Richard Eskow of the Center for the American Future, posted a very good one a couple of days ago. He used the old union meme “which side are you on” to beat up the President and Congress about Social Security being placed on the negotiating table. I thought his writing on it was striking. Here’s some of it:
“This is a moment of moral clarity. Right now there are only two sides in the Social Security debate: the side that says it’s acceptable to cut benefits – in a way that raises taxes for all income except the highest – and the side that says it isn’t.
“It’s time to ask our leaders – and ourselves – a simple question: Which side are you on?
“Nancy Pelosi says she can convince most Congressional Democrats to “stick with the President” as he pursues his gratuitous and callous plan to cut Social Security benefits as part of a deficit deal – even though Social Security does not contribute to the deficit.”
I certainly hope that Nancy Pelosi cannot convince most Democrats to risk their seats and prepare the way for a Republican sweep in 2014 by voting to cut SS. The Republicans will respond to this by casting themselves as the protectors of SS, and while this is ridiculous, the Democrats will not be credible in claiming that they are its protectors, and they will lose their identity as the protectors of the safety net, a very high price to pay for the sake of raising taxes on the rich by an amount that is insignificant in the greater scheme of things. Eskow goes on:
“Excuse me: Stick with the President? What about sticking with our seniors and our veterans? What about sticking with our disabled fellow Americans? What What about sticking with the more than 4,000 children on Social Security who lost a parent in the Iraq War?
“If you want to “stick with” Americans on Social Security, it’s time to call everybody who represents you in Washington – your Representative, your Senator, your President – and tell them that they’ll lose your support if they do this deal.
“It’s time for an end to the Orwellian doublespeak. Cutting benefits won’t “strengthen” Social Security, as Nancy Pelosi claims. Cuts of 6.5 percent for a 75 year old and 9.2 percent for a 95 year old aren’t so small that “folks won’t even notice ‘em,” as President Obama claimed. They’re not a “technical” adjustment, as his press secretary argued, nor do “most economists believe … this about getting a proper measure of inflation.
“The smart economists know that even today’s cost of living formula isn’t enough. It undercounts the things older and disabled people use the most, like health care and public transportation. Some other people know the formula’s inadequate, too: Seniors. They live with the costs every day.
“So let’s stop all the double-talk and get down to the real question at hand: Which side are you on?”
The framing is “which side are you on”? Will you stick with the President and the people, who will do a deal at any costs, or will you stick with seniors and the American people. This reminds me of the frame Randy Wray recently used in one of his posts on re-framing MMT. That framing came from Bruce Springsteen:
We take care of our own
We take care of our own
Wherever this flag’s flown
We take care of our own
And it’s amplified by Randy Wray this way:
“. . . We don’t let old folks sleep on the street. We take care of our own. We don’t let children go hungry. We take care of our own. We don’t exclude the 47%. We take care of our own.
“We’re all stakeholders in this great nation. We take care of our own. White, black, brown, yellow and red, we take care of our own. Young or old, healthy or sick, we take care of our own. . . .
“We need a good government to help us take care of our own. We need good public services and infrastructure to keep our country strong so that we can take care of our own. Our government spends to keep our country strong so that we can take care of our own. . . .
“Sovereign government cannot be forced into involuntary insolvency. It can always afford to make all payments as they come due. It can always afford to buy anything that is for sale for its own currency. It can always financially afford any spending that is in the public interest. It can always afford to take care of its own.
“Anything that is technologically feasible is financially affordable for the sovereign issuer of the currency. It comes down to technology, resources, and political will. We’ve got the technology to take care of our own. We’ve got the resources to take care of our own. All that is missing is the political will.”
So, which side are you on? Are you on the side of most of us who want to take care of our own, wherever our flag’s flown; or are you on the side of people who believe that the US Government’s fiat money financial resources are necessarily constrained, so that we must choose between taking care of our own and making sure that our wealthy people and large corporations don’t have to risk any of their wealth by giving their due to our country?
Don’t get me wrong, I know the Federal Government doesn’t need tax revenue from the wealthy or anyone to fund anything, because it’s false that the Federal Government must spend only after it taxes or borrows. But there are still at least three good reasons to tax. First, the value of our fiat money is driven by the need to have enough to pay taxes. Second, taxing is needed to regulate and manage inflation. And third, taxing is needed to lessen economic inequality so that political inequality does not become so extreme that it poses a danger to democracy. All three reasons are ultimately about taking care of our own.
