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By Dan Kervick

Bill Mitchell has a really great piece up today at his wonderful blog, billyblog.  After briefly discussing the Modern Monetary Theory (MMT) emphasis on the operational realities of the monetary system, and asking whether or not it is important to situate those discussions of operations and macroeconomics in broader debates about ethics and morality, Bill lays out his own view:

The “operational reality” is factual and sufficient is one view. Just the massive loss of national income is a sufficient political motivation to do everything possible to avoid mass unemployment.

According to this narrow view, no further discussion about the other personal and societal costs (damage to physical and mental health; family breakdown; increased incidence of alcohol and substance abuse; increase crime rates; skill loss, and the rest of it) is needed and only leads to the accusation that MMT is mired in a contest of values rather than being about the cold, hard operational reality.

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By Stephanie Kelton

I submitted the following Letter to the Editor in response to Annie Lowrey’s July 4 article on Warren Mosler and MMT.  The Times chose not to run it.  So I will.

Thank you for alerting your readers to the growing impact of the anti-austerity branch of economics known as MMT. More than a decade ago, Warren Mosler challenged the economics profession, insisting that the U.S. would be a far more prosperous nation if we stopped basing our fiscal and monetary policies on macroeconomic theories that were designed for a country whose currency was still tied to gold. I was among the first wave of academic economists to reach agreement on this point. Now hundreds of articles, book chapters and conference presentations later, the ideas have spread well beyond the ivory towers. Tens of thousands of professionals in finance, business, government, etc., many of them formerly self-proclaimed deficit hawks, now champion Warren’s insight that our fears about debt and deficits are based on a failure to understand how modern money works–and that it’s holding all of us back.

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By Stephanie Kelton

Check out this graphical presentation of the history of American finance (h/t Matt Busigin). Laid side-to-side, this incredible visual results in roughly 80 feet of political and economic history from 1861 to 1935. American ingenuity, war, speculation, market manipulation, panics, trade wars, natural disasters, etc.

And be sure to study the legend carefully.  To learn more about Ayers’ Index of Business Activity, see here.  Enjoy!

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By Dan Kervick

I appeared today on The Attitude with Arnie Arnesen to talk about my recent post “Do Banks Create Money from Thin Air?” But we ultimately veered into discussion of financial stability, where I tried to make the point at the end of the segment that – in my view – the problem of financial instability is not due so much to bank “money creation”, but is a much broader problem of the leveraging of debt with debt that is built into the nature of capitalist finance, and is a persistent danger that can only be met with a permanently vigilant, clean and independent regulatory apparatus – unlike the one we have!  Lot’s of good MMT and Bill Black themes in this discussion.

Dan Kervick on The Attitude

The Attitude is broadcast by WNHN 94.7 in Concord, New Hampshire.

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By Dan Kervick

I appeared today on The Attitude with Arnie Arnesen to talk about taxes.  The discussion began with the Apple tax avoidance issue, but expanded into some of the broader context for thinking about taxes – some of which I discussed in my recent post, “Money, Taxes and What We Can Afford”.  We also spent a few minutes discussing gambling as a means of raising state revenue, since the New Hampshire House of Representatives defeated a major casino gambling bill yesterday.  Enjoy!

Dan Kervick on The Attitude

The Attitude is broadcast by WNHN 94.7 in Concord, New Hampshire.

Follow @DanMKervick

By Dan Kervick

By Dan Kervick