In a recent essay I suggested that MMT might be applied incrementally to put people to work creating certain very special public goods. I suggested that the social norms which prevent people from “seeing” the logic of issuing fiat money to pay for sovereign spending might be placated by this incremental approach—especially if the public goods in question were something overwhelmingly and incontrovertibly beneficial to our country as a whole. This suggestion was strongly criticized by Joe Firestone. So far as I can tell, the essence of his objection is that a proposal to mint a smaller sovereign coin—to be used to achieve some specific goal—would more likely be repudiated by the status quo than a proposal to mint a very large one with the express purpose of overturning the status quo itself.
Greetings from Davos! I’m actually writing this over the mid-Atlantic as I return from being a keynote speaker at the annual “Public Eye” “shame prize” awarded to Goldman Sachs for its abuses. The shame prize award was made in Davos during the World Economic Forum as a counter-WEF event. Shell also “won” a shame prize, but I spoke on Goldman Sachs, the role of epidemics of accounting control fraud, and the WEF’s anti-regulatory and pro-executive compensation policies. I explained that the anti-regulatory policies were intended to fuel the destructive regulatory “race to the bottom” and why the executive and professional compensation policies maximized the incentives to defraud. I also explained that WEF was a fraud denier. Collectively, these three WEF policies contributed to creating the intensely criminogenic environments that produce the epidemics of accounting control fraud driving our worst financial crises. Detailed written developments of these arguments can be found here on our UMKC economics blog: New Economic Perspectives. Continue reading →