Eskow ends with:
“Tell the President you’re against the chained CPI. Tell your Senators and your Representative to declare their unequivocal opposition to it like Grijalva and Ellison and the others did, and to vote accordingly.
“And ask them that simple question: Which side are you on?”
I agree, and I’d also add:
Tell them that SS, Medicare, and Medicaid are litmus tests for them. Vote to cut them and you’re gone after the next election. It will be “Bye Bye Marjorie” or whatever your name happens to be, for you!
More and more of us know the dirty big secret that there is no debt/deficit crisis. That the Government isn’t constrained in the amount of fiat financial resources it can create.
So, we know that we can afford the cost of the social safety net, and even a lot more generous one than we have today. We also know that the Government has the financial capability to underwrite full employment, Medicare for All, a first class educational system, alternative energy development, infrastructure reinvention, programs to counter and reverse climate change, and whatever else we need to do to solve our problems.
So, don’t you go telling us any longer about the fiscal constraints that excuse your not doing your jobs. We know those don’t exist. We know you have no excuses.
So, get off it, and represent us! Help us take care of our own and each other, or resign from public office!
And that goes for the most junior Congressperson and also for the President of the United States! If you’re not on our side and you don’t want to help us take care of our own, then get out of our way and give somebody else a chance who’s patriotic enough to serve!
After what I saw the police reaction to non-violent Occupy protests in 2011, I am not surprised that Occupy didn’t advance in that direction. There are, however, offshoots of Occupy such as Occupy the SEC which have done very good work submitting briefs re certain regulations as opposed to the bank lobbying for their interests. There is also the developing police state that can and probably will use drones and other means to control and disband protesters.
That reply was to SteveK9.
I agree about Occupy and the dangers we have today from Police. However, protests may still not be gone. Remember, that they were very dangerous during the civil rights movement of the 1960s; because the Southern Law Enofrcement people would kill people. But at some point that did not stop the protests.
Also, today we have other means of protesting through the Internet which may ultimately prove very effective, and you’re also right that certain Occupy actions have already proven effective.
I am not clear how the threat to vote Democrats out in 2014 – i.e. for cutting Social security and other safety net programs – is either credible or, sorry to say it, even fully coherent. I certainly agree that the politicians don’t know what they are doing economically, and of course I agree that it is going to be an absolute and gratuitous slap in our progressive faces when they cut SS in any way, but I think we need to be both tactical and strategic about it. It’s almost certain to happen, and it has been in the pipeline for a long time. I don’t think anyone has much reason to be surprised that the day may actually be at hand.
As long as the politicians continue to live in their ‘mainstream’-narrative bubble they will continue to sincerely believe that their actions protect the future of SS and of beneficiaries. They’re wrong. They could hardly be more wrong – but they’re not being disingenuous. Yes, what they say is untrue, but they’re not lying because they don’t know that it’s untrue. So, we’re just going to take a lot of hits like this in the near future. I try to focus on the fact that whatever they do now can and will be undone after the, you know, MMT revolution.
I sincerely wish I could believe that American progressives are, or could soon become, the kind of grass-roots political force in America that could effectively primary sitting Democrats from the left in districts gerrymandered to make them all but impossible for Republicans. Nothing would make me happier. And I do not rule out the possibility that the betrayal now being concocted in the White House may be toxic enough, egregious enough and insulting enough to have a very electrifying effect in progressive ranks. If this happens, and we see an outraged left rise up, prepared to sacrifice and devote limitless energy to a campaign to move the Democratic Party hard left, then great. I’m in. But where is the evidence that such an uprising is really likely? Obama and his crew have been calling us “effing retarded” and crapping all over their promises to us for years. We’re still voting for them, and, as of right now, we still have nowhere else to go, and they still know it.
