I have not had time to finish my response to Jonathan Portes on MMT, and I will be publishing one here since Prospect are allowing me just 1875b words to respond and I will be teaching all day today after a hectic day yesterday.
In the meantime, Peter May has responded at Progressive Pulse. Give that a quick look, I suggest.
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I have and it is good.
Have a great day teaching. I wish I was there.
You’d be welcome….
Be careful what you wish for Pilgrim.
(just kidding)
In a previous post January 31 2019 at 7:58 am
ray says:
‘RM the UK’s most “prominent proponent” because Michell and Mosler are not from the UK..and all the best economists in the UK don’t believe in MMT’
If only the, ‘best economists in the UK’ did believe in MMT, the Great Financial Crash may not have happened…
Thanks for all your work Richard..
Thanks
Mainstream dissembling about MMT is to be expected.
The elite worked this out before Nixon abandoned the gold standard coupling to the dollar.
The elite Establishment has fuelled the neo-liberal revolution entirely by understanding how to use MMT to its own advantage; whilst steadfastly crippling the opposition with enslavement to orthodox economic bullshit.
Knowledge is power and the progressive forces that wish to share and utilise that power had better figure-out how it works instead of blethering shite and firing straw men arguments.
In 2012 Portes gave interview to Mehdi Hasan at Huffington Post in which he said he rejects the claim that the economy is like a household – that is, when debts get too big, the way to reduce debts is to cut back on spending . Keynes, he claims, debunked such arguments in the 1930s; the Keynesian ” paradox of thrift ” says that the more we all cut back, the more we reduce effective demand, which leads to slower growth and self-reinforcing recession.
Why then do clever people continue to make these false analogies between national economies and domestic households ? ” Politicians do it because they know it’s an argument that resonates,” is his rather blunt response.
Does he agree with the Guardian columnist Polly Toynbee that perhaps ” the paradox of thrift is just too paradoxical for the public ? ” Portes nods his head. Well then, what’s the simple way of explaining Keynesian demand management to the man in the street ? He shrugs his shoulders.” There is no simple way that works.”
But there is : you explain how money is created and by whom which is what we did in our film ‘ Money for Nothing ‘ which in the three months it has been on YouTube has been watched 5250 times since we published it on 8th November last.
This , I think, is his problem with MMT . He just cannot come to terms with the fact that all money in the twenty first century is created out of thin air which is at the heart of MMT.
“…It’s not much help to tell a chancellor trying to write a Budget–setting out her tax and spending plans–that reversing the order would magically solve all their problems.”
There seems to be a bit of a fixation on this one. I recently has someone quote Simon Wren-Lewis similarly:
“… according to MMT tax never finances spending, but follows it, or something like that. I don’t mean to make fun…”
Putting things in a specific order shouldn’t matter it seems: even if were true, its merely some kind of abstruse but ultimately meaningless academic distinction that only MMT advocates mistakenly or foolishly think is important: a form of magical thinking or laughable foolishness.
– Why so much apparent difficulty with this amongst the supposedly learned in this discipline? To me it seems axiomatic not to confuse or conflate a cart with a horse and to place them in an order that both maximises progress and allows control when required.
I have to conclude that as Andy Crow points out, it just looks like transparent dissembling.
Just read Portes’s drivel. So incredibly frustrating to read this nonsense, most (all?) of which has been debunked for decades. While Bill Mitchell isn’t everyone’s cup of tea, he has addressed all of the Portes ‘arguments’ in detail, and I’m bound to add, with rigour and clarity. I rather hope he picks this up. I gather Portes is viewed as influential. This could actually help the cause. If a prominent critic of MMT is shown to be utterly then more people will be attracted to the MMT message. For that reason I also greatly look forward to Richard’s response.
One thing that tickled me – Portes showed his creds by acknowledging MMT did not apply without restriction to countries in the eurozone, but then held up Germany as evidence that Government surpluses are not a barrier to growth. Well, Italian, Greek and Spanish Euro deficits and private debt could have something to do with that in Germany’s Case, no?
The response is out
You are highly likely to be correct.
Most people’s understanding of money is that it only appears in exchange for something – labour (wages) , information about personal circumstances (benefits) effort (job seekers allowance, those seeking promotion), putting aside one’s principles (known by lawyers, accountants, CEO s, ratings agencies and politicians) etc.
But there, beyond that, no one (with the exception of places like this and others) seems to want to know any more. Despite an obsession with accruing it, we seem to take it for granted. It’s so limiting to the understanding of the world we live in. It’s a mental cage of sorts.