Category Archives: Guest Blogger

MMT is a Political Problem: Part 2

Thornton Parker

      In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one.  In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success.  First, consider some poor prospects.   

      All readers of NEP know how Social Security works and it seems like a natural for MMT.  But is it?  Wall Street sees the program as a leak from what should be their profitable money flow.  For years, the former investment banker and secretary of commerce under Ronald Reagan, Pete Peterson, kept forecasting its failure.  George W. Bush tried to fix the leak by privatizing it.  Arguing the virtues of MMT for Social Security is a sure way to stir up Wall Street bees that are quiet at the moment.

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MMT is a Political Problem: Part 1

By Thornton Parker

       The way a problem is seen can determine how or even if it gets solved.  When the French engineer, Ferdinand de Lesseps, was picked to build the Panama Canal, he saw it as another excavation problem as his Suez Canal had been.  But Egypt was flat and Panama had a mountain. 

When the United States took over the job, John Stevens, who was put in charge, saw it as a railroad problem.  The biggest task was to move ninety-six million cubic yards of rock and earth, as fast as the fifteen giant steam shovels cut them out of the mountain, from the Pacific side of Panama to the Atlantic side for building a dam and raising a lake that would be part of the canal.  

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GW, CC, and MM

By Thornton Parker

  The way a problem is seen may determine how or even if it gets solved.  Global warming (GW) and climate change (CC) are going to scramble many ideas about how developed economies work.  At root, GW and CC must be seen as money problems, and modern money (MM) is the key to solving them.   

     Energy companies spend money to find, extract, and market fossil fuels.  Other companies use money to create products and services that consume fossil fuel energy.  Money enables every step from ground to atmosphere and is the common ingredient of all aspects of the global warming problem.    

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How Far Can We Push This Thing? Some Optimistic Reflections on the Potential For Economic Experimentation

Crossposted from Phil Pilkington’s Blog – Fixing the Economists.

Readers are probably aware that there is quite a lot of discussion of Modern Monetary Theory (MMT) and the potential for fiscal experimentation batting around at the moment. Others have weighed in on this already, and I have little to add.

It is striking, however, that most of the push-back — where there is push-back — is not focused on trying to discredit the idea that we should engage in fiscal experimentation. Indeed, the notion that we should engage in fiscal experimentation seems to be, if not mainstream, at the very least part of the discussion.

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Hy Minsky, Low Finance: Modern Money, Civil Rights, and Consumer Debt

By Raúl Carrillo

I delivered the remarks published below at the First International Conference on MMT on September 22nd, 2017. The panel, entitled “Modern Money, Courts, and Civil Rights — Against Legal Predation”, explored the interplay between the cycle of crisis, austerity, and privatization, and the concomitant loss of rights for the public. I was joined by two esteemed law professors: Angela P. Harris, formerly of UC Davis School of Law, and Martha McCluskey, of the University at Buffalo School of Law. The panel was moderated by Danny Sufranski, MMN Harvard Chapter President.

These remarks were delivered solely in my capacity as a director of the Modern Money Network and do not reflect the views of any past or present employers.

Good morning, everyone. My name is Raúl Carrillo and I’m a director of the Modern Money Network (MMN), a student-driven interdisciplinary organization promoting public understanding of money, law, finance, and the economy (obviously embracing MMT as a foundation). By day, I’m an attorney specifically focused on consumer financial protection or as one notorious predator, Capital One, would say, “What’s in your wallet?” Perhaps a better way to put it, is that, in the Minskian sense, I help people manage their “survival constraints.”

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A Memo From MMT’s Legal Department

By Rohan Grey and Raúl Carrillo

Orthodox economists are often inclined to think of law as an external force that ‘intervenes’ to regulate otherwise naturally occurring economic phenomena. In contrast, Modern Monetary Theory and its antecedent intellectual traditions have long recognized that law in fact constitutes and shapes modern economies and the monetary regimes that underpin them. For example, Knapp argued explicitly that money was a “creature of law.” Similarly, Keynes, in A Treatise on Money, stated:

“The State…comes in first of all as the authority of law which enforces the payment of the thing which corresponds to the name or description in the contracts. But it comes in doubly when, in addition, it claims the right to determine and declare what thing corresponds to the name, and to vary its declaration from time to time-when, that is to say, it claims the right to re-edit the dictionary. This right is claimed by all modern states and has been so claimed for some four thousand years at least.”

Today, many of the core propositions of MMT can be understood as essentially legal arguments. Here are a few examples:

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Monetary Sovereigns, Monetary Subjects: Modern Money & The Criminal Legal System

By Raúl Carrillo

I delivered the talk published below as part of a panel at Yale’s annual Rebellious Lawyering Conference, on February 17th, 2017. The panel, entitled “Financing Criminal Justice”, co-hosted by The Modern Money Network, focused on the connections between fiscal austerity and the horrors of the U.S. criminal legal system. I was joined on the panel by Thomas Harvey, Co-Founder and Executive Director of ArchCityDefenders, Judge Jaribu Hill, Director of the Mississippi Workers’ Center for Human Rights, and Mitali Nagrecha, Director of Harvard Law School’s National Criminal Justice Debt Initiative.

Together, we discussed how financially-strapped local government entities, charged with public safety, perpetuate social violence, especially upon low-income communities of color. My presentation focused on macroeconomic context. More specifically, I attempted to build a bridge between the insights of MMT and arguments asserted by opponents of mass incarceration, police brutality, and criminal justice debt.

Good afternoon, everyone. Buenas tardes. In my short legal career, I have had some hands-on experience with these issues. After law school, I joined the Enforcement Division at the Consumer Financial Protection Bureau. We did (some) work at the intersections of private consumer debt and criminal justice debt. I’m currently at New Economy Project, an anti-poverty organization, in New York City. Some of our clients do wind up behind bars because of failures to appear and failures to pay. Some do leave incarceration only to return home to frozen accounts and judgment liens in addition to the fees they were charged for their time in the system. I’m not here to speak about all that, though. I’ll leave it to the experts.

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JMK Writings Project

jmk

DECEMBER 8, 2016.

THE CLOSING DATE FOR THE CROWDFUNDING CAMPAIGN FOR THE JMK WRITINGS PROJECT.

I thank, from the bottom of my heart, all those who have backed the campaign, with donations ranging from USD5 to USD1,000.  Almost everyone has said complimentary things about the proposed edition (‘great idea’, ‘wonderful project’,   ‘best of luck’ etc), but far fewer have followed up with contributions.

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Paid Leave and Daycare: Luxuries of the Wealthy

Originally published in The Minskys by Lara Merling

The U.S. trails the rest of the world in benefits available to families. Currently, the only industrialized country that does not guarantee paid maternity leave for new mothers is the United States. While other countries offer generous paid parental leave and some form of childcare subsidies, the U.S. does not. This lack of policies to support working families widens economic inequality and limits opportunities of children not born in wealthy households.

smalldaycare

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‘Control Fraud’ – Corrupt Bankers Do It, Congress Ignores It

The bipartisan shellacking Senators gave John Stumpf, the Wells Fargo CEO, last week made for great television, but did nothing about the real scandal: Our government continues to look the other way as many top bankers thumb their noses at fraud laws.

There is a term for the criminality that infects our biggest banks and damages the economy, and there is a solution to this problem. But there is also an obstacle.

Read more of David Cray Johnston’s post: ‘Control Fraud’ – Corrupt Bankers Do It, Congress Ignores It | Investopedia