Author Archives: William Black

Democrats Should Refuse to Continue to Support Stupidity and Cowardice

William K. Black
September 15, 2019      Kansas City, MO

A craven group of Democrats is furious with Beto O’Rourke for calling for the mandatory sale of assault rifles to the United States.  Reuters’ headline says it all:  “O’Rourke’s ‘hell yes’ vow to take away rifles worries U.S. lawmakers pushing for gun limits.”  Seriously?  Democratic lawmakers (who have adopted no meaningful federal law in response to tens of thousands of gun deaths and maiming) are upset because a prominent Democrat proposed a law to get military-style assault rifles out of civilian life.  Granted, the Republicans have patented their right to be the party of stupid, but Democrats should not compete by becoming the party of less stupid, but equally cowardly.

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Rigged System Apologists and Deniers Fear Senators Warren and Sanders

William K. Black

August 26, 2019     Kansas City, MO

Greg Weiner has written an article aimed at those he hates – progressive Democrats.  He entitled it “The Shallow Cynicism of ‘Everything is Rigged.’” Weiner wrote, in the midst of the most corrupt administration in U.S. history, not to attack President Trump, but instead to attack Senators Warren and Sanders.  Their sin?  They oppose corruption.  Worse, they view corruption as immoral, they ‘walk the walk’ by refusing to take contributions from corporations, and they are proving remarkably skilled at explaining to the public how the corrupt rig specific systems.  Democrats are reacting by giving strong support to Warren and Sanders.  Weiner argues that some corruption is good and that we need far more of it.

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Tom Friedman Just Noticed that the UK “Has Gone Mad” (Part 2)

By William K. Black
April 11, 2019     Bloomington, MN

Part 7b of the MMT Series
Part 7a is available here.

Blair, Brexit, and Friedman Show the Need for MMT Insights

Part One: The MMT Critique of Orthodox Microfoundations

Orthodox ‘modern macro’ is based on ‘microfoundations’ that implicitly assume that firms profit-maximize, that there are no negative externalities, that there is no market power, and that there is no control fraud or predation. In sum, they assume out of existence reality and particularly the parts of reality that produce the “endemic” global financial crises that Friedman admits his favored model produce. (See Parts 2A and 2B of this MMT Series for a much more detailed discussion of microfoundations.)

Friedman, of course, loved both Blair and Brown. In the same April 22, 2005 column, Friedman described Brown as Blair’s “deft finance minister.” (Perhaps he meant to write ‘daft.’) In 2005, the UK was racing toward the GFC. It nosed Wall Street at the wire to ‘win’ the regulatory ‘race to the bottom’ that produced the epidemics of control fraud and predation in the U.S. and the UK that hyper-inflated bubbles and drove the GFC. The UK economy was sick in 2005. It was systematically misallocating capital. It was driven not by real industrial productivity gains, but by accounting scams in the City of London. The ethics of the City of London had fallen to sewer levels. Its biggest banks had been specializing in predating on their customers for two decades. Its most prestigious bankers were driving the two largest price-rigging cartels (Libor and Forex) in world history. Even the sleaziest U.S. bankers at the ‘vampire squid’ (Goldman Sachs) based their worst, most rapacious predators in the City of London. On any real economic basis, many of the UK’s largest banks were insolvent because of their terrible asset quality.

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Tom Friedman Just Noticed that the UK “Has Gone Mad” (Part 1)

By William K. Black
April 11, 2019     Bloomington, MN

Part 7a of the MMT Series

Tom Friedman’s April 2, 2019 column concluded “The United Kingdom Has Gone Mad.” To which, the only possible response is – ‘you just noticed?’ The UK went ‘mad’ 22 years ago when Parliament elected the odious Tony Blair Prime Minister. I think many Tory policies were mad long before that date, but the Labour Party opposed them. The entire UK did not go ‘mad’ until Blair created “New Labour” and adopted Tory policies and became PM in 1997. Blair explicitly modeled the name and the adoption of neoliberal economic and military policies on Bill Clinton and the “New Democrats.” The UK became ‘mad’ when both of its major parties adopted the neoliberal economic and military policies that Friedman celebrates and proselytizes. I am dividing this article into two subparts for reasons of length. This part deals with the general madness. The next part (7b) explains its relevance to Modern Monetary Theory (MMT).

