I am drawn to write this because of a comment I made on an earlier
post that started me thinking about MMT and its lack of broad acceptance.
Bill Mitchell, whom I have great respect for and who is an awesome writer and fierce proponent of MMT,
writes in his blog today:
"...demonstrates a palpable failure to comprehend what the real issues confronting the Eurozone are and how Eurozone Member States (19 of them) are fundamentally different in terms of fiscal capacity relative to nations that issue their own currency."
Mitchell's an extremely smart guy, but he seems to suggest that Germany's leaders (and elsewhere in the ruling class of Europe) don't understand the difference between the whole currency issuing and non-currency issuing thing. Basically it's a statement that they're all stupid.
Now let me just fully disclose that I have been of this view for a long time and I have written, here, numerous times about my run-ins with people like David Stockman who totally contradict themselves left and right when they spout their nonsense. I have argued that this had to be a sign of stupidity because a really clever yet manipulative person who knew the truth, but was intent on spewing propaganda would have his/her story worked out in a way so as not to look self-contradictory. In other words, so as not to look stupid.
Furthmermroe, over the years of publishing this blog I have receieved dozens of emails from readers telling me that they used to think the way the mainstream thought, but thanks to MMT and a little reflection they have had an epiphany and now see, clearly, how the prevailing "wisdom" is all wrong. Furthermore, most of these folks had no formal training in economics, which is proof that people can shed false dogma's if they wish. I know I certainly did.
Matt Franko and I have spoken about this, too, where we have pretty much agreed that it was stupidity that causes these folks to stay with their dogma despite mountains of evidence and proof that they are wrong (think: Reinhart and Rogoff fiasco) or, simply by looking at the ongoing failure of their policies and theories.
In the past I'd argue with Warren Mosler about this. Mosler would insist that many in the economic mainstream really knew the truth, but for whatever reason (and he offered no explanation) they would continue spewing their nonsense. I used to tell Mosler that he was naive and crazy to beleive that, but now I am beginning to think that Mosler was right. This has led me to see why, after 20+ years, MMT has gone nowhere and it won't go anywhere.
The powers that be have absolutely no reason to embrace MMT and change the way the game is being played. What for? The wealth and power that they are accumulating, which I am sure is beyond their wildest dreams, is reason enough to stay with the status quo even if the underlying concepts are "wrong." (Wrong for whom?)
Seriously, what reason do they have to change over to a system that would be more fair and equitable to everybody else when it does absolutely nothing for them? It's like Hillary Clinton saying she wants corporations to "share" more of their profits or, Paul Tudor Jones thinking there's a "free market" answer to inequality. The system has avarice and inequality built into its very nature and it was made that way not by kindness and gentle cajoling, but by brute force. To take it away requires brute force as well, but that ain't gonna happen. It simply cannot be wrested away and certainly not by a bunch of professorly dissertations or blog posts. Those in power don't give a shit about blog posts unless it suits their interests.
Look at Bernie Sanders. He may not be full blown MMT, but he's close and he has Stephanie Kelton working with him. Sanders is attracting huge crowds wherever he goes because regular people--Democrats and Republicans--love his message, but what chance does he have of winning? The powers that be will crush him when it comes to fund raising and they will be able to drown out or twist and poison his message and I'm sure he knows that.
Furthermore even if Sanders was elected president how would he get his policies passed? He'd certainly be facing a Congress where most members were put there by the elites for the very reason of thwarting him. Sanders thinks it's a matter of more people voting, but I think he's naive on that point. Over 60 million people voted for "change" when they voted for Obama and look what happened: more of the same.
Granted, Sanders would not be another Obama as he has plainly stated and I totally believe him on that point, however, this groundswell of grassroots support that he says is necessary to really affect change is not likely to happen because endless amounts of money would be spent to keep people voting against their own interests.
Even now you are starting to see many left-leaning pundits and some notable Democrats working hard to marginalize Sanders. Some might be tempted to say they are cannibalizing their own, but that would be incorrect. They just don't want to rock the system where they, too, have a place. Maybe not the top place, but a place nonetheless.
Perhaps I'm being too pessimistic. If I am, please, tell me why. Tell me where I am wrong. Tell me where I am making a mistake and all we need is more time and patience and enough people voting. Personally, I just don't see it.
If it's jungle out there with a bunch of predators running around then we have to become one of the predators and not the prey. We need to get into the ruling class etiher by buying into it or riding its ideological coattails. I'm pretty sure that all of you who read this blog won't be able to stomach the latter. So that leaves only option #1. Let's roll!
