MMT: overcoming the political divide.

So what you are saying is that MMT can't work during a period of full employment? That describes most of the Trump era until like 2 weeks ago.

 

You didn't prove anything empirically. But if you can make an argument that Volcker's monetary policy actually increased inflation I'd like to hear it.

 

I did, you just didn't recognise it. I referred to the published evidence e.g. https://doi.org/10.1080/104277102200004767

Is this an effort to refer to Reaganomics? That was ironically Military Keynesianism

 

From your link, "... but the policies that went under the label of monetarism ended up being very different from what one would expect from reading the academic literature on monetarism."

So in other words, not Monetarism. You actually proved yourself wrong (empirically!), so congratulations!

Wow, wrong again! That's a twofer in one post!

"Reaganomics" had nothing to do with Volcker's monetary policy.

OK let's see some more uninformed desperate attempts!

 

You mean the textbook crackpottery of the theorist didn't work? Golly gosh!

Absolutely ignorant! You're the one that referred to a myth. Thatcher was a committed disciple of Friedman. That religion led to disaster.

This also is utterly ignorant. I sometimes forget you don't do content. Government policy, according to the monetarist cretins, is just fiscal bad and monetary good. You referred to a period dominated by Military Keynesianism. Tut tut.

 

I didn't mention either Thatcher or Friedman. You did.

You would seem more intelligent if you had at least an intelligent rebuttal, but you don't. You're posting way above your knowledge base if you don't know the difference between "Reaganomics" and Monetarism. If you are going to post about things you don't know anything about, why not about the actual topic of this thread, MMT (the topic isn't monetarism, which is a good thing for you since you've shown you don't know anything about it)?

Then you could provide actual empirical evidence of the validity of MMT!

I anxiously await...

 

Yep, its called content. Friedman was the monetarist poster child. Thatcher implemented it like it was candy.

That government policy is fiscal and monetary policy is Econ 101. Do you want me to treat you like you're ignorant? Sorry, I'm going to at least pretend knowledge. You referred to a period dominated by Military Keynesianism. To even suggest monetarism is not credible, given it rejects the Keynesian perspective.

This amused me. It suggest that you're sheep. Of course Reaganomics pretended to be radical. In reality it was just Military Keynesianism: tax cuts coupled with military "investments". That you support such inefficiency, and pretend its the folly of monetarism, is gold dust.

Did you forget the point? MMT isn't built on crackpottery. It has theoretical relevance. In contrast, you blindly celebrate monetarism (a well known crackpottery). I'm sure, mind you, that you're still waiting for the inflationary pressures from quantitative easing (which merely defended the financial class to the detriment of every other ****er

 

It seems that the more we chat, the more you've gone astray.

"Military Keynesianism?" Has nothing to do with anything discussed.

Reaganomics? Has nothing to do with anything discussed.

Monetarism? Again, has nothing to do with anything discussed. You brought it up in #60, for reasons unknown, since it's not applicable to this thread's discussion of MMT.

If MMT has, as you say, "theoretical relevance," you're free to make that case, but based on your desperate attempts to move the topic away from MMT, I'm not encouraged that you are capable of doing that. I'm curious, why are you engaging in a topic that you seem to have little understanding of, and then try to change the topic away from it? What is the purpose of that?

 

Problem with your definition of "full employment" - which the latest figure (before corona) was said to be c. 3.6% unemployment in the US.
The official U6 figure, ie involuntary un+underemployment (before corona) was c.7%.
(Note: if you have at least 1 hour of work in a week, you are considered 'employed'.... a grotesque statistical lie).

But U6 itself in an underestimation of the level of real involuntary un/underemployment, because people who have given up looking for work are no longer registered by the statistician. The true figure is over 10%, ie, a sizable section of the population face permanent recessionary conditions.

If in fact everyone of working age was able to obtain an above poverty job in a 40 hour week, indeed MMT would not be necessary, because this fictictious market economy with everyone working would be operating at 100% efficiency.