The thing Establishment Democrats have to hold over the progressive base in 2016 is the specter of 2010. They will plead and scold and remind everyone that *they* are still the only force standing between the rest of us and the firey-eyed, barbarian, Ayn Randian Right, which is not coming after the safety net at the margins or in the long run. These people are looking at our safety net the way an orca looks at a baby seal. The Dems will remind everyone of what life was like when Allen West and his ilk ruled the roost. They will not plead guilty to their Great Betrayal, but they may have a way to effectively plead no-contest. They may say that the alternative was anarchy, non-governance, and a constitutional crisis with consequences so unpredictable that we might have witnessed a second global financial whirlwind, and another opportunity to fall into a second Great Depression.
And is it not possible that, in this very limited context, they may be right?
Is it not possible that a radical, rejectionist front might form in Congress? It would be anchored by the usual Tea Party suspects – people who daily inhabit the Matrix-like fantasy world where up really is down and down really is up – but it might still able to extort or intimidate more traditional far-right Republicans into a bloc. Which might simply try to obstructively annul the Constitution of the United States, stop anything at all from passing and thereby declare national bankruptcy through voluntary default. Can anyone assure me that this cannot, possibly, happen? For if it can, then it really must be stopped, even if we have to buy the time it will take to get rid of these people with concessions that look very costly, but only become so over longer time horizons. It is a terrible, terrible price to pay because of the terrible precedent it would set. But is it more terrible than the bank bailout of 2009?
I don’t know whether any of this is true or false, but I don’t want to find out in a standoff between a rejectionist front on the right and a rejectionist front on the left that prevents any resolution of the current crisis by an absolute refusal to ever cut anything in Social Security. And I am *on* Social Security. (I do, of course, completely support the principle that SS should never be cut, that it should rather, always be in a process of being expanded, both materially, through benefit increases, and temporally through lowering the eligibility age, in line with the growth and development of the real economy which supplies the actual goods and services which seniors, survivors and the disabled actually consume. But this principle is strategic. Our current problem is tactical.)
As for Mr. Eskow’s concrete plan of action, it boils down to “drop a dime”, (though they don’t make pay phones anymore). Mr. Exkow is asking people to skip the email and the snail mail and take the decisive step of actually *calling* their representatives, threatening to vote them out without delay, the very next chance they get, which is in 2016 – if they cut SS. Absent a massive, unprecedented and successful progressive uprising in the field of electoral politics, who wins these seats? Relatively moderate Republicans who will, nevertheless, be wielded by a Congressional Republican leadership whose style might be called, using the antiseptic language of the old Reaganites, “authoritarian”. They will obediently join the ranks of the firey-eyed barbarians wearing suits, and equiped with very large American Flag lapel-pins.
Realistically, what force on or near the political left in America has the mass, the funding and the organizational acumen to primary sitting Democrats from the left? If we answer anything else except “Obama-For-America Incorporated” (I don’t know the current name), then I think we are kidding ourselves. How likely is it that the president’s most ardent supporters, most of them quite young, will desert him and bring their skills and energy to a campaign to weaken and denigrate him over Social Security, just as he is reaching a perceived high-point in effectiveness and public approval?
No, I’m sorry. I don’t see a scenario where either progressives or the vulnerable constituencies we try to protect do better than we do by winning the painful uphill battle to re-take the House as soon as demographics bring it within reach. It is not realistic to think we can do better *electorally* right now. And electoral politics is mind-bogglingly resource-intensive. Not even Warren could write this check.
Since we can’t fire our representatives right now, we shouldn’t try. It’s just prohibitively expensive and tactically impossible. What we *can* realistically hope to change, and must change, is some of their thinking. Such efforts would be blunted, and much time would be wasted, if we were to react or over-react to Obama’s next inevitable satan sandwich. Like, by attacking and undermining the only cadre of potential MMT legislators we have or are likely to have any time soon. Most of our work, for now, will still be done, and will have to be done in the “superstructure”, not the base. Imagine Al Franken in a room with Chris Hayes, Mike Norman, and any one of the Columbia tag-teams who dunked it at Columbia last month. That’s the way I imagine spreading the influence of MMT among opinion-makers, both in Washington and elsewhere.
That and the work of sites like this – bringing back the Enlightenment (new and improved), one mind at a time.
It’s a good analysis; but I didn’t say we should vote against Democrats. I said we should vote against anybody who cuts SS or other safety net programs, especially because there’s no deficit/debt crisis and we here know it!
