Pheuuww that was fun! My recent blog on “Debt-Free Money” brought the commentators out of the basement, especially over at Naked Capitalism. At last count there were 438 comments on the blog at NC, of which about 400 were nonsense (at best). OK well not 400 because many were by Lambert, Joe, STF, and a number of others who did their best in the battle against nonsense. And Yves prefaced the piece with a prophetic comment: “Virtually all of the complaints about MMT are based on a failure to understand what it says about how money works.” Thanks to all of them, but really you cannot defeat silliness with reason. A small number of determined masters at baiting (that is, master baiters) can overwhelm a site.
I happened to be reading my AARP magazine (OK go ahead and laugh) and came across this from Dame Helen Mirren on social media: “It reminds me of a stinky old pub. In the corner would be this slightly disgusting old man who sits there all day, every day. If you went up and talked to him you’d get the kind of grumpy, horrible, moldy, old meaningless crap that you read on Twitter.”
Here’s a typical exchange. Note I’ve substituted “Subaru” for “MMT”.
Hi, I’m looking to trade-in my old Chevy Monza. Terrible in the snow.
You came to the right place. All of our Subarus are AWD.
Great. Does it fly?
Well, pretty fast on a level road.
I mean fly. In the air. I want to fly to Tokyo.
Uhhm. No. Have to keep it on the ground.
That Subaru won’t fly? What are you trying to sell me? You are trying to destroy the environment.
But neither does your Chevy; and the Subaru will drive through snow while getting three times the MPG of your old car.
Does it float? I like party boats.
No, the Subaru won’t float, either. Neither does your Chevy. Which is a poorly made piece of junk.
You must be an idiot trying to sell me a car that won’t float or fly. You are an apologist for banksters.
Sorry, I thought you wanted a car.
See, you keep ignoring the real issue.
Oh. What is that?
Interplanetary space travel.
OOOOOKay. Sounds good.
Good? You idiot. It is terrible. Only the rich can afford it. You guys only think of the One Percent.
Well, I mean, when it becomes technologically possible we could have a public transportation system for all.
Zimbabwe! Weimar! You’re always trying to destroy our currency. Just like you did in the 1920s in Germany.
I don’t think there were any Subarus in Germany in the 1920s.
There you go again. All high ivory tower theory, ignoring policy.
OK enough with Subarus. You think I exaggerate? Take a gander.
jgordon July 2, 2014 at 10:16 pm. You all on the MMT bandwagon need to differentiate between your idealized, ivory-tower theories about how monetary systems work to produce (or not produce) good outcomes, and the reality that everything is regarding the distribution of resources is all about power games and politics… Of course it goes without saying that MMT will not in any way avert or mitigate the ecological holocaust that is already under way. Obsessing about MMT is a lot like stopping on the track to worry over a stubbed toe while the train is barreling down on you. This is not the time to be nitpicking details about your preferred method of capitalist ideology. This is the time for an entirely new paradigm.
(Yep, that Subaru won’t get you to Mars.)
BFWR July 2, 2014 at 9:01 pm. Everyone here including MMTers misses the empirical fact of a scarcity ratio of individual incomes and costs/prices that is continuous throughout the productive process/the economy itself. I’m all for profit, I’m all for endogenous money and all for the fact that the economy is inherently unstable not stable, but cost cannot be ignored or abstracted out of the equation…and if, as I propose that the economy is described by the formula: P = I < C/P
(There you go, economics in one easy formula.)
psychohistorian July 3, 2014 at 2:46 am. I read over 300 comments to this posting and not once did I read anyone referring to how MMT relates to privately held wealth….the accumulated kind through inheritance….how can it call itself descriptive of finance when it leaves out the 800 lb gorilla of inherited wealth/money and the power it wields. Until and unless the current power of that wealth is neutered MMT is an academic pipe dream.
(I just wrote a blog on sin taxes and taxing wealth as a sin. This post, however, was about debt-free money, as anyone who had read the title might have noticed.)
Moneta July 3, 2014 at 7:41 am. The thing is that the US consumes 25% of world resource production. To be able to do this they need the military. If they cut the military and transfer the spending power t the general population then the 25% will drop and the general population will realize that despite having more dollars to spend, their purchasing power is still going down. Of course this wold not happen overnight, so in the beginning it might look like it is working.
(Spell check? Let’s see. Debt-free money. Military agression. At least it rhymes? In some language?)
Rosario July 2, 2014 at 10:35 pm My problem with MMT is that it is not a scientific theory yet it operates ideologically in a manner similar to genuine scientific theories. Scientific processes require repeated experimentation with replicated results in a controlled system. Markets do not allow for any of this since they are based on politics and culture, which are not inherently rational and certainly not scientific…. I advocate for a scientific understanding of economy, but MMT does not provide this possibility since its foundation is legalism, not materialism. We take MMT terms as given, but I ask. What is production? What is consumption? What is currency? These are political and legal concepts not materialist concepts. …We cannot continue to pretend we understand something scientifically when it is anything but.