Friedman’s April 2, 2019 column was about Brexit, which understandably sticks in the craw of the populist spreader of the myth that the world is becoming ‘flat’ and a ‘hyper-meritocracy.’ The wealthy rig the world to make it tilt sharply. Plutocrats tilt it to ensure that a huge and increasing share of the world’s wealth flows to them. Friedman is the most infamous shill for those plutocrats. The plutocrats tilt and warp the economy unevenly to favor not simply the wealthy, but a favored subset that is typically the opposite of a meritocracy (kakistocracy). Worse, the world tilts toward catastrophe because the ultra-wealthy kakistocracy’s political pawns have produced environments so criminogenic that they produce our recurrent, intensifying financial crises. Friedman is shocked that one of the two epicenters of the global kakistocracy and plutocracy – the City of London – has forced the UK to follow policies so self-destructive and rapacious that vast swaths of the UK rose in opposition by voting for Brexit. The City of London, of course, hates Brexit.

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MMT Scholars’ Predictive and Policy Successes – Part A

Number 2A in the MMT Series

By William K. Black
March 31, 2019     Bloomington, MN

Introduction

The second article in this series deals with Modern Monetary Theory’s (MMT) predictive and policy successes.  The article has three, separately published, parts.  Part 2A deals explains why predictive ability and policy success are so critical – and notes that MMT’s critics have been conspicuously unable to provide a record of predictive failure by MMT scholars.

Part 2B deals with MMT successes in microeconomics.  The MMT work on microeconomics constitutes a powerful refutation of the ‘microfoundations’ of ‘modern macroeconomics.’  The key characteristics that the MMT theorists have demonstrated dramatically superior predictive ability, particularly in the most important microfoundation issues of the last 70 years.  In the microfoundations context, MMT scholars have also demonstrated exceptional policy success.

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Wolfers Blames MMT for Orthodox Economists’ Ignorance of MMT

By William K. Black
March 14, 2019     Bloomington, MN

Number 6 in a Series of Articles on MMT

Justin Wolfers is an economist who is disgracing the university I love, the University of Michigan.  I had the great fortune to be born in Detroit and receive the first seven years of my higher education as an instate student at the University of Michigan.  I was able to graduate with virtually no debt.  Wolfers is also a native of Australia, which means he is familiar with kangaroos.  That familiarity is ironic because Wolfers is devoting his time these days to serving as the chief apologist for a kangaroo court of orthodox economists that convened to declare Modern Monetary Theory (MMT) anathema.

Kangaroo courts are sham legal proceedings which are set-up in order to give the impression of a fair legal process. In fact, they offer no impartial justice as the verdict, invariably to the detriment of the accused, is decided in advance.

The orthodox economists’ kangaroo court met that definition.  Here is what happened – and there is no factual dispute about it.  MMT opponents ignorant of MMT scholarship drafted two strawman questions.  (They were actually the same question, with unimportant changes in phraseology.)  The willingness of people who never read MMT scholarship to be fervent opponents of MMT demonstrates the severity of the scandal.  The kangaroo ‘poll’ drafters falsely claimed that MMT scholars would answer “yes” to both questions.  Indeed, the deliberate implication was that a “yes” answer to both questions defined MMT’s core precepts.  MMT scholars have repeatedly and unequivocally made clear for decades that the answer to both questions is “no.”  MMT scholars have repeatedly and unequivocally over the last nine years explained to Paul Krugman, the falsity of his recurrent ascription of the same strawman used by the orthodox economists’ kangaroo court to MMT scholars.  As I have demonstrated in prior articles in this series, Brad DeLong has documented Krugman’s repeated falsehoods, the repeated statements of MMT scholars refuting Krugman’s strawman claims, and the clear statements by MMT scholars as to what they actually believe, write, and teach.

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The Day Orthodox Economists Lost Their Minds and Integrity

William K. Black
March 14, 2019     Bloomington, MN

Fifth Article in a Series on MMT

Something extraordinary happened yesterday.  Orthodox economists, frustrated by their inability to intimidate progressive elected officials, have launched a coordinated assault on MMT in hopes of making it politically dangerous for elected officials to embrace MMT.  Yesterday brought three remarkable revelations about orthodox economists’ willingness to engage in naked intellectual dishonesty in their desperation to find something to discredit MMT.

The orthodox economic attack on MMT should be a ‘slam dunk’ – if orthodox economists were correct about MMT.  There are two obvious ways to deliver the ‘slam dunk.’  First, orthodox economists preach that a theory’s predictive ability is the test of its validity.  MMT scholars have been making predictions for decades, so orthodox economists should be able to produce a large number of falsified predictions by MMT scholars and declare victory.  There is only one problem with this option – MMT scholars have an exceptionally fine predictive record and orthodox macro scholars have such a terrible predictive record that prominent economists deride “modern macro” as the “dark ages” (Paul Krugman) and a religion unsuccessfully posing as a pseudo-science (Paul Romer).  .

