February 26, 2020

Master of MMT ― Master of proto-scientific garbage

Comment on Bill Mitchell on ‘Rounding off the Masterclass in London last weekend’*

Blog-Reference

Bill Mitchell tells his masterclass: “Viewed in a differ way, we have the accounting expression for the sectoral balances; (G – T) = (S – I) – (X – M + FNI)”

This equation is provably false because the balance of the business sector which is known as macroeconomic profit Q is missing. An economic approach that lacks the foundational magnitude profit is proto-scientific garbage.

Because the foundational macroeconomic relation is false the whole of MMT's analytical superstructure is false. Therefore, MMT's policy guidance has NO sound scientific foundations. Because of their absolute lack of scientific competence, MMTers are a public danger.

The correct sectoral balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0.#1-#6

Egmont Kakarot-Handtke


* billy blog
#1 MMTers: too stupid for simple math
#2 #DrainTheScientificSwamp
#3 The sectoral balances obfuscation: stupidity or corruption?
#4 Wikipedia and the promotion of economists’ idiotism (II)
#5 Rectification of MMT macro accounting
#6 MMT is refuted on all counts, see cross-references MMT

Related 'Refuting MMT’s new Macroeconomics Textbook'

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Wikimedia AXEC118d



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REPLY to S400 on Feb 27

Bill Mitchell is doing good old Keynesian macro in his masterclass. Unfortunately, he has not realized to this day that

• there is NO such thing as equilibrium in economics,
• the correct sectoral balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0 with Q as macroeconomic profit,
• that the Keynesian multiplier lacks the price mechanism.#1, #2

Bill Mitchell claims: “So we have moved beyond meagre accounting at this stage.” No, MMT got not even the elementary algebra that underlies macro accounting right.



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REPLY to S400 on Apr 3

You say: “I asked you two questions. You answered none.”

Here is the one answer to all your questions Stop Recycling Dead Economic Theories, Start the Paradigm Shift.

February 15, 2020

MMTers: too stupid for simple math

Comment on Peter Cooper on “Politicians Who Want Us to Live Beyond Our Means”#1

Blog-References

Peter Cooper asserts: “Here is a simple accounting relationship. It is an identity, true by definition: Government Balance + Domestic Private Sector Balance + Foreign Balance = 0.

This identity composes a nation’s economy into three broad sectors. The government sector spends and taxes. The domestic private sector spends (households consume, businesses invest) and receives income. The foreign sector receives payments from, and makes payments to, domestic residents.

A sector is in surplus (its financial balance is positive) when its total spending is less than its income or revenue. Conversely, a sector is in deficit (its balance is negative) when its total spending exceeds its income or revenue. The accounting identity shows that the balances of the three sectors must sum to zero. If one sector maintains a surplus, at least one of the other sectors must be in deficit.”

Matt Franko echoes: “‘Here is a simple accounting relationship. It is an identity, true by definition: Government Balance + Domestic Private Sector Balance + Foreign Balance = 0’ if it was that ‘simple!’ then everybody would understand it …”.

Good point. MMTers definitively do NOT understand it. Neither does the rest of the basket of deplorables who have successfully completed Econ 101.

Eric Tymoigne, for example, asserts#2: “First, regarding the identity itself, for a domestic economy we have, in terms of economic flows: GFB + PDFB + RWFB ≡ 0.

With PDFB the private domestic financial balance, RWFB the financial balance of the Rest of the World, and GFB the government financial balance. This identity holds all the time, in any domestic economy (in a world economy RWFB disappears). For economic analysis, it is insightful to arrange this identity differently in function of the type of monetary regime. In a country that is monetarily sovereign the federal government has full financial flexibility. By monetary sovereignty, one means that there is a stable and operative federal/national government that is the monopoly supplier of the currency used as ultimate means of payment in the domestic economy, and that the domestic currency is not tied to any asset (like gold) or foreign currency.” and “This means that, for a monetarily sovereign country, the most insightful way to arrange the national accounting identity is: −GFB ≡ PDFB + RWFB or −GFB ≡ NGFB.