(And so….we shouldn’t try to understand the economy because we cannot run experiments on it?)
Moneta July 3, 2014 at 8:13 am. There is a large number of countries out there that are family or dictator run. Many protected by the US. They don’t care about MMT and the population, they just care about their personal loot.
(Moneta is the champion of non sequiturs!)
Bobbo July 2, 2014 at 9:50 pm. …Just to clarify: I wholeheartedly agree that universal health care should be a top priority. But not by simply throwing more money at the fundamentally flawed system we have now. Not by saying “No worries, the government can never run out of money.” The system itself needs to be restructured from the ground up.
(Would it be better to throw “debt-free money” at health care?)
Moneta July 2, 2014 at 8:05 am Monetary policy morphed into MMT when the US hit a ceiling and needed to increase its level of deception. For the last 40 years, MMT has been a tool used by neo-liberals to get us into our current predicament. As long as the US consumes more energy that it’s fair global share, deception and corruption will prevail and the country will continue its downward spiral.
(Wow. MMT took over monetary policy 40 years ago? And nice non sequitur!)
James KIng July 2, 2014 at 12:45 pm Let’s look at the coat check girl analogy for a second: What happens if you give the coat check girl your coat and she hands you a ticket. But, instead of owing you back only your coat when you redeem the ticket, the coat check girl has to not only give you your coat but also part of ANOTHER coat. Maybe a button, maybe a sleeve, maybe another whole coat.
(??)
nothing but the truth July 2, 2014 at 10:29 pm. you folks are obsessed with money. money is a means to something. MMT is just economists realizing after a hundred years that they did not understand how finance works.
Roland July 2, 2014 at 10:28 pm. “MMT is descriptive of our current system.” That’s what I most dislike about it. At best, a monetary system which promotes unlimited government borrowing power has proven useless for the purpose of improving the general welfare, since the period of deepest government indebtedness has coincided exactly with the impoverishment of the majority.
(Presumably, Roland prefers monetary theory that is NOT descriptive of our current system—which includes all monetary theory that is not MMT? I like the following statement on what economics is all about a bit better. And at least he brings in cars.)
Mike July 2, 2014 at 1:17 pm. Imagine a very large vehicle. One so large that it has 100 wheels and tires. Imagine 90 of the tires are flat. A good portion of the main article is akin to a group of a dozeneconomists gathered around 2 or 3 of the tires that are not flat, claiming that “this vehicle is just fine, these tires we examined are perfect and completely functional!”
kevinearick July 2, 2014 at 3:44 pm. Independence. The vast majority recognize that they are not going to make the cut, to escape the gravity of perception imposed upon them, and so seek out the game that best suits their position, based upon the perception of others, imprisoning themselves to game theory. Before life begins, they have already lost, of their own free will. Locked into a distribution of game players, they seek competitive advantage, with weapons happily supplied by others doing the same. The perception of debt, guilt, is simply the best weapon to grow the ponzi, to exploit natural resources among those incapable of seeing beyond the past. In this game, global family law, a blood knot between enemies and mercenaries, reigns supreme. At the top end of feudalism, marriage contracts are arranged among enemies, who only hate others more than they hate each other and themselves. As you travel down, the civil marriage contract becomes more mercenary in nature; love is contingent, which means that there is no love, just cheap substitutes.
(The next time I want to write about marriage contracts and cheap love substitutes, I’ll refer to this missive.)
JZ July 2, 2014 at 9:05 am. Lol. Wake me when MMT demonstrates how to print oil.
(Done, dude. My new 3-D printer.)
The Dork of Cork July 2, 2014 at 2:21 pm. MMT accepts the notion of a war economy (full employment). It seems to junk the albeit quaint notion that capital was /is apparently used to reduce work !! One must always ask the simple questions. Such as who exactly are we working for when the economy is at full employment. Also it accepts the notion that the state must paper over the loss of purchasing power inherent in free banking. Its therefore the worst of all worlds – its free banking given state sanction. Essentially its a letter of marque given a academic gloss.
(I don’t think the Dork needs translation. This is as crystal clear as a glossy academic marque.)
washunate July 3, 2014 at 11:10 am. Susan, I think you’re misusing double-entry bookkeeping. For example, when we convert coastal wetlands into federally-subsidized real estate development, we certainly destroy habitat and make storms worse and so forth.
(That takes the prize as the best non sequitur.)
docG July 2, 2014 at 9:53 am. I do not find Chomsky amusing. Nothing personal. In fact I actually admire the guy. On the other hand, when it comes to MMT — or the Platinum Coin — or BitCoin. THAT’s amusing. For sure. I always love reading about that stuff, can’t get enough of it. I also love Bernie Madoff for the same reason. Only we’re not hearing too much about him lately, what a shame! Ezra Pound was especially amusing when explaining what money is all about. Gertrude Stein called him the “village explainer.” She too was amused. There is something truly insane about all this explaining explaining explaining, especially when the answer is so obvious. That’s what makes it all so: amusing.
Yep, amusing.
Go ahead. Read the rest.
Oh, and Happy 4th.