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Four “Tells” That Show Krugman Knows He Cannot Win an Honest Debate

William K. Black
March 13, 2019     Bloomington, MN

Fourth article in the Series on MMT

  1. Honest debaters do not create strawmen arguments about opposing theories and then claim victory by attacking their own strawmen.

When Krugman and a bevy of the “Very Serious People” (VSP) Krugman used to ridicule created and then attacked strawman MMT positions (e.g., using Roche’s rant), they were unintentionally revealing their knowledge that they did not believe they could dispute successfully MMT scholars’ real positions.

  1. Honest orthodox economists and journalist do not spread “myths” they know to be “obvious falsehood[s]” in order to deny MMT insights the orthodox economists and journalist know to be “obviously true.” The second “tell” that the VSPs know they cannot win an honest debate is this deliberate strategy of deceiving the public and elected officials through the VSPs’ myths about nations with fully sovereign currencies. 

My first article quoted the “Very Serious People’s” admissions that MMT is “obviously true” and that the VSPs spread “myths,” quasi-religious “superstition,” and “obvious falsehood[s]” to deceive the voters and elected officials to reject MMT.  VSPs are openly admitting that the reason they lie is that they believe that the voters and elected officials would agree with MMT scholars’ if there were an honest debate.  You do not lie to win a debate when the facts are on your side. Continue reading

Three Natural Experiments Documenting Krugman’s Bias Against MMT

William K. Black
March 13, 2019      Bloomington, MN

Third article in a series on MMT[1]

I urge readers to review Scott Fullwiler’s brief paper on the theoretical and predictive successes of MMT scholars on a topic of enormous theoretical and practical importance.  You do not need economics training to understand it.  Fullwiler reports the results of two “natural experiments.”  In this context, this means an unplanned experiment.  The twin experiments were:

  1. What would happen if orthodox scholars tested the predictive strength of MMT?
  2. How would Paul Krugman react to an orthodox scholar’s demonstration of the predictive accuracy of key MMT insights – if Krugman did not know that the orthodox scholar’s work was verifying key MMT predictions?

Fullwiler’s paper answers both questions.  The orthodox scholar, unknowingly, confirmed the predictive strength of many of MMT’s most important insights.  Krugman praised De Grauwe’s findings as “seminal.”  Krugman had no idea he was praising the predictive successes of MMT scholars because Krugman had never read MMT scholars’ work.  Fullwiler’s paper shows that a series of MMT scholars made De Grauwe’s point more than a decade before De Grauwe published his “seminal” contribution in an orthodox journal.  Stephanie Kelton was one of the MMT scholars who demonstrated precedence, making Krugman’s use of the word “seminal” as a descriptor even more unintentionally humorous.

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MMT Takes Center Stage – and Orthodox Economists Freak

William K. Black
March 11, 2019     Bloomington, MN

First Article in a Series

The massive, coordinated assault on Modern Monetary Theory (MMT) scholars by the most elite forces of orthodoxy represents a watershed moment in economics, but we must not lose sight that the real attack is actually on progressives, particularly the newly elected progressive members of Congress plus Elizabeth Warren, and Bernie Sanders.  Even that statement is incomplete, for it is the combination of the rise of these progressive elected officials, the 2020 presidential election (and nomination battle), and the exceptional embrace of progressive policies by the general public and Democratic Party candidates for the presidential nomination that prompted the coordinated and personalized assault of overwhelmingly neoliberal economists on MMT scholars.  This first column in a series provides an overview of why the progressives’ embrace of MMT spurred the terrified assault on MMT by orthodox economists.  That desperate assault reveals how much orthodox economists fear the voters’ increasing embrace of the progressive core policy issues on the environment, health care, and restoring the rule of law to the markets.  Later articles in this series will flesh out that overview.

The polls showing enormous public support for the key progressive initiatives terrify the neoliberals.  Sanders’ 2016 policy initiatives have transformed the Democratic Party candidates’ policy proposals for 2020.  Imitation is the sincerest form of flattery.  Warren’s policy proposals are having a similar effect.  Polls show broad support for the Green New Deal, Medicare for All, a jobs guaranty program, a tax system that would reverse the current race to plutocracy, a campaign to reduce gun slaughter and massacres, the restoration of the rule of law (including antitrust laws) to business (particularly banking and Silicon Valley), and a meaningful minimum wage.

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