Also, there are different ways to do this. One is third party, of course; and that impact is likely to be small. But the other is internal challenges to people who vote against the safety net. There are low bars for entrance into both D and R primaries in most states, and incumbents can be beaten by insurgents as the tea party has shown. We can beat more incumbents who vote against SS, Medicare, and Medicaid through primaries, and then still vote Democratic in 2014, and avoid a Republican taleover. Nor do our candidates have to appear particularly left wing. All they have to do is to attack the incumbents on the issues where the compromises they voted for went against majority opinion as measured by the polls.
Your analysis, and maybe the incumbents themselves, aren’t recognizing that they are voting against things (safety net programs) the majority of voters want them to leave untouched, and for something (defense spending) that the voters want to see seriously cut. So, all challengers have to do is reflect the voter polling to mount a challenge to incumbents who have sold out to the Wall Street CEOs. I live in Alexandria, just outside of DC and my Congressman is Jim Moran. he always wins by substantial margins, because he never gets any challenge from within the D Party. But he’s ripe for replacement, because he always supports a Democratic President when in power, and is only progressive in rhetoric and when we have a Republican President.
Both Democratic Primaries and attempts to convince people like Al Franken (that have a brain), do seem like good approaches. I had some hope that the ‘Occupy’ movement could grow into a political force. I’m afraid people aren’t miserable enough yet. And, unfortunately that could remain true. Advances in technology mean that even in the face of ridiculous unfairness, people at the bottom are not going to suffer like French peasants before the Revolution.
I agree that people aren’t miserable enough yet; but to compare things with the French Revolution is a little extreme. Here we do still have the vote even though we also have its manipulation, suppression, gerrymandering and dirty tactics to keep people away. So, to take the Congress and State legislatures won’t require revolution, only good organization, a modicum of money, use of internet technologies, and people getting out the vote. We can do that without having to go to the same lengths as the French peasants or the Russian workers and peasants.
I don’t know if we will make the Congress better for the 99% after the election of 2014. But we certainly can do so; and we certainly can swing it in favor of the most of us in 2017.
Thanks so much for the reply. Let me start by saying that whatever “we here” may know – which I take to mean “here inside the NEP/MMT community”, a vanishingly small number of American voters have even the first, tiny inkling of it. I think that, in its present iteration, what “we know” is far too complicated for electoral politics. I can’t think of a way to turn the SS-cut-related anger of senior citizens – who mostly vote Republican anyway – into energy for progressive primary challenges to entrenched Establishment Democrats. These Democrats seem to me to be the only politicians for whom SS cuts of the type we are hearing about are electorally problematic. If there are a handful of exceptions at the margin – and if your own district is one of them – I can’t see it making a big difference as soon as 2016. All of the Republicans will happily vote for the cuts, knowing that they are gerrymandered in, and knowing that their propaganda apparatus can simultaneously harrow Dems for the cuts while praising their own votes for them as “reforms” and as “saving the program for future generations.” Their whole show runs on stupid, one hundred percent of the time, with a little extra push from mild cognitive impairment. I think they’ll be O.K.
That said, if anyone, anywhere knows of an opportunity for a progressive to knock off a sitting Democratic representative from the left, how can I not love that? I love that. But I don’t know how to do it myself. I voted for the left-challenger to my freshman representative in our primary (i.e. the easiest Establishment Dem to beat in a primary). The progressive lost by a very, very wide margin to Mark Pocan, who is just an average Democratic pol I had hardly heard of. He won going away. Party organization and even a little name recognition made him unbeatable, and I live in one of the most progressive enclaves, within one of the most progressive counties, in the country. Will the same challenger or another one, beat Pocan in the next primary because he will have voted, *like hundred of other Democrats* for chained-CPI? I don’t know, but it sure seems unlikely. Even if some elderly Republicans cross over to punish Pocan for that vote (which I must say strikes me as unlikely), our district is gerrymandered so hard for the Dems, it can’t possibly make much difference. Elderly Democrats and true-blue progressives might – just might – put the challenger over the top, seeing this vote as betrayal. But that’s one measly seat won in the most favorable conditions I can imagine for a progressive challenger, and purchased at the expense of almost all of the energy and bandwidth available for the next two years. And probably requiring, in addition to this, significant outside support, both political and monetary.
But that makes it sound like I know what I’m talking about, which I really don’t. I’ve read “Game Change”. That’s how much I know about high-stakes electoral politics.