Where NGFB is the non-government financial balance (the sum of the financial balance of the private domestic sector and the Rest of the World). This way of arranging the identity shows well that the government sector (through its federal branch) is the ultimate provider/holder of domestic currency: government fiscal deficit (surplus) is always equal to non-government financial surplus (deficit).”

All this is provably false.#3-#8 To begin with, the number of sectors is FOUR: household sector, business sector, government sector, and Rest of the World. Accordingly, the axiomatically correct balances equation reads (X−M)+(G−T)+(I−S)−(Q−Yd)=0. Legend: Q macroeconomic profit, S household sector saving, G government expenditures, T taxes.

The sectoral balances equation reduces to −S=Q when the economy is reduced to the household and business sector. And it reduces to G−T=Q when the economy is reduced to the government and business sector, that is Public Deficit = Private Profit.

Note that neither Peter Copper nor Eric Tymoigne ever tell one anything about macroeconomic profit Q which is the balance of the business sector. One would think that this balance plays a central role in any description of the monetary economy. Obviously, it does NOT and this tells one something important about economics and economists: economics is failed/fake science and economists are either stupid or corrupt or both.

Egmont Kakarot-Handtke


#1 heteconomist
#2 New Economic Perspectives, Another Take on the Financial Balances
#3 The sectoral balances obfuscation: stupidity or corruption?
#4 Wikipedia and the promotion of economists’ idiotism (I)
#5 Wikipedia and the promotion of economists’ idiotism (II)
#6 Rectification of MMT macro accounting
#7 Economists cannot do the simple math of profit — better keep them out of politics
#8 Truth by definition? The Profit Theory is axiomatically false for 200+ years

Related 'Deficit cheerleaders ― the Oligarchy’s useful idiots'.

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REPLY to Matt Franko on Feb 16

You say: “‘that is Public Deficit = Private Profit.’ Egmont the libertarians will N_E_V_E_R accept that... they just will not....”

Economics is a science according to its self-definition since the founding fathers. Science runs on the criterion true/false with true/false defined by material/formal consistency and NOTHING else. In science, it is a matter of indifference what libertarians think or accept or not accept. Libertarians are political agenda pushers and NOT scientists. The opinions of anti-scientists/politicians/trolls are irrelevant in science. Science is about knowledge, politics is about opinions. Opinions are worthless, and politicians are known to be utterly stupid creatures.

Money does originally NOT come into the economy by government deficit-spending. Imagine that the balances of the government and the household sector are zero for a start, that is, all sectoral balances are zero, does this means that no money comes into the economy? NO! It is the Central Bank that issues the transaction money, i.e. finances the wage bill Yw with C=Yw and G=T and Q=0.#1-#5

Scientists listen to what the math says and NOT to what political agenda pushers say. And the math says that the MMT balances equation is false. MMT is refuted on all counts.


#1 The ultimate ― analytical ― origin of money
#2 How money emerges out of nothing ― the functional account
#3 Basics of monetary theory: the two monies
#4 The right and the wrong way to bring money into the economy
#5 Criminals and the monetary order

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Wikimedia AXEC118d


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February 10, 2020

Mindfuck or the Eternal Return of dead economic theories

Comment on David Andolfatto on ‘Kalecki on the Political Aspects of Full Employment’

Blog-Reference and Blog-Reference

The state of economics is this: theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years.

The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong. What we have is the pluralism of provably false theories.

Obviously, economists violate the core principle of science, i.e. to bury refuted theories for good: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941)

The characteristic of science is ‘Conjecture and Refutation’, i.e. to ensure the material and formal consistency of a theory, to bury a theory at the Flat-Earth-Cemetery if refuted, and to replace it by something better. The characteristic of non-science, i.e. religion, politics, and common sense, is to endlessly repeat the same silly stories and the same false claims and only to defend/adapt them by ever more intricate reinterpretations.

Non-science means to keep everything in the swamp between true and false where “nothing is clear and everything is possible” (Keynes), science means to get out of the swamp.

