is still government by the dinosaurs in power. Can they read the handwriting on the wall?

Zero Hedge
Ocasio-Cortez Formulates "Green New Deal" To Fix Climate And "Repair Historic Oppression"
Tyler Durden

Karl W. Smith — Democrats Will Profit From Trump's Populism

Likewise, Ocasio-Cortez has forced elites on both sides to at least grapple with the economic tenets of modern monetary theory. MMT, as it is known, suggests that a government with its own currency does not need to raise taxes in order to increase spending. So far MMT has faced strong pushback from elites of the left and right. But its basic contention, that deficit spending isn’t as bad as you have been led to believe, is gaining support.

These two propositions — that the government should check the power of private-sector billionaires and should spend freely to alleviate social ills — form the core of the classic leftist platform. And these positions are becoming more influential, not less, in the Democratic Party....

Bloomberg Opinion
Democrats Will Profit From Trump's Populism

Karl W. Smith

MMT at Davos

What the Davos crowd is talking about.

SFGate
Among some in Davos, debate over Ocasio-Cortez's proposed 70 percent tax on rich is over
Hamza Shaban, The Washington Post

See also

NY Post
How elite financiers feel about Ocasio-Cortez's proposed wealthy tax

Jaron Steinbuch

Michael Graham — Alexandria Ocasio-Cortez’s fiscal vision adds up – to trillions

So longer just "socialist"! Now it is "pseudo-communist." Some people are becoming really unhinged!

No wonder she wants to criminalize Michael Bloomberg’s wealth (though not his politics or campaign contributions) and supports something called “Modern Monetary Theory” — which says that every time the government spends $10 but only collects $8 in taxes to pay for it, you’re actually up two bucks. MMT says that the government owes it to the people to just keep printing money to pay for all the stuff they want. (Seriously. Google it.)

Confiscating wealth, printing unlimited money, free stuff for everyone and no fiscal responsibility?

ROFLMAO.

The Boston Herald — Opinion
Alexandria Ocasio-Cortez’s fiscal vision adds up – to trillions

Michael Graham

Mark Jeftovic — The Disturbing Rise Of Modern Monetary Theory (MMT)

I attempted to link directly to the source of the post, which ZH crossposted, but got the message that the site''s bandwidth limit had been exceeded. Apparently MMT is going viral. AOC is a big deal. She has changed the national conversation.

The "criticism" is pretty standard, from the gut rather than the head. Dealing with the truth is hard.

Zero Hedge
The Disturbing Rise Of Modern Monetary Theory (MMT)
Mark Jeftovic via Guerilla-Capitalism.com

Eliza Reiman — Alexandria Ocasio-Cortez slams 'far-right former governor' Scott Walker after he mischaracterizes ...

• Rep. Alexandria Ocasio-Cortez slammed former Wisconsin Gov. Scott Walker's simplification of her proposal to hike taxes on the super-rich in a tweet on Tuesday.
• Walker said he told a group of fifth graders that the policy amounted to their grandmother taking 70% of their $10 pocketmoney.
• In a viral takedown, Ocasio-Cortez pointed out that the proposed marginal tax rate increase would only apply to the wealthiest Americans.

Business Insider

Alexandria Ocasio-Cortez slams 'far-right former governor' Scott Walker after he mischaracterizes ...
Eliza Reiman

Harje Ronngard — She's Not Serious…Is She?

What happens when a business runs at a loss?

If it happens for long enough, eventually it’ll go bust.

So why should it be any different for the government?

Doh. Another Johnny-come-lately who still hasn't heard that the government is the currency issuer and that everyone that uses the currency must obtain it ultimately from the issuer as the monopoly provider.

Therefore, currency users are financially constrained, whereas a government that is sovereign in its currency is not constrained financially. Since the government is the currency issuer, it can always meet its obligations denominated in that currency.

The constraint on such governments is not financial but real. The constraint is the availability of real resources priced in the currency that the government issues. This implies that the government can always purchase and deploy idle resources without affecting prices.

However, if the government competes with the private sector for real resources in markets, then prices will adjust to what the government offers. This can increase market prices of scarce goods unless production increases to meet the higher demand.

MoneyMorning (Australia)
She's Not Serious…Is She?

Harje Ronngard

Clarissa — Kardashianization of Politics

Journalists simply follow ratings. The Kardashians have a huge following. When you see a woman who is a parody of a star on the Kardashians, you’ve got to put her on to attract viewers. I tune in for her like I don’t for Elizabeth Warren or Paul Ryan because she’s simply so goshdarn funny. It’s the Kardashian-type funny but it’s still entertaining.

Alexandria the Great Ocasio-Cortez.