I’m thinking about the way conventional Democratic electoral politics just sucked the life out of the original mass movement here to beat back Scott Walker. In the early days, sentiment was building for a statewide general strike. Really. Labor councils were sanctioning one. The Dems gradually turned the focus over to the Recall campaign, which progressives, looking out at the outraged masses, saw as a sure win. But it quickly turned into the same-old same-old. There were no new progressive demands – no program. It fairly quickly degenerated into “Scott-Walker-is-a-low-down-lying-low-life.” Republicans were happy enough to re-fight the same campaign with a dash of union-bashing. Walker won a plurality of *working class* votes, telling oppressed private-sector workers that their taxes shouldn’t go to gild the bathroom fixtures of lazy government pencil-pushers. To be fair, he really won on process. A lot of people didn’t approve of, or even understand, the Recall process. Their votes for Walker were mainly votes for “now don’t get so riled up – you’ll get your chance.”
But, oh, what if we had actually had that general strike?
I’m leery of electoral strategies because the institutional and media dynamics lean so far toward the Established Order, and, again, because it requires such stupendous amounts of money and energy. Movement politics are iffy in just as many ways, of course. At any given point, finding the right interface between the two could be our definition of the art of politics.
Right now, I frankly see electoral politics at the federal level as a trap. Sure we can vote. Sure, we can try to raise up DCCC-type formations. We can certainly wish them well. But our insurgency is taking place in a different context, taking aim at a completely different component of the neoliberal superstructure. We are a coalescing core of intellectually armed-and-ready agents – agents of a truth-and-reality-based economics. But our battlefield is not (yet) the base-turnout battlefield of canvassing, polling, advertising and voting. We don’t belittle these things, and we all do what we can. I personally think that local and statewide politics have more to offer, but again, it’s an instinct. I don’t know.
What I do know is that Big Economics is in trouble, and its movers and shakers are starting to sweat. Krugman wrings his hands over it. The *IMF* pulls back the reality-based veil from some of it (see a recent Billy Blog – easy to find). The movie “Inside Job” led to a 60 Minutes piece and to “Predator Nation”. It is dawning on people that a few of these big-time intellectuals are really just crooks, who rent their reputations to Wall Street or the Romney campaign, and who walk away filthy rich no matter how little resemblance their modeling and analysis ultimately bears to anything in the real world.
It’s not my place to name names. This is a stable the “profession” itself will have to clean. But the first set of names, dates, places and outrages is already in the public domain, and though the arc of history bends slowly, it bends toward truth.
Gotta go. Thanks for the time, as always.
Thanks for your thought-provoking comments and to Joe for responding to them. As I read them and some of the comments in response to Stephanie’s LA Times op-ed piece (big congratulations on that, BTW!), I’m reminded of a book I recently started reading called “Creating Wealth: Growing Local Economies with Local Currencies.” It’s written by Gwendolyn Hallsmith and Bernard Lietaer. I’m reading it because I was intrigued by a few videos I recently watched of presentations by Lietaer.
The focus of the book is on the potentially very positive role of “complementary” currencies that could be used as a supplement to fiat currency. Among its uses would be to link underutilized resources (including the involuntarily unemployed) with unmet needs.
While one could argue that such currencies would not be needed in a well functioning democracy in which policymakers understood and applied MMT, this is (sadly) not the society or political system in which we now live. And it may not be for some time (though I hope that’s not the case).
Based on what I’ve read so far, I’m very impressed (I’m about to read a short section on UMKC Buckaroos). This leads to a question for the MMT community, whether you be a non-expert supporter like myself, or one of the movement’s leading thinkers:
Do you see a potentially positive role for complementary currencies, especially in an environment (as we have today) where national political dynamics and economic policy remain pretty tightly under the control of neoliberal philosophies and the oligarchs who finance the continuation of this situation?
It seems to me that a grassroots mobilization focused on complementary currencies used for progressive purposes could achieve positive change, even if limited in scope geographically or otherwise. This change and the way in which it was achieved could then spur other progressive-minded citizens and organizations–and even some political leaders–to open their minds to a new view of the relationship between financial and real resources, and to the possibilities for using the former to better mobilize the latter to increase prosperity in ways now thought “financially unaffordable,” due to ignorance (willful or otherwise) regarding how modern monetary systems work.