Economics is NOT science. Economists are NOT scientists but political agenda pushers.#1 The very characteristic of agenda-pushing is meta-communication or what the Ancients called sophistry or what the Moderns call mindfuck.

Science tries to figure out whether a given statement that relates to a real-world subject matter is true or false. Scientific truth is well-defined by material/formal consistency. Mindfuck is not about reality but about what others say or think about reality and the motivation behind it.

Kalecki is a case in point. He argues
“[1] Absent full employment policy the ‘state of confidence’ will produce business cycles. Under laisser-faire then, industry leaders can credibly use this fact to exert a powerful indirect control over government policy.
[2] Supporting obviously beneficial public sector investments leads to a slippery slope. The government may wish to encroach in other areas in competition with private enterprise.
[3] In a perpetually full employment economy, the threat of unemployment vanishes as a discipline device for employers. As well, the social position of the boss would be undermined and the self assurance and class consciousness of the working class would grow, leading to political instability.”

Obviously, Kalecki speculates about what goes on in the heads of politicians, workers, and the captains of industry. Obviously, Kalecki is NOT concerned about how the economic system works. He is NOT doing science but brain-dead folk-psychology.#2

Thinking hard about how the actual economy works will eventually lead to the true employment theory. Mindfuck, on the other hand, will never get out of the self-referential cycle of second-guessing and motive-imputation.#3

Kalecki, to be sure, is but one incompetent scientist in the history of economics mindfuck which is euphemistically called the history of economic thought. No thought there, merely political blather.

Kalecki, to be sure, is refuted on all counts.#4, #5, #6 High time for Mr. Andolfatto to bury him and to end those proto-scientific mindfuck exercises.

Egmont Kakarot-Handtke


#1 There are NO crank scientists in economics because economics is NOT a science
#2 Cross-references NOT a Science of Behavior
#3 The economist as storyteller
#4 Truth by definition? The Profit Theory is axiomatically false for 200+ years
#5 Kalecki got it wrong, Allais got it right
#6 For details of the big picture see cross-references Kalecki

Related 'The problem with economics as a discipline' and 'Economic narratives are for the scientific garbage dump' and 'Economics ― the science that never was' and 'Ending the pluralism of provably false economic theories with the long-overdue Paradigm Shift' and 'Stop Recycling Dead Economic Theories, Start the Paradigm Shift'.

February 8, 2020

There are NO crank scientists in economics because economics is NOT a science

Comment on Blair Fix on ‘How do you spot a crank?’

Blog-Reference

Crank-spotting is a recurrent issue in economics: “A sure sign of a crisis is the prevalence of cranks. It is characteristic of a crisis in theory that cranks get a hearing from the public which orthodoxy is failing to satisfy. In the thirties we had Major Douglas, and social credit ― it can all be done with a fountain pen ― and Warren and Pearson who convinced President Roosevelt that raising the dollar price of gold would raise the price of everything else and bring the slump to an end. The cranks are to be preferred to the orthodox because they see that there is a problem. Nowadays we have plenty of cranks taking up the problems that the economists overlook.” (Joan Robinson, 1972)#1

Blair Fix takes up the issue for our time and clarifies it for himself: “I think about everything I know about neoclassical economics ― its flaws, its absurdities. I reassure myself that I’ve made the right choice. I’m not a crank. I’m a rational critic of an absurd theory.”

Well, that is what all cranks say, so Blair Fix has to go a little deeper: “The only way to judge if someone is a crank is to think rationally for yourself. You must become knowledgeable in the subject matter. You must immerse yourself in the crank’s arguments, and in the counterarguments. You must study the evidence, and if needed, run your own tests. In short, to identify a ‘crank’ you must become a scientist yourself.”

And this brings us immediately to the end of the road: “You likely see the problem with this approach. Few people have the time to become experts in one subject. And no one has the time to become an expert in every subject. So the best way to identify a crank (do science for yourself) is out of most people’s reach.”

Having told lay people that they have no chance of spotting a crank, Blair Fix then turns around and tells them how to spot cranks and how he spotted them in economics, more specifically, in neoclassical economics.

