The mainstream attack on MMT is nothing less than an attempt to disguise the glaringly obvious error at the center of the mainstream view of economic thinking. Mainstream economics is a nihilistic theory devoid of moral anchor. Mainstream economics ceased to explore the operation of the real economy decades ago and has become an intellectual exercise that assumes the organization of modern society is justified simply because that is how it is. While some mainstream economists may want to tinker around the edges to make the system more fair few really want to call into question the organizing realities. The biggest reality they do not wish to face is that money is a symbolic creation rather than an actual productive resource.
The attacks on MMT are taking a comical turn. A recent one, courtesy of Noah Smith, takes aim at a paper I wrote in the 90s titled “Monopoly Money: The State as a Price Setter”.
It focused on a key MMT idea—that the currency-issuing monopolist (just like any other monopolist) is a price setter. The economics that I was taught didn’t even consider the implications. So I wrote down a few equations to look at different scenarios of prices paid and real resources purchased by a currency-issuing government, given the level of aggregate tax liability and private saving desires.
Posted onMarch 20, 2019|Comments Off on Billions From Deutsche Bank Despite Trump’s Bankruptcies, Defaults, and Financial Malfeasance
The latest developments about Trump’s relationship to Deutsche Bank could be the unraveling with Deutsche Bank and Trump facing a serious legal probe on bank fraud by the House Financial Services Committee chaired by Rep. Maxine Waters. NEP’s Bill Black appears on The Real News Network to discuss. You can view here with transcript.
Posted onMarch 11, 2019|Comments Off on Clinton-Era Official Says Left Should Lead Following Center-Right Failures
On The Real News Network, NEP’s Bill Black analyzes Assistant Secretary of Treasury Brad DeLong’s statement that neo-liberals should get out of the way and let the left lead since coalition with Republicans did not work. You can view here with transcript.
Lawrence Summers, according to Lawrence Summers, is a “serious economist.” He has just written an op-ed in the Washington Post in which he seriously explains why Modern Money Theory—as proposed by “fringe economists,” as he calls them—is a recipe for disaster. I am going to leave it to the “fringe economists” to rebut Mr. Summers; (I’m confident that professors Wray, Kelton, Tcherneva, Tymoigne, and Fullwiler can take care of that job quite easily). What I want to consider is something even more fundamental: How is it that someone who presents himself as a “serious economist” can get away with speaking incoherently while expecting us—the everyday citizens of America—to take what he is saying as true?
Trump’s “middle class tax cut” is a tax hike. NEP’s Bill Black says Trump could have been a popular President, if he hadn’t lied about middle class tax cuts and building infrastructure in Bill’s latest appearance on The Real News Network. You can view with transcript here.
Recent developments in the cryptocurrency world highlight the dangers of trading in this type of “coin.” But how important is cryptocurrency to the financial world and why should we care? NEP’s Bill Black appears on The Real News to discuss this. You can view with transcript here.
William K. Black
December 17, 2018 Bloomington, MN
In 1983, Federal Home Loan Bank Board Chairman Richard (Dick) Pratt published his Agenda for Reform about how to deal with the savings and loan debacle. He had just made that debacle inevitable by deregulating and desupervising the industry. In his Agenda, he called for some protective steps (none of which he took or even proposed as rules), but overwhelmingly called for more deregulation and desupervision while promising that the raging fraud epidemic he had super-charged could not occur.
Pratt put three quotations on the front and back covers of his Agenda. Two of the passages admitted his knowledge that deregulating and desupervising the industry at a time when it was endemically insolvent could greatly increase losses. Both of those quotations went on to explain Pratt’s real concern about those increased losses to the public – they might discredit deregulation. The greatly increased losses to the public did not horrify him. The fact that that deregulation would trigger those losses did not horrify him. The thing that horrified him was that the public might realize that deregulation and desupervision caused widespread fraud and losses and this could lead the public to block, or even roll back, dangerous deregulation and desupervision.
William K. Black
Associate Professor of Economics and Law, UMKC
December 5, 2018 Bloomington, MN 55437
I cannot write many blogs during the fall semesters because I teach four classes (I co-teach one of them). The fall term of instruction at UMKC is now over so I am writing one piece before turning to grading. I have recently done additional research on a topic I know is of great interest – the prosecution of elite white-collar criminals. I have organized it in the form of a game in which the reader guesses who authored the quoted passage. Continue reading →