Anyone have any thoughts on this?
I see a potentially positive role for private currencies, especially now when the influence on the USD of the Street and the 1% is so great. However, the question we have to ask ourselves is whether the proliferation of such currencies would not have a negative impact on the legitimacy and value of the dollar when the financial system is democratized. Consider, right now the incentive for the financial community to develop alternative currencies is limited because they such a heavy influence on the dollar, the bond markets, the currency markets, and international exchanges. But when that influence lessens and the currency is used to benefit most Americans, rather than just the Street and the wealthy, then if the idea of private currencies has attained legitimacy, you can rest assured that financial interests will invent their own international private currency and try to de-legitimize state currencies. At that point, any benefit the poor and middle class get out of their own currencies may easily be washed away by the overthrow of the State currency.
I know the above is diffuse angst, and not supported by any serious modeling or analysis. What I’m saying is that we need some serious modeling of the impact of private currencies before we embrace them.
Interesting points Joe, which I hadn’t thought of (as I keep reading, I may find out if Lietaer has).
My understanding of these complementary currencies is that they are and would be fairly localized and/or focused on a specific purpose like education, and would typically establish rules to minimize the risk they could be hijacked by Wall Street types.
And, to some extent, the latter are already creating their own forms of exchange currencies (loosely defined), which they’re using to speculate and wreak havoc on national economies, etc. So my sense is that a broader expansion of complementary currencies like the Buckaroo and some others that Lietaer cites and has proposed would not necessarily increase the risks of empowering Wall Street to undertake more aggressive and effective efforts to de-legitimize state currencies.
That being said, I also concede that this point of view is not grounded in any serious analysis that I’m aware of, though I do plan to read more of Lietaer’s work to see how far he and others may have taken this.
And to reiterate my own “diffuse angst,” I’m lately not so confident that the democratization of the financial system you refer to is anything close to even a medium-term prospect, due in large part to the deeply corrupted political system we have in this country. If this corruption isn’t addressed (a heavy lift, at best, but certainly worth trying), it seems likely that the financial system’s instability and excesses will not be brought under control and that, as Lietaer argues, complementary currencies can provide the real economy and local communities with an increased buffer of financial resilience if and when future GFCs of various types and sizes occur.
Again, I appreciate the feedback. And great work on the PCS. I learned a lot from your posts, and hope that those with a lot more influence than me did as well.
I can. Run on 1) offering an increase in the COLA by replacing the new and unfair chained-CPI with a CPI-E. 2); strengthening Medicare by enhancing it according to the provisions of HR 676 increasing coverage to 100% of basic health care services; 3) opposition to established Democrats and to the established Democratic Party as a whole including the President using very sharp criticisms focused on the economy, protection of the banksters, fraudsters, and other criminals, and opposition to the ACA; and 4) the fiscal irresponsibility of placing deficit and debt concerns ahead of job creation, and solving all of our other problems.
That’s a winning platform if you use the right messaging. The establishment Dem won’t be able to counter because they’ll be tied to DCCC money.
I don’t think that would be effective against the kind of insurgent campaign I’m talking about; because the Democrat running will be divorcing himself from the establishment Dems from the beginning and will have won the primary on that basis. So, when she or he turns to face the Republicans they can’t be tagged with the Party failure.
That’s where I think you’re wrong. They can be beat by someone speaking clear kanguage telling them she/he will do everything they can to legislate the platform I stated above.
Joe — No analysis. Just a big THANKS for a great post. And, thanks for continuing to push the PCS in your writings.
Thank you, John. I will be going back to PCS posts pretty soon. I have one more post I want to do on Michael Hoexter’s framing proposal, and then I have at least two more PCS posts in the pipeline. In addition, after the New Year and the likely year-end band-aid that will be put on the fiscal cliff, we will probably have very tough conflicts in January over moderating the portion of fiscal cliff damage that isn’t covered by the band-aid and also over the debt ceiling. So, I’ll be pushing for as long as the crisis lasts to get past the debt ceiling for good by using $60 T PCS. I’ll keep trying until I’m sure that Democratic Congresspeople know about this option and will be trying to persuade them to reject any deal the President wants to make on the debt ceiling. I want to leave him in the position where he has to choose between default and using either PCS or consols to avoid it! Not only will this stop any entitlement cuts; but I also think it’s the next step toward getting the public and everyone in Congress to recognize that we don’t need to tax or borrow using debt instruments that count against the debt ceiling.