But in the end it amounts again to a big frustration for laypeople: “Philosophers of science have thought for a long time about the ‘crank identification problem’. But they don’t call it this, of course. They call it the ‘demarcation problem’. The demarcation problem is about how to distinguish between ‘science’ and ‘non-science’. It’s a problem that has kept many philosophers up at night. Karl Popper thought he had the solution with ‘falsifiability’. Scientific theories, Popper proposed, make falsifiable predictions. Pseudoscience, in contrast, does not. Many scientists (including me) still think that falsifiability is the bare-bones standard of a good theory.”

Note that Blair Fix has just played a trick on you. By citing philosophers of science he implicitly suggested that economics is a science and he, too, is a scientist: “Many scientists (including me) still think …”. The point is that Blair Fix is a fake scientist who has to be expelled from the scientific community.

The methodological fact of the matter is that economists claim from Adam Smith/Karl Marx onward to the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” that they are doing science. They do NOT. Economics is what Feynman called cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”#2

What economics is still missing after 200+ years is the true theory. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong. As a result of the utter scientific incompetence of the representative economist, what has been achieved is the pluralism of provably false theories.

Economics is a failed science. Blair Fix, though, cannot admit that economists are incompetent scientists but pulls the complexity argument out of the top hat#3: “But as we move to more complex systems, theory becomes more difficult to test. And for that reason, knowledge becomes less secure. Chemistry is more complex than physics, and so less secure knowledge. Biology is more complex than chemistry, and so less secure still. And the social sciences? They study impossibly complex systems. So knowledge in the social sciences is orders of magnitude less secure than in the natural sciences.”

It is worth recalling that this lame excuse has already been used by the founding fathers: “There is a property common to almost all the moral sciences, and by which they are distinguished from many of the physical; this is, that it is seldom in our power to make experiments in them. In chemistry and natural philosophy, we can not only observe what happens under all the combinations of circumstances which nature brings together, but we may also try an indefinite number of new combinations. This we can seldom do in ethical, and scarcely ever in political science. We cannot try forms of government and systems of national policy on a diminutive scale in our laboratories, shaping our experiments as we think they may most conduce to the advancement of knowledge. We therefore study nature under circumstances of great disadvantage in these sciences; being confined to the limited number of experiments which take place (if we may so speak) of their own accord, without any preparation or management of ours; in circumstances, moreover, of great complexity, and never perfectly known to us; and with the far greater part of the processes concealed from our observation. (J.S. Mill)#4

Sounds plausible but is completely beside the point because economics is NOT a social science and not a science of human behavior but a system science.

What economists tell the world is that the failure of economics is due to the subject matter and not to the scientific incompetence of economists. On this point, there is unanimity among economists of all schools. The fact of the matter is, though, that economists are even too stupid for the elementary algebra that underlies macroeconomics.#5, #6

Economics is a failed science. Economists are NOT scientists but political agenda pushers, i.e. clowns and useful idiots in the political Circus Maximus.#7 Blair Fix is no exception.

Egmont Kakarot-Handtke


#1 For the history of crank-spotting see Wikipedia Fads and Fallacies in the Name of Science
#2 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#3 Failed economics: The losers’ long list of lame excuses
#4 Complexity and stupidity
#5 In principle, everybody can check it out for themselves: How the Intelligent Non-Economist Can Refute Every Economist Hands Down
#6 MMT: How mathematical incompetence helps the Kelton-Fraud
#7 Cross-references Political Economics/Stupidity/Corruption

Related 'Complexity, scientific incompetence, and the art of asking the right questions' and 'There is no soft science only soft brains' and 'The problem with economics as a discipline' and 'Microfoundations are dead for 140+ years: high time to move on' and 'Why is economics such a scientific embarrassment?' and 'Economics: The greatest scientific hoax in modern times' and 'Economics: Not a pretty story' and 'Ending the pluralism of provably false economic theories with the long-overdue Paradigm Shift'.