But that is the point: our current market economies are based on a FALSE neoliberal/monetarist paradigm, itself grounded in erroneous classical economics, erroneous because those classical principles - eg "invisible hand" markets - amount to anarchism, in an economic guise.

 

I will not disagree with you that the current state of market economies in First World countries are based on a false neoliberal paradigm, and is grounded in erroneous mainstream economics.
That said, I think we disagree on exactly what the problem is, and what the alternative solution should be.
But at least we have some common ground for agreement.

I think free market economics is very valuable, but of course it has to be within the right and proper context.

 

I question whether MMT could achieve much higher efficiency, and how it would purport to do it.

 

https://www.thenation.com/article/economy/corona-biden-fed/

We Can Afford to Beat This Crisis

"Even deficit hawks like Joe Biden know that when faced with the genuine prospect of annihilation, the only adequate response is to do whatever it takes to prevent it.

His response: “Nobody will pay for anything having to do with the crisis. This is a national emergency. There isn’t a question of whether or not this is something that could be covered by insurance, or anything else. We, out of the Treasury, are going to pay for this.”


ie (possibly) MMT.....?

"This was a noticeable rhetorical shift for Biden, who has spent the entire primary season attacking his opponent Bernie Sanders for not adequately explaining how he would “pay for” his ambitious spending proposals*, and who only days ago indicated that as president, he would veto legislation enacting Medicare for All because of concern over the price tag. Indeed, Biden has been a proud deficit hawk his entire career:

[* MMT explains how available resources, not money, are the issue]

"As a senator, he broke with his own party to support a Republican-sponsored Balanced Budget Amendment, and as vice president, he spearheaded efforts to achieve a bipartisan deficit reduction deal that included cuts to Medicare, Medicaid, and Social Security".

Better late than never, I suppose....although I doubt Joe has any understanding of MMT.

 

As I've said before in this thread, you are free to test it if you can find a country dumb enough to volunteer for it. We can watch the results and see what's what.

 

Given you don't understand any of the economics, what it seems to you doesn't really matter. Monetarism was constructed as a reaction to neo-Keynesianism. It was used to highlight how you merely need to control the money supply and, by also getting rid of any labour rigidities (code for labour rights), we would achieve a low inflation utopia at a low natural rate of unemployment.

It is then quite cretinous to suggest Military Keynesianism is irrelevant to the discussion. By adopting Keynesianism, Reaganomics kicked monetarism into touch.

You're the one that brought up a period where Keynesianism was adopted. Pretending monetarism really wasn't cunning, but your whole argument is based on not understanding economics.

I'm not a supporter of MMT (although I was sympathetic to Labour's People's Quantitative Easing approach). I do know, however, that monetarism is based on hot air. By supporting it, you ensure that you really have no means to critique MMT. By supporting crackpottery, you've left yourself no where to go.

 

Wow you are still trying to wheel the conversation back to monetarism! Instead of hijacking a thread on a different topic, why don't you start a thread on Monetarism? Make you case on it's own instead of trying to use it simply to distract?

 

I'm not a great fan of dishonesty! I have merely used monetarism to indicate that you have no understanding of economics. How can you then critique MMT?

 

We can critique what limited things are explained to us. Stop playing appeal to experts.

 

Valid application of economics is 'appeal to experts'? Crikey, hard right comment really amounts to feck all.

 

I'm just saying, you can't have an argument (not in a normal public forum) if you will immediately dismiss what anyone has to say because they are not intimately familiar with some obscure esoteric economic terminology.

 

I'm referring to orthodox economics that he has openly stated that he agrees with. I appreciate hard right folk will state stuff without knowledge or consequence, but most folk should try something a tad more cunning.

 

So you were never interested in monetarism at all, merely credentials? On a forum, why would that matter? You've not demonstrated any evidence of a knowledge base or formal training to offer legitimate criticism either, and yet you've insisted on doing so, even when it made you look foolish, such as your confusion of "Reaganomics" with monetarism. If you don't know the difference, you're hardly an authority. So using your own standards, "you have no understanding of economics. How can you then critique?"

So thanks for ruling yourself out of the conversation.

 

"Right and proper context"?

