Bill Mitchell — The neoliberal ‘progressives’ and their bankster mates are becoming rattled

You know, an Italian won the British Open golf championship yesterday (the first Italian to ever win a golf major) because of the uncertainty surrounding Brexit negotiations. The causality is impeccable. I am sure about that, although it might take me a while to work it out. But if a British golfer cannot win their Open Championship (Rose tied for second, two shots back) then it must be because of Brexit. Everything else that goes wrong is, so why not the golf? It is the same when three former US policy makers, central bankers, Wall Street-types, claim that the US no longer “have to tools to counter the next financial crisis”. They know full well that that statement is a blatant lie. But they say it. To remain relevant as their stars dim? To do service to their conservative mates? All of the above and more. But the media grab the headline and the American public and the public in general is dealt another piece of neoliberal misinformation that helps entrench the hold on power by the elites. But things are changing, and these entrenched elites and the vested interests they serve don’t like it a bit....

Fabricated causes and scapegoating.

Bill Mitchell – billy blog
The neoliberal ‘progressives’ and their bankster mates are becoming rattled
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Lars P. Syll — The Permanent Income Hypothesis

Milton Friedman's PIH disconfirmed.

Lars P. Syll’s Blog
The Permanent Income Hypothesis
Lars P. Syll | Professor, Malmo University

See also

On randomness and probability in economics

Gavin Kennedy — Lost Legacies Stance of the Invisible Hand Is Endorsed

Weekend reading.

Michael Emmett Brady, California State University, published in the Social Science Research Network (SSRN) he takes giant steps to demolishing Samuelson’s myth. Michael Emmett Brady writes the most significant contribution to the invsisible-hand debate since 1948:

“Who Taught Paul Samuelson the Myth of the “Invisible Hand” at the University of Chicago? The most likely answer is Jacob Viner or fellow student George Stigler” .

 Its author takes the invisible-hand debate onto another level. Brady’s paper is available free via: https://ssrn.com/abstract=3078415

I highly recommend that readers visit the SSRN web site and read Michael Brady’s paper.There is no substitute for reading Michael Emmett Brady’s relatively short paper. It would be invidious for me to attempt to summarise that which is down-loadable in full from SSRN. I shall quote from Brady’s thoughtful contribution below, but I urge readers to follow his whole argument from its SSRN original….

The paper is 24 pages and an easy read.

Adam Smith's Lost Legacy
Lost Legacies Stance of the Invisible Hand Is Endorsed
Gavin Kennedy | Professor Emeritus, Heriot Watt University

The Corruption of Capitalism by Guy Standing: review by Brian Davey

Guy Standing’s The Corruption of Capitalism (Biteback Publishing 2017) is a powerful attack on rentier capitalism and, very explicitly, a call to revolt. It is very informative and the detailed factual descriptions that Standing puts before his readers are intended to make them angry. He succeeded with me and probably will with most readers. Standing is at his best describing the features of crony capitalism that are totally different from the neo-liberal story of free markets that justifies it. His charge is that neo-liberal economic policies are based on lies which he lists in order to describe what really happens....

Corporate statism.

Feasta
The Corruption of Capitalism by Guy Standing: review by Brian Davey

News of New Book on Adam Smith by Gavin Kennedy

An Authentic Account of Adam Smith

Gavin Kennedy

To be published by Palgrave-Macmillan, 1st September, 2017

Busting the myth.

Adam Smith's Lost Legacy
News of New Book on Adam Smith by Gavin Kennedy
Gavin Kennedy | Professor Emeritus, Heriot Watt University

Gavin Kennedy — Kenneth Arrow And The Invisible Hand

Adam Smith scholar and biographer Gavin Kennedy further exposes the myth of "the invisible hand" originated by Paul Samuelson, after which it went viral. Those who have fallen victim to it are likely exculpable since it is not their business to know the fine points. But economists? It's their field. What is their excuse?

Adam Smith's Lost Legacy

Kenneth Arrow And The Invisible Hand

Gavin Kennedy | Professor Emeritus, Heriot Watt University

Dani Rodrik — Straight Talk on Trade

This reluctance to be honest about trade has cost economists their credibility with the public. Worse still, it has fed their opponents’ narrative. Economists’ failure to provide the full picture on trade, with all of the necessary distinctions and caveats, has made it easier to tar trade, often wrongly, with all sorts of ill effects.…

Ideology? Paternalism? Trade is not the only thing that economists refuse to be honest about, as Randy Wray pointed out about Paul Samuelson and deficit myths.

