Pinch-Hitting For Peterson, Responses

By L. Randall Wray

It is perhaps a bit unseemly for the protagonist to be the first to answer Stephanie Kelton’s call for responses. However, I wanted to address two comments received to the series.

First, from GLH there was a question about the term “beltway progressive”. Fair enough. Comes from “inside the beltway” of Washington DC. Many “think tanks” (a misnomer as few think tanks actually do any thinking—most simply push an ideological agenda) locate within the beltway to have easy access to politicians, policy-makers, lobbyists, media, and funding. Most of these are center-right, or crazy right, but there are a few progressive think tanks slugging it out. I did not use the term in a derogatory manner, although I did criticize the “group think” on debts and deficits that emerges from within the beltway.

Locating within the beltway does provide many advantages. When media types are working on a story, they want to go where the action is—and that is usually Washington. The media loves to report on politics—as opposed to, say, economics—because everyone has an opinion and all opinions are seemingly more-or-less equal. It is easy to get a debate about the significance of the most insignificant political poll; it is easy to get some instant expert weighing in on what “the American people” want, and what any particular election “really means”. Occasionally they will cover economics, usually some proposed legislation that will benefit really rich people. Think tanks offer a veil of respectability that registered lobbyists cannot provide. It is hard for a policy-maker to directly affirm that he’s supporting a piece of legislation that benefits—let us say—some blood-sucking vampire squid because that firm’s lobbyists have promised campaign contributions. So it is much better to turn to a think tank that takes vampire squid money to produce “research” reports advocating policy that will benefit vampire squids. So that is the main role of beltway think tanks.

And that is, to me, what is so problematic about beltway progressives adopting the Pete Peterson approach to deficits, debt ratios, unfunded entitlements, and fiscal responsibility. As I have argued, that adoption is probably a “coincidence” in the sense that progressives in Washington are merely sucking the same air. It is “within the beltway” thinking. And within that beltway there is no longer any room for disagreement about “unsustainable” deficits and debt.

I know this from personal experience. It is much harder to influence policy from Kansas City or from upstate NY (the Levy Economics Institute). Yes, reporters occasionally decide: “hey maybe we should get an economist who is not connected to the beltway think tanks; maybe one of those farm country hillbillies in the Midwest. How about Kansas?” (UMKC, by the way, is in Missouri, and we are quite a distance from the Ozarks–but the confusion about Midwest geography probably helps us.) So we get our airtime. Occasionally I venture inside the beltway and meet with policymakers, politicians, heads of civil rights or labor groups, and so on. When I say that government solvency is not at issue, they look at me like I’ve just sprouted two horns. They call for the guards to escort me out. They warn me not to come back until I’ve got a letter signed by Joe Blow from XYZ progressive think-tank from within the beltway endorsing my proposal. I am not kidding, but I won’t name names. (Sometimes it is even worse—they’ll say: “Oh you are one of those economists that Paul Krugman attacked because you claim deficits never matter. Don’t come back.”) Therefore, not only is the endorsement by beltway progressives of the Peterson view limiting the range of debate within the beltway, it also closes off the beltway to any progressive alternative outside the beltway.

Second, for Craig Austin. Yes, I know we are terrible writers and promoters and don’t know a thing about PR. And yet, you are here, along with 2500+ readers every day to read what we write. A half dozen of us created the MMT that you now love dearly—those of us here at UMKC plus Warren Mosler, Bill Mitchell, and Scott Fullwiler. So we are not complete failures. We want you and others to take up the fight. If you are better at marketing, great, do it. If you want to self-promote your own blog, go for it.

But if you are here to get funding from us, you are delusional. There is no money.

Let me explain how things work at NEP. It was Stephanie Kelton’s brainchild; she bought a URL out of her pocket change, roped a couple of UMKC profs to donate time, got some of our associates to donate their time (Marshall, Scott), and started the blog. Frankly, I was skeptical. I barely even knew what a blog was (I knew Bill Mitchell had one but wasn’t quite sure if it was a disease or other affliction). She learned how to set up the blog, and then got some volunteer techie assistance from our grad students. There is no revenue; if there are expenses, Stephanie covers them out of pocket. And she and her techie grad students post every blog that is put up because the rest of us are too damned incompetent to learn how to do it. We can barely distinguish a URL from a URINAL.

So if you want money out of UMKC, here is what you need to do. Apply to our PhD program; get accepted; and if you are among the top applicants you might be awarded a stipend. For the princely sum of $10,000 per year, you attend lectures and study for 40+ hours a week. You also must work as a slave (whoops, we now call them GTAs—graduate teaching assistants) assigned to a prof for 20 hours per week, grading papers, leading discussions, holding office hours, and later teaching your own class. And then if we discover you know anything about computers, you get to donate your time at night to helping on the NEP.

So if you wonder why we do not have a PR firm, it is because we have not yet found one to work for free.