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.
Growth in the US increasingly brings income inequality. A striking deterioration in this trend has occurred since the 80s, when economic recoveries delivered the vast majority of income growth to the wealthiest US households. This note updates my original inequality chart (reproduced below) with the latest data. For earlier discussions, see e.g., here, here, and here.
Figure 1: bottom 90% vs. top 10%, 1949-2012 expansions (incl. capital gains)
A lot has been said already. For me, this was the culmination of a decades-long process where the Democrats sold out their progressive agenda and happily embraced the Republican’s neoliberal economic policies. For some of the best analysis, see here, here, here and here.
My own view is that the Democrats have not had an economic policy of their own for nearly half a century, just an ‘inferior’ version of what Republicans usually champion—tax cuts on the wealthy, dismantling the public safety-net, ‘fighting’ inflation by creating unemployment, market liberalization and deregulation across the board, which among other things brought us a colossal financial sector that has cannibalized the productive economy.
NEP’s Pavlina Tcherneva appears on the Laura Flanders Show. Pavlina says the current practice of gender-blind and race-blind fiscal policy lacks visions and helps no one. Congress, according to Pavlina is focusing on the wrong things. A self ascribed feminist economist, Pavlina says feminist fiscal policy is real, not simply ideological, and should be a central part of the American economy. We’ll encourage growth, she says, by creating employment — not the opposite. And employment begins with targeting women and racial minorities as the benefactors of policy.
NEP’s Pavlina Tcherneva appears on RT’s Boom and Bust with Ameera David and continues her conversation with RT-TV explaining how the Job Guarantee program delivers the economic benefits that the Basic Income proposal only promises. She appears at 12 min and 55 seconds.
Global unemployment is expected to surpass 200 million people for the first time on record by the end of 2017, according a recent ILO study, and limitations of official statistics suggest that the problem is much larger . As conventional measures increasingly fail to produce tight labor markets and jobless recoveries become the norm, economists grapple with this new reality by calling it secular stagnation and by adjusting upwards the rates of unemployment deemed ‘natural’ — but the human, social and economic costs of this growing problem are rarely considered in economic modeling.
Discussions of the ‘politically possible’ always remind me of a favorite quote: “Argue for your limitations, and sure enough they’re yours.”
Bernie Sanders’ issues page reads like a list of everything we’ve been told is not politically possible. And yet he’s getting record breaking support, precisely because people are tired of being told that something cannot be done–that it is impossible to get money out of politics, or that tackling inequality and racial injustice is unrealistic, or that securing a living wage is a political nonstarter.
Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’. And now he should add the Job Guarantee (JG) to his list of issues. Indeed, he already has the key ingredients—a bold proposal to eliminate unemployment by creating 13 million decent-paying jobs, a living wage, and a federally-funded youth job guarantee, which Sandy Darity correctly called a stepping stone (a pilot program) to a blanket job guarantee for all.
Pavlina Tcherneva discusses Greece’s Bailout with Richard Aldous on American Interest. You can listen here. She describes a deal that seems to contain more austerity than was initially proposed, and calls some of its economic incentives perverse. She discusses why the economic situation in Greece today is in some ways worse than was America’s Great Depression, and compares the decision to bail out Greece to Ireland’s austerity experience.