Great. Just last week the magazine “The Week” had the PCS idea blurbed on the front cover. Unfortunately, they only quoted Plumer, Drum, Yglesias, and Weisenthal in the article and most of the quotes related to the silliness or gimmickry of that option. Even so, it’s a print medium with over 500,000 subscribers and a newsstand presence, so I consider it a net positive in bringing the idea to a wider audience.
Looking forward to your future posts. May the new year be a healthy and prosperous one for you and your loved ones.
If anyone is still following this thread, some thoughts:
1.) First, thanks to all for a lively exchange of ideas.
2.) @Mitch Shapiro – I caught M. Bernard Lietaer’s talk on YouTube regarding complimentary currencies, and followed up as far as the C3 movement in Uruguay (which he cites). If there is anything to this, MMT should be able to parse and parcel it better than anyone around. It impresses me a lot, not least because M. Lietaer takes it very explicitly back to Chartalism, and emphasizes the importance of the fact that C3 currency is valid tender to pay Uruguayan taxes. Lietaer even throws in a mention of UMKC.
I would love to hear a leading MMT person’s take on this.
3.) Regarding electoral politics:
Again, my principal response is: if anyone thinks they can make this work, and knows how to (which I don’t), then tally-ho. All the love. But I don’t think my skepticism is mere pessimism. Consider the electoral career of Warren Mosler. Consider, first the candidate himself – for here is a person with instantaneous credibility as a successful, multi-channel entrepreneur. And he knows his MMT cold, hot and every temperature in between. He can well be said to have invented it – at minimum, he helped to inspire and motivate its co-inventors. Add to this an obvious factor – he could afford to take the time and spend a little of his own money. I don’t know that he did, but he was, at least, at liberty to devote his own time and other resources to these projects. And no matter what anyone thinks of his charisma-factor, Warren, on the stump, was never at a loss for words or uncertain about how to frame his message.
If an MMT movement luminary of this stature, running mainly as a non-ideolgical, moral voice, and as a voice of reason, can’t win a largely symbolic post representing the Virgin Islands, I think it should give us pause.
But I have two other, even more threshold-level issues with this topic. First, I don’t see anything new or explicitly MMT in the dissident platform that is being proposed. Regular progressive and populist Democrats are having this discussion for themselves – Mr. Eskow in this case. I think we all wish them well – I certainly do. But it doesn’t take MMT to tell you that the Wall Street predators are coming after the safety net with both hands and a steam shovel, or that Barrack Obama is is willing to foam the runway for his agenda using senior citizens, students, and the poor for foam. He isn’t just willing to. He wants to. Because he is a lawyer acting on the internal advice of some long-defunct economist (albeit one with plenty of wide-awake avatars).
Obama thinks that it is essential to cut the deficit. He’s not lying. He really thinks that it is. And Mr. Eskow (or Mr.Krugman, or Mr. Baker or Mr. Reich), would, if pressed, agree. Though they would all displace this necessity into the indefinite future, and would strongly emphasize the immediate-term disaster that austerity would inflict, even these liberal-minded Equilibrators are still in thrall to the models and methodologies of the ‘mainstream’. Unable to articulate a real alternative, they end up hemming and hawing about the timing of it all and “who should pay”. It devolves into a moral argument about the poor – “Oh spare them, spare them! You should tax the rich instead!” That’s not an economic argument that leads to MMT precursors, so threshold question number one is: how does this process advance MMT thinking in the first place?
The second issue I have here is even more basic. I want to better understand just how we are imagining / predicting / forecasting that the MMT paradigm will come to actually do the things it is capable of doing – as the self-conscious, theoretical basis of practical economic policy in the real world. And where do we think we are now, in relation to getting that to happen? I know how I view it.
I think MMT is a dissident academic and intellectual movement, still far out on the fringes, and still marginalized by the powerful, deeply-entrenched, ‘mainstream’ academic powerhouses – Chicago, Harvard, MIT, (and, for some reason, people always seem to mention Minnesota – what’s up in Minnesota, anyway?) Anyway, MMT can’t win any arguments with Big Economics, because Big Economics is a closed system – it won’t debate. Why should it? It controls all of the big departments, all the journals, the endowments, the contacts with business and the media – everything. It doesn’t even need to acknowledge MMT’s existence, so it usually doesn’t.