The "younger generation" is about being natural and part off that means "not politically correct," let alone "serious." The older generation — the folks on the way out — grew up in an environment in which success meant "being serious," so as to establish gravitas and finally be recognized as a "very serious person" (VSP). That's out now. The mask is off.

This short blog post captures it. 

"The times they are a-changin'." (Dylan's Nobel in Literature is looking a lot more prescient. If you haven't yet read his Nobel lecture, it's good.)

Clarissa's Blog
Kardashianization of Politics

Clarissa

See also

The Establishment answer — wishful thinking.

Face the Nation — CBS
Commentary: Alexandria Ocasio-Cortez becomes the Sarah Palin of the Left

See also

Bonus pic. Alexandria the Great, Stephanie Kelton opposite, Pavlina Tcherneva behind (Twitter).

Three "power ladies" to be reckoned with. Wait, make that "high power ladies," as in, "You ain't seen nuthin' yet."

Bill Mitchell — Limits to government spending are not determined by private bond markets

The article had a picture of the latest progressive political star – Alexandria Ocasio-Cortez with the caption that she:

... backs the view that restraints on a government’s spending are primarily set by the amount it can borrow without fuelling inflation.

Progressive types then thought it was useful to retweet this incessantly for a few days.
My response – I certainly hope that Alexandria Ocasio-Cortez does not back that construction of the limits on spending for a currency-issuing government.

And I certainly hope that progressives do not embrace it either.

Why?

It is fundamentally incorrect and just reframes the way neoliberals think and uses their sort of language....

Bill Mitchell – billy blog

Limits to government spending are not determined by private bond markets

Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

David Swanson — Why Ocasio-Cortez’s Platform is So Great

Alexandria Ocasio-Cortez’ platform is dramatically better than many may realize. It tackles the greatest evil in existence in a way that no other big-2 congressional candidate’s website does and which most do not even mention. And in doing so, it makes serious much of the rest of her socialist platform in a way that even presidential candidate Bernie Sanders did not — a way promoted by the peace movement, the Poor People’s Campaign, and Black Lives Matter.…

By labeling her foreign policy platform “A Peace Economy,” Ocasio-Cortez, using a phrase popular with the peace movement, makes the financial connection without shying away from the immoral and criminal and counter-productive character of war. The fact is that war endangers rather than protecting, erodes rights, militarizes police and society, destroys the natural environment, directly kills and injures and traumatizes and harms millions, and — on top of that — does the most damage through the diversion of resources from where they could do good. War is the only place where enough money sits with which to try to protect the environment or to guarantee education or retirement or other basic rights. Candidates who do not mention war spending are not serious about the things they do mention.

Ignorant of the currency issuer-users distinction, but otherwise right on. Alexandria covers the bases.

Counterpunch
Why Ocasio-Cortez’s Platform is So Great

David Swanson

Briahna Gray — There’s an Easy Answer to Why Alexandria Ocasio-Cortez Won: Socialism

Ocasio-Cortez’s socialist message is not an incidental part of a larger demographic story. And her socialism shouldn’t be treated as a virus opportunistically riding the vector of her Latina form. Socialism is inextricable from Ocasio-Cortez’s success because it’s the secret behind her ability to do what the Democratic party has long failed to do — articulate a holistic progressive vision for America.

Socialism is a framework that supports a belief that a country in which everyone can live with dignity is not the stuff of fantasies, of “ponies” — nor is it the selfish dream of a “privileged” populous who want something for nothing. It’s a socialist conception of the world which emboldens Ocasio-Cortez to aver, on a popular late night show, that “in a modern, moral and wealthy society, no person in America should be too poor to live.”

Socialism reveals that capitalism — a system which privileges markets over community — is not a natural truth, but a political choice to which there are alternatives. It shows that Jeff Bezos’s wealth cannot be understood as unrelated to the plight of Amazon’s workers, but is a consequence of their hardships. It reveals one man’s merit to be another woman’s wage theft, and challenges society to value humans outside of our ability to toil. It’s what sets up Ocasio-Cortez to talk about human dignity as non-negotiable. Where Nancy Pelosi quips, “we’re capitalists, and that’s just the way it is,” socialism says that’s not good enough....

Ocasio-Cortez put it best: “At the end of the day, I’m a candidate that doesn’t take corporate money, that champions Medicare for all, a federal jobs guarantee, the abolishment of ICE, and a green New Deal. But I approach those issues with the lenses of the community that I live in. And that is not as easy to say as ‘identity politics.'”

The Intercept

There’s an Easy Answer to Why Alexandria Ocasio-Cortez Won: Socialism

Briahna Gray