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#PointOfProof
Feb 10

January 30, 2020

Economics: Not a pretty story

Comment on Bill Mitchell on ‘Be careful of what parades as academic research’*

Blog-Reference and Blog-Reference

Bill Mitchell directs attention to ugly facts and top names: “Remember the 2010 film ― Inside Job ― which documented how my profession had become corrupted by the financial services sector into producing, allegedly, independent research reports extolling the virtues of deregulation etc and not admitting they were being paid for by the beneficiaries of the propaganda masquerading as research. It shows how corruption runs deep in the economics profession to accompany the incompetence that mainstream macroeconomists display. Well, I have been following an unfolding story about how Uber has decided to draw on that corrupt tendency for their own gains. It is not a pretty story.” and “I will leave it to you to check if you are interested. 1. Top names in the field ― Judd Cramer, Alan B. Krueger, Jonathan V. Hall, Peter Cohen, Robert Hahn, Steven Levitt, Robert Metcalfe, 2. Top ranked journals ― NBER Working Papers, American Economic Review.”

By pointing at an individual case of wrongdoing Bill Mitchell draws the attention away from (i) that economics as a WHOLE is a scientific fraud since the founding fathers, and (ii), that he is part of it.

The general public and the representative economist have NO proper understanding of what economics is all about. For a start, it is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

A closer look at the history of economic thought shows that theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. The founding fathers were quite outspoken about their agenda: “That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; …” (J. S. Mill)

Political economics has produced NOTHING of scientific value in the last 200+ years. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics does NOT satisfy scientific standards to this day.#2

From this follows that economic policy guidance from Adam Smith/Karl Marx onward NEVER had sound scientific foundations. Left/center/right does NOT matter, ALL of economics is proto-scientific garbage, or in other words, political propaganda in a scientific bluff package.

To point at individual wrongdoers obscures the fact that economics is failure/fake/fraud from Econ 101 to textbooks to the peer-review process of journals to the EconNobel.#3

This holds also for MMT#4 and Bill Mitchell#5. MMT claims that deficit-spending/money-creation is for the benefit of WeThePeople and the solution of almost all problems between unemployment and the survival of humanity. This is not the case, MMT is provably false as economic theory and MMT policy is ultimately for the benefit of the Oligarchy. The observable distribution of financial wealth is the result mainly of public deficit-spending. MMTers are not scientists but agenda pushers.

Bill Mitchell claims: “In fact, as a life-long educator, I clearly form the view that most of the distasteful things we read or hear from others are the result of ignorance and a lack of education. These things are clearly manipulated for ideological and political purposes by others but at the root of the problem is a lack of education. Education is the path to a more enlightened, tolerant and inclusive society. That is the driving principle I have always operated on. Which is why the relatively recent trend on social media that is variously called ― Cancel culture or Call-out culture ― is disturbing to say the least.”

True, but entirely beside the point. Bill Mitchell is NOT a teacher but a manipulator of public opinion. He is NOT a progressive fighter for WeThePeople but an agenda pusher for the Oligarchy. Like his academic colleagues, Bill Mitchell lacks the defining characteristic of a scientist: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)#6

For economics in general and MMT, in particular, there is NO future. It holds: “Scrap the lot and start again.” (Joan Robinson)

Egmont Kakarot-Handtke


* Billy Blog
#1 For details of the big picture see cross-references Failed/Fake Scientists
#2 Failed economics: The losers’ long list of lame excuses
#3 Links on the Economics Nobel
#4 For the full-spectrum refutation of MMT see cross-references MMT
#5 Bill Mitchell’s dishonorable discharge from the sciences
#6 Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion

Related 'Economics, MMT, and the corruption of science' and '“Inhumane stupidity” ― bad economic policy as inevitable consequence of false economic theory' and 'The problem with economics as a discipline' and 'Trust in science? Yes, but economics is NOT a science' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'False economic theory makes bad economic policy'. For more details of the big picture see cross-references Political Economics/Stupidity/Corruption.