But this doesn’t tell the whole story. This makes economics sound like some kind of academic scam, which it isn’t, (even though it sometimes is (cf. “Inside Job”)). But even within the overall ‘mainstream’-dominated field, individual thinkers, often working along tangential lines, are always developing creative new ideas and trains of thought, and also contributing to a scientific, methodological process which has a separate, evolutionary life of its own. Economists like Hyman Minsky and George Akerloff and Wynn Godley (and, no doubt, hundreds I have never heard of), pioneered theories and models that didn’t so much challenge the ‘mainstream’ as run parallel to it, developing streamlets and pools and tributaries which eventually flowed together and “found their own level” in MMT itself.
Meanwhile, back in the real world, 30 years of driving economic policy using the ideological cant and voo-doo economic nostrums of the ‘mainstream’ have come off the rails. The world economy is teetering. The people are rioting. And the students, particularly the ones studying economics, are increasingly perplexed by the incoherence of their own professors. What’s that you say? Slumps and depressions are now quite impossible, thanks to the Greatness of the Moderation? *All* of the people who aren’t working are just enjoying a little time off? Everything will quickly return to normal, provided we resist the temptation to do anything at all except cut aggregate demand?
So, we are back where JMK was when he was thinking through the General Theory. Everything theoretical is upside down, but no one who has any influence knows, or even suspects, that this is the case – and the world is falling apart. I see MMT coming into its own in the same way Keynes’ ideas did. First, he addressed his message to the economics profession itself (this is explicit in the GT). But he made the argument accessible enough for lay people, provided they were pretty smart and open-minded lay people, to get the gist of the idea and see the sense it made, counterintuitive sense though it was.
That’s where I think MMT, broadly, is today. There are particular memes, if I’m understanding that word, that stand out far more prominently, with PCS being the most obvious example. I think complimentary currencies might acquire a similarly high profile. But even if these ideas spark interest in the media, or even become base phenomena of real importance, the heart of the matter is when and how our David gets a real shot at Goliath. In the case of Keynes, it helped that he was a very famous man with a lot of very famous, prominent intellectual friends. But it still wasn’t easy – before the Depression, most people treated Keynes as a crank. (Sound familiar?)
Anyway, here’s how I think the thing works: first, the movement spreads, online and in academic hot-spots like Italy and Finland. People in other disciplines start to notice too, and people in general start to wonder why the economists who have gotten it it wrong are still in charge, while the ones who got so much of it right are still marginalized. Institutes spring up (NEP… what else? what next?). MMT ideas leak into the mainstream and provoke comment, even if it’s on Fox (does anyone remember, “Why! Why! It’s naked Keynesianism! On television! Are the nation’s youth safe??) As time passes, a few somewhat influential people in the media start to take it seriously and look into it. This, I think, may be our most likely route to presenting unfiltered MMT ideas to an initial cadre of actual office-holders. Beyond that, it would be pure guesswork.
But this seems much more realistic to me than thinking that we will start an MMT faction within a base Dem insurgency that is mainly reacting to Obama and his cuts, and win over rank and file Dems to MMT, such that a progressive challenger comes to office already MMT-aware, (much less having run on an MMT platform). Pols aren’t ready for it. People in general aren’t anywhere near being ready for it. In my mental model, all of that comes much later. “A new deal for the American worker,” started out as a poker metaphor and an empty political throw-away. All it did was help get FDR elected. It took years to turn it into even the germ of a Keynesian-inspired set of policies and programs, and it took a decade to actually work.
I don’t think we can skip the intermediate steps. I would be happy if we could just make MMT a little more accessible to the *intelligentsia* at this point. We need to win the interest and, ultimately, the support of opinion-makers of every kind. I think MMT may be quite close to doing that. But don’t forget the four-part Gandhi dynamic – the one that goes “they ignore, they ridicule, they fight us, then we win.” We are only, at best, on the cusp of step two. Almost no one thinks that we will ever amount to anything they will actually have to fight. For my part, I’m thinking about how we best stand up to the ridicule.