Project Syndicate
Straight Talk on Trade
Dani Rodrik | Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government

Noah Smith — Want More Startups? Build a Better Safety Net

Good one. Another myth debunked.

It's about creating space and the right conditions for things to happen rather than relying on incentive.

This goes along with Mariana Mazzucato's entrepreneurial state. A safety net creates space and an entrepreneurial state creates the right conditions.

Bloomberg View
Want More Startups? Build a Better Safety Net

Noah Smith, contributor

Gavin Kennedy — Adam Smith's Metaphoric "invisible hand" and the Mythical Invisible Hand of Modern Economists

There is no actual Adam Smith's invisible hand. 

The invisible hand of modern economics is Paul Samuelson's invisible hand of market forces guiding equilibrium and optimization. 

As Joseph Stiglitz famously said, "There is no invisible hand."

Adam Smith's Lost Legacy
Adam Smith's Metaphoric "invisible hand" and the Mythical Invisible Hand of Modern Economists
Gavin Kennedy | Professor Emeritus, Heriot Watt University

Yves Smith — Investment Manager GMO Debunks Mythology of “Sound Finance,” or Deficit Hawkery

Word is getting around. The last mile continues to close. GMO is not the Bank of England, but it is influential in financial circles.  This will be widely read.

Naked Capitalism
Investment Manager GMO Debunks Mythology of “Sound Finance,” or Deficit Hawkery
Yves Smith

Bill Mitchell — Long-term unemployment behaviour reflects austerity bias in Eurozone

The Economist is in for it today.

The Economist magazine, never one to resist the urge to promote flawed ‘free market’ analysis, does not seem to have learned any lessons from its erroneous coverage of the GFC. It the latest version of what has to be one of the worst-named columns ‘The Economist explains’ (given explanation usually requires knowledge to be imparted) – Why long-term unemployment in the euro area is so high (August 2, 2015), all the usual myths about the labour market are propagated and the obvious ignored because it doesn’t fit the ideological position of the magazine.…

Enjoy the smackdown.

Bill Mitchell – billy blog
Long-term unemployment behaviour reflects austerity bias in Eurozone
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Warwick Smith — Repeat after me: the Australian economy is not like a household budget

MMT.

The Guardian
Repeat after me: the Australian economy is not like a household budget
Warwick Smith | chairman of ANZ New South Wales and chairman of the advisory board of Australian Equity Group

ht Warren Mosler

Lars P. Syll — NAIRU — a failed metaphor legitimizing austerity policies

NAIRU — another neoclassical myth based on simplistic assumptions and ignoring the elephants in the room.

Lars P. Syll’s Blog
NAIRU — a failed metaphor legitimizing austerity policies
Lars P. Syll | Professor, Malmo University

Think Left — Why do politicians tell us Debt/Deficit myths which they must know to be untrue?

The New Economic Perspectives’ video clip on the Government budget, Deficits and Debt presented below (produced for educational purposes), debunks the myths that politicians tell their populations to justify ‘austerity’. In the case of the clip, it starts with 3 full minutes of American politicians misinforming the electorate. An identical montage aimed at the UK electorate could undoubtably just feature George Osborne’s utterances from his forthcoming Autumn statement scheduled for this Thursday (5th December 2013).

However, the reality is that all economists know that the deficit and debt mythologies are not true and ’have long known that the idea of balancing budgets over the cycle is a bit like a fairy story we tell to frighten the kids’.

Nice post. Nice intro to MMT.  Good work, JK.

Think Left

Why do politicians tell us Debt/Deficit myths which they must know to be untrue?

(h/t Andy Blatchford on FB)

Bill Mitchell — How to discuss Modern Monetary Theory

Important post by Bill today.

I have been travelling a lot today (nearly 6 hours starting early) and so haven’t much time for blog writing. I am working on a paper at present on the use of metaphors in economics and how Modern Monetary Theory (MMT) might usefully frame its offering to overcome some of the obvious prejudices that prevent, what are basic concepts, penetrating the public psyche. Here are some notes on that theme. The blog is just a rough sketch and will be refined over the coming weeks. There is a section at the end that encourages reader feedback – lets see what you think.

Bill Mitchell – billy blog

How to discuss Modern Monetary Theory

William F. (Bill) Mitchell |Professor of Economics at Charles Darwin University, Professor of Economics at the University of Newcastle, and inaugural director of CofFEE