Monthly Archives: March 2013

BACK TO THE FUTURE: MODERN MONEY CONFERENCE IN 1999

Posted on March 30, 2013 by | 19 comments

By L. Randall Wray

I thought readers might enjoy taking a peek back in time to 1999, to a conference organized at the New School by Stephanie Bell (Kelton), Mat Forstater and Edward Nell. This was pre-UMKC, just before we made the big move. The Center for Full Employment and Price Stabililty was housed at the Levy Economics Institute and Ms. Bell was pursuing a PhD. I’m including the conference program, my outline, and my notes for presentation. Note that the conference was organized around Charles Goodhart’s presentation, based on his deservedly famous article, “The Two Concepts of Money”, published in the European Journal of Political Economy in 1998. Hence in my presentation, I adopt his taxonomy of approaches to money as the “M form” (metalist or monetarist) and the “C form” (cartalist or chartalist or state money). You will see that it’s all there–the basics of what became MMT: state money of account, taxes drive money, endogenous (private) money, and labor bufferstock to stabilize prices.

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Dan Kervick Interviews Bill Black and Marshall Auerback on The Attitude

Posted on March 29, 2013 by | 6 comments

By Dan Kervick

I had the pleasure of sitting in today for Arnie Arnesen as a guest host for The Attitude on WNHN 94.7 FM in Concord, New Hampshire.   Arnie’s mother passed away over the weekend, and she has taken a one-week personal hiatus.

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Letter to the President: If Social Security Solvency’s really a Problem Then Why Not Do This?

Posted on March 29, 2013 by | 184 comments

By Joe Firestone

Dear Mr. President,

Over the past 3 years you’ve returned again and again to the idea that Social Security has a long-term solvency problem, and therefore needs “reform,” even though, as of the end of 2012, the “Trust Fund” had nearly $2.7 Trillion in it. In spite of this healthy trust fund asset balance, SS Trustee projections, say that the trust fund will be down to zero by 2033 and that thereafter, until 2086, SS will be able to pay roughly only 75% of scheduled benefits without either cuts or increased sources of revenue. Continue reading →

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A Plague on All Your Budgets

Posted on March 26, 2013 by | 47 comments

By Joe Firestone

The Sector Financial Balances Model:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0

is an accounting identity that provides a focus for macroeconomic analysis, explanation, and prediction by economists applying the Modern Money Theory (MMT) approach. It leads to a very critical line of thinking about the budget deficit projections produced for our consumption by the Congressional Progressive Caucus (CPC), Congressional Budget Office (CBO), the House, and the Senate. The US has recently had a sharp decline in its balance of trade deficit. It now stands at about 3% of GDP; which means that the rest of the world has a surplus, a balance of +3% of US GDP in its annual trade with the United States.  Continue reading →

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Let the Palmer House (not Fiscal House) be our Guide

Posted on March 25, 2013 by | 8 comments

By Mitch Green

Readers of this blog familiar with my previous posts know that I love trains. Sure, they’re slow. And after about twelve hours the coach cars start to get a little, well, worn. But, as a mode of conveyance they offer one time to reflect, and if you are lucky a little time to explore a new city.

Source: Wikimedia Commons

Travelling from Kansas City to NYC via Chicago, I had the pleasure of visiting the Palmer House – a fine example of the workmanship of a bygone era. Upon entering the great hall I was immediately struck by the grandeur of its ceiling. I have had the privilege to experience similar wonder and amazement in travels elsewhere, and as far as ornate ceilings this was not my first time at the rodeo – I’ve been to the Sistine Chapel, after all. What struck me the most about that moment in the Palmer House was not driven by my taste for architecture or the fine arts (which is probably ‘vulgar’ by any convention), but that it serves as a lasting example of what society is capable of achieving. Continue reading →

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The NY Times Calls Third Way “Center-Left” and Turns a Study on its Head

Posted on March 21, 2013 by | 18 comments

By William K. Black

Some lies will not die.  As I have demonstrated repeatedly, Third Way is Wall Street on the Potomac.  It is funded secretly by Wall Street (it refuses to reveal its donors), it is openly run by Wall Street, and it lobbies endlessly for Wall Street.  Third Way, like every Pete Peterson front group, is dedicated to shredding the safety net as its highest priority and throwing the Nation back into a gratuitous recession through self-destructive austerity.  Continue reading →

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Why MMT is Right and the Dreamers are Wrong: Kaldor Versus the Kaldorians

Posted on March 20, 2013 by | 298 comments

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

Dreaming, I was only dreaming
I wake and I find you asleep

– Billie Holiday “Gloomy Sunday”

The criticisms of Modern Monetary Theory (MMT) on the internet and in academia can be placed into three categories: the cranks; the nit-pickers; and the Kaldorians. The cranks make up by far the largest group. These are the people that simply have not bothered to understand the theory. These, which include some prominent academics, say things like: “The MMTers say that deficits don’t matter; they forgot about hyperinflation!” These people can usually be safely ignored as they are not arguing in good faith. Continue reading →

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The Miracle Product That Cures Degenerative Entitlement Syndrome!

Posted on March 20, 2013 by | 45 comments

By Dan Kervick

During last year’s presidential election, Dr. Willard M. Romney diagnosed a previously unrecognized epidemic illness that is eating away at the moral foundations of our country.  Romney was the first medical scientist to grasp that 47% of our citizens have been transformed into an army of zombie parasites now known to the experts as “moochers.”  The moochers have been infected with DES, Degenerative Entitlement Syndrome, a 21st century plague whose victims live lives solely devoted to sucking funds from the bank accounts of decent people.   Not one to sit idly by while an invasive undead horde saps and impurifies our precious bodily fluids, Dr. Romney attempted to sound the national alarm about the moocher scourge.  But alas, he was ahead of his time.  The country was not yet ready to hear his bracing but prescient DES warning.

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Yglesias Cheers a Double Betrayal of Cyprus

Posted on March 20, 2013 by | 37 comments

By William K. Black

Slate’s Matthew Yglesias writes columns about economics and finance.  Yglesias has been writing about Cyprus, and my critiques of the policies he has been proposing are the subject of this column.  The short version of the background one needs to understand the issues is that Cyprus is in a crisis and the EU is willing to bail out its collapsing banks only if Cyprus raises revenues.  The EU is unwilling to make the banks’ sophisticated creditors – the bondholders – take any losses.  The EU wanted the banks’ least sophisticated creditors – the depositors – to take losses, even if their deposits were small enough to be within the deposit insurance limit.  The reality, which the EU wishes to obscure by calling its proposal a tax, is that that the EU was insisting that depositors no longer be fully protected from loss by government deposit insurance.  The EU demand was made shortly after the EU and Cyprus’ government pledged that depositors under the insurance limit would suffer no losses.  Continue reading →

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O’Donnell Thinks Krugman is “a lonely voice opposing austerity” because he listens to MSNBC

Posted on March 19, 2013 by | 14 comments

By William K. Black

On March 18, 2013, Lawrence O’Donnell stated that John Boehner’s admission that the U.S. faces no current debt crisis vindicated Paul Krugman, who O’Donnell described as “a lonely voice opposing austerity.”  It is true that Krugman has been a strong opponent of austerity and has been proven correct.  It is also true that MSNBC has frequently portrayed Krugman as an isolated, virtually sole opponent of austerity.  Continue reading →

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