Tag Archives: MMT

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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Democracies With Sovereign Currencies Can Dance

By Anonymous
April 9, 2019

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.

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MMT, Models, Multidisciplinarity

By Pavlina R. Tcherneva

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.

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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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A Must Read: Why does everyone hate MMT?

By L.Randall Wray

The attacks on MMT continue full steam ahead. Janet Yellen (former Fed chair, but clueless on money and banking)—a centrist–has joined the fray. Jerry Epstein—on the official left–has ramped up his ridiculous claims, now associating MMT with “America First” and fascism (you knew that was coming—it has always been the refuge of critics who couldn’t come up with valid critiques).

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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.

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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A Conspiracy Against MMT? Chicago Booth’s Polling and Trolling

By L. Randall Wray

MMT continues to inflame hysterical attacks. Who would have thought that it would take MMT to bring together everyone from the crazy right to the insular left to unite in common cause against an obscure theory of money and government finance? The attacks seem to be so concerted and coordinated that one starts to think there just might be a conspiracy behind them. But why?

Bill Black’s recent column The Day Orthodox Economists Lost Their Minds and Integrity exposes the dishonesty of MMT’s critics on shocking display in a newly released poll of mainstreamer economists on two questions that supposedly are based on MMT’s teachings.

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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