Today’s topic almost qualifies for the “you just can’t make this up” category. But first we need a bit of context.
Some years back a guy named Cullen Roche came across our writings. (Disclosure: I still have no idea who he is but he apparently has had a blog for quite some time.) He thought MMT was the best thing since sliced bread, and apparently wrote an MMT manifesto that many readers have praised for clarity. Read it here: https://www.dropbox.com/s/hgq1poyf8c5olfm/Roche%20MMT.pdf Indeed, there were even commentators on my blogs who proclaimed that Roche’s explanation was better than mine. So far, so good. I’m happy to cede the exposition to a better writer. Indeed, readers here will recall that I ran an excellent 3 part series by Michael Merrill precisely for that reason.
Indeed, I just looked at Cullen’s original paper, and it’s pretty good. Here’s his abstract:
But Cullen gradually realized that MMT is not just a description of “how government really spends”, but also leads to a range of policy options. And he did not like what he saw. MMT quite naturally supports progressive policy. Freed of “budget constraints” and the myths of “Uncle Sam is running out of money”, we can get on with using government to serve the public purpose.
Cullen hated that conclusion. Above all, he hates the idea of full employment, once remarking that unemployment works for him (presumably he meant that unemployment of others works for him). Hence, he tried mightily to separate MMT from the Job Guarantee. To no avail—it is the JG buffer stock that logically provides the anchor to sovereign currency so that we can run continuous full employment without setting off inflation.
So Cullen and his merry band of Neocons jumped the MMT ship in a huff and formed something called MMR, which is supposed to be MMT but without progressive ideas.
Come to find out, it is MMT without any ideas. The only thing MMR has put forward is a simple equation: S = I + (S – I).
Right. And from that we can further derive: S+I = S + I. With a bit more mathematical manipulation we can determine that S=S or I=I. And we finally reach the brilliant observation that 0=0.
And so like rats that jumped a floating ship in the mid-Atlantic, MMR sank into oblivion.
Meanwhile, MMT goes on from strength to strength. Witness Brad DeLong using Chartalism to do battle with Bitcoins: http://equitablegrowth.org/2013/12/05/978/bitcoin-the-south-sea-bubble-and-chartalism. But you know all that.
OK, with that background take a look at these two exchanges from Twitter last night.
First Chris Hayes welcomes Matthew Klein from Bloomberg aboard the MMT ship. Cullen immediately interjects that Sovereign government is a user, not an issuer of the currency! He then claims that MMT’s description is actually wrong! (A description that Cullen actually embraced.) In the next exchange, Klein has to remind Cullen of what he’s written.
Cullen then admits he’s gone “anal” and needs to “get a life”. Amen to that!