Can we agree that, if a nation has the productive capacity and available resources, attainment of real full employment is the first requirement of a functional economy?

Why would you just accept that free market economics - which are indeed the engine of progress (since individuals are self-interested) - must of necessity involve a denial of the universal right to participate in and contribute to the economy, according to the individual's ability and capacity?

…………..

More on inflation, which is the reason most people reject the idea of money creation in the public sphere:

(Unless you have another idea re what the problem actually is; note that MMT also easily deals with a situation of declining population and a necessary reduction in resource consumption, if these are your concerns. Notice that MMT is fundamentally all about universal participation in sustainable resource development).

http://bilbo.economicoutlook.net/blog/?p=34315

(professor Bill Mitchell, on inflation):

"No-one...…. is suggesting that a government would continue expanding nominal spending via ever-growing deficits once an economy had reached full capacity and full employment. It is obvious that if such a strategy was pursued then ever-increasing inflation would be the result.

This is because firms cannot squeeze any more real output out of the resources in use.

Alternatively, when there are idle resources (such as unemployed labour and machines), an expansion of nominal spending will likely be mostly absorbed by higher production (real output) and firms will be highly reluctant to try to increase prices for fear of losing market share to other firms in the sector.

Most importantly, growth in nominal spending can continue even when the economy is operating at full capacity as long as it matches the growth in that productive capacity and doesn’t strain the capacity of the economy to respond to the extra spending with output growth."

 

Why would I be interested in known crackpottery? It was just pertinent in your grunt over MMT, as you celebrate known nonsense to hide from alternative perspective.

Even now you can't help but misrepresent. I said the obvious. Reaganomics was neo-Keynesian and therefore, as that is mutually exclusive to monetarism, you only chirped your ignorance.

You need to try and use economics. Don't cling on to that dogmatic right wing ignorance anymore. It will ensure continued irrelevance.

 

Is Joe Biden thinking of putting it to the test? (see post #87 above):

"Nobody will pay for anything having to do with the crisis. This is a national emergency. There isn’t a question of whether or not this is something that could be covered by insurance, or anything else. We, out of the Treasury, are going to pay for this.”

 

Note: I myself thought that Reagonomics (and Thatcherism) is related to Friedman's monetarism, though I am prepared to admit I was wrong after following your replies in this thread.

Professor John Harvey, in his refutation of orthodox mainstream economics, notes the confusion over all these terms:

"incidentally, “Keynes” and “Keynesian” are not the same thing...long story!"
…….

His article itself is illuminating:

https://www.forbes.com/sites/johntharvey/2019/03/05/mmt-sense-or-nonsense/#700db0c05852

"Just a few days ago, I mentioned on Twitter that I have no patience for getting involved in the current public debate over Modern Monetary Theory (MMT). So much of it ends up as ad hominem, straw man, or people talking past each other that it seemed like an utter waste of time.

Well, I changed my mind!

Paul Krugman had already been in the fight against MMT for some years, and now eminent mainstream economists Lawrence Summers and Kenneth Rogoff have thrown their hats into the ring. I know I’m not going to settle anything by adding my two cents, but I just have to get this off my chest. Long story short: Krugman/Summers/Rogoff are wrong.
(example):

Rogoff: "Even moving to a centrally planned economy (perhaps the goal for some MMT supporters) would not solve this problem".

Harvey: "This was a thinly-veiled attack. He clearly knows that no one has suggested this, hence his “perhaps.” Actually, Kenneth Rogoff is a very nice man. I served on a panel with him last spring at the US Naval War College. To be honest, it just makes me kind of sad that he would say something like that rather than sticking to the premises and structure of the arguments".

Which shows how distorted is the mainstream approach the topic....
…..
BTW, I notice you are not a supporter of MMT.

What is your preferred system?

Bill Mitchell (MMT advocate) is contemptuous of British Labour's acceptance of fiscal discipline above full employment

http://bilbo.economicoutlook.net/blog/?p=31963

"British Labour Party is mad to sign up to the ‘Charter of Budget Responsibility’".