January 28, 2020

Economics, MMT, and the corruption of science

Comment on Bill Mitchell on ‘If it quacks!’*

Blog-Reference and Blog-Reference

The political fact of the matter is this: currently there is NO Democracy and there is NO Autocracy. The currently prevailing form of government has been called Oligarchy by the ancient Greeks.#1 The first problem of the Oligarchy is to keep up the appearances of democracy, that is, political measures should appear as the faithful execution of the will/best interest of WeThePeople. This applies in particular to economic policy. So, one important activity of the Oligarchy has always been to produce public opinion and populist pressure. Needless to emphasize that the term Oligarchy does not denote something homogenous and fixed but a temporary institutional arrangement. Neither does the term imply a moral valuation.

The economic fact of the matter is this: the market economy is already for a long time on the life support of the State. The economy runs on profits and macroeconomic profit is in the main produced by public deficits. The axiomatically correct macroeconomic Profit Law reads Q=Qm+Qn with Qm=Yd+(I−Sm)+(G−T)+(X−M). This Law tells one, among many other things, that Public Deficit G−T>0 = Private Profit Qm which means that the Oligarchy’s financial wealth and public debt grow in lockstep, or, in a formula: Financial Wealth of the Oligarchy = Public Debt of WeThePeople. The beauty of the situation is that people think that public debt is somebody else’s problem. This is true, of course, until it is no longer true, that is until the debt stops growing or goes into the reverse. The market economy lives literally on borrowed time.

The Oligarchy, in turn, uses the opulent deficit-produced free lunches to nudge the State’s legislative, executive, judiciary institutions in its favor. Much of the money goes into the production of public opinion. Without knowing the details, one can assume for a mature Oligarchy that key opinion producers like journalists, entertainers, priests/preachers/ gurus, writers, filmmakers, and academics are with few exceptions directly or indirectly sponsored/supported/controlled by the Oligarchy.

And here is the problem: in the political realm, anybody can talk any bullshit whatsoever, in the scientific realm this is NOT admitted. Science is committed to the growth of knowledge and scientific knowledge is well-defined by material and formal consistency. At least, this was the idea before science became politically weaponized. This happened in economics at an early stage. The founding fathers considered themselves as political economists which is to say as useful idiots for the (then-) Oligarchy.

“That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; and the topics are introduced in an order suitable to that view of the purpose of his book.” (J. S. Mill)

To this day, economics is at the proto-scientific level. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics does NOT satisfy scientific criteria. This would be no problem because under the license of free speech/ freedom of the press anything goes in the political realm. However, economists claim from Adam Smith/Karl Marx onward to the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” to do science. This is NOT the case, the representative economist is NOT a scientist but a political fraudster.

The actual case is MMT. Academic MMTers like Bill Mitchell and Stephanie Kelton are currently extremely busy to spread the gospel of deficit-spending/money-creation. This runs in perfect harmony with Mr. Trump’s policy.

The exact point where the fraud kicks in is when MMTers tell the general public that MMT is for the benefit of WeThePeople and that MMT helps to solve almost all problems between unemployment and the survival of humanity.

Bill Mitchell argues: “… the current challenges are different to a military threat but an existential threat no less and require urgent and significant response from the public sector. … The broader point is that the ‘means’… cannot be constructed in terms of financial aggregates. To do so is to construct the currency-issuing government as being financially-constrained in the same way a household is. A household has to earn income or borrow or run down prior savings or sell previously acquired assets (financial or otherwise) in order to spend. A currency-issuing government is not financially constrained and can purchase whatever is for sale in that currency including all idle labour.”

This is true in the same sense that a counterfeiter always has the ‘means’ to buy whatever he wants. However, from the fact that this is technically possible does NOT follow that it is good policy. Taken the economy as a whole, it is bad policy for WeThePeople and good policy for the Oligarchy. Bringing money into the economy at the demand side amounts to robbing WeThePeople.#2, #3

There is NO way around it: MMT policy is a political fraud and MMT academics are stupid/corrupt scientists. Science is built on the ethics of individual integrity and self-government of the scientific community. As MMT proves, economics is politically corrupted and the mechanisms of scientific self-government do not function properly.

MMT is false theory, MMT is false policy, MMTers are fake scientists and agenda pushers for the Oligarchy.#4 The rest of economics, though, is NOT any better.

Egmont Kakarot-Handtke


*   Billy Blog
#1 Wikipedia Oligarchy
#2 Criminals and the monetary order
#3 Q: How are you going to pay for it? MMT: By stealth taxation!
#4 MMT: How the Oligarchy communicates with WeThePeople

Related 'There is no truth in political economics' and 'Keynes, Lerner, MMT, Trump and exploding profit' and 'Another MMT shitshow' and 'Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder' and 'Bill Mitchell cracks the spending whip over the Swabian Housewife' and 'MMT, Bill Mitchell, and the lack of basic scientific integrity' and 'MMT: academic snake oil for the people'. and 'Very busy these days: Wall Street’s agents' and 'The problem with economics as a discipline' and 'Trust in science? Yes, but economics is NOT a science' and 'Exploding the Household Fallacy' and 'Stephanie Kelton: “All deficits are good for someone” Yes, Someone=Oligarchy' and 'Mr. Wray goes to Washington' and 'Deficit cheerleaders ― the Oligarchy’s useful idiots' and 'How to spot economics trolls' and 'Show first your economic axioms or get out of the discussion' and 'Links on the Economics Nobel'.


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Philip Mirowski Money and the Unflappable Economist

January 26, 2020

The futile search for the “most useful idea in economics”

Comment on Sandwichman on ‘What is the Most Useful Idea in Economics?’ and ‘War, Peace and the End of Shorter Hours’.

Blog-Reference

“NPR’s Planet Money went to the 2020 American Economic Association conference in San Diego where they asked economists, ‘what is the most useful idea in economics?’ David Autor appears near the end of the episode to talk about the lump-of-labor fallacy. Almost exactly 87 years earlier, on January 18, 1933, Arthur Dahlberg appeared before a Senate subcommittee to give testimony on the thirty-hour work week bill. The lump-of-labor fallacy would be a useful idea indeed if it would show economists how little they have learned and how much they have forgotten in the intervening 87 years.”#1

For a summary, Sandwichman quotes Dahlberg: “The whole economic mechanism is so involved that we get lost in following the process.” and “… I tried to devise a technique by which I could more vividly present these economic interrelationships. I concluded the technique of the use of words for describing social process is inadequate. It is almost impossible to get agreement on what is happening, much misinterpretation over words. The memory forgets, and the best ones can not consider more than one aspect of the problem at a time.”

Indeed, that is why economists have not figured out in 200+ years how the economy works. Economists are still in the proto-scientific swamp where “nothing is clear and everything is possible” (Keynes) and they have NOTHING of scientific value to show for. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong. The usefulness of economists consists NOT of any scientific achievement but their employability as useful political idiots.

This keeps economists occupied in decently paid jobs. Economists, in turn, keep their lump-of-labor intact by recycling brain-dead stuff ad infinitum.

Now, the fun is over. The Employment Law is given as a testable formula.#2 This puts an abrupt end to the conversation and makes scores of economists unemployed — including Sandwichman.


#1 To begin with, it is a naive idea to go to the ASSA in order to find out whether economists have produced anything useful or worthwhile. ASSA is a rally where economists get their communicative marching orders. See ASSA2020 has been a success ― sorta kinda.
#2 Go! ― test the Profit and Employment Law

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REPLY to Sandwichman on Jan 26

“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)

So, it is absolutely irrelevant that you are a devout non-economist.

The question is how the actual economy works. If you know, tell it but do not recycle silly dialogues from the history of garbage economics.

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Switch of threads

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REPLY to Sandwichman on Feb 1

The time evolution of the most elementary economic system is given by the economic God Equation.#1

Because the equation consists of measurable variables it is testable in principle and therefore satisfies basic scientific requirements.

The equation fully replaces the Dahlberg/Goldberg depictions which can now be disposed of for good on the garbage dump.


#1 Wikimedia AXEC25a