By J.D. ALT
theme and illustrations of this essay are from the new book “Paying Ourselves to Save the
might seem, as we observe the U.S. government “instantly” generating $2
trillion new dollars for direct payments and grants to people and businesses,
that the coronavirus pandemic has shed a new light on the authenticity (and
necessity) of modern money theory (MMT). But that light, if it is being shed at
all, is illuminating instead the dramatic limitations of the “standard money
theory” we insist on applying to the exigencies of an unfolding modern society
(including, but not limited to, how to deal with pandemics).
By J.D. ALT
ironic that, at this moment, when the truthfulness and utility of modern money
theory (MMT) is being publicly realized—(and even potentially implemented!)—that its singular vulnerability
must emerge as a real concern: hyper-inflation.
most recent thing I’ve written—Paying Ourselves to Save the
Planet—addresses the issue of
hyper-inflation as follows:
The last two and a half months I’ve been at work on a new book. As it evolved, I found I was approaching MMT from a new direction—one which made an explanation of MMT much less counter-intuitive and, perhaps, less controversial. The approach is relatively simple and straight-forward: follow what I began calling “standard money theory” step by step until one reaches a perspective that has, almost seamlessly, become “modern money theory.”
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.
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.
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.
By Michael Hoexter, Ph.D.
In the final section of this essay, I will look at the
combined effect of the conflicts and collusion between the two types of
Machiavellian political actors that dominate the higher offices and influential
media organizations in the United States and to a lesser degree in other
countries today. Looking solely and
narrowly at one party or the other encourages myopia and the creation of a “voodoo
doll” in which all manner of evil is thought to be embodied, i.e. projected
onto. Thus our tendencies towards psychological “splitting” from our childhoods
are supported by finding the supposedly single locus of “bad”. The process of
collapse of our democracy is more complex and encompassing than just the
description, criticism and/or demonization of one party or set of actors.
The focus on just one actor as the primary source of
political evil has split progressives and the Left in the period 2016 to the
present: there are some who focus almost exclusively on the neoliberal
Democratic Party and its neoconservative militarist allies as essentially the
“worst human beings” in or near seats of political power. Others focus almost exclusively on Trump, the
Trumpist Republicans and/or the far right outside the Republican Party. These essays here are an attempt at synthesis
of what might be called a “two-front” battle for the future of American democracy
and, in an era of rapid climate deterioration, generalized to other nations,
the future of human civilization on the planet.
I will at the end offer an outline of what an anti-Machiavellian
politics and policy orientation would look like.
By Michael Hoexter, Ph.D.
While describing the machinations of the Democratic Party
Establishment creates an repellent vision of political scheming and ethical
compromise, today’s Republican Party is a few qualitative steps more repellent,
more reactionary, and at the same time simpler to describe. To compare and create a realistic vision of
the current American political landscape, one has to be able to conceive of
both “bad” and “worse”, i.e. degrees of moral compromise and turpitude in
political (and social-economic) life.
With the re-mobilization of the anti-New Deal, anti-civil
rights, anti-Communist Far Right following its crushing electoral defeat in the
1964 Republican Presidential Election (the aftermath of the Goldwater campaign)
and the emergence of the New Right in the 1970’s, the Republican Party has been
over a period of decades fully transformed into a party of open reactionaries
and racists, determined to defend a couple centuries of sometimes ill-gotten
gains and privilege of wealthy white European-origin people on the North
American continent, with a massive propaganda campaign and gun-enabled domestic
(This is a 3-part essay divided here into a total of 4 installments, with the first part divided into two)
By Michael Hoexter, Ph.D.
Attracting Popular Discontent
The basic structure of concentric circles of the discourse
and ideological “space” of a political party or partisan organization,
described in the foregoing could apply to almost any political party or for
that matter any group with a relatively passionately held set of beliefs
against which they believe others are opposed.
Using this schematic diagram of a group, the specific role of
“containment vessel for popular discontent” is more likely to be, in the now
almost 50 year old neoliberal era, to be slated for a party like the Democratic
Party or one of the Parties of the
Socialist International, like the British Labour Party, the German SPD, the
Australian Labour Party, etc.
On the other hand, when such center-left parties fail to
attract popular discontent and they in agitating outside governing roles or
acting in governing roles generate more popular discontent, other political
actors, including center-right and far right political actors and movements,
can capture popular discontent for their own purposes. Such was the case in
2016 in the United States, in Great Britain through the Brexit process with the
emergence of UKIP and then the “Brexit Party”, the Northern League in Italy,
the Alternative für Deutschland in Germany, the National Front in France,
the BJP in India, etc. Less successfully
or durably, other newer left of center parties like Syriza in Greece, Podemos
in Spain, La France Insoumise, or various Green Parties have attempted to
represent discontents at one point or another which the traditional parties of
the Left have failed to address.
By L. Randall Wray
This blog is based on the testimony I provided to the US
House of Representatives. My written statement will be published in the
Congressional Record (a version is also at the Levy Economics Institute: http://www.levyinstitute.org/publications/statement-of-senior-scholar-l-randall-wray-to-the-house-budget-committee.
The full statement was co-authored with Yeva Nersisyan.
I will argue that the Federal Government’s deficit and debt
are not so scary as we are led to believe.
Neither the deficit nor the debt ratio is on an
unsustainable path. In some sense, chronic deficits and a rising debt ratio are
They are not due to out of control spending—now or in the
future. They serve a useful public purpose. In any case they are largely
